Contract analysis

I. Executive Summary The purpose of this memorandum is to advise the Special Committee of the Board of Directors of Redstone Gaming Corp. ("RGC" or the "Company") on the relative merits of two principal courses of action available to the Committee and the Board in response to the ongoing activist campaign by Pinnacle Harbor Capital Partners, LP ("Pinnacle Harbor" or the "Activist"): (a) pursuing direct engagement and

II. Background and Current Posture A. Pinnacle Harbor's Position and Demands Pinnacle Harbor Capital Partners, LP is a Delaware limited partnership with its principal offices located at 590 Madison Avenue, 34th Floor, New York, New York 10022. The general partner of Pinnacle Harbor is Pinnacle Harbor Capital Management, LLC, also a Delaware limited liability company. Pinnacle Harbor manages assets under management ("

1. Board Representation. Pinnacle Harbor demands the appointment of two Pinnacle Harbor-nominated candidates to the RGC Board of Directors (the "Board"): • Dr. Sandra Trevelyan, age 55, the former Chief Operating Officer of Meridian Interactive Holdings, Inc., a mid-cap interactive gaming company that was acquired in 2020. Dr. Trevelyan has a background in interactive gaming operations, digital platform development,

2. Strategic Review of the Interactive Gaming Division. Pinnacle Harbor demands a formal strategic review of RGC's interactive gaming division (the "Interactive Gaming Division"), which generated revenue of approximately $412 million in fiscal year 2021, representing approximately 14.4% of RGC's total revenue of $2.87 billion. Pinnacle Harbor has publicly stated that it believes the Interactive Gaming Division is und

3. Return of Capital. Pinnacle Harbor demands the return of $300 million to shareholders through either a special dividend or an accelerated share repurchase program. Pinnacle Harbor has argued that the Company's balance sheet is over-capitalized and that the current capital allocation strategy does not optimize returns for stockholders. C. Procedural Status The following is a summary of the key events and milestones

III. Analysis: Contested Proxy Election Scenario A. Probability Assessment — Outcome of a Contested Election In assessing the likely outcome of a contested proxy election at the 2023 Annual Meeting, Calderwood & Harkness has considered the following factors, in consultation with Calloway Pinnacle Trust Bank and Whitfield Morrow Partners: Board Composition and Governance Profile. The RGC Board currently consists of ni

IV. Analysis: Settlement / Direct Engagement Scenario A. Strategic Rationale for Settlement Calderwood & Harkness believes that there are compelling strategic reasons for the Special Committee to authorize direct engagement and settlement discussions with Pinnacle Harbor, subject to the parameters set forth in Section V below. The principal benefits of a negotiated settlement include the following: Avoidance of Costs

V. Proposed Settlement Parameters Based on our analysis of the relevant considerations, Calderwood & Harkness recommends that the Special Committee authorize settlement discussions with Pinnacle Harbor within the following parameters. Each parameter is discussed in detail below. A. Standstill Period We recommend an eighteen (18) month standstill period commencing on the date of execution of the settlement agreement (

I. Termination Triggers The settlement agreement should include customary termination provisions, allowing either party to terminate the agreement upon the occurrence of specified triggering events. We recommend the following termination triggers: • Material Breach. Either party may terminate the agreement upon a material breach by the other party that remains uncured for fifteen (15) business days after written noti

VI. Process Recommendations A. Negotiation Team and Authority Calderwood & Harkness recommends that Douglas Fairchild of Calderwood & Harkness LLP and Patricia "Trish" Nakamura, General Counsel and Corporate Secretary of RGC, serve as the primary negotiators on behalf of the Company and the Special Committee in settlement discussions with Pinnacle Harbor. Mr. Fairchild brings deep experience in activist defense engag

VII. D&O Insurance Considerations Calderwood & Harkness notes the following considerations related to the Company's directors' and officers' liability insurance program in connection with the Pinnacle Harbor campaign and any settlement thereof. Notice of Circumstances. A notice of circumstances was submitted on November 16, 2022 — promptly following the formation of the Special Committee and the commencement of the C