1017-00007 · Client 1017 · Engagement

engagement-letter-aurelius.docx DOCUMENT M&A / Corporate

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CALDERWOOD & HARKNESS LLP Counsellors at Law

787 Seventh Avenue, 42nd Floor New York, New York 10019 Telephone: (212) 558-4000 Facsimile: (212) 558-3588 www.calderwoodharkness.com

August 16, 2021

BY EMAIL AND INTERNATIONAL COURIER

Hugh Pemberton, Esq. General Counsel Aurelius Global Media Group PLC 44 Lombard Crescent London EC3V 9BQ United Kingdom

Re: Engagement of Calderwood & Harkness LLP as U.S. M&A Counsel — Proposed Tender Offer for Shares of Pinnacle Content Holdings, Inc. Matter Number: 1011-00002

Dear Mr. Pemberton:

We are writing to confirm the terms under which Calderwood & Harkness LLP ("C&H" or the "Firm") has been retained by Aurelius Global Media Group PLC ("Aurelius" or the "Client") as its U.S. mergers and acquisitions counsel in connection with the proposed tender offer for shares of Pinnacle Content Holdings, Inc. described more fully below. We appreciate your confidence in the Firm and look forward to working with you and your team on this important transaction.

This engagement letter (this "Letter") sets forth the terms and conditions governing our engagement. We ask that you review this Letter carefully, and if the terms set forth herein are acceptable, please confirm your acceptance by executing a copy of this Letter in the space indicated below and returning it to our attention.

1. Engagement and Scope of Representation

Calderwood & Harkness LLP is pleased to confirm its engagement by Aurelius Global Media Group PLC, a public limited company organized under the laws of England and Wales (registered number 08541276), as U.S. mergers and acquisitions counsel. Specifically, the Firm has been retained to advise and represent Aurelius and its wholly owned U.S. subsidiary, Aurelius Media Holdings LLC, a Delaware limited liability company ("AMH LLC," and together with Aurelius, the "Aurelius Parties"), in connection with the proposed tender offer (the "Offer") to acquire up to 6,980,050 shares of common stock, par value $0.001 per share (the "Shares"), representing approximately 34.9% of the outstanding shares of common stock of Pinnacle Content Holdings, Inc., a Delaware corporation whose shares of common stock are listed and traded on the Nasdaq Stock Market under the symbol "PCHL" ("Pinnacle" or the "Target"), at a price of $4.01 per Share, net to the seller in cash, without interest and less any applicable withholding taxes, for an aggregate deal value of approximately $28,000,000 (the "Transaction").

Without limiting the generality of the foregoing, the Firm's services in connection with the Offer are expected to include the following:

(a) Schedule TO and Tender Offer Filings. Preparation, review, and filing of the Schedule TO (Tender Offer Statement) with the U.S. Securities and Exchange Commission (the "SEC") pursuant to Section 14(d)(1) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule 14d-3 promulgated thereunder, including all exhibits and amendments thereto as may be required or advisable.

(b) Offer Documents. Drafting and revision of the Offer to Purchase, the related Letter of Transmittal, the Notice of Guaranteed Delivery, and all other ancillary offer documents and materials to be disseminated to Pinnacle shareholders in connection with the Offer.

(c) Schedule 13D Filings. Review and, as necessary, preparation of amendments to any Schedule 13D filings with the SEC relating to Aurelius's existing and future beneficial ownership of Shares of Pinnacle, including any amendments required to be filed in connection with the commencement of the Offer or changes in ownership during the pendency of the Offer.

(d) SEC Coordination. Coordination with the SEC Division of Corporation Finance and the Office of Mergers and Acquisitions regarding any comment letters, staff inquiries, telephonic conferences, or no-action requests relating to the Schedule TO, the offer documents, or any other filings made in connection with the Offer.

(e) Depositary and Information Agent Arrangements. Negotiation and drafting of the depositary agreement with Continental Fiduciary Services, Inc. (the "Depositary"), including all schedules and exhibits thereto, and coordination with Ridgeway Proxy Advisors LLC (the "Information Agent") regarding the information agent agreement and the distribution of offer materials to Pinnacle shareholders and their brokers, dealers, banks, and other nominees.

(f) Hart-Scott-Rodino Act Compliance. Advising on the applicability of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and the rules and regulations promulgated thereunder, to the Transaction, and preparing or assisting in the preparation of any required Notification and Report Form and related documentary attachments for filing with the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice.

(g) Defensive Measures Analysis. Analyzing Pinnacle's corporate governance documents, including its certificate of incorporation, bylaws, and any shareholder rights plan (commonly known as a "poison pill") or other anti-takeover provisions, including any provisions under Section 203 of the Delaware General Corporation Law or comparable statutes, and advising the Aurelius Parties on the legal implications of such provisions for the structure and consummation of the Offer.

(h) Target's Schedule 14D-9. Reviewing and analyzing Pinnacle's Schedule 14D-9 (Solicitation/Recommendation Statement) filed with the SEC in response to the Offer, including any amendments thereto, and advising the Aurelius Parties on the legal implications of the recommendations and disclosures contained therein.

(i) Negotiations with Pinnacle and its Counsel. Negotiation of any standstill agreement, governance agreement, board representation agreement, voting agreement, or other agreement or arrangement with Pinnacle, its board of directors, or its outside legal counsel, Caldwell Burris & Shoemaker LLP, in connection with or related to the Offer, including any potential transition to a negotiated transaction.

(j) Delaware Corporate Law Advice. Advising on Delaware corporate law matters relevant to the Offer, including matters relating to fiduciary duties of directors of the Target, the application of Section 203 of the Delaware General Corporation Law, and the interpretation and enforceability of any provisions of the Target's certificate of incorporation or bylaws that may affect the Offer or subsequent steps.

(k) General M&A Advisory Services. Such other general M&A advisory services as may be reasonably requested by the Client from time to time in connection with the Offer, including advising on any modifications to the terms or conditions of the Offer, extensions of the offer period, and post-closing integration matters to the extent they implicate U.S. legal issues.

The Client acknowledges and agrees that C&H is engaged solely as U.S. counsel in connection with the Offer. Advice on English law matters, including compliance with the rules and regulations of the Financial Conduct Authority, the London Stock Exchange, and applicable United Kingdom securities laws and regulations, is being provided separately by Dunmore Asset Advisors Chambers LLP (lead partner: Alistair Drummond, Esq.). Financial advisory services in connection with the Offer, including valuation analysis, financing strategy, and investor communications, are being provided separately by Strathmore Corporation Harcourt Partners (lead banker: Genevieve Tran). The Firm assumes no responsibility for the advice rendered by such other advisors, and the Client should look solely to such advisors with respect to matters within their respective areas of engagement.

2. Staffing

The Firm intends to staff this engagement with attorneys who have significant experience in U.S. mergers and acquisitions, public company tender offers, and SEC regulatory practice. The following attorneys have been assigned to this matter:

Responsible Partner: James Prentice, Partner, Mergers & Acquisitions Group

Billing Partner: Sandra Tung, Partner, Mergers & Acquisitions Group

Lead Associate: Tiffany Rosenthal, Associate, Mergers & Acquisitions Group

Working Associate: Andrew Fitzpatrick, Associate, Mergers & Acquisitions Group

From time to time, it may be necessary or appropriate to assign additional attorneys, paralegals, or other paraprofessionals to the engagement in order to ensure efficient and timely completion of the work. The Firm will provide notice to the Client of any such additional staffing assignments. The Firm will endeavor to staff the engagement in a manner that is cost-effective and avoids unnecessary duplication of effort.

For purposes of day-to-day communications regarding the Offer, the primary contact at the Firm will be James Prentice, who can be reached at (212) 558-4127 or jprentice@calderwoodharkness.com. The primary contact for the Client will be Hugh Pemberton, Esq., General Counsel, with a copy to Rupert Ashford, Head of Corporate Development, Aurelius Global Media Group PLC. The Client agrees to designate Mr. Pemberton and Mr. Ashford as the principal persons authorized to provide instructions to the Firm on behalf of the Client and the Aurelius Parties in connection with the engagement.

3. Fees and Hourly Rates

The Firm will charge for its professional services on an hourly basis at the Firm's then-current standard hourly rates, which are as follows for the current calendar year:

The Firm's standard hourly rates are subject to periodic adjustment, typically on an annual basis effective January 1 of each year. The Firm will provide advance written notice to the Client of any rate adjustments, and the adjusted rates will apply to services rendered on and after the effective date of such adjustment. In the event that the engagement extends beyond January 1, 2022, the Client acknowledges that the rates set forth above may be superseded by the Firm's then-current standard rates, as communicated to the Client.

Based on the Firm's current understanding of the anticipated scope of the engagement, and assuming a transaction timeline of approximately eight to twelve weeks from the date of commencement of the Offer through its completion (including the filing of the Schedule TO, preparation of all offer documents, responses to any SEC comment letters, negotiation of the depositary and information agent agreements, HSR Act compliance, and related negotiations), the Firm estimates that total professional fees for the engagement will range from $350,000 to $500,000. This estimate is provided solely for the Client's planning purposes and does not constitute a fee cap, fee ceiling, fixed fee, or maximum fee arrangement of any kind. Actual fees incurred may be higher or lower than this estimate depending on a number of factors, including but not limited to:

(i) the complexity and duration of the Offer, including any extensions of the offer period or amendments to the terms of the Offer;

(ii) the nature and extent of any defensive measures adopted or threatened by Pinnacle or its board of directors;

(iii) the nature, scope, and number of rounds of SEC comments received from the Division of Corporation Finance, the Office of Mergers and Acquisitions, or other SEC staff;

(iv) the extent of negotiations with Pinnacle, its board, or its counsel, Caldwell Burris & Shoemaker LLP;

(v) whether the Offer transitions from an unsolicited to a negotiated transaction;

(vi) the extent and complexity of any HSR Act review or second request; and

(vii) such other circumstances as may affect the nature and scope of the services required.

The fee estimate set forth above does not include fees for any litigation, arbitration, or other dispute resolution proceedings that may arise in connection with the Offer, including any action brought by Pinnacle, its shareholders, or any other party in the Delaware Court of Chancery, any U.S. federal court, or any other tribunal. Should litigation arise, the Firm and the Client will discuss the scope, staffing, and fee arrangements for such litigation separately.

4. Expenses and Disbursements

In addition to the professional fees described in Section 3 above, the Client will be responsible for reimbursement of all reasonable out-of-pocket expenses and disbursements incurred by the Firm in connection with the engagement. Such expenses and disbursements may include, without limitation, the following:

(a) filing fees, including SEC filing fees associated with the Schedule TO and any amendments thereto;

(b) Hart-Scott-Rodino Act filing fees payable to the Federal Trade Commission (the current HSR Act filing fee for a transaction valued at approximately $28,000,000 is estimated at $45,000, based on the filing fee thresholds in effect for fiscal year 2021; the actual filing fee will depend on the applicable fee schedule at the time of filing);

(c) travel expenses, including airfare, ground transportation, hotel accommodations, and meals, incurred in connection with meetings with the Client, the SEC, regulatory authorities, the Target, or other parties, to the extent reasonably necessary for the conduct of the engagement;

(d) courier, overnight delivery, and postage charges;

(e) document reproduction, printing, and binding costs;

(f) charges for computerized legal research services, including Westmark Data Systems, Sundial Solutions, and similar databases;

(g) long-distance telephone and video conferencing charges;

(h) costs of third-party vendors retained in connection with the engagement, including document management, translation, and electronic filing services; and

(i) such other expenses and disbursements as are customarily incurred in connection with transactions of this type.

The HSR Act filing fee referenced in clause (b) above, and any SEC filing fees referenced in clause (a) above, will be passed through to the Client on a dollar-for-dollar basis without markup. With respect to any single disbursement or expense item expected to exceed $5,000, the Firm will use commercially reasonable efforts to obtain advance approval from the Client before incurring such expense; provided, however, that the failure to obtain such advance approval shall not relieve the Client of its obligation to reimburse the Firm for expenses reasonably incurred in connection with the engagement.

5. Billing and Payment Terms

The Firm will render monthly invoices to the Client for professional fees and expenses incurred during the immediately preceding calendar month. All invoices will reference Matter Number 1011-00002 and will include a summary of fees by timekeeper, a description of the services rendered, and an itemization of disbursements and expenses.

Invoices are due and payable within thirty (30) days of the date of the invoice. Any amounts remaining unpaid beyond thirty (30) days from the date of the invoice shall accrue interest at a rate of 1.0% per month (equivalent to 12% per annum), compounded monthly, or the maximum rate permitted by applicable law, whichever is less, from the date payment was due until the date of actual payment.

The Client may, at any time, request reasonable additional detail or supporting documentation with respect to any invoice, and the Firm will make commercially reasonable efforts to provide such detail promptly. Any good faith dispute regarding the amount or accuracy of an invoice shall not relieve the Client of its obligation to pay the undisputed portion of the invoice when due.

All invoices will be directed to the attention of Hugh Pemberton, General Counsel, at the Client's address set forth above, or to such other person or address as the Client may designate in writing from time to time.

6. Retainer

No retainer or advance payment of fees is required at this time. The Firm reserves the right, however, to request a retainer or advance payment of fees in the event that (a) the scope of the engagement materially expands beyond the scope described in Section 1 of this Letter, or (b) any invoice remains unpaid for a period of sixty (60) days or more beyond its due date. Any retainer or advance payment received by the Firm will be deposited in the Firm's client trust account and applied against fees and expenses as they are incurred, with any unused balance refunded to the Client promptly upon conclusion of the engagement.

7. Conflicts of Interest and Waivers

The Firm has conducted a conflicts check with respect to this engagement in accordance with its standard procedures and the applicable Rules of Professional Conduct.

Based on the results of that conflicts check, the Firm confirms the following:

(a) Pinnacle Content Holdings, Inc. The Firm does not currently represent Pinnacle Content Holdings, Inc. or any of its directors, officers, or known affiliates in any matter, and the Firm has not represented Pinnacle or any such persons in any matter within the past three years.

(b) Brindoval National Bank, N.A. The Firm does not currently represent Brindoval National Bank, N.A. ("Brindoval") in connection with this Transaction or any matter related thereto. The Firm may, however, from time to time represent Brindoval or one or more of its affiliates in matters unrelated to this engagement. The Client hereby consents to the Firm's continued representation of Brindoval and its affiliates in such unrelated matters, provided that such representation is not materially adverse to the Client's interests in the Transaction or this engagement. In the event that any representation of Brindoval or its affiliates becomes or is reasonably likely to become materially adverse to the Client's interests in this matter, the Firm will promptly notify the Client and seek to resolve the conflict in accordance with applicable ethical rules.

The Client further acknowledges that Calderwood & Harkness LLP is a large, multi-office law firm with a substantial number of attorneys and clients across a range practice areas and industries. It is possible, and indeed likely, that the Firm may from time to time represent other clients whose interests may be adverse to the interests of Aurelius or its affiliates in matters that are wholly unrelated to this engagement. The Client hereby provides its advance consent (a "General Waiver") to the Firm's representation of other clients in such unrelated matters, provided that (i) such matters are not substantially related to the subject matter of this engagement, (ii) the Firm does not use any confidential information of the Client in such other representation, and (iii) such representation does not involve a direct assertion of a claim against the Client in a litigation or arbitration proceeding. This General Waiver is intended to be consistent with the requirements of Rule 1.7 of the New York Rules of Professional Conduct and is given after reasonable consideration by the Client.

If at any time during the course of this engagement an actual or potential conflict of interest arises that is not covered by the foregoing consents and waivers, the Firm will promptly notify the Client and discuss appropriate measures to address the conflict, which may include obtaining informed written consent from the affected parties or, if the conflict cannot be resolved through consent, withdrawing from the engagement in accordance with applicable ethical rules and the provisions of Section 11 of this Letter.

8. Confidentiality

The Firm will maintain the confidentiality of all information received from or on behalf of the Client in connection with this engagement, in accordance with the Firm's professional obligations under the applicable Rules of Professional Conduct and the attorney-client privilege. The Firm will not disclose any such confidential information to any third party without the prior written consent of the Client, except as may be required by applicable law, court order, or ethical obligation, or as necessary to carry out the Firm's responsibilities in connection with the engagement (for example, in the preparation and filing of SEC documents or in communications with regulatory authorities on behalf of the Client).

The confidentiality obligations set forth in this Section 8 shall survive the termination or completion of this engagement and shall continue in full force and effect indefinitely, subject only to applicable law and professional responsibility rules.

The Client acknowledges that certain documents and filings prepared by or with the assistance of the Firm in connection with the Offer, including the Schedule TO, the Offer to Purchase, the Letter of Transmittal, and any amendments to the Schedule 13D, will be filed with the SEC and will be publicly available. The Client further acknowledges that the content of such public filings is determined by the Client and subject to applicable disclosure requirements under the Exchange Act and the rules and regulations of the SEC, and the Firm's assistance in preparing such filings does not waive the attorney-client privilege or work product protection with respect to the Firm's underlying legal analysis, advice, or communications with the Client.

9. Document Retention

The Firm will retain files, documents, and records related to this engagement in accordance with the Firm's standard document retention policies, as in effect from time to time. Such policies currently provide for the retention of engagement files for a period of not less than seven (7) years following the conclusion of the engagement, subject to certain exceptions for categories of documents that may be retained for longer or shorter periods.

Upon the conclusion of this engagement, the Client may request the return of original documents provided to the Firm by the Client. The Firm may retain copies of such documents for its own files and records. The Firm may also retain copies of work product generated by the Firm in connection with the engagement, subject to the confidentiality obligations set forth in Section 8.

Following the expiration of the applicable retention period, the Firm may destroy or dispose of engagement files and documents in accordance with the Firm's standard document destruction procedures, without further notice to the Client, unless the Client provides the Firm with written instructions to the contrary prior to the expiration of such retention period.

10. Limitation of Engagement; No Tax or Financial Advice

The Firm's engagement is strictly limited to the scope of services described in Section 1 of this Letter. In particular, and without limiting the generality of the foregoing:

(a) No Tax Advice. The Firm is not engaged to provide, and will not provide, tax advice of any kind in connection with the Offer or the Transaction. The Client should consult its own tax advisors, including Kingsley Dunbar LLP (or such other tax advisors as the Client may retain), with respect to all tax matters relating to the Offer, including the U.S. federal, state, and local income tax consequences to the Aurelius Parties of the acquisition of Shares, any withholding tax obligations, and any UK or cross-border tax implications of the Transaction.

(b) No Financial Advisory Services. The Firm is not engaged to provide, and will not provide, financial advisory services, valuation analysis, fairness opinions, or financing advice. Such services are being provided separately by Strathmore Corporation Harcourt Partners (lead banker: Genevieve Tran), and the Client should look solely to Strathmore Corporation Harcourt Partners with respect to such matters.

(c) No English Law Advice. The Firm is not engaged to provide, and will not provide, advice on English law, including matters relating to the rules and regulations of the Financial Conduct Authority, the London Stock Exchange, UK takeover regulations, or any other aspect of English or European Union law. Such advice is being provided separately by Dunmore Asset Advisors Chambers LLP (lead partner: Alistair Drummond), and the Client should look solely to Dunmore Asset Advisors Chambers LLP with respect to such matters.

The Firm's advice in connection with this engagement relates to U.S. federal securities law (including the Exchange Act and the rules and regulations of the SEC relating to tender offers), Delaware corporate law (including the Delaware General Corporation Law), the HSR Act, and such other U.S. regulatory matters as are directly relevant to the Offer. The Client acknowledges that the Firm's advice is limited to these areas and that the Client is responsible for obtaining advice from other qualified advisors with respect to all other legal, tax, financial, and regulatory matters.

11. Termination

Either the Client or the Firm may terminate this engagement at any time upon written notice to the other party. Termination shall be effective upon receipt of such written notice, or on such later date as may be specified in the notice.

In the event of termination of this engagement by either party for any reason:

(a) the Client shall remain responsible for the payment of all professional fees and expenses incurred by the Firm through and including the effective date of termination, in accordance with the terms of this Letter;

(b) the Firm will take such steps as are reasonably necessary to protect the Client's interests during any transition to successor counsel, including the orderly transfer of files, documents, and work product, and such other transitional assistance as may be required by applicable ethical rules; and

(c) the Firm's obligations under Sections 7, 8, and 9 of this Letter shall survive termination of the engagement and remain in full force and effect.

The Firm's right to terminate this engagement is subject to the applicable Rules of Professional Conduct governing withdrawal from representation, including the obligation to provide reasonable notice to the Client and to obtain leave of any tribunal before which the Firm may have appeared on behalf of the Client, where required.

12. Governing Law and Dispute Resolution

This Letter shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflict of laws principles.

Any dispute, controversy, or claim arising out of or relating to this Letter, the Firm's engagement, or the services provided or to be provided by the Firm hereunder, including any dispute regarding the amount or payment of fees or expenses, shall be resolved by binding arbitration administered by the American Arbitration Association ("AAA") in the Borough of Manhattan, City of New York, New York, in accordance with the AAA's Commercial Arbitration Rules then in effect. The arbitration shall be conducted before a single arbitrator selected in accordance with the AAA's rules. The arbitrator's award shall be final and binding on the parties and may be entered as a judgment in any court of competent jurisdiction. Each party shall bear its own costs and attorneys' fees in connection with any such arbitration, unless the arbitrator determines that an award of costs and fees to the prevailing party is appropriate under the circumstances.

Notwithstanding the foregoing, the parties may mutually agree in writing to resolve any dispute through mediation, negotiation, or another alternative dispute resolution mechanism in lieu of binding arbitration.

13. Entire Agreement; Amendments

This Letter constitutes the entire agreement between the parties with respect to the subject matter hereof, including the terms and conditions of the Firm's engagement by the Client, and supersedes all prior and contemporaneous discussions, negotiations, understandings, and agreements, whether oral or written, relating to such subject matter.

No amendment, modification, or waiver of any provision of this Letter shall be effective unless set forth in a written instrument signed by both parties. No failure or delay by either party in exercising any right or remedy under this Letter shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or remedy preclude any other or further exercise thereof or the exercise of any other right or remedy.

14. Acceptance and Counterparts

We respectfully request that the Client confirm its acceptance of the terms and conditions set forth in this Letter by having an authorized representative sign and return a copy of this Letter to the Firm at the address set forth below. This Letter shall become effective upon execution by both parties.

This Letter may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Counterparts may be delivered by electronic mail (in .pdf format), facsimile transmission, or other electronic means, and any counterpart so delivered shall be deemed to have been duly and validly delivered and shall be valid and effective for all purposes.

We are enthusiastic about the opportunity to work with Aurelius and the broader deal team on this important transaction. Should you have any questions regarding the terms of this Letter or any other matter, please do not hesitate to contact James Prentice at (212) 558-4127 or Sandra Tung at (212) 558-4215 at your earliest convenience.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Name: James Prentice

Title: Partner, Mergers & Acquisitions Group

(Responsible Partner)

By: ________

Name: Sandra Tung

Title: Partner, Mergers & Acquisitions Group

(Billing Partner)

Address:

787 Seventh Avenue, 42nd Floor New York, New York 10019

ACCEPTED AND AGREED:

AURELIUS GLOBAL MEDIA GROUP PLC

By: ________

Name: Hugh Pemberton

Title: General Counsel

Date: ________

Address:

44 Lombard Crescent London EC3V 9BQ United Kingdom

cc:

Rupert Ashford, Head of Corporate Development, Aurelius Global Media Group PLC

Elena Markov, Chief Financial Officer, Aurelius Global Media Group PLC

Alistair Drummond, Partner, Dunmore Asset Advisors Chambers LLP (UK Counsel)

Timekeeper Category	Current Hourly Rate
Partners	$1,350
Of Counsel	$1,150
Senior Associates (6th year and above)	$950
Associates (1st through 5th year)	$750
Paralegals and Legal Assistants	$375

CALDERWOOD & HARKNESS LLP Counsellors at Law
787 Seventh Avenue, 42nd Floor New York, New York 10019 Telephone: (212) 558-4000 Facsimile: (212) 558-3588 www.calderwoodharkness.com
August 16, 2021
BY EMAIL AND INTERNATIONAL COURIER
Hugh Pemberton, Esq. General Counsel Aurelius Global Media Group PLC 44 Lombard Crescent London EC3V 9BQ United Kingdom
Re: Engagement of Calderwood & Harkness LLP as U.S. M&A Counsel — Proposed Tender Offer for Shares of Pinnacle Content Holdings, Inc. Matter Number: 1011-00002
Dear Mr. Pemberton:
We are writing to confirm the terms under which Calderwood & Harkness LLP ("C&H" or the "Firm") has been retained by Aurelius Global Media Group PLC ("Aurelius" or the "Client") as its U.S. mergers and acquisitions counsel in connection with the proposed tender offer for shares of Pinnacle Content Holdings, Inc. described more fully below. We appreciate your confidence in the Firm and look forward to working with you and your team on this important transaction.
This engagement letter (this "Letter") sets forth the terms and conditions governing our engagement. We ask that you review this Letter carefully, and if the terms set forth herein are acceptable, please confirm your acceptance by executing a copy of this Letter in the space indicated below and returning it to our attention.
1. Engagement and Scope of Representation
Calderwood & Harkness LLP is pleased to confirm its engagement by Aurelius Global Media Group PLC, a public limited company organized under the laws of England and Wales (registered number 08541276), as U.S. mergers and acquisitions counsel. Specifically, the Firm has been retained to advise and represent Aurelius and its wholly owned U.S. subsidiary, Aurelius Media Holdings LLC, a Delaware limited liability company ("AMH LLC," and together with Aurelius, the "Aurelius Parties"), in connection with the proposed tender offer (the "Offer") to acquire up to 6,980,050 shares of common stock, par value $0.001 per share (the "Shares"), representing approximately 34.9% of the outstanding shares of common stock of Pinnacle Content Holdings, Inc., a Delaware corporation whose shares of common stock are listed and traded on the Nasdaq Stock Market under the symbol "PCHL" ("Pinnacle" or the "Target"), at a price of $4.01 per Share, net to the seller in cash, without interest and less any applicable withholding taxes, for an aggregate deal value of approximately $28,000,000 (the "Transaction").
Without limiting the generality of the foregoing, the Firm's services in connection with the Offer are expected to include the following:
(a) Schedule TO and Tender Offer Filings. Preparation, review, and filing of the Schedule TO (Tender Offer Statement) with the U.S. Securities and Exchange Commission (the "SEC") pursuant to Section 14(d)(1) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule 14d-3 promulgated thereunder, including all exhibits and amendments thereto as may be required or advisable.
(b) Offer Documents. Drafting and revision of the Offer to Purchase, the related Letter of Transmittal, the Notice of Guaranteed Delivery, and all other ancillary offer documents and materials to be disseminated to Pinnacle shareholders in connection with the Offer.
(c) Schedule 13D Filings. Review and, as necessary, preparation of amendments to any Schedule 13D filings with the SEC relating to Aurelius's existing and future beneficial ownership of Shares of Pinnacle, including any amendments required to be filed in connection with the commencement of the Offer or changes in ownership during the pendency of the Offer.
(d) SEC Coordination. Coordination with the SEC Division of Corporation Finance and the Office of Mergers and Acquisitions regarding any comment letters, staff inquiries, telephonic conferences, or no-action requests relating to the Schedule TO, the offer documents, or any other filings made in connection with the Offer.
(e) Depositary and Information Agent Arrangements. Negotiation and drafting of the depositary agreement with Continental Fiduciary Services, Inc. (the "Depositary"), including all schedules and exhibits thereto, and coordination with Ridgeway Proxy Advisors LLC (the "Information Agent") regarding the information agent agreement and the distribution of offer materials to Pinnacle shareholders and their brokers, dealers, banks, and other nominees.
(f) Hart-Scott-Rodino Act Compliance. Advising on the applicability of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and the rules and regulations promulgated thereunder, to the Transaction, and preparing or assisting in the preparation of any required Notification and Report Form and related documentary attachments for filing with the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice.
(g) Defensive Measures Analysis. Analyzing Pinnacle's corporate governance documents, including its certificate of incorporation, bylaws, and any shareholder rights plan (commonly known as a "poison pill") or other anti-takeover provisions, including any provisions under Section 203 of the Delaware General Corporation Law or comparable statutes, and advising the Aurelius Parties on the legal implications of such provisions for the structure and consummation of the Offer.
(h) Target's Schedule 14D-9. Reviewing and analyzing Pinnacle's Schedule 14D-9 (Solicitation/Recommendation Statement) filed with the SEC in response to the Offer, including any amendments thereto, and advising the Aurelius Parties on the legal implications of the recommendations and disclosures contained therein.
(i) Negotiations with Pinnacle and its Counsel. Negotiation of any standstill agreement, governance agreement, board representation agreement, voting agreement, or other agreement or arrangement with Pinnacle, its board of directors, or its outside legal counsel, Caldwell Burris & Shoemaker LLP, in connection with or related to the Offer, including any potential transition to a negotiated transaction.
(j) Delaware Corporate Law Advice. Advising on Delaware corporate law matters relevant to the Offer, including matters relating to fiduciary duties of directors of the Target, the application of Section 203 of the Delaware General Corporation Law, and the interpretation and enforceability of any provisions of the Target's certificate of incorporation or bylaws that may affect the Offer or subsequent steps.
(k) General M&A Advisory Services. Such other general M&A advisory services as may be reasonably requested by the Client from time to time in connection with the Offer, including advising on any modifications to the terms or conditions of the Offer, extensions of the offer period, and post-closing integration matters to the extent they implicate U.S. legal issues.
The Client acknowledges and agrees that C&H is engaged solely as U.S. counsel in connection with the Offer. Advice on English law matters, including compliance with the rules and regulations of the Financial Conduct Authority, the London Stock Exchange, and applicable United Kingdom securities laws and regulations, is being provided separately by Dunmore Asset Advisors Chambers LLP (lead partner: Alistair Drummond, Esq.). Financial advisory services in connection with the Offer, including valuation analysis, financing strategy, and investor communications, are being provided separately by Strathmore Corporation Harcourt Partners (lead banker: Genevieve Tran). The Firm assumes no responsibility for the advice rendered by such other advisors, and the Client should look solely to such advisors with respect to matters within their respective areas of engagement.
2. Staffing
The Firm intends to staff this engagement with attorneys who have significant experience in U.S. mergers and acquisitions, public company tender offers, and SEC regulatory practice. The following attorneys have been assigned to this matter:
Responsible Partner: James Prentice, Partner, Mergers & Acquisitions Group
Billing Partner: Sandra Tung, Partner, Mergers & Acquisitions Group
Lead Associate: Tiffany Rosenthal, Associate, Mergers & Acquisitions Group
Working Associate: Andrew Fitzpatrick, Associate, Mergers & Acquisitions Group
From time to time, it may be necessary or appropriate to assign additional attorneys, paralegals, or other paraprofessionals to the engagement in order to ensure efficient and timely completion of the work. The Firm will provide notice to the Client of any such additional staffing assignments. The Firm will endeavor to staff the engagement in a manner that is cost-effective and avoids unnecessary duplication of effort.
For purposes of day-to-day communications regarding the Offer, the primary contact at the Firm will be James Prentice, who can be reached at (212) 558-4127 or jprentice@calderwoodharkness.com. The primary contact for the Client will be Hugh Pemberton, Esq., General Counsel, with a copy to Rupert Ashford, Head of Corporate Development, Aurelius Global Media Group PLC. The Client agrees to designate Mr. Pemberton and Mr. Ashford as the principal persons authorized to provide instructions to the Firm on behalf of the Client and the Aurelius Parties in connection with the engagement.
3. Fees and Hourly Rates
The Firm will charge for its professional services on an hourly basis at the Firm's then-current standard hourly rates, which are as follows for the current calendar year:
The Firm's standard hourly rates are subject to periodic adjustment, typically on an annual basis effective January 1 of each year. The Firm will provide advance written notice to the Client of any rate adjustments, and the adjusted rates will apply to services rendered on and after the effective date of such adjustment. In the event that the engagement extends beyond January 1, 2022, the Client acknowledges that the rates set forth above may be superseded by the Firm's then-current standard rates, as communicated to the Client.
Based on the Firm's current understanding of the anticipated scope of the engagement, and assuming a transaction timeline of approximately eight to twelve weeks from the date of commencement of the Offer through its completion (including the filing of the Schedule TO, preparation of all offer documents, responses to any SEC comment letters, negotiation of the depositary and information agent agreements, HSR Act compliance, and related negotiations), the Firm estimates that total professional fees for the engagement will range from $350,000 to $500,000. This estimate is provided solely for the Client's planning purposes and does not constitute a fee cap, fee ceiling, fixed fee, or maximum fee arrangement of any kind. Actual fees incurred may be higher or lower than this estimate depending on a number of factors, including but not limited to:
(i) the complexity and duration of the Offer, including any extensions of the offer period or amendments to the terms of the Offer;
(ii) the nature and extent of any defensive measures adopted or threatened by Pinnacle or its board of directors;
(iii) the nature, scope, and number of rounds of SEC comments received from the Division of Corporation Finance, the Office of Mergers and Acquisitions, or other SEC staff;
(iv) the extent of negotiations with Pinnacle, its board, or its counsel, Caldwell Burris & Shoemaker LLP;
(v) whether the Offer transitions from an unsolicited to a negotiated transaction;
(vi) the extent and complexity of any HSR Act review or second request; and
(vii) such other circumstances as may affect the nature and scope of the services required.
The fee estimate set forth above does not include fees for any litigation, arbitration, or other dispute resolution proceedings that may arise in connection with the Offer, including any action brought by Pinnacle, its shareholders, or any other party in the Delaware Court of Chancery, any U.S. federal court, or any other tribunal. Should litigation arise, the Firm and the Client will discuss the scope, staffing, and fee arrangements for such litigation separately.
4. Expenses and Disbursements
In addition to the professional fees described in Section 3 above, the Client will be responsible for reimbursement of all reasonable out-of-pocket expenses and disbursements incurred by the Firm in connection with the engagement. Such expenses and disbursements may include, without limitation, the following:
(a) filing fees, including SEC filing fees associated with the Schedule TO and any amendments thereto;
(b) Hart-Scott-Rodino Act filing fees payable to the Federal Trade Commission (the current HSR Act filing fee for a transaction valued at approximately $28,000,000 is estimated at $45,000, based on the filing fee thresholds in effect for fiscal year 2021; the actual filing fee will depend on the applicable fee schedule at the time of filing);
(c) travel expenses, including airfare, ground transportation, hotel accommodations, and meals, incurred in connection with meetings with the Client, the SEC, regulatory authorities, the Target, or other parties, to the extent reasonably necessary for the conduct of the engagement;
(d) courier, overnight delivery, and postage charges;
(e) document reproduction, printing, and binding costs;
(f) charges for computerized legal research services, including Westmark Data Systems, Sundial Solutions, and similar databases;
(g) long-distance telephone and video conferencing charges;
(h) costs of third-party vendors retained in connection with the engagement, including document management, translation, and electronic filing services; and
(i) such other expenses and disbursements as are customarily incurred in connection with transactions of this type.
The HSR Act filing fee referenced in clause (b) above, and any SEC filing fees referenced in clause (a) above, will be passed through to the Client on a dollar-for-dollar basis without markup. With respect to any single disbursement or expense item expected to exceed $5,000, the Firm will use commercially reasonable efforts to obtain advance approval from the Client before incurring such expense; provided, however, that the failure to obtain such advance approval shall not relieve the Client of its obligation to reimburse the Firm for expenses reasonably incurred in connection with the engagement.
5. Billing and Payment Terms
The Firm will render monthly invoices to the Client for professional fees and expenses incurred during the immediately preceding calendar month. All invoices will reference Matter Number 1011-00002 and will include a summary of fees by timekeeper, a description of the services rendered, and an itemization of disbursements and expenses.
Invoices are due and payable within thirty (30) days of the date of the invoice. Any amounts remaining unpaid beyond thirty (30) days from the date of the invoice shall accrue interest at a rate of 1.0% per month (equivalent to 12% per annum), compounded monthly, or the maximum rate permitted by applicable law, whichever is less, from the date payment was due until the date of actual payment.
The Client may, at any time, request reasonable additional detail or supporting documentation with respect to any invoice, and the Firm will make commercially reasonable efforts to provide such detail promptly. Any good faith dispute regarding the amount or accuracy of an invoice shall not relieve the Client of its obligation to pay the undisputed portion of the invoice when due.
All invoices will be directed to the attention of Hugh Pemberton, General Counsel, at the Client's address set forth above, or to such other person or address as the Client may designate in writing from time to time.
6. Retainer
No retainer or advance payment of fees is required at this time. The Firm reserves the right, however, to request a retainer or advance payment of fees in the event that (a) the scope of the engagement materially expands beyond the scope described in Section 1 of this Letter, or (b) any invoice remains unpaid for a period of sixty (60) days or more beyond its due date. Any retainer or advance payment received by the Firm will be deposited in the Firm's client trust account and applied against fees and expenses as they are incurred, with any unused balance refunded to the Client promptly upon conclusion of the engagement.
7. Conflicts of Interest and Waivers
The Firm has conducted a conflicts check with respect to this engagement in accordance with its standard procedures and the applicable Rules of Professional Conduct.
Based on the results of that conflicts check, the Firm confirms the following:
(a) Pinnacle Content Holdings, Inc. The Firm does not currently represent Pinnacle Content Holdings, Inc. or any of its directors, officers, or known affiliates in any matter, and the Firm has not represented Pinnacle or any such persons in any matter within the past three years.
(b) Brindoval National Bank, N.A. The Firm does not currently represent Brindoval National Bank, N.A. ("Brindoval") in connection with this Transaction or any matter related thereto. The Firm may, however, from time to time represent Brindoval or one or more of its affiliates in matters unrelated to this engagement. The Client hereby consents to the Firm's continued representation of Brindoval and its affiliates in such unrelated matters, provided that such representation is not materially adverse to the Client's interests in the Transaction or this engagement. In the event that any representation of Brindoval or its affiliates becomes or is reasonably likely to become materially adverse to the Client's interests in this matter, the Firm will promptly notify the Client and seek to resolve the conflict in accordance with applicable ethical rules.
The Client further acknowledges that Calderwood & Harkness LLP is a large, multi-office law firm with a substantial number of attorneys and clients across a range practice areas and industries. It is possible, and indeed likely, that the Firm may from time to time represent other clients whose interests may be adverse to the interests of Aurelius or its affiliates in matters that are wholly unrelated to this engagement. The Client hereby provides its advance consent (a "General Waiver") to the Firm's representation of other clients in such unrelated matters, provided that (i) such matters are not substantially related to the subject matter of this engagement, (ii) the Firm does not use any confidential information of the Client in such other representation, and (iii) such representation does not involve a direct assertion of a claim against the Client in a litigation or arbitration proceeding. This General Waiver is intended to be consistent with the requirements of Rule 1.7 of the New York Rules of Professional Conduct and is given after reasonable consideration by the Client.
If at any time during the course of this engagement an actual or potential conflict of interest arises that is not covered by the foregoing consents and waivers, the Firm will promptly notify the Client and discuss appropriate measures to address the conflict, which may include obtaining informed written consent from the affected parties or, if the conflict cannot be resolved through consent, withdrawing from the engagement in accordance with applicable ethical rules and the provisions of Section 11 of this Letter.
8. Confidentiality
The Firm will maintain the confidentiality of all information received from or on behalf of the Client in connection with this engagement, in accordance with the Firm's professional obligations under the applicable Rules of Professional Conduct and the attorney-client privilege. The Firm will not disclose any such confidential information to any third party without the prior written consent of the Client, except as may be required by applicable law, court order, or ethical obligation, or as necessary to carry out the Firm's responsibilities in connection with the engagement (for example, in the preparation and filing of SEC documents or in communications with regulatory authorities on behalf of the Client).
The confidentiality obligations set forth in this Section 8 shall survive the termination or completion of this engagement and shall continue in full force and effect indefinitely, subject only to applicable law and professional responsibility rules.
The Client acknowledges that certain documents and filings prepared by or with the assistance of the Firm in connection with the Offer, including the Schedule TO, the Offer to Purchase, the Letter of Transmittal, and any amendments to the Schedule 13D, will be filed with the SEC and will be publicly available. The Client further acknowledges that the content of such public filings is determined by the Client and subject to applicable disclosure requirements under the Exchange Act and the rules and regulations of the SEC, and the Firm's assistance in preparing such filings does not waive the attorney-client privilege or work product protection with respect to the Firm's underlying legal analysis, advice, or communications with the Client.
9. Document Retention
The Firm will retain files, documents, and records related to this engagement in accordance with the Firm's standard document retention policies, as in effect from time to time. Such policies currently provide for the retention of engagement files for a period of not less than seven (7) years following the conclusion of the engagement, subject to certain exceptions for categories of documents that may be retained for longer or shorter periods.
Upon the conclusion of this engagement, the Client may request the return of original documents provided to the Firm by the Client. The Firm may retain copies of such documents for its own files and records. The Firm may also retain copies of work product generated by the Firm in connection with the engagement, subject to the confidentiality obligations set forth in Section 8.
Following the expiration of the applicable retention period, the Firm may destroy or dispose of engagement files and documents in accordance with the Firm's standard document destruction procedures, without further notice to the Client, unless the Client provides the Firm with written instructions to the contrary prior to the expiration of such retention period.
10. Limitation of Engagement; No Tax or Financial Advice
The Firm's engagement is strictly limited to the scope of services described in Section 1 of this Letter. In particular, and without limiting the generality of the foregoing:
(a) No Tax Advice. The Firm is not engaged to provide, and will not provide, tax advice of any kind in connection with the Offer or the Transaction. The Client should consult its own tax advisors, including Kingsley Dunbar LLP (or such other tax advisors as the Client may retain), with respect to all tax matters relating to the Offer, including the U.S. federal, state, and local income tax consequences to the Aurelius Parties of the acquisition of Shares, any withholding tax obligations, and any UK or cross-border tax implications of the Transaction.
(b) No Financial Advisory Services. The Firm is not engaged to provide, and will not provide, financial advisory services, valuation analysis, fairness opinions, or financing advice. Such services are being provided separately by Strathmore Corporation Harcourt Partners (lead banker: Genevieve Tran), and the Client should look solely to Strathmore Corporation Harcourt Partners with respect to such matters.
(c) No English Law Advice. The Firm is not engaged to provide, and will not provide, advice on English law, including matters relating to the rules and regulations of the Financial Conduct Authority, the London Stock Exchange, UK takeover regulations, or any other aspect of English or European Union law. Such advice is being provided separately by Dunmore Asset Advisors Chambers LLP (lead partner: Alistair Drummond), and the Client should look solely to Dunmore Asset Advisors Chambers LLP with respect to such matters.
The Firm's advice in connection with this engagement relates to U.S. federal securities law (including the Exchange Act and the rules and regulations of the SEC relating to tender offers), Delaware corporate law (including the Delaware General Corporation Law), the HSR Act, and such other U.S. regulatory matters as are directly relevant to the Offer. The Client acknowledges that the Firm's advice is limited to these areas and that the Client is responsible for obtaining advice from other qualified advisors with respect to all other legal, tax, financial, and regulatory matters.
11. Termination
Either the Client or the Firm may terminate this engagement at any time upon written notice to the other party. Termination shall be effective upon receipt of such written notice, or on such later date as may be specified in the notice.
In the event of termination of this engagement by either party for any reason:
(a) the Client shall remain responsible for the payment of all professional fees and expenses incurred by the Firm through and including the effective date of termination, in accordance with the terms of this Letter;
(b) the Firm will take such steps as are reasonably necessary to protect the Client's interests during any transition to successor counsel, including the orderly transfer of files, documents, and work product, and such other transitional assistance as may be required by applicable ethical rules; and
(c) the Firm's obligations under Sections 7, 8, and 9 of this Letter shall survive termination of the engagement and remain in full force and effect.
The Firm's right to terminate this engagement is subject to the applicable Rules of Professional Conduct governing withdrawal from representation, including the obligation to provide reasonable notice to the Client and to obtain leave of any tribunal before which the Firm may have appeared on behalf of the Client, where required.
12. Governing Law and Dispute Resolution
This Letter shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflict of laws principles.
Any dispute, controversy, or claim arising out of or relating to this Letter, the Firm's engagement, or the services provided or to be provided by the Firm hereunder, including any dispute regarding the amount or payment of fees or expenses, shall be resolved by binding arbitration administered by the American Arbitration Association ("AAA") in the Borough of Manhattan, City of New York, New York, in accordance with the AAA's Commercial Arbitration Rules then in effect. The arbitration shall be conducted before a single arbitrator selected in accordance with the AAA's rules. The arbitrator's award shall be final and binding on the parties and may be entered as a judgment in any court of competent jurisdiction. Each party shall bear its own costs and attorneys' fees in connection with any such arbitration, unless the arbitrator determines that an award of costs and fees to the prevailing party is appropriate under the circumstances.
Notwithstanding the foregoing, the parties may mutually agree in writing to resolve any dispute through mediation, negotiation, or another alternative dispute resolution mechanism in lieu of binding arbitration.
13. Entire Agreement; Amendments
This Letter constitutes the entire agreement between the parties with respect to the subject matter hereof, including the terms and conditions of the Firm's engagement by the Client, and supersedes all prior and contemporaneous discussions, negotiations, understandings, and agreements, whether oral or written, relating to such subject matter.
No amendment, modification, or waiver of any provision of this Letter shall be effective unless set forth in a written instrument signed by both parties. No failure or delay by either party in exercising any right or remedy under this Letter shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or remedy preclude any other or further exercise thereof or the exercise of any other right or remedy.
14. Acceptance and Counterparts
We respectfully request that the Client confirm its acceptance of the terms and conditions set forth in this Letter by having an authorized representative sign and return a copy of this Letter to the Firm at the address set forth below. This Letter shall become effective upon execution by both parties.
This Letter may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Counterparts may be delivered by electronic mail (in .pdf format), facsimile transmission, or other electronic means, and any counterpart so delivered shall be deemed to have been duly and validly delivered and shall be valid and effective for all purposes.
We are enthusiastic about the opportunity to work with Aurelius and the broader deal team on this important transaction. Should you have any questions regarding the terms of this Letter or any other matter, please do not hesitate to contact James Prentice at (212) 558-4127 or Sandra Tung at (212) 558-4215 at your earliest convenience.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Name: James Prentice
Title: Partner, Mergers & Acquisitions Group
(Responsible Partner)
By: ________
Name: Sandra Tung
Title: Partner, Mergers & Acquisitions Group
(Billing Partner)
Address:
787 Seventh Avenue, 42nd Floor New York, New York 10019
ACCEPTED AND AGREED:
AURELIUS GLOBAL MEDIA GROUP PLC
By: ________
Name: Hugh Pemberton
Title: General Counsel
Date: ________
Address:
44 Lombard Crescent London EC3V 9BQ United Kingdom
cc:
Rupert Ashford, Head of Corporate Development, Aurelius Global Media Group PLC
Elena Markov, Chief Financial Officer, Aurelius Global Media Group PLC
Alistair Drummond, Partner, Dunmore Asset Advisors Chambers LLP (UK Counsel)
Timekeeper Category | Current Hourly Rate
Partners | $1,350
Of Counsel | $1,150
Senior Associates (6th year and above) | $950
Associates (1st through 5th year) | $750
Paralegals and Legal Assistants | $375

CALDERWOOD & HARKNESS LLP Counsellors at Law

BY EMAIL AND INTERNATIONAL COURIER

CALDERWOOD & HARKNESS LLP

ACCEPTED AND AGREED:

AURELIUS GLOBAL MEDIA GROUP PLC

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