share purchase agreement - gfh elenora sportexecution version_redacted
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EXECUTION VERSION
20013769.6
Dated 6 February 2014
(1) GFH CAPITAL LIMITED
- and -
(2)
ELEONORA SPORT LIMITED
AGREEMENT RELATING TO THE SALE AND
PURCHASE OF 75 PER CENT. OF THE ISSUED SHARE
CAPITAL OF LUFC HOLDING LIMITED
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(i)
TABLE OF CONTENTS
No. Heading Page
1. DEFINITIONS AND INTERPRETATION 1
2. AGREEMENT FOR SALE 9
3. PURCHASE CONSIDERATION 10
4. FURTHER RESTRUCTURING OF INDEBTEDNESS 11
5. COMPLETION 12
6. POST-COMPLETION OBLIGATIONS 14
7. VENDORS WARRANTIES 15
8. LIMITATIONS OF LIABILITY 19
9. PURCHASER'S WARRANTIES 1910. ASSIGNMENT 20
11. FURTHER ASSURANCE 20
12. CONFIDENTIALITY 20
13. ANNOUNCEMENTS 21
14. COSTS 22
15. PAYMENTS UNDER THE AGREEMENT 22
16. AMENDMENTS 23
17. WAIVERS AND REMEDIES 23
18. ENTIRE AGREEMENT 23
19. SURVIVAL OF OBLIGATIONS 24
20. RIGHTS OF THIRD PARTIES 24
21. NOTICES 24
22. COUNTERPARTS 26
23. GOVERNING LAW 26
24. JURISDICTION 26
SCHEDULE 1 26
PART A THE COMPANY 26
PART B THE SUBSIDIARIES 27
SCHEDULE 2 THE GUARANTEE 43
SCHEDULE 3 COMPLETION DOCUMENTS 45
SCHEDULE 4 WARRANTY LIMITATIONS 46
SCHEDULE 5 FINANCIAL INFORMATION STATEMENT 50
SCHEDULE 6 SHORT-FORM SHAREHOLDERS' AGREEMENT 52
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THIS AGREEMENT is made on 6 February 2014
BETWEEN:
(1)
GFH CAPITAL LIMITED (incorporated and registered in the Dubai International
Financial Centre with company number 0117 whose principal place of business is atOffice 402, Level 4, Precinct Building 3, Gate District, Dubai International Financial
Centre, P.O. Box 506544, Dubai, United Arab Emirates (the Vendor); and
(2)
ELEONORA SPORT LIMITED (incorporated in England and Wales with company
number 08862382 whose registered office is at 27/28 Eastcastle Street, London W1W
8DH (the Purchaser).
RECITALS:
(A)
The Company (as defined below) is a private company limited by shares
incorporated in the Cayman Islands further details of which are set out in Part A ofSchedule 1.
(B) The Vendor has agreed to sell and the Purchaser has agreed to purchase seventy-
five 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 short-
term 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. DEFINITIONS AND INTERPRETATION
1.1
In this Agreement, the following definitions apply:
2012 KB SPA means the share purchase agreement entered into between FSF
Limited, Homer Group Investment Limited, Halton Sports Limited, Outram Ventures
Limited, the Company and Mr Ken Bates relating to the acquisition of Leeds City
Holdings Limited on 20 November 2012 (as amended on 27 November 2012 and 20
December 2012);
Affiliate means with respect to any specified person, a person that, directly or
indirectly, through one or more intermediaries, Controls or is Controlled by, or is
under common Control with the person specified;
Business means the business carried on by the Group of running the English
professional football club Leeds United Football Club and all ancillary or related
business of the Group at Completion;
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Charge Documentation means the documentation required to place a first fixed
charge over the Shares (and upon the Reorganisation, over such shares in Leeds City
Holdings Limited as shall then be owned by the Purchaser) as security for the
Purchasers obligations hereunder substantially in the agreed form, and in relation to
the shares in Leeds City Holdings Limited post-Reorganisation in such customary
form as shall provide an equivalent level of security;
Claimmeans any claim made under this Agreement by the Purchaser;
Club means Leeds United Football Club Limited, a company incorporated and
registered in England and Wales with company number 06233875 further details of
which are set out in Part B of Schedule 1;
Club Director has the meaning given to it in the Regulations, including any person
who is able to Control over the Club for the purposes of (and as defined in) Section 1
of Appendix 3 to the Regulations (including, for the avoidance of doubt, thePurchaser);
Company means LUFC Holding Limited, a company incorporated and registered in
the Cayman Islands with company number MC-270270 further details of which are
set out in Part A of Schedule 1;
Completion means completion of the sale and purchase of the Shares in accordance
with Clause 5 of this Agreement;
Completion Date means the date on which Completion takes place;
Confidential Information means:
(a)
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)
details of the negotiations, provisions or subject matter of this Agreement;
and
(c) any confidential information obtained by a party which relates the other
party during the course of the negotiation and execution of this Agreement,
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 orConnected 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:
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(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)
in the case of a partnership or limited partnership, the right to exercise morethan 50 per cent. of the votes exercisable at any meeting of partners of that
partnership or limited partnership (and, in the case of a limited partnership,
Control of each of its general partners) and/or the right to receive more than
50 per cent. of the economic interest in that partnership or limited
partnership; or
(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,
whether by virtue of provisions contained in its memorandum or articles of
association or, as the case may be, certificate of incorporation or by-laws, statutes or
other constitutional documents, partnership agreement or any contract or
arrangement with any other persons, and Controlling shall be construed
accordingly;
Costs means all claims, obligations, liabilities, losses, damages, costs (including
reasonable legal costs) and expenses (including Taxation) or penalties in each case of
any nature whatsoever, whensoever and howsoever arising;
CTA 2010 means the Corporation Tax Act 2010;
Debtmeans the aggregate amount of all financial debt (including any accrued but
unpaid interest) of the Group at Completion to the Vendor or to any of its Affiliates
or Connected parties (and for the avoidance of doubt, excluding payments under the
2012 KB SPA and any creditors and including for the avoidance of doubt Brendale
Holdings Limited and Berrydale Seventh Sport Holdings Limited, Envest, Salah
Nooruddin, Sport Capital (BVI), SCL (Guernsey) and David Haigh and each of their
respective Affiliates);
Deferred Consideration means the First Deferred Payment and the Second
Deferred Payment;
Deferred Payment Date(s) means the First Deferred Payment Date and the Second
Deferred Payment Date (as the case may be);
Encumbrance means any interest of any person including, without prejudice to the
generality of the foregoing, any fixed security, debenture, mortgage, charge,
assignation, pledge, deposit by way of security, bill of sale, lease, hire-purchase,
credit sale and other agreements for payment on deferred terms, right to acquire,
option, lien or right of pre-emption, security interest, title retention or other right ofretention or any other security agreement or arrangement whatsoever;
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Second Long-Term Loan Payment means the second additional payment of
6,500,000 (six million five hundred thousand pounds sterling) (plus any accrued but
unpaid amount due in respect of the annual profit rate or interest thereon) payable
to the Vendor (or its nominated Affiliate) in accordance with Clause 3.4;
Second Long-Term Loan Payment Datehas the meaning given to it in Clause 3.4;
Set-off Due Amount means the amount (if any) payable by the Vendor to the
Purchaser in respect of a Resolved Claim;
Shareholders Agreement means the agreement relating to the conduct of the
affairs of the Company and to be entered into between the Vendor, the Purchaser
and the other shareholders of the Company and the Company in a form to be
agreed between the parties acting reasonably based on the Short-Form
Shareholders Agreement;
Shares means 37,500 ordinary shares of 1 each in the capital of the Company
which represent seventy-five per cent. of the entire issued share capital of the
Company;
Short Form Shareholders Agreementmeans a short form agreement relating to
the conduct of the affairs of the Company in the agreed form as set out in Schedule
6;
Short-Term Loan Indebtednesshas the meaning given to it in Clause 4.1;
Short-Term Loan Payments means the payments to be made by the Club to theVendor pursuant to Clause 4;
Specified Warranties means the Warranties contained in Clauses 7.2.14 and 7.2.15;
Sport Capital (BVI) means Sport Capital Limited, a company incorporated in British
Virgin Islands with company number 1746253 whose registered office is at
Wickhams Cay, PO Box 146, Road Town, Tortola, British Virgin Islands;
Sport Capital and Flowers Debt means the aggregate principal amount of
1,945,000 (plus all interest and or profit accrued thereon) owed by the Club to SCL
(Guernsey) and Andrew Flowers and or his Affiliates;
Subsidiaries means the subsidiaries of the Company details of which are set out in
Part B of Schedule 1;
Taxation orTax means:
(a) any form of taxation and statutory, governmental, state, federal, provincial,
local governmental or municipal duty, impost, levy, tariff, charge,
contribution, deduction, withholding or liability of any nature wherever
imposed and whether or not any such taxation, duty, impost, levy, tariff,
charge, contribution, deduction, withholding or liability arises in respect of
any actual, deemed, gross or net income, profit or gain, or any receipt,
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payment, distribution, sale, purchase, disposal, use, occupation, franchise,
value, value added, property or other right and includes, without limitation,
all payroll and social security taxes (whether or not subject to PAYE), any
amounts payable pursuant to Chapter 3 Part 10 CTA 2010, any balancing
payment (within the meaning of Chapter 6 Part 4 TIOPA), any charge
pursuant to s.208 Finance Act 2004 and any amount payable in respect of, or
on account of, any of the foregoing; and
(b) any penalty, charge, surcharge, fine or interest payable in connection with
any amount falling within paragraph (a) or in connection with any non-
compliance or delay in complying with any legislative requirement (including
any requirement to register or to submit a notice or return) relating to the
administration or collection of any taxation, duty, impost, levy or tariff,
charge, contribution, deduction, withholding or liability mentioned in
paragraph (a);
Thomas Eggar Reportmeans 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 Solicitorsmeans 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
In this Agreement, unless otherwise specified or the context otherwiserequires:
(a)
words importing the singular only shall include the plural and vice
versa;
(b) words importing the whole shall be treated as including a reference
to any part thereof;
(c) words importing any gender shall include all other genders;
(d)
reference to a Schedule, Annexure, Exhibit or other attachment or to
any recital, clause or paragraph is to the relevant Schedule,
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Annexure, Exhibit, other attachment recital, clause or paragraph of
this Agreement;
(e) reference to this Agreement or to any other document is a reference
to this Agreement or to that other document as modified, amended,
varied, supplemented, assigned, novated or replaced from time totime as permitted by this Agreement;
(f) reference to any provision of law is a reference to that provision as
modified or re-enacted from time to time;
(g) reference to any statutory provision is a reference to any
subordinate legislation made under that provision from time to
time;
(h) reference to any legal term for any action, remedy, method of
judicial proceeding, legal document, legal status, court, official or
any legal concept, state of affairs or thing shall in respect of any
jurisdiction other than England be deemed to include that which
most closely approximates in that jurisdiction to the English legal
term;
(i) references to a time of day shall be to the time in Dubai, United
Arab Emirates, unless otherwise specified; and
(j) reference to any statute or statutory provision relating to Tax in the
United Kingdom shall include, without limitation, any equivalent ornearest equivalent thereof in any other relevant jurisdiction.
1.2.2 Any phrase in this Agreement introduced by the term include, including, in
particularor any such similar expression will be construed as illustrative and
will not limit the sense of the words preceding that term.
1.2.3
Headings used in this Agreement are for reference only and shall not affect
its construction or interpretation.
1.3 Other references
In this Agreement a reference to:
1.3.1 this Agreementmeans this Agreement and all Schedules, Annexures, Exhibits
and other attachments to this Agreement;
1.3.2 business daymeans 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 formmeans in a form agreed by the parties
or by the Vendor's Solicitors and the Purchaser's Solicitors and signed or
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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 personincludes any individual, firm, company, corporation, body corporate,
government, state or agency of state, trust or foundation, or any association,
partnership or unincorporated body of two or more of the foregoing(whether or not having separate legal personality and wherever incorporated
or established);
1.3.5 a subsidiarymeans a subsidiary as defined in section 1159 of the Companies
Act 2006 and a company shall be treated, for the purposes only of the
membership requirement contained in subsections 1159(1)(b) and (c), as a
member of another company even if its shares in that company are
registered in the name of (a) another person (or its nominee), whether by way
of security or in connection with the taking of security, or (b) its nominee;
1.3.6 a holding companymeans a holding company as defined in section 1159 of
the Companies Act 2006 and a company shall be treated, for the purposes
only of the membership requirement contained in subsections 1159(1)(b) and
(c), as a member of another company even if its shares in that company are
registered in the name of (a) another person (or its nominee), whether by way
of security or in connection with the taking of security, or (b) its nominee; and
1.3.7 written or in writing includes faxes and any non-transitory form of visible
reproduction or words including electronic mail but excluding text
messaging via mobile phone.
2. AGREEMENT FOR SALE
2.1 Sale and Purchase
Subject to the terms and conditions of this Agreement the Vendor shall sell, with full
title guarantee and the Purchaser shall purchase, as at Completion, the Shares.
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 theCompany 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 The 2012 KB SPA
The Club shall be responsible for all payments under the 2012 KB SPA. The
Purchaser shall procure that the Club shall on demand indemnify the Vendor in
respect of any and all claims in respect of which the Vendor is found liable under or
in connection with the 2012 KB SPA. This indemnity does not extend to any
obligation for non-financial obligations of the Club or the Vendor, for example,
without limitation, confidentiality obligations.
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
the Initial Consideration; and
3.1.2 the Deferred Consideration,
and the Purchaser shall procure that the Club:
3.1.3
repays the Short-Term Loan Indebtedness to the lender thereunder in
accordance with Clause 4; and
3.1.4 repays the Long-Term Loan Indebtedness to the lender thereunder in
accordance with Clause 3.4.
3.2
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 on or before the First Deferred Payment Date an amount equivalent to the
First Deferred Payment; and
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3.3.2 on or before the Second Deferred Payment Date an amount equivalent to the
Second Deferred Payment (subject to Clause 7.4).
3.4 Long-Term Loan Repayments
The Long-Term Loan Indebtedness shall bear an annual profit rate of 2 per cent. perannum until such amounts are repaid in accordance with this Clause 3.4. The
Purchaser shall procure (as primary obligor) that the Club repays the Long-Term
Loan Indebtedness as follows:
3.4.1 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 suchfurther 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 Long-
Term Loan Indebtedness in accordance with this Agreement.
4. FURTHER RESTRUCTURING OF INDEBTEDNESS
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 includingDavid 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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(c) Massimo Cellino be appointed as the Managing Director of the
Company;
(d) David Haigh be appointed as the Chief Executive Officer of the Club
at least until the end of the current football season;
(e) Salah Nooruddin be appointed as Chairman of the Club at least until
the end of the 2014/15 football season;
(f) a person nominated by the Purchaser be appointed as Honorary
President of the Club;
(g) Daniel Arty and Christopher Farnell be appointed as directors of the
Company; and
(h) the person nominated by the Purchaser be appointed as the
secretary of the Company (if required),
5.1.3 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.
5.2 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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5.2.2 deliver an executed original copy of the Charge Documentation in the agreed
form to the Vendor's solicitors.
5.3 Failure to comply
5.3.1
If in any respect the obligations set out in this Clause 5, (i) the Vendor are noteach 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) proceed to Completion as far as practicable (but not including
completion of some only of the Shares); or
(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.
5.3.2 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.
5.4 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 anyevent 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 Following Completion, the Purchaser shall:
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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.
7. VENDORS WARRANTIES
Warranties
7.1
The Vendor warrants to the Purchaser as at the date hereof and as at theCompletion 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) result in a breach of any provision of the articles of association or
constitutional documents of the Vendor; or
(b) result in a breach of any law, order, judgment or decree of any court
or governmental agency to which the Vendor is a party or by which
any Vendor is subject or bound;
7.2
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:
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7.2.1 it is the sole legal and beneficial owner of the Shares;
7.2.2 the Shares are free from all Encumbrances;
7.2.3 the Shares are fully paid or credited as fully paid;
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 theShort-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:
(a) any issued shares or assets of the Subsidiaries; or
(b) any unissued shares, debentures or other unissued securities or
assets of the Company or any of the Subsidiaries, and
(c) so far as the Vendor is aware and other than as disclosed in the
Thomas Eggar Report (i) no such Encumbrance had been grantedprior to the Acquisition Date, and (ii) since the Acquisition Date, no
commitment to create any such Encumbrance has been given, nor
has any person served notice on the Company to claim any such
rights;
7.2.9 since the Acquisition Date, other than as Fairly Disclosed the Company has
not:
(a)
purchased, redeemed, reduced, forfeited or repaid any of its own
share capital; or
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(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 inthe 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 arms-length commercial terms;
7.2.12 following the Further Restructuring of the Indebtedness pursuant to Clauses
3.4 and 4, the Debt (excluding the Sport Capital and Flowers Debt, and the
Enterprise Insurance Debt) shall not exceed the aggregate of:
(a) 10,500,000 in respect of the Short-Term Loan Indebtedness; and
(b) 13,500,000 in respect of the Long-Term Loan Indebtedness
(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);
7.2.13 so far as the Vendor is aware, the factual information contained in the
Thomas Eggar Report was true, accurate and complete as at the date of its
preparation. For the avoidance of doubt, no warranty is given with respect of
any projection, forward-looking statement, statement of opinion or legal
advice contained therein;
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).
7.3
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
Purchaser's Right of Set-Off
In the event of a Resolved Claim, the Purchaser's sole remedy shall be the right to
deduct any Set-Off Due Amount (up to a maximum of 1,000,000 for all Resolved
Claims) from the amount of from the amount of the payment due under clause 4.2.3
(being the final installment of the Short-Term Loan Indebtedness).
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:
7.5.1 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.
7.6
Knowledge of the Vendor
Where any Warranty refers to the knowledge, information or belief or awareness of
the Vendor, such knowledge, information, belief or awareness shall be limited to the
knowledge of the Board of Directors of the Vendor.
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 ofthe 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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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 andafter the term of this Agreement preserve the confidentiality of, and not directly or
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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 in compliance with any requirement of law or regulation or pursuant to the
order of a court of competent jurisdiction; or
13.2.2 in response to a requirement of the regulations of the London Stock
Exchange plc, the UK Listing Authority, the Panel on Takeovers and Mergers,
the Financial Conduct Authority, the Bahrain Stock Exchange, the Central
Bank of Bahrain or other applicable regulatory authority,
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. PAYMENTS UNDER THE AGREEMENT
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, theVendor'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.
WAIVERS AND REMEDIES
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 may be waived only in writing and specifically.
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):
18.1.1 constitutes the entire agreement and understanding between the parties with
respect to the subject matter of this Agreement; and
18.1.2
supersedes and extinguishes any prior drafts, agreements, undertakings,
understandings, promises or conditions, whether oral or written, express or
implied between the parties relating to such subject matter.
18.2 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
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Fax Number: +973 17 540006
With a copy to:
Nicholas Tomlinson
Gibson Dunn & Crutcher LLPTelephone House
2-4 Temple Avenue
London, EC4Y OHB
Fax Number: +44 (0)20 7071 4244
The Purchaser:
Address: 57/28 Eastcastle Street, London W1W 8DH
For the attention of: 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
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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.
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PART B THE SUBSIDIARIES
Leeds City Holdings Limited
Previous Names Leeds United Football Club Limited (changed on 06/06/2008)
Date of incorporation 03/04/2006
Place of incorporation England and Wales
Company number 05765697
Registered office Elland Road Stadium, Elland Road, Leeds, West Yorkshire, LS11
0ES
Issued share capital 1,400,000 divided into 140,000,000 shares of 0.01 each
Directors Salem Patel
David Lawrence Haigh
Abed Abdulrasool Abdulnabi Alzeera
Secretary David Lawrence Haigh
Accounting reference
date
30 June
Auditors Baker Tilly UK Audit LLP
Mortgages and charges Date
registered
21/06/2012
Type Debenture
Charge holder Compass Contract Services (UK) Limited
Date created 14/06/2012
Security Fixed and floating charge over the
undertaking and all of its property and assets
(present and future) in respect of all monies
due from the Company to the charge Holder
up to a maximum amount of 2,000,000
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Date
registered
Type
Charge holder
Date created
Date
registered
Type
22/06/2013
Charge code: 0576 5697 0004
Brendale Holdings Limited
contains fixed charge
20/06/2013
18/10/2013
Charge code: 0576 5697 0005
Charge holder
Date created
Security
Berrydale Seventh Sport Holdings Limited
15/10/2013
MRO1 contains fixed charge; notification of
addition or amendment of charge.
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Name Leeds United Football Club Limited
Previous name(s) Leeds United 2007 Limited (until 06/06/2008)
Date of incorporation 01/05/2007
Place of incorporation England and Wales
Company number 06233875
Registered office Elland Road Stadium, Elland Road, Leeds, West Yorkshire, LS11 0ES
Authorised share
capital
500,032 divided into 500,000 ordinary shares of 1 each and
32 preference shares of 1.00 each
Issued share capital 500,000 divided into 500,000 ordinary shares of 1 each
Shareholder Name Leeds City Holdings Limited
Shares 500,000 ordinary shares
Capacity Legal and beneficial owner
Directors Salem Patel
David Lawrence Haigh
Salah Abdulla Nooruddin
Secretary David Lawrence Haigh
Accounting reference
date
30 June
Auditors Baker Tilly UK Audit LLP
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Mortgages and charges Date registered 05/06/2008
Type Charge on Deposit
Charge holder Governor and Company of the Bank of Ireland
Date created 20/05/2008Secured on Account number 81596984 in respect of all
monies due or to become due from the
company to the Governor and Company of
the Bank of Ireland on any account
whatsoever
Date registered 21/06/2012
Type Debenture
Charge holder Compass Contract Services (UK) Limited
Date created 14/06/2012
Security Land with title numbers WYK792229,
WYK792185 and WYK792186 and a fixed and
floating charge over the undertaking and all
property and assets (present and future) in
respect of all monies due up to a maximum of
2,000,000
Date registered 03/11/2012
Type Legal Charge over Designated Bank Account
Charge holder Enterprise Insurance Company Plc
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 registered22/06/2013
Type Charge code: 0623 3875 0006
Charge holder Brendale Holdings Limited
Date created 20/06/2013
Security MR01 contains fixed charge, contains floating
charge, notification of addition to or
amendment of charge
Date registered 18/10/2013
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Name Leeds United Investments Limited
Previous name(s) Broomco (2596) Limited (changed on 30/07/2001)
Date of incorporation 25/06/2001
Place of incorporation England and WalesCompany number 04240946
Registered office Elland Road, Leeds, West Yorkshire, LS11 0ES
Authorised share
capital
1,000 divided into 1,000 ordinary shares of 1.00 each
Issued share capital 2.00 divided into 2 ordinary shares of 1.00 each
Shareholder Name Leeds City Holdings Limited
Shares 2 ordinary shares
Capacity Legal and beneficial owner
Director David Lawrence Haigh
Secretary David Lawrence Haigh
Accounting reference
date
30 June
Auditors --
Mortgages and charges None
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Name Leeds United 2007 Limited
Previous name(s) Leeds City Holdings Limited (changed on 06/06/2008)
Date of incorporation 19/02/2008
Place of incorporation England and WalesCompany number 06508135
Registered office Elland Road Stadium, Elland Road, Leeds, West Yorkshire, LS11
0ES
Authorised share capital 1,000 divided into 1,000 ordinary shares of 1.00 each
Issued share capital 1 ordinary share of 1.00
Shareholders Name Leeds City Holdings Limited
Shares 1 ordinary share
Capacity Legal and beneficial owner
Director David Lawrence Haigh
Secretary David Lawrence Haigh
Accounting reference date 28 February
Auditors --
Mortgages and charges None
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Name Leeds City Limited
Date of incorporation 20/06/2006
Place of incorporation England and Wales
Company number 05852123Registered office Elland Road, Leeds, West Yorkshire, LS11 0ES
Authorised share capital 1,000 divided into 1,000 ordinary shares of 1.00 each
Issued share capital 1 ordinary share of 1.00
Shareholder Name Leeds City Holdings Limited
Shares 1 ordinary share
Capacity Legal and beneficial owner
Director David Lawrence HaighSecretary David Lawrence Haigh
Accounting reference date 30 June
Auditors --
Mortgages and charges None
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Name Leeds First Limited
Date of incorporation 13/06/2007
Place of incorporation England and Wales
Company number 06278942Registered office Elland Road Stadium, Elland Road, Leeds, West Yorkshire, LS11
0ES
Authorised share capital 1,000 divided into 1,000 ordinary shares of 1.00 each
Issued share capital 1 ordinary share of 1.00
Shareholder Name Leeds City Holdings Limited
Shares 1 ordinary share
Capacity Legal and beneficial owner
Director David Lawrence Haigh
Secretary David Lawrence Haigh
Accounting reference date 30 June
Auditors --
Mortgages and charges None
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Name Yorkshire First Limited
Date of incorporation 13/06/2007
Place of incorporation England and Wales
Company number 06278936Registered office Elland Road Stadium, Elland Road, Leeds, West Yorkshire, LS11
0ES
Authorised share capital 1,000 divided into 1,000 ordinary shares of 1.00 each
Issued share capital 1 ordinary share of 1.00
Shareholder Name Leeds City Holdings Limited
Shares 1 ordinary share
Capacity Legal and beneficial owner
Director David Lawrence Haigh
Secretary David Lawrence Haigh
Accounting reference date 30 June
Auditors --
Mortgages and charges None
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Name Leeds United Centenary Pavilion Limited
Date of incorporation 29/06/2010
Place of incorporation England and Wales
Company number 07299184Registered office Elland Road Stadium, Elland Road, Leeds, West Yorkshire, LS11
0ES
Authorised share capital The company does not have one
Issued share capital 1 ordinary share of 1.00
Shareholder Name Leeds City Holdings Limited
Shares 1 ordinary share
Capacity Legal and beneficial owner
Director David Lawrence Haigh
Secretary David Lawrence Haigh
Accounting reference date 30 June
Auditors Baker Tilly UK Audit LLP
Mortgages and charges Date
registered
21/06/2012
Type Debenture
Charge holder Compass Contract Services (UK) Limited
Date created 14/06/2012
Security Fixed and floating charge over the
undertaking and all property and assets
(present and future) in respect of all monies
due or to become due from the Company to
the Charge holder up to a maximum of
2,000,000
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Name Leeds United Financial Services Limited
Date of incorporation 19/09/2011
Place of incorporation England and Wales
Company number 07779130Registered office Elland Road Stadium, Elland Road, Leeds, West Yorkshire, LS11
0ES
Authorised share capital The company does not have one
Issued share capital 1 ordinary share of 1.00
Shareholder Name Leeds City Holdings Limited
Shares 1 ordinary share
Capacity Legal and beneficial owner
Director David Lawrence Haigh
Secretary David Lawrence Haigh
Accounting reference date 30 September
Auditors --
Mortgages and charges None
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Name Elland Road Limited
Previous name(s) Charmed Garden Limited (changed on 03/11/2009)
Date of incorporation 19/08/2009
Place of incorporation England and WalesCompany number 06994205
Registered office Elland Road Stadium, Elland Road, Leeds, West Yorkshire, LS11
0ES
Authorised share capital 1,000 divided into 1,000 ordinary shares of 1.00 each
Issued share capital 1 ordinary share of 1.00
Shareholder Name Leeds City Holdings Limited
Shares 1 ordinary share
Capacity Legal and beneficial owner
Director David Lawrence Haigh
Secretary David Lawrence Haigh
Accounting reference date 31 August
Auditors --
Mortgages and charges None
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Name Leeds United Media Limited
Date of incorporation 22/09/2009
Place of incorporation England and Wales
Company number 07026702Registered office Elland Road Stadium, Elland Road, Leeds, West Yorkshire, LS11
0ES
Authorised share capital 100 divided into 100 ordinary shares of 1.00 each
Issued share capital 1 ordinary share of 1.00
Shareholder Name Leeds City Holdings Limited
Shares 1 ordinary share
Capacity Legal and beneficial owner
Directors David Lawrence Haigh
Secretary David Lawrence Haigh
Accounting reference date 30 June
Auditors Baker Tilly UK Audit LLP
Mortgages and charges None
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Name Yorkshire Radio Limited
Date of incorporation 08/06/1994
Place of incorporation England and Wales
Company number 02936757Registered office Elland Road Stadium, Elland Road, Leeds, West Yorkshire, LS11
0ES
Authorised share capital 500,000 divided into 500,000 ordinary shares of 1.00 each
Issued share capital 3,000 ordinary 3,000 ordinary shares of 1.00 each
Shareholders Name Leeds United Media Limited
Shares 2850 ordinary shares
Capacity Legal and beneficial owner
Name Ruth Gregory
Shares 75 ordinary shares
Capacity Legal and beneficial owner
Name Benjamin Fry
Shares 75 ordinary shares
Capacity Legal and beneficial owner
Director David Lawrence Haigh
Secretary David Lawrence Haigh
Accounting reference date 30 June
Auditors Baker Tilly UK Audit LLP
Mortgages and charges None
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Name Fan Radio Limited
Previous name(s) Settar Limited (changed on 25/11/2005)
Date of incorporation 10/06/2005
Place of incorporation England and WalesCompany number 05478203
Registered office Elland Road Stadium, Elland Road, Leeds, West Yorkshire, LS11
0ES
Authorised share capital 1,000 divided into 1,000 ordinary shares of 1.00 each
Issued share capital 1 ordinary share of 1.00
Shareholder Name Yorkshire Radio Limited
Shares 1 ordinary share
Capacity Legal and beneficial owner
Director David Lawrence Haigh
Secretary David Lawrence Haigh
Accounting reference date 30 June
Auditors --
Mortgages and charges None
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SCHEDULE 2 THE GUARANTEE
1. 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 thisSchedule 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 agrees, in addition to its obligations set out in paragraph 1.1, to indemnifythe Vendor on demand against any direct and foreseeable loss, damage,
cost (including reasonable and proper legal and other professional costs),
fine, penalty, sanction, legal remedy, compensation, court or tribunal order
and any other similar liability whatsoever that the Vendor or any of its
Affiliates may suffer, sustain or incur whether arising under statute, contract
or at common law by reason of any breach by the Club or LCH of its
obligations under and/or pursuant to the Guaranteed Agreements
howsoever arising, save that this paragraph 1.2 shall not be construed as
imposing greater obligations or liabilities on the Purchaser than are imposed
on the Club or LCH under the Guaranteed Agreements, and the Purchaser
shall have the benefits of all rights, counterclaims and defences available to
the Club and LCH.
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 any alteration in the obligations undertaken by the Club or LCH whether by
way of any addendum or variation to this agreement or otherwise;
2.2 the taking, variation, renewal or release of, the enforcement or neglect to
perfect or enforce any right, guarantee, remedy or security from or against
the Club, LCH or any other person; or
2.3 the dissolution, amalgamation, reconstruction, reorganisation, change in
status, function, control or ownership, insolvency, liquidation or the
appointment of an administrator or receiver of the Club, LCH or any other
person.
3. The guarantee contained in this Schedule shall be a primary obligation of the
Purchaser and accordingly the Vendor shall not be obliged before enforcing this
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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. The guarantee contained in this Schedule is a continuing guarantee, and accordingly,
shall remain in full force and effect (notwithstanding any intermediate satisfaction by
the Club or LCH, the Purchaser or any other person) until all obligations, warranties,
duties and undertakings now or in the future to be carried out or performed by the
Club or LCH under the Guaranteed Agreements have been satisfied or performed in
full and is not revocable and is in addition to and not in substitution for and shall notmerge with any other right, remedy, guarantee or security which the Vendor may at
any time hold for the performance of such obligations and may be enforced without
first having recourse to any such security.
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.
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SCHEDULE 3 COMPLETION DOCUMENTS
1. 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.
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SCHEDULE 4 WARRANTY LIMITATIONS
1. 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. FINANCIAL THRESHOLD FOR INDIVIDUAL CLAIMS
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 claimsarising out of, or in respect of, the same, or similar, facts or circumstances shall be
treated as comprising a single claim.
2.2 In the following paragraphs of this Schedule Relevant Claim means a Warranty
Claim that is not excluded by paragraph 2.1, or a Claim under the Indemnity (unless
specifically stated otherwise).
3.
AGGREGATE FINANCIAL THRESHOLD FOR CLAIMS
3.1 The Vendor shall have no liability in respect of a Relevant Claim:
3.1.1 unless the Claim Amount for that Relevant Claim; or
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,
shall exceed 500,000 (five hundred thousand pounds sterling) in respect of
Warranties that are not Specified Warranties, 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.
3.2
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
This paragraph 3 shall not apply to the Indemnity.
4.
NOTIFICATION OF CLAIMS
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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. MAXIMUM LIMIT FOR CLAIMS
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).
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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 (asapplicable). 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 it is provided for, or an allowance or reserve has been created in respect of
it, in the (i) unaudited consolidated balance sheet and profit and loss
account of the Company for the financial year ended 30 June 2013 and all
accompanying notes and appendices thereto or (ii) means the unaudited
management accounts of the Company and the Subsidiaries (whether
consolidated or not) for the period from 1 July 2013 to 31 October 2013;
6.1.5 it relates to any provisions of this Agreement or any of the agreements
entered into or amended in connection with this Agreement;
6.1.6
it relates to any provision of the memorandum or articles of association ofthe Company or other member of the Group (or equivalent constitutional
documents)
6.1.7 all matters which would be revealed by an online search at
http://direct.companieshouse.gov.uk of the file of the Club held at the
relevant office of the Registrar of Companies in the United Kingdom as at
the date hereof;
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 bycontribution or indemnity under applicable insurance; or
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6.1.9 it relates to any document listed on Annex A hereto insofar as it relates to
any Encumbrances over the Group.
6.2 The Purchaser is not entitled to recover damages or otherwise obtain payment,
reimbursement or restitution to the extent that would mean that the Purchaser has
recovered more than once in respect of the same loss or liability.
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.
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SCHEDULE 5 FINANCIAL INFORMATION STATEMENT
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SCHEDULE 6 SHORT-FORM SHAREHOLDERS' AGREEMENT
SHORT-FORM SHAREHOLDERS AGREEMENT
This Short-Form SHA is a schedule to the SPA between GFH Capital Limited (GFH) and Eleanora Sport Limited (ESL) dated 31
January 2014 relating to the sale of 75% of LUFC Holding Ltd (the SPA). This Short-Form SHA is legally binding on ESL and GFH and
will be replaced by a long-form shareholders agreement following Completion as provided for in the SPA. Terms not otherwise
defined herein shall have the meaning given in the SPA. These terms will apply to any other holding company following the
restructuring contemplated in the SPA and the long-form SHA will be adopted as part of that restructuring as provided in the SPA.
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 followingsentence): (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 (togetherEN) will own 7.02% of the Company consisting of 3,511.4 ordinary shares; and (iv) InternationalInvestment 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, theGFH Parties will own an aggregate of 25% of the Company between them and that they plan to formallyrestructure their holdings to reflect the above stated percentages. Any transfers between the GFH Partiesfollowing 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 asprovided 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 obligationto do so). As a part of such obligation, ESL shall provide loans to the Club equal to 1 million on signingof 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 Boardapproval, provided the other shareholders are subsequently offered the opportunity to participate pro-rata totheir respective shareholdings. The term of the loans shall be on arms length commercial terms (with amaximum 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 providedthat they are non-dilutive to the GFH Parties shareholding in the Company (meaning additional sharesmay be issued to them, to true-up the percentages subject to the UEFA fair play regulations if theCompany 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 asprovided 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 acquiringsome of the debt to be capitalised).
Constitutional
Documents
The Companys articles of association (the Articles) will be amended to reflect the terms of thisAgreement. To the extent that there is a conflict between the terms of this Agreement and the Articles thisAgreement will prevail.
Board and Governance Provisions
Constitutionand The Board (and board of the Club) will consist of at least 5 Directors (but no more than 7) with: (a) 2nominated, appointed and capable of being removed by GFH (the GFH Directors); and (b) up to 5
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Procedures of
the Board
nominated, appointed and capable of being removed by ESL (the ESL Directors), provided in each casethe 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. TheLong Form SHA will set out the detailed customary procedures for the Board (and other relevant boards) tofollow, including procedures to appoint alternates. ESL shall appoint and remove the chairman of theBoard 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 regularmeetings, at least every 2 months on a schedule to be mutually agreed. Any Director will be entitled to calla special meeting of the Board on not less than 5 business days notice. Directors will also be able toattend Board meetings by telephone or video conference. The Board shall have the full power to establishone 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 orhis 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 beincluded in the Long-Form SHA.
The quorum for meetings of the Board shall be 2 Directors, comprised of at least one GFH Director if aReserved Matter is to be considered. If a quorum is not present, then the meeting shall be adjourned for 2business days and be held at the same place and time, although the quorum at any adjourned meeting willbe 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 Managin