Contract analysis

I. Purpose This memorandum sets forth a preliminary phase-based litigation budget for the defense of Fuentes v. Aurelius Media Americas Inc., Case No. 22STCV38214, filed in the Superior Court of the State of California for the County of Los Angeles on November 1, 2022. The budget encompasses the full scope of defensive work anticipated in connection with the Fuentes class action and Private Attorneys General Act ("PA

II. Phase-Based Budget Summary The following table presents our estimated fees, estimated expenses, and combined totals for each of the ten phases of work we anticipate in connection with the defense of the Fuentes class action, the related Halloran action, the PAGA claims, and the Aldrich individual action. A detailed description of the scope of work encompassed by each phase follows in Section III below. The fee es

III. Phase Descriptions The following sections describe the anticipated scope of work for each phase, identify the principal tasks and deliverables, and provide additional detail regarding expense estimates where applicable. Phase 1 — Case Assessment & Engagement Setup (November–December 2022) — $197,000 Phase 1 encompasses the initial assessment, fact-gathering, and administrative work necessary to establish the fou

IV. Key Assumptions The budget set forth in this memorandum is based on the following key assumptions. Material changes in any of these assumptions may require revision of the budget, and we will promptly notify AMA of any such changes.

1. Halloran Consolidation. We assume that the Halloran action (Case No. 22STCV39501), which has not yet been filed as of the date of this memorandum but is anticipated imminently, will be consolidated with the Fuentes action and will not require a separately budgeted defense. All work related to the Halloran action is included within the phase-based budget set forth above. If consolidation is denied or if the Hallora

2. Settlement Assumption. This budget assumes that the class action will proceed through class certification briefing and, if certified, to mediation and settlement. The budget does not include trial costs. If the class action does not settle and proceeds to trial, a supplemental trial budget will be prepared. Estimated trial costs (not included in this budget): $1,200,000–$1,800,000 in additional fees and expenses f

3. Aldrich Settlement Assumption. This budget assumes that the Aldrich individual action will be resolved through mediation and settlement, as contemplated in Phase 9 above. If the Aldrich matter proceeds to trial, an additional $300,000–$500,000 in fees and expenses should be anticipated, covering trial preparation, a five to seven court-day bench trial, and post-trial proceedings.

4. Expert Expenses (Phase 5). Expert expenses represent the largest single expense item in the budget and include the estimated fees for Dr. Rajesh Makhija (approximately $160,000) and Dr. Catherine Lindstrom (approximately $180,000). The remaining expert expense allocation covers ancillary costs, including data analysis, report production, hearing preparation, and expert deposition defense. Actual expert costs may v

5. E-discovery Expenses (Phase 3). E-discovery expenses are estimated based on the processing of approximately 150,000 documents through our e-discovery vendor, Marlowe Asset Management Litigation Technology Inc. (600 Anton Boulevard, Suite 900, Costa Mesa, CA 92626). Actual costs will depend on the volume of data collected from AMA's custodians and enterprise systems, the number of search terms applied during the cu

6. No Interlocutory Appeal. This budget does not include the potential costs of an interlocutory appeal by writ of mandate from a class certification order. If the Court grants class certification and an appeal is warranted, a supplemental budget of $150,000–$250,000 should be anticipated for the preparation and prosecution of a petition for writ of mandate in the California Court of Appeal.

7. Staffing. The budget is based on the engagement team identified in the Staffing Plan Memorandum provided separately, with the following personnel and approximate allocation percentages: • Renata Vasquez (Partner) — $1,125/hour — approximately 25–30% allocation. Ms. Vasquez will serve as lead relationship partner and will be responsible for overall case strategy, class certification opposition, mediation, and clien

V. Comparison to Insurance Coverage The following analysis compares the estimated budget to AMA's available insurance coverage and provides recommendations regarding coverage strategy. EPL Policy (Pemberton Mutual Assurance Co.) • Policy Number: PMA-EPL-2022-00837 • Self-Insured Retention (SIR): $5,000,000 per claim • Aggregate Limit: $15,000,000 • Tender Status: Tender letter submitted November 8, 2022; acknowledgme