December 14 1998

Dear Tim

Further to our various discussions and exchanges I enclose updated proposals which reflect my current view of where the project should go. If you are happy with the proposal then I suggest we meet to progress matters further.

The site and leads generated currently belongs to Danny. However he is looking for a dynamic Internet partner.

While it would be easy to employ a company to build and maintain the site, that in itself would be unlikely to attract or encourage the most entrepreneurial input.

Danny therefore proposes that any Internet partner will receive an income and benefit if the Web Site is ever sold . Not only is it good business sense but it is also more fun to share success. Based on meetings Tim Joyce and his company Hoop look to be a compatible partner.

The Web-Site will be a owned by a Limited Company. The shares will be distributed as follows:

Tim 25%

Danny 25%

Professional Funding Ltd 50%

Professional Funding is a company set up by Danny to provide The Mortgage Infrastructure supporting the site.

Building the site. To achieve an attractive site capable of evolution will require much imaginative input from both parties. Key components will be:

• A user-friendly application form which can be electronically altered to accommodate different lender and client requirements.
• A feel which is friendly, professional, informative and contemporary.
• A structure which will allow multiple-visits and on-line updates.

Maintaining The Site will involve

• Information updates
• Data analysis
• Site Improvements

Marketing The Site It may be necessary to employ outside help at fairly early stage in order to stay ahead of competition. Marketing will include.

• Direct advertising
• Online advertising
• Search-engine listing
• Trade-journals
• Using various existing mortgage connections.
• Press-release

• Design, build and maintain site
• Support technical enquiries from customers.
• Data-analysis and record-keeping
• Online marketing
• Other Duties as agreed

• Provide site- text.
• Ensure site is compliant with financial regulations and laws.
• Create and maintain supporting mortgage infrastructure (Professional Funding)
• Off line marketing
• Other Duties as agreed
• Creation of Limited Company

To provide remuneration for the above responsibilities each mortgage generated by the site will pay the site a levy of £150. This levy will be shared as follows:

• Danny’s Budget-£50
• Tim’s Budget-£50
• Marketing-Budget-£50

This structure allows each project participant to have an equal stake in creating a growing income.

By each controlling their own budget it avoids the need for time-wasting consultation on spending and discourages waste. Joint decisions will need to be made about significant marketing spend but it is understood that both parties will actively market the site within the confines of their own budget by using low-cost techniques.

The business will have minimal start up costs as Tim and Danny will make no charge for their work until Company has funds. Danny is bringing existing traffic to the arrangement. Tim will incur costs in setting up site. Danny has out of necessity spent about one hundred hours creating the outline of the mortgage infrastructure.

Managing The Mortgage Infrastructure will be entirely down to Danny and will involve:

• Ensuring Forms Become Mortgages-

To do this he will need to build a team of advisers and administrators.

• Negotiating With Lenders

About a hundred hours of preparation in these two areas have already taken place. Hundreds more will have to follow.

These two areas will deliver what the marketing promises. If they fail then the site cannot earn income. I propose that one of Tim’s responsibilities should be to randomly check those cases that haven’t succeeded in becoming mortgages to allow an objective counterpoint to Danny’s activities and therefore increase success.

1. Applicant fills on line application
1. This is E-Mailed to adviser who contacts client
1. Adviser helps client choose product.
1. Lender agrees loan and valuation takes place.
1. Mortgage Offer
1. Completion
1. Payment

1. One Form covers most of market and where it does not provision will be made.
2. Site will evolve to provide a universal process which will eventually be the only sensible way to trade. Applicant, broker, lender, estate-agent and solicitor will all be able to visit the clients own bulletin board and use it as a common communication point. The client will control the process far more effectively than ever before.
3. Site enhances process and reduces nobody’s earning potential. It is broker-friendly and allows fellow professionals in the mortgage process to interact.

At the moment. None. Big Lenders do not want a unified approach as it does not favour them. They prefer the safety of their current distribution channels. However this head in the sand approach cannot persist. It is the job of Professional Funding to continue coaxing lenders into our way of doing business. If the customer wants to trade this way they must oblige. They will make the initial mistake of setting up their own sites. (could be some business there Tim) but at the end of the day a customer wants choice.

Because of this a site offering choice and the most up to date approach will thrive.

All worthwhile ideas are out their floating in the ether of common perception. If we do not do it somebody else will.

The above is a sketch of a business plan and naturally omits significant detail. Figures used are symbolic of intent and are not based on a strict calculation process. However phase one at £15000 per month is a comfortable initial target. Because of this I feel it is worth us both getting involved and my instincts tell me that we can achieve the rest. The market is certainly ripe for the picking.

I hope you share my enthusiasm for the above and I look forward to your input. Because the scope and details of my planning have changed I feel a detailed meeting to discuss web site contents and any

other points would be a good idea. It would be good to do this before Christmas. I look forward to hearing from you.

Regards

Danny