Dear Claudia, Thomas, Priya, and Counsel,
I am pleased to confirm that, as of today, July 19, 2024, all parties have executed the definitive transaction documents in connection with the sale of 100% of the membership interests in Meridian Press Holdings LLC (Delaware file no. 4521889) by Aurelius Media Holdings Inc. to Ridgeline Publishing Acquisition Corp., the acquisition vehicle of Pinnacle Ridge Capital Partners Fund IV, L.P., at an enterprise value of $480,000,000.
Congratulations to the entire Aurelius team, Pinnacle Ridge, and all of our fellow advisors on reaching this important milestone. This has been a tremendous collective effort, and we are grateful for the collaboration and diligence of everyone involved.
Set forth below is a summary of the executed documents, the status of key regulatory approvals, and the path forward to closing.
**I. Summary of Executed Documents**
The following documents have been fully executed and exchanged by the parties:
1. **Membership Interest Purchase Agreement (MIPA)** — among Aurelius Media Holdings Inc., as Seller, Ridgeline Publishing Acquisition Corp., as Buyer, and, solely for purposes of certain provisions thereof, Aurelius Global Media Group PLC and Pinnacle Ridge Capital Partners Fund IV, L.P.; governed by the laws of the State of Delaware.
2. **Transition Services Agreement (TSA)** — between Aurelius Media Holdings Inc., as Service Provider, and Ridgeline Publishing Acquisition Corp., as Service Recipient, effective as of Closing. The TSA provides for up to 18 months of transition services across IT Infrastructure & Systems, Finance & Accounting, HR & Payroll, and Facilities & Real Estate, as well as reverse TSA services for distribution logistics support for a period of up to 12 months.
3. **Escrow Agreement** — among Aurelius Media Holdings Inc., Ridgeline Publishing Acquisition Corp., and Granite Trust Company, N.A., as Escrow Agent, effective as of Closing. The Escrow Agreement provides for the deposit of $72,000,000 into escrow to secure Seller's indemnification obligations under the MIPA.
4. **Trademark License Agreement** — between Ridgeline Publishing Acquisition Corp., as Licensor, and Aurelius Media Holdings Inc., as Licensee, effective as of Closing, granting Aurelius a 3-year royalty-free license to use the "Meridian" name in connection with legacy digital content on Aurelius's streaming platform.
5. **Non-Competition and Non-Solicitation Agreement** — by Aurelius Global Media Group PLC and Aurelius Media Holdings Inc. in favor of Ridgeline Publishing Acquisition Corp.
6. **Section 338(h)(10) Election Agreement** — between Aurelius Media Holdings Inc. and Ridgeline Publishing Acquisition Corp., providing for the joint making of an election under Section 338(h)(10) of the Internal Revenue Code.
In addition, Buyer's counsel (Hathaway, Locke & Barnett LLP) has confirmed delivery of the Debt Commitment Letter from Clearwater National Bank, N.A., as Administrative Agent and Lead Arranger, for the senior secured credit facilities consisting of a $200,000,000 Term Loan B and a $60,000,000 Revolving Credit Facility, which was a condition to signing under the MIPA. We thank Graham and his team for the timely coordination on this item.
**II. Representations and Warranties Insurance**
The representations and warranties insurance policy with Kelvantis Omnivrel Insurance Company is expected to be bound shortly, with binding anticipated no later than July 22, 2024. Megan Chu is coordinating directly with the underwriting team (David Kowalski at Kelvantis) to finalize the policy. For reference, the key terms are as follows: coverage limit of $72,000,000; retention of $4,800,000; premium of $1,800,000, split 50/50 between Seller and Buyer. We will circulate confirmation once the policy is bound.
**III. Regulatory Approvals — Status Update**
- **HSR Act (Hart-Scott-Rodino):** Early termination of the HSR waiting period was granted on June 28, 2024. This condition to Closing is satisfied.
- **Canadian Competition Act:** The required filing has been made. Clearance remains pending. As a reminder, receipt of Canadian Competition Act clearance is a condition to Closing under the MIPA. We will continue to monitor progress and provide updates as developments occur.
**IV. Target Closing Date and Key Pre-Closing Milestones**
The target Closing Date under the MIPA is **November 8, 2024**. The following key items must be completed between signing and Closing:
1. **Canadian Competition Act clearance** — pending, as noted above.
2. **Incorporation of Ridgeline Publishing Acquisition Corp.** — the Buyer acquisition vehicle is to be fully incorporated and organized prior to Closing.
3. **Third-party consents** — Landlord consents are required for 4 of the 10 leased premises; efforts to obtain these consents are underway. In addition, certain author and content license agreement consents remain outstanding. We will track and circulate a consent status tracker in the coming weeks.
4. **Estimated closing statement and funds flow memorandum** — to be prepared and exchanged in accordance with the timeline set forth in the MIPA.
5. **Good standing certificates** — Certificates of good standing for Meridian Press Holdings LLC and each of its subsidiaries (Meridian Distribution Services Inc., Bellweather Academic Press Inc., Foxglove Media LLC, and Meridian Press Canada ULC) are to be obtained within 5 business days of Closing.
6. **Buyer's debt financing documentation** — Amberley & Kincaid LLP is coordinating with Clearwater National Bank, N.A. and Trident Capital Finance LLC to finalize the definitive credit documentation.
7. **Seller closing deliverables** — including the officer's certificate, secretary's certificate with incumbency, FIRPTA certificate, bring-down certificate, assignment of membership interests, and payoff letter for the $50,000,000 intercompany promissory note.
**V. Interim Operating Covenants**
I would like to take this opportunity to remind the Aurelius team and Meridian Press management — including Jonathan Kessler and Angela Moretti — that the pre-closing covenants set forth in the MIPA are now in effect. From today through Closing, the Business must be operated in the ordinary course consistent with past practice, and Seller must obtain Buyer's prior written consent for any actions outside the ordinary course as specified in the relevant sections of the MIPA. Calderwood & Harkness will circulate a separate summary of the key interim covenant obligations early next week to assist the Aurelius and Meridian teams with day-to-day compliance.
**VI. Document Distribution and Execution Copies**
Calderwood & Harkness will circulate fully executed PDF copies of all transaction documents to the full distribution list early next week. Original signature pages are being held in escrow by Calderwood & Harkness and Hathaway, Locke & Barnett LLP pending Closing and will be released and attached to the originals at that time. Please reference **Calderwood & Harkness Matter No. 1043-00002** in all correspondence related to this transaction.
**VII. Acknowledgments and Next Steps**
I want to extend sincere thanks to the teams on all sides for their extraordinary work in getting us to signing — the Aurelius team, Pinnacle Ridge Capital Partners, Haverford Whitmore & Co., Drummond Zanthor Partners LLC, Hathaway, Locke & Barnett LLP, and all other advisors who contributed to this effort. It has been a pleasure working with each of you through this process.
Going forward, **Megan Chu** will serve as the primary day-to-day point of contact for all pre-closing matters, with **Derek Okonkwo** supporting. Of course, Jim Prentice and I remain fully available and engaged as we work toward the November closing.
Please do not hesitate to reach out with any questions or comments.
With warm regards,
**Beatrice Holloway** Partner, Mergers & Acquisitions Calderwood & Harkness LLP 425 Park Avenue, New York, NY 10022 Tel: (212) 558-4000
---
*CONFIDENTIALITY NOTICE: This email message, including any attachments, is for the sole use of the intended recipient(s) and may contain information that is privileged, confidential, and exempt from disclosure under applicable law, including attorney-client privileged communications and attorney work product. If you are not an intended recipient, you are hereby notified that any dissemination, distribution, copying, or other use of this message or its attachments is strictly prohibited. If you have received this communication in error, please notify the sender immediately by reply email and permanently delete the original message and all copies. Thank you.*