Page 58 - Microsoft Word - Hot Shots CIM Version 1.9.2 Final

HG&L has been formed to be the holding company of as many wholly owned subsidiaries
as there will be Centres built across the UK. As such, HG&L will, over time, raise the funds
required to meet the cost of the first 5 Centres to be built in the UK. Thus the equity
funding required will be contributed to HG&L, with it's £10 ordinary shares in HG&L
currently held as follows and the investors shareholding to be agreed:

£10 Shares % Holding
Phil Harrison* 66 55.00%
Ian DW Robertson 21 17.50%

Malcolm Pearcey 5 4.20%
Keeping Inn Ltd (STR Group) 16 13.30%

Howsam Ltd 12 10.00%
Investors - TBA
Total 100%

Phil Harrison holds 12 shares for Howsam Ltd, as security for the repayment by HG&L
of the phase 1 £300,000 loan made by it to HG&L. That loan is repayable on financial
close. It was made to fund HG&L’s working capital needs during the period up to
recieving planning consent. Following the delays in planning it has been fully used.
discussions with funders are underway to meet the project expenses through to financial
close. Other loans made are from the HG&L Directors (20k) and Keeping Inn Ltd (63,381)

Together with the HG&L Articles of Association reflecting the shareholdings above and
the various shareholder rights needed in respect of them, a draft shareholders ’
agreement has been prepared In Appendix 5.

The equity contributions, including the subscription premium on the £10 ordinary shares,
made to HG&L amount to £133,490. On financial close of the equity, contribution by
investors will comprise:

• Up to £1.5m liabilities, including repayment of the above loans, and various other
pre- closing costs.

• The balance of £6.5m to be lent to HNL to meet the costs of acquisition and
development of the Newcastle land and buildings.

• Further contributions will follow in accordance with the HG&L and Newcastle
development cash flows in Appendix 4 to this CIM.

The balance of the cost of the Centre will be paid from the bank funding against usual
monthly certificates issued by Equals Consulting, employer’s agent to the project.

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