HEADS OF AGREEMENT
1. These Heads of Agreement are made between Red Hot Concepts US ("Red Hot")
and The Celebrated Group Plc ("Celebrated").
2. These Heads of Agreement are not legally binding with the exception of
paragraphs 11 (announcements), 12 (costs), 13 (confidentiality) and 15
(law). Red Hot are currently the owners of 100% of the shares of Restaurant
House Limited ("Restaurant House"), a company incorporated in England and
wish to merge Restaurant House with Celebrated. This merger will be done by
exchanging the shares of Restaurant House for new ordinary shares in
Celebrated ("the Exchange") to create a larger Celebrated ("Mergeco") on
the following terms. The account treatment on this merger will need to be
looked at further.
3. Red Hot will exchange 100% of the shares in Restaurant House for:
(a) the issue of new ordinary shares in Celebrated fully paid at an issue
price of 15p; and
(b) an option for the issue to Red Hot of 2 million of new ordinary shares
in Celebrated at an issue price of 15p, exercisable at any time in
whole or in part within three years of completion.
New ordinary shares of Celebrated issued, will rank pari passu in all
respects with the existing ordinary shares of Celebrated.
4. Restaurant House is valued, for the purposes of these Heads of Agreement
and the pricing at a total net book price of between (pound)4 million to
(pound)4.5 million. The parties together will assess and agree to this
value.
5. The shares of Restaurant House will be purchased by Celebrated under the
terms of an English law share purchase agreement and tax covenant, pursuant
to which Red Hot will give Celebrated the usual representations, warranties
and indemnities customary in such documentation. Also in such agreement
Celebrated will give Red Hot representations, warranties and indemnities in
respect of the issue of shares, as is customary in a subscription agreement
(including accounts and events since, constitution and material
liabilities).
6. The foregoing terms are based on the assumption and are conditional upon:
(a) a share price of Celebrated on re-listing, not less than 14.5p; and
(b) on re-listing Red Hot owning at least 40% of the fully diluted share
capital of Celebrated (exclusive of Red Hot's options).
7. On re-listing, the Board of Celebrated will consist of three directors
appointed by Red Hot (one (maybe two) of which will be executives) and four
other directors, two of which will be executives) at no less than their
current remuneration levels (making a total of seven). Key matters will
require the unanimous consent of the board.
8. After the signing these Heads of Agreement, Celebrated will visit Brinkers
in the US. Brinkers consent will be needed to the Transaction.
9. On the signing of these Heads of Agreement, an amount of due diligence will
be undertaken by the parties on Restaurant House and Celebrated. It may be
easiest if financial and legal advisers to Restaurant House, produce due
diligence on Restaurant House and financial and legal advisers to
Celebrated produce due diligence on Celebrated, particularly if this
relates to work for that flotation etc.
10.1 Celebrated advisers will draw up the merger agreement and the circular to
shareholders requesting:
(a) consent to the entire merger (and Re-admission if required) (together
"the Transaction"); and
(b) whitewashing the Takeover Code (and also obtaining consent from the
Panel) (together "the Resolutions").
10.2 Xxxxx Xxxxx will look to see whether the shares should be suspended and
whether an announcement should be made and whether the shares will have to
be re-admitted.
11. No party will make any announcement relating to the terms of the
Transaction without the consent of the other and in particular, it is noted
that no announcement should be made by Celebrated until Restaurant House
has considered the consents it requires from Xxxxxxx pursuant to the MFA.
12. Each party will pay its own legal accountancy and other costs in connection
with the Transaction (whether or not it completes), save that Celebrated
(as Mergeco) will pay all Margeco type costs, such as all due diligence
that is required and costs relating to any re-admission/re-listing.
13. Each party agrees that all information which has been or may hereafter be
disclosed in connection with the Transaction (other than its own
information on itself) being referred to in these Heads of Agreement as the
"Confidential Information" will be kept confidential by it and hereby
undertakes as follows:
(a) to maintain the Confidential Information in strict confidence and,
save as provided in these Heads of Agreement or required by the Stock
Exchange or the AIM Rules or by law (and then to consult with the
others):
(i) not to divulge any of the Confidential Information to
any third party and in particular not to communicate,
indicate or suggest to any third party either the fact
that discussions or negotiations are taking place
concerning the possible Transaction or any of the terms
or conditions or the status of the discussions or
negotiations;
(ii) not to make use of the Confidential Information other
than for the purpose of deciding whether to enter into
the Transaction; and
(iii) to restrict access to the Confidential Information only
to responsible employees or professional advisers who
need to have such access for the purpose of evaluating
the possible Transaction.
14. Xxxxx Xxxxx will produce a draft timetable and list of parties and list of
expenses for Mergeco for the Transaction as soon as practicable.
15. These Heads of Agreement shall be governed and construed in accordance with
English law so far as they are expressed to be legally binding. Each of the
parties hereby submits to the non-exclusive jurisdiction of the English
Courts.
Signed ______________________________________
for and on behalf of Red Hot Concepts US, Inc.
in the presence of:
Signed ______________________________________
for and on behalf of The Celebrated Group Plc
in the presence of:
