Contract analysis

I. Executive Summary This memorandum analyzes the directors' and officers' liability insurance program maintained by Redstone Gaming Corp. ("RGC" or the "Company") and assesses coverage availability for defense costs and potential liabilities arising from the activist board-seat campaign initiated by Pinnacle Harbor Capital Partners, LP ("Pinnacle Harbor" or "PHCP"). The purpose of this review is to provide the engag

II. Background A. The Activist Campaign Between approximately June 2022 and November 2022, Pinnacle Harbor Capital Partners, LP accumulated a stake of approximately 6.8% in RGC common stock, representing 7,119,600 shares out of 104,700,000 shares outstanding. Based on publicly available information and the data reflected in Pinnacle Harbor's preliminary Schedule 13D filing, the weighted-average purchase price was app

III. D&O Insurance Program Overview A. Program Structure RGC's directors' and officers' liability insurance program is placed and administered through Glenmore Caulfield Insurance Brokers, Inc. ("Glenmore Caulfield"), a national specialty insurance brokerage firm. The primary broker contact is Sarah Voss, Senior Vice President, who has handled the RGC D&O placement for the past three policy cycles. The program curren

IV. Insuring Agreements — Coverage Analysis The Northbridge primary policy contains three separate insuring agreements, commonly referred to as Side A, Side B, and Side C. Each insuring agreement has distinct coverage triggers, conditions, and applicability to the facts of the Pinnacle Harbor activist campaign. This section analyzes each insuring agreement in turn. A. Side A — Individual Director and Officer Coverage

V. Definition of "Claim" and "Loss" Under the Policies A. Definition of "Claim" The Northbridge primary policy defines "Claim" broadly to include: (i) any written demand for monetary damages or non-monetary or injunctive relief; (ii) any civil, criminal, administrative, regulatory, or arbitration proceeding commenced by the filing of a complaint, information, indictment, or similar pleading; (iii) any formal or infor

VI. Notice of Circumstances A. Timing and Method Notice of circumstances was submitted to both Northbridge Indemnity Company and Creston National Insurance Co. on November 16, 2022, one day after the Calderwood & Harkness engagement letter was fully executed. The notice was prepared with input from the Calderwood & Harkness team and was submitted through the Company's insurance broker, Glenmore Caulfield Insurance Br

VII. Potential Coverage Issues and Exclusions This section identifies and analyzes the principal exclusions and potential coverage issues that could affect the availability of coverage under the RGC D&O insurance program in connection with the Pinnacle Harbor activist campaign. Based on the current facts, no exclusions appear likely to apply. However, this analysis should be revisited as circumstances develop. A. Ins

VIII. Communications with Broker and Carriers A. Summary of Discussions with Glenmore Caulfield Marcus Leung spoke with Sarah Voss, Senior Vice President at Glenmore Caulfield Insurance Brokers, Inc., on November 16, 2022, to coordinate the filing of the notice of circumstances with both carriers. During that conversation, Ms. Voss confirmed the following: • The notice of circumstances would be delivered by Glenmore

IX. Estimated Exposure and Adequacy of Limits A. Estimated Defense Cost Exposure The following is an estimate of defense costs that may be incurred in connection with the Pinnacle Harbor activist campaign: The estimated total legal defense costs (Calderwood & Harkness fees) of approximately $1,380,000 are well within the $15 million primary layer limit and are unlikely to approach, let alone exhaust, the primary laye

X. Recommendations Based on the foregoing analysis, the following recommendations are submitted for the engagement team's consideration:

1. Continue to Update Carriers. File supplemental notices of circumstances with Northbridge Indemnity Company and Creston National Insurance Co. as material developments occur in the activist campaign. Material developments warranting supplemental notice include, but are not limited to: the receipt of a formal nomination notice from Pinnacle Harbor; the commencement of a contested proxy solicitation; the filing of an

2. Maintain Broker Coordination. Continue regular communications with Sarah Voss at Glenmore Caulfield Insurance Brokers, Inc., to ensure timely responses to carrier requests and inquiries, to coordinate renewal discussions, and to maintain an open channel for coverage guidance. Glenmore Caulfield should be copied on all significant carrier correspondence and should be consulted before any substantive communications

3. Defense Cost Tracking. Implement a system for tracking and segregating defense costs that may be recoverable under the D&O program from costs that are not. Specifically, Calderwood & Harkness time entries should be coded or tagged to distinguish between (a) work performed in defense of directors and officers in their capacities as such (potentially covered under Side A and Side B), (b) work performed in defense of

4. Consent to Incur Costs. Review the Northbridge primary policy's consent provisions regarding the selection of counsel and the retention of advisors. Most D&O policies require the insured to obtain the insurer's prior written consent before incurring defense costs that the insured intends to submit for reimbursement. Confirm that Calderwood & Harkness's engagement has been communicated to the carriers through the n

5. Renewal Disclosure. Ensure that the January 1, 2023 renewal application fully and accurately discloses the Pinnacle Harbor activist campaign and all related circumstances to preserve coverage continuity and to avoid any future rescission or coverage-denial arguments. Coordinate with Patricia Nakamura and Sarah Voss on the preparation and submission of the renewal application. Calderwood & Harkness should review th

6. Evaluate Adequacy of Limits. In light of the activist campaign, the Special Committee and the Board should consider whether additional excess layers should be procured at renewal to increase the total tower capacity. Discuss with Glenmore Caulfield the availability and pricing of additional excess D&O coverage and, in particular, the possibility of procuring a standalone Side A DIC (difference in conditions) polic

7. Board Communication. Inform the Special Committee (Delacroix, Vasquez, Morse) and the full Board that D&O coverage is expected to be available for qualifying defense costs arising from the Pinnacle Harbor activist campaign, subject to the $500,000 SIR and policy terms. This communication should provide directors with comfort and assurance that they are protected as the