Contract analysis

I. Executive Summary The purpose of this memorandum is to analyze the implications of the results of Aurelius Global Media Group PLC's ("AGMG" or the "Company") June 7, 2024 Annual General Meeting (the "AGM") on the Company's directors' and officers' liability insurance coverage, with particular focus on continuing coverage for departing directors and the notice obligations triggered by the board reconstitution. This

1. Continuing Coverage for Departing Directors. Departing directors Kessler, Pemberton, and Delgado-Ríos remain "Insured Persons" under the Helmsley policy for claims arising from Wrongful Acts committed during their respective periods of service on the Board. However, the Board must take affirmative steps to preserve this coverage, including by filing timely notice with Helmsley and evaluating the procurement of ext

2. Prompt Notice Required. The board reconstitution constitutes a material change in the composition of the Board that almost certainly triggers notice obligations under the Helmsley policy. In addition, the activist campaign, contested proxy election, pending Section 220 books-and-records demand, and related matters constitute "circumstances" that may give rise to future claims and should be reported to Helmsley on

3. Tail Coverage Evaluation. The Board should evaluate whether to procure tail (extended reporting period) coverage or a standalone run-off policy for the departing directors, in order to ensure that claims asserted after the current policy period (or after any future policy renewal that may exclude former directors) are covered. We estimate that a six-year tail endorsement for the departing directors could cost betw

4. Potential Coverage Gaps. Potential coverage gaps exist with respect to the activist-related claims environment, including the applicability of the policy's "change in control" provision, the "Insured vs. Insured" exclusion, and coverage for non-U.S. regulatory proceedings. These gaps require immediate review and, where possible, remediation through endorsements or supplemental coverage. Each of these conclusions i

II. Overview of Current D&O Policy A. Policy Details The Company's current directors' and officers' liability insurance program is summarized as follows: The policy is structured as a claims-made policy, meaning that it covers claims first made against Insured Persons during the policy period (or any applicable extended reporting period), regardless of when the underlying Wrongful Act occurred, provided the Wrongful

III. Impact of Board Reconstitution on Coverage A. Departing Directors: Tobias Kessler, Hugh Pemberton, and Sofia Delgado-Ríos All three departing directors ceased to serve as members of the Board of Directors as of the conclusion of the June 7, 2024 AGM, when the results of the contested election were certified and the Corvus Peak nominees were declared elected. Under standard D&O policy terms, and consistent with t

Section 220 Books-and-Records Demand. We note with particular concern the ongoing Section 220 books-and-records demand filed by Corvus Peak on March 22, 2024, seeking access to CEO search committee materials and related Board deliberations. The Company objected to the demand on privilege grounds in its April 2, 2024 response. If Corvus Peak escalates this demand by filing suit in the Delaware Court of Chancery to com

IV. Notice Obligations A. Notice of Board Reconstitution Virtually all D&O policies require the Named Insured to provide prompt written notice to the carrier of material changes in the composition of the board of directors. This obligation is typically heightened when the change results from a contested election or activist campaign, as such events signal an increased risk of claims against directors and officers. Th

V. Tail Coverage / Extended Reporting Period Analysis A. Need for Tail Coverage "Tail" or "extended reporting period" ("ERP") coverage is a mechanism that extends the time during which claims can be reported under a claims-made policy after the policy period ends or after an insured person ceases to be covered under the policy. In the context of D&O insurance, tail coverage is particularly important for departing dir

1. Negotiate Tail Endorsement Under Existing Helmsley Policy. The most straightforward option is to request that Helmsley Indemnity Corp. issue a tail endorsement to the existing policy, extending the reporting period for departing directors Kessler, Pemberton, and Delgado-Ríos. A tail endorsement would allow claims arising from the departing directors' service to be reported under the existing policy's terms and lim

2. Standalone Run-Off Policy. As an alternative to a tail endorsement, the Company (or the departing directors individually) could procure a separate, standalone run-off D&O policy from Helmsley or another carrier. A standalone run-off policy would provide dedicated coverage for the departing directors for claims arising from their board service, independent of the Company's ongoing D&O program. This option offers th

3. Indemnification Agreements. As a complement to (but not a substitute for) insurance coverage, the Company should ensure that individual indemnification agreements between AGMG and each departing director are in place and enforceable. These agreements provide a contractual obligation of indemnification that survives the director's departure from the Board and cannot be unilaterally amended by the reconstituted Boar

VI. "Change in Control" Provision Analysis A. Potential Trigger A significant number of D&O policies contain a "change in control" provision that operates to modify or limit coverage upon the occurrence of a defined change-in-control event affecting the Named Insured. The typical effect of a change-in-control trigger is that the existing policy automatically converts to a "run-off-only" policy for the remainder of th

1. Obtain and Review the Complete Helmsley Policy. As noted in Section II.B above, a complete review of the Helmsley policy — including all endorsements, riders, and amendments — is necessary to determine the precise "change in control" definition applicable to the Company's coverage. Nadine Khalil should request the complete policy text from Helmsley (or from the Company's insurance broker) immediately, and Calderwo

2. Request Written Confirmation from Helmsley. If the policy text reveals any ambiguity regarding whether the June 7, 2024 board reconstitution constitutes a "change in control," we recommend requesting a written confirmation from Helmsley that the reconstitution does not trigger the change-in-control provision. Such a confirmation — often referred to as a "no-action" or "no-trigger" letter — would provide certainty

3. Prepare for Alternative Scenarios. In the event that the change-in-control provision is triggered (or that Helmsley takes the position that it has been triggered), the Company should be prepared to procure a new prospective D&O policy promptly. We recommend that the Company's insurance broker be placed on notice of this contingency so that preliminary market soundings can be conducted.

VII. "Insured vs. Insured" Exclusion A standard feature of virtually all D&O policies is the "Insured vs. Insured" exclusion, which bars coverage for claims brought by one Insured Person (or by the Named Insured itself) against another Insured Person. The purpose of this exclusion is to prevent collusive or self-dealing claims — that is, claims manufactured by or at the direction of the insured entity or its insiders

VIII. Specific Risk Scenarios and Coverage Implications A. Securities Litigation Risk The contested proxy campaign, the CEO succession deadlock, and the public disputes between the Board and Corvus Peak have generated significant negative publicity and market uncertainty regarding AGMG. In the experience of the authors, the combination of a contested proxy election, public allegations of board dysfunction, and a high

IX. Indemnification Framework — Interaction with D&O Coverage A. AGMG's Indemnification Obligations The Company's Amended and Restated Bylaws (effective March 22, 2022) contain indemnification provisions consistent with DGCL Section 145, which establishes the framework for corporate indemnification of directors and officers under Delaware law. The principal elements of this framework are as follows: Mandatory Indemni