<p><strong>Ad Hoc Committee of Shareholders of Harcourt Pub Limited (&lsquo;AHC&rsquo;)</strong></p>

<p>28th May 2020</p>

<p><strong>To: The Directors of Harcourt Pub Limited</strong></p>

<p><strong>By email to: &nbsp;James McCulloch, james@harcourtinns.co.uk</strong></p>

<p>Dear Sirs</p>

<p><strong>Financial Position of the Harcourt Pub Limited (the &lsquo;Company&rsquo;)</strong></p>

<p>We write to inform you that a significant group of shareholders of the Company representing over 60% of the members has been formed. We expect this percentage to grow significantly as we reach out to the other shareholders.&nbsp; The AHC has been formed to act as a convenient forum to discuss the position of the Company in the light of the impact of the covid pandemic. For logistical convenience the AHC has a smaller &lsquo;core&rsquo; membership consisting of Nicholas Curtis, Alistair Higgins, Stephen Nurse, Stephen Phillips, John Soden, and Nick Stockdale.</p>

<p>The AHC recognises that the Company faces an extremely challenging financial position in view of both the lost revenue caused by the on-going lockdown and possible measures likely to be put in place by the government when the lock down finishes.&nbsp; The AHC will form a suitable sounding board for the directors as they review the position of the Company going forward.&nbsp; We hope the directors will find this useful and also recognise that it would be wise to work with the AHC to review strategic decisions affecting the Company.&nbsp;&nbsp; One of the significant near term decisions will be whether &nbsp;to reopen the pub or appoint agents to advise on selling. &nbsp;Shareholders will expect to be kept fully appraised of these decisions.</p>

<p>You will be aware that even prior to the pandemic many shareholders have expressed concerns direct to James McCullouch on a number of issues including that there was a lack of transparency regarding the financial position and strategic direction of the company.&nbsp; Financial performance seemed anaemic even prior to the lockdown as far as we could discern. The AHC has concerns regarding costs and level of debt generally, including the costs of the management contract, and the funding and timing of the proposed planning permission to add additional rooms.&nbsp; There are numerous small shareholdings and we recognise that informing each individual shareholder on a day to date basis is not realistic.&nbsp; Regardless we believe reporting needs to significantly improve, something which is particularly important given the inherent conflicts of interests of the two main executive directors who also benefit from a management contract with the Company.&nbsp; These conflicts of interest will likely become particularly apparent where decisions are being made regarding the strategic direction of the Company.</p>

<p>We would propose that a meeting between Stephen Nurse, John Soden and James McCulloch to discuss many of the issues raised above.&nbsp; Stephen and John will report back to the core group following the meeting.&nbsp; Prior to that meeting we attach an information request list which the AHC has put together to help us consider the current position of the Company.&nbsp; We would be grateful if you could pull the information together as soon as possible.</p>

<p>We look forward to a constructive dialogue in these challenging times.</p>

<p>Yours Faithfully,</p>

<p>Ad Hoc Group of Shareholders of the Harcourt Pub Limited</p>

<p>&nbsp;</p>

<p>&nbsp;</p>

<p><strong>Harcourt Group shareholder notes</strong><br />
Questions to James/Request for information:<br />
1. Principal pub management contracts with each pub:<br />
a. Management agreements with Ducalian/Ducalian successor;<br />
b. Service agreements e.g. with &ldquo;head office co&rdquo; (see also 4b below);<br />
c. Other key contracts such as director appointment contracts<br />
2. Explanation of how the pub operator contract with each pub was terminated<br />
3. Any legacy arrangements for each pub re: the split of Ducalian (into pubs and storage)/confirmation any buy out of one party by another was not financed by the pubs<br />
4. EIS status update:<br />
a. Hero, KPH, and Crown;<br />
b. Status of &ldquo;head office co&rdquo; which we understand caused the prevailing EIS issue (see also point 13c)<br />
c. Initial tax advice regarding the set up of &ldquo;head office co&rdquo;<br />
5. 2019 accounts for each pub and summary of performance for that 2019 period (i.e. prior to COVID-19)<br />
6. All historic filed accounts for each pub<br />
7. Current capital structure of each pub to include all share classes, all debt (short and long term), and all debt like instruments<br />
8. Explanation for level of debt in each pub versus IM base case i.e. what has the debt be used for<br />
9. Up to date management accounts for each pub for current trading period<br />
10. Re-opening strategy for each pub including whether you intend to apply for any government covid-related loans<br />
11. Budget 2020-21 for each pub<br />
12. Status of planning permission for Harcourt<br />
13. Exit strategy for<br />
a. Three Cranes, Coach and Harcourt (which are out of EIS holding period);<br />
b. Hero, KPH, and Crown;<br />
c. Any separation issues re: &ldquo;head office co&rdquo;.<br />
14. Governance - have you considered how to address conflicts of interest of the board of each pub as you work through any strategic options?</p>

<p>&nbsp;</p>