HOT CHILI LIMITED ACN 130 955 725

BEFORE DOWNLOADING, PRINTING OR VIEWING THE PROSPECTUS, YOU MUST CAREFULLY READ THE TERMS SET OUT IN THIS NOTICE

Important information

This is an important document that should be read in its entirety.  If you do not understand it or are in doubt as to the course you should follow, you should consult your stockbroker, accountant or professional adviser. 

Hot Chili Limited ACN 130 955 725 (Company) has lodged a Replacement Prospectus dated 23 March 2010 (Prospectus) with the Australian Securities and Investments Commission (ASIC) for an offer of 30,000,000 shares at an issue price of 20 cents each to raise $6,000,000 with provisions to accept over-subscription for up to a further 10,000,000 shares to raise up to a further $2,000,000, to raise a maximum of $8,000,000 (Offer).

Lodgement of Prospectus with ASIC

The paper form of the Prospectus has been lodged with ASIC.

Application pursuant to Application Form only

An Application for Shares (as defined in the Prospectus) offered under the Prospectus can only be made by completing the Application Form attached to or accompanying the Prospectus and then lodging the Application Form and the Application Monies in accordance with the instructions set out in the Prospectus and the Application Form.  

Warnings

The Corporations Act prohibits any person from passing onto another person an Application Form unless it is attached to a hard copy of the Prospectus or it accompanies the complete and unaltered version of the Prospectus (whether in paper or electronic form).  The Company will not accept a completed Application Form if it has reason to believe that you have not received a complete and unaltered copy of the Prospectus or if it has reason to believe that Application Form has been altered or tampered with in any way.  If you are accessing an electronic copy of the Prospectus, please ensure that you have received the entire Prospectus accompanied by the Application Form.  If not, please contact the Company. 

For legal reasons, the information and electronic Prospectus provided by this website is only available to persons accessing this website from within AUSTRALIA ONLY.  If you are accessing this website from anywhere outside Australia, please DO NOT download the electronic Prospectus accessible through this website.

This Prospectus does not constitute an offer of securities in any jurisdiction where, or to any person to whom, it would not be lawful to issue the Prospectus or make the offer.  It is the responsibility of any applicant outside Australia to ensure compliance with all laws of any country relevant to their applications, and any such applicant should consult their professional advisers as to whether any government or other consents are required, or whether any formalities need to be observed to enable them to apply for and be allotted any securities.

No action has been taken to register, qualify or otherwise permit the offer in any jurisdiction outside Australia.

No person is authorised to give information or to make any representation in relation to the Offer which is not contained in the Prospectus and such information may not be relied upon as having been authorised by the directors of the Company.  D.J. Carmichael Pty Limited and Carmichael Corporate Pty Ltd (jointly referred to as DJ Carmichael) are the joint lead managers, sponsoring brokers and corporate advisers to the Company.  Neither DJ Carmichael nor any of its officers accept any liability or responsibility in respect of the Prospectus or the Offer.

Acknowledgements

By accessing the Prospectus (by clicking on the link below) you acknowledge that you:

• have read, understood and agreed to the terms and conditions set out above; and
• are an Australian resident and that you are downloading the Prospectus in Australia.

You have read, understood and agreed to the above terms and conditions, and acknowledge that you are an Australian resident downloading the Prospectus in Australia?

Hot Chili Limited

Prospectus

10. Additional information

 

9 SUMMARY OF MATERIAL CONTRACTS 9.5 DJ CARMICHAEL MANDATE 9.6 EXECUTIVE SERVICE AGREEMENT – CHRISTIAN EASTERDAY PURSUANT TO A MANDATE AGREEMENT DATED 11 DECEMBER 2009, THE COMPANY HAS ENGAGED DJ CARMICHAEL PTY LTD AND CARMICHAEL CORPORATE PTY LTD (TOGETHER, DJ CARMICHAEL) ON AN EXCLUSIVE BASIS AS LEAD MANAGER, SPONSORING BROKER AND CORPORATE ADVISER TO THE COMPANY IN RESPECT OF THE OFFER AND PRE-OFFER SEED CAPITAL RAISING. A 6% FEE WAS PAID TO DJ CARMICHAEL FOR THE SEED AND PRE-OFFER CAPITAL RAISING. IN ADDITION, DJ CARMICHAEL WAS GRANTED 340,000 OPTIONS AND PAID THE SUM OF $15,000 FOR THEIR SERVICES IN RESPECT OF THE PRE-OFFER CAPITAL RAISING. THE FEES PAID OR PAYABLE TO DJ CARMICHAEL IN RESPECT OF THE OFFER COMPRISE: • A SPONSORING BROKER FEE OF $40,000; • A 5% PLACEMENT FEE BASED ON THE TOTAL FUNDS RAISED UNDER THE OFFER; AND • A 1% MANAGEMENT FEE OF THE TOTAL FUNDS RAISED. DJ CARMICHAEL WILL ALSO BE GRANTED THAT NUMBER OF OPTIONS EQUAL TO 1% OF THE NUMBER OF SHARES ISSUED UNDER THE OFFER, BEING 300,000 OPTIONS IN THE EVENT OF MINIMUM SUBSCRIPTION TO THE OFFER AND 400,000 OPTIONS IF THE MAXIMUM SUBSCRIPTION IS ACHIEVED. THE TERMS OF THE OPTIONS ARE SET OUT IN SECTION 10.2. THE TERMS OF THE OPTIONS ARE SET OUT IN SECTION 10.2. UNDER THE AGREEMENT, THE COMPANY AGREES TO INDEMNIFY DJ CARMICHAEL AGAINST ALL ACTIONS, CLAIMS, DEMANDS OR PROCEEDINGS WHICH MAY BE INSTITUTED AGAINST DJ CARMICHAEL, AND ALL LIABILITIES, LOSSES, DAMAGES, COSTS AND EXPENSES (INCLUDING REASONABLE LEGAL COSTS AND EXPENSES) WHICH MAY BE SUFFERED BY DJ CARMICHAEL IN CONNECTION WITH OR ARISING FROM THIS ENGAGEMENT. HOWEVER, THE COMPANY WILL NOT BE RESPONSIBLE FOR ANY LIABILITIES, LOSSES, DAMAGES, COSTS OR EXPENSES TO THE EXTENT TO WHICH THEY RESULT FROM WILFUL DEFAULT OR NEGLIGENCE ON THE PART OF DJ CARMICHAEL. THE COMPANY HAS ENTERED INTO AN EXECUTIVE SERVICE AGREEMENT WITH MR CHRISTIAN EASTERDAY, AS MANAGING DIRECTOR OF THE COMPANY. REMUNERATION UNDER THE AGREEMENT, MR EASTERDAY WILL RECEIVE AN ANNUAL SALARY OF $220,000, PLUS SUPERANNUATION AT THE RATE OF 12% AND OTHER ENTITLEMENTS. MR EASTERDAY’S REMUNERATION IS SUBJECT TO ANNUAL REVIEW. TERM AND TERMINATION MR EASTERDAY IS EMPLOYED FOR AN INITIAL TERM OF 3 YEARS, COMMENCING ON 5 APRIL 2010 AND ENDING ON 5 APRIL 2013 (END DATE). AT LEAST 6 MONTHS’ BEFORE THE END DATE, EITHER PARTY MAY GIVE NOTICE THAT THE AGREEMENT WILL TERMINATE ON THE END DATE. DURING THE INITIAL 3 YEAR TERM, THE COMPANY MAY TERMINATE THE AGREEMENT BY PROVIDING MR EASTERDAY WITH NOTICE OF TERMINATION OR PAYMENT IN LIEU OF NOTICE UP TO AN AMOUNT EQUIVALENT TO 6 MONTHS’ REMUNERATION. AFTER THE INITIAL TERM, THE AGREEMENT WILL CONTINUE UNTIL EITHER MR EASTERDAY TERMINATES THE AGREEMENT BY GIVING THE COMPANY 6 MONTHS’ NOTICE, OR THE COMPANY TERMINATES THE AGREEMENT BY GIVING MR EASTERDAY 6 MONTHS’ NOTICE OR PAYMENT IN LIEU OF NOTICE UP TO AN AMOUNT EQUIVALENT TO 6 MONTHS’ REMUNERATION. THE COMPANY MAY TERMINATE THE AGREEMENT SUMMARILY FOR ANY SERIOUS INCIDENTS OF WRONGDOING BY MR EASTERDAY. TERMINATION ENTITLEMENTS UPON TERMINATION OF THE AGREEMENT, MR EASTERDAY WILL BE ENTITLED TO TERMINATION BENEFITS IN ACCORDANCE WITH PART 2D.2 OF THE CORPORATIONS ACT. THE TERMINATION BENEFITS (INCLUDING ANY AMOUNT OF PAYMENT IN LIEU OF NOTICE) MUST NOT EXCEED THE AMOUNT EQUAL TO ONE TIMES THE EXECUTIVE’S AVERAGE ANNUAL BASE SALARY IN THE LAST THREE YEARS’ OF SERVICE WITH THE COMPANY, UNLESS THE BENEFIT HAS FIRST BEEN APPROVED BY SHAREHOLDERS IN A GENERAL MEETING. POST TERMINATION RESTRAINTS MR EASTERDAY IS SUBJECT TO POST TERMINATION NON-COMPETITION RESTRAINTS UP TO A MAXIMUM OF 12 MONTHS FROM THE DATE OF TERMINATION. 132

133 HOT CHILI LIMITED PROSPECTUS

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