1. Background The Company traded as a provider of self storage facilities and operates 8 units throughout the UK.

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1 Space Maker Storage Limited - in Administration ( the Company ) Information regarding the sale of all of the business and assets of the Company on 30 April 2010 as required by Statement of Insolvency Practice No Background The Company traded as a provider of self storage facilities and operates 8 units throughout the UK. The company was insolvent because since the latter part of 2008, it was not in a position to service its loans to the fixed and floating charge creditor, Nationwide Building Society (the Building Society ). A sale was conducted through a pre-pack in order to preserve the business. This sale forms part of a larger restructuring of the secured lender s debt to the Group (as discussed in para 12 below). 2. The source of the administrators initial introduction Babcock and Brown Space Maker Investment Limited and its 11 subsidiaries operate 12 self storage facilities across the UK ( the Group ). Space Maker Storage Limited is a trading subsidiary. PricewaterhouseCoopers LLP ( PwC ) was initially introduced to the business in December 2008 by the Building Society. The Building Society s lending is secured against the assets of the Company and the Group, supported by cross guarantees. At the time of the introduction, the Group was facing difficulties servicing its interest payments (on circa 42m of loan finance), and was in breach of its banking facilities in relation to its outstanding loans, as a result of deterioration in trading and property markets. 3. The extent of the administrators involvement prior to the appointment In January 2009 PwC was formally instructed by the Building Society and the Group (at the request of the Building Society) to review and comment on the short term cash requirement, historic and current performance, current financial position, medium term projections and the options and estimated financial outcomes for the Building Society. The review was commissioned to assist the Building Society in considering its strategy in respect of its lending to the Group. PricewaterhouseCoopers LLP is a limited liability partnership registered in England with registered number OC The registered office of PricewaterhouseCoopers LLP is 1 EmBuilding Societyment Place, London WC2N 6RH. PricewaterhouseCoopers LLP is authorised and regulated by the Financial Services Authority for designated investment business.

2 A second phase of work was agreed in April 2009 whereby PwC was formally instructed by the Building Society and the Group (at the request of the Building Society) to market the business and assets for sale. The business and assets of the Group were marketed for sale, however, the highest offer received was in the region of 32m, subject to due diligence. In August 2009 a further phase of work was agreed for PwC to assist the Building Society with identifying and implementing a medium term strategy for repayment of its indebtedness. It was ultimately decided that the most appropriate solution would be to find a third party to manage all or part of the Group. In January 2010, the Building Society agreed to a restructuring of its loans to the Group. The restructuring was conducted with the intention that there would be: - no disruption for customers, suppliers or staff; and - that outstanding amounts due to trade creditors would continue to be met as they fell due. The Company was not able to support historic liabilities and therefore as part of the financial restructuring it was necessary for the Company to enter Administration. In order to achieve a seamless transfer, the Company s business and assets were sold immediately following the Joint Administrators appointment to a newly formed company, Space Maker Trading Limited. PwC had no other relationship with the Company, other Group companies or their respective directors prior to January Marketing activities conducted by the Company and / or administrators Due to the Company s operational and financial dependency on the continued support of its fellow Group companies, it was not possible to market the Company on a standalone basis. The Group as a whole was marketed for sale by PwC for four months during However, the highest offers received of between c. 20m and c. 32m (subject to due diligence), were insufficient to repay the monies owed to the Building Society in full and were therefore not accepted. (2)

3 The ultimate agreement by the Building Society to a financial restructuring of the Group s lending was conditional upon the inclusion of the business and assets of the Company within the restructured group. Notwithstanding the lack of marketing of the Company s business and assets on a standalone basis, the Joint Administrators consider that the sale agreed as part of the overall financial restructuring of the Group was in the best interests of the Company s creditors as a whole. 5. Valuations obtained of the business or the underlying assets As part of the work undertaken by PwC, an analysis was prepared to provide an estimate of realisations from a sale of the Group and/or the Company by an insolvency practitioner ( IP ). This was intended to provide an IP with an indication of potential proceeds for the Group in an open and unrestricted market between informed and prudent parties acting at arm s length and under no compulsion to act. The analysis undertaken by PwC estimated that a sale of the business and assets following an insolvency process would result in realisations significantly below the level of the outstanding debt to the Building Society of 42m in relation to the Group as a whole. The assets of the Company include eight intragroup leases with an associated company, Space Maker Properties Limited, which is the freeholder / leaseholder. The leases were valued on a going concern basis at 8 by specialist agents CBRE Richard Ellis Limited, who also valued the business at 3.71m. Other assets and their respective net book values as at 31 March are as follows: - Fixtures and fittings of 1,175 - Stock of 45k - Debtors of c. 345k of which circa 87k are considered to be collectable as the remaining debtors relate to invoices raised in advance of the storage being provided. - Prepayments of 168k which are not considered to be recoverable. Inter-company debts of 3.5m from related entities that are insolvent and unable to pay. (3)

4 6. Alternative course(s) of action considered by the administrator and the possible financial outcome(s) of the alternative course(s) of action, including why it was not appropriate to trade the business and offer it for sale as a going concern during the administration For the reasons set out above, there were no other options available to the Company. In light of the Group s financial difficulties, the Building Society was unable to provide ongoing support on existing terms. The conditions attached to the wider financial restructuring precluded the possibility of trading the Company and offering it for sale as a going concern during Administration. Trading whilst in Administration may also have damaged the reputation of the business with customers and affected the ongoing trade performance of the Group. Further, it was the Building Society s intention that the proposed restructuring would ensure that all liabilities to trade creditors would be paid, so far as commercially possible. The following alternatives were deemed inappropriate: Creditors Voluntary or Compulsory Liquidation: The process to place the Company into liquidation is slower than Administration and would have resulted in a loss of goodwill in the underlying core business once notice became public. Company Voluntary Arrangement: The largest creditor of the Company is the secured lender whose debt and rights would have been unaffected by a Company Voluntary Arrangement. Neither of these alternatives would have resulted in creditors being paid in full under their normal terms of trade or preserved the customer base. 7. Details of requests made to potential funders to fund working capital requirements Neither the Building Society nor the Company s shareholders were in a position to provide any additional funding to the Company or the Group on existing terms. As the Building Society has ultimately agreed to a restructuring of its lending to the Group as explained above, there was no requirement for the Group to approach alternative funders. During the period prior to the financial restructuring, following agreement with the Building Society in relation to interest payments, the Group retained sufficient liquidity to meet its working capital needs throughout the period. 8. Whether efforts were made to consult major creditors The largest creditor of the Company is the Building Society. HMRC has a potential claim for VAT against a related company in the same VAT group (4)

5 9. The date of the transaction 30 April 2010 estimated at 3m, in respect of a Group restructuring that took place in The Company may be contractually obligated for the liabilities of the associated subsidiary company therefore HMRC has a potential exposure. The Administrators consulted with HMRC on the proposed restructuring during April 2010 who understood the reasons why the transaction was taking place. 10. Details of the assets involved and the nature of the transaction Assets sold: Space Maker Trading Limited acquired the business assets owned by the Company and ongoing trading liabilities including: - goodwill; - intra-group leases; - chattels and stock: - the benefit of customer contracts (subject to the burden of them); - debts and other claims against third parties; - records; - intellectual property; - IT systems; - the benefit of prepayments; and - any other assets used in the business. Space Maker Stores Limited acquired the benefit of any debts or other claims that the Company may from time to time be owed or have against certain companies in the Group. Space Maker Trading Limited will also assume certain specified liabilities of the Company. Liabilities excluded: Any liability which the Company may have in relation to the claims for unpaid VAT made by HMRC against Space Maker Storage 2 Limited. 11. The consideration for the transaction, terms of payment, and any condition of the contract that could materially affect the consideration Amount of consideration: In addition to Space Maker Trading Limited s undertaking to assume certain specified liabilities of the Company, consideration for the transaction was c. 3,843,186 broken down as follows and was based either upon professional valuations or on the book values of the Company: Goodwill m Intra-group leases - 9 Stock - 45k Other chattels - 1.1k The benefit (subject to the burden) of customer (5)

6 contracts and debts and other claims against third parties - 87k Records, intellectual property and IT systems - 1 The benefit of all prepayments and any other assets used in the business - 1 The benefit of inter company debts - 1 Date paid: 30 April 2010 Amount of any deferred consideration: There was no deferred consideration. 12. If the sale is part of a wider transaction, a description of the other aspects of the transaction The sale of the Company s business and assets is an integral part of an overall financial restructuring agreed between the Building Society and the Group. The restructuring also entailed: an Administrator being appointed over Space Maker Self Storage Limited; a receiver being appointed over the shares in R & M Hampson Limited owned by Space Maker Property Holdings LLC, which were subsequently transferred; and a receiver being appointed over the shares in Space Maker Properties Limited owned by Space Maker Properties II Limited, which were subsequently transferred The total consideration for all of the Group s assets is circa 45m. 13. Likely outcome for creditors Unsecured creditors: It is expected that Space Maker Trading Limited will continue to pay the trade and other suppliers of the Company in the normal course of business. Consequently it is intended that the trading liabilities of the Company existing at the date of appointment, together with all customer deposits, will ultimately be settled in full, thereby resulting in no unsecured claims in the Administration except for claims by associated companies and HM Revenue & Customs for taxation liabilities. Preferential creditors: All of the employees of the Company transferred to Space Maker Trading Limited therefore there are not expected to be any preferential creditor claims. Secured creditors: Proceeds of 3.71 million in respect of the fixed charge assets have been paid to the Building Society. (6)

7 14. The identity of the purchaser(s) Space Maker Trading Limited and Space Maker Stores Limited. 15. Any connection between the purchaser and the directors, shareholders or secured creditors of the Company Both Space Maker Trading Limited and Space Maker Stores Limited are independent third parties with no connection to the directors or shareholders. As stated above, the Building Society is funding the purchasing entities. 16. Whether the purchaser was independently advised 17. The names of any directors, or former directors, of the Company who are involved in the management or ownership of the purchaser, or of any other entity into which any of the assets were / will be transferred 18. Whether any directors had given guarantees for amounts due from the Company to a prior financier, and whether that financier is financing the new business 19. Any options, buy-back arrangements or similar conditions attached to the contract of sale Space Maker Trading Limited and Space Maker Stores Limited were not connected parties but in any event were independently advised by DLA Piper UK LLP, solicitors. The directors and former directors of the Company are not involved in the management or ownership of Space Maker Trading Limited or Space Maker Stores Limited. The directors had not provided guarantees to the Building Society. As stated above, the Building Society is financing Space Maker Trading Limited and Space Maker Stores Limited. Not applicable. (7)

8 Creditor s name and address. Space Maker Storage Limited - in Administration Statement of Claim form Total amount of your claim, including any VAT at the date the administration commenced. Please provide details of any documents that substantiate your claim including where applicable, details of any reservation of title in respect of goods to which the debt relates. If relevant, please attach a statement of account. What goods or services did you provide? Is all or part of your claim preferential as defined in the Insolvency Act 1986? (see footnote) If so, please provide details where indicated, otherwise leave this section blank. Category Amount (s) claimed as preferential If you have security for your debt, please provide details of the type and value of the security, the date it was given, and provide details of how you have valued your security. If no security held, leave this section blank. We have a duty as administrators to consider the conduct of the directors prior to our appointment. Are there any particular matters relating to the purchase of goods and services from yourselves, or any other matters that you feel should be reviewed? If so, please provide brief details on this form or on a separate sheet if there is insufficient room. Signature of creditor or person authorised to act on behalf of the creditor. Date Name in block capitals. Position with or relation to the creditor (e.g. director, company secretary, solicitor). On completion, please return to PricewaterhouseCoopers LLP, 12 Plumtree Court, London EC4A 4HT, for the attention of Jenna Wise. (8)

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