Contract analysis

From: Nathaniel Bower <nbower@calderwoodharkness.com> To: Tobias Kessler <tkessler@aureliusmedia.com> Cc: Colette Whitman <cwhitman@calderwoodharkness.com> Date: Fri, 19 Apr 2024 06:47:00 -0000 Subject: PRIVILEGED & CONFIDENTIAL — Jonathan Hale: Conflict of Interest Analysis and Recommendations

ATTORNEY-CLIENT PRIVILEGED AND CONFIDENTIAL ATTORNEY WORK PRODUCT THIS COMMUNICATION IS PROTECTED BY THE ATTORNEY-CLIENT PRIVILEGE AND THE WORK PRODUCT DOCTRINE. IT IS INTENDED SOLELY FOR THE MEMBERS OF THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS OF AURELIUS GLOBAL MEDIA GROUP INC. AND SHOULD NOT BE FORWARDED, COPIED, OR DISCLOSED TO ANY OTHER PERSON WITHOUT PRIOR CONSULTATION WITH OUTSIDE COUNSEL.

I am writing to follow up on the Special Committee's April 18, 2024 interviews of the five external CEO candidates, including Jonathan Hale (former Chairman and CEO of Meridian Studios International Inc.). The purpose of this email is to flag a significant conflict-of-interest concern regarding Mr. Hale that, in our judgment, warrants the Committee's immediate attention before his candidacy is advanced further. My co

**I. The Hale-Solberg Relationship — Factual Background**

Jonathan Hale, age 56, served as Chairman and CEO of Meridian Studios International Inc. from 2014 to 2022, during which time he oversaw its acquisition by Zenith Consolidated Entertainment Corp. in a transaction valued at approximately $3.1 billion. Prior to his tenure at Meridian Studios, Mr. Hale served as President of Broadcast & Cable at Solaris Media Group Inc.

As the Committee is aware, Damien Solberg is the Founding Partner and Chief Investment Officer of Corvus Peak Capital Partners LP, the activist shareholder that currently holds approximately 8.7% of AGMG's outstanding common shares (approximately 35,896,200 shares) and has nominated three directors — Malcolm Trask, Vanessa Loring, and Dr. Raymond Chu — for election at the June 7 Annual General Meeting.

Our review has identified that Mr. Hale and Mr. Solberg have served together on the board of directors of Keystone Digital Ventures Ltd., a UK-incorporated private limited company. This represents a direct, documented professional relationship between the two individuals. Additionally, Mr. Hale is described in various public references as a "known associate" of Mr. Solberg, and the relationship appears to extend beyo

I also think it important for the Committee to be mindful of the internal board dynamics at play. As matters currently stand, among the directors who support Mr. Hale's candidacy on the pre-reconstitution Board are Tobias Kessler, Reginald Osei, and Dr. Anwen Llewellyn (three of ten voting directors), while Ms. Nair-Whitfield's supporters include Dame Elspeth Greenvale, Lucinda Farrow-Grant, Hugh Pemberton, and Sofia

**II. Conflict Analysis — Independence Concerns**

The Hale-Solberg relationship raises material concerns about whether Mr. Hale can properly be considered a "truly independent" external candidate, or whether his appointment would effectively afford Corvus Peak influence over the CEO position in addition to the board seats it is seeking through its proxy contest.

Under the NYSE Listed Company Manual's independence standards, the central question is whether Mr. Hale has a material relationship with any significant shareholder — here, Corvus Peak and its principals — that would impair his independent judgment as CEO.

Under Delaware law, the Board's fiduciary duty of loyalty requires that the CEO search process not be influenced by, or conducted for the benefit of, any particular shareholder or faction. Selecting a candidate with undisclosed or inadequately vetted ties to the activist shareholder could expose the Board to claims that the process lacked independence and that directors breached their fiduciary duties.

The Committee will recall that Corvus Peak's April 15, 2024 public letter already criticized the Board's designation of Priya Nair-Whitfield as Interim CEO as a "predetermined outcome." If the Board were to select Mr. Hale without thoroughly vetting and documenting the Solberg relationship, it could face a mirror-image criticism — namely, that the selection was influenced by or coordinated with the activist. This wou

The Hale-Solberg connection also raises questions about information flow. Specifically, it is presently unknown whether Mr. Hale has communicated with Mr. Solberg or with Erin Nakamura (Corvus Peak's portfolio manager for the AGMG campaign) regarding the CEO search, and whether any such communications could have compromised the confidentiality of the search process.

**III. Corvus Peak's Role in Mr. Hale's Candidacy**

I also wish to note a circumstantial concern. Corvus Peak's February 12, 2024 demand letter to the Board called for, among other things, a formal CEO succession plan. Mr. Hale subsequently emerged as an external candidate whose background and professional relationships appear to align with Corvus Peak's stated preferences. While this does not establish that Mr. Hale is Corvus Peak's "chosen" candidate, the optics are

Based on the foregoing, we recommend the following:

1. **Enhanced Due Diligence on Mr. Hale's Independence.** Before advancing Mr. Hale's candidacy to the finalist stage, the Special Committee should:

(a) Request that Mr. Hale provide a complete disclosure of all professional and personal relationships with Damien Solberg, Erin Nakamura, and any other Corvus Peak personnel or affiliates;

(b) Request disclosure of all communications between Mr. Hale and Corvus Peak — or its agents, including Blackthorn Howell & Crane LLP and Falconer Strauss LLC — regarding AGMG, the CEO search, or his potential candidacy;

(c) Request disclosure of the full details of Mr. Hale's tenure on the board of Keystone Digital Ventures Ltd., including dates of service, whether Mr. Solberg served concurrently, and the nature of any ongoing business relationship between the two; and

(d) Consider engaging Hargrove Tate Partners LLC (Christine Aldridge) to conduct supplemental background diligence focused specifically on the Hale-Solberg relationship.

2. **Contemporaneous Documentation.** Whatever the Committee ultimately decides regarding Mr. Hale's candidacy, the deliberative process must be fully documented. If the Committee determines that the relationship is not disqualifying, the basis for that conclusion should be memorialized in the Committee minutes and supported by the diligence record. A clear contemporaneous record will be the Committee's strongest pro

3. **Recusal Considerations.** If any Committee member has a pre-existing relationship with Mr. Hale or Mr. Solberg that could create even an appearance of a conflict, that member should consider recusal from the Hale evaluation. I am not aware of any such relationship at this time, but I raise the point in the interest of completeness.

4. **Process Integrity.** We recommend that the Committee not advance Mr. Hale to the finalist stage until the enhanced diligence described above is complete. This will protect the integrity of the search process and the Board's fiduciary position regardless of the ultimate outcome of the diligence.

I am available to discuss any of the foregoing by phone or in person at the Committee's convenience. As noted, the full written memorandum will provide a more detailed legal analysis, including discussion of the relevant Delaware case law, and we expect to deliver it to the Committee in the very near term.

Finally, I would ask that this communication not be shared outside the Special Committee, Calderwood & Harkness, and Nadine Khalil (General Counsel) without prior consultation with our office.

Nathaniel Bower Partner Calderwood & Harkness LLP 787 Seventh Avenue New York, NY 10019 Tel: (212) 558-4000 Email: nbower@calderwoodharkness.com