PRIVATE AND CONFIDENTIAL Memorandum of Understanding

This note sets out the understanding reached by the parties in relation to the sale and purchase of an 85.34% stake in the issued share capital of Acorn p.l.c. ("Target") by Oak Limited ("Oak") to Wavetower Limited (Company Number 7380537) ("Bidder") pursuant to the terms of a to be agreed sale and purchase agreement (the "SPA") and the corresponding obligation on Bidder to make an unconditional mandatory cash offer pursuant to the Code on Takeovers and Mergers (the "Code"). Nothing in this MOU is, nor is it intended to be, legally binding and it shall not create any binding obligations whatsoever. Bidder has not yet formed a firm intention to make an offer and nothing in this letter should be regarded as a firm intention to make an Offer for the purposes of the Code requiring Target to make an announcement under Rule 2 of the Code. 1. Overall consideration Bidder is required to pay 33 million to acquire the entire issued share capital of Target and to acquire or repay the Debt (as defined below). Accordingly, 33m is the agreed enterprise value of Target. 2. Acquisition of Shares It is acknowledged that 57.05% of Targets ordinary share capital is held by Oak and 34.42% is held by a subsidiary of Larch. It is intended that a restructuring of Larch will be implemented which will result in Oak acquiring additional Target shares sufficient to take Oaks total shareholding in Target to 85.34%. If this restructuring is not completed by the time at which Bidder and Oak are prepared to execute a definitive sale agreement (SPA) in relation to the transaction it is intended that Bidder will acquire the 57.05% position of Oak with a binding commitment by Oak to sell to Bidder the remaining shares constituting the 85.34% position as and when those are acquired by Oak on the restructuring of Larch. Following execution and simultaneous completion (at least as to 57.05% of the Target shares) of the SPA, Bidder will be obliged under Rule 9 of the Code to extend an unconditional mandatory cash offer (Offer) to the holders of all other ordinary shareholders in the Target (the " Remaining Shareholders"). Bidder's preference is for the Remaining Shareholders to retain their interests in Target, recognising that it will however be obliged to make the Offer for the entire issued share capital. It is not Bidder's current intention to compulsorily acquire the minority interests in Target should it be in a position to exercise those rights. Further, it is the current intention of Bidder to procure that, post completion of the Offer, Target remains listed on the PLUS market, so that Bidder may raise further equity share capital to fund the working capital needs of Target going forward. 3. LBG Debt breakdown of components On completion of the SPA ("Completion"), Target is expected to have up to 27.5m of debt, consisting of (i) a term loan of approximately 19m (ii) an overdraft facility with a negative balance

of 3m (iii) a loan of 4m in respect of a sale and lease back of a parcel of land (the "Finance Lease") and (iv) a break cost liability of approximately 1.5m in connection with a hedge (collectively, the "Debt"). All 2010/11 UEFA Champions League cash received by Target will be retained within Targets business in the ordinary course. 4. Acquisition of Debt Bidder will acquire from Lloyds Banking Group (LBG) at Completion that part of the Debt which is assignable for full value. The remainder of the Debt will be repaid at Completion with funds which it is intended will be borrowed on an interim basis by Target from Bidder. It is intended that the Bidder will inherit LBGs position as a secured creditor of the Target. The total outstanding acquired or interim debt owed by Target to Bidder is referred to in the remainder of this document as the New Debt. 5. Repayment of New Debt Oak and the Bidder have agreed that the New Debt will ultimately be repaid following Completion, by Bidder subscribing for a new class of ordinary shares or preference shares in Target to enable Target to repay the New Debt in full. It is acknowledged that the Target is one of a number of companies in the group of companies of which Oak and Target form part (Oak Group) which is party to a number of appeals raised by the Oak Group, including Target, against assessments to PAYE and NIC issued by HMRC in relation to an employee benefit trust structure operated by the Oak Group ( Tax Case). The Tax Case is expected to be determined, settled or withdrawn within 9 months after the date of this letter. Target and Bidder have agreed that the obligation on Bidder to refinance the New Debt with an ordinary share or preference share issue will be postponed until after the Tax Case has been determined, settled or withdrawn and the New Debt will be refinanced with an ordinary share or preference share issue within 10 weeks after the date of such determination, settlement or withdrawal. The rights attaching to the class of ordinary shares or preference shares need to be finalised but presently Bidder suggests that (i) if such shares are ordinary shares they will be non-voting shares that would otherwise rank pari passu and rateably with the existing issued ordinary shares in Target preference shares, and (ii) if such shares are preference shares they will be non-voting convertible cumulative redeemable preference shares with an agreed coupon that would be payable where sufficient distributable reserves were in existence or otherwise rolled over. If such shares are preference shares, the Bidder would be entitled to be repaid the amount subscribed or deemed to be subscribed for such shares in preference to ordinary shareholders in the event of an exit or liquidation. If preference shares are to be issued, these will need to be structured such that these are classified as "equity" and not "debt" on Target's balance sheet for the purpose of UK GAAP. Whilst the final form of the proposal needs to be agreed, the current intention is that after Completion but before the ordinary share or preference share issue, the new board of Target will

procure that Target convenes a GM at which it will propose special resolutions to, amongst other things, disapply statutory pre-emption rights and adopt new articles of association of Target (the "Articles") which create the new class of ordinary shares or preference shares. Bidder will then subscribe for such number of ordinary shares or preference shares sufficient to place Target in funds to repay the New Debt. For the avoidance of all doubt, no application would be made for listing of the ordinary share(s) or preference share(s). Given that the ordinary shares or preference shares will be non-voting, no existing ordinary shareholders will be diluted in terms of voting power as a result of the placing by Target of the ordinary shares or preference shares to Bidder. Further, Target should be able to avoid the need to prepare a prospectus in order to make the offer of the ordinary shares or preference shares to Bidder, as an offer to one shareholder would not constitute an offer to the public under the Prospectus Directive. Finally, the related party transaction rules for PLUS would not preclude Bidder, who will by such time be the legal owner of 85.34% of the issued share capital of Target, from voting on the resolution, thus guaranteeing the resolution will be passed. 6. Conduct of the Tax Case The parties agree that Oak Group will continue to manage all aspects of the Tax Case and agree to keep Bidder informed at key stages. Appropriate wording will be included in the SPA to cover at least the following issues: Oak Group will conduct the Tax Case for all appellant parties including Target; Oak Group will actively consult with Target in relation to all actions relating to the Tax Case which may in any way affect Target; Oak will indemnify Target in respect of its reasonable legal costs in connection with the Tax Case (which should not be material as Oak Group will conduct the case); Bidder to procure that Target provides all assistance reasonably required by Oak in connection with the Tax Case; and Bidder will ensure that (i) no steps are taken to terminate the employment contracts of Martin Bain (Chief Executive) and Andrew Dickson (Head of Football Administration) (otherwise than in circumstances justifying the summary termination of eith er individuals employment without Target being obliged to pay such individual any compensation) until the Tax Case is determined, settled or withdrawn, and (ii) such individuals attend at the continued hearing of the appeal before the Tax Tribunal to give evidence. 7. Escrow Oak is prepared to place its proportion of the total amount payable for Targets shares (33 million less the amount of the Debt as at Completion multiplied by 85.34/100) into an escrow account until the Tax Case is determined, settled or withdrawn. If any amount is payable directly by Target to HMRC in respect of the determination or settlement of the Tax Case, such amount will be paid from

the escrow account to the Bidder, up to the total amount standing to the credit of the escrow account. Subject to the foregoing sentence, the amount standing to the credit of the escrow account (including interest) will be paid to Oak as soon as practicable after the determination, settlement or withdrawal of the Tax Case. 8. Due diligence and exclusivity It is envisaged that Oak will approach the Chairman of Target to arrange a meeting with the Chairman of Target and to enable due diligence to commence as soon as practicable. It is also envisaged that Oak will undertake in writing to deal exclusively with Bidder for a period to be agreed and will agree not to solicit other offers for its shares in Target during such period, such undertaking to be in the agreed form. 9. Warranties Oak shall offer up warranties in the SPA as to title and capacity. Bidder will offer up warranties as to capacity. Any issues that arise during the due diligence phase shall be raised and addressed by the parties and their advisers at the time. 10. Future funding Following any Offer becoming or being declared unconditional in all respects, Bidder proposes to make additional funds available to Target for updating Ibrox Stadium including creating more corporate areas, increasing capacity and looking to develop the G51 Project. Bidder acknowledges that Oak and the fans of Target would like some additional comfort regarding access to proceeds to be used for the future funding of Target. Bidder is prepared to give hard assurances in respect of its ability to contribute 10 m during its first two years of ownership and a current intention statement regarding its intention to contribute 5m per year for the following three years. As regards the hard assurance as to the availability of the 10m of additional funding, Bidder will work with Oak to agree a form of assurance that is acceptable, for instance an irrevocable commitment to procure and underwrite future equity offers. This needs to be discussed further. 11. SPA Undertakings Bidder: is prepared to confirm that entry into of the SPA will not give rise to a breach of the SFA, SPL, etc rules; shall not be required to contribute to Target any unused portion of the Offer funds remaining as a result of shareholders not accepting the Offer; will undertake to Oak that its shareholders will be those persons referred to in the proof of funds letter from Collyer Bristow to Oak dated 8 November 2010; and will consult with Oak as regards the terms of the Offer.

Comfort will also be provided that assets of the Target will not be used in future to support any acquisition related debt, including the New Debt. 12. Anti-embarrassment Bidder acknowledges that Oak has sought some additional comfort in the event that Bidder sells Target for a sum greater than the aggregate sum paid by Bidder for Target (including the Debt), or where Target enters the English Premier League (or any successor league), , in each case within the period of five years from Completion. Bidder and Oak acknowledge that this gives rise to certain technical issues under the Code but agree that, whilst the quantum of such remains open, they will instruct their advisers to work together in good faith to try and find an appropriate mechanic to deliver anti-embarrassment upside to Oak. 13. PR Bidder and Oak will procure that their respective PR advisers collaborate in relation to the PR strategy to be associated with the transaction, it being noted that the PR strategy should be in place prior to the Offer being notified by Oak to the Chairman of Target. In the case of a press leak, Bidder and Oak shall not comment on the transaction to the press in any case, without prejudice to either of their legal or regulatory obligations.