Contract analysis

I. Executive Summary This memorandum sets forth Calderwood & Harkness LLP's revised settlement authority recommendation for both the Fuentes class action and the Aldrich individual executive dispute, in advance of the second mediation session scheduled for September 8, 2023. The memorandum is directed to the three individuals within the Aurelius Media Americas Inc. ("AMA") and Aurelius Global Media Group plc ("AGMG")

II. Revised Settlement Authority Recommendation A. Summary Table The following table summarizes the pre-mediation authority previously authorized for Session #1 and the revised authority we recommend for Session #2: As reflected above, the net effect of the revised recommendation is a reduction of $500,000 in total maximum authority. This reduction is achieved by narrowing the Aldrich range from $1,500,000–$3,000,000

III. Anticipated Settlement Structure — Class Action A. Projected Term Sheet (if settled at $15M authority ceiling) The following table sets forth the projected allocation of the Gross Settlement Amount if the class action settles at the $15,000,000 maximum authority ceiling. We note that the actual GSA may be lower than $15,000,000; these figures are illustrative and reflect the maximum authority scenario for planni

IV. Anticipated Settlement Structure — Aldrich A. Projected Term Sheet (if settled at $2.5M authority ceiling) The following table sets forth the projected terms of the Aldrich settlement if the matter resolves at the $2,500,000 cash maximum authority ceiling: The mutual general release would cover all claims and cross-claims between AMA and Aldrich, including Aldrich's claims for wrongful termination, breach of the

V. Insurance Coordination — Pemberton Mutual Assurance Co. A. EPL Policy Summary AMA maintains an Employment Practices Liability ("EPL") insurance policy with Pemberton Mutual Assurance Co. The relevant policy details are as follows: The policy provides coverage for "Employment Practices" claims, subject to the SIR, the aggregate limit, and the various exclusions and reservations set forth in the policy. Pemberton ha

1. Insured v. Insured Exclusion (§ IV.C). Pemberton invoked the Insured v. Insured Exclusion as applied to AMA's cross-claims against Aldrich, arguing that both AMA and Aldrich qualify as "insureds" under the policy and that claims between insureds are excluded from coverage. While this exclusion is typically directed at collusive or internal disputes, Pemberton's position is not unreasonable on its face given the po

2. Offensive Litigation Characterization. Pemberton characterized AMA's cross-claims as offensive litigation falling outside the scope of "defense" coverage under the EPL policy. The policy provides coverage for the defense of claims brought against the insured, and Pemberton argued that AMA's affirmative cross-claims for breach of contract, trade secret misappropriation, breach of fiduciary duty, and conversion are

3. Proprietary Business Interests. Pemberton argued that AMA's restrictive covenant and trade secret claims relate to AMA's proprietary business interests rather than to "Employment Practices" as defined in the policy. Under this reasoning, claims arising from the enforcement of post-employment restrictive covenants and the protection of trade secrets fall outside the insuring agreement. In light of this denial, AMA

VI. Combined Financial Summary A. All-In Cost Analysis at Maximum Authority The following table sets forth AMA's total financial exposure at the maximum authority levels recommended in this memorandum: The total AMA out-of-pocket exposure of approximately $11,550,000 represents the maximum all-in cost to AMA if both matters settle at the authority ceilings recommended herein. This figure includes all defense costs al

VII. Board Approval Requirement Pursuant to Section 7.4 of AMA's Outside Counsel Guidelines, settlement authority exceeding $5,000,000 requires the approval of the following individuals and bodies:

1. Gregory Tanaka, Vice President, Legal & Compliance, Aurelius Media Americas Inc.;

2. Philippa Cartwright, General Counsel, Aurelius Global Media Group plc;

3. Jonathan Mercer, President, Aurelius Media Americas Inc.; and

4. The AGMG Board's Audit and Risk Committee. The total revised authority of $17,500,000 recommended in this memorandum exceeds the $5,000,000 threshold and therefore requires approval from all four of the above. We understand that Greg, Philippa, and Jonathan are in a position to review and act on this memorandum promptly. However, we are aware that obtaining Audit and Risk Committee approval may require scheduling

VIII. Mediation Session #2 — Logistics and Strategy A. Logistics The logistical details for Mediation Session #2 are as follows: • Date: Friday, September 8, 2023 • Location: Westpark Dispute Resolution Inc., 1925 Century Park East, Suite 1700, Los Angeles, California 90067 • Mediator: Hon. Patricia Okoro (Ret.) • Format: Combined session — the class action and the Aldrich individual matter will be addressed in a sin

IX. Recommendation Based on the foregoing analysis, we recommend that AMA authorize the revised settlement parameters set forth in Section II of this memorandum, specifically: • Maximum class action Gross Settlement Amount: $15,000,000, inclusive of a $750,000 PAGA component; • Maximum Aldrich individual cash settlement: $2,500,000; • Maximum Aldrich RSU acceleration: 10,200 of 15,300 unvested AGMG RSUs (with forfeit