CALDERWOOD & HARKNESS LLP 787 Seventh Avenue, New York, NY 10019 Telephone: +1 (212) 558-4000
Nathaniel Bower Partner Direct Dial: +1 (212) 558-4112 nbower@calderwoodharkness.com
July 8, 2024
VIA EMAIL AND INTERNATIONAL COURIER
Dame Elspeth Greenvale Independent Non-Executive Chair (Transitional) and the Board of Directors Aurelius Global Media Group PLC 14 Sceptre Row London EC2V 7QN United Kingdom
Re: Acknowledgment of Termination of Engagement — Matter No. 1017-00002
Dear Dame Elspeth and Members of the Board of Directors:
We write on behalf of Calderwood & Harkness LLP ("Calderwood & Harkness" or the "Firm") to formally acknowledge the termination of the Firm's engagement as independent governance counsel to the Board of Directors (the "Board") of Aurelius Global Media Group PLC ("AGMG" or the "Company"). This letter sets forth the Firm's acknowledgment of such termination, summarizes the scope and duration of the engagement, addresses the status of final work product and transition materials, presents the Firm's final invoice and outstanding financial matters, and confirms the Firm's continuing obligations following termination. We respectfully request that this letter and its accompanying enclosure receive the Board's prompt attention.
I. Acknowledgment of Termination Notice
Calderwood & Harkness hereby acknowledges receipt of the Board's written notification dated June 21, 2024 (the "Termination Notice"), advising that the engagement of Calderwood & Harkness as independent governance counsel to the Board of Directors of Aurelius Global Media Group PLC is terminated effective July 8, 2024. We confirm that the Termination Notice was delivered on behalf of the reconstituted Board by Vanessa Loring, in her capacity as Chair of the Nominating & Governance Committee of the Board.
This letter serves as the Firm's formal acknowledgment of such termination. In connection therewith, we confirm that the following engagement agreements between the Firm and the Board are terminated as of this date:
(a) the original Engagement Letter between Calderwood & Harkness LLP and the Board of Directors of Aurelius Global Media Group PLC, dated March 12, 2024, which established the terms and scope of the Firm's engagement as independent governance counsel in connection with certain contested governance matters described more fully below; and
(b) the Amended Engagement Letter dated April 22, 2024, which expanded the scope of the Firm's engagement to include legal coordination with Stonebridge Crane & Co. in connection with the Board's evaluation of strategic alternatives for the Company.
Both the original Engagement Letter and the Amended Engagement Letter (collectively, the "Engagement Letters") are terminated effective as of the date hereof. All references to the "engagement" in this letter refer to the engagement governed by the Engagement Letters under Matter No. 1017-00002.
The Firm has ceased all substantive legal work on behalf of the Board as of the date of this letter, and no further professional services will be rendered absent a separate written agreement between the parties.
II. Summary of Engagement Scope and Duration
For the sake of completeness, and to facilitate the Board's transition to successor counsel, we briefly summarize the scope and duration of the Firm's engagement.
Calderwood & Harkness was initially engaged on March 12, 2024, to serve as independent governance counsel to the Board in connection with:
(i) the contested CEO succession process precipitated by the resignation of Marcus Vane as Chief Executive Officer of AGMG on March 8, 2024, and the attendant governance considerations arising therefrom, including the formation and operation of a CEO Search Committee and the negotiation and finalization of separation arrangements;
(ii) the Board's evaluation of and response to the activist campaign initiated by Corvus Peak Capital Partners LP ("Corvus Peak"), including matters related to Corvus Peak's public letter to the Board dated March 14, 2024, its amended Schedule 13D filing with the U.S. Securities and Exchange Commission, its threatened proxy contest, and its demand for books and records pursuant to Section 220 of the Delaware General Corporation Law ("DGCL § 220"); and
(iii) related corporate governance and fiduciary duty matters, including the review of the Company's certificate of incorporation, bylaws, and corporate governance guidelines, the evaluation of Board composition and committee structure, and the provision of advice concerning directors' fiduciary obligations under Delaware law and, as applicable, the UK Companies Act 2006.
On April 22, 2024, the scope of the engagement was expanded pursuant to the Amended Engagement Letter to include legal coordination in connection with the Board's engagement of Stonebridge Crane & Co. as the Company's financial advisor for the evaluation of strategic alternatives. This expanded scope encompassed the review and negotiation of the Stonebridge Crane & Co. engagement letter, the structuring of information barriers and confidentiality protocols, the evaluation of potential transaction structures, and ongoing coordination with Stonebridge Crane & Co. concerning the strategic alternatives process.
In total, the engagement spanned approximately 119 days, from March 12, 2024, through July 8, 2024.
Throughout the engagement, the Firm's engagement team consisted of the following attorneys and staff:
• Nathaniel Bower, Partner — Responsible Partner and primary point of contact for the Board;
• Colette Whitman, Partner — Billing Partner, with responsibility for engagement administration, billing matters, and substantive advisory work;
• Audrey Zhou, Associate — Lead Associate, responsible for day-to-day management of work streams, drafting of memoranda and correspondence, and coordination with AGMG's General Counsel; and
• Brendan Walsh, Associate — Working Associate, responsible for legal research, due diligence, and preparation of privilege logs and document productions.
Each member of the engagement team contributed substantially to the work performed during the engagement, and we are confident that the breadth and depth of our collective efforts served the Board well during an exceptionally dynamic period in the Company's history.
III. Final Work Product and Transition Materials
Calderwood & Harkness delivered its final work product and comprehensive transition materials to the Board on July 1, 2024, under a separate cover letter addressed to Dame Elspeth Greenvale. The transition package was designed to provide the Board and any successor counsel with a complete and organized record of the Firm's work during the engagement and to identify all pending matters requiring continued attention. The materials delivered on July 1, 2024, included the following:
1. Transition Memorandum: Summary of Engagement Work Product. This memorandum provides a comprehensive catalog of all substantive advice rendered by the Firm during the engagement, organized by subject matter and work stream. It identifies all pending issues and open matters as of the date of the memorandum, summarizes the Firm's principal recommendations on unresolved questions, and includes guidance for successor counsel regarding the current posture of each work stream.
2. Privilege Log — Materials Withheld from Corvus Peak's DGCL § 220 Production. This document constitutes the final, complete privilege log listing all documents withheld from the production of books and records in response to the demand served by Corvus Peak Capital Partners LP on March 22, 2024, pursuant to DGCL § 220. The privilege log identifies each withheld document by date, author, recipient, subject matter, and the specific privilege basis for withholding (i.e., attorney-client privilege, work product doctrine, or both). The Firm invested considerable effort in ensuring that the privilege log is thorough and defensible, and we recommend that successor counsel review it carefully in connection with any further proceedings related to the § 220 demand.
3. Index of Work Product Delivered to Client. This index provides a complete listing of all memoranda, draft board resolutions, correspondence, presentations, research memoranda, and other deliverables produced by Calderwood & Harkness and delivered to the Board or to AGMG's General Counsel during the engagement. The index is organized chronologically and cross-referenced by subject matter to facilitate identification and retrieval of specific work product.
4. Status Memorandum: Open and Unresolved Issues at Termination. This memorandum identifies all pending matters that remain open and unresolved as of the termination of the engagement and that will require the attention of successor counsel. The open matters identified include, among others:
(a) the status of the DGCL § 220 books-and-records demand served by Corvus Peak Capital Partners LP, including the ongoing negotiation of the scope of production and the potential for litigation in the Delaware Court of Chancery if the parties are unable to reach agreement;
(b) the analysis and procurement of directors' and officers' ("D&O") tail insurance coverage for the three departing directors — Tobias Kessler, Hugh Pemberton, and Sofia Delgado-Ríos — under the Company's existing D&O policy issued by Helmsley Indemnity Corp. (Policy No. HIC-DOL-2024-009347), including the evaluation of run-off coverage periods and the adequacy of policy limits;
(c) the contractual termination of the Company's engagement of Hargrove Tate Partners LLC as strategic communications advisor, including the analysis of remaining fee obligations and indemnification provisions under the Hargrove Tate engagement letter; and
(d) the status of the Company's engagement of Stonebridge Crane & Co. as financial advisor for the strategic alternatives review, including the Firm's analysis of tail fee exposure under the Stonebridge Crane & Co. engagement letter in the event that a qualifying transaction is consummated during the contractual tail period.
We strongly recommend that the Board review these transition materials carefully and ensure that they are delivered to successor counsel in a timely manner so as to avoid any lapse in the handling of pending matters. Several of the open issues identified in the Status Memorandum are time-sensitive and may require prompt action by successor counsel.
IV. Final Invoice and Financial Matters
The Firm's final invoice for Matter No. 1017-00002 is submitted concurrently with this letter and is dated July 8, 2024. We set forth below a summary of the Firm's total professional fees, expenses, and outstanding balance for the engagement.
Total Professional Fees for the Engagement: $1,034,625.00
The professional fees were incurred as follows:
Total Expenses (travel, printing, court filing fees, database charges): $38,442.00
Grand Total for the Engagement: $1,073,067.00
Outstanding Balance as of July 8, 2024: $312,817.00
The outstanding balance of $312,817.00 reflects amounts attributable to professional fees and expenses incurred during the final billing period of the engagement, after application of all prior payments and retainer credits. The outstanding balance is due and payable in accordance with the payment terms set forth in Section 7 of the Engagement Letter, which provides for payment within thirty (30) days of the date of invoice.
We note that the quarterly evergreen retainer of $75,000.00 was last replenished on June 14, 2024, in accordance with Section 7(b) of the Engagement Letter. The retainer has been applied against professional fees incurred during the final billing period, and any unused retainer balance is reflected as a credit on the final invoice enclosed herewith.
We respectfully request prompt payment of the outstanding balance. Should the Board or the Company's finance department have any questions regarding the final invoice, please direct such inquiries to Colette Whitman at cwhitman@calderwoodharkness.com or +1 (212) 558-4237.
V. Preservation of Records and Privileged Materials
Calderwood & Harkness will retain its internal files relating to Matter No. 1017-00002 in accordance with the Firm's document retention policy (the "Retention Policy"), which provides for a minimum seven-year retention hold from the date of matter closure. During the retention period, the Firm's files will be maintained in secure, access-controlled storage, and will not be destroyed, altered, or disposed of without advance notice to the Company.
All materials generated during the engagement that are subject to the attorney-client privilege and/or the work product doctrine remain privileged and confidential. The Firm will take all reasonable steps to preserve the integrity and confidentiality of such materials in its possession.
As the Board is aware, the attorney-client privilege with respect to communications and materials generated during the engagement belongs to Aurelius Global Media Group PLC and its Board of Directors as the client. The Firm will not waive, disclose, or otherwise compromise the privilege over any such materials absent the client's express written authorization or as may be required by applicable law, regulation, or order of a court of competent jurisdiction.
We respectfully remind the Board that it should take appropriate steps to preserve the attorney-client privilege over all Calderwood & Harkness work product in its possession, including in connection with any transition of engagement materials to successor counsel. Care should be taken to ensure that privileged materials are transmitted to successor counsel under appropriate confidentiality protections and that the common interest or joint defense doctrine, as applicable, is invoked where materials are shared with third parties in the course of ongoing matters.
In furtherance of the foregoing, the Firm has implemented internal protocols to ensure the integrity and security of all privileged materials in the Firm's files, as set forth in the Document Retention & Privilege Protocol dated July 5, 2024, a copy of which has been provided to Dame Elspeth Greenvale and to AGMG's General Counsel, Nadine Khalil. We encourage the Board and the Company to retain a copy of this protocol for their records and to communicate any questions or concerns regarding the Firm's retention practices to the undersigned.
VI. Continuing Obligations of the Firm
Notwithstanding the termination of the engagement effective as of the date hereof, Calderwood & Harkness acknowledges and affirms the following continuing obligations, which shall survive the termination of the engagement:
Confidentiality. The Firm will maintain the strict confidentiality of all information received during the engagement, including all non-public, proprietary, or sensitive information concerning AGMG, its directors, officers, employees, business operations, financial condition, and strategic plans. This obligation of confidentiality is governed by the applicable rules of professional conduct — including, without limitation, Rule 1.6 of the New York Rules of Professional Conduct and Principle 6.3 of the Solicitors Regulation Authority Standards and Regulations — and by the specific confidentiality provisions set forth in Section 9 of the Engagement Letter. The Firm's obligation of confidentiality shall continue indefinitely and is not limited to the seven-year retention period described in Section V above.
Cooperation. The Firm will cooperate reasonably with the Board and any successor counsel in connection with the orderly transition of matters arising from or relating to the engagement. Such cooperation shall include, without limitation, responding to reasonable inquiries from successor counsel regarding the work product delivered during the engagement, providing clarification of the Firm's advice and recommendations as set forth in the transition materials, and making members of the engagement team available for telephonic or video conferences during a reasonable transition period. The Firm reserves the right to charge for cooperation services rendered at the request of the Board or successor counsel beyond a de minimis threshold, at the standard hourly rates of the relevant timekeepers, and subject to the prior written agreement of the Board.
Non-Representation of Adverse Parties. In accordance with the conflicts provisions set forth in Section 10 of the Engagement Letter and the applicable rules of professional conduct, the Firm will not undertake any representation that is adverse to AGMG in any matter that is substantially related to the subject matter of the engagement, without the prior written consent of the Board. This obligation applies to all attorneys at the Firm and covers all matters that are the same as, or substantially related to, the matters on which the Firm advised the Board during the engagement, including the contested CEO succession process, the Corvus Peak activist campaign, the DGCL § 220 demand, and the strategic alternatives review. The Firm has updated its internal conflicts database to reflect this continuing obligation.
Regulatory Compliance. The Firm will comply with all applicable data protection and records management requirements in connection with the retention and handling of engagement files and client data. Given the dual-listed nature of AGMG (NYSE: AGMG; LSE: AGMG.L) and the cross-border character of the engagement, the Firm acknowledges that its obligations extend to compliance with applicable requirements under both United States law (including, without limitation, applicable federal and state privacy and data security statutes and regulations) and United Kingdom law (including, without limitation, the UK General Data Protection Regulation and the Data Protection Act 2018). The Firm will promptly notify the Board of any actual or suspected data breach affecting engagement files or client data.
The foregoing continuing obligations are not intended to be exhaustive and are in addition to any other obligations that may be imposed on the Firm by applicable law or the rules of professional conduct.
VII. Successor Counsel Transition
The Firm understands that the reconstituted Board intends to engage new governance counsel to advise the Board on the matters previously handled by Calderwood & Harkness and on such other governance matters as may arise. We support the Board's decision to ensure continuity of legal representation and stand ready to cooperate fully with successor counsel to ensure a seamless and orderly transition.
To that end, Calderwood & Harkness is prepared to make the members of the engagement team available for a reasonable transition period following the date of this letter to address questions from successor counsel regarding pending matters and delivered work product. We anticipate that such transition assistance will principally involve telephonic or video conferences with successor counsel, and we will endeavor to be responsive and efficient in providing the information requested.
We respectfully recommend that successor counsel give prompt attention to the open and unresolved issues identified in the Status Memorandum dated July 1, 2024. In particular, we highlight the following matters as requiring near-term action:
(a) Corvus Peak DGCL § 220 Demand. The books-and-records demand served by Corvus Peak Capital Partners LP on March 22, 2024, remains unresolved. As of the date of termination, the parties had not reached agreement on the scope of production, and Corvus Peak's counsel at Palliser & Mott LLP indicated in its most recent correspondence (dated June 18, 2024) that it was prepared to seek judicial enforcement of the demand in the Delaware Court of Chancery if a consensual resolution is not reached within a reasonable period. Successor counsel should prioritize this matter and consider whether to resume negotiations or prepare for potential litigation.
(b) D&O Tail Coverage for Departing Directors. The analysis of D&O tail insurance coverage for Tobias Kessler, Hugh Pemberton, and Sofia Delgado-Ríos under the Helmsley Indemnity Corp. policy (Policy No. HIC-DOL-2024-009347) was substantially advanced but not finalized at the time of termination. Certain questions remain regarding the adequacy of policy limits and the availability of extended reporting period coverage. The departing directors' indemnification rights under the Company's certificate of incorporation and bylaws should also be confirmed. We recommend that successor counsel coordinate with the Company's insurance broker and with Helmsley Indemnity Corp. to finalize these arrangements without delay.
(c) Stonebridge Crane & Co. Tail Fee Exposure. The Stonebridge Crane & Co. engagement letter contains a tail fee provision that would entitle Stonebridge Crane & Co. to a transaction fee if a change-of-control transaction involving AGMG is consummated within the twelve-month tail period following termination of the Stonebridge Crane engagement. Based on the Firm's analysis, the estimated tail fee exposure is approximately $21.6 million, calculated on the basis of a fee rate of 0.25% applied to the Company's estimated enterprise value of approximately $8.65 billion. Successor counsel should evaluate the Board's options with respect to the Stonebridge Crane engagement, including whether to continue, modify, or terminate the engagement, and should carefully assess the implications of the tail fee provision in each scenario.
Any requests for transition cooperation should be directed to Nathaniel Bower at nbower@calderwoodharkness.com or +1 (212) 558-4112, or to Colette Whitman at cwhitman@calderwoodharkness.com or +1 (212) 558-4237. We are committed to making the transition as smooth and efficient as possible.
VIII. Acknowledgments and Closing
In closing, we wish to express our sincere appreciation for the Board's confidence in retaining Calderwood & Harkness as independent governance counsel during what has been a complex and challenging period for the Company. The issues confronting the Board during the engagement — including a contested CEO succession, an aggressive activist campaign, and the evaluation of transformative strategic alternatives — demanded the highest levels of diligence, judgment, and professionalism from all involved.
We are grateful for the cooperation and professionalism demonstrated by Dame Elspeth Greenvale, by Nadine Khalil in her capacity as General Counsel & Corporate Secretary, and by each member of the Board throughout the engagement. Their responsiveness, candor, and commitment to sound governance contributed immeasurably to the effectiveness of the Firm's work.
We wish the Board well as it navigates the significant matters that lie ahead. The Firm remains available should the Board require any further assistance consistent with the terms of this letter and the Firm's continuing obligations as described herein.
We appreciate your prompt attention to the final invoice enclosed herewith and to the transition matters addressed in this letter. Please do not hesitate to contact the undersigned with any questions.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Nathaniel Bower Partner Calderwood & Harkness LLP 787 Seventh Avenue New York, NY 10019 Telephone: +1 (212) 558-4112
Email: nbower@calderwoodharkness.com
cc: Nadine Khalil, General Counsel & Corporate Secretary, Aurelius Global Media Group PLC cc: Colette Whitman, Partner, Calderwood & Harkness LLP cc: Audrey Zhou, Associate, Calderwood & Harkness LLP cc: Brendan Walsh, Associate, Calderwood & Harkness LLP
Enclosure: Final Invoice dated July 8, 2024 (Matter No. 1017-00002)
| Timekeeper | Hours | Rate (per hour) | Total |
| Nathaniel Bower (Partner) | 247.5 | $1,750.00 | $433,125.00 |
| Colette Whitman (Partner) | 134.0 | $1,625.00 | $217,750.00 |
| Audrey Zhou (Associate) | 262.0 | $985.00 | $258,070.00 |
| Brendan Walsh (Associate) | 173.0 | $725.00 | $125,425.00 |
| Paralegal charges | — | — | $255.00 |
| Total Professional Fees | 816.5 | $1,034,625.00 |