CALDERWOOD & HARKNESS LLP 777 South Flower Street, Suite 4200 Los Angeles, California 90017 Telephone: (213) 555-7100 Facsimile: (213) 555-7101 www.calderwoodharkness.com
November 1, 2022
VIA EMAIL AND FEDEX
Mr. Gregory Tanaka Vice President, Legal & Compliance Aurelius Media Americas Inc. 8500 Sunset Boulevard, Suite 1400 West Hollywood, California 90069
Re: Engagement of Calderwood & Harkness LLP — Defense of Aurelius Media Americas Inc.; Fuentes v. Aurelius Media Americas Inc., LASC Case No. 22STCV38214; and Related Matters C&H Matter No.: 1017-00004
Dear Mr. Tanaka:
Thank you for selecting Calderwood & Harkness LLP (the "Firm," "C&H," "we," or "us") to represent Aurelius Media Americas Inc. ("AMA," the "Company," or "you") in connection with the matters described below. We are pleased to confirm the terms and conditions of our engagement in this letter (the "Engagement Letter"). This Engagement Letter, together with its attachments, sets forth the agreement between the Firm and AMA regarding the scope of our representation, the applicable fee arrangements, and the respective responsibilities of the parties. We ask that you review this letter carefully and, if it accurately reflects your understanding of our mutual agreement, sign and return a copy to us as indicated below.
1. Scope of Engagement
The Firm's representation of AMA under this Engagement Letter shall encompass the following matters (collectively, the "Matters"):
(a) Putative Class Action — *Fuentes*. Defense of the putative class action styled Marisol Fuentes v. Aurelius Media Americas Inc., Case No. 22STCV38214, filed on or about October 18, 2022, in the Superior Court of the State of California, County of Los Angeles, Central District, and any related or consolidated actions arising out of the same or substantially similar factual allegations. We understand that a related action filed by a plaintiff identified as Halloran is anticipated and may be consolidated with the Fuentes matter; our representation extends to the defense of any such related or consolidated actions. Additionally, we anticipate that additional named plaintiffs may be added to the Fuentes complaint by way of amendment or intervention, and our engagement scope includes the defense of AMA against claims brought by any such additional named plaintiffs in connection with the same operative facts.
(b) PAGA Representative Claims. Defense of any representative claims brought under the California Private Attorneys General Act, California Labor Code §§ 2698 et seq. ("PAGA"), to the extent such claims arise from the same operative facts as the Fuentes action described in Section 1(a) above. We note that a PAGA notice was served on the California Labor and Workforce Development Agency ("LWDA") on September 15, 2022, and we understand that PAGA claims may be asserted in the Fuentes action or in a separately filed proceeding. Our representation encompasses the defense of AMA against any such PAGA claims regardless of the forum in which they are brought.
(c) Individual Executive Employment Claims. Defense of any individual employment claims brought by former executives of AMA arising out of terminations of employment occurring on or about October 2022, including without limitation claims for wrongful termination, breach of contract, breach of the implied covenant of good faith and fair dealing, and any disputes relating to post-employment restrictive covenant obligations, including non-competition, non-solicitation, and confidentiality provisions contained in employment agreements or separation agreements. We understand that a potential action by a former executive identified as Gavin Aldrich is anticipated; our representation includes the defense of any claims brought by Mr. Aldrich and by any other similarly situated former AMA executives whose claims arise from the same or related set of terminations.
Exclusions. Our representation under this Engagement Letter does not extend to the defense of, or counsel in connection with, any regulatory investigations by federal, state, or local governmental agencies; any tax matters, including tax audits, assessments, or disputes; or any corporate transactions, including mergers, acquisitions, divestitures, or financing transactions. Should any such matters arise and should AMA wish to engage the Firm in connection therewith, the scope of our engagement would need to be expanded by a separate written agreement executed by both parties.
2. Engagement Team
The Firm has assembled the following team of attorneys to handle the Matters on AMA's behalf:
Renata Vasquez, Partner — Ms. Vasquez will serve as the Responsible Attorney for this engagement and will have overall supervisory responsibility for all aspects of the representation. Ms. Vasquez has extensive experience defending complex employment class actions and PAGA claims in California state and federal courts. Ms. Vasquez may be reached directly at (213) 555-7200 or by email at rvasquez@calderwoodharkness.com.
Bernard Crawford, Partner — Mr. Crawford will serve as the Billing Attorney for this engagement and will be responsible for billing, invoicing, and fee-related matters. Mr. Crawford has significant experience in employment litigation and restrictive covenant disputes. Mr. Crawford may be reached directly at (213) 555-7214 or by email at bcrawford@calderwoodharkness.com.
Devon Archer, Senior Associate — Mr. Archer will serve as the Lead Associate and will be responsible for the day-to-day management of litigation tasks, including drafting pleadings and motions, managing discovery, and coordinating with the Firm's engagement team. Mr. Archer may be reached directly at (213) 555-7238 or by email at darcher@calderwoodharkness.com.
Nadia Petrov, Associate — Ms. Petrov will serve as a Working Associate and will assist with legal research, discovery, deposition preparation, and other tasks as assigned by Ms. Vasquez and Mr. Crawford. Ms. Petrov may be reached directly at (213) 555-7251 or by email at npetrov@calderwoodharkness.com.
From time to time, additional attorneys, paralegals, litigation support staff, or other Firm personnel may be assigned to work on the Matters as the needs of the representation require. The Firm will advise AMA's designated contact in advance of any material staffing changes, including the addition or substitution of any partner or senior associate to the engagement team. The assignment of additional personnel will be guided by considerations of efficiency and the specialized expertise required by the particular task at hand.
3. Billing Rates and Fee Arrangements
Professional services rendered by the Firm in connection with this engagement will be billed on an hourly basis at the current standard hourly rates of the timekeepers assigned to the Matters. The current standard hourly rates for the members of the engagement team are as follows:
The Firm's standard hourly rates are subject to periodic adjustment, which typically takes effect on January 1 of each calendar year. The Firm will provide AMA with advance written notification of any rate changes prior to the effective date of such adjustments. Any adjusted rates will apply to services rendered on and after the effective date of the adjustment.
We acknowledge that we have received and reviewed AMA's outside counsel guidelines dated March 15, 2021 (the "OCGs"). We understand that the OCGs govern certain billing protocols applicable to outside counsel engaged by AMA, including, without limitation, requirements for pre-approval of individual expenses exceeding $5,000, staffing notifications, and the submission of monthly invoices in a specified format. The Firm confirms that it will comply with the requirements set forth in the OCGs, subject to the clarifications and qualifications noted in the attached OCG Compliance Confirmation, which is attached hereto as Document 5 and incorporated herein by reference. In the event of any conflict between the terms of this Engagement Letter and the OCGs, the terms of this Engagement Letter shall control unless otherwise agreed in writing by both parties.
4. Expenses
AMA shall be responsible for the reimbursement of all reasonable out-of-pocket expenses incurred by the Firm in connection with the Matters. Such expenses will be billed to AMA at the Firm's cost or, where applicable, at the Firm's standard reimbursement rates. Examples of reimbursable expenses include, but are not limited to, the following:
•  Court filing fees, motion fees, and other court costs;
•  Deposition transcript fees and videography charges;
•  Expert witness fees and consulting expenses;
•  Electronic discovery and litigation support vendor charges, including charges incurred through Marlowe Asset Management Litigation Technology Inc., which has been identified as the anticipated e-discovery vendor for the Matters;
•  Travel expenses, including airfare, ground transportation, lodging, and meals reasonably incurred in connection with the Matters;
•  Messenger, courier, and delivery charges;
•  Document reproduction, printing, and copying costs;
•  Computerized legal research charges (e.g., Westmark Data Systems, Calderon Systems); and
•  Postage and telecommunications charges directly attributable to the Matters.
Consistent with the requirements of the OCGs, any individual expense item anticipated to exceed $5,000 will be submitted to AMA's designated contact for pre-approval prior to the Firm's incurring such expense. The Firm will use commercially reasonable efforts to provide AMA with advance notice of significant anticipated expenditures so that AMA may evaluate and approve such costs in a timely manner.
5. Invoicing and Payment
The Firm will submit monthly invoices to AMA detailing all professional fees earned and expenses incurred during the preceding billing period. Each invoice will include a description of the services rendered, the identity of the timekeeper performing each task, the time expended, the applicable hourly rate, and an itemized listing of expenses. Invoices will be submitted in accordance with the format and electronic billing requirements specified in the OCGs.
Payment of all invoices is due within thirty (30) days of the date of the invoice. Any amounts remaining unpaid after such thirty-day period shall be considered past due and shall accrue interest at the rate of one percent (1.0%) per month, which is equivalent to twelve percent (12%) per annum, calculated on the outstanding balance from the date the payment was due until the date of receipt of payment in full. The Firm reserves the right to suspend work on the Matters in the event of a material delinquency in payment, subject to applicable rules of professional conduct and any obligations imposed by court order.
6. Insurance Coordination
We acknowledge that AMA maintains an employment practices liability ("EPL") insurance policy that may provide coverage for certain claims within the scope of this engagement. The relevant policy details, as provided to us, are as follows:
Carrier: Pemberton Mutual Assurance Co. Policy Number: PMA-EPL-2022-00837 Self-Insured Retention ("SIR"): $5,000,000 Aggregate Policy Limit: $15,000,000
The Firm will coordinate the tender of applicable claims to Pemberton Mutual Assurance Co. ("Pemberton") and will work cooperatively with AMA's insurance broker, Kestrel Risk Advisors Ltd. (contact: Samuel Okonkwo, Managing Director, One Broadgate, London EC2M 2QS, United Kingdom), as appropriate, to ensure timely and proper notice of claims, compliance with policy conditions, and preservation of AMA's coverage rights under the EPL policy. We note that, given the $5,000,000 self-insured retention, defense costs incurred early in the Matters are likely to fall within the retention and will be the direct financial responsibility of AMA. We will monitor the erosion of the SIR and advise AMA when defense costs and/or indemnity payments approach the threshold at which Pemberton's coverage obligations may be triggered.
We further acknowledge that AMA maintains directors' and officers' liability ("D&O") coverage, the relevant details of which are as follows:
Primary Carrier: Redcliffe Specialty Insurance Ltd. Policy Number: RSI-DO-2022-04419 Primary Tower Limit: $10,000,000
Excess Carrier: Ashford Re Ltd. Policy Number: ARL-EX-2022-01102 Excess Tower Limit: $25,000,000
The Firm will advise AMA separately regarding the applicability of the D&O coverage to the matters within the scope of this engagement, including an analysis of whether the claims at issue constitute "Securities Claims" or "Management Liability Claims" (or equivalent defined terms) under the applicable D&O policies. To the extent D&O coverage may be implicated, the Firm will assist with the preparation and submission of appropriate notices and will coordinate with AMA's broker and the relevant insurers as necessary.
7. Client Responsibilities
The success of our representation depends in significant part on the full and timely cooperation of AMA and its personnel. AMA agrees to cooperate fully with the Firm in connection with the Matters, including by undertaking the following obligations:
(a) Access to Documents and Personnel. AMA shall provide timely and complete access to all documents, records, data, and personnel that the Firm reasonably requests in connection with the Matters. This includes, without limitation, employment records, payroll data, timekeeping records, internal communications, human resources files, corporate policies and procedures, and any other materials relevant to the claims and defenses at issue.
(b) Litigation Holds. AMA shall implement and maintain appropriate litigation holds on all potentially relevant documents and electronically stored information ("ESI") in connection with the Matters. We emphasize the critical importance of preserving the integrity and completeness of relevant data sources. In particular, AMA must take immediate steps to preserve all data and records maintained within the NovaPay Solutions TimeTrack Pro timekeeping system, including but not limited to employee clock-in and clock-out records, meal and rest period entries, overtime calculations, schedule modifications, and system audit logs. This preservation obligation extends to all seven of AMA's California production facilities. The Firm will provide AMA with a detailed litigation hold memorandum and will work with AMA's information technology department to ensure that preservation protocols are properly implemented and maintained throughout the duration of the Matters.
(c) discovery Cooperation. AMA shall provide prompt and thorough responses to all discovery-related inquiries from the Firm, including requests for information needed to prepare responses to interrogatories, requests for production of documents, requests for admissions, and any other discovery propounded by opposing parties. Timely cooperation is essential to ensure compliance with court-imposed deadlines and to avoid potential sanctions.
(d) Witness Availability. AMA shall make current and former employees, officers, and other personnel available for witness preparation sessions, depositions, hearings, and trial testimony as reasonably requested by the Firm. AMA shall use reasonable efforts to facilitate the scheduling of such sessions at mutually convenient times and to minimize disruption to the Company's business operations.
8. Confidentiality and Privilege
All communications between AMA and the Firm in connection with this engagement, including written and oral communications, memoranda, analyses, and work product prepared by the Firm, are intended to be protected by the attorney-client privilege, the work product doctrine, and any other applicable protections under federal and state law. The protections afforded by these doctrines are vital to the effectiveness of our representation and to the preservation of AMA's legal rights.
AMA should take care to preserve the confidentiality of all communications with the Firm and all documents and materials generated by the Firm in connection with this engagement. Communications regarding the Matters should be directed to the members of the engagement team identified in Section 2 of this Engagement Letter and should be clearly marked as "Privileged and Confidential — Attorney-Client Communication" or with words of similar import.
AMA should not disclose privileged communications, attorney work product, or the substance of legal advice provided by the Firm to third parties — including employees who are not directly involved in the Matters, outside consultants, business partners, or media representatives — without first consulting with the Firm. Inadvertent or unauthorized disclosure of privileged materials to third parties may result in a waiver of the attorney-client privilege or work product protection, which could have significant adverse consequences for AMA's position in the Matters. If AMA becomes aware of any actual or potential disclosure of privileged materials, AMA should notify the Firm immediately so that appropriate steps may be taken to mitigate any resulting harm.
9. Termination
Either party may terminate this engagement at any time upon written notice to the other party. Any such termination shall be subject to the applicable California Rules of Professional Conduct and any orders of any court or tribunal before which the Firm has appeared on behalf of AMA. In the event that AMA elects to terminate the engagement, the Firm will take all reasonable steps to protect AMA's interests during the transition period, including by cooperating with successor counsel and facilitating the orderly transfer of files and work product.
In the event that the Firm elects to withdraw from the representation, the Firm will provide AMA with reasonable advance notice and will seek leave of court, if required, to withdraw as counsel of record. The Firm will not seek to withdraw at a time or in a manner that would materially prejudice AMA's interests in the Matters without first affording AMA a reasonable opportunity to retain successor counsel.
Upon termination of the engagement, whether by AMA or by the Firm, AMA shall remain responsible for the payment of all fees earned and expenses incurred by the Firm through the effective date of termination. Any outstanding invoices shall become due and payable in accordance with the terms set forth in Section 5 of this Engagement Letter.
10. Governing Law
This Engagement Letter and the rights and obligations of the parties hereunder shall be governed by and construed in accordance with the laws of the State of California, without regard to principles of conflicts of law. Any dispute arising out of or relating to this Engagement Letter or the engagement contemplated hereby shall be resolved in accordance with the laws and procedures of the State of California, and the parties hereby consent to the exclusive jurisdiction of the state and federal courts located in the County of Los Angeles, California, for the resolution of any such disputes.
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We believe that the foregoing accurately reflects the mutual understanding between the Firm and AMA with respect to the terms and conditions of this engagement. If you are in agreement, please sign and date this Engagement Letter in the space provided below and return a fully executed copy to the Firm at your earliest convenience. A duplicate original is enclosed for your records.
We are very much looking forward to working with you and your team on these matters. Please do not hesitate to contact Renata Vasquez or Bernard Crawford if you have any questions regarding this Engagement Letter or any aspect of the representation.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Renata Vasquez, Partner
ACKNOWLEDGED AND AGREED:
AURELIUS MEDIA AMERICAS INC.
By: ________
Name: Gregory Tanaka
Title: Vice President, Legal & Compliance
Date: ________
cc: Philippa Cartwright, General Counsel, Aurelius Global Media Group PLC, 34 Kingsway, London WC2B 6EX, United Kingdom Renata Vasquez (file) Bernard Crawford
Timekeeper | Position | Current Hourly Rate
Renata Vasquez | Partner | $1,125.00
Bernard Crawford | Partner | $1,075.00
Devon Archer | Senior Associate | $785.00
Nadia Petrov | Associate | $625.00
Paralegal Staff | Paralegal | $375.00