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SECTION 338(h)(10) ELECTION AGREEMENT

Dated as of July 19, 2024

by and between

AURELIUS MEDIA HOLDINGS INC.

a Delaware corporation

and

RIDGELINE PUBLISHING ACQUISITION CORP.

a Delaware corporation

In connection with the acquisition of 100% of the membership interests in Meridian Press Holdings LLC a Delaware limited liability company

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SECTION 338(h)(10) ELECTION AGREEMENT

This Section 338(h)(10) Election Agreement (this "Agreement") is entered into as of July 19, 2024 (the "Agreement Date"), by and between:

(1) Aurelius Media Holdings Inc., a Delaware corporation (Secretary of State file no. 5987324), with its principal office at c/o Aurelius Global Media Group PLC, 14 Clarges Street, London W1J 8AQ, United Kingdom (hereinafter referred to as "Seller" or "Old Target Parent"); and

(2) Ridgeline Publishing Acquisition Corp., a Delaware corporation (Secretary of State file no. 6501982), with its principal office at c/o Pinnacle Ridge Capital Management LLC, 600 Lexington Avenue, 38th Floor, New York, NY 10022 (hereinafter referred to as "Buyer" or "Purchasing Corporation").

Seller and Buyer are sometimes referred to herein individually as a "Party" and collectively as the "Parties."

This Agreement is made in connection with the purchase by Buyer of one hundred percent (100%) of the membership interests (the "Membership Interests") in Meridian Press Holdings LLC, a Delaware limited liability company (Secretary of State file no. 4521889) (the "Company" or "Target"), on the terms and subject to the conditions set forth herein and in the Purchase Agreement (as defined below).

RECITALS

WHEREAS, Aurelius Media Holdings Inc., as Seller, and Ridgeline Publishing Acquisition Corp., as Buyer, together with, solely for purposes of certain provisions thereof, Aurelius Global Media Group PLC, a public limited company incorporated in England and Wales (Companies House No. 08431276) ("Parent Guarantor"), and Pinnacle Ridge Capital Partners Fund IV, L.P., a Delaware limited partnership (Secretary of State file no. 6234577) ("Sponsor"), have entered into that certain Membership Interest Purchase Agreement, dated as of July 19, 2024 (as it may be amended, restated, supplemented, or otherwise modified from time to time, the "Purchase Agreement" or the "MIPA"), pursuant to which Seller has agreed to sell, and Buyer has agreed to purchase, one hundred percent (100%) of the Membership Interests in Meridian Press Holdings LLC at an enterprise value of Four Hundred Eighty Million Dollars ($480,000,000), on the terms and subject to the conditions set forth in the Purchase Agreement (the "Transaction");

WHEREAS, Meridian Press Holdings LLC is a Delaware limited liability company that has been and is treated as a disregarded entity for United States federal income tax purposes, with its sole member being Aurelius Media Holdings Inc. The Company, directly and through its subsidiaries (collectively, the "Tarvex Group"), operates a diversified media and publishing business. The Company's subsidiaries include: (i) Meridian Distribution Services Inc., a Delaware corporation (Secretary of State file no. 4736201); (ii) Bellweather Academic Press Inc., a Delaware corporation (Secretary of State file no. 4801133); (iii) Foxglove Media LLC, a New York limited liability company; and (iv) Meridian Press Canada ULC, a British Columbia unlimited liability company (each, a "Target Subsidiary" and collectively, the "Target Subsidiaries");

WHEREAS, Seller and Buyer desire to jointly make an election under Section 338(h)(10) of the Internal Revenue Code of 1986, as amended (the "Code"), and Treasury Regulations Section 1.338(h)(10)-1 promulgated thereunder, and any corresponding or similar elections under applicable state and local tax laws, with respect to the acquisition of the Membership Interests in the Company (collectively, the "Election"), such that the Transaction shall be treated as a deemed sale of all of the assets of the Company (and applicable Target Subsidiaries) in a single transaction at the close of the Closing Date (as defined herein) for United States federal income tax purposes and for purposes of applicable state and local income taxes, followed by a deemed liquidation of Old Target into Seller; and

WHEREAS, this Agreement is entered into pursuant to and in satisfaction of the obligations of the Parties under Section 6.13 of the Purchase Agreement, which requires the Parties to enter into a Section 338(h)(10) Election Agreement on mutually acceptable terms and conditions on or prior to the Closing Date.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE I — DEFINITIONS

Section 1.1 — Defined Terms

As used in this Agreement, the following terms shall have the meanings set forth below:

"Aggregate Deemed Sale Price" or "ADSP" means the amount determined in accordance with Treasury Regulations Section 1.338-4, which generally equals the sum of (a) the grossed-up amount realized on the sale of the stock (or, in the case of a disregarded entity, the membership interests) of Old Target, and (b) the liabilities of Old Target as of the beginning of the day after the Closing Date, plus any other relevant items described in Treasury Regulations Section 1.338-4.

"Adjusted Grossed-Up Basis" or "AGUB" means the amount determined in accordance with Treasury Regulations Section 1.338-5, which generally equals the sum of (a) the grossed-up basis of the Purchasing Corporation's recently purchased stock (or membership interests) in Old Target, (b) the liabilities of new Target as of the beginning of the day after the Closing Date, and (c) any other relevant items described in Treasury Regulations Section 1.338-5.

"Allocation" means the allocation of the ADSP and the AGUB among the seven asset classes prescribed by Treasury Regulations Section 1.338-6(b), as set forth in the Allocation Schedule, as such allocation may be revised, adjusted, and finalized in accordance with Article III of this Agreement.

"Allocation Schedule" means the schedule attached hereto as Exhibit A, setting forth the form of the allocation methodology and preliminary allocation of the deemed asset sale purchase price among the asset classes prescribed by Treasury Regulations Section 1.338-6(b), as such schedule may be completed, revised, and finalized in accordance with Article III of this Agreement.

"Closing" means the closing of the transactions contemplated by the Purchase Agreement, including the sale and purchase of the Membership Interests.

"Closing Date" means November 15, 2024, or such other date on which the Closing occurs in accordance with the Purchase Agreement.

"Code" means the Internal Revenue Code of 1986, as amended, and any successor statute. References to a specific provision of the Code include any Treasury Regulations promulgated thereunder and any successor provision thereto.

"Dispute Notice" has the meaning set forth in Section 3.3(a) of this Agreement.

"Election" means the Section 338(h)(10) Election and any corresponding or similar elections under applicable state or local tax laws made pursuant to Article II of this Agreement.

"Election Forms" means IRS Form 8023 (Elections Under Section 338 for Corporations Making Qualified Stock Purchases), IRS Form 8883 (Asset Allocation Statement Under Section 338), and any corresponding or analogous forms required under applicable state or local tax laws to effectuate the Election or report the allocation of purchase price in connection with the deemed asset sale.

"Enterprise Value" means Four Hundred Eighty Million Dollars ($480,000,000), as set forth in the Purchase Agreement.

"Equity Purchase Price" means the estimated equity purchase price of Four Hundred Eighteen Million Dollars ($418,000,000), as calculated under the Purchase Agreement, determined as follows:

(a) Enterprise Value of $480,000,000;

(b) less estimated Closing Indebtedness of $62,500,000, consisting of (i) an intercompany promissory note in the principal amount of $50,000,000 payable to Aurelius Global Media Group PLC, and (ii) capital lease obligations of $12,500,000;

(d) less estimated Target Transaction Expenses of $4,700,000;

(e) less estimated net working capital shortfall of $3,000,000 (being the amount by which the estimated Closing Net Working Capital is less than the Target Net Working Capital, as such terms are defined in the Purchase Agreement);

in each case subject to post-closing adjustment and true-up in accordance with the terms and conditions of the Purchase Agreement.

"Estimated Tax Liability" means the estimated United States federal and state income tax liability of Seller arising from the deemed asset sale in an amount of approximately Forty-Eight Million Dollars ($48,000,000), based on an Estimated Taxable Gain of approximately Two Hundred Twenty-Eight Million Dollars ($228,000,000) at a blended federal and state effective income tax rate of approximately twenty-one percent (21%).

"Estimated Taxable Gain" means the estimated taxable gain to be recognized by Seller as a result of the deemed asset sale, in the approximate amount of Two Hundred Twenty-Eight Million Dollars ($228,000,000), which represents the excess of the ADSP over Old Target's aggregate adjusted tax basis in its assets, as estimated by Seller and its tax advisors as of the date hereof.

"Final Allocation" means the allocation of the ADSP and the AGUB among the asset classes prescribed by Treasury Regulations Section 1.338-6(b), as finally determined pursuant to Article III of this Agreement (whether by acceptance by Seller, agreement of the Parties, or determination by the Neutral Accountant).

"IRS" means the Internal Revenue Service, a bureau of the United States Department of the Treasury.

"Neutral Accountant" means Kensington Forensic Advisors LLP, located at 90 Park Avenue, New York, NY 10016, or, if Kensington Forensic Advisors LLP is unable or unwilling to serve in such capacity, such other independent nationally recognized accounting or valuation firm as the Parties may mutually agree upon in writing, which firm shall not have a material professional relationship with either Party or any of their respective affiliates.

"Old Target" means Meridian Press Holdings LLC as it exists prior to the deemed asset sale on the Closing Date, and, for purposes of determining the ADSP and the allocation thereof, shall include the assets held by Old Target (including assets held by any Target Subsidiary that is treated as a disregarded entity or pass-through entity for United States federal income tax purposes) as of the close of the Closing Date.

"Purchase Agreement" means the Membership Interest Purchase Agreement, dated as of July 19, 2024, by and 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, as Parent Guarantor, and Pinnacle Ridge Capital Partners Fund IV, L.P., as Sponsor, as such agreement may be amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms.

"Review Period" has the meaning set forth in Section 3.3(a) of this Agreement.

"Section 338(h)(10) Election" means the election described in Section 338(h)(10) of the Code and Treasury Regulations Section 1.338(h)(10)-1 to treat the acquisition of the Membership Interests as a deemed sale of all of the assets of Old Target for United States federal income tax purposes.

"Target Subsidiaries" means, collectively, Meridian Distribution Services Inc. (Delaware corporation, Secretary of State file no. 4736201), Bellweather Academic Press Inc. (Delaware corporation, Secretary of State file no. 4801133), Foxglove Media LLC (a New York limited liability company), and Meridian Press Canada ULC (a British Columbia unlimited liability company), and "Target Subsidiary" means any one of them.

"Tax" or "Taxes" means all federal, state, local, and foreign taxes of any kind, including income, franchise, gross receipts, excise, property (real and personal), sales, use, transfer, documentary, stamp, registration, value added, withholding, payroll, employment, social security, and other taxes, together with any interest, penalties, additions to tax, or additional amounts imposed with respect thereto.

"Tax Returns" means all returns, declarations, reports, claims for refund, statements, schedules, forms, information returns, and other documents (including any amendments thereto) filed or required to be filed with any taxing authority in respect of Taxes.

"Treasury Regulations" means the regulations promulgated under the Code by the United States Department of the Treasury, as such regulations may be amended from time to time. References to a specific provision of the Treasury Regulations include any successor provision thereto.

Section 1.2 — Purchase Agreement Definitions

Capitalized terms used but not otherwise defined in this Agreement shall have the respective meanings ascribed to such terms in the Purchase Agreement. In the event of any conflict between a definition set forth in Section 1.1 of this Agreement and a definition set forth in the Purchase Agreement, the definition set forth in this Agreement shall control for purposes of this Agreement.

Section 1.3 — Interpretive Provisions

Unless the context otherwise requires, the following rules of interpretation shall apply to this Agreement:

(a) The words "hereof," "herein," "hereunder," and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement.

(b) All references herein to Articles, Sections, and Exhibits shall be deemed to be references to Articles, Sections, and Exhibits of or to this Agreement unless the context otherwise requires.

(c) The terms "include," "includes," and "including" shall be deemed to be followed by the words "without limitation" whether or not so followed.

(d) The singular shall include the plural, and the masculine gender shall include the feminine and neuter genders, and vice versa, as the context requires.

(e) References to any statute, rule, or regulation shall include all amendments thereto and all successor statutes, rules, and regulations, unless the context otherwise requires.

(f) References to a "person" shall include any individual, corporation, partnership, limited liability company, joint venture, trust, unincorporated association, governmental authority, or other entity.

(g) The headings and captions contained in this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement.

(h) The Parties have participated jointly in the negotiation and drafting of this Agreement, and in the event of any ambiguity or question of intent or interpretation, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provision of this Agreement.

(i) References to "days" shall mean calendar days unless otherwise expressly stated. If the last day for performing any act or exercising any right falls on a Saturday, Sunday, or federal holiday, such act may be performed or such right may be exercised on the next succeeding business day.

ARTICLE II — SECTION 338(h)(10) ELECTION

Section 2.1 — Joint Election

Seller and Buyer hereby agree to jointly make an election under Section 338(h)(10) of the Code and Treasury Regulations Section 1.338(h)(10)-1 with respect to the acquisition by Buyer of one hundred percent (100%) of the Membership Interests in Meridian Press Holdings LLC. The Parties acknowledge and agree that the Company is treated as a disregarded entity for United States federal income tax purposes and that Seller is the sole member of the Company. The Parties further acknowledge and agree that, notwithstanding the form of the Transaction as a sale of membership interests, the effect of the Election is to treat the Transaction for United States federal income tax purposes as if:

(a) Old Target sold all of its assets (including the assets of any Target Subsidiary that is a disregarded entity or other pass-through entity for United States federal income tax purposes) to an unrelated third-party purchaser in a single transaction at the close of the Closing Date in exchange for the Aggregate Deemed Sale Price; and

(b) immediately following such deemed asset sale, Old Target distributed the proceeds of such deemed asset sale and its remaining assets, if any, to Seller in complete liquidation of Old Target.

The Parties intend that the Election shall apply to the acquisition of the Membership Interests and, to the fullest extent permitted by applicable law and the Treasury Regulations, to the deemed acquisition of the assets of each Target Subsidiary that is a qualified subchapter S subsidiary, a disregarded entity, or other pass-through entity for United States federal income tax purposes. To the extent that any Target Subsidiary is treated as a separate corporation for United States federal income tax purposes, the Parties shall cooperate in good faith to determine whether a separate Section 338(h)(10) election or other appropriate election is required or desirable with respect to such Target Subsidiary, and shall make such election if mutually agreed.

Section 2.2 — Corresponding State and Local Elections

In addition to the Section 338(h)(10) Election under the Code, the Parties further agree to make any corresponding or similar elections under the tax laws of each state and local jurisdiction in which the Company or any Target Subsidiary files Tax Returns or is otherwise subject to Tax, to the fullest extent that such elections are available under the applicable tax laws of such jurisdictions. Without limiting the foregoing, the Parties specifically acknowledge that the Company and the Target Subsidiaries conduct business operations in, or otherwise have nexus with, the following jurisdictions, among others:

(a) Delaware — state of incorporation and formation of the Company, Meridian Distribution Services Inc., and Bellweather Academic Press Inc.;

(b) New York — state of formation of Foxglove Media LLC and location of the Company's principal executive offices;

(d) Ohio — location of the Company's distribution center at 2200 Westbelt Drive, Columbus, OH 43228;

(e) Texas — location of the Company's distribution center at 8700 Freeport Parkway, Dallas, TX 75063;

(f) Nevada — location of the Company's distribution center at 1400 Scheels Drive, Reno, NV 89502; and

(g) such other states and local jurisdictions in which the Company or any Target Subsidiary has filing obligations, economic nexus, or tax exposure as identified by the Parties and their respective tax advisors.

Each Party shall cooperate in good faith to identify all jurisdictions in which a corresponding or similar state or local election is available and to take all actions necessary to effectuate such elections. To the extent that a particular state or local jurisdiction does not recognize or permit a corresponding election, the Parties shall cooperate to ensure that the Transaction is reported in such jurisdiction in a manner that is as consistent as practicable with the treatment of the Transaction as a deemed asset sale.

Section 2.3 — Treatment as Deemed Asset Sale

The Parties agree that, as a result of the Election, the Transaction shall be treated for United States federal income tax purposes and, to the extent applicable, for state and local income tax purposes, as a deemed sale of all of the assets of Old Target (including the assets of any Target Subsidiary that is treated as a disregarded entity or pass-through entity) in a single transaction at the close of the Closing Date for the Aggregate Deemed Sale Price. The Parties further agree to the following:

(a) Gain Recognition by Seller. Seller shall be responsible for recognizing and reporting any gain or loss resulting from the deemed asset sale on its applicable Tax Returns. The Parties acknowledge that the estimated taxable gain to be recognized by Seller as a result of the deemed asset sale is approximately Two Hundred Twenty-Eight Million Dollars ($228,000,000), and the estimated United States federal and state income tax liability arising therefrom is approximately Forty-Eight Million Dollars ($48,000,000), based on a blended federal and state effective income tax rate of approximately twenty-one percent (21%). Seller shall be solely responsible for the payment of all such Taxes.

(b) Step-Up in Basis. As a result of the Election, Buyer shall receive a step-up in the tax basis of the assets of the Company and the applicable Target Subsidiaries to an amount equal to the AGUB, allocated among the asset classes in accordance with the Final Allocation determined pursuant to Article III hereof. Buyer acknowledges that the benefits of such step-up in tax basis are reflected in the negotiated purchase price and the economics of the Transaction.

(c) No Inconsistent Treatment. Neither Party shall take any action, or fail to take any action, that would cause the deemed asset sale treatment resulting from the Election to be disregarded, invalidated, or otherwise rendered ineffective for United States federal income tax purposes or for purposes of any applicable state or local income tax.

Section 2.4 — Preparation and Filing of Election Forms

(a) IRS Form 8023. Buyer shall be responsible for preparing IRS Form 8023 (Elections Under Section 338 for Corporations Making Qualified Stock Purchases) in a manner consistent with this Agreement and the Purchase Agreement. Buyer shall deliver a complete draft of Form 8023 to Seller not later than sixty (60) days prior to the due date for filing such form (which due date, pursuant to Treasury Regulations Section 1.338-2(e)(1), is generally the fifteenth (15th) day of the ninth (9th) month beginning after the month that includes the Closing Date). Seller shall review such draft Form 8023 and, provided such form is consistent with this Agreement and the terms of the Election as set forth herein, Seller shall execute and return such form to Buyer within fifteen (15) business days after receipt thereof. In the event Seller reasonably believes that the draft Form 8023 is not consistent with this Agreement, Seller shall notify Buyer in writing of any objections within such fifteen (15) business day period, and the Parties shall cooperate in good faith to resolve any such objections. Each Party shall retain a copy of the fully executed Form 8023 for its records.

(b) IRS Form 8883. Each Party shall be responsible for preparing and filing its own IRS Form 8883 (Asset Allocation Statement Under Section 338) with its applicable Tax Return for the taxable year that includes the Closing Date. Each Party shall prepare its Form 8883 in a manner that is entirely consistent with the Final Allocation determined pursuant to Article III of this Agreement. Each Party shall provide the other Party with a copy of its completed Form 8883 (or a draft thereof) at least fifteen (15) days prior to the filing thereof, for informational purposes and to confirm consistency.

(c) State and Local Forms. The Parties shall cooperate in the preparation and filing of any and all state or local forms, returns, statements, or other documents required to effectuate any corresponding or similar state or local elections. Buyer shall be responsible for preparing initial drafts of all such forms and shall deliver such drafts to Seller for review at least thirty (30) days prior to the applicable filing deadline. Seller shall review and execute (to the extent execution by Seller is required) such forms within fifteen (15) business days after receipt, provided such forms are consistent with this Agreement. In the event that a particular jurisdiction requires a separate form or procedure that is unique to that jurisdiction, the Parties shall cooperate in good faith to satisfy such requirements.

(d) Timely Filing. Each Party shall use its reasonable best efforts to ensure that all Election Forms are prepared, executed, and filed on a timely basis in accordance with the applicable deadlines prescribed by the Code, the Treasury Regulations, and any applicable state or local tax laws. Neither Party shall take any action, or fail to take any action, that would cause the Election to be invalid, untimely, or that is inconsistent with the Election having been validly made. Without limiting the generality of the foregoing, each Party shall promptly notify the other Party if it becomes aware of any circumstance that could reasonably be expected to impair the validity or timeliness of the Election.

Section 2.5 — Irrevocability

Once the Section 338(h)(10) Election has been made, such Election shall be irrevocable and may not be revoked, rescinded, terminated, or modified without the prior written consent of both Seller and Buyer. Each Party acknowledges that the other Party is relying on the making of the Election in entering into the Transaction and that the revocation or modification of the Election without the consent of both Parties would cause material harm to the non-consenting Party. The foregoing irrevocability shall apply equally to any corresponding state or local elections made pursuant to Section 2.2 of this Agreement, to the fullest extent permitted by applicable law.

ARTICLE III — ALLOCATION OF DEEMED ASSET SALE PURCHASE PRICE

Section 3.1 — Allocation Methodology

The Aggregate Deemed Sale Price (ADSP) and the Adjusted Grossed-Up Basis (AGUB) shall be allocated among the assets of Old Target (and any applicable Target Subsidiary whose assets are treated as assets of Old Target for purposes of the Election) in accordance with the residual method prescribed by Section 338(b)(5) of the Code and Treasury Regulations Sections 1.338-6 and 1.338-7. The allocation shall be made among the following seven (7) asset classes prescribed by Treasury Regulations Section 1.338-6(b), in the order of priority set forth therein:

(i) Class I — Cash and General Deposit Accounts. Cash and general deposit accounts (including demand deposits, savings accounts, and similar accounts), including the estimated Closing Cash of approximately Eight Million Two Hundred Thousand Dollars ($8,200,000) held in the Company's operating accounts and any petty cash on hand at the distribution centers.

(ii) Class II — Actively Traded Personal Property, Certificates of Deposit, and Foreign Currency. Actively traded personal property (within the meaning of Section 1092(d)(1) of the Code), certificates of deposit, and foreign currency held by the Company or any Target Subsidiary.

(iii) Class III — Accounts Receivable, Mortgages, and Credit Card Receivables. Accounts receivable (including trade receivables from publishers, institutional subscribers, and retail accounts), mortgages, and credit card receivables, derived in part from the estimated Closing Net Working Capital of approximately One Hundred Forty-Two Million Dollars ($142,000,000) as set forth in the estimated closing statement.

(iv) Class IV — Stock in Trade, Inventory, and Property Held for Sale to Customers. Inventory, stock in trade, and other property held primarily for sale to customers in the ordinary course of business, including book inventory, periodical inventory, and other publishing-related inventory maintained at the Company's distribution centers.

(v) Class V — All Other Tangible and Intangible Assets Not Classified Elsewhere. All assets not otherwise classified in Classes I through IV, VI, or VII, including: (A) tangible personal property such as distribution center equipment, warehouse racking systems, automated sorting and packing machinery, and fixtures at the Company's fourteen (14) distribution centers; (B) owned real property, including the facilities located at Edison, New Jersey (45 Fieldcrest Avenue), Columbus, Ohio (2200 Westbelt Drive), Dallas, Texas (8700 Freeport Parkway), and Reno, Nevada (1400 Scheels Drive); (C) leasehold interests in eight (8) United States locations and two (2) Canadian locations, together with all associated leasehold improvements; (D) furniture, fixtures, and equipment; (E) computer hardware and information technology infrastructure; and (F) other tangible and intangible assets properly classified in Class V under the Treasury Regulations.

(vi) Class VI — Section 197 Intangibles Other Than Goodwill and Going Concern Value. Section 197 intangibles (within the meaning of Section 197(d) of the Code) other than goodwill and going concern value, including: (A) the "Meridian Press," "Bellweather Academic," and "Foxglove" trademarks, trade names, service marks, and associated logos, including all United States and Canadian trademark registrations; (B) ISBN (International Standard Book Number) prefix assignments held by the Company and the Target Subsidiaries; (C) author and content license agreements; (D) the Oakbridge Distribution Alliance Agreement and all rights thereunder; (E) customer relationships, including institutional subscriber lists, retail distribution agreements, and publisher distribution contracts; (F) educational content licenses; and (G) other identifiable intangible assets properly classified in Class VI under the Treasury Regulations.

(vii) Class VII — Goodwill and Going Concern Value. Goodwill and going concern value, which shall receive the residual amount of the ADSP and AGUB remaining after allocation to Classes I through VI in accordance with Treasury Regulations Section 1.338-6(b).

The Parties acknowledge and agree that the residual method requires that the ADSP and AGUB first be allocated to Class I assets in an amount equal to the fair market value of such assets, then to Class II assets in an amount equal to the fair market value of such assets, and so on through Class VI, with any remaining balance allocated to Class VII (goodwill and going concern value).

Section 3.2 — Preliminary Allocation

(a) Not later than ninety (90) days following the Closing Date (i.e., not later than February 13, 2025), Buyer shall prepare and deliver to Seller a preliminary Allocation Schedule substantially in the form of Exhibit A attached hereto (the "Preliminary Allocation"). The Preliminary Allocation shall set forth the fair market values of the assets allocated to each of Class I through Class VII. The Preliminary Allocation shall be prepared on the basis of the estimated Equity Purchase Price of Four Hundred Eighteen Million Dollars ($418,000,000) (as set forth in the estimated closing statement delivered at the Closing) and the estimated amounts of Closing Indebtedness, Closing Cash, Target Transaction Expenses, and the net working capital adjustment as of the Closing Date, and shall be computed in accordance with the residual method described in Section 3.1 above.

(b) The Preliminary Allocation shall be prepared in good faith and shall reflect the fair market values of the assets of Old Target (and applicable Target Subsidiaries) as of the Closing Date, determined in accordance with applicable valuation principles and methodologies. In preparing the Preliminary Allocation, Buyer may engage independent appraisers or valuation experts, at Buyer's expense, to determine the fair market values of specific asset categories (including real property, tangible personal property, and identifiable intangible assets).

(c) The Preliminary Allocation shall be adjusted, to the extent necessary, to reflect the final purchase price amounts once the post-closing purchase price true-up is completed pursuant to the terms and conditions of the Purchase Agreement. The Parties acknowledge that the post-closing net working capital true-up deadline under the Purchase Agreement is February 13, 2025.

Section 3.3 — Review and Dispute Resolution

(a) Review Period. Seller shall have a period of thirty (30) days following receipt of the Preliminary Allocation (the "Review Period") to review the Preliminary Allocation. During the Review Period, Seller shall either: (i) deliver to Buyer a written notice accepting the Preliminary Allocation, in which case the Preliminary Allocation shall constitute the Final Allocation (subject to any adjustments required under Section 3.4); or (ii) deliver to Buyer a written notice of dispute (a "Dispute Notice") specifying in reasonable detail each item or amount in the Preliminary Allocation that Seller disputes, the basis for such dispute, and Seller's proposed allocation for each such disputed item, together with any supporting documentation or analysis. If Seller fails to deliver either a notice of acceptance or a Dispute Notice within the Review Period, Seller shall be deemed to have accepted the Preliminary Allocation, and the Preliminary Allocation shall constitute the Final Allocation (subject to any adjustments required under Section 3.4).

(b) Negotiation. If Seller delivers a Dispute Notice in accordance with Section 3.3(a), the Parties shall negotiate in good faith for a period of fifteen (15) days following the date of delivery of the Dispute Notice (the "Negotiation Period") to resolve the disputed items. During the Negotiation Period, each Party shall make available to the other Party such information, documentation, and access to its respective tax advisors and valuation experts as may be reasonably requested by the other Party to facilitate the resolution of the disputed items. Any items resolved during the Negotiation Period shall be reflected in a revised Allocation Schedule agreed upon in writing by both Parties.

(c) Neutral Accountant. If the Parties are unable to resolve any or all of the disputed items within the Negotiation Period, the remaining disputed items (and only such remaining disputed items) shall be submitted for final and binding determination to Kensington Forensic Advisors LLP, located at 90 Park Avenue, New York, NY 10016 (or, if Kensington Forensic Advisors LLP is unable or unwilling to serve, to another independent nationally recognized accounting or valuation firm mutually agreed upon by the Parties) (the "Neutral Accountant"). The Neutral Accountant shall act as an expert and not as an arbitrator. The following procedures shall apply to the Neutral Accountant's determination:

(i) Within ten (10) business days following the engagement of the Neutral Accountant, each Party shall submit to the Neutral Accountant a written statement setting forth its position on each remaining disputed item, together with all supporting documentation, analyses, and any other materials that such Party wishes the Neutral Accountant to consider.

(ii) The Neutral Accountant shall resolve only the specific items in dispute submitted to it and may not assign a value to any disputed item that is greater than the highest value proposed by either Party or less than the lowest value proposed by either Party for such item.

(iii) The Neutral Accountant shall render its written determination within thirty (30) days following submission of the Parties' written statements. The determination of the Neutral Accountant shall be final and binding upon the Parties and shall not be subject to appeal or review except for fraud or manifest error.

(iv) The fees and expenses of the Neutral Accountant shall be borne equally (50/50) by the Parties. Each Party shall bear its own costs and expenses (including fees and expenses of its own advisors) in connection with the Neutral Accountant proceedings.

(d) Final Allocation. The allocation as: (i) accepted by Seller (or deemed accepted) pursuant to Section 3.3(a); (ii) agreed upon by the Parties during the Negotiation Period pursuant to Section 3.3(b); or (iii) determined by the Neutral Accountant pursuant to Section 3.3(c) (in each case, as applicable, taking into account the resolution of all disputed and undisputed items), shall constitute the "Final Allocation" for all purposes of this Agreement. The Final Allocation, once determined, shall be binding upon the Parties and their respective affiliates for all Tax purposes.

Section 3.4 — Adjustments to Allocation

In the event of any adjustment to the Equity Purchase Price pursuant to the post-closing purchase price true-up provisions of the Purchase Agreement (including the net working capital true-up, which has a deadline of February 13, 2025) or any other adjustment to the aggregate consideration paid or payable in connection with the Transaction, including but not limited to:

(a) any payment to or from the escrow fund of Seventy-Two Million Dollars ($72,000,000) deposited with Granite Trust Company, N.A. (escrow account number GT-ESC-2024-11150048) pursuant to the Escrow Agreement;

(b) any indemnification payment made by or to either Party under the Purchase Agreement;

(d) any adjustment resulting from a determination by a taxing authority or a court of competent jurisdiction;

the Final Allocation shall be adjusted in a manner consistent with the residual method under Treasury Regulations Sections 1.338-6 and 1.338-7 and the principles and methodologies set forth in this Article III. Within thirty (30) days following the occurrence of any event giving rise to such an adjustment, Buyer shall prepare a revised Allocation Schedule and deliver it to Seller for review. The review and dispute resolution procedures set forth in Section 3.3 of this Agreement shall apply, mutatis mutandis, to any such revised Allocation Schedule.

Section 3.5 — Consistency

Each Party hereby agrees, for itself and on behalf of its affiliates, to:

(a) report the deemed asset sale resulting from the Election on all Tax Returns (including, without limitation, IRS Form 8883 and any corresponding state or local forms) and in all dealings with the IRS, state and local tax authorities, and any other taxing authorities in a manner entirely consistent with the Final Allocation (and any adjustments thereto made in accordance with Section 3.4);

(b) not take any position on any Tax Return, in any audit, examination, or administrative or judicial proceeding, or in any other filing or communication with any taxing authority, that is inconsistent with the Final Allocation, unless required to do so by a "determination" (within the meaning of Section 1313(a) of the Code) or by a comparable final determination under applicable state or local tax law; and

(c) promptly notify the other Party in writing (and in any event within ten (10) business days) of any challenge, inquiry, proposed adjustment, or deficiency asserted by any taxing authority with respect to the Final Allocation, the Election, or the treatment of the Transaction as a deemed asset sale, and to consult with the other Party in good faith prior to agreeing to or contesting any such challenge.

The Parties acknowledge and agree that the obligation of consistency set forth in this Section 3.5 is a material inducement for each Party to enter into this Agreement and that a breach of such obligation could result in material adverse tax consequences to the non-breaching Party.

ARTICLE IV — TAX REPORTING AND COOPERATION

Section 4.1 — Tax Returns

Each Party shall prepare and file, or cause to be prepared and filed, all Tax Returns required to be filed in connection with the Election in a manner consistent with this Agreement, the Final Allocation, and the treatment of the Transaction as a deemed asset sale. Without limiting the generality of the foregoing:

(a) Seller's Tax Returns. Seller acknowledges and agrees that the deemed asset sale will result in the recognition of gain by Seller, with an estimated taxable gain of approximately Two Hundred Twenty-Eight Million Dollars ($228,000,000). Seller shall be solely responsible for reporting such gain on the applicable Tax Returns of Aurelius Media Holdings Inc. (and, to the extent applicable, the consolidated or combined Tax Returns of Aurelius Global Media Group PLC or any of its affiliates). Seller shall be solely responsible for the payment of all Taxes arising from or attributable to such gain.

(b) Buyer's Tax Returns. Buyer shall report the acquisition of the assets of the Company (and applicable Target Subsidiaries) on Buyer's Tax Returns in a manner consistent with the Election and the Final Allocation. Buyer shall claim amortization and depreciation deductions with respect to the stepped-up basis in the assets of the Company resulting from the Election in accordance with the applicable provisions of the Code and the Treasury Regulations.

(c) Pre-Closing Tax Returns. Seller shall be responsible for the preparation and filing of all Tax Returns of the Company and the Target Subsidiaries for all taxable periods ending on or before the Closing Date, in accordance with the terms and conditions of the Purchase Agreement. Buyer shall be responsible for the preparation and filing of all Tax Returns of the Company and the Target Subsidiaries for all taxable periods beginning after the Closing Date and for Straddle Periods, in each case in accordance with the terms and conditions of the Purchase Agreement.

Section 4.2 — Cooperation

Each Party shall, and shall cause its respective affiliates, officers, directors, employees, agents, and representatives (including Aurelius Global Media Group PLC in the case of Seller, and Pinnacle Ridge Capital Partners Fund IV, L.P. and Pinnacle Ridge Capital GP IV LLC in the case of Buyer) to, cooperate fully and in good faith with the other Party in connection with the Election and the matters contemplated by this Agreement. Without limiting the generality of the foregoing, each Party shall:

(a) provide to the other Party all information reasonably requested by such other Party in connection with the preparation and filing of the Election Forms, the Allocation Schedule, and any Tax Returns relating to the Election, including, without limitation, access to the books, records, workpapers, financial statements, and Tax Returns of the Company and the Target Subsidiaries;

(b) execute and deliver, or cause to be executed and delivered, all forms, documents, instruments, certificates, powers of attorney, and other papers required to effectuate the Election and any corresponding state or local elections, in each case within the time periods specified in this Agreement or, if no time period is specified, within a reasonable time after request therefor;

(c) cooperate fully in the preparation of the Allocation Schedule, any revised Allocation Schedule, and the Final Allocation, including by providing access to the Company's fixed asset registers, depreciation schedules, intangible asset records, real property appraisals, and other records and information reasonably necessary to determine the fair market values of the assets of Old Target;

(d) notify the other Party in writing within ten (10) business days of receipt of any written notice, inquiry, subpoena, information document request, notice of proposed adjustment, revenue agent's report, notice of deficiency, or similar communication from the IRS or any state or local taxing authority that relates to or may affect the Election, the Final Allocation, or the treatment of the Transaction as a deemed asset sale;

(e) cooperate fully in connection with any audit, examination, administrative proceeding, or judicial proceeding relating to the Election, the Final Allocation, or the deemed asset sale treatment, including by making available relevant employees, agents, and advisors for interviews, meetings, and testimony, and by providing access to relevant documents and records; and

(f) not settle, compromise, or otherwise resolve any claim, assessment, or proceeding relating to the Election or the Final Allocation without the prior written consent of the other Party (such consent not to be unreasonably withheld, conditioned, or delayed).

Section 4.3 — Retention of Records

Each Party shall retain, and shall cause its affiliates to retain, all records, documents, workpapers, correspondence, and other materials relating to the Election, the Allocation, and the deemed asset sale treatment of the Transaction for a period of not less than seven (7) years following the Closing Date (i.e., until at least November 15, 2031), or such longer period as may be required by: (a) applicable law or regulation; (b) any applicable statute of limitations (including any extensions or tolling thereof); or (c) the reasonable written request of the other Party. Upon the expiration of such retention period, neither Party shall destroy or dispose of any such records without first providing the other Party with at least thirty (30) days' prior written notice and a reasonable opportunity to copy or take possession of such records at such Party's own expense.

Section 4.4 — Tax Advisors

The Parties acknowledge and agree that:

(a) Seller's independent auditor and tax advisor is Pemberton Graves LLP (engagement partner: Robert Ainsley), and Seller's tax counsel is Calderwood & Harkness LLP (specialist partner, tax: Leonard Cross);

(b) Buyer's independent accounting and tax advisor is Whitecliff & Harding LLP (engagement partner: Susan Cartwright); and

(c) each Party has been represented by its own independent tax advisors in connection with the negotiation and execution of this Agreement, and each Party has independently evaluated the tax consequences of the Election and the Transaction.

Nothing in this Agreement shall be construed to create any obligation on either Party to share with the other Party any privileged tax advice, attorney-client communications, tax opinions, or other work product prepared by or for such Party by its tax advisors or legal counsel. The foregoing shall not limit any Party's obligation to provide information and cooperation as expressly required by Section 4.2 of this Agreement.

ARTICLE V — REPRESENTATIONS AND WARRANTIES

Section 5.1 — Seller's Representations and Warranties

Aurelius Media Holdings Inc. hereby represents and warrants to Buyer as of the date hereof and as of the Closing Date as follows:

(a) Organization and Good Standing. Seller is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware (Secretary of State file no. 5987324). Seller has all requisite corporate power and authority to own, lease, and operate its properties and assets and to conduct its business as presently conducted.

(b) Authority. Seller has all requisite corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder, including, without limitation, the authority to make the Section 338(h)(10) Election on behalf of itself as the seller of the membership interests in the Company (which, for purposes of the Election, are treated as the stock of Old Target). The execution and delivery of this Agreement and the performance by Seller of its obligations hereunder have been duly authorized by all necessary corporate action on the part of Seller, including the approval of the board of directors of Aurelius Media Holdings Inc. by resolution duly adopted at a meeting held on July 17, 2024, and no other corporate proceedings on the part of Seller are necessary to authorize this Agreement or the transactions contemplated hereby.

(c) Disregarded Entity Status. Meridian Press Holdings LLC is, and at all times since its formation has been, treated as a disregarded entity for United States federal income tax purposes within the meaning of Treasury Regulations Section 301.7701-3. Seller is the sole member of the Company, and no other person or entity has any ownership interest, membership interest, profits interest, or other equity interest in the Company. The Company has not made an election under Treasury Regulations Section 301.7701-3 to be classified as a corporation for United States federal income tax purposes.

(d) Binding Obligation. This Agreement has been duly executed and delivered by Seller and constitutes the valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and other similar laws affecting creditors' rights generally, and to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

(e) No Conflicts. The execution and delivery of this Agreement by Seller and the performance by Seller of its obligations hereunder do not and will not: (i) violate or conflict with any provision of the certificate of incorporation, bylaws, or other organizational documents of Seller; (ii) violate or conflict with any law, statute, regulation, order, judgment, or decree applicable to Seller; or (iii) result in a breach of, or constitute a default under, any material agreement, contract, indenture, or instrument to which Seller is a party or by which Seller or any of its properties or assets are bound.

(f) Board Approval. The board of directors of Aurelius Media Holdings Inc. has approved this Agreement and the transactions contemplated hereby, including the making of the Election, by resolution duly adopted at a meeting of the board of directors held on July 17, 2024, at which a quorum was present and acting.

Section 5.2 — Buyer's Representations and Warranties

Ridgeline Publishing Acquisition Corp. hereby represents and warrants to Seller as of the date hereof and as of the Closing Date as follows:

(a) Organization and Good Standing. Buyer is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware (Secretary of State file no. 6501982), having been incorporated on October 2, 2024, as a special-purpose acquisition vehicle formed for the purpose of consummating the Transaction. Buyer has all requisite corporate power and authority to own, lease, and operate its properties and assets and to conduct its business as presently conducted and as contemplated by this Agreement and the Purchase Agreement.

(b) Authority. Buyer has all requisite corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder, including, without limitation, the authority to make the Section 338(h)(10) Election as the purchasing corporation (within the meaning of Section 338(d)(1) of the Code). The execution and delivery of this Agreement and the performance by Buyer of its obligations hereunder have been duly authorized by all necessary corporate action on the part of Buyer, and no other corporate proceedings on the part of Buyer are necessary to authorize this Agreement or the transactions contemplated hereby.

(c) Binding Obligation. This Agreement has been duly executed and delivered by Buyer and constitutes the valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and other similar laws affecting creditors' rights generally, and to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

(d) No Conflicts. The execution and delivery of this Agreement by Buyer and the performance by Buyer of its obligations hereunder do not and will not: (i) violate or conflict with any provision of the certificate of incorporation, bylaws, or other organizational documents of Buyer; (ii) violate or conflict with any law, statute, regulation, order, judgment, or decree applicable to Buyer; or (iii) result in a breach of, or constitute a default under, any material agreement, contract, indenture, or instrument to which Buyer is a party or by which Buyer or any of its properties or assets are bound.

ARTICLE VI — INDEMNIFICATION

Section 6.1 — Indemnification by Seller

Subject to the terms and conditions of this Article VI, Seller shall indemnify, defend, and hold harmless Buyer and its affiliates, and their respective officers, directors, employees, agents, successors, and permitted assigns (collectively, the "Buyer Indemnified Parties"), from and against any and all losses, damages, liabilities, claims, demands, actions, causes of action, judgments, settlements, fines, penalties, costs, and expenses (including reasonable attorneys' fees and expenses and reasonable fees and expenses of other professionals) (collectively, "Losses") arising from or relating to:

(a) any breach of any representation or warranty of Seller contained in Section 5.1 of this Agreement; and

(b) any breach by Seller of any covenant, agreement, or obligation of Seller contained in this Agreement, including, without limitation, Seller's failure to timely execute, deliver, or file any Election Form required to be executed, delivered, or filed by Seller under this Agreement.

Seller's indemnification obligations under this Section 6.1 shall be subject to the indemnification limitations set forth in the Purchase Agreement, including: (i) the aggregate indemnification cap of Seventy-Two Million Dollars ($72,000,000) (representing fifteen percent (15%) of the Enterprise Value); (ii) the indemnification basket (deductible) of Four Million Eight Hundred Thousand Dollars ($4,800,000) (representing one percent (1%) of the Enterprise Value); (iii) the general survival period of eighteen (18) months from the Closing Date for representations and warranties (other than fundamental representations); and (iv) the tax indemnity survival period, which shall continue until sixty (60) days after the expiration of the applicable statute of limitations (including any extensions or tolling thereof) for the Taxes to which such indemnification obligation relates. The Parties acknowledge that any Losses arising from the invalidity of the Election due to Seller's breach would constitute Losses subject to the tax indemnity survival period.

Section 6.2 — Indemnification by Buyer

Subject to the terms and conditions of this Article VI, Buyer shall indemnify, defend, and hold harmless Seller and its affiliates, and their respective officers, directors, employees, agents, successors, and permitted assigns (collectively, the "Seller Indemnified Parties"), from and against any and all Losses arising from or relating to:

(a) any breach of any representation or warranty of Buyer contained in Section 5.2 of this Agreement; and

(b) any breach by Buyer of any covenant, agreement, or obligation of Buyer contained in this Agreement, including, without limitation, Buyer's failure to timely prepare, execute, deliver, or file any Election Form or Allocation Schedule required to be prepared, executed, delivered, or filed by Buyer under this Agreement.

Without limiting the foregoing, Buyer acknowledges that if the Election is invalidated or rendered ineffective as a result of Buyer's breach of its obligations under this Agreement, Seller may suffer material Losses, including, without limitation, additional Tax liabilities, penalties, and interest arising from the recharacterization of the Transaction for Tax purposes. Buyer's indemnification obligations under this Section 6.2 shall not be subject to any basket, deductible, or cap.

Section 6.3 — Coordination with Purchase Agreement

The indemnification provisions of this Agreement are intended to supplement, and not to supplant, limit, or supersede, the indemnification provisions of the Purchase Agreement (Article IX thereof). This Agreement provides additional and specific remedies with respect to breaches of the covenants, representations, and warranties set forth herein relating to the Election and the Allocation, and the indemnification provisions of the Purchase Agreement provide broader remedies with respect to the Transaction as a whole. In the event of any conflict or inconsistency between the indemnification provisions of this Agreement and the indemnification provisions of the Purchase Agreement, the provisions of the Purchase Agreement shall control; provided, however, that to the extent this Agreement provides for indemnification with respect to matters specifically relating to the Election or the Allocation that are not otherwise addressed in the Purchase Agreement, the provisions of this Agreement shall govern. The Parties shall cooperate in good faith to avoid duplication of recovery under this Agreement and the Purchase Agreement with respect to the same Loss.

ARTICLE VII — TRANSFER TAXES

Section 7.1 — Transfer Taxes

Any and all transfer, sales, use, stamp, documentary, registration, recording, conveyance, or similar Taxes, fees, or charges (including any related interest and penalties) imposed by any federal, state, local, or foreign taxing authority in connection with the deemed asset sale resulting from the Election (collectively, "Transfer Taxes") shall be borne equally (fifty percent (50%) by Seller and fifty percent (50%) by Buyer), consistent with the transfer tax provision set forth in the Purchase Agreement. The Party required by applicable law to file a Tax Return or other report with respect to any such Transfer Tax shall prepare and file such Tax Return or report in a timely manner, and shall promptly provide a copy thereof to the other Party together with evidence of payment. The other Party shall promptly reimburse the filing Party for its share (fifty percent (50%)) of any such Transfer Tax within ten (10) business days of receipt of a written request for reimbursement accompanied by reasonable supporting documentation.

ARTICLE VIII — MISCELLANEOUS

Section 8.1 — Governing Law

This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware, without giving effect to any choice of law or conflict of laws provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. Any legal action, suit, or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby shall be brought exclusively in the Court of Chancery of the State of Delaware (or, if the Court of Chancery lacks jurisdiction, the Superior Court of the State of Delaware, or, if neither such state court has jurisdiction, the United States District Court for the District of Delaware), and each Party hereby irrevocably submits to the exclusive jurisdiction of such courts and waives any objection it may have to the laying of venue in such courts or any claim that such courts constitute an inconvenient forum.

Section 8.2 — Entire Agreement; Relationship to Purchase Agreement

This Agreement, together with the Purchase Agreement and the other transaction documents executed and delivered in connection with the Transaction (including, without limitation, the Escrow Agreement by and among Seller, Buyer, and Granite Trust Company, N.A. as escrow agent, the Transition Services Agreement, the Trademark License Agreement, the Non-Competition and Non-Solicitation Agreement, and the Seller Disclosure Schedules), constitutes the entire agreement of the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous negotiations, discussions, understandings, agreements, and representations, whether written or oral, with respect to such subject matter. In the event of any conflict or inconsistency between this Agreement and the Purchase Agreement with respect to the Election, the Allocation, or the deemed asset sale treatmen

SECTION 338(h)(10) ELECTION AGREEMENT
Dated as of July 19, 2024
by and between
AURELIUS MEDIA HOLDINGS INC.
a Delaware corporation
and
RIDGELINE PUBLISHING ACQUISITION CORP.
a Delaware corporation
In connection with the acquisition of 100% of the membership interests in Meridian Press Holdings LLC a Delaware limited liability company
TABLE OF CONTENTS
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SECTION 338(h)(10) ELECTION AGREEMENT
This Section 338(h)(10) Election Agreement (this "Agreement") is entered into as of July 19, 2024 (the "Agreement Date"), by and between:
(1) Aurelius Media Holdings Inc., a Delaware corporation (Secretary of State file no. 5987324), with its principal office at c/o Aurelius Global Media Group PLC, 14 Clarges Street, London W1J 8AQ, United Kingdom (hereinafter referred to as "Seller" or "Old Target Parent"); and
(2) Ridgeline Publishing Acquisition Corp., a Delaware corporation (Secretary of State file no. 6501982), with its principal office at c/o Pinnacle Ridge Capital Management LLC, 600 Lexington Avenue, 38th Floor, New York, NY 10022 (hereinafter referred to as "Buyer" or "Purchasing Corporation").
Seller and Buyer are sometimes referred to herein individually as a "Party" and collectively as the "Parties."
This Agreement is made in connection with the purchase by Buyer of one hundred percent (100%) of the membership interests (the "Membership Interests") in Meridian Press Holdings LLC, a Delaware limited liability company (Secretary of State file no. 4521889) (the "Company" or "Target"), on the terms and subject to the conditions set forth herein and in the Purchase Agreement (as defined below).
RECITALS
WHEREAS, Aurelius Media Holdings Inc., as Seller, and Ridgeline Publishing Acquisition Corp., as Buyer, together with, solely for purposes of certain provisions thereof, Aurelius Global Media Group PLC, a public limited company incorporated in England and Wales (Companies House No. 08431276) ("Parent Guarantor"), and Pinnacle Ridge Capital Partners Fund IV, L.P., a Delaware limited partnership (Secretary of State file no. 6234577) ("Sponsor"), have entered into that certain Membership Interest Purchase Agreement, dated as of July 19, 2024 (as it may be amended, restated, supplemented, or otherwise modified from time to time, the "Purchase Agreement" or the "MIPA"), pursuant to which Seller has agreed to sell, and Buyer has agreed to purchase, one hundred percent (100%) of the Membership Interests in Meridian Press Holdings LLC at an enterprise value of Four Hundred Eighty Million Dollars ($480,000,000), on the terms and subject to the conditions set forth in the Purchase Agreement (the "Transaction");
WHEREAS, Meridian Press Holdings LLC is a Delaware limited liability company that has been and is treated as a disregarded entity for United States federal income tax purposes, with its sole member being Aurelius Media Holdings Inc. The Company, directly and through its subsidiaries (collectively, the "Tarvex Group"), operates a diversified media and publishing business. The Company's subsidiaries include: (i) Meridian Distribution Services Inc., a Delaware corporation (Secretary of State file no. 4736201); (ii) Bellweather Academic Press Inc., a Delaware corporation (Secretary of State file no. 4801133); (iii) Foxglove Media LLC, a New York limited liability company; and (iv) Meridian Press Canada ULC, a British Columbia unlimited liability company (each, a "Target Subsidiary" and collectively, the "Target Subsidiaries");
WHEREAS, Seller and Buyer desire to jointly make an election under Section 338(h)(10) of the Internal Revenue Code of 1986, as amended (the "Code"), and Treasury Regulations Section 1.338(h)(10)-1 promulgated thereunder, and any corresponding or similar elections under applicable state and local tax laws, with respect to the acquisition of the Membership Interests in the Company (collectively, the "Election"), such that the Transaction shall be treated as a deemed sale of all of the assets of the Company (and applicable Target Subsidiaries) in a single transaction at the close of the Closing Date (as defined herein) for United States federal income tax purposes and for purposes of applicable state and local income taxes, followed by a deemed liquidation of Old Target into Seller; and
WHEREAS, this Agreement is entered into pursuant to and in satisfaction of the obligations of the Parties under Section 6.13 of the Purchase Agreement, which requires the Parties to enter into a Section 338(h)(10) Election Agreement on mutually acceptable terms and conditions on or prior to the Closing Date.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
ARTICLE I — DEFINITIONS
Section 1.1 — Defined Terms
As used in this Agreement, the following terms shall have the meanings set forth below:
"Aggregate Deemed Sale Price" or "ADSP" means the amount determined in accordance with Treasury Regulations Section 1.338-4, which generally equals the sum of (a) the grossed-up amount realized on the sale of the stock (or, in the case of a disregarded entity, the membership interests) of Old Target, and (b) the liabilities of Old Target as of the beginning of the day after the Closing Date, plus any other relevant items described in Treasury Regulations Section 1.338-4.
"Adjusted Grossed-Up Basis" or "AGUB" means the amount determined in accordance with Treasury Regulations Section 1.338-5, which generally equals the sum of (a) the grossed-up basis of the Purchasing Corporation's recently purchased stock (or membership interests) in Old Target, (b) the liabilities of new Target as of the beginning of the day after the Closing Date, and (c) any other relevant items described in Treasury Regulations Section 1.338-5.
"Allocation" means the allocation of the ADSP and the AGUB among the seven asset classes prescribed by Treasury Regulations Section 1.338-6(b), as set forth in the Allocation Schedule, as such allocation may be revised, adjusted, and finalized in accordance with Article III of this Agreement.
"Allocation Schedule" means the schedule attached hereto as Exhibit A, setting forth the form of the allocation methodology and preliminary allocation of the deemed asset sale purchase price among the asset classes prescribed by Treasury Regulations Section 1.338-6(b), as such schedule may be completed, revised, and finalized in accordance with Article III of this Agreement.
"Closing" means the closing of the transactions contemplated by the Purchase Agreement, including the sale and purchase of the Membership Interests.
"Closing Date" means November 15, 2024, or such other date on which the Closing occurs in accordance with the Purchase Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, and any successor statute. References to a specific provision of the Code include any Treasury Regulations promulgated thereunder and any successor provision thereto.
"Dispute Notice" has the meaning set forth in Section 3.3(a) of this Agreement.
"Election" means the Section 338(h)(10) Election and any corresponding or similar elections under applicable state or local tax laws made pursuant to Article II of this Agreement.
"Election Forms" means IRS Form 8023 (Elections Under Section 338 for Corporations Making Qualified Stock Purchases), IRS Form 8883 (Asset Allocation Statement Under Section 338), and any corresponding or analogous forms required under applicable state or local tax laws to effectuate the Election or report the allocation of purchase price in connection with the deemed asset sale.
"Enterprise Value" means Four Hundred Eighty Million Dollars ($480,000,000), as set forth in the Purchase Agreement.
"Equity Purchase Price" means the estimated equity purchase price of Four Hundred Eighteen Million Dollars ($418,000,000), as calculated under the Purchase Agreement, determined as follows:
(a) Enterprise Value of $480,000,000;
(b) less estimated Closing Indebtedness of $62,500,000, consisting of (i) an intercompany promissory note in the principal amount of $50,000,000 payable to Aurelius Global Media Group PLC, and (ii) capital lease obligations of $12,500,000;
(c) plus estimated Closing Cash of $8,200,000;
(d) less estimated Target Transaction Expenses of $4,700,000;
(e) less estimated net working capital shortfall of $3,000,000 (being the amount by which the estimated Closing Net Working Capital is less than the Target Net Working Capital, as such terms are defined in the Purchase Agreement);
in each case subject to post-closing adjustment and true-up in accordance with the terms and conditions of the Purchase Agreement.
"Estimated Tax Liability" means the estimated United States federal and state income tax liability of Seller arising from the deemed asset sale in an amount of approximately Forty-Eight Million Dollars ($48,000,000), based on an Estimated Taxable Gain of approximately Two Hundred Twenty-Eight Million Dollars ($228,000,000) at a blended federal and state effective income tax rate of approximately twenty-one percent (21%).
"Estimated Taxable Gain" means the estimated taxable gain to be recognized by Seller as a result of the deemed asset sale, in the approximate amount of Two Hundred Twenty-Eight Million Dollars ($228,000,000), which represents the excess of the ADSP over Old Target's aggregate adjusted tax basis in its assets, as estimated by Seller and its tax advisors as of the date hereof.
"Final Allocation" means the allocation of the ADSP and the AGUB among the asset classes prescribed by Treasury Regulations Section 1.338-6(b), as finally determined pursuant to Article III of this Agreement (whether by acceptance by Seller, agreement of the Parties, or determination by the Neutral Accountant).
"IRS" means the Internal Revenue Service, a bureau of the United States Department of the Treasury.
"Neutral Accountant" means Kensington Forensic Advisors LLP, located at 90 Park Avenue, New York, NY 10016, or, if Kensington Forensic Advisors LLP is unable or unwilling to serve in such capacity, such other independent nationally recognized accounting or valuation firm as the Parties may mutually agree upon in writing, which firm shall not have a material professional relationship with either Party or any of their respective affiliates.
"Old Target" means Meridian Press Holdings LLC as it exists prior to the deemed asset sale on the Closing Date, and, for purposes of determining the ADSP and the allocation thereof, shall include the assets held by Old Target (including assets held by any Target Subsidiary that is treated as a disregarded entity or pass-through entity for United States federal income tax purposes) as of the close of the Closing Date.
"Purchase Agreement" means the Membership Interest Purchase Agreement, dated as of July 19, 2024, by and 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, as Parent Guarantor, and Pinnacle Ridge Capital Partners Fund IV, L.P., as Sponsor, as such agreement may be amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms.
"Review Period" has the meaning set forth in Section 3.3(a) of this Agreement.
"Section 338(h)(10) Election" means the election described in Section 338(h)(10) of the Code and Treasury Regulations Section 1.338(h)(10)-1 to treat the acquisition of the Membership Interests as a deemed sale of all of the assets of Old Target for United States federal income tax purposes.
"Target Subsidiaries" means, collectively, Meridian Distribution Services Inc. (Delaware corporation, Secretary of State file no. 4736201), Bellweather Academic Press Inc. (Delaware corporation, Secretary of State file no. 4801133), Foxglove Media LLC (a New York limited liability company), and Meridian Press Canada ULC (a British Columbia unlimited liability company), and "Target Subsidiary" means any one of them.
"Tax" or "Taxes" means all federal, state, local, and foreign taxes of any kind, including income, franchise, gross receipts, excise, property (real and personal), sales, use, transfer, documentary, stamp, registration, value added, withholding, payroll, employment, social security, and other taxes, together with any interest, penalties, additions to tax, or additional amounts imposed with respect thereto.
"Tax Returns" means all returns, declarations, reports, claims for refund, statements, schedules, forms, information returns, and other documents (including any amendments thereto) filed or required to be filed with any taxing authority in respect of Taxes.
"Treasury Regulations" means the regulations promulgated under the Code by the United States Department of the Treasury, as such regulations may be amended from time to time. References to a specific provision of the Treasury Regulations include any successor provision thereto.
Section 1.2 — Purchase Agreement Definitions
Capitalized terms used but not otherwise defined in this Agreement shall have the respective meanings ascribed to such terms in the Purchase Agreement. In the event of any conflict between a definition set forth in Section 1.1 of this Agreement and a definition set forth in the Purchase Agreement, the definition set forth in this Agreement shall control for purposes of this Agreement.
Section 1.3 — Interpretive Provisions
Unless the context otherwise requires, the following rules of interpretation shall apply to this Agreement:
(a) The words "hereof," "herein," "hereunder," and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement.
(b) All references herein to Articles, Sections, and Exhibits shall be deemed to be references to Articles, Sections, and Exhibits of or to this Agreement unless the context otherwise requires.
(c) The terms "include," "includes," and "including" shall be deemed to be followed by the words "without limitation" whether or not so followed.
(d) The singular shall include the plural, and the masculine gender shall include the feminine and neuter genders, and vice versa, as the context requires.
(e) References to any statute, rule, or regulation shall include all amendments thereto and all successor statutes, rules, and regulations, unless the context otherwise requires.
(f) References to a "person" shall include any individual, corporation, partnership, limited liability company, joint venture, trust, unincorporated association, governmental authority, or other entity.
(g) The headings and captions contained in this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement.
(h) The Parties have participated jointly in the negotiation and drafting of this Agreement, and in the event of any ambiguity or question of intent or interpretation, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provision of this Agreement.
(i) References to "days" shall mean calendar days unless otherwise expressly stated. If the last day for performing any act or exercising any right falls on a Saturday, Sunday, or federal holiday, such act may be performed or such right may be exercised on the next succeeding business day.
ARTICLE II — SECTION 338(h)(10) ELECTION
Section 2.1 — Joint Election
Seller and Buyer hereby agree to jointly make an election under Section 338(h)(10) of the Code and Treasury Regulations Section 1.338(h)(10)-1 with respect to the acquisition by Buyer of one hundred percent (100%) of the Membership Interests in Meridian Press Holdings LLC. The Parties acknowledge and agree that the Company is treated as a disregarded entity for United States federal income tax purposes and that Seller is the sole member of the Company. The Parties further acknowledge and agree that, notwithstanding the form of the Transaction as a sale of membership interests, the effect of the Election is to treat the Transaction for United States federal income tax purposes as if:
(a) Old Target sold all of its assets (including the assets of any Target Subsidiary that is a disregarded entity or other pass-through entity for United States federal income tax purposes) to an unrelated third-party purchaser in a single transaction at the close of the Closing Date in exchange for the Aggregate Deemed Sale Price; and
(b) immediately following such deemed asset sale, Old Target distributed the proceeds of such deemed asset sale and its remaining assets, if any, to Seller in complete liquidation of Old Target.
The Parties intend that the Election shall apply to the acquisition of the Membership Interests and, to the fullest extent permitted by applicable law and the Treasury Regulations, to the deemed acquisition of the assets of each Target Subsidiary that is a qualified subchapter S subsidiary, a disregarded entity, or other pass-through entity for United States federal income tax purposes. To the extent that any Target Subsidiary is treated as a separate corporation for United States federal income tax purposes, the Parties shall cooperate in good faith to determine whether a separate Section 338(h)(10) election or other appropriate election is required or desirable with respect to such Target Subsidiary, and shall make such election if mutually agreed.
Section 2.2 — Corresponding State and Local Elections
In addition to the Section 338(h)(10) Election under the Code, the Parties further agree to make any corresponding or similar elections under the tax laws of each state and local jurisdiction in which the Company or any Target Subsidiary files Tax Returns or is otherwise subject to Tax, to the fullest extent that such elections are available under the applicable tax laws of such jurisdictions. Without limiting the foregoing, the Parties specifically acknowledge that the Company and the Target Subsidiaries conduct business operations in, or otherwise have nexus with, the following jurisdictions, among others:
(a) Delaware — state of incorporation and formation of the Company, Meridian Distribution Services Inc., and Bellweather Academic Press Inc.;
(b) New York — state of formation of Foxglove Media LLC and location of the Company's principal executive offices;
(c) New Jersey — location of the Company's distribution center at 45 Fieldcrest Avenue, Edison, NJ 08837;
(d) Ohio — location of the Company's distribution center at 2200 Westbelt Drive, Columbus, OH 43228;
(e) Texas — location of the Company's distribution center at 8700 Freeport Parkway, Dallas, TX 75063;
(f) Nevada — location of the Company's distribution center at 1400 Scheels Drive, Reno, NV 89502; and
(g) such other states and local jurisdictions in which the Company or any Target Subsidiary has filing obligations, economic nexus, or tax exposure as identified by the Parties and their respective tax advisors.
Each Party shall cooperate in good faith to identify all jurisdictions in which a corresponding or similar state or local election is available and to take all actions necessary to effectuate such elections. To the extent that a particular state or local jurisdiction does not recognize or permit a corresponding election, the Parties shall cooperate to ensure that the Transaction is reported in such jurisdiction in a manner that is as consistent as practicable with the treatment of the Transaction as a deemed asset sale.
Section 2.3 — Treatment as Deemed Asset Sale
The Parties agree that, as a result of the Election, the Transaction shall be treated for United States federal income tax purposes and, to the extent applicable, for state and local income tax purposes, as a deemed sale of all of the assets of Old Target (including the assets of any Target Subsidiary that is treated as a disregarded entity or pass-through entity) in a single transaction at the close of the Closing Date for the Aggregate Deemed Sale Price. The Parties further agree to the following:
(a) Gain Recognition by Seller. Seller shall be responsible for recognizing and reporting any gain or loss resulting from the deemed asset sale on its applicable Tax Returns. The Parties acknowledge that the estimated taxable gain to be recognized by Seller as a result of the deemed asset sale is approximately Two Hundred Twenty-Eight Million Dollars ($228,000,000), and the estimated United States federal and state income tax liability arising therefrom is approximately Forty-Eight Million Dollars ($48,000,000), based on a blended federal and state effective income tax rate of approximately twenty-one percent (21%). Seller shall be solely responsible for the payment of all such Taxes.
(b) Step-Up in Basis. As a result of the Election, Buyer shall receive a step-up in the tax basis of the assets of the Company and the applicable Target Subsidiaries to an amount equal to the AGUB, allocated among the asset classes in accordance with the Final Allocation determined pursuant to Article III hereof. Buyer acknowledges that the benefits of such step-up in tax basis are reflected in the negotiated purchase price and the economics of the Transaction.
(c) No Inconsistent Treatment. Neither Party shall take any action, or fail to take any action, that would cause the deemed asset sale treatment resulting from the Election to be disregarded, invalidated, or otherwise rendered ineffective for United States federal income tax purposes or for purposes of any applicable state or local income tax.
Section 2.4 — Preparation and Filing of Election Forms
(a) IRS Form 8023. Buyer shall be responsible for preparing IRS Form 8023 (Elections Under Section 338 for Corporations Making Qualified Stock Purchases) in a manner consistent with this Agreement and the Purchase Agreement. Buyer shall deliver a complete draft of Form 8023 to Seller not later than sixty (60) days prior to the due date for filing such form (which due date, pursuant to Treasury Regulations Section 1.338-2(e)(1), is generally the fifteenth (15th) day of the ninth (9th) month beginning after the month that includes the Closing Date). Seller shall review such draft Form 8023 and, provided such form is consistent with this Agreement and the terms of the Election as set forth herein, Seller shall execute and return such form to Buyer within fifteen (15) business days after receipt thereof. In the event Seller reasonably believes that the draft Form 8023 is not consistent with this Agreement, Seller shall notify Buyer in writing of any objections within such fifteen (15) business day period, and the Parties shall cooperate in good faith to resolve any such objections. Each Party shall retain a copy of the fully executed Form 8023 for its records.
(b) IRS Form 8883. Each Party shall be responsible for preparing and filing its own IRS Form 8883 (Asset Allocation Statement Under Section 338) with its applicable Tax Return for the taxable year that includes the Closing Date. Each Party shall prepare its Form 8883 in a manner that is entirely consistent with the Final Allocation determined pursuant to Article III of this Agreement. Each Party shall provide the other Party with a copy of its completed Form 8883 (or a draft thereof) at least fifteen (15) days prior to the filing thereof, for informational purposes and to confirm consistency.
(c) State and Local Forms. The Parties shall cooperate in the preparation and filing of any and all state or local forms, returns, statements, or other documents required to effectuate any corresponding or similar state or local elections. Buyer shall be responsible for preparing initial drafts of all such forms and shall deliver such drafts to Seller for review at least thirty (30) days prior to the applicable filing deadline. Seller shall review and execute (to the extent execution by Seller is required) such forms within fifteen (15) business days after receipt, provided such forms are consistent with this Agreement. In the event that a particular jurisdiction requires a separate form or procedure that is unique to that jurisdiction, the Parties shall cooperate in good faith to satisfy such requirements.
(d) Timely Filing. Each Party shall use its reasonable best efforts to ensure that all Election Forms are prepared, executed, and filed on a timely basis in accordance with the applicable deadlines prescribed by the Code, the Treasury Regulations, and any applicable state or local tax laws. Neither Party shall take any action, or fail to take any action, that would cause the Election to be invalid, untimely, or that is inconsistent with the Election having been validly made. Without limiting the generality of the foregoing, each Party shall promptly notify the other Party if it becomes aware of any circumstance that could reasonably be expected to impair the validity or timeliness of the Election.
Section 2.5 — Irrevocability
Once the Section 338(h)(10) Election has been made, such Election shall be irrevocable and may not be revoked, rescinded, terminated, or modified without the prior written consent of both Seller and Buyer. Each Party acknowledges that the other Party is relying on the making of the Election in entering into the Transaction and that the revocation or modification of the Election without the consent of both Parties would cause material harm to the non-consenting Party. The foregoing irrevocability shall apply equally to any corresponding state or local elections made pursuant to Section 2.2 of this Agreement, to the fullest extent permitted by applicable law.
ARTICLE III — ALLOCATION OF DEEMED ASSET SALE PURCHASE PRICE
Section 3.1 — Allocation Methodology
The Aggregate Deemed Sale Price (ADSP) and the Adjusted Grossed-Up Basis (AGUB) shall be allocated among the assets of Old Target (and any applicable Target Subsidiary whose assets are treated as assets of Old Target for purposes of the Election) in accordance with the residual method prescribed by Section 338(b)(5) of the Code and Treasury Regulations Sections 1.338-6 and 1.338-7. The allocation shall be made among the following seven (7) asset classes prescribed by Treasury Regulations Section 1.338-6(b), in the order of priority set forth therein:
(i) Class I — Cash and General Deposit Accounts. Cash and general deposit accounts (including demand deposits, savings accounts, and similar accounts), including the estimated Closing Cash of approximately Eight Million Two Hundred Thousand Dollars ($8,200,000) held in the Company's operating accounts and any petty cash on hand at the distribution centers.
(ii) Class II — Actively Traded Personal Property, Certificates of Deposit, and Foreign Currency. Actively traded personal property (within the meaning of Section 1092(d)(1) of the Code), certificates of deposit, and foreign currency held by the Company or any Target Subsidiary.
(iii) Class III — Accounts Receivable, Mortgages, and Credit Card Receivables. Accounts receivable (including trade receivables from publishers, institutional subscribers, and retail accounts), mortgages, and credit card receivables, derived in part from the estimated Closing Net Working Capital of approximately One Hundred Forty-Two Million Dollars ($142,000,000) as set forth in the estimated closing statement.
(iv) Class IV — Stock in Trade, Inventory, and Property Held for Sale to Customers. Inventory, stock in trade, and other property held primarily for sale to customers in the ordinary course of business, including book inventory, periodical inventory, and other publishing-related inventory maintained at the Company's distribution centers.
(v) Class V — All Other Tangible and Intangible Assets Not Classified Elsewhere. All assets not otherwise classified in Classes I through IV, VI, or VII, including: (A) tangible personal property such as distribution center equipment, warehouse racking systems, automated sorting and packing machinery, and fixtures at the Company's fourteen (14) distribution centers; (B) owned real property, including the facilities located at Edison, New Jersey (45 Fieldcrest Avenue), Columbus, Ohio (2200 Westbelt Drive), Dallas, Texas (8700 Freeport Parkway), and Reno, Nevada (1400 Scheels Drive); (C) leasehold interests in eight (8) United States locations and two (2) Canadian locations, together with all associated leasehold improvements; (D) furniture, fixtures, and equipment; (E) computer hardware and information technology infrastructure; and (F) other tangible and intangible assets properly classified in Class V under the Treasury Regulations.
(vi) Class VI — Section 197 Intangibles Other Than Goodwill and Going Concern Value. Section 197 intangibles (within the meaning of Section 197(d) of the Code) other than goodwill and going concern value, including: (A) the "Meridian Press," "Bellweather Academic," and "Foxglove" trademarks, trade names, service marks, and associated logos, including all United States and Canadian trademark registrations; (B) ISBN (International Standard Book Number) prefix assignments held by the Company and the Target Subsidiaries; (C) author and content license agreements; (D) the Oakbridge Distribution Alliance Agreement and all rights thereunder; (E) customer relationships, including institutional subscriber lists, retail distribution agreements, and publisher distribution contracts; (F) educational content licenses; and (G) other identifiable intangible assets properly classified in Class VI under the Treasury Regulations.
(vii) Class VII — Goodwill and Going Concern Value. Goodwill and going concern value, which shall receive the residual amount of the ADSP and AGUB remaining after allocation to Classes I through VI in accordance with Treasury Regulations Section 1.338-6(b).
The Parties acknowledge and agree that the residual method requires that the ADSP and AGUB first be allocated to Class I assets in an amount equal to the fair market value of such assets, then to Class II assets in an amount equal to the fair market value of such assets, and so on through Class VI, with any remaining balance allocated to Class VII (goodwill and going concern value).
Section 3.2 — Preliminary Allocation
(a) Not later than ninety (90) days following the Closing Date (i.e., not later than February 13, 2025), Buyer shall prepare and deliver to Seller a preliminary Allocation Schedule substantially in the form of Exhibit A attached hereto (the "Preliminary Allocation"). The Preliminary Allocation shall set forth the fair market values of the assets allocated to each of Class I through Class VII. The Preliminary Allocation shall be prepared on the basis of the estimated Equity Purchase Price of Four Hundred Eighteen Million Dollars ($418,000,000) (as set forth in the estimated closing statement delivered at the Closing) and the estimated amounts of Closing Indebtedness, Closing Cash, Target Transaction Expenses, and the net working capital adjustment as of the Closing Date, and shall be computed in accordance with the residual method described in Section 3.1 above.
(b) The Preliminary Allocation shall be prepared in good faith and shall reflect the fair market values of the assets of Old Target (and applicable Target Subsidiaries) as of the Closing Date, determined in accordance with applicable valuation principles and methodologies. In preparing the Preliminary Allocation, Buyer may engage independent appraisers or valuation experts, at Buyer's expense, to determine the fair market values of specific asset categories (including real property, tangible personal property, and identifiable intangible assets).
(c) The Preliminary Allocation shall be adjusted, to the extent necessary, to reflect the final purchase price amounts once the post-closing purchase price true-up is completed pursuant to the terms and conditions of the Purchase Agreement. The Parties acknowledge that the post-closing net working capital true-up deadline under the Purchase Agreement is February 13, 2025.
Section 3.3 — Review and Dispute Resolution
(a) Review Period. Seller shall have a period of thirty (30) days following receipt of the Preliminary Allocation (the "Review Period") to review the Preliminary Allocation. During the Review Period, Seller shall either: (i) deliver to Buyer a written notice accepting the Preliminary Allocation, in which case the Preliminary Allocation shall constitute the Final Allocation (subject to any adjustments required under Section 3.4); or (ii) deliver to Buyer a written notice of dispute (a "Dispute Notice") specifying in reasonable detail each item or amount in the Preliminary Allocation that Seller disputes, the basis for such dispute, and Seller's proposed allocation for each such disputed item, together with any supporting documentation or analysis. If Seller fails to deliver either a notice of acceptance or a Dispute Notice within the Review Period, Seller shall be deemed to have accepted the Preliminary Allocation, and the Preliminary Allocation shall constitute the Final Allocation (subject to any adjustments required under Section 3.4).
(b) Negotiation. If Seller delivers a Dispute Notice in accordance with Section 3.3(a), the Parties shall negotiate in good faith for a period of fifteen (15) days following the date of delivery of the Dispute Notice (the "Negotiation Period") to resolve the disputed items. During the Negotiation Period, each Party shall make available to the other Party such information, documentation, and access to its respective tax advisors and valuation experts as may be reasonably requested by the other Party to facilitate the resolution of the disputed items. Any items resolved during the Negotiation Period shall be reflected in a revised Allocation Schedule agreed upon in writing by both Parties.
(c) Neutral Accountant. If the Parties are unable to resolve any or all of the disputed items within the Negotiation Period, the remaining disputed items (and only such remaining disputed items) shall be submitted for final and binding determination to Kensington Forensic Advisors LLP, located at 90 Park Avenue, New York, NY 10016 (or, if Kensington Forensic Advisors LLP is unable or unwilling to serve, to another independent nationally recognized accounting or valuation firm mutually agreed upon by the Parties) (the "Neutral Accountant"). The Neutral Accountant shall act as an expert and not as an arbitrator. The following procedures shall apply to the Neutral Accountant's determination:
(i) Within ten (10) business days following the engagement of the Neutral Accountant, each Party shall submit to the Neutral Accountant a written statement setting forth its position on each remaining disputed item, together with all supporting documentation, analyses, and any other materials that such Party wishes the Neutral Accountant to consider.
(ii) The Neutral Accountant shall resolve only the specific items in dispute submitted to it and may not assign a value to any disputed item that is greater than the highest value proposed by either Party or less than the lowest value proposed by either Party for such item.
(iii) The Neutral Accountant shall render its written determination within thirty (30) days following submission of the Parties' written statements. The determination of the Neutral Accountant shall be final and binding upon the Parties and shall not be subject to appeal or review except for fraud or manifest error.
(iv) The fees and expenses of the Neutral Accountant shall be borne equally (50/50) by the Parties. Each Party shall bear its own costs and expenses (including fees and expenses of its own advisors) in connection with the Neutral Accountant proceedings.
(d) Final Allocation. The allocation as: (i) accepted by Seller (or deemed accepted) pursuant to Section 3.3(a); (ii) agreed upon by the Parties during the Negotiation Period pursuant to Section 3.3(b); or (iii) determined by the Neutral Accountant pursuant to Section 3.3(c) (in each case, as applicable, taking into account the resolution of all disputed and undisputed items), shall constitute the "Final Allocation" for all purposes of this Agreement. The Final Allocation, once determined, shall be binding upon the Parties and their respective affiliates for all Tax purposes.
Section 3.4 — Adjustments to Allocation
In the event of any adjustment to the Equity Purchase Price pursuant to the post-closing purchase price true-up provisions of the Purchase Agreement (including the net working capital true-up, which has a deadline of February 13, 2025) or any other adjustment to the aggregate consideration paid or payable in connection with the Transaction, including but not limited to:
(a) any payment to or from the escrow fund of Seventy-Two Million Dollars ($72,000,000) deposited with Granite Trust Company, N.A. (escrow account number GT-ESC-2024-11150048) pursuant to the Escrow Agreement;
(b) any indemnification payment made by or to either Party under the Purchase Agreement;
(c) any earn-out payment, contingent consideration, or other deferred payment, if applicable; or
(d) any adjustment resulting from a determination by a taxing authority or a court of competent jurisdiction;
the Final Allocation shall be adjusted in a manner consistent with the residual method under Treasury Regulations Sections 1.338-6 and 1.338-7 and the principles and methodologies set forth in this Article III. Within thirty (30) days following the occurrence of any event giving rise to such an adjustment, Buyer shall prepare a revised Allocation Schedule and deliver it to Seller for review. The review and dispute resolution procedures set forth in Section 3.3 of this Agreement shall apply, mutatis mutandis, to any such revised Allocation Schedule.
Section 3.5 — Consistency
Each Party hereby agrees, for itself and on behalf of its affiliates, to:
(a) report the deemed asset sale resulting from the Election on all Tax Returns (including, without limitation, IRS Form 8883 and any corresponding state or local forms) and in all dealings with the IRS, state and local tax authorities, and any other taxing authorities in a manner entirely consistent with the Final Allocation (and any adjustments thereto made in accordance with Section 3.4);
(b) not take any position on any Tax Return, in any audit, examination, or administrative or judicial proceeding, or in any other filing or communication with any taxing authority, that is inconsistent with the Final Allocation, unless required to do so by a "determination" (within the meaning of Section 1313(a) of the Code) or by a comparable final determination under applicable state or local tax law; and
(c) promptly notify the other Party in writing (and in any event within ten (10) business days) of any challenge, inquiry, proposed adjustment, or deficiency asserted by any taxing authority with respect to the Final Allocation, the Election, or the treatment of the Transaction as a deemed asset sale, and to consult with the other Party in good faith prior to agreeing to or contesting any such challenge.
The Parties acknowledge and agree that the obligation of consistency set forth in this Section 3.5 is a material inducement for each Party to enter into this Agreement and that a breach of such obligation could result in material adverse tax consequences to the non-breaching Party.
ARTICLE IV — TAX REPORTING AND COOPERATION
Section 4.1 — Tax Returns
Each Party shall prepare and file, or cause to be prepared and filed, all Tax Returns required to be filed in connection with the Election in a manner consistent with this Agreement, the Final Allocation, and the treatment of the Transaction as a deemed asset sale. Without limiting the generality of the foregoing:
(a) Seller's Tax Returns. Seller acknowledges and agrees that the deemed asset sale will result in the recognition of gain by Seller, with an estimated taxable gain of approximately Two Hundred Twenty-Eight Million Dollars ($228,000,000). Seller shall be solely responsible for reporting such gain on the applicable Tax Returns of Aurelius Media Holdings Inc. (and, to the extent applicable, the consolidated or combined Tax Returns of Aurelius Global Media Group PLC or any of its affiliates). Seller shall be solely responsible for the payment of all Taxes arising from or attributable to such gain.
(b) Buyer's Tax Returns. Buyer shall report the acquisition of the assets of the Company (and applicable Target Subsidiaries) on Buyer's Tax Returns in a manner consistent with the Election and the Final Allocation. Buyer shall claim amortization and depreciation deductions with respect to the stepped-up basis in the assets of the Company resulting from the Election in accordance with the applicable provisions of the Code and the Treasury Regulations.
(c) Pre-Closing Tax Returns. Seller shall be responsible for the preparation and filing of all Tax Returns of the Company and the Target Subsidiaries for all taxable periods ending on or before the Closing Date, in accordance with the terms and conditions of the Purchase Agreement. Buyer shall be responsible for the preparation and filing of all Tax Returns of the Company and the Target Subsidiaries for all taxable periods beginning after the Closing Date and for Straddle Periods, in each case in accordance with the terms and conditions of the Purchase Agreement.
Section 4.2 — Cooperation
Each Party shall, and shall cause its respective affiliates, officers, directors, employees, agents, and representatives (including Aurelius Global Media Group PLC in the case of Seller, and Pinnacle Ridge Capital Partners Fund IV, L.P. and Pinnacle Ridge Capital GP IV LLC in the case of Buyer) to, cooperate fully and in good faith with the other Party in connection with the Election and the matters contemplated by this Agreement. Without limiting the generality of the foregoing, each Party shall:
(a) provide to the other Party all information reasonably requested by such other Party in connection with the preparation and filing of the Election Forms, the Allocation Schedule, and any Tax Returns relating to the Election, including, without limitation, access to the books, records, workpapers, financial statements, and Tax Returns of the Company and the Target Subsidiaries;
(b) execute and deliver, or cause to be executed and delivered, all forms, documents, instruments, certificates, powers of attorney, and other papers required to effectuate the Election and any corresponding state or local elections, in each case within the time periods specified in this Agreement or, if no time period is specified, within a reasonable time after request therefor;
(c) cooperate fully in the preparation of the Allocation Schedule, any revised Allocation Schedule, and the Final Allocation, including by providing access to the Company's fixed asset registers, depreciation schedules, intangible asset records, real property appraisals, and other records and information reasonably necessary to determine the fair market values of the assets of Old Target;
(d) notify the other Party in writing within ten (10) business days of receipt of any written notice, inquiry, subpoena, information document request, notice of proposed adjustment, revenue agent's report, notice of deficiency, or similar communication from the IRS or any state or local taxing authority that relates to or may affect the Election, the Final Allocation, or the treatment of the Transaction as a deemed asset sale;
(e) cooperate fully in connection with any audit, examination, administrative proceeding, or judicial proceeding relating to the Election, the Final Allocation, or the deemed asset sale treatment, including by making available relevant employees, agents, and advisors for interviews, meetings, and testimony, and by providing access to relevant documents and records; and
(f) not settle, compromise, or otherwise resolve any claim, assessment, or proceeding relating to the Election or the Final Allocation without the prior written consent of the other Party (such consent not to be unreasonably withheld, conditioned, or delayed).
Section 4.3 — Retention of Records
Each Party shall retain, and shall cause its affiliates to retain, all records, documents, workpapers, correspondence, and other materials relating to the Election, the Allocation, and the deemed asset sale treatment of the Transaction for a period of not less than seven (7) years following the Closing Date (i.e., until at least November 15, 2031), or such longer period as may be required by: (a) applicable law or regulation; (b) any applicable statute of limitations (including any extensions or tolling thereof); or (c) the reasonable written request of the other Party. Upon the expiration of such retention period, neither Party shall destroy or dispose of any such records without first providing the other Party with at least thirty (30) days' prior written notice and a reasonable opportunity to copy or take possession of such records at such Party's own expense.
Section 4.4 — Tax Advisors
The Parties acknowledge and agree that:
(a) Seller's independent auditor and tax advisor is Pemberton Graves LLP (engagement partner: Robert Ainsley), and Seller's tax counsel is Calderwood & Harkness LLP (specialist partner, tax: Leonard Cross);
(b) Buyer's independent accounting and tax advisor is Whitecliff & Harding LLP (engagement partner: Susan Cartwright); and
(c) each Party has been represented by its own independent tax advisors in connection with the negotiation and execution of this Agreement, and each Party has independently evaluated the tax consequences of the Election and the Transaction.
Nothing in this Agreement shall be construed to create any obligation on either Party to share with the other Party any privileged tax advice, attorney-client communications, tax opinions, or other work product prepared by or for such Party by its tax advisors or legal counsel. The foregoing shall not limit any Party's obligation to provide information and cooperation as expressly required by Section 4.2 of this Agreement.
ARTICLE V — REPRESENTATIONS AND WARRANTIES
Section 5.1 — Seller's Representations and Warranties
Aurelius Media Holdings Inc. hereby represents and warrants to Buyer as of the date hereof and as of the Closing Date as follows:
(a) Organization and Good Standing. Seller is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware (Secretary of State file no. 5987324). Seller has all requisite corporate power and authority to own, lease, and operate its properties and assets and to conduct its business as presently conducted.
(b) Authority. Seller has all requisite corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder, including, without limitation, the authority to make the Section 338(h)(10) Election on behalf of itself as the seller of the membership interests in the Company (which, for purposes of the Election, are treated as the stock of Old Target). The execution and delivery of this Agreement and the performance by Seller of its obligations hereunder have been duly authorized by all necessary corporate action on the part of Seller, including the approval of the board of directors of Aurelius Media Holdings Inc. by resolution duly adopted at a meeting held on July 17, 2024, and no other corporate proceedings on the part of Seller are necessary to authorize this Agreement or the transactions contemplated hereby.
(c) Disregarded Entity Status. Meridian Press Holdings LLC is, and at all times since its formation has been, treated as a disregarded entity for United States federal income tax purposes within the meaning of Treasury Regulations Section 301.7701-3. Seller is the sole member of the Company, and no other person or entity has any ownership interest, membership interest, profits interest, or other equity interest in the Company. The Company has not made an election under Treasury Regulations Section 301.7701-3 to be classified as a corporation for United States federal income tax purposes.
(d) Binding Obligation. This Agreement has been duly executed and delivered by Seller and constitutes the valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and other similar laws affecting creditors' rights generally, and to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).
(e) No Conflicts. The execution and delivery of this Agreement by Seller and the performance by Seller of its obligations hereunder do not and will not: (i) violate or conflict with any provision of the certificate of incorporation, bylaws, or other organizational documents of Seller; (ii) violate or conflict with any law, statute, regulation, order, judgment, or decree applicable to Seller; or (iii) result in a breach of, or constitute a default under, any material agreement, contract, indenture, or instrument to which Seller is a party or by which Seller or any of its properties or assets are bound.
(f) Board Approval. The board of directors of Aurelius Media Holdings Inc. has approved this Agreement and the transactions contemplated hereby, including the making of the Election, by resolution duly adopted at a meeting of the board of directors held on July 17, 2024, at which a quorum was present and acting.
Section 5.2 — Buyer's Representations and Warranties
Ridgeline Publishing Acquisition Corp. hereby represents and warrants to Seller as of the date hereof and as of the Closing Date as follows:
(a) Organization and Good Standing. Buyer is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware (Secretary of State file no. 6501982), having been incorporated on October 2, 2024, as a special-purpose acquisition vehicle formed for the purpose of consummating the Transaction. Buyer has all requisite corporate power and authority to own, lease, and operate its properties and assets and to conduct its business as presently conducted and as contemplated by this Agreement and the Purchase Agreement.
(b) Authority. Buyer has all requisite corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder, including, without limitation, the authority to make the Section 338(h)(10) Election as the purchasing corporation (within the meaning of Section 338(d)(1) of the Code). The execution and delivery of this Agreement and the performance by Buyer of its obligations hereunder have been duly authorized by all necessary corporate action on the part of Buyer, and no other corporate proceedings on the part of Buyer are necessary to authorize this Agreement or the transactions contemplated hereby.
(c) Binding Obligation. This Agreement has been duly executed and delivered by Buyer and constitutes the valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and other similar laws affecting creditors' rights generally, and to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).
(d) No Conflicts. The execution and delivery of this Agreement by Buyer and the performance by Buyer of its obligations hereunder do not and will not: (i) violate or conflict with any provision of the certificate of incorporation, bylaws, or other organizational documents of Buyer; (ii) violate or conflict with any law, statute, regulation, order, judgment, or decree applicable to Buyer; or (iii) result in a breach of, or constitute a default under, any material agreement, contract, indenture, or instrument to which Buyer is a party or by which Buyer or any of its properties or assets are bound.
ARTICLE VI — INDEMNIFICATION
Section 6.1 — Indemnification by Seller
Subject to the terms and conditions of this Article VI, Seller shall indemnify, defend, and hold harmless Buyer and its affiliates, and their respective officers, directors, employees, agents, successors, and permitted assigns (collectively, the "Buyer Indemnified Parties"), from and against any and all losses, damages, liabilities, claims, demands, actions, causes of action, judgments, settlements, fines, penalties, costs, and expenses (including reasonable attorneys' fees and expenses and reasonable fees and expenses of other professionals) (collectively, "Losses") arising from or relating to:
(a) any breach of any representation or warranty of Seller contained in Section 5.1 of this Agreement; and
(b) any breach by Seller of any covenant, agreement, or obligation of Seller contained in this Agreement, including, without limitation, Seller's failure to timely execute, deliver, or file any Election Form required to be executed, delivered, or filed by Seller under this Agreement.
Seller's indemnification obligations under this Section 6.1 shall be subject to the indemnification limitations set forth in the Purchase Agreement, including: (i) the aggregate indemnification cap of Seventy-Two Million Dollars ($72,000,000) (representing fifteen percent (15%) of the Enterprise Value); (ii) the indemnification basket (deductible) of Four Million Eight Hundred Thousand Dollars ($4,800,000) (representing one percent (1%) of the Enterprise Value); (iii) the general survival period of eighteen (18) months from the Closing Date for representations and warranties (other than fundamental representations); and (iv) the tax indemnity survival period, which shall continue until sixty (60) days after the expiration of the applicable statute of limitations (including any extensions or tolling thereof) for the Taxes to which such indemnification obligation relates. The Parties acknowledge that any Losses arising from the invalidity of the Election due to Seller's breach would constitute Losses subject to the tax indemnity survival period.
Section 6.2 — Indemnification by Buyer
Subject to the terms and conditions of this Article VI, Buyer shall indemnify, defend, and hold harmless Seller and its affiliates, and their respective officers, directors, employees, agents, successors, and permitted assigns (collectively, the "Seller Indemnified Parties"), from and against any and all Losses arising from or relating to:
(a) any breach of any representation or warranty of Buyer contained in Section 5.2 of this Agreement; and
(b) any breach by Buyer of any covenant, agreement, or obligation of Buyer contained in this Agreement, including, without limitation, Buyer's failure to timely prepare, execute, deliver, or file any Election Form or Allocation Schedule required to be prepared, executed, delivered, or filed by Buyer under this Agreement.
Without limiting the foregoing, Buyer acknowledges that if the Election is invalidated or rendered ineffective as a result of Buyer's breach of its obligations under this Agreement, Seller may suffer material Losses, including, without limitation, additional Tax liabilities, penalties, and interest arising from the recharacterization of the Transaction for Tax purposes. Buyer's indemnification obligations under this Section 6.2 shall not be subject to any basket, deductible, or cap.
Section 6.3 — Coordination with Purchase Agreement
The indemnification provisions of this Agreement are intended to supplement, and not to supplant, limit, or supersede, the indemnification provisions of the Purchase Agreement (Article IX thereof). This Agreement provides additional and specific remedies with respect to breaches of the covenants, representations, and warranties set forth herein relating to the Election and the Allocation, and the indemnification provisions of the Purchase Agreement provide broader remedies with respect to the Transaction as a whole. In the event of any conflict or inconsistency between the indemnification provisions of this Agreement and the indemnification provisions of the Purchase Agreement, the provisions of the Purchase Agreement shall control; provided, however, that to the extent this Agreement provides for indemnification with respect to matters specifically relating to the Election or the Allocation that are not otherwise addressed in the Purchase Agreement, the provisions of this Agreement shall govern. The Parties shall cooperate in good faith to avoid duplication of recovery under this Agreement and the Purchase Agreement with respect to the same Loss.
ARTICLE VII — TRANSFER TAXES
Section 7.1 — Transfer Taxes
Any and all transfer, sales, use, stamp, documentary, registration, recording, conveyance, or similar Taxes, fees, or charges (including any related interest and penalties) imposed by any federal, state, local, or foreign taxing authority in connection with the deemed asset sale resulting from the Election (collectively, "Transfer Taxes") shall be borne equally (fifty percent (50%) by Seller and fifty percent (50%) by Buyer), consistent with the transfer tax provision set forth in the Purchase Agreement. The Party required by applicable law to file a Tax Return or other report with respect to any such Transfer Tax shall prepare and file such Tax Return or report in a timely manner, and shall promptly provide a copy thereof to the other Party together with evidence of payment. The other Party shall promptly reimburse the filing Party for its share (fifty percent (50%)) of any such Transfer Tax within ten (10) business days of receipt of a written request for reimbursement accompanied by reasonable supporting documentation.
ARTICLE VIII — MISCELLANEOUS
Section 8.1 — Governing Law
This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware, without giving effect to any choice of law or conflict of laws provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. Any legal action, suit, or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby shall be brought exclusively in the Court of Chancery of the State of Delaware (or, if the Court of Chancery lacks jurisdiction, the Superior Court of the State of Delaware, or, if neither such state court has jurisdiction, the United States District Court for the District of Delaware), and each Party hereby irrevocably submits to the exclusive jurisdiction of such courts and waives any objection it may have to the laying of venue in such courts or any claim that such courts constitute an inconvenient forum.
Section 8.2 — Entire Agreement; Relationship to Purchase Agreement
This Agreement, together with the Purchase Agreement and the other transaction documents executed and delivered in connection with the Transaction (including, without limitation, the Escrow Agreement by and among Seller, Buyer, and Granite Trust Company, N.A. as escrow agent, the Transition Services Agreement, the Trademark License Agreement, the Non-Competition and Non-Solicitation Agreement, and the Seller Disclosure Schedules), constitutes the entire agreement of the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous negotiations, discussions, understandings, agreements, and representations, whether written or oral, with respect to such subject matter. In the event of any conflict or inconsistency between this Agreement and the Purchase Agreement with respect to the Election, the Allocation, or the deemed asset sale treatmen

SECTION 338(h)(10) ELECTION AGREEMENT

AURELIUS MEDIA HOLDINGS INC.

RIDGELINE PUBLISHING ACQUISITION CORP.

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