<p>Dear James,</p>

<p>Stephen and I have shared the information you have given us in our calls and by email in the last week or so with the core group. I am writing to set out initial thoughts and reactions.</p>

<p>There is a universal feeling of shock and disbelief at the financial position of the pubs and the extent of debt and commitments which have built up which significantly impact shareholder value. The high head office costs do not seem to be delivering the necessary benefits to all pubs even pre C-19.<br />
Our initial thoughts are that the priority is for immediate action to be taken to stabilise each pub and to protect value. To that end we believe you should not spend your time rushing or analysing how to re-open the pubs in the next few weeks because the situation is so uncertain and is likely to deplete cash even more. Instead we suggest you focus your attention and energy on the following:</p>

<p>1. &nbsp;developing further cashflows for each individual pub setting out immediate liquidity needs assuming re-opening does not take place for the next two months, showing the minimum payments that needs to be made to protect the pub and a narrative highlighting issues or risks which threaten continuation and any key milestones in the coming weeks.</p>

<p>2. Take business bounce-back loans where possible but husband cash and pay only essential costs which protect the pubs in the medium term. For the avoidance of doubt we believe management fees must not be paid. Please send an update on each application made and status.</p>

<p>3. Managing for cash is essential. Please ask Rachel to compile a list for each pub of payments that are absolutely essential in the coming weeks to ensure stability and any further costs that can be cut.</p>

<p>4. Work up your proposal to shareholders so that it can be discussed as soon as possible and then we can consider with you how it can be presented to each of the 6 shareholder groups. This includes getting independent valuation ranges (upside and downside) for each of the pubs as soon as possible. Please confirm when valuations will be provided and from who as well as the instructions which have been given to them</p>

<p>5. Provide all the information that has been requested and promised to us (Stephen Nurse) will send a separate comprehensive list for completeness)</p>

<p>6. provide the correspondence and legal advice relating to the management agreement for the Harcourt with Harcourt management (Andrew Endean?)</p>

<p>7. Provide the EIS correspondence with HMRC and ensure that EIS certification is chased with HMRC and set up a call early this week between Philip Hare and Steve Partridge as agreed. Please provide dates when the most recent information on the Hero and KPH were provided to HMRC, confirm that there is nothing outstanding and when you intend to chase HMRC (if this has not already been done).</p>

<p>8. We would like to seek views from one or two pub specialists known to the group and therefore would like to set up discussions for them with Steve Ham on his operational view of each pub and how operations can be optimised including re-opening strategies where appropriate. Please confirm your agreement so that we can initiate this and provide Steve&rsquo;s contact details.</p>

<p>9. Finally, we would like to nominate a director representing shareholders for each pub company. Please confirm that you are agreeable to this.&nbsp;As we understand you will be making some kind of offer in the next few weeks it would be sensible for you to be able to defer decision-making on that offer to the shareholder director. I&rsquo;m sure you appreciate the point that you cannot make an offer and then consider that offer as a director given your fiduciary duty to avoid conflicts as a director.</p>