<p><strong>Subject to Contract </strong></p>

<p><strong>Without Prejudice</strong></p>

<p><strong>PROPOSED TERMS FOR TERMINATION AND SETTLEMENT OF CLAIMS RELATING TO MANAGEMENT AGREEMENTS AND OPERATING AGREEMENTS [subject to tax review]</strong></p>

<p><strong>Parties:</strong></p>

<p>Harcourt Inns, Harcourt Investments, James Mcculloch (JM), Henry Harris (HH), Ducalian Capital, and each pub company managed by Harcourt Investments (&lsquo;<strong>Pubcos</strong>&rsquo;)</p>

<p><strong>Definitions:</strong></p>

<p><strong>&lsquo;A Shares&rsquo; </strong>any A Shares issued by any Pubco</p>

<p>&nbsp;&lsquo;<strong>Ducalian Claims&rsquo;</strong> any claim by Ducalian against JM or any JM owned / controlled vehicle</p>

<p><strong>&lsquo;Consultancy Contract</strong>&rsquo; contract between JM and each Pubco under which JM assists the operations of the Pubcos and if applicable the progress of any EIS application pursuant to which JM will be paid &pound;30,000 per annum for 3 years</p>

<p>&lsquo;<strong>Harcourt/JM Claims&rsquo;</strong> means the claims of Harcourt Investments, Harcourt Inns HH and JM or any vehicle controlled by JM against any Pubco arising for any reason under any management contract, operating contract, service or employment contract, &nbsp;loan or outstanding obligation of any kind</p>

<p>&lsquo;<strong>Pubco Claims&rsquo; </strong>any claims arising against Harcourt Investments, Harcourt Inns, JM, HH, and Ducalian arising as a result of breach of contract, breach of fiduciary duty, misfeasance, negligence or any other claim save fraud</p>

<p>&lsquo;<strong>Pubco Intercompany Claims&rsquo; </strong>claims (if any) any pub has any other Pubco<a href="#_ftn1" name="_ftnref1">[1]</a></p>

<p><strong>Key terms:</strong></p>

<p><strong>Closing:</strong></p>

<p>The following takes effect on signing (the &lsquo;<strong>Closing</strong>&rsquo;) of a Settlement Agreement (&lsquo;<strong>Settlement Agreement</strong>&rsquo;) which will implement the Proposed Terms in a legally binding manner</p>

<p><strong>Termination:&nbsp; </strong></p>

<p>The management agreement with Harcourt Investments and any operating agreements with Harcourt Inns will be terminated on Closing</p>

<p><strong>Resignation:</strong></p>

<p>JM and Henry Harris will resign as directors from each pub without any recourse or compensation as soon as replacement directors have been identified by the shareholder Ad hoc committee (&lsquo;<strong>SAG</strong>&rsquo;) provided however that JM will continue to provide support/continuity to achieve a smooth takeover to a new operator and assist with the EIS certification pursuant to a Consultancy Contract</p>

<p><strong>Claims:</strong></p>

<p>All &nbsp;Harcourt/JM Claims will be released save for claims amounting to [&pound;100,000] which will be deferred and paid on the date of an Exit (as defined in the articles of association in each Pubco)</p>

<p>All Pubco Intercompany Claims will be released</p>

<p>All Pubco Claims will be released</p>

<p>All Ducalian Claims will be released</p>

<p><strong>A Shares:</strong></p>

<p>Any holder of A Shares shall transfer such shares back to each respective Pubco which will hold them in treasury</p>

<p><strong>General Meeting:</strong></p>

<p>Shareholders will vote at an General Meeting of each pub to enter into the Settlement Agreement,&nbsp; the Consultancy Agreement and approve the new management contract for each Pubco and the appointment of new directors</p>

<p>&nbsp;</p>

<p>&nbsp;</p>

<p>&nbsp;</p>

<hr />
<p><a href="#_ftnref1" name="_ftn1">[1]</a> These claims should not exist as all pubs should have been run independently of each other but included in case this is not the case</p>