1033-00001 · Calderwood & Harkness LLP · Engagement

engagement-letter-rgc-mezzanine.docx DOCUMENT M&A / Corporate

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CALDERWOOD & HARKNESS LLP Attorneys at Law

300 South Fourth Street, Suite 2800 Las Vegas, NV 89101 Telephone: (702) 555-8400 Facsimile: (702) 555-8401 www.calderwoodharkness.com

October 31, 2022

VIA ELECTRONIC MAIL AND HAND DELIVERY

Thomas Kierkegaard, Esq. General Counsel Redstone Gaming Corp. 4250 South Decatur Boulevard, Suite 1100 Las Vegas, NV 89103

Re: Engagement of Calderwood & Harkness LLP — Proposed $35,000,000 Mezzanine Financing C&H Matter No. 1033-00001

Dear Mr. Kierkegaard:

1. Purpose and Scope of Engagement

Calderwood & Harkness LLP ("C&H" or the "Firm") is pleased to confirm its engagement by Redstone Gaming Corp., a Nevada corporation ("RGC" or the "Company"), to serve as outside legal counsel to RGC in connection with a proposed mezzanine financing in the aggregate principal amount of Thirty-Five Million Dollars ($35,000,000) (the "Mezzanine Financing" or the "Transaction"). We understand that RGC is a publicly traded company whose common stock is listed on the Nasdaq Stock Market LLC under the ticker symbol "RDGM," and that RGC is subject to the periodic reporting and disclosure requirements of the Securities Exchange Act of 1934, as amended. The Firm's representation of RGC will be conducted with due regard for RGC's obligations as a public reporting company, including with respect to any material nonpublic information that may be disclosed to the Firm in the course of this engagement.

The scope of the Firm's representation shall include the following:

(a) Structuring, Negotiation, and Documentation. Advising RGC, as borrower, in connection with the structuring, negotiation, and documentation of the Mezzanine Financing, including advising on the terms and conditions of the proposed mezzanine debt, the economic and structural features thereof, and the allocation of risk among the parties.

(b) Principal Transaction Documents. Drafting and/or reviewing the principal transaction documents, including, without limitation, the mezzanine note purchase agreement (or credit agreement, as applicable), the warrant agreement (including any registration rights provisions), the pledge and security agreement, the intercreditor and subordination agreement, and all related ancillary documents, schedules, exhibits, and closing deliverables as may be necessary or appropriate in connection with the Transaction.

(c) Existing Indebtedness Analysis. Analyzing the impact of the Mezzanine Financing on RGC's existing indebtedness, including, without limitation, the Second Amended and Restated Credit Agreement, dated as of March 15, 2021 (as heretofore amended, supplemented, or otherwise modified from time to time), among RGC, as borrower, Cornerstone National Bank, N.A., as Administrative Agent, and the lenders party thereto (the "Senior Credit Facility"), and advising on any required consents, waivers, amendments, or intercreditor arrangements that may be necessary or advisable in connection with the incurrence of the mezzanine indebtedness.

(d) Nevada Gaming Regulatory Considerations. Advising on Nevada gaming regulatory considerations arising in connection with the Transaction, including any Nevada Gaming Control Board and Nevada Gaming Commission suitability filing requirements, notification obligations, or approval requirements applicable to the prospective mezzanine lender and its principals, officers, directors, and beneficial owners, and coordinating with the Company's regulatory affairs team as necessary.

(e) Securities Law Matters. Advising on applicable federal and state securities law matters, including the availability of exemptions under Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"), and Regulation D promulgated thereunder, for any equity or equity-linked securities (including warrants, conversion rights, or similar instruments) to be issued in connection with the Transaction, and advising on any related blue sky filings, Form D filings, or legends required on securities certificates or book-entry notations.

(f) Corporate Authorizations and Closing Deliverables. Preparation or review of corporate authorizations, including resolutions of the Board of Directors of RGC and any committee thereof, officer's certificates, secretary's certificates, legal opinions to be delivered at closing, good standing certificates, and all other closing deliverables as may be required by the transaction documents or as may be customary for transactions of this nature.

(g) Coordination with Transaction Parties. Coordination with RGC's placement agent, Ashford Peak Advisory Group, LLC ("Ashford Peak"), the prospective mezzanine lender and its counsel, the existing senior lender (Cornerstone National Bank, N.A.) and its counsel, RGC's independent auditor, Harmon & Grayling CPAs, LLP, and any proposed escrow agent or collateral agent, as appropriate in connection with the Transaction.

Notwithstanding the foregoing, the scope of the Firm's engagement is expressly limited to the Transaction described herein and does not extend to tax advice (including federal, state, local, or foreign tax matters), accounting matters, business or financial advisory services, insurance matters, real estate matters, environmental matters, employment or benefits matters, or any litigation, arbitration, or regulatory enforcement matters, except as specifically set forth above with respect to gaming regulatory filings. The Firm is not acting as a financial advisor, placement agent, or broker-dealer in connection with the Transaction. RGC should continue to consult its own tax advisors, accountants, financial advisors, and other professionals with respect to such matters.

Any expansion of the scope of this engagement, including representation in connection with additional transactions, regulatory proceedings, or other matters, will require the mutual written agreement of both the Firm and RGC prior to the commencement of any such additional work.

2. Use of Proceeds (Background)

We understand that the proceeds of the Mezzanine Financing are intended to be applied as follows: (i) approximately Twenty-Two Million Dollars ($22,000,000) to fund capital expenditures for the upgrade and enhancement of RGC's digital wagering platform, referred to internally within the Company as "Project Catalyst," which we understand involves the deployment of next-generation mobile and online sports betting and iGaming technology across RGC's licensed jurisdictions; and (ii) approximately Thirteen Million Dollars ($13,000,000) to fund the expansion of RGC's tribal gaming management contracts in the states of Arizona and New Mexico, including any associated licensing, regulatory, and operational expenditures related thereto.

This background information regarding the intended use of proceeds is provided for context only, to facilitate the Firm's understanding of the business rationale for the Transaction and to assist in the preparation and negotiation of the transaction documents. The inclusion of this information in this engagement letter does not constitute, and shall not be construed as, business, financial, or investment advice by the Firm. RGC acknowledges that the Firm has not been engaged to evaluate, and is not rendering any opinion regarding, the commercial merits, financial viability, or investment suitability of the Mezzanine Financing or the proposed use of proceeds.

3. Engagement Team

The following attorneys will constitute the primary engagement team assigned to this matter:

Claudia Merritt — Responsible Partner, Banking & Finance Group. Ms. Merritt will serve as the Responsible Partner with overall supervisory authority for the engagement. Ms. Merritt will be responsible for strategic direction, key negotiations, and the review and approval of all material deliverables. Ms. Merritt has extensive experience in mezzanine and subordinated debt financings, gaming industry transactions, and complex capital markets matters.

Ian Blackwood — Billing Partner, Banking & Finance Group. Mr. Blackwood will serve as the Billing Partner responsible for billing administration, fee matters, and the management of the Firm's internal accounting and timekeeping records with respect to this engagement. Mr. Blackwood will also be available to provide substantive legal counsel on matters relating to secured transactions and intercreditor arrangements.

Marcus Leung — Lead Associate, Banking & Finance Group. Mr. Leung will serve as the lead associate responsible for day-to-day drafting, document production, transaction management, and coordination with opposing counsel and other transaction parties. Mr. Leung will serve as the primary day-to-day contact for the engagement team and will manage the preparation and distribution of document drafts, closing checklists, and signature pages.

Sophie Tremblay — Working Associate, Banking & Finance Group. Ms. Tremblay will assist with legal research, drafting of ancillary documents, due diligence review, and other matters as directed by Ms. Merritt and Mr. Leung.

From time to time, additional attorneys, paralegals, or other paraprofessionals may be assigned to the engagement as necessary in light of the volume, complexity, or timing requirements of the Transaction. The Firm will provide advance notice to RGC where practicable prior to the assignment of additional engagement team members, and will communicate the applicable billing rates for any such additional personnel.

For purposes of this engagement, the primary client contact at RGC shall be Thomas Kierkegaard, Esq., General Counsel. Unless otherwise directed, the Firm will direct all substantive communications, document transmissions, and requests for authorization to Mr. Kierkegaard, with copies to Priya Sandoval, Chief Financial Officer, and Angela Fong, Treasurer, as appropriate. RGC may designate additional or alternative contacts by written notice to the Firm at any time.

4. Fees and Billing Arrangements

4.1 Hourly Rates

Fees for legal services rendered in connection with this engagement will be calculated on an hourly basis at the following rates for the members of the engagement team identified above:

In the event that additional attorneys or paraprofessionals are assigned to the engagement, such personnel will be billed at the Firm's then-current standard rates, which will be communicated to RGC in advance of any billing for services rendered by such additional personnel. Current standard rates for the Firm's other timekeepers range from $350.00 per hour for junior paralegals to $1,450.00 per hour for senior partners, depending on the individual's experience and position within the Firm.

The Firm's standard hourly rates are subject to annual adjustment, typically effective as of January 1 of each calendar year. RGC will receive written notice of any rate increase at least thirty (30) days in advance of the effective date of such increase. Unless RGC objects in writing within fifteen (15) days of receiving such notice, the revised rates will apply to all services rendered on or after the effective date of the increase.

4.2 Expenses. In addition to fees for legal services, RGC will be responsible for the reimbursement of reasonable out-of-pocket expenses incurred by the Firm in connection with the engagement. Such expenses may include, without limitation, the following:

(a) Filing fees, recording fees, and similar governmental charges;

(b) Courier and overnight delivery charges;

(c) Travel expenses, including airfare, ground transportation, lodging, and meals, if travel is required in connection with the Transaction (any travel will be approved by RGC in advance);

(d) Computer-assisted legal research and database charges (including Westmark Data Systems, Sundial Solutions, and similar services);

(e) Photocopying and document production costs;

(f) Long-distance telephone and conference call charges; and

(g) Other reasonable and documented out-of-pocket disbursements directly related to the engagement.

Expenses in excess of Five Thousand Dollars ($5,000.00) in any single billing period will require advance written approval from RGC prior to the Firm incurring such expense. RGC's approval may be provided by email from Mr. Kierkegaard, Ms. Sandoval, or Ms. Fong.

4.3 Billing and Payment Terms

The Firm will issue monthly invoices for fees and expenses incurred during the preceding calendar month. Each invoice will include a detailed description of the services rendered, the timekeeper responsible, the hours expended, and the applicable rate, as well as an itemized summary of expenses incurred. Invoices will be transmitted electronically to the attention of Mr. Kierkegaard, with a copy to Ms. Sandoval and Ms. Fong, unless RGC designates an alternative billing contact or accounts payable address.

Invoices are payable within thirty (30) days of receipt. The Firm reserves the right to charge interest on past-due amounts at the rate of one percent (1.0%) per month (twelve percent (12.0%) per annum), or the maximum rate permitted by applicable law, whichever is less, accruing from the date such payment was due until the date of actual receipt by the Firm. The Firm may, in its discretion, waive or reduce interest charges on a case-by-case basis, but any such waiver shall not constitute a waiver of the Firm's right to charge interest on future past-due amounts.

In the event that any invoice remains unpaid for more than sixty (60) days following the date of issuance, the Firm reserves the right to suspend work on the engagement, upon reasonable written notice to RGC, until all outstanding amounts are brought current, subject to the Firm's obligations under applicable rules of professional conduct.

4.4 Fee Estimates

The Firm does not provide fixed-fee quotes for engagements of this type. Actual fees will depend on a number of factors, including the complexity, duration, and circumstances of the Transaction, the scope and extent of negotiations with the prospective mezzanine lender and its counsel, the nature and extent of any gaming regulatory filings or approvals required, the need for any amendments or waivers under the Senior Credit Facility, the number and complexity of ancillary documents, and any unforeseen issues or complications that may arise during the course of the engagement.

Any fee estimate provided by the Firm, whether orally or in writing, is non-binding and is provided solely for informational and budgeting purposes. Such estimates are based on assumptions regarding the scope and complexity of the Transaction as understood at the time the estimate is given, and actual fees may vary materially from any such estimate. The Firm will endeavor to keep RGC informed on a regular basis regarding the accumulation of fees and expenses and will promptly advise RGC of any material developments that are likely to result in a significant increase in projected fees.

5. Retainer

No retainer or advance deposit is required at the inception of this engagement. However, the Firm reserves the right to request a retainer or advance deposit at any time during the engagement if, in the Firm's reasonable judgment, circumstances warrant such a request, including, without limitation, in the event that invoices remain past due or if the scope or complexity of the engagement increases significantly beyond original expectations. Any retainer or advance deposit received by the Firm will be deposited into the Firm's client trust account and applied against fees and expenses in accordance with applicable rules governing client trust funds. The Firm will provide RGC with an accounting of any retainer amounts held and applied.

6. Identification of Adverse and Related Parties

Based on the information provided to the Firm to date, the Firm understands the principal parties to the Transaction to include the following:

(a) Redstone Gaming Corp. — Borrower and client of the Firm in this matter;

(b) Pinnacle Bridge Capital Partners, LP and its affiliates, including Pinnacle Bridge Capital Management, LLC (as general partner) and Pinnacle Bridge Mezzanine Opportunities Fund IV, LP (as the prospective mezzanine lender and note purchaser);

(d) Ashford Peak Advisory Group, LLC — Placement agent engaged by RGC in connection with the Mezzanine Financing;

(e) Wainwright Hess & Caldwell LLP — Outside legal counsel to Pinnacle Bridge Capital Partners, LP and its affiliates in connection with the Transaction;

(f) Harmon & Grayling CPAs, LLP — RGC's independent registered public accounting firm and independent auditor; and

(g) Dralvecen Title & Escrow Co. — Proposed escrow and/or collateral agent for the Transaction.

RGC is requested to promptly advise the Firm of any additional parties, affiliates, subsidiaries, or individuals that should be included in the Firm's conflicts database or that may be involved in the Transaction, so that the Firm may supplement its conflicts check as necessary.

The Firm represents RGC only in this matter. The Firm does not represent, and will not be deemed to represent, any of the other parties listed above in connection with the Transaction. The Firm's duties and obligations run solely to RGC as its client in this engagement.

7. Conflict of Interest Check and Waiver

The Firm has conducted a conflicts check based on the information provided by RGC as described in Section 6 above, utilizing the Firm's internal conflicts clearance system and database. As of the date hereof, the Firm has not identified any conflict of interest that would preclude the Firm's representation of RGC in this matter under the Nevada Rules of Professional Conduct or any other applicable rules governing attorney conduct.

RGC acknowledges that the Firm is a full-service law firm with a diverse client base and that the Firm represents, and may in the future represent, other clients in matters unrelated to this Transaction that may involve one or more of the other parties identified in Section 6 above. Such representations may include matters in which the interests of the Firm's other clients differ from or are potentially adverse to the interests of one or more of the parties identified in Section 6, but in contexts wholly unrelated to this Transaction and the subject matter hereof.

RGC hereby consents to the Firm's continued representation of such other clients in matters unrelated to this Transaction, provided that the Firm will not represent any party adverse to RGC in connection with this Transaction or any matter substantially related to this Transaction without RGC's prior written consent. This consent is given with the understanding that the Firm will maintain appropriate information barriers and ethical safeguards in accordance with applicable rules of professional conduct.

If a conflict of interest arises during the course of the engagement that was not identified as of the date hereof, the Firm will promptly notify RGC in writing of the nature and circumstances of such conflict. The Firm and RGC will endeavor in good faith to resolve any such conflict, including through the use of appropriate waivers or information barriers. If the conflict cannot be resolved in a manner consistent with applicable professional conduct rules, the Firm may be required to withdraw from the engagement in accordance with such rules and the provisions of Section 10 of this letter.

8. Confidentiality

The Firm will maintain in strict confidence all information provided by RGC in connection with this engagement, including all documents, data, communications, memoranda, analyses, financial information, business plans, trade secrets, and other materials furnished by RGC or its officers, directors, employees, agents, or advisors, consistent with the Firm's obligations under applicable rules of professional conduct, including Nevada Rule of Professional Conduct 1.6, and as may otherwise be required by law.

RGC's confidential information will not be disclosed by the Firm to any third party except in the following circumstances:

(i) With RGC's prior written or oral consent (which may be provided by email from Mr. Kierkegaard or his designee);

(ii) As reasonably necessary in the ordinary course of the Firm's representation of RGC in connection with this engagement, including disclosures to opposing counsel, regulatory bodies, escrow or collateral agents, title companies, or other third-party service providers involved in the Transaction, and only to the extent required for the proper performance of the Firm's duties;

(iii) As required by applicable law, regulation, court order, subpoena, or governmental request, provided that the Firm will, to the extent permitted by law, promptly notify RGC of any such requirement and cooperate with RGC in seeking a protective order or other appropriate remedy; or

(iv) As necessary for the Firm to enforce its rights under this engagement letter, including the collection of fees and expenses, or to defend itself against any claim, complaint, or proceeding relating to the engagement, to the extent permitted by applicable rules of professional conduct.

The Firm's obligations under this Section 8 shall survive the termination or conclusion of the engagement, regardless of the reason for such termination or conclusion.

9. Document Retention

Upon the conclusion or termination of the engagement (including any period of dormancy, suspension, or inactivity), the Firm will retain client files and work product in accordance with the Firm's standard document retention policy. The Firm's current policy provides for the retention of closed matter files, including both paper and electronic records, for a period of not less than seven (7) years from the date the matter is closed in the Firm's records management system. Following the expiration of the applicable retention period, the Firm may destroy or dispose of such files without further notice to RGC, unless RGC has previously requested the return or transfer of such materials.

RGC may request the return or delivery of original documents (including original executed instruments, certificates, and agreements) at any time during or after the engagement, and the Firm will comply with any such request within a commercially reasonable period of time. The Firm reserves the right to retain copies of any documents returned to RGC for its own records, subject to the confidentiality obligations set forth in Section 8 of this letter.

10. Termination

Either party may terminate this engagement at any time, with or without cause, upon written notice to the other party. Such notice may be provided by email, personal delivery, or overnight courier to the addresses set forth in this letter or to such other address as either party may designate in writing from time to time.

Notwithstanding any termination by RGC, RGC will remain responsible for the payment of all fees for services rendered and expenses incurred through the effective date of termination, in accordance with the billing and payment terms set forth in Section 4 of this letter. Any outstanding invoices for pre-termination work shall become due and payable upon termination.

The Firm's withdrawal from the engagement will be subject to applicable rules of professional conduct, including Nevada Rules of Professional Conduct 1.16 and any applicable rules of any court, regulatory body, or arbitral tribunal before which the Firm may be appearing on behalf of RGC. Where applicable, the Firm's withdrawal will be conditioned upon any required court or tribunal approval.

In the event that the Transaction does not proceed to closing, or the matter is placed on dormant or inactive status for any reason, the Firm will preserve all draft documentation and work product related to the engagement and will confirm the status of the matter in writing to RGC. If the matter remains dormant or inactive for a period of twelve (12) months or more, the Firm may, after consultation with RGC, close the matter in its records management system, subject to the document retention provisions of Section 9 above.

11. No Guarantee of Outcome

RGC acknowledges and agrees that the Firm's engagement pursuant to this letter does not guarantee any particular outcome with respect to the Transaction, including, without limitation, the successful closing of the Mezzanine Financing, the obtainment of any required regulatory approvals or consents, or the achievement of any specific commercial, financial, or legal objective. The practice of law involves inherent uncertainties, and the Firm cannot and does not make any representations or warranties regarding the ultimate outcome of any legal matter.

The Firm's advice is based on current law, regulations, and interpretive guidance as of the date such advice is provided, and is subject to change in light of subsequent legislative, regulatory, judicial, or administrative developments. The Firm undertakes no obligation to update or supplement any advice previously rendered except as may be specifically agreed in writing.

12. Governing Law and Dispute Resolution

This engagement letter and the relationship between the Firm and RGC arising hereunder shall be governed by and construed in accordance with the laws of the State of Nevada, without regard to principles of conflict of laws that would require the application of the laws of any other jurisdiction.

Any dispute, claim, or controversy arising out of or relating to this engagement, the Firm's representation of RGC, or the fees and expenses charged in connection herewith, that cannot be resolved through good faith negotiation between the parties, shall be submitted to final and binding arbitration in Clark County, Nevada, administered by the American Arbitration Association in accordance with its then-current Commercial Arbitration Rules. The arbitration shall be conducted by a single arbitrator mutually selected by the parties or, if the parties are unable to agree, appointed in accordance with the rules of the American Arbitration Association. The arbitrator's award shall be final, binding, and enforceable in any court of competent jurisdiction. Each party shall bear its own costs and attorneys' fees incurred in connection with any such arbitration, unless the arbitrator determines that an award of costs and fees to the prevailing party is appropriate. This Section 12 shall not preclude either party from seeking temporary or preliminary injunctive relief in a court of competent jurisdiction to the extent necessary to preserve the status quo or prevent irreparable harm pending the outcome of arbitration.

13. Entire Agreement and Amendments

This letter constitutes the entire agreement between the Firm and RGC with respect to the subject matter hereof, including the scope of the engagement, the fee arrangement, and the other terms and conditions governing the Firm's representation of RGC in connection with the Transaction. This letter supersedes all prior or contemporaneous oral or written communications, proposals, negotiations, understandings, or agreements between the parties relating to the subject matter hereof.

This letter may be amended, modified, or supplemented only by a written instrument duly executed by both the Firm and RGC. No waiver of any provision of this letter shall be effective unless set forth in a written instrument signed by the party granting such waiver, and no such waiver shall constitute a waiver of any other provision or a continuing waiver of the same provision.

14. Acceptance and Execution

We are pleased to have this opportunity to work with RGC on the Mezzanine Financing and look forward to a successful collaboration. If the foregoing accurately reflects your understanding of the terms of this engagement, please confirm RGC's agreement by executing and returning the enclosed copy of this letter to the undersigned at your earliest convenience. An executed copy returned by electronic means (including PDF transmitted by email) shall be deemed an original for all purposes.

Please do not hesitate to contact me or any member of the engagement team if you have any questions regarding the foregoing or wish to discuss any aspect of this engagement.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Name: Claudia Merritt

Title: Partner

Date: October 31, 2022

ACKNOWLEDGMENT AND AGREEMENT

The undersigned, on behalf of Redstone Gaming Corp., hereby acknowledges receipt of the foregoing engagement letter, confirms that the terms and conditions set forth therein accurately reflect the agreement between Redstone Gaming Corp. and Calderwood & Harkness LLP with respect to the engagement described herein, and agrees to be bound by such terms and conditions.

REDSTONE GAMING CORP.

By: ________

Name: Thomas Kierkegaard, Esq.

Title: General Counsel

Date: ________

cc: Priya Sandoval, Chief Financial Officer, Redstone Gaming Corp. cc: Angela Fong, Treasurer, Redstone Gaming Corp. cc: Ian Blackwood, Partner, Calderwood & Harkness LLP

Attorney	Position	Hourly Rate
Claudia Merritt	Partner	$1,250.00
Ian Blackwood	Partner	$1,175.00
Marcus Leung	Senior Associate	$875.00
Sophie Tremblay	Associate	$640.00

CALDERWOOD & HARKNESS LLP Attorneys at Law
300 South Fourth Street, Suite 2800 Las Vegas, NV 89101 Telephone: (702) 555-8400 Facsimile: (702) 555-8401 www.calderwoodharkness.com
October 31, 2022
VIA ELECTRONIC MAIL AND HAND DELIVERY
Thomas Kierkegaard, Esq. General Counsel Redstone Gaming Corp. 4250 South Decatur Boulevard, Suite 1100 Las Vegas, NV 89103
Re: Engagement of Calderwood & Harkness LLP — Proposed $35,000,000 Mezzanine Financing C&H Matter No. 1033-00001
Dear Mr. Kierkegaard:
1. Purpose and Scope of Engagement
Calderwood & Harkness LLP ("C&H" or the "Firm") is pleased to confirm its engagement by Redstone Gaming Corp., a Nevada corporation ("RGC" or the "Company"), to serve as outside legal counsel to RGC in connection with a proposed mezzanine financing in the aggregate principal amount of Thirty-Five Million Dollars ($35,000,000) (the "Mezzanine Financing" or the "Transaction"). We understand that RGC is a publicly traded company whose common stock is listed on the Nasdaq Stock Market LLC under the ticker symbol "RDGM," and that RGC is subject to the periodic reporting and disclosure requirements of the Securities Exchange Act of 1934, as amended. The Firm's representation of RGC will be conducted with due regard for RGC's obligations as a public reporting company, including with respect to any material nonpublic information that may be disclosed to the Firm in the course of this engagement.
The scope of the Firm's representation shall include the following:
(a) Structuring, Negotiation, and Documentation. Advising RGC, as borrower, in connection with the structuring, negotiation, and documentation of the Mezzanine Financing, including advising on the terms and conditions of the proposed mezzanine debt, the economic and structural features thereof, and the allocation of risk among the parties.
(b) Principal Transaction Documents. Drafting and/or reviewing the principal transaction documents, including, without limitation, the mezzanine note purchase agreement (or credit agreement, as applicable), the warrant agreement (including any registration rights provisions), the pledge and security agreement, the intercreditor and subordination agreement, and all related ancillary documents, schedules, exhibits, and closing deliverables as may be necessary or appropriate in connection with the Transaction.
(c) Existing Indebtedness Analysis. Analyzing the impact of the Mezzanine Financing on RGC's existing indebtedness, including, without limitation, the Second Amended and Restated Credit Agreement, dated as of March 15, 2021 (as heretofore amended, supplemented, or otherwise modified from time to time), among RGC, as borrower, Cornerstone National Bank, N.A., as Administrative Agent, and the lenders party thereto (the "Senior Credit Facility"), and advising on any required consents, waivers, amendments, or intercreditor arrangements that may be necessary or advisable in connection with the incurrence of the mezzanine indebtedness.
(d) Nevada Gaming Regulatory Considerations. Advising on Nevada gaming regulatory considerations arising in connection with the Transaction, including any Nevada Gaming Control Board and Nevada Gaming Commission suitability filing requirements, notification obligations, or approval requirements applicable to the prospective mezzanine lender and its principals, officers, directors, and beneficial owners, and coordinating with the Company's regulatory affairs team as necessary.
(e) Securities Law Matters. Advising on applicable federal and state securities law matters, including the availability of exemptions under Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"), and Regulation D promulgated thereunder, for any equity or equity-linked securities (including warrants, conversion rights, or similar instruments) to be issued in connection with the Transaction, and advising on any related blue sky filings, Form D filings, or legends required on securities certificates or book-entry notations.
(f) Corporate Authorizations and Closing Deliverables. Preparation or review of corporate authorizations, including resolutions of the Board of Directors of RGC and any committee thereof, officer's certificates, secretary's certificates, legal opinions to be delivered at closing, good standing certificates, and all other closing deliverables as may be required by the transaction documents or as may be customary for transactions of this nature.
(g) Coordination with Transaction Parties. Coordination with RGC's placement agent, Ashford Peak Advisory Group, LLC ("Ashford Peak"), the prospective mezzanine lender and its counsel, the existing senior lender (Cornerstone National Bank, N.A.) and its counsel, RGC's independent auditor, Harmon & Grayling CPAs, LLP, and any proposed escrow agent or collateral agent, as appropriate in connection with the Transaction.
Notwithstanding the foregoing, the scope of the Firm's engagement is expressly limited to the Transaction described herein and does not extend to tax advice (including federal, state, local, or foreign tax matters), accounting matters, business or financial advisory services, insurance matters, real estate matters, environmental matters, employment or benefits matters, or any litigation, arbitration, or regulatory enforcement matters, except as specifically set forth above with respect to gaming regulatory filings. The Firm is not acting as a financial advisor, placement agent, or broker-dealer in connection with the Transaction. RGC should continue to consult its own tax advisors, accountants, financial advisors, and other professionals with respect to such matters.
Any expansion of the scope of this engagement, including representation in connection with additional transactions, regulatory proceedings, or other matters, will require the mutual written agreement of both the Firm and RGC prior to the commencement of any such additional work.
2. Use of Proceeds (Background)
We understand that the proceeds of the Mezzanine Financing are intended to be applied as follows: (i) approximately Twenty-Two Million Dollars ($22,000,000) to fund capital expenditures for the upgrade and enhancement of RGC's digital wagering platform, referred to internally within the Company as "Project Catalyst," which we understand involves the deployment of next-generation mobile and online sports betting and iGaming technology across RGC's licensed jurisdictions; and (ii) approximately Thirteen Million Dollars ($13,000,000) to fund the expansion of RGC's tribal gaming management contracts in the states of Arizona and New Mexico, including any associated licensing, regulatory, and operational expenditures related thereto.
This background information regarding the intended use of proceeds is provided for context only, to facilitate the Firm's understanding of the business rationale for the Transaction and to assist in the preparation and negotiation of the transaction documents. The inclusion of this information in this engagement letter does not constitute, and shall not be construed as, business, financial, or investment advice by the Firm. RGC acknowledges that the Firm has not been engaged to evaluate, and is not rendering any opinion regarding, the commercial merits, financial viability, or investment suitability of the Mezzanine Financing or the proposed use of proceeds.
3. Engagement Team
The following attorneys will constitute the primary engagement team assigned to this matter:
Claudia Merritt — Responsible Partner, Banking & Finance Group. Ms. Merritt will serve as the Responsible Partner with overall supervisory authority for the engagement. Ms. Merritt will be responsible for strategic direction, key negotiations, and the review and approval of all material deliverables. Ms. Merritt has extensive experience in mezzanine and subordinated debt financings, gaming industry transactions, and complex capital markets matters.
Ian Blackwood — Billing Partner, Banking & Finance Group. Mr. Blackwood will serve as the Billing Partner responsible for billing administration, fee matters, and the management of the Firm's internal accounting and timekeeping records with respect to this engagement. Mr. Blackwood will also be available to provide substantive legal counsel on matters relating to secured transactions and intercreditor arrangements.
Marcus Leung — Lead Associate, Banking & Finance Group. Mr. Leung will serve as the lead associate responsible for day-to-day drafting, document production, transaction management, and coordination with opposing counsel and other transaction parties. Mr. Leung will serve as the primary day-to-day contact for the engagement team and will manage the preparation and distribution of document drafts, closing checklists, and signature pages.
Sophie Tremblay — Working Associate, Banking & Finance Group. Ms. Tremblay will assist with legal research, drafting of ancillary documents, due diligence review, and other matters as directed by Ms. Merritt and Mr. Leung.
From time to time, additional attorneys, paralegals, or other paraprofessionals may be assigned to the engagement as necessary in light of the volume, complexity, or timing requirements of the Transaction. The Firm will provide advance notice to RGC where practicable prior to the assignment of additional engagement team members, and will communicate the applicable billing rates for any such additional personnel.
For purposes of this engagement, the primary client contact at RGC shall be Thomas Kierkegaard, Esq., General Counsel. Unless otherwise directed, the Firm will direct all substantive communications, document transmissions, and requests for authorization to Mr. Kierkegaard, with copies to Priya Sandoval, Chief Financial Officer, and Angela Fong, Treasurer, as appropriate. RGC may designate additional or alternative contacts by written notice to the Firm at any time.
4. Fees and Billing Arrangements
4.1 Hourly Rates
Fees for legal services rendered in connection with this engagement will be calculated on an hourly basis at the following rates for the members of the engagement team identified above:
In the event that additional attorneys or paraprofessionals are assigned to the engagement, such personnel will be billed at the Firm's then-current standard rates, which will be communicated to RGC in advance of any billing for services rendered by such additional personnel. Current standard rates for the Firm's other timekeepers range from $350.00 per hour for junior paralegals to $1,450.00 per hour for senior partners, depending on the individual's experience and position within the Firm.
The Firm's standard hourly rates are subject to annual adjustment, typically effective as of January 1 of each calendar year. RGC will receive written notice of any rate increase at least thirty (30) days in advance of the effective date of such increase. Unless RGC objects in writing within fifteen (15) days of receiving such notice, the revised rates will apply to all services rendered on or after the effective date of the increase.
4.2 Expenses.  In addition to fees for legal services, RGC will be responsible for the reimbursement of reasonable out-of-pocket expenses incurred by the Firm in connection with the engagement. Such expenses may include, without limitation, the following:
(a) Filing fees, recording fees, and similar governmental charges;
(b) Courier and overnight delivery charges;
(c) Travel expenses, including airfare, ground transportation, lodging, and meals, if travel is required in connection with the Transaction (any travel will be approved by RGC in advance);
(d) Computer-assisted legal research and database charges (including Westmark Data Systems, Sundial Solutions, and similar services);
(e) Photocopying and document production costs;
(f) Long-distance telephone and conference call charges; and
(g) Other reasonable and documented out-of-pocket disbursements directly related to the engagement.
Expenses in excess of Five Thousand Dollars ($5,000.00) in any single billing period will require advance written approval from RGC prior to the Firm incurring such expense. RGC's approval may be provided by email from Mr. Kierkegaard, Ms. Sandoval, or Ms. Fong.
4.3 Billing and Payment Terms
The Firm will issue monthly invoices for fees and expenses incurred during the preceding calendar month. Each invoice will include a detailed description of the services rendered, the timekeeper responsible, the hours expended, and the applicable rate, as well as an itemized summary of expenses incurred. Invoices will be transmitted electronically to the attention of Mr. Kierkegaard, with a copy to Ms. Sandoval and Ms. Fong, unless RGC designates an alternative billing contact or accounts payable address.
Invoices are payable within thirty (30) days of receipt. The Firm reserves the right to charge interest on past-due amounts at the rate of one percent (1.0%) per month (twelve percent (12.0%) per annum), or the maximum rate permitted by applicable law, whichever is less, accruing from the date such payment was due until the date of actual receipt by the Firm. The Firm may, in its discretion, waive or reduce interest charges on a case-by-case basis, but any such waiver shall not constitute a waiver of the Firm's right to charge interest on future past-due amounts.
In the event that any invoice remains unpaid for more than sixty (60) days following the date of issuance, the Firm reserves the right to suspend work on the engagement, upon reasonable written notice to RGC, until all outstanding amounts are brought current, subject to the Firm's obligations under applicable rules of professional conduct.
4.4 Fee Estimates
The Firm does not provide fixed-fee quotes for engagements of this type. Actual fees will depend on a number of factors, including the complexity, duration, and circumstances of the Transaction, the scope and extent of negotiations with the prospective mezzanine lender and its counsel, the nature and extent of any gaming regulatory filings or approvals required, the need for any amendments or waivers under the Senior Credit Facility, the number and complexity of ancillary documents, and any unforeseen issues or complications that may arise during the course of the engagement.
Any fee estimate provided by the Firm, whether orally or in writing, is non-binding and is provided solely for informational and budgeting purposes. Such estimates are based on assumptions regarding the scope and complexity of the Transaction as understood at the time the estimate is given, and actual fees may vary materially from any such estimate. The Firm will endeavor to keep RGC informed on a regular basis regarding the accumulation of fees and expenses and will promptly advise RGC of any material developments that are likely to result in a significant increase in projected fees.
5. Retainer
No retainer or advance deposit is required at the inception of this engagement. However, the Firm reserves the right to request a retainer or advance deposit at any time during the engagement if, in the Firm's reasonable judgment, circumstances warrant such a request, including, without limitation, in the event that invoices remain past due or if the scope or complexity of the engagement increases significantly beyond original expectations. Any retainer or advance deposit received by the Firm will be deposited into the Firm's client trust account and applied against fees and expenses in accordance with applicable rules governing client trust funds. The Firm will provide RGC with an accounting of any retainer amounts held and applied.
6. Identification of Adverse and Related Parties
Based on the information provided to the Firm to date, the Firm understands the principal parties to the Transaction to include the following:
(a) Redstone Gaming Corp. — Borrower and client of the Firm in this matter;
(b) Pinnacle Bridge Capital Partners, LP and its affiliates, including Pinnacle Bridge Capital Management, LLC (as general partner) and Pinnacle Bridge Mezzanine Opportunities Fund IV, LP (as the prospective mezzanine lender and note purchaser);
(c) Cornerstone National Bank, N.A. — Existing senior lender and Administrative Agent under the Senior Credit Facility;
(d) Ashford Peak Advisory Group, LLC — Placement agent engaged by RGC in connection with the Mezzanine Financing;
(e) Wainwright Hess & Caldwell LLP — Outside legal counsel to Pinnacle Bridge Capital Partners, LP and its affiliates in connection with the Transaction;
(f) Harmon & Grayling CPAs, LLP — RGC's independent registered public accounting firm and independent auditor; and
(g) Dralvecen Title & Escrow Co. — Proposed escrow and/or collateral agent for the Transaction.
RGC is requested to promptly advise the Firm of any additional parties, affiliates, subsidiaries, or individuals that should be included in the Firm's conflicts database or that may be involved in the Transaction, so that the Firm may supplement its conflicts check as necessary.
The Firm represents RGC only in this matter. The Firm does not represent, and will not be deemed to represent, any of the other parties listed above in connection with the Transaction. The Firm's duties and obligations run solely to RGC as its client in this engagement.
7. Conflict of Interest Check and Waiver
The Firm has conducted a conflicts check based on the information provided by RGC as described in Section 6 above, utilizing the Firm's internal conflicts clearance system and database. As of the date hereof, the Firm has not identified any conflict of interest that would preclude the Firm's representation of RGC in this matter under the Nevada Rules of Professional Conduct or any other applicable rules governing attorney conduct.
RGC acknowledges that the Firm is a full-service law firm with a diverse client base and that the Firm represents, and may in the future represent, other clients in matters unrelated to this Transaction that may involve one or more of the other parties identified in Section 6 above. Such representations may include matters in which the interests of the Firm's other clients differ from or are potentially adverse to the interests of one or more of the parties identified in Section 6, but in contexts wholly unrelated to this Transaction and the subject matter hereof.
RGC hereby consents to the Firm's continued representation of such other clients in matters unrelated to this Transaction, provided that the Firm will not represent any party adverse to RGC in connection with this Transaction or any matter substantially related to this Transaction without RGC's prior written consent. This consent is given with the understanding that the Firm will maintain appropriate information barriers and ethical safeguards in accordance with applicable rules of professional conduct.
If a conflict of interest arises during the course of the engagement that was not identified as of the date hereof, the Firm will promptly notify RGC in writing of the nature and circumstances of such conflict. The Firm and RGC will endeavor in good faith to resolve any such conflict, including through the use of appropriate waivers or information barriers. If the conflict cannot be resolved in a manner consistent with applicable professional conduct rules, the Firm may be required to withdraw from the engagement in accordance with such rules and the provisions of Section 10 of this letter.
8. Confidentiality
The Firm will maintain in strict confidence all information provided by RGC in connection with this engagement, including all documents, data, communications, memoranda, analyses, financial information, business plans, trade secrets, and other materials furnished by RGC or its officers, directors, employees, agents, or advisors, consistent with the Firm's obligations under applicable rules of professional conduct, including Nevada Rule of Professional Conduct 1.6, and as may otherwise be required by law.
RGC's confidential information will not be disclosed by the Firm to any third party except in the following circumstances:
(i) With RGC's prior written or oral consent (which may be provided by email from Mr. Kierkegaard or his designee);
(ii) As reasonably necessary in the ordinary course of the Firm's representation of RGC in connection with this engagement, including disclosures to opposing counsel, regulatory bodies, escrow or collateral agents, title companies, or other third-party service providers involved in the Transaction, and only to the extent required for the proper performance of the Firm's duties;
(iii) As required by applicable law, regulation, court order, subpoena, or governmental request, provided that the Firm will, to the extent permitted by law, promptly notify RGC of any such requirement and cooperate with RGC in seeking a protective order or other appropriate remedy; or
(iv) As necessary for the Firm to enforce its rights under this engagement letter, including the collection of fees and expenses, or to defend itself against any claim, complaint, or proceeding relating to the engagement, to the extent permitted by applicable rules of professional conduct.
The Firm's obligations under this Section 8 shall survive the termination or conclusion of the engagement, regardless of the reason for such termination or conclusion.
9. Document Retention
Upon the conclusion or termination of the engagement (including any period of dormancy, suspension, or inactivity), the Firm will retain client files and work product in accordance with the Firm's standard document retention policy. The Firm's current policy provides for the retention of closed matter files, including both paper and electronic records, for a period of not less than seven (7) years from the date the matter is closed in the Firm's records management system. Following the expiration of the applicable retention period, the Firm may destroy or dispose of such files without further notice to RGC, unless RGC has previously requested the return or transfer of such materials.
RGC may request the return or delivery of original documents (including original executed instruments, certificates, and agreements) at any time during or after the engagement, and the Firm will comply with any such request within a commercially reasonable period of time. The Firm reserves the right to retain copies of any documents returned to RGC for its own records, subject to the confidentiality obligations set forth in Section 8 of this letter.
10. Termination
Either party may terminate this engagement at any time, with or without cause, upon written notice to the other party. Such notice may be provided by email, personal delivery, or overnight courier to the addresses set forth in this letter or to such other address as either party may designate in writing from time to time.
Notwithstanding any termination by RGC, RGC will remain responsible for the payment of all fees for services rendered and expenses incurred through the effective date of termination, in accordance with the billing and payment terms set forth in Section 4 of this letter. Any outstanding invoices for pre-termination work shall become due and payable upon termination.
The Firm's withdrawal from the engagement will be subject to applicable rules of professional conduct, including Nevada Rules of Professional Conduct 1.16 and any applicable rules of any court, regulatory body, or arbitral tribunal before which the Firm may be appearing on behalf of RGC. Where applicable, the Firm's withdrawal will be conditioned upon any required court or tribunal approval.
In the event that the Transaction does not proceed to closing, or the matter is placed on dormant or inactive status for any reason, the Firm will preserve all draft documentation and work product related to the engagement and will confirm the status of the matter in writing to RGC. If the matter remains dormant or inactive for a period of twelve (12) months or more, the Firm may, after consultation with RGC, close the matter in its records management system, subject to the document retention provisions of Section 9 above.
11. No Guarantee of Outcome
RGC acknowledges and agrees that the Firm's engagement pursuant to this letter does not guarantee any particular outcome with respect to the Transaction, including, without limitation, the successful closing of the Mezzanine Financing, the obtainment of any required regulatory approvals or consents, or the achievement of any specific commercial, financial, or legal objective. The practice of law involves inherent uncertainties, and the Firm cannot and does not make any representations or warranties regarding the ultimate outcome of any legal matter.
The Firm's advice is based on current law, regulations, and interpretive guidance as of the date such advice is provided, and is subject to change in light of subsequent legislative, regulatory, judicial, or administrative developments. The Firm undertakes no obligation to update or supplement any advice previously rendered except as may be specifically agreed in writing.
12. Governing Law and Dispute Resolution
This engagement letter and the relationship between the Firm and RGC arising hereunder shall be governed by and construed in accordance with the laws of the State of Nevada, without regard to principles of conflict of laws that would require the application of the laws of any other jurisdiction.
Any dispute, claim, or controversy arising out of or relating to this engagement, the Firm's representation of RGC, or the fees and expenses charged in connection herewith, that cannot be resolved through good faith negotiation between the parties, shall be submitted to final and binding arbitration in Clark County, Nevada, administered by the American Arbitration Association in accordance with its then-current Commercial Arbitration Rules. The arbitration shall be conducted by a single arbitrator mutually selected by the parties or, if the parties are unable to agree, appointed in accordance with the rules of the American Arbitration Association. The arbitrator's award shall be final, binding, and enforceable in any court of competent jurisdiction. Each party shall bear its own costs and attorneys' fees incurred in connection with any such arbitration, unless the arbitrator determines that an award of costs and fees to the prevailing party is appropriate. This Section 12 shall not preclude either party from seeking temporary or preliminary injunctive relief in a court of competent jurisdiction to the extent necessary to preserve the status quo or prevent irreparable harm pending the outcome of arbitration.
13. Entire Agreement and Amendments
This letter constitutes the entire agreement between the Firm and RGC with respect to the subject matter hereof, including the scope of the engagement, the fee arrangement, and the other terms and conditions governing the Firm's representation of RGC in connection with the Transaction. This letter supersedes all prior or contemporaneous oral or written communications, proposals, negotiations, understandings, or agreements between the parties relating to the subject matter hereof.
This letter may be amended, modified, or supplemented only by a written instrument duly executed by both the Firm and RGC. No waiver of any provision of this letter shall be effective unless set forth in a written instrument signed by the party granting such waiver, and no such waiver shall constitute a waiver of any other provision or a continuing waiver of the same provision.
14. Acceptance and Execution
We are pleased to have this opportunity to work with RGC on the Mezzanine Financing and look forward to a successful collaboration. If the foregoing accurately reflects your understanding of the terms of this engagement, please confirm RGC's agreement by executing and returning the enclosed copy of this letter to the undersigned at your earliest convenience. An executed copy returned by electronic means (including PDF transmitted by email) shall be deemed an original for all purposes.
Please do not hesitate to contact me or any member of the engagement team if you have any questions regarding the foregoing or wish to discuss any aspect of this engagement.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Name: Claudia Merritt
Title: Partner
Date: October 31, 2022
ACKNOWLEDGMENT AND AGREEMENT
The undersigned, on behalf of Redstone Gaming Corp., hereby acknowledges receipt of the foregoing engagement letter, confirms that the terms and conditions set forth therein accurately reflect the agreement between Redstone Gaming Corp. and Calderwood & Harkness LLP with respect to the engagement described herein, and agrees to be bound by such terms and conditions.
REDSTONE GAMING CORP.
By: ________
Name: Thomas Kierkegaard, Esq.
Title: General Counsel
Date: ________
cc: Priya Sandoval, Chief Financial Officer, Redstone Gaming Corp. cc: Angela Fong, Treasurer, Redstone Gaming Corp. cc: Ian Blackwood, Partner, Calderwood & Harkness LLP
Attorney | Position | Hourly Rate
Claudia Merritt | Partner | $1,250.00
Ian Blackwood | Partner | $1,175.00
Marcus Leung | Senior Associate | $875.00
Sophie Tremblay | Associate | $640.00

CALDERWOOD & HARKNESS LLP Attorneys at Law

VIA ELECTRONIC MAIL AND HAND DELIVERY

CALDERWOOD & HARKNESS LLP

ACKNOWLEDGMENT AND AGREEMENT

REDSTONE GAMING CORP.

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