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GFH Capital Limited

SUBJECT TO CONTRACT

06/07/2012

Dear Ahsan Ali Syed

Proposed investment in a joint venture vehicle (Acquisition Company) which will be established by
GFH Capital Limited (Promoter) and which will acquire the entire issued share capital of Leeds City
Holdings Limited (Acquisition)

1.

Introduction

1.1

Further to our recent discussions, these heads of terms set out the principal terms and
conditions on and subject to which [WGA Sports Advisory] (Investor) is willing to make a
capital investment into the Acquisition Company, subject to the agreement and signing by the
parties of a detailed legally binding subscription and shareholders agreement (Transaction).

2.

Terms of the Transaction

2.1

The Investor will invest in total the sum of 36,800,000 (thirty six million eight hundred
thousand pounds) (Subscription Price) in return for a 80% (eighty percent) stake (Investor
Shareholding) in the share capital of the Acquisition Company (Subscription).

2.2

The Subscription Price shall be used to subscribe for such number of shares in the Acquisition
Company so as to provide the Investor with the Investor Shareholding.

2.3

The Investor agrees and acknowledges that the Promoter may arrange for other parties to
make a future investment in the Acquisition Vehicle provided that up until the Acquisition as
planned takes place (unless the parties otherwise agree) the shareholding of the Investor shall
not fall below 80% (eighty percent) of the shares in the Acquisition Vehicle.

2.4

The parties agree that as a condition to the Subscription they shall enter into a subscription
and shareholders agreement (Shareholders Agreement) which will set out the terms of the
Subscription and the reasonable protections for the shareholders to the Acquisition Company
including meeting a specified percentage shareholding threshold for certain decisions to be
taken and usual share transfer protections. In addition the Shareholders Agreement will

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confirm that the Investor will be entitled to nominate one director to the board of the
Acquisition Company, such nomination to be initially for Sheikh Abdul Rahman Al-Khalifa.
2.5

The parties agree that the Promoter has the option (Put Option) to sell its remaining holding in
the Acquisition Company, at any time, to the Investor for a value which will be 2.5 multiple
of the revenue of Leeds City Holdings Limited or 15,000,000, whichever is the higher and
the Investor must acquire such shares within four (4) weeks of notice been issued by the
Promoter.

2.6

The parties agree that the Promoter will act as asset manager for the Acquisition Company
and Leeds City Holding for such time and on such terms as the Promoter elects.

2.7

The Investor agrees that the structure of the Acquisition Company and its investment therein
must be structured in the best interests of the Acquisition Company to enable it to complete
the acquisition detailed herein and that this may require changes to the structure of the
Acquisition company and the terms of this Agreement.

3.

Conditions

3.1

The Subscription is subject to and conditional upon the following conditions being met:
3.1.1

the Promoter being satisfied as to:


(a)

proof of funds for the Transaction from the Investor;

(b)

the identity of the ultimate beneficial owner(s) of the Investor and its
funds or such other entity or entities that will participate in the
Transaction,

(c)

the financial and tax status of the Investor;

(d)

any third party, regulatory or tax consents or approvals required for the
Subscription being received on terms reasonably satisfactory to the
Promoter, including in particular any necessary ownership or governance
tests, such as the fit and proper persons test of the Football League
Limited, and such consents and approvals remaining in full force and
effect;

(e)

the Subscription by the Investor being in the best interests of the


Acquisition Company; and

3.1.2

the parties signing a detailed and legally binding subscription and shareholders
agreement to be prepared by the Promoters solicitors on terms to be agreed by the
Investor and Promoter, acting reasonably. The Shareholders Agreement will
incorporate usual protections for shareholders and other terms negotiated between

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the parties, including the directors appointment mentioned in clause 2.6.


3.2

The Investor warrants and represents to the Promoter that neither the Investor nor any of its
subsidiaries, nor any of their employees, agents or associates, has been subject at any time to a
fit a proper persons test (or similar test) by the Football League Limited (or similar entity or
body) and has failed such test.

4.

Completion
The Acquisition Company intends to proceed as quickly as possible with the proposed
Subscription. The Investors and the Promoter will negotiate in good faith with a view to the
Subscription and Shareholders Agreement completing on or before 10 August 2012.

5.

Deposit

5.1

The Investor shall on the signing of these heads of terms pay to the Promoter the sum of
3,600,000 (Deposit) as a deposit in respect of the Subscription Price, such sum to be sent by
electronic transfer to the bank account of the Promoter, details of which shall be provided by
the Promoter. On the Subscription, the Investor shall be deemed to have paid the sum of
3,600,000 of the Subscription Amount accordingly, unless such sum is retained by the
Promoter under the terms of clause 5.2 in which case the Subscription Amount shall be
payable in full.

5.2

In the event that the Subscription does not complete before 10 August 2012 (or such later
date as the parties may agree) because the conditions in clause 3.1.1(e) above are not satisfied
then the Deposit shall be returned to the Investor within 30 business days. If the Subscription
does not complete before 10 August 2012 (or such later date as the parties may agree) for any
other reason then the Deposit shall be retained by the Promoter and shall not be returned to
the Investor. In the event the Subscription does not complete before 10 August 2012 (or such
later date as the parties may agree) all other terms of this agreement are hereby confirmed and
the terms of this agreement shall continue and remain in full force and effect.

6.

Announcements and confidentiality

6.1 In this clause:


"Confidential Information" means information which relates to the Promoter's business or
the Acquisition that is made available directly or indirectly to the Investor, whether orally,
visually or in writing (including graphic material), whether before or after the date of this
agreement. Confidential Information includes but is not limited to:
6.1.1

business, financial, operational, technical, administrative, marketing, planning and


staff information relating to the Promoter or the Acquisition;

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6.1.2

proprietary information, technical data, know-how, formulae, processes and


engineering processes, strategies, designs, photographs, drawings, specifications,
software, inventions, patents, technology, hardware configuration information,
samples, technical literature or other material of a Promoter including information
which is attributable to or the existence of which is derived from discussions relating
to the Purpose;

6.1.3

any notes, extracts, analyses or materials prepared by or on behalf of the Investor


which are copied or derived from information made available by the Promoter;

6.1.4

the existence and terms of this agreement; and

6.1.5

the existence and content of any discussions or negotiations between the parties.

"Permitted Purpose" means the purpose of evaluating the Acquisition and/or the
Transaction;
"Representatives" means directors, officers, members, employees, agents, managers and
consultants of, and individuals seconded to work for, a party; and
6.2

In consideration of any access the Investor may have to the Confidential Information of the
Promoter, the Investor shall:
6.2.1

keep the Confidential Information strictly confidential, not disclose it to any third
party (unless prior approved in writing by the Promoter) and not make any use
whatsoever of the Confidential Information for any purpose, whether commercial or
non-commercial, other than the Permitted Purpose;

6.2.2

take all reasonable and prudent steps and security measures necessary to prevent the
Confidential Information from being disclosed to any third party (except as prior
approved in writing by the Promoter);

6.2.3

not copy, reduce into writing, or summarise any Confidential Information except to
the extent strictly necessary to carry out the Permitted Purpose;

6.2.4

not disclose any Confidential Information to any more than the minimum number of
Representatives strictly necessary to carry out the Permitted Purpose and shall ensure
that all those to whom the Confidential Information is disclosed are aware of and
observe the terms of this agreement in all respects as if they were a party to this
agreement obtaining such undertakings as are necessary, in terms at least as extensive
and binding upon the Representatives as the terms of this agreement are upon the
parties; and

6.2.5

on the Promoter's request, require confidentiality undertakings from any third party to

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whom Confidential Information is disclosed.


6.3

The Investor shall not, without the Promoter's prior written consent, use the Confidential
Information for its advantage, commercial or otherwise.

6.4

The Investor acknowledges and agrees that all property, including intellectual property, in the
Confidential Information and in documents and other materials containing the Confidential
Information shall remain with and be vested in the Promoter or its licensors (as applicable).

6.5

Except for the right to use the Confidential Information for the Permitted Purpose as set out in
this agreement, nothing in this agreement shall be construed as granting to or conferring on
the Investor any licence, right, title or interest in or to the Confidential Information or to give
any licence to use, sell, copy or further develop such Confidential Information.

This

agreement shall not be construed so as to require the parties to enter into any further
agreements.
6.6

When the Permitted Purpose comes to an end or when requested to do so in writing by the
Promoter, the Investor shall promptly:
6.6.1

deliver to the Promoter any documents and other materials in its possession or
control that contain any of the Promoter's Confidential Information;

6.6.2

permanently delete, destroy and erase all electronic copies of the Confidential
Information from any computer or data storage system into which the Confidential
Information was entered; and

6.6.3
6.7

make no further use of the Confidential Information.

The Investor shall, if required to do so by the Promoter, provide a certificate signed by an


officer of the Investor certifying that the provisions of clauses 6.6.1 and 6.6.2 above have
been complied with.

6.8

Following the date on which the Investor has complied with its obligations under clauses 6.6
and 6.7, the Investor's obligations in clause 6.2 in respect of Confidential Information
disclosed prior to that date shall continue in force for a period of six years from that date.

6.9

No announcement regarding the proposals in these heads of agreement will be made other
than in terms approved by the Promoter.

7.

Costs

7.1

Except as set out in clause 9.4 each party shall bear its own costs and expenses in connection
with the Transaction and the documents forming part of the Transaction, including but not
limited to the Shareholders Agreement.

8.

Notices

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8.1

In this clause:
8.1.1

Relevant Day means any day other than a Saturday, Sunday or a day which is a
public holiday at the address of the receiving party;

8.1.2

any reference to a time is to the time at the address of the receiving party; and

8.1.3

reference to an e-mail or fax being received shall mean receipt at the first device
hosting electronic communication services for that corporate body or partnership
at which it is received.

8.2

Any notice under this agreement shall be delivered by hand to the Investor or the Promoter at
its respective address shown below (or such other address as may be notified in accordance
with this clause 8) or be sent by fax or email to the fax or email address set out below:
The Investor:
For the attention of:
Address:
Fax number:
Email address:

The Promoter:
For the attention of: David Haigh
Address: 402, Level 4, Precinct Building 3, The Gate District, Dubai International
Financial Centre P.O. Box 506544, Dubai, United Arab Emirates
Fax number: +971 4 3637 324
Email address: dhaigh@gfh- capital.com
8.3

Any notice so delivered or sent shall be deemed to have been served when received except
that if it is received between 5.30pm on a Relevant Day and 9.00am on the next Relevant
Day it shall be deemed to have been served at 9.00am on the second of such Relevant Days.

9.

Miscellaneous

9.1

The Promoter makes no representation or warranty as to the accuracy, completeness or


otherwise of the Confidential Information supplied, and the Investor acknowledges and agrees
that it is responsible for making its own evaluation of such information.

9.2

The Investor acknowledges and agrees that the Promoter has not provided any financial
advice to it in respect of the Transaction and the Investor acknowledges and agrees that it is

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responsible for making its own evaluation of the Transaction.


9.3

The Investor shall be liable to the Promoter for the actions or omissions of the Investor's
Representatives in relation to this agreement, as if they were the actions or omissions of the
Investor.

9.4

The Investor shall notify the Promoter immediately in writing if it becomes aware that the
Promoters Confidential Information has been disclosed to an unauthorised third party.

9.5

The Investor undertakes to indemnify the Promoter against any loss or damage arising from
any breach of this agreement by the Investor including but not limited to the unauthorised
disclosure of the Promoters Confidential Information, and from all actions, proceedings,
claims, demands, costs (including reasonable legal costs, awards and damages), arising as a
result of any breach or non-performance of any of its undertakings or obligations under this
agreement and against all legal costs, costs of due diligence and other associated costs
incurred by the Promoter in anticipation of or in connection with the Transaction and the
Acquisition.

9.6

The Investor acknowledges and agrees that its breach of this agreement may result in
immediate and irreparable harm to the Promoter, for which damages may not be an adequate
remedy. Without prejudice to any other rights and remedies it may have, the Promoter shall
be entitled to seek equitable relief (including without limitation injunctive relief) in relation to
any threatened or actual breach of any of the terms of this agreement and to protect and
enforce its intellectual property rights.

9.7

A waiver of any term of this agreement shall be valid only if it is in writing and signed by
both parties.

9.8

The clauses of this agreement are severable and if any clause or identifiable part is held to be
invalid or unenforceable by any court of competent jurisdiction then such invalidity or
unenforceability shall not affect the validity or enforceability of the remaining clauses or parts
of the agreement.

10.

Governing law

10.1

These heads of terms, and the negotiations between the Investor and the Promoter in
connection with the proposed Transaction (Negotiations), and all disputes and claims arising
out of or in connection with them or their formation (including non-contractual disputes or
claims), shall be governed by, and construed in accordance with, the law of England and
Wales.

10.2

Each party irrevocably agrees to submit to the non-exclusive jurisdiction of the courts of
England and Wales as regards any claim or matter arising under or in connection with these

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heads of terms and the Negotiations or their subject matter or formation (including noncontractual disputes and claims). This submission is for the benefit of the Promoter and shall
not limit the right of the Promoter to select any other court or jurisdiction (including any
arbitration court or centre and associated rules) as the forum to hear and determine any
proceedings and to settle any disputes, nor shall the selection of one court or jurisdiction by
the Promoter preclude the use of any other court or jurisdiction by the Promoter (whether
concurrently or not). The Investor irrevocably waives any objection which it might at any
time have to the courts of England and Wales, or such other court (including any arbitration
court or centre and associated rules) selected by the Promoter pursuant to this clause 10.2,
being nominated as the forum to hear and determine any proceedings and to settle any
disputes and the Investor agrees not to claim that the courts of England, or such other court
(including any arbitration court or centre and associated rules) selected by the Promoter, are
not a convenient or appropriate forum
10.3

The Investor irrevocably appoints [NAME] of [ENGLAND/WALES ADDRESS] as its agent


to receive on its behalf in England or Wales service of any proceedings under clause 10.2.
Such service shall be deemed completed on delivery to such agent (whether or not it is
forwarded to and received by the Investor) and shall be valid until such time as the Promoter
has received prior written notice from the Investor that such agent has ceased to act as agent.
If for any reason such agent ceases to be able to act as agent or no longer has an address in
England or Wales, the Investor shall forthwith appoint a substitute acceptable to The Promoter
and deliver to the Promoter the new agent's name and address within England and Wales.

10.4

This Agreement (in so far as it is stated to be enforceable) is made for the benefit of the
parties to it and their successors and permitted assigns and is not intended to benefit or be
enforceable by any third party under the Contracts (Rights of Third Parties) Act 1999 or
otherwise.

In witness whereof the parties hereto have executed this document as a deed and it is delivered on the
date stated at the beginning of this deed.

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Signed by GFH Capital Limited


acting by

, a director,

in the presence of:

Witness Name:
Address:

Occupation:

Signed by [WGA Sports Advisory]


acting by

, a director,

in the presence of:

Witness Name:
Address:

Occupation: