Professional Documents
Culture Documents
(1)
(2)
20013769.6
TABLE OF CONTENTS
No.
Heading
Page
1.
2.
3.
PURCHASE CONSIDERATION
10
4.
11
5.
COMPLETION
12
6.
POST-COMPLETION OBLIGATIONS
14
7.
VENDORS WARRANTIES
15
8.
LIMITATIONS OF LIABILITY
19
9.
PURCHASER'S WARRANTIES
19
10.
ASSIGNMENT
20
11.
FURTHER ASSURANCE
20
12.
CONFIDENTIALITY
20
13.
ANNOUNCEMENTS
21
14.
COSTS
22
15.
22
16.
AMENDMENTS
23
17.
23
18.
ENTIRE AGREEMENT
23
19.
SURVIVAL OF OBLIGATIONS
24
20.
24
21.
NOTICES
24
22.
COUNTERPARTS
26
23.
GOVERNING LAW
26
24.
JURISDICTION
26
SCHEDULE 1
26
26
27
43
45
46
50
52
20013769.6
(i)
20013769.6
(ii)
(2)
RECITALS:
(A)
(B)
The Vendor has agreed to sell and the Purchaser has agreed to purchase seventyfive per cent. of the issued shares in the capital of the Company subject to and on
the following terms and conditions, including obligations of up to 35,000,000 (thirty
five million pounds sterling) comprising (i) 11,000,000 (eleven million pounds
sterling) of consideration payable to the Vendor, (ii) repayment by the Club of
10,500,000 (ten million five hundred thousand pounds sterling) of existing shortterm debt within four years from Completion, and (iii) repayment by the Club of
13,500,000 (thirteen million five hundred thousand pounds sterling) of existing
long-term debt (with each of (ii) and (iii) guaranteed by the Purchaser).
AGREED TERMS:
1.
1.1
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all information or data of any Group Company in relation to the Business (in
whatever medium including in written, oral, visual or electronic form and
whether before or after the date of this Agreement) including all business,
financial, commercial, technical, operational, organisational, legal,
management and marketing information; and
(b)
(c)
which in each case is not publicly available or otherwise in the public domain other
than by reason of a breach by a party of the terms of this Agreement;
Connected or Connected party in relation to a person, has the meaning contained
in section 1122 of the Corporation Tax Act 2010, and for the purposes of this
Agreement, shall include any Affiliate or person Connected to the Chairman of the
Club immediately prior to the execution of this Agreement;
Control means (whether directly or indirectly), from time to time:
20013769.6
(a)
in the case of a body corporate, the right to exercise more than 50 per cent.
of the votes exercisable at any meeting of that body corporate and/or the
right to receive more than 50 per cent. of the economic interest in that body
corporate and/or the right to appoint more than 50 per cent. of its directors;
(b)
(c)
in the case of any other person, the right to exercise a majority of the voting
rights or otherwise the power to exercise or the actual exercise of control
over that person and/or the right to receive more than 50 per cent. of the
economic interest in respect of that person,
20013769.6
Premier League means the Football Association Premier League managed by the
Football Association Premier League Limited (company number: 02719699) whose
registered office is at 30 Gloucester Place, London W1U 8PL (or any successor of
either of the same);
Purchaser's Solicitors means Mishcon de Reya Solicitors of Summit House, 12 Red
Lion Square, London WC1R 4QD;
Regulations means the Regulations promulgated by The Football League Limited
dated 4 July 2013, as amended, modified and re-enacted from time to time,
including where relevant any user guides and/or explanatory notes published from
time to time by The Football League Limited that are applicable to the same;
Reorganisation means the corporate reorganisation to be carried out by the Vendor
and the Purchaser following Completion in a tax efficient manner for all parties and
the Group so that following such reorganisation:
(a)
(b)
the remaining twenty-five per cent. of Leeds City Holdings Limited is held by
the GFH Parties (as such term is defined in the Short Form Shareholders
Agreement) or any of their respective wholly-owned subsidiaries; and
(c)
Resolved Claim means a claim under the Specified Warranties given by the Vendor
which has been:
(d)
finally agreed or settled in writing between the Purchaser and the Vendor as
to both liability and quantum;
(e)
(f)
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Thomas Eggar Report means the legal due diligence report dated 10 November
2012 prepared by Thomas Eggar LLP in relation to the acquisition of Leeds City
Holdings Limited by the Company expressly excluding any projections, forecasts or
other forward-looking information, any statements of opinion, any advice and any
other information that does not constitute historical factual information regarding
the Group, its business, operations or affairs;
TIOPA means the Taxation (International and Other Provisions) Act 2010;
VAT means value added tax (whether of the United Kingdom or elsewhere) and any
similar, replacement, additional or supplementary charge or tax;
VAT Regulations means the Value Added Tax Regulations 1995 (SI 1995/2518);
Vendor's Solicitors means Gibson, Dunn & Crutcher LLP of Telephone House, 2-4
Temple Avenue, London EC4Y 0HB, United Kingdom; and
Warranties means the warranties set out in Clauses 7.1 and 7.2.
1.2
Construction
1.2.1
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words importing the singular only shall include the plural and vice
versa;
(b)
(c)
(d)
1.3
(e)
(f)
(g)
(h)
(i)
(j)
1.2.2
1.2.3
Headings used in this Agreement are for reference only and shall not affect
its construction or interpretation.
Other references
In this Agreement a reference to:
1.3.1
this Agreement means this Agreement and all Schedules, Annexures, Exhibits
and other attachments to this Agreement;
1.3.2
business day means a day which is not a Friday, Saturday, Sunday or public
holiday during which banks are open for normal banking business in London,
United Kingdom and Dubai, United Arab Emirates;
1.3.3
a document being in the agreed form means in a form agreed by the parties
or by the Vendor's Solicitors and the Purchaser's Solicitors and signed or
20013769.6
initialled by or on behalf of the Vendor and the Purchaser for the purposes of
identification or executed contemporaneously with this Agreement;
1.3.4
1.3.5
1.3.6
1.3.7
2.
2.1
2.2
Waiver of rights
The Vendor hereby waives or agrees to procure the waiver of any pre-emption rights
which may exist in relation to the Shares pursuant to the articles of association of the
Company or otherwise by the Completion Date.
2.3
Simultaneous acquisition
On Completion, the Purchaser shall not be obliged to complete the purchase of the
Shares and the Vendor shall not be obliged to complete the sale of the Shares
unless the purchase and sale of all the Shares is completed simultaneously.
2.4
Entitlement to dividends
The Purchaser shall be entitled to receive all dividends and distributions declared or
made by the Company in respect of the Shares on or after Completion.
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2.5
Purchaser knowledge
The Purchaser confirms to the Vendor that neither it nor any its Affiliates (excluding
the Company and the Subsidiaries) is actually aware of any fact, matter or event, the
import of which it knows as at Completion constitutes a breach of Warranty or
Indemnity.
2.6
3.
PURCHASE CONSIDERATION
3.1
Consideration
The consideration for the sale by the Vendor of the Shares shall be up to
11,000,000 (eleven million pounds sterling) and shall comprise:
3.1.1
3.1.2
3.2
3.1.3
in
3.1.4
Initial Consideration
The Purchaser shall pay the Initial Consideration to the Vendor on Completion in
accordance with Clause 5.2.
3.3
Deferred Consideration
On the following dates, the Purchaser shall pay to Vendor:
3.3.1
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10
3.3.2
3.4
the First Long-Term Loan Payment to the Lender under the Long-Term Loan
Indebtedness by not later than 31 August in the first season of the Club
being promoted to the Premier League after the date of this Agreement (the
First Long-Term Loan Payment Date) (and, for the avoidance of doubt, if
the Club secures promotion to the Premier League on any further occasion,
the First Long-Term Loan Payment shall not be payable pursuant to any such
further promotion); and
3.4.2
the Second Long-Term Loan Payment to the Lender under the Long-Term
Loan Indebtedness by not later than 31 August in the second year in which
the Club plays in the Premier League following the year in which the First
Long-Term Loan Payment Date occurs (the Second Long-Term Loan
Payment Date).
The parties shall cause the terms of the Long-Term Loan Indebtedness to be
amended and updated to reflect the terms of this Agreement as soon as
reasonably practicable following Completion.
3.5
Guarantee
The Purchaser shall give a guarantee in the form set out in Schedule 2 with respect
to the repayment by the Club of the Short-Term Loan Indebtedness and the LongTerm Loan Indebtedness in accordance with this Agreement.
4.
4.1
The Purchaser acknowledges and agrees that as at the date hereof, the Club is
indebted to the Vendor and its Affiliates and/or Connected parties (not including
David Haigh or Sport Capital (BVI) or SCL (Guernsey) or Andrew Flowers (or any of
his Affiliates)) in the amount of 10,500,000 (ten million five hundred thousand
pounds sterling), in respect of short-term loan facilities provided to the Club by the
Vendor, its Affiliates and/or Connected parties (as amended following Completion to
give effect to the provisions of this Agreement, the Short-Term Loan
Indebtedness). The parties shall cause the terms of the Short-Term Loan
Indebtedness to be amended and updated to reflect the terms of this Agreement as
soon as reasonably practicable following Completion. The Short-Term Loan
Indebtedness shall bear an annual profit rate of 5 (five) per cent. per annum until
such amounts are repaid in accordance with this Clause 4.
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11
4.2
The Purchaser shall procure (as primary obligor) that the Club repays the Short-Term
Loan Indebtedness into the Vendor's bank account referred to in Clause 5.2.1 as
follows:
4.2.1
the
Short-Term
Loan
4.2.2
Short-Term
Loan
4.2.3
6,500,000 (six million five hundred pounds sterling) of the Short-Term Loan
Indebtedness by not later than 14 December 2017; or
plus any accrued but unpaid amount due in respect of the annual profit rate
on such amounts.
4.3
By not later than 31 August in the first season of the Club being promoted to the
Premier League after the date of this Agreement, the Purchaser shall procure (as
primary obligor) that the Club repays the amount of Short-Term Loan Indebtedness
(plus any accrued but unpaid amount due in respect of the annual profit rate on
such amounts) not yet paid in accordance with clause 4.2.
5.
COMPLETION
Completion shall take place immediately after the execution of this Agreement at
Leeds United Football Club, Elland Road Stadium, Elland Road, Leeds LS11 0ES.
5.1
Vendor's obligations
At Completion the Vendor shall:
5.1.1
5.1.2
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(a)
(b)
12
5.1.3
5.2
(c)
(d)
(e)
(f)
(g)
(h)
upon the relevant loans being amended, procure the release of Leeds City
Holdings Limited and Leeds United Football Club Limited from their charges
to Brendale Holdings Limited and Berrydale Seventh Sport Holdings Limited
registered at Companies House and procure the due filing of the forms MR04
at Companies House in respect thereof.
Purchaser's obligations
At Completion the Purchaser shall, subject to compliance by the Vendor with the
obligations set out in Clause 5.1:
5.2.1
telegraphically transfer to the Vendor's bank account detailed below (or such
other account of the Vendors as specified by the Vendors) the amount of
the Initial Consideration:
Standard Chartered Bank London
Swift :
For account of: Standard Chartered Bank Bahrain
Swift:
Beneficiary: Gulf Finance House BSC. Bahrain
SWIFT:
Account Number:
; and
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13
5.2.2
5.3
Failure to comply
5.3.1
5.3.2
5.4
If in any respect the obligations set out in this Clause 5, (i) the Vendor are not
each complied with by the Completion Date; or (ii) of the Purchaser are not
complied with on the Completion Date, the party not in default shall not be
obliged to complete this Agreement and may (without prejudice to its rights
under this Agreement):
(a)
defer Completion to a date not more than 28 days after that date;
(b)
(c)
waive all or any of the requirements set out in Clause 5.1 (if the
Vendor is the defaulting party) or 7.2 (if the Purchaser is the
defaulting party) at its discretion by means of a notice to that effect
in writing served on the other.
If, and only if, the party not in default shall have deferred Completion in
accordance with Clause 5.3.1 for a period of at least 21 days and the party in
default is still unable to comply with the obligations in this Clause 5 and
Schedule 3 by such date, then the party not in default may rescind this
Agreement by way of written notice.
Continuing obligations
The provisions of this Agreement in so far as the same shall not have been
performed at Completion (other than the Warranties) shall not be extinguished or
affected by Completion, or by any other event or matter whatsoever, except by a
specific and duly authorised written waiver or release by the party affected. The
Warranties shall survive Completion as set out in Schedule 4.
6.
POST-COMPLETION OBLIGATIONS
6.1
The Vendor and the Purchaser undertake that as soon as practicable and in any
event within 40 business days of Completion, they shall at their own respective cost,
use all reasonable endeavours to effect the Reorganisation, execute the Charge
Documentation, and enter into the Shareholders Agreement in substitution for the
Short-Form Shareholders Agreement. From Completion until the entry into the
Shareholders Agreement, the parties agree to manage and conduct the affairs of the
Company in accordance with the Short-Form Shareholders' Agreement. If the
Reorganisation does not occur within such period permitted by the Vendor (being
not less than 40 business days of this Agreement), the Purchaser shall procure that
the Charge Documentation is entered into by the Purchaser over the Shares.
6.2
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14
7.
6.2.1
use all reasonable endeavours to deliver to the Vendor a certified copy of the
written confirmation from The Football League Limited that any individual
person associated with the Purchaser who falls within the definition of Club
Director (including, without limitation, any individual person that the
Purchaser proposes to appoint to the Board or any board of another member
of the Group and any person who Controls the Purchaser) is not subject to a
"Disqualifying Condition" as defined in Appendix 3 to the Regulations (with
Control being as defined in the explanatory notes to the Regulations);
6.2.2
seek to attract leading player and management talent to the Club and to
increase sponsorship revenues so as to secure promotion to the Premier
League and thereafter, qualify for the European Football Championships. In
particular, the Purchaser shall seek to make further funding available to the
Club as and when required on arms length commercial terms which does not
affect any repayment of the Short-Term Indebtedness or the Long-Term
Indebtedness; and
6.2.3
procure that the Club settles the Enterprise Insurance Debt as it falls due,
subject the Vendor procuring that David Haigh uses all reasonable
endeavours to negotiate a reduction or deferral in the amount to be paid, or
the date that such payment is required.
VENDORS WARRANTIES
Warranties
7.1
7.2
The Vendor warrants to the Purchaser as at the date hereof and as at the
Completion Date that:
7.1.1
the Vendor is duly incorporated and validly existing under the laws of its
place of incorporation;
7.1.2
the Vendor has full power and authority to enter into and perform this
Agreement and this Agreement when executed will constitute valid and
binding obligations on the Vendor, in accordance with its terms;
7.1.3
the execution and delivery of, and the performance by the Vendor of its
obligations under this Agreement will not:
(a)
(b)
Subject to the matters Fairly Disclosed and the other terms and conditions of this
Agreement, the Vendor warrants to the Purchaser as at Completion that:
20013769.6
15
7.2.1
7.2.2
7.2.3
7.2.4
the Company has not since the date of its incorporation, nor will it have, at
Completion any liabilities or assets other than shares in Leeds City Holdings
Limited;
7.2.5
the Company has not, since the date of its incorporation, traded;
7.2.6
other than in connection with the Sport Capital and Flowers Debt, as at the
date hereof, neither the Company nor any of its Subsidiaries is a party to any
option agreement or subject to any other rights or obligations which require
the issue or allotment or transfer of any share in the Company or any interest
in any share in the Company;
7.2.7
other than in connection with the Sport Capital and Flowers Debt, since 20
December 2012 (the Acquisition Date) neither the Vendor, the Company nor
any of the Subsidiaries has agreed to confer any right to require, at any time,
the transfer, creation, issue or allotment of any share, loan capital or other
securities (or any rights or interest in them) of the Company or any of the
Subsidiaries, and so far as the Vendor is aware, no person has (i) claimed in
writing, or (ii) served notice on the Company claiming, any such right;
7.2.8
since the Acquisition Date, other than as entered into in connection with the
Short-Term Indebtedness and Long-Term Indebtedness or as set out in
Schedule 1, no Encumbrance has been granted to any person or otherwise
exists affecting:
7.2.9
(a)
(b)
(c)
since the Acquisition Date, other than as Fairly Disclosed the Company has
not:
(a)
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16
(b)
issued any securities that are convertible into Shares (other than in
connection with the Sport Capital and Flowers Debt);
7.2.10
since the Acquisition Date no shares in the capital of the Company or any of
the Subsidiaries have been issued, and no transfer of any such shares has
been registered, except between the GFH Parties (as such term is defined in
the Short Form Shareholders Agreement) and in accordance with all
applicable laws and the memorandum and articles of association of the
Company or the relevant Subsidiary (as the case may be) and so far as the
Vendor is aware, all such transfers have been duly stamped (where
applicable);
7.2.11
since the Acquisition Date, other than the Short-Term Indebtedness and
Long-Term Indebtedness, no Connected party of the Vendor has entered into
on behalf of the Company or the Group any obligation, commitment or
potential liability which has not been Fairly Disclosed or is otherwise on armslength commercial terms;
7.2.12
(b)
(except that in each case, the parties recognise that any waiver,
novation/assignment or capitalization in accordance with such Further
Restructuring of Indebtedness may take place after Completion);
7.3
7.2.13
7.2.14
notice to terminate the Original SPA has been sent to Sport Capital (BVI) in
accordance with its terms; and
7.2.15
the Financial Information Statement sets out a true and accurate statement of
the total assets and total liabilities of the Company as at the Completion Date
and will not be misleading in any material respect, applying a consistent use
of all accounting policies and treatments used in respect thereof, whether by
omission or otherwise (material for the purposes of this Clause 7.2.15 means
a discrepancy of 100,000 (one hundred thousand pounds sterling) or more
in respect of any item).
Vendors Indemnities
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The Vendor agrees to indemnify and keep the Purchaser and the Company
indemnified against all Costs which are suffered or incurred by any of them, and
which arise directly or indirectly in connection with any breach of the Warranties
contained in Clauses 7.2.1, 7.2.2, 7.2.3 or 7.2.12.
7.4
7.5
Purchaser's remedies
The rights and remedies of the Purchaser in respect of any breach of the Warranties
shall not be affected by:
7.6
7.5.1
the Purchaser failing to exercise or delaying the exercise of any of its rights or
remedies; or
7.5.2
any other event or matter whatsoever except a specific and duly authorised
written waiver or release.
7.7
Information supplied by the Vendor, the Company, any Group Company or the
Officers
7.8
The Purchaser agrees that any information supplied by the Company or any Group
Company or by or on behalf of the employees, directors, agents, professional
advisers or officers of the Company or any Group Company (the Officers) to the
Purchaser or its advisers in connection with the Warranties shall not constitute a
warranty, representation or guarantee as to the accuracy of such information in
favour of the Purchaser and the Purchaser undertakes to the Vendor (on behalf of
the Vendor and as trustee of the Company and its employees, directors, agents,
professional advisers or officers) that the Purchaser, on behalf of itself and its
Affiliates, waives and may not enforce any right which it may have in respect of a
misrepresentation, inaccuracy or omission in or from information or advice supplied
or given by Company or any Group Company.
7.9
Reliance
The Purchaser has entered into this Agreement in reliance of the Warranties.
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18
8.
LIMITATIONS OF LIABILITY
8.1
8.2
9.
PURCHASER'S WARRANTIES
9.1
Warranties
The Purchaser warrants to the Vendor that as at the date hereof and as at the
Completion Date that:
9.1.1
the Purchaser is duly incorporated and validly existing under the laws of its
place of incorporation;
9.1.2
the Purchaser has full power and authority to enter into and perform this
Agreement and this Agreement when executed will constitute valid and
binding obligations on the Vendor, in accordance with its terms;
9.1.3
the execution and delivery of, and the performance by the Purchaser of its
obligations under this Agreement will not:
9.1.4
9.2
(a)
(b)
the Purchaser has sufficient financial resources to meet its obligations to pay
the Initial Consideration and the Deferred Consideration under this
Agreement when they are due and also to guarantee the Clubs obligations
to repay the Long-Term Loan Indebtedness and the Short-Term Loan
Indebtedness under this Agreement when they are due.
Purchaser's Indemnity
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In the event that entering into and/or complying the terms of this Agreement results
in a breach of the Regulations, the Purchaser agrees to indemnify and keep the
Vendor, the Company, the Club and any of their respective employees, directors or
officers, indemnified against all Costs which are suffered or incurred by any of them,
in connection with such breach.
10.
ASSIGNMENT
10.1
Save in accordance with Clause 10.2, no party shall without the prior written consent
of the other party assign, transfer (in whole or in part) or charge or deal in any
manner with this Agreement or the benefit of or the rights under this Agreement.
Each party undertakes to the other party that, unless it assigns this Agreement to a
permitted assignee, it is and will continue to be a party to this Agreement for its own
benefit and not for the benefit of any other person.
10.2
Permitted Assignments
The Vendor (and any permitted assignee) may at any time assign all or any of its
rights and benefits under this Agreement (including the rights to receive the
Deferred Consideration, the Short-Term Loan Payments and the Long-Term Loan
Payments, if any) to any of its Affiliates on terms that (i) compel the re-assignment of
any such rights or benefits to the Vendor in the event that the transferee ceases to
by an Affiliate of the Vendor, and (ii) such Affiliate agrees to be bound by the other
terms of this Agreement by way of the execution of a customary deed of adherence
in a form and substance satisfactory to the Purchaser.
10.3
Rights of assignees
Any permitted assignee of a party under this Clause 10 shall be entitled to enforce
and be bound by the terms of this Agreement with effect from the date of
assignment as if it were a party to the Agreement. For the avoidance of doubt, until
a person becomes a permitted assignee, it shall not be entitled to enforce any term
of this Agreement whether as a third party or otherwise.
11.
FURTHER ASSURANCE
The Vendor shall take all necessary steps and co-operate fully with the Purchaser to
ensure that it obtains the full benefit of the Shares and shall, at the cost of the
Purchaser, execute such documents and take such other steps (or procure other
necessary parties to take such steps) as are necessary under applicable law for
vesting in the Purchaser all its rights and interests in the Shares and the full benefit
of this Agreement.
12.
CONFIDENTIALITY
12.1
Prohibition on disclosure
Each of the parties hereby undertakes with the other, that it shall both during and
after the term of this Agreement preserve the confidentiality of, and not directly or
20013769.6
20
indirectly use, otherwise than for the purposes of this Agreement, or disclose, any
Confidential Information:
12.2
12.1.1
12.1.2
with the prior written consent of the party to whose affairs such confidential
information relates.
Permitted disclosures
The circumstances referred to in Clause 12.1.1 above are:
12.2.1
where the confidential information enters the public domain otherwise than
as a result of a breach by any of the parties of its obligations in this Clause
12;
12.2.2
(b)
(c)
(d)
the other party has given prior written approval to the disclosure; or
(e)
No time limit
The restrictions contained in this Clause 12 shall continue to apply after the
completion or termination of this Agreement without limit in time.
13.
ANNOUNCEMENTS
13.1
Prohibition on announcements
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Subject to Clause 13.2, neither party shall make any announcement in relation to this
Agreement or otherwise publicise its existence or its contents or use or refer to the
name, trade mark or trade name of the other party in any disclosure without the
prior written consent of the other party (such consent not to be unreasonably
withheld or delayed).
13.2
Exceptions
The provisions of Clause 13.1 shall not apply to disclosure of matters required to be
made:
13.2.1
13.2.2
provided that in each case, the disclosing party first, to the extent legally permissible,
first consults with the other party in relation to such disclosure.
13.3
No time limit
The restriction in Clause 13.1 shall apply without limit of time.
14.
COSTS
All expenses incurred by or on behalf of the parties, including all fees of professional
advisers employed by either of the parties in connection with the negotiation,
preparation and execution of this Agreement shall be borne solely by the party
which incurred them.
15.
15.1
All sums payable to the Vendor pursuant to this Agreement shall be paid to the
Vendor's bank account detailed in Clause 5.2.1 (the Vendor's Solicitors being
irrevocably authorised to receive all such sums) and, for the avoidance of doubt, the
Vendor's Solicitors receipt shall be good discharge of the same and the Purchaser's
obligations in respect of payment of such sums shall automatically determine upon
payment of the sums to the Vendor's bank account in accordance with this
Agreement.
15.2
All sums payable by the Purchaser, the Vendor or any member of the Group
pursuant to this Agreement shall be paid free and clear of all deductions or
withholdings whatsoever, save only as may be required by law.
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16.
AMENDMENTS
No amendment of this Agreement or any of the documents referred to in it shall be
effective unless it is in writing and signed by or on behalf of each of the parties.
17.
17.1
Except as otherwise stated in this Agreement, the rights and remedies of each party
under this Agreement:
17.1.1
are in addition to and not exclusive of rights and remedies under the general
law; and
17.1.2
17.2
Delay in exercising or non-exercise of any right under this Agreement is not a waiver
of that right.
17.3
Partial exercise of any right under this Agreement shall not preclude any further or
other exercise of that right or any other right under this Agreement.
17.4
Waiver of a breach of any term of this Agreement shall not operate as a waiver of
breach of any other term or any subsequent breach of that term.
18.
ENTIRE AGREEMENT
18.1
Entire agreement
This Agreement (together with the documents referred to herein):
18.2
18.1.1
constitutes the entire agreement and understanding between the parties with
respect to the subject matter of this Agreement; and
18.1.2
Reliance
Each party acknowledges to the other that it has not been induced to enter into this
Agreement by nor has it relied upon any representation, promise, assurance,
warranty or undertaking (whether in writing or not) by or on behalf of the other
party or any other person save for those contained in this Agreement. Accordingly,
each of the parties acknowledges and agrees that the only remedy available to it in
respect of the subject matter of this Agreement shall be for breach of contract under
the terms of this Agreement and it shall have no right of action against any other
party in respect of any such representation, promise, assurance, warranty or
undertaking.
18.3
Fraud
20013769.6
23
This Clause 18 shall not exclude any liability which either party would otherwise have
to the other or any right which either of them may have to rescind this Agreement in
respect of any statements made fraudulently by the other prior to the execution of
this Agreement or any rights which either of them may have in respect of fraudulent
concealment by the other.
19.
SURVIVAL OF OBLIGATIONS
Notwithstanding Completion each and every right and obligation of the Purchaser
and the Vendor under this Agreement shall, except in so far as fully performed at
Completion, continue in full force and effect.
20.
21.
NOTICES
21.1
Writing
All notices between the parties with respect to this Agreement shall be in writing and
signed by or on behalf of the party giving it.
21.2
Service
Any notice referred in Clause 21.1, may be served:
21.2.1
by delivering it by hand;
21.2.2
by post, being (i) (where the addresses of both parties in Clause 21.5 are in
the United Kingdom) first class pre-paid post (provided that a certificate of
posting is obtained) or special or recorded delivery (or other "proof of
delivery" or "proof of posting" service that Royal Mail may from time to time
offer), or (ii) (where the addresses of two or more of the parties in Clause 21.5
are in different countries) air mail;
21.2.3
by fax, provided that a copy is also sent by first class pre-paid post as set out
in Clause 21.2.2; or
21.2.4
by electronic mail,
to the address of the addressee set out below, or to such other address as the
addressee may from time to time have notified for the purpose of this Clause 21.
21.3
Deemed delivery
20013769.6
24
21.4
21.3.1
21.3.2
21.3.3
if sent by air mail, five business days after posting, exclusive of the day of
posting;
21.3.4
if sent by fax, at the time of transmission unless sent after 17:00 in the place
of receipt in which case it shall be deemed to have been received on the next
business day in the place of receipt (provided that a copy has also been sent
by post as set out in Clause 21.2.3); or
21.3.5
Proof of service
In proving service:
21.5
21.4.1
21.4.2
21.4.3
Address:
Hisham Alrayes
20013769.6
25
Fax Number:
+973 17 540006
The Purchaser:
Address:
Daniel Arty
or such other address or fax number as may be notified in writing by the relevant
party to the other party from time to time.
21.6
No electronic transmission
Any notice or communication given under this Agreement shall not be validly served
if sent by text messaging via mobile phone.
22.
COUNTERPARTS
22.1
Execution in counterparts
This Agreement may be signed in any number of counterparts and by the parties on
separate counterparts, but shall not be effective until each party has signed at least
one counterpart.
22.2
One Agreement
Each counterpart shall be treated as an original of this Agreement but all
counterparts shall together constitute one and the same agreement.
23.
GOVERNING LAW
This Agreement and any dispute or claim arising out of or in connection with it
(including any non-contractual claims or disputes) shall be governed by and
construed in accordance with the laws of England and Wales.
24.
JURISDICTION
In relation to any legal action or proceedings (a) arising out of or in connection with
this Agreement or its implementation or effect or (b) relating to any non-contractual
obligations arising out of or in connection with this Agreement, each of the parties
20013769.6
26
irrevocably submits to the non-exclusive jurisdiction of the English courts and waives
any objection to proceedings in such courts on the grounds of venue or on the
grounds that proceedings have been brought in an inappropriate forum.
20013769.6
27
20013769.6
SCHEDULE 1
PART A THE COMPANY
Name
Date of incorporation
11 July 2012
Place of incorporation
Cayman Islands
Company number
MC-270270
Registered office
Directors
Secretary
None
20013769.6
26
Date of incorporation
03/04/2006
Place of incorporation
Company number
05765697
Registered office
Directors
Salem Patel
David Lawrence Haigh
Abed Abdulrasool Abdulnabi Alzeera
Secretary
Accounting
date
30 June
Auditors
Date
registered
21/06/2012
Type
Debenture
Charge holder
Date created
14/06/2012
Security
20013769.6
27
Date
registered
22/06/2013
Type
Charge holder
Date created
20/06/2013
Date
registered
18/10/2013
Type
Charge holder
Date created
15/10/2013
Security
20013769.6
28
Name
Previous name(s)
Date of incorporation
01/05/2007
Place of incorporation
Company number
06233875
Registered office
Elland Road Stadium, Elland Road, Leeds, West Yorkshire, LS11 0ES
Authorised share
capital
Shareholder
Name
Shares
Capacity
Directors
Salem Patel
David Lawrence Haigh
Salah Abdulla Nooruddin
Secretary
Accounting
date
Auditors
20013769.6
29
Date registered
05/06/2008
Type
Charge on Deposit
Charge holder
Date created
20/05/2008
Secured on
Date registered
21/06/2012
Type
Debenture
Charge holder
Date created
14/06/2012
Security
Date registered
03/11/2012
Type
Charge holder
Date created
22/10/2012
Security
Account number
with sort code
in respect of all monies due or to
become due from the Company to the Charge
holder or to become due from the company
to Enterprise Insurance Company Plc
Date registered
22/06/2013
Type
Charge holder
Date created
20/06/2013
Security
Date registered
18/10/2013
20013769.6
30
Type
Charge holder
Date created
15/10/2013
Security
20013769.6
31
Name
Previous name(s)
Date of incorporation
25/06/2001
Place of incorporation
Company number
04240946
Registered office
Authorised
capital
Shareholder
Name
Shares
2 ordinary shares
Capacity
Director
Secretary
Accounting
date
reference 30 June
Auditors
--
None
20013769.6
32
Name
Previous name(s)
Date of incorporation
19/02/2008
Place of incorporation
Company number
06508135
Registered office
Shareholders
Name
Shares
1 ordinary share
Capacity
Director
Secretary
28 February
Auditors
--
None
20013769.6
33
Name
Date of incorporation
20/06/2006
Place of incorporation
Company number
05852123
Registered office
Shareholder
Name
Shares
1 ordinary share
Capacity
Director
Secretary
30 June
Auditors
--
None
20013769.6
34
Name
Date of incorporation
13/06/2007
Place of incorporation
Company number
06278942
Registered office
Shareholder
Name
Shares
1 ordinary share
Capacity
Director
Secretary
30 June
Auditors
--
None
20013769.6
35
Name
Date of incorporation
13/06/2007
Place of incorporation
Company number
06278936
Registered office
Shareholder
Name
Shares
1 ordinary share
Capacity
Director
Secretary
30 June
Auditors
--
None
20013769.6
36
Name
Date of incorporation
29/06/2010
Place of incorporation
Company number
07299184
Registered office
Shareholder
Name
Shares
1 ordinary share
Capacity
Director
Secretary
30 June
Auditors
Date
registered
21/06/2012
Type
Debenture
Charge holder
Date created
14/06/2012
Security
20013769.6
37
Name
Date of incorporation
19/09/2011
Place of incorporation
Company number
07779130
Registered office
Shareholder
Name
Shares
1 ordinary share
Capacity
Director
Secretary
30 September
Auditors
--
None
20013769.6
38
Name
Previous name(s)
Date of incorporation
19/08/2009
Place of incorporation
Company number
06994205
Registered office
Shareholder
Name
Shares
1 ordinary share
Capacity
Director
Secretary
31 August
Auditors
--
None
20013769.6
39
Name
Date of incorporation
22/09/2009
Place of incorporation
Company number
07026702
Registered office
Shareholder
Name
Shares
1 ordinary share
Capacity
Directors
Secretary
30 June
Auditors
None
20013769.6
40
Name
Date of incorporation
08/06/1994
Place of incorporation
Company number
02936757
Registered office
Shareholders
Name
Shares
Capacity
Name
Ruth Gregory
Shares
75 ordinary shares
Capacity
Name
Benjamin Fry
Shares
75 ordinary shares
Capacity
Director
Secretary
30 June
Auditors
None
20013769.6
41
Name
Previous name(s)
Date of incorporation
10/06/2005
Place of incorporation
Company number
05478203
Registered office
Shareholder
Name
Shares
1 ordinary share
Capacity
Director
Secretary
30 June
Auditors
--
None
20013769.6
42
2.
3.
In consideration of the Vendor entering into this Agreement with the Purchaser, the
Purchaser:
1.1
as primary obligor, guarantees to the Vendor (which for the purposes of this
Schedule shall include the relevant lender under the relevant facility) the due
and punctual performance by the Club and Leeds City Holdings Ltd (LCH)
of each and all of the obligations of the Club and LCH under and pursuant
to the Short Term-Loan Indebtedness and the Long-Term Loan
Indebtedness (the Guaranteed Agreements) when and if such obligations
shall become due and/or performable according to the terms of such
agreements (as are to be amended pursuant to the terms of this
Agreement); and
1.2
The Purchaser agrees that it shall not in any way be released from liability in
connection with the guarantee contained in this Schedule by any act, omission,
matter or other thing whereby (in absence of this paragraph 2) the Purchaser would
or might be released in whole or in part from liability under the guarantee contained
in this Schedule including, whether or not known to the Purchaser:
2.1
2.2
2.3
20013769.6
43
guarantee contained in this Schedule to take any action in any court or arbitral
proceedings against the Club or LCH, to enforce any other security held by it in
respect of the obligations of the Club or LCH under the Guaranteed Agreements or
to exercise, levy or enforce any distress, diligence or other process of execution
against the Club or LCH, but the Vendor shall notify the Purchaser simultaneously of
its notification to the Club or LCH of any claim under this guarantee. In the event
that the Vendor brings proceedings against the Club or LCH, the Purchaser shall be
bound by any findings of fact, interim or final award or judgment made by an
arbitrator or the court in such proceedings.
5.
6.
The Purchaser shall reimburse the Vendor for all legal and other costs (including
VAT) reasonably and properly incurred by the Vendor and its Affiliates in connection
with the enforcement of the guarantee contained in this Schedule.
20013769.6
44
Duly executed transfer of the Shares in favour of the Purchaser or its nominees
together with the relevant share certificates (or a customary indemnity in relation
thereto).
2.
The resignations as deeds of each of the persons specified in Clause 5.1.2 (b) as
directors of the Company in which each of them shall acknowledge in the agreed
terms that he has no claims against the Company for compensation for loss of office
or otherwise.
3.
All the statutory and other books of the Company and of the Subsidiaries (which
shall be written up to date) together with their certificates of incorporation (and any
certificate of incorporation on change of name) and common seals insofar as they
are in the possession of or under the control of the Vendor and not the Company or
the Subsidiaries or any of them).
4.
The deeds and documents constituting title to the Properties insofar as they are in
the possession of or under the control of the Vendor (and not the Company or the
Subsidiaries or any of them).
5.
Certified copies of the board minutes of the Company in respect of the board
meetings held pursuant to Clause 5.1.2.
20013769.6
45
DEFINITIONS
For the purposes of this Schedule:
1.1
Warranty Claim means a claim arising under and/or for breach of one or more
Warranties.
1.2
Claim Amount means, in respect of a Warranty Claim, the amount which may
recoverable from the Vendor in respect of that Warranty Claim.
2.
2.1
The Vendor shall have no liability in respect of an individual Warranty Claim if the
Claim Amount for that Warranty Claim, is less than 20,000 (twenty thousand
pounds sterling). However, for the purposes of this paragraph, two or more claims
arising out of, or in respect of, the same, or similar, facts or circumstances shall be
treated as comprising a single claim.
2.2
3.
3.1
3.1.2
unless and until the Claim Amount for that Relevant Claim, when aggregated
with all other Claim Amounts in respect of other Relevant Claims,
Where a Claim Amount, or (as the case may be) the aggregate of all the Claim
Amounts, exceeds 500,000 (five hundred thousand pounds sterling) or 100,000
(one hundred thousand pounds sterling) as applicable, the Vendor shall be liable for
the whole of the Claim Amount, or (as the case may be) the Claim Amounts, and not
just the excess over 500,000 (five hundred thousand pounds sterling), or 100,000
(one hundred thousand pounds sterling) in respect of Specified Warranty 7.2.14, and
zero in respect of Specified Warranty 7.2.15.
3.3
4.
NOTIFICATION OF CLAIMS
20013769.6
46
4.1
The Vendor shall have no liability in respect of a Relevant Claim unless notice in
writing of the Relevant Claim (stating so far as practicable, the nature of the Relevant
Claim and the Claim Amount) has been given to the Vendor on or before the second
anniversary of Completion in the case of a Warranty Claim or a Claim under the
Indemnity, save in respect of Specified Warranties in which case notice in writing of
the Relevant Claim (stating so far as practicable, the nature of the Relevant Claim
and the Claim Amount) must be given to the Vendor on or before the date falling six
weeks after the date of this Agreement. Any Relevant Claim which has been made
against the Vendor and which has not been previously satisfied, settled or withdrawn
shall be deemed to have been withdrawn and shall become fully barred and
unenforceable on the expiry of the period of 6 months commencing on the date on
which notice of the Relevant Claim was given to the Vendor in accordance with this
paragraph 4.1, unless legal proceedings in respect of the Relevant Claim shall have
been properly issued and served on the Vendor within such 6 month period and are
being pursued with reasonable diligence.
4.2
The time limits in paragraph 4.1 shall not exclude or limit any Relevant Claim in
respect of a liability which is contingent or unascertained where written notice of the
Relevant Claim (stating, so far as practicable, the nature and amount of the Relevant
Claim) is given to the Vendor before the expiry of the relevant periods specified in
those paragraphs.
4.3
Where notice of a Relevant Claim against the Vendor has been duly given and part
of such Relevant Claim relates to a liability which is contingent:
4.3.1
the Vendor shall have no liability to the Purchaser in respect of that part of
the Relevant Claim until such time as the contingent liability becomes an
actual liability; and
4.3.2
(unless it has been previously satisfied, settled or withdrawn) that part of the
Relevant Claim shall be deemed to have been withdrawn and shall become
fully barred and unenforceable on the expiry of the period of 6 months
commencing on the date on which the contingent liability became an actual
liability, unless legal proceedings in respect of that part of such Relevant
Claim shall have been properly issued and served on the Vendor within such
6 month period and are being pursued with reasonable diligence.
5.
5.1
The aggregate liability of the Vendor in respect of all Relevant Claims when
aggregated with its other liabilities under this Agreement shall not exceed the lower
of:
5.1.1
11,000,000 (eleven million pounds sterling), (or, if such amount has not
been received, the amount actually received by the Vendor) excluding in
respect of Specified Warranties; and
5.1.2
75 per cent. of the underlying loss suffered by the Company or any of the
Subsidiaries (without double counting).
20013769.6
47
5.2
The aggregate liability of the Vendor in respect of all Relevant Claims in respect of
Specified Warranties shall not exceed 1,000,000 (one million pounds sterling) which
may only be satisfied in accordance with Clause 7.4.
5.3
The Purchaser may only pursue Relevant Claims against the Vendor until the
aggregate cap on its liability set out in paragraphs 5.1 and 5.2 or is reached (as
applicable). For the avoidance of doubt each Relevant Claim made against, and
satisfied in full by, the Vendor shall reduce the Vendor's aggregate cap on liability by
the amount claimed under any such Relevant Claim.
6.
OTHER LIMITATIONS
6.1
The Vendor shall have no liability in respect of any Relevant Claim to the extent that:
6.1.1
the Vendor remedies the relevant breach giving rise to such Relevant Claim
within 10 business days of being notified of the relevant Claim under
paragraph 4 above;
6.1.2
the fact, matter or circumstances relating to such Relevant Claim have been
Fairly Disclosed;
6.1.3
it arises or is increased as a result of the passing of, or a change in, any law
(or interpretation thereof) or administrative practice of any governmental
authority or regulatory authority (including The Football Association, The
Premier League Limited and The Football League Limited) after the
Completion Date;
6.1.4
6.1.5
6.1.6
6.1.7
6.1.8
it relates to any loss for which the Purchaser or any member of the Group
has recovered any sum in full or partial satisfaction of such loss whether by
contribution or indemnity under applicable insurance; or
20013769.6
48
6.1.9
6.2
6.3
The Purchaser shall, and shall procure that each of its Affiliates (including, following
Completion, the Company and its Subsidiaries) shall, take all reasonable steps to
mitigate any losses which would give rise to a Relevant Claim.
20013769.6
49
20013769.6
50
20013769.6
51
Organisational Provisions
The Company
LUFC Holding Ltd, private limited company incorporated in the Cayman Islands (the Company).
Shareholdings
Following Completion the Company will have the following shareholder structure (subject to the following
sentence): (i) ESL will own 75% of the Company consisting of 37,500 ordinary shares; (ii) GFH will own
10.46% of the Company consisting of 5,226.3 ordinary shares; Envest and Salah Nooruddin (together
EN) will own 7.02% of the Company consisting of 3,511.4 ordinary shares; and (iv) International
Investment Bank BSC (IIB, and together with EN and GFH, the GFH Parties) will own 7.52% of the
Company consisting of 3,762.2 ordinary shares. It is noted and accepted that following Completion, the
GFH Parties will own an aggregate of 25% of the Company between them and that they plan to formally
restructure their holdings to reflect the above stated percentages. Any transfers between the GFH Parties
following Completion shall be a permitted transfer as noted below.
Loans and
Financing
Following Completion the Short Term Loan Indebtedness and the Long Term Loan Indebtedness will be
amended to reflect the terms of the SPA. The existing loans from Sport Capital Ltd will be repaid as
provided in the SPA. If the Company or the Club require additional funding as the board of the Company
(the Board ) determines from time to time, then ESL shall be obliged to provide that financing (with
each of the other shareholders entitled to participate pro-rata to their shareholdings, but with no obligation
to do so). As a part of such obligation, ESL shall provide loans to the Club equal to 1 million on signing
of the SPA and in the near term 1 million as and when required but in any event on or prior to 10 February
2014. If emergency funding is required, then ESL can loan money to the Company or Club with Board
approval, provided the other shareholders are subsequently offered the opportunity to participate pro-rata to
their respective shareholdings. The term of the loans shall be on arms length commercial terms (with a
maximum interest rate or profit rate of 10% pa).
Further
Issuance of
Shares
Any new issues of shares by the Company shall be on a pre-emptive basis to all shareholders; and provided
that they are non-dilutive to the GFH Parties shareholding in the Company (meaning additional shares
may be issued to them, to true-up the percentages subject to the UEFA fair play regulations if the
Company is required to increase its capital or capitalise existing loans from SCL (although that shall not
apply to the Short Term Indebtedness or Long Term Indebtedness, which shall always be payable as
provided in the SPA)), provided that in such circumstances the GFH Parties shall be offered the
opportunity to participate in the recapitalisation pro-rata to their percentage holding (through acquiring
some of the debt to be capitalised).
Constitutional
Documents
The Companys articles of association (the Articles) will be amended to reflect the terms of this
Agreement. To the extent that there is a conflict between the terms of this Agreement and the Articles this
Agreement will prevail.
Board and Governance Provisions
Constitution
and
The Board (and board of the Club) will consist of at least 5 Directors (but no more than 7) with: (a) 2
nominated, appointed and capable of being removed by GFH (the GFH Directors); and (b) up to 5
20013769.6
52
Procedures of
the Board
nominated, appointed and capable of being removed by ESL (the ESL Directors), provided in each case
the applicable Football League or FA Premier League regulations (Football Regulations) are followed.
The first Directors shall be as set out in the SPA.
Each of the GFH Directors will have the right to be appointed to the board of any Group Company. The
Long Form SHA will set out the detailed customary procedures for the Board (and other relevant boards) to
follow, including procedures to appoint alternates. ESL shall appoint and remove the chairman of the
Board and the first chairman shall be Salah Nooruddin. The Group shall take out appropriate D&O
insurance cover.
Other than as noted in respect of the Reserved Matters below, the Board shall act by a simple majority, and
the Chairman shall in the case of equality of votes, not have any casting vote. The Board will have regular
meetings, at least every 2 months on a schedule to be mutually agreed. Any Director will be entitled to call
a special meeting of the Board on not less than 5 business days notice. Directors will also be able to
attend Board meetings by telephone or video conference. The Board shall have the full power to establish
one or more other customary committees of the Board, which will must have at least one GFH Director and
be subject to the Reserved Matters. In the event of any related party transaction in which any Director or
his appointing shareholder (or either of their affiliates or connected persons) has an interest, then that
Director will not be able to vote or be counted in the quorum for that matter. Fuller provisions will be
included in the Long-Form SHA.
The quorum for meetings of the Board shall be 2 Directors, comprised of at least one GFH Director if a
Reserved Matter is to be considered. If a quorum is not present, then the meeting shall be adjourned for 2
business days and be held at the same place and time, although the quorum at any adjourned meeting will
be any two Directors present. Directors will not be paid a salary (except if they are also employees)
although reasonable expenses will be refunded.
Senior
Management
The Group shall delegate the day to day operations of the Company and the Club to the Managing Director
on such terms as the Board may determine from time to time, who in turn may delegate to the Club
Chairman, the CEO and the CFO on the terms decided by the Managing Director. Each of the foregoing
people shall enter into employment contracts reasonably satisfactory to GFH and ESL. The Board will
decide the terms and compensation of other senior managers and adopt a delegated authority matrix setting
out in detail the authorities and reporting responsibilities of the Managing Director, the Club Chairman, the
Club Manager, the CEO and the CFO.
ESL shall be able to appoint (in consultation with GFH, with ESL providing CVs and biographies) suitably
qualified candidates for the roles of CEO, CFO, Managing Director and Club Chairman, subject always to
following the applicable Football Regulations. The first Managing Director shall be Massimo Cellino and
the first Club Chairman shall be Salah Nooruddin (who shall stay in position until at least the end of the
14/15 football season). The first CEO shall be David Haigh (who shall stay in position until at least the end
of the 13/14 football season).
Budget and
Business Plan
Following Completion, the Managing Director shall develop both an annual business plan (the Business
Plan and Budget) by no later than 30 June with respect to the following season which shall include as a
minimum: important strategic issues, staff expenditures, annual development and marketing budget, annual
operating budget, financial projections (including a forecasted P/L statement, source of revenue statement,
Balance Sheet, Cash Flow and Capital Expenditure etc.), detailed assumptions list with identified risks and
risk mitigations plan along with any other items the Board decides. The Business Plan and Budget will
then need to be approved by 85% of the shareholders. If the Board or the shareholders do not approve the
proposed Business Plan and Budget then ESL can elect in writing for it to take effect, so long as the GFH
Parties have no direct financial liability as a result of its implementation.
Reserved
Matters
The following decisions and / or transactions of the Company shall require the consent of either (a) ESL
and GFH as shareholders (either in writing or in a general meeting where at least 85% of the votes in
favour including ESL and GFH) or (b) a majority of the Directors such majority to include at least one
GFH Director:
20013769.6
53
Declaring or paying dividends for so long as the Short Term Loan Indebtedness is outstanding or making
capital distributions, including any repurchase or redemption of any Shares.
Acquiring, leasing or disposing of shares, business or material assets (meaning assets material to the
Group, including the football stadium but excluding football players) in or of any company or
undertaking or participating in any partnership or joint venture.
Issuing any new Shares or issue or approve the issue of other securities (including securities convertible
into Shares or securities which result in the issue of Shares) in any member of the Group (including the
Company) or granting any options or other rights to acquire any of the foregoing (including the terms
upon which such Shares, securities, options or rights are to be issued).
Altering the Articles of Association or other constitutional documents of any member of the Group, save as
required in connection with any act or matter approved under this Agreement or as provided for in the
SPA.
Changing the rights attaching to the Shares.
Entering into or agreeing to enter into an arrangement, contract or transaction with any of the Companys
Shareholders or a Related Party Transaction (as customarily defined), save as otherwise permitted
under this Agreement and the SPA.
Taking any action to wind up any member of the Group or entering into any compromise arrangement with
any member of the Groups creditors or any class thereof.
Approving the merger, amalgamation, consolidation, dissolution, transfer, or initial public offering of any
member of the Group.
Entering into borrowings, or refinancing of current indebtedness , in excess of 10,000,000 over the level
of debt at Completion by the Company or any other member of the Group, including any Shareholder
Loans, except that such 10,000,000 amount can be increased to the extent that such excess (or part
thereof) is used to repay the Short-Term Indebtedness.
Deadlock
In the event that GFH or ESL votes against or abstains from voting on a Reserved Matter then within 14
days after the relevant Board meeting either of such shareholders may serve a notice on the other party
initiating the deadlock procedure, identifying the matter and giving reasons for its position. The recipient
then must respond within 14 days setting out the reasons for its position and attaching all relevant
information. If within 30 days after receipt, the matter has still not been resolved, then the matter can be
referred to the Chairman of Gulf Finance House BSC and Massimo Cellino to resolve within 60 days. If
the matter is not resolved by them, then the matter will not pass.
Information and Reporting; GFH Shareholder Rights
Information
Rights
The Company shall provide to each Shareholder in English for the Company and each other member of the
Group:
unaudited management accounts of the Company within 15 business days following the end of each
calendar month;
for each of the first three quarters of each financial year of the Company, (i) unaudited quarterly
consolidated financial statements of the Company for such quarter, including a balance sheet, income
statement, cash flow statement and statement of changes in financial position within 45 days
following, the end of such quarter;
for each financial year of the Company, (i) audited annual consolidated financial statements of the
Company including a balance sheet, income statement, cash flow statement and statement of changes
in financial position (together with the notes thereto and the Directors' report and Auditors' report
thereon) within 90 days following, the end of such financial year; and
such other information relating to the Group as a Shareholder may reasonably request in writing to the
Company and within 15 business days of such request.
Each Shareholder will have the right to attend the Groups premises, meet with the management and
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employees of the Group and inspect Companys books and records of account as well as receive all
information as it reasonably requests relating to the Group and its operations. Each party will provide the
other will all information as it reasonably requires for its compliance and internal policy requirements.
GFH
Shareholder
Rights
For so long as the GFH Parties are interested in 15% of the shares, GFH and its related parties shall be
entitled to: (i) utilise one (1) executive corporate box on level four (4) of the Stadium; (ii) utilise two (2)
seats in the Lord Harewood Suite of the Stadium (and any such other suite where the Board or other Club
officials sit) for all matches played at the Stadium; (iii) attend and be provided with at least two (2) seats
alongside other officials and Representatives of the Club at all matches played by the Club away from the
Stadium as part of the official delegation of the Club; and (iv) for each GFH Director, one (1) designated
parking space at the Stadium in the same vehicle parking area as the other officials and Representatives of
the Club, for use at all times without charge or expense to GFH or the GFH Directors.
Permitted Transfers shall be (i) transfers to affiliates (who shall be wholly-owned subsidiaries and
persons in which a shareholder owns or controls at least 50% of the voting rights / rights to appoint a
majority of the board (provided a customary deed of adherence to the SHA is first executed by the
transferee) or among the GFH Parties; and (ii) transfers consistent with the provisions set forth below
(ROFO, Default Call Rights, Tag etc). With the exception of these permitted transfers, no Shareholder
shall transfer any shares in the Company.
Right of First
Offer and
Approval of
Third Party
Purchasers
ROFO. If any Shareholder wishes to directly or indirectly transfer any of its shares to a third party, such
Shareholder must first offer to transfer such shares to the other Shareholders in their respective equity
proportions by way of giving irrevocable ROFO notice. The ROFO notice shall contain all of the
proposed terms of the transfer including the cash price per share.
ROFO Process. Each shareholder shall have a 45 day acceptance period from receipt to (i) purchase or
nominate a purchaser for the offered shares by delivering a buy notice; (ii) indicate in the buy notice
whether it want to acquire any other shares not taken up by other shareholders; or (iii) consent to the third
party transfer. If no notice is received from a shareholder by the transferor, such shareholder shall be
deemed to have consented to such proposed transfer (in which case any other shareholder which has
accepted option (ii) can take up the shortfall in shares, or if less than full acceptances are received, the
transferor may make the transfer on the proposed offer terms within 45 days after the end of the
acceptance period (subject to any necessary regulatory consents). No new ROFO notice can be submitted
by the transferor until after 3 months from the end of the last acceptance period.
Objection Period. Once the ROFO process outlined above has been followed, at least 20 business days
prior to the intended transfer to a third party, the transferor must give notice to the other shareholders
specifying the identity of the third party (and of any natural persons controlling it) and the expected date
for completion of the transfer. There will then follow a 10 business day objection period for any
shareholder to object on the ground that the proposed third party purchaser causes or is reasonably likely
to cause a material regulatory or compliance concern for the Company or the Objecting Shareholder or
any Affiliate of each of the foregoing, including (i) in relation to compliance with any requirements under
the relevant Football Regulations for owners and directors of football clubs to be fit and proper persons,
and (ii) circumstances where the Objecting Shareholder reasonably believes the third party purchaser has,
directly or indirectly, engaged in any activity which has resulted in or is reasonably likely to result in a
material violation of any applicable laws. If an objection notice has been served, then no transfer to that
third party purchaser can take place.
As a condition to completion of such transfer, the third party shall be required to become party to the
Shareholders Agreement by entering into a customary deed of adherence.
For the avoidance of doubt, the above provisions shall not apply to the reorganisation as provided for in
the SPA (or any transfers between the GFH Parties contemplated above).
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Tag-Along
If ESL proposes to directly or indirectly sell shares in the Company to a third party (and having complied
with the ROFO procedures), it shall give notice to the Company and the other shareholders of the relevant
terms and cash price, following which all other Shareholders shall for a period of 15 business days be
entitled to accept the tag-along offer and ESL will be obliged to ensure that the third party acquires their
shares on the same terms and for the same cash price (and ESL shall not be permitted to transfer its shares
unless they transfer to the third party at the same time).
Drag-Along
Provided that ESL has first complied with the ROFO provisions or 85% of the shareholders so approve, if
ESL and its permitted assignees sell all of their shares in the Company (currently 75%) to a third party
purchaser for cash, they can require the other shareholders to sell their shares to that third party purchaser
on the same terms (with the only warranties or indemnities relating to title to the shares being transferred)
provided that (i) each of the GFH Parties receives a minimum price equal to the higher of its pro rata
share of either Fair Market Value (as defined below) or the current 35m valuation, and (ii) with all
outstanding consideration (including the Short Term and Long Term Loans under the SPA being
accelerated and paid to GFH on completion of the relevant transfer).
Default Call
Rights
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General Provisions
Warranties
Each party represents to the other that: it is duly incorporated, has the power and capacity to enter into
this Agreement, which is legally binding on it and that there is no conflict between this Agreement and
such partys constitutional documents and contracts and further that it is not insolvent.
Confidentiality /
Announcements
/ Nondisparagement /
Compliance
No party shall use any other party's confidential information for any purpose other than to perform its
obligations under the Shareholders Agreement except as may be required by law, a court of competent
jurisdiction or any governmental or regulatory authority. All shareholders must agree before any public
announcement or press release is made, subject to the law, regulation or court order. No party will make
any derogatory or defamatory statement about the other party, it affiliates, officer, employees or
shareholders and/or the Club and shall procure that its affiliates do not make any such statements.
Survival and
Boiler Plate
This Agreement is intended to be legally binding upon Completion under the SPA until the earlier of (a) a
shareholder ceasing to hold any shares (except in relation to provisions that are stated to survive such
transfer and antecedent breaches: or (b) this is replaced with the Long-Form Shareholders Agreement.
The following clauses of the SPA shall, mutatis mutandis, be incorporated into this Agreement: 1.2 and
1.3 (Interpretation); 12 (Assignment); 13 (Further Assurances); 16 (Costs); 18 (Amendments); 19
(Waivers and Remedies); 20 (Entire Agreement); 21 (Survival of Obligations); 22 (Rights of Third
Parties); 23 (Notices); and 24 (Counterparts).
Governing law
& Dispute
Resolution
Governed by the laws of England & Wales. Any dispute or disagreement will be exclusively and finally
settled by a panel of three arbitrators acting under the rules of the LCIA Arbitration Centre. The
arbitration will be conducted in England and the language of the arbitration shall be English.
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