Solocal : Board of Directors’ report to the SoLocal Group’s shareholders’ extraordinary general meeting dated 15 December 2016

Informal translation from the French For information purposes only‌‌‌‌‌‌

(the "Company")

Resolutions to be submitted to the vote of the shareholders

Important note

This report of the Board of Directors has been drawn up based on the agenda and draft resolutions published in the meeting notice of the Company's extraordinary general shareholders' meeting published in the Bulletin des Annonces Légales Obligatoires no.‌‌‌

135 of 9 November 2016. The Company's shareholders' attention is drawn to the possibility of an amendment to this agenda and to these draft resolutions following (a) requests for inclusion of items and draft resolutions on the agenda that would be, as the case may be, submitted by the Company's shareholders in accordance with the law and

(b) amendments that would be, as the case may be, made by the Company's Board of Directors. In such event, a supplement to this report of the Board of Directors will be made available to the Company's shareholders before the extraordinary general shareholders' meeting to be held on 15 December 2016.

Table of contents

Resolutions falling within the scope of competence of the extraordinary shareholders' meeting

1. Restructuring of the Company financial debt

   • Share capital decrease by reducing the par value of the shares;

   • Delegation of authority to the Board of Directors to issue Company's shares, with shareholders' preferential subscription rights preserved;

   • Authorisation granted to the Board of Directors to increase the number of shares to be issued in the event of over-subscription to the issue, with shareholders' preferential subscription rights preserved, of Company's shares, pursuant to the second resolution submitted to the vote of the general meeting;

   • Delegation of authority to the Board of Directors to proceed with the issue and allocation, free of charge, of new shares in favour of the shareholders of the Company, by way of incorporation of premiums into the share capital;

   • Delegation of authority to the Board of Directors to issue new shares, without shareholders' preferential subscription rights and reserved to a category of persons meeting specific criteria;

   • Delegation of authority to the Board of Directors to issue mandatory convertible bonds (obligations à option de conversion et remboursables en actions), without shareholders' preferential subscription rights and reserved to a category of persons meeting specific criteria;

   • Delegation of authority to the Board of Directors to issue new shares with warrants for shares attached (ABSA), without shareholders' preferential subscription rights and reserved to a category of persons meeting specific criteria;

   • Delegation of authority to the Board of Directors to proceed with a share capital increase reserved to the members of the group savings plan of the SoLocal Group;

2. Progress in corporate affairs since the beginning of the current financial year

3. Amendment to the Company's by-laws

   • Amendment to article 12 of the by-laws.

     Ladies and Gentlemen,

     We have called this extraordinary general shareholders' meeting, in accordance with the law and the provisions of the Company's by-laws, in order notably to ask you to vote on the following:

   • the Board of Directors' report and the statutory auditors' reports to this meeting;

   • the share capital decrease by reducing the par value of the shares;

   • the delegation of authority to the Board of Directors to issue Company's shares, with shareholders' preferential subscription rights preserved;

   • the authorisation granted to the Board of Directors to increase the number of shares to be issued in the event of over-subscription to the issue, with shareholders' preferential subscription rights preserved, of Company's shares, pursuant to the second resolution submitted to the vote of the general meeting;

   • the delegation of authority to the Board of Directors to proceed with the issue and allocation, free of charge, of new shares in favour of the shareholders of the Company, by way of incorporation of premiums into the share capital;

   • the delegation of authority to the Board of Directors to issue new shares, without shareholders' preferential subscription rights and reserved to a category of persons meeting specific criteria;

   • the delegation of authority to the Board of Directors to issue mandatory convertible bonds (obligations à option de conversion et remboursables en actions), without shareholders' preferential subscription rights and reserved to a category of persons meeting specific criteria;

   • the delegation of authority to the Board of Directors to issue new shares with warrants for shares attached (ABSA), without shareholders' preferential subscription rights and reserved to a category of persons meeting specific criteria;

   • the delegation of authority to the Board of Directors to proceed with a share capital increase reserved to the members of the group savings plan of the SoLocal Group; and

   • the amendment to article 12 of the by-laws.

   The required convening notices have been duly sent to you and all the documents and items provided for by the applicable regulations have been made available to you within the legal deadlines.

   Resolutions falling within the scope of competence of the extraordinary shareholders' meeting

4. Restructuring of the Company's financial debt

5. The Company has drawn up for several months a restructuring plan of its financial debt aiming at allowing the group to find margins for financial manoeuvre to resume its Internet business provided for in its "Conquer 2018" plan with long-term and steady growth.

   A project of financial restructuring plan, resulting from discussions between the Company and a group of creditors with whom an agreement in principle was reached on 1 August 2016 (the "Initial Plan"), has been approved by the Company's creditors on 12 October 2016 but rejected by its shareholders during the combined general meeting held on 19 October 2016.

   New discussions have taken place between the different stakeholders. Such discussions have resulted in the unanimous adoption by the Company's Board of Directors, the association RegroupementPPLocal and a group of three creditors, representing approximatively 37% of the outstanding financial debt, of a revised financial restructuring plan, announced on 3 November 2016, that contains improvements for the Company and its shareholders compared to the Initial Plan (the "Revised Plan").

   This Revised Plan, just as the Initial Plan, provides that, in return for the principal amounts of their receivables, which amounted to €1,164 million (€M) as at 30 June 2016, SoLocal Group's financial creditors would receive:

   • a receivable of €400 M (which may be reduced to €340 M in the event of over- subscription to the share capital increase reserved to the shareholders described in the following point, the proceed of the over-subscription being used in this case to reduce the amount of the residual financial debt even further);

   • cash (stemming from a share capital increase with shareholders' preferential subscription rights preserved of €405 M that may be increased to €465.75 M in the event of over-subscription and, as the case may be, from share capital increases reserved to third party investors, who are not creditors of the Company, of an aggregate amount of €35 M);

   • MCB (obligations à option de conversion remboursables en actions) if the total amount of cash subscription to the share capital increase reserved to the shareholders and, as the case may be, to share capital increases reserved to third party investors who are not creditors of the Company, would be less than

     €300 M;

   • Company's shares that may be stemming from the share capital increase with shareholders' preferential subscription rights preserved if the latter is not fully subscribed to by the Company's shareholders (or by the assignees of preferential subscription rights), the financial creditors having to subscribe by way of set-off with receivables to all the shares that would not be subscribed to in cash by the Company's shareholders (or by the assignees of preferential subscription rights);

   • for the remainder of the debt, shares with warrants for shares attached (in the event where the total amount of cash subscription to the share capital increase reserved to shareholders and, as the case may be, to share capital increases reserved to third party investors who are not creditors of the Company, would be less than €250 M), stemming from a share capital increase reserved to the financial creditors with a subscription price per share which varies depending