RB 19/2010 Subscription Agreement with WP Holdings VII B.V.

The Management Board of AmRest Holdings SE (“AmRest” or the “Company”) informs about the signing of a Share Subscription Agreement (“Agreement”) between AmRest and WP Holdings VII B.V. (“Subscriber”), registered in Amsterdam, The Netherlands, dated 22 April 2010.
The Subscriber, which is an affiliate of Warburg Pincus, intends to subscribe for 4,726,263 new shares of the Company at a price of PLN 65 per share, which equates to 24.99% of the diluted share capital (“Subscription Shares”).  In addition, within 12 months from the date on which the Subscription Shares are registered by the registry court proper for the Company's registered office, the Subscriber will have an option to subscribe for additional shares in up to two installments to the extent that its shareholding does not exceed 33% of the post-issuance share capital (”Additional Subscription Shares”). The issuance price for the Additional Subscription Shares will be PLN 75 per share.
The Subscription Shares will be issued to the Subscriber pursuant to the authority granted to the Management Board of AmRest on the basis of articles 444-4471 of the Polish Commercial Companies Code and §4 of the Company's statutes and with the approval of the Supervisory Board given in the resolution of 21 April 2010 for excluding the pre-emptive rights of current shareholders of the Company.
The subscription will be finalized in two stages – Pre-Completion and Completion.
At Pre-Completion, the Subscriber will transfer the total subscription price for the Subscription Shares to an escrow account. The Pre-Completion is conditional upon: (i) receipt of US regulatory approval (under Hard Scott Rodino Antitrust Improvements Act), (ii) receipt of consent from franchisors under contracts binding the Company (iii) demonstration by AmRest to the Subscriber that refinancing/restructuring of the full amount of AmRest Group’s existing bank facilities will be achievable prior to 31 December 2010.  If any of the Pre-Completion conditions cannot be satisfied or are waived, at the Subscriber’s discretion, within 90 days from the Agreement date, the Agreement shall be terminated unless both parties agree otherwise.
After the total subscription price has been transferred by the Subscriber, the Company will file an application with the registry court, proper for the Company's registered office, for registration of the Subscription Shares.
Completion will take place at the moment of registering the increase in the share capital of the Company related to the Subscription Shares by the registry court proper for the Company's registered office. After Completion, the Company has committed to do all within its power to ensure that two candidates nominated by the Subscriber will be appointed to its Supervisory Board. If the registration of the Subscription Shares is not completed within 90 days starting from the date of Pre-Completion, the Subscriber may terminate this Agreement.
The Company shall prepare a Prospectus to admit all of the Subscription Shares to trading on the Warsaw Stock Exchange as soon as possible after the Completion date and in any event within 120 days from that date. If the Prospectus is not prepared and submitted to the Polish Financial Supervision Authority within 120 days from the date of Completion then the Company shall pay a contractual penalty to the Subscriber of PLN 12 million. This penalty does not exclude Subscriber’s right to claim damages exceeding the amount of penalty.
If the Company does not comply with its obligation to issue the Additional Subscription Shares to the Subscriber then it will pay to the Subscriber a contractual penalty of PLN 6.50 for each Additional Subscription Share not so issued. This penalty does not exclude Subscriber’s right to claim damages exceeding the amount of penalty.
In the period between signing the Agreement and the time when both Subscriber candidates are appointed to the Supervisory Board, the Company shall operate its business in the usual way. At the same time, the Company shall not enter into any non-ordinary agreements, arrangements or obligations where the aggregate value exceeds PLN 12 million, unless the Subscriber agrees otherwise in writing. These limitations will expire after at least two candidates of the Subscriber are appointed to the Supervisory Board or in any event, after the third anniversary of the Completion.
In addition, the Management Board of AmRest announces that the Company has received the following notification in connection with the effected transaction from Mr. Henry McGovern, Chairman of the Supervisory Board of the Company.  Mr. McGovern has declared that: (i) he will not resign from his office as a member of the supervisory board of the Company before the expiry of the current 6 (six) year term of his appointment; (ii) he will not reduce his shareholding in the Company or resign from his position with the Company. (iii) he will vote at the first General Meeting convened after the Completion in favor of appointing to the Company’s Supervisory Board 2 (two) nominees of the Subscriber (this obligation shall cease to apply when Mr. Henry McGovern and the Subscriber’s capital group together hold in aggregate more than 33% of votes). It should be noted that Mr. Henry McGovern underlined that these undertakings do not constitute any sort of agreement referred to in Article 87 section 1 points 5) or 6) of the Act on Public Offering.
AmRest Management is committed to growing the business and believes that the Company is uniquely positioned to seize the potential of its brands and opportunities provided by a still underpenetrated restaurant market in the region. The gross funds of approximately PLN 307.2m will primarily be used to support the Company’s accelerated organic growth initiatives in CEE to achieve its goal of market leadership in core markets. Growth in 2010 (total of 60-70 new openings) can be funded through a combination of internal cash flow and debt financing. However the proceeds of the equity issuance will be used to fund the accelerated growth plan beyond 2010, including to open more than 100 restaurants in 2011. The proceeds are not intended to change the Group’s leverage ratios over long-term.
Warburg Pincus’ profile is provided in the Appendix to this regulatory announcement.
Legal act:Par. 56 sec.1 point 2 of the Act on Public Offering dated 29 July 2005 in conjunction with par. 5 section 1 point 3 of the order of the Minister of Finance dated 19 February 2009 on current reports

Appendix to RB 19 2010
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