Royal Bank of Scotland : Posting of Scheme Document

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION. THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.

FOR IMMEDIATE RELEASE

11 APRIL 2018

RECOMMENDED CASH OFFER

for

FREEAGENT HOLDINGS PLC ('FREEAGENT' OR THE 'COMPANY')

by

SILVERMERE HOLDINGS LIMITED ('RBS BIDCO')

(a wholly-owned indirect subsidiary of The Royal Bank of Scotland Group plc)

to be implemented by means of a scheme of arrangement

under Part 26 of the Companies Act 2006

Posting of Scheme Document

On 27 March 2018, the boards of FreeAgent and The Royal Bank of Scotland Group plc announced that they had reached agreement on the terms of a recommended cash offer pursuant to which RBS Bidco will acquire the entire issued and to be issued share capital of FreeAgent (the 'Acquisition'), which will be effected by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006 ('Scheme').

The Board of FreeAgent is pleased to announce that the scheme document in relation to the Acquisition (the 'Scheme Document') is today being posted to FreeAgent Shareholders, containing, amongst other things, the full terms and conditions of the Acquisition, an explanatory statement pursuant to section 897 of the Companies Act 2006, an expected timetable of principal events, notices of the Court Meeting and General Meeting and details of the actions to be taken by FreeAgent Shareholders, together with the Forms of Proxy for the Meetings. FreeAgent is also posting the Scheme Document to participants in the FreeAgent Share Option Schemes for information only and those persons with information rights.

Capitalised terms in this announcement (the 'Announcement'), unless otherwise defined, have the same meanings as set out in the Scheme Document. Copies of this Announcement and the Scheme Document will be available free of charge (subject to certain restrictions relating to persons in Restricted Jurisdictions) on FreeAgent's website at http://www.freeagent.com/investors up to and including the Effective Date. The contents of this website are not incorporated into, and do not form part of, this Announcement.

Notices of the Court Meeting and General Meeting

As detailed further in the Scheme Document, the Scheme is subject to the Conditions. To become effective, the Scheme requires, among other things, that the requisite majorities of Independent Scheme Shareholders vote in favour of the Scheme at the Court Meeting and that the requisite majorities of eligible FreeAgent Shareholders vote in favour of the Resolutions to be proposed at the General Meeting.

Notices convening the Court Meeting and the General Meeting for 12.00 noon on 8 May 2018 and 12.05 p.m. on 8 May 2018 respectively (or, in respect of the General Meeting, as soon thereafter as the Court Meeting is concluded or adjourned), to be held at the offices of Dentons UK and Middle East LLP at Quartermile One, 15 Lauriston Place, Edinburgh, EH3 9EP, are set out in the Scheme Document. Forms of Proxy for use at such Meetings are enclosed with the Scheme Document.

It is important that, for the Court Meeting in particular, as many votes as possible are cast so that the Court may be satisfied that there is a fair representation of eligible FreeAgent Shareholder opinion. FreeAgent Shareholders are therefore strongly encouraged to complete, sign and return their Forms of Proxy (once received) (or appoint a proxy through the CREST electronic proxy appointment service) as soon as possible in accordance with the instructions for doing so, even if they intend to attend the meeting in person.

Timetable

The current expected timetable of principal events for the implementation of the Scheme is set out below and in the Scheme Document. Once the date of the Court Hearing to sanction the Scheme is known the Company will make a further announcement of the full timetable, including the date on which FreeAgent Shares will be cancelled from admission to trading on AIM. All times shown in this Announcement are references to London time unless otherwise stated.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Notes:

1. The dates and times given are indicative only and are based on FreeAgent's current expectations and may be subject to change (including as a result of changes to the timetable for fulfilment of any applicable regulatory and Acquisition clearance approvals and changes to the Court timetable). If any of the times or dates above change, the revised times and dates will be notified to FreeAgent Shareholders by announcement through a Regulatory Information Service and on its website athttps://www.freeagent.com/investors.

2. The BLUE Form of Proxy for the Court Meeting may, alternatively, be handed to FreeAgent's Registrars, Computershare, on behalf of the Chairman of the Court Meeting, before the start of the Court Meeting (or any adjournment thereof). However, if possible, eligible FreeAgent Shareholders are requested to lodge the BLUE Forms of Proxy (or the electronic equivalent) not later than 48 hours (excluding any part of a day which is not a working day) before the time appointed for the Court Meeting, even if they intend to attend the Court Meeting in person.

3. The WHITE Form of Proxy for the General Meeting (or the electronic equivalent) must be lodged with FreeAgent's Registrars, Computershare, by no later than 12.05 p.m. on 3 May 2018 in order for it to be valid, or, if the General Meeting is adjourned to another day, not later than 48 hours (excluding any part of a day which is not a working day) before the time fixed for the holding of the adjourned meeting. If the WHITE Form of Proxy is not returned by such time, it will be invalid.

4. Only those FreeAgent Shareholders registered on the register of members of FreeAgent and those persons participating in a FreeAgent Share Option Scheme which results in them being eligible to vote at the Meetings as at the Voting Record Time will be entitled to vote at the Meetings (save as set out in paragraph 10 of Part II of the Scheme Document). If either Meeting is adjourned, the Voting Record Time for the adjourned Meeting will be 6.00 p.m. on the day which is two Business Days before the date set for the adjourned meeting(s).

5. To commence at the time fixed or, if later, immediately after the conclusion or adjournment of the Court Meeting.

6. These times and dates will depend, among other things, on whether and when the Conditions are satisfied or (where applicable) waived and the date upon which the Court sanctions the Scheme and the Court Order is delivered to the Registrar of Companies. The Company will give adequate notice of any changes by issuing an announcement through a Regulatory Information Service and on its websitehttps://www.freeagent.com/investors.

7. Any references to D or to a day after D are references to a Business Day.

8. The Court Hearing to sanction the Scheme is to be held on such date as FreeAgent and RBS may agree and the Court may allow.

9. This is the latest date by which the Scheme may become Effective unless FreeAgent and RBS agree, and (if required) the Court and the Takeover Panel allow, a later date.

END

Important notices

CMS Cameron McKenna Nabarro Olswang LLP is retained as legal adviser to RBS and RBS BidCo. Dentons UK and Middle East LLP is retained as legal adviser to FreeAgent.

Merrill Lynch International (BofA Merrill Lynch), which is authorised by the Prudential Regulation Authority and regulated in the United Kingdom by the Financial Conduct Authority and the Prudential Regulation Authority, is acting exclusively for RBS and RBS BidCo and no one else in connection with the subject matter of this announcement and will not be responsible to anyone other than RBS and RBS BidCo for providing the protections afforded to clients of BofA Merrill Lynch or for providing advice in connection with the subject matter of this announcement.

Nplus1 Singer Advisory LLP (N+1 Singer), which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting solely for FreeAgent as financial adviser and broker in relation to the matters referred to in this announcement and for no one else. N+1 Singer will not be responsible to anyone other than FreeAgent for providing the protections afforded to its clients or for providing advice in relation to the contents of this announcement or any arrangement referred to herein.

BofA Merrill Lynch and N+1 Singer have given and not withdrawn their consent to the publication of this announcement with the inclusion in it of the references to their respective names and (where applicable) advice in the form and context in which they appear.

This announcement is for information purposes only and is not intended to and does not constitute or form part of an offer to sell or subscribe for or any invitation to purchase or subscribe for any securities or the solicitation of an offer to buy any securities, pursuant to the Acquisition or otherwise. The Acquisition will be made solely by means of the Scheme Document or any document by which the Acquisition is made which will contain the full terms and conditions of the Acquisition, including details of how to vote in respect of the Scheme.

Any approval, decision or other response to the Acquisition should be made only on the basis of the information in the Scheme Document. FreeAgent Shareholders are strongly advised to read the formal documentation in relation to the Acquisition once it has been despatched.

The statements contained in this announcement are made as at the date of this announcement, unless some other time is specified in relation to them.

Overseas Shareholders

The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law. Persons who are not resident in the United Kingdom or who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves of, and observe, any applicable requirements. In particular the ability of persons who are not resident in the UK, to vote their FreeAgent Shares with respect to the Scheme at the Court Meeting, and/or the General Meeting, or to appoint another person as proxy to vote at the Court Meeting and/or the General Meeting on their behalf, may be affected by the laws of the relevant jurisdictions in which they are located. Any failure to comply with the restrictions may constitute a violation of the securities laws of any such jurisdiction. This announcement does not constitute an offer or an invitation to purchase or subscribe for any securities or a solicitation of an offer to buy any securities pursuant to this announcement or otherwise in any jurisdiction in which such offer or solicitation is unlawful. This announcement has been prepared for the purposes of complying with the laws of the United Kingdom, the Market Abuse Regulation and the City Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of any jurisdiction outside United Kingdom. To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person.

Unless otherwise determined by RBS BidCo or required by the City Code, and permitted by applicable law and regulation, the Acquisition will not be made available, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person may vote in favour of the Acquisition by any such use, means, instrumentality or form within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Accordingly, copies of this announcement and any formal documentation relating to the Acquisition are not being, and must not be, directly or indirectly, mailed, transmitted or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction or any other jurisdiction where to do so would constitute a violation of the laws of that jurisdiction, and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send such documents in or into or from any Restricted Jurisdiction. Doing so may render invalid any related purported vote in respect of the Acquisition. If the Acquisition is implemented by way of a Takeover Offer (unless otherwise permitted by applicable law and regulation), the Takeover Offer may not be made directly or indirectly, in or into, or by the use of mails or any means or instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the Takeover Offer may not be capable of acceptance by any such use, means, instrumentality or facilities or from within any Restricted Jurisdiction.

The availability of the Acquisition to FreeAgent Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are resident. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable requirements.

Further details in relation to FreeAgent Shareholders in overseas jurisdictions are contained in the Scheme Document.

Notice to US holders of FreeAgent Shares

The Acquisition relates to the shares in a Scottish public limited company and is proposed to be made by means of a scheme of arrangement provided for under Scots law and, in the case of a scheme of arrangement, Part 26 of the Companies Act. A transaction effected by means of a scheme of arrangement is not subject to the proxy solicitation or tender offer rules under the Exchange Act. Accordingly, the Acquisition is subject to the disclosure requirements, rules and practices applicable in the United Kingdom to schemes of arrangement, which differ from the requirements of US proxy solicitation or tender offer rules. If, in the future, RBS BidCo exercises the right to implement the Acquisition by way of a Takeover Offer and determines to extend the offer into the US, the Acquisition will be made in compliance with applicable US laws and regulations. Financial information included in this announcement and the Scheme Document has been or will have been prepared in accordance with non-US accounting standards that may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the US.

It may be difficult for US holders of FreeAgent Shares to enforce their rights and any claim arising out of the US federal securities laws, since RBS, RBS BidCo and FreeAgent are located in a non-US jurisdiction, and some or all of their officers and directors may be residents of a non-US jurisdiction. US holders of FreeAgent Shares may not be able to sue a non-US company or its officers or directors in a non-US court for violations of the US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgement.

Neither the SEC nor any securities commission of any state of the United States has approved the Acquisition, passed upon the fairness of the Acquisition or passed upon the adequacy or accuracy of this announcement. Any representation to the contrary is a criminal offence in the United States.

The receipt of cash pursuant to the Acquisition by a US holder as consideration for the transfer of its FreeAgent Shares pursuant to the Scheme will likely be a taxable transaction for United States federal income tax purposes and under applicable United States state and local, as well as foreign and other, tax laws. Each US holder is urged to consult his or her independent professional adviser immediately regarding the tax consequences of the Acquisition applicable to him or her.

In accordance with normal UK practice and pursuant to Rule 14e-5(b) of the Exchange Act, RBS BidCo or its nominees or brokers (acting as agents) may from time to time make certain purchases of, or arrangements to purchase, FreeAgent Shares outside the United States, other than pursuant to the Acquisition, until the Scheme becomes Effective and/or the date on which the Takeover Offer becomes unconditional, lapses or is otherwise withdrawn. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases will be disclosed as required in the UK, will be reported to the Regulatory Information Service of the London Stock Exchange and will be available on the London Stock Exchange website.

Forward looking statements

This announcement contains statements about RBS, RBS BidCo and FreeAgent that are or may be forward looking statements. All statements other than statements of historical facts included in this announcement may be forward looking statements. Without limitation, any statements preceded or followed by or that include the words 'targets', 'plans', 'believes', 'expects', 'aims', 'intends', 'will', 'may', 'anticipates', 'estimates', 'projects' or words or terms of similar substance or the negative thereof, are forward looking statements. Forward looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of RBS, RBS BidCo or FreeAgent's operations and potential synergies resulting from the Acquisition; and (iii) the effects of government regulation on RBS, RBS BidCo or FreeAgent's businesses.

Such forward looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward looking statements. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward looking statements, which speak only as of the date hereof. FreeAgent, RBS and RBS BidCo disclaim any obligation to update any forward looking or other statements contained herein, except as required by applicable law. Except as expressly provided in this announcement, they have not been reviewed by the auditors of FreeAgent or RBS. All subsequent oral or written forward looking statements attributable to FreeAgent, RBS or RBS BidCo or any of their respective members, directors, officers or employees or any persons acting on their behalf are expressly qualified in their entirety by the cautionary statement above. Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this announcement.

No member of the RBS Group, nor the FreeAgent Group, nor any of their respective associates, directors, officers, employees or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement will actually occur.

Disclosure requirements of the City Code

Under Rule 8.3(a) of the City Code, any person who at the relevant time is interested (directly or indirectly) in 1 per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the Offer Period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 p.m. (London time) on the 10th business day following the commencement of the Offer Period and, if appropriate, by no later than 3.30 p.m. (London time) on the 10th Business Day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the City Code, any person who is, or becomes, interested (directly or indirectly) in 1 per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 p.m. (London time) on the Business Day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the Offer Period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Information relating to FreeAgent Shareholders

Please be aware that addresses, electronic addresses and certain information provided by FreeAgent Shareholders, persons with information rights and other relevant persons for the receipt of communications from FreeAgent may be provided to RBS and RBS BidCo during the Offer Period as required under Section 4 of Appendix 4 to the City Code, in order to comply with Rule 2.11(c).

No profit forecast or estimates

No statement in this announcement is intended as a profit forecast or profit estimate for FreeAgent or the FreeAgent Group or RBS or the RBS Group. No statement in this announcement should be interpreted to mean that earnings per FreeAgent Share or earnings per RBS Share for the current or future financial years would necessarily match or exceed the historical published earnings per FreeAgent Share or earnings per RBS Share.

Publication on website and availability of hard copies

A copy of this announcement will be available free of charge, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on RBS's and FreeAgent's websites at https://investors.rbs.com and www.https://www.freeagent.com/investors, respectively, by no later than 12.00 p.m. (London time) on the Business Day following this announcement. None the contents of RBS's website, those of FreeAgent's website, or those of any other website accessible from hyperlinks on either RBS's or FreeAgent's website, are incorporated into or form part of this announcement.

FreeAgent Shareholders may request a hard copy of this announcement (and any information incorporated by reference in this announcement) by writing to Computershare at Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol, BS99 6ZZ or by calling, between 8.30am and 5.30pm (UK time) Monday to Friday (except UK public holidays), on 03707071721 from within the UK or +443707071721, if calling from outside the UK. FreeAgent Shareholders may also request that all future documents, announcements and information to be sent to them in relation to the Acquisition should be in hard copy form. A hard copy of such documents, announcements (including this announcement) and information will not be sent unless such a request is made.

Rule 2.9 Requirement

In accordance with Rule 2.9 of the City Code, FreeAgent confirms that as at the date of this announcement, it has in issue and admitted to trading on AIM 40,742,775 ordinary shares of 1 pence each. The International Securities Identification Number (ISIN) of the ordinary shares is GB00BDFVDY36.