1017-00009 · Aurelius Global Media Group · Engagement

fee-estimate-memo.docx DOCUMENT Real Estate

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MEMORANDUM

From: Angela Fontaine, Billing Partner, Real Estate — Calderwood & Harkness LLP

To: Tariq Nassar, General Counsel — Aurelius Global Media Group PLC, 14 Cavendish Square, London W1G 0DW, United Kingdom

Date: April 7, 2023

Re: Fee Estimate — Headquarters Lease at 787 Seventh Avenue, New York, NY 10019

Matter No.: 1017-00009

PRIVILEGED & CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION

I. Introduction and Purpose

This memorandum is submitted in connection with the engagement letter executed on April 6, 2023, between Calderwood & Harkness LLP, with offices at 425 Park Avenue, 18th Floor, New York, NY 10022 ("Calderwood & Harkness" or the "Firm"), and Aurelius Global Media Group PLC ("Aurelius" or the "Client"). The purpose of this memorandum is to provide the Client with a detailed fee estimate for the negotiation, documentation, and closing of a long-term headquarters lease at the building commonly known as Greystone Tower, located at 787 Seventh Avenue, New York, NY 10019 (the "Building").

As set forth in the engagement letter, the tenant under the proposed lease will be Aurelius Media Holdings Inc., a Delaware corporation and wholly owned subsidiary of Aurelius Global Media Group PLC (the "Tenant"). The landlord under the proposed lease will be Greystone Metropolitan Realty LLC, a Delaware limited liability company (the "Landlord").

The transaction, as currently contemplated, involves a lease of approximately 185,000 rentable square feet ("RSF") of Class A commercial office space across Floors 34 through 38 of the Building, for a primary lease term of fifteen (15) years. Based on the deal summary provided by the Client's real estate team, the approximate aggregate deal value over the initial term is $90,000,000. The transaction is of considerable scale and complexity, encompassing not only the core lease itself but also a parent company guaranty, subordination and non-disturbance arrangements with the Building's existing mortgage lender, title and environmental diligence, and a comprehensive suite of closing deliverables.

Douglas Fairchild, a partner in the Firm's Real Estate Department, serves as the responsible partner on this engagement and will provide overall strategic direction and senior-level review of all principal transaction documents. I serve as the billing partner and will be responsible for ongoing fee management, budget tracking, and all billing-related communications with the Client. The day-to-day engagement team consists of Rafael Dominguez, a senior associate in the Real Estate Department, who will serve as the lead associate responsible for drafting, negotiation, and coordination of the lease and ancillary documents, and Cynthia Ho, a mid-level associate in the Real Estate Department, who will serve as the working associate and will support Mr. Dominguez across all phases of the engagement.

This fee estimate has been prepared based on our understanding of the transaction as described in the preliminary term sheet and letter of intent provided by the Client, as well as discussions with the Client's internal team and tenant's broker. As with any significant commercial lease negotiation, the actual fees incurred will depend on a number of variables, including the complexity and pace of negotiations, the responsiveness of opposing counsel and third parties, and the emergence of any currently unforeseen issues. The estimate set forth below represents our best good-faith assessment of the likely range of fees, taking into account our extensive experience with comparable transactions in the New York City Class A office market.

II. Summary Fee Estimate

Based on the scope of work described in detail in Section IV below, the Firm's total estimated legal fees for the representation of Aurelius in connection with the negotiation, documentation, and closing of the headquarters lease at the Building are:

Total Estimated Legal Fees: $475,000 – $575,000 Exclusive of Disbursements and Third-Party Costs

The range set forth above reflects the inherent variability associated with a transaction of this nature, including the anticipated complexity of the core lease negotiation, the expected number of negotiation rounds with Landlord's counsel, and the scope of ancillary documents that will require separate negotiation and documentation, including the Subordination, Non-Disturbance and Attornment Agreement ("SNDA") with the Building's existing first mortgagee, the parent guaranty of lease, title and environmental review, and the full suite of closing deliverables.

The following important qualifications apply to this estimate:

(a) This estimate does not include fees for any future exercise of expansion options, renewal option negotiations, or dispute resolution matters arising under or in connection with the lease following the closing of the initial lease transaction.

(b) This estimate is not a fee cap or maximum fee agreement. Actual fees will be billed on the basis of time expended by the engagement team at the applicable billing rates set forth in Section III below. The estimate represents the Firm's good-faith projection of the likely range of fees, but is not a guarantee that fees will fall within the stated range.

(c) Calderwood & Harkness will endeavor to manage the engagement efficiently and to stay within the estimated range to the extent consistent with the provision of high-quality legal services. If, at any point during the engagement, circumstances suggest that fees may exceed the high end of the estimated range, the Firm will promptly advise the Client and discuss the reasons for the potential variance and any available alternatives.

III. Billing Rates

The following billing rates will apply to the engagement:

The rates set forth above are Calderwood & Harkness's standard 2023 rates for timekeepers in the Firm's Real Estate Department. No rate increase is anticipated during the projected timeline of this matter, which is expected to run from April 2023 through August 2023. In the event that the matter extends beyond calendar year 2023, any rate adjustments effective January 1, 2024 would apply to time recorded on or after that date, in accordance with the terms of the engagement letter.

All time will be billed in increments of one-tenth (0.1) of an hour. Invoices will be rendered on a monthly basis, and payment is due within thirty (30) days of the invoice date. Detailed billing and invoicing procedures are set forth in Section VIII of this memorandum.

It is anticipated that the bulk of the time on this engagement will be recorded by the associate team—Mr. Dominguez and Ms. Ho—with partner involvement concentrated in the areas of strategic negotiation, client-facing communications, senior review of final document drafts, and resolution of critical deal points. This allocation is designed to deliver the benefit of experienced partner oversight while managing the overall cost of the engagement through the effective use of associate resources.

IV. Scope of Work and Fee Breakdown by Phase

The following sets forth a detailed description of the scope of work to be performed by the Firm in connection with the headquarters lease transaction, organized by phase. Each phase includes an estimated fee range, a summary of the work to be performed, and a discussion of the key issues and assumptions applicable to that phase.

A. Lease Negotiation and Drafting — Estimated $225,000 – $275,000

This phase represents the core of the engagement and is expected to account for the largest portion of the overall fee estimate. It encompasses the full cycle of lease negotiation and documentation, from initial receipt and review of the Landlord's form lease through execution of the final agreed-upon document.

Review of Landlord's Initial Draft Lease. It is anticipated that Landlord's counsel, Pemberton Locke & Strauss LLP (lead partner: Diane Ashford), will deliver an initial draft Agreement of Lease based on the Landlord's institutional form. Calderwood & Harkness will conduct a comprehensive review and analysis of the initial draft, identifying all provisions requiring modification, supplementation, or clarification to protect the Client's interests. The initial review will include a detailed summary memorandum or annotated issues list for the Client's review and discussion prior to the preparation of the Firm's first markup.

Preparation of Initial Comment Letter and Redline Markup. Following the Client's review and approval of the Firm's issues summary, the engagement team will prepare a detailed first markup of the Landlord's draft lease, addressing all substantive provisions. Where appropriate, the Firm will also prepare a cover letter or comment letter to accompany the redline, highlighting the Client's principal concerns and proposed deal terms for the benefit of Landlord's counsel.

Key Negotiation Issues Anticipated. Based on the preliminary term sheet and our discussions with the Client's real estate team, the following issues are expected to be among the most significant and time-intensive elements of the lease negotiation:

Assignment and Subletting Provisions. The negotiation of the assignment and subletting article is expected to be of critical importance to Aurelius. In particular, the Client requires a change of control assignment right permitting assignment of the lease to a successor entity without the Landlord's consent upon a change of control of either Aurelius Media Holdings Inc. (the Tenant) or Aurelius Global Media Group PLC (the ultimate parent), subject to negotiated net worth requirements and guaranty replacement provisions. Given the Client's publicly traded parent company structure and the potential for future mergers, acquisitions, or corporate reorganizations, this provision will require careful drafting to ensure the broadest possible flexibility for the Client while addressing the Landlord's customary credit and operational concerns. The negotiation of this provision is expected to involve multiple rounds of discussion, including consideration of partial assignment and subletting rights, recapture provisions, and profit-sharing mechanics.

Expansion Option for Floors 39 and 40. The term sheet contemplates an expansion option covering Floors 39 and 40 of the Building (approximately 74,000 RSF). Key terms to be negotiated include the exercise window (both the initial notice date and the outside exercise date), the determination of fair market rent (including any floor or ceiling), the co-terminous term requirement, and the conditions to exercise (including financial condition and default cure status). The expansion option terms will be documented in a separate exhibit (Exhibit E) to the lease and will require coordination with the fair market rent determination procedure set forth in Exhibit G.

Right of First Offer on Floors 30–33. The Client has negotiated a right of first offer ("ROFO") covering Floors 30 through 33 of the Building. A significant aspect of this negotiation will be the subordination of the Client's ROFO to the existing rights of Kestrel Insurance Holdings Inc., which currently occupies a portion of those floors and holds its own preferential leasing rights. The Firm will need to carefully review the terms of the Kestrel rights (to the extent disclosed by the Landlord) and negotiate appropriate protections to ensure that the Client's ROFO becomes operative upon the lapse or waiver of any superior rights. The ROFO terms will be documented in Exhibit F to the lease.

Parent Guaranty Terms. The Landlord has required that Aurelius Global Media Group PLC provide a guaranty of the Tenant's obligations under the lease. The Client has negotiated a cap on the guaranty in the amount of $18,000,000, together with release mechanics upon a change of control of the Tenant or the guarantor. The negotiation of the guaranty is addressed separately in Phase B below, but the interplay between the guaranty and the lease provisions regarding assignment, subletting, and change of control will require careful coordination during the lease negotiation phase.

Security Deposit Structure. The lease contemplates a security deposit in the form of an irrevocable standby letter of credit, with a burn-down schedule permitting periodic reductions in the face amount of the letter of credit based on the passage of time and the Tenant's compliance with the lease. The negotiation of the letter of credit terms will include the form of the letter of credit (to be attached as Exhibit D), the identity of the issuing bank, the burn-down trigger dates and amounts, the Landlord's draw rights, and the replacement and transfer mechanics.

Tenant Improvement Allowance Provisions. The Landlord has agreed to provide a tenant improvement allowance of $85.00 per RSF, totaling $15,725,000 in the aggregate. In addition, the Client has the option to elect an excess tenant improvement allowance of up to $15.00 per RSF, totaling $2,775,000, which would be amortized over the initial lease term at an interest rate of 7.5% per annum and repaid as additional rent. The Work Letter Agreement (Exhibit C) will require detailed negotiation regarding the scope of base building work, the Tenant's construction process (including approval rights, construction management, and lien waiver requirements), the disbursement mechanics for the tenant improvement allowance, and the amortization and repayment terms for any excess TI election.

Operating Expense and Real Estate Tax Escalation Provisions. The lease will include a base year (Calendar Year 2023) escalation structure for both operating expenses and real estate taxes. The Client's proportionate share is expected to be 12.76%, based on 185,000 RSF divided by the total building area of approximately 1,450,000 RSF. Key negotiation points will include the definition of operating expenses (including customary exclusions and "gross-up" provisions for years in which the Building is not fully occupied), the treatment of capital expenditures, the controllable expense cap (both the annual percentage increase and the base to which it applies), audit rights, and the interaction between the base year and any rent abatement or free rent periods that may affect the Landlord's reported expenses during the base year.

Renewal Options. The lease is expected to include two (2) consecutive five-year renewal options at fair market rent. The negotiation will address the exercise mechanics, the determination of fair market rent (including the process set forth in Exhibit G), the conditions to exercise, and the treatment of tenant improvements and base building condition upon renewal.

Signage Rights. The Client has negotiated signage rights in three locations: the Building lobby, the elevator bank serving the Client's floors, and an exterior building-top sign. Each category of signage will require separate negotiation regarding design approval, installation and removal obligations, compliance with applicable law (including New York City signage regulations and landmark designations, if any), and exclusivity.

Use Clause. The permitted use clause will be negotiated to ensure that the Client's full range of headquarters activities are covered, including general office use, studio and production use (consistent with the Client's media and entertainment operations), and ancillary uses consistent with a global media, entertainment, and e-commerce headquarters, such as cafeteria and food service, fitness facilities, event and conference space, and similar amenities.

Number of Negotiation Rounds. The Firm's fee estimate for this phase is based on the assumption that there will be approximately three to four (3–4) full rounds of redlines and markups exchanged between Calderwood & Harkness and Pemberton Locke & Strauss LLP before the parties reach agreement on the final lease form. Each round will involve preparation and review of a comprehensive lease redline, together with review of the opposing party's responsive markup. If additional rounds are required, fees for this phase may trend toward the upper end of the estimated range or, in the case of protracted negotiations, exceed the estimate.

Conference Calls and Negotiation Sessions. Throughout the lease negotiation process, the Firm anticipates participating in multiple conference calls and in-person or virtual negotiation sessions with Landlord's counsel (Diane Ashford of Pemberton Locke & Strauss LLP), the Client's internal team (including Vivienne Caldwell, SVP Global Real Estate & Facilities, and Tariq Nassar, General Counsel), and the Tenant's broker, Blackmoor Advisory Group LLC (Dennis Rourke). These sessions are an essential part of the negotiation process and are included in the fee estimate for this phase.

Preparation and Negotiation of Lease Exhibits. In addition to the body of the lease, the Firm will prepare or negotiate the following exhibits, each of which involves its own substantive issues and drafting requirements:

• Exhibit A — Floor Plans (certification page confirming the demised premises and measurement methodology);

• Exhibit B — Rules and Regulations (review and negotiation of the Building's standard rules and regulations, with modifications as appropriate for the Client's operations);

• Exhibit C — Work Letter Agreement (detailed construction and tenant improvement provisions, as discussed above);

• Exhibit D — Form of Letter of Credit (form of irrevocable standby letter of credit acceptable to both parties and the issuing bank);

• Exhibit E — Expansion Option Terms (terms and conditions governing the Client's option to expand into Floors 39 and 40);

• Exhibit F — Right of First Offer Terms (terms and conditions governing the Client's ROFO on Floors 30–33, subject to the existing rights of Kestrel Insurance Holdings Inc.); and

• Exhibit G — Fair Market Rent Determination Procedure (the procedure for determining fair market rent for purposes of the expansion option and renewal options, including any appraisal or arbitration mechanics).

B. Guaranty of Lease — Estimated $25,000 – $35,000

This phase encompasses the drafting and negotiation of the Guaranty of Lease to be executed by Aurelius Global Media Group PLC, as guarantor, in connection with the headquarters lease. As noted above, the Landlord has required a parent guaranty of all obligations of the Tenant under the lease, subject to a negotiated cap of $18,000,000.

The principal areas of negotiation for the Guaranty are expected to include the scope of the guaranteed obligations, the enforceability and waiver provisions, the cap amount and its application (including whether the cap applies to the aggregate of all claims or to each individual claim), and—critically—the change of control release mechanics and replacement guaranty provisions. Given that the guarantor is an English public limited company, the Firm will also review and advise on cross-border enforceability considerations relating to an English PLC guarantying obligations under a New York-governed lease, including choice of law, service of process, and recognition of judgments.

The Guaranty will be negotiated in parallel with the core lease negotiations, as the guaranty provisions are closely interrelated with the assignment, subletting, and change of control provisions of the lease itself. Coordination between the two workstreams is essential and is reflected in the fee estimates for both this phase and Phase A.

C. SNDA Negotiation — Estimated $40,000 – $55,000

This phase covers the negotiation of the Subordination, Non-Disturbance and Attornment Agreement ("SNDA") with Atlas Continental Bank, N.A., which holds the existing first mortgage on the Building. Based on information provided by the Landlord, the outstanding balance of the mortgage is approximately $620,000,000, and the mortgage was recorded on January 15, 2019. Atlas Continental Bank's outside counsel for the SNDA negotiation is Halsted & Brinkley LLP, with Thomas Brinkley serving as the lead attorney.

The key substantive issues in the SNDA negotiation are expected to include the scope and specificity of the non-disturbance protections afforded to the Tenant in the event of a foreclosure, deed-in-lieu of foreclosure, or other exercise of remedies by the lender; the Tenant's right to cure defaults and receive notices; the treatment of insurance and condemnation proceeds; the lender's obligation to honor the Landlord's commitments under the lease (including the tenant improvement allowance, security deposit, and letter of credit); and the Tenant's right to offset or deduct from rent in certain circumstances.

The SNDA is a condition precedent to the Commencement Date of the lease. Accordingly, timely completion of the SNDA negotiation is critical to maintaining the overall transaction timeline.

The Firm's fee estimate for this phase is based on the assumption that there will be approximately two to three (2–3) rounds of comments exchanged among Calderwood & Harkness, Pemberton Locke & Strauss LLP (on behalf of the Landlord), and Halsted & Brinkley LLP (on behalf of Atlas Continental Bank). We note that this phase may trend toward the higher end of the estimated range—or in some cases exceed it—given that lender negotiations frequently involve institutional form resistance, multi-party coordination challenges, and slower response times due to the lender's internal approval processes.

D. Title and Survey Review — Estimated $30,000 – $40,000

Calderwood & Harkness will conduct a comprehensive review of the leasehold title commitment to be issued by Commonwealth Fidelity Title Insurance Co. for the Tenant's leasehold interest at Block 1024, Lot 18, Borough of Manhattan, New York County, New York. The title review will include the following:

(a) Identification and analysis of all permitted exceptions, including any mortgages, liens, easements, restrictions, and encumbrances affecting the Building and the demised premises;

(b) Determination of any required endorsements for the leasehold title insurance policy, including endorsements for contiguity, access, zoning, survey, and such other endorsements as may be appropriate for a leasehold interest of this nature and value;

(c) Preparation of a title objection letter, if warranted, identifying any exceptions that are unacceptable or require curative action by the Landlord; and

(d) Review and analysis of the ALTA/NSPS land title survey of the Building and surrounding property.

In addition, the Firm will conduct a zoning analysis to confirm that the Tenant's intended use—as a global media, entertainment, and e-commerce headquarters, including general office, studio and production, and ancillary uses—is a permitted use under the New York City Zoning Resolution for the applicable zoning district.

The Firm will coordinate with Commonwealth Fidelity Title Insurance Co. regarding the requirements for issuance of a leasehold title insurance policy, including any affidavits, certifications, or indemnities required from the Tenant or the Landlord.

E. Environmental and Physical Due Diligence Review — Estimated $15,000 – $20,000

The Firm will review and prepare a summary of the Phase I Environmental Site Assessment ("ESA") to be conducted by Greenfield Environmental Sciences LLC (Dr. Nadine Bertram, P.E.) in accordance with ASTM Standard E1527-21. The summary will highlight any Recognized Environmental Conditions ("RECs"), Historical Recognized Environmental Conditions ("HRECs"), or Controlled Recognized Environmental Conditions ("CRECs") identified in the Phase I ESA, together with any business environmental risks or de minimis conditions noted by the consultant.

In addition, the Firm will analyze the Landlord's environmental representations and indemnification provisions in the lease, with particular attention to pre-existing environmental conditions and the Landlord's obligations with respect to asbestos-containing materials and any abatement requirements in connection with the Tenant's construction of tenant improvements.

No Phase II Environmental Site Assessment is currently anticipated based on the preliminary due diligence information available. However, if the Phase I ESA identifies RECs that warrant further investigation, or if the Tenant otherwise elects to proceed with a Phase II assessment, the Firm's fees for review of the Phase II ESA and related analysis would be in addition to the estimate set forth above, and the Firm would provide a supplemental estimate at that time.

F. Landlord Financial Diligence — Estimated $10,000 – $15,000

Calderwood & Harkness will review the building-level financial statements and operating expense history provided by Greystone Metropolitan Realty LLC, to the extent made available by the Landlord or its counsel. This review is important for two principal reasons: first, to assess the Landlord's financial condition and the financial stability of the Building's operations; and second, to evaluate the historical and projected operating expense and real estate tax escalation trends that will directly affect the Tenant's cost of occupancy over the lease term.

The Firm's review will include an analysis of historical controllable and uncontrollable operating expenses, real estate tax escalation trends, and the implications of the base year (Calendar Year 2023) for the Tenant's proportionate share of escalation charges. As noted above, the Tenant's proportionate share is expected to be 12.76%, calculated as 185,000 RSF divided by 1,450,000 RSF (the total rentable area of the Building). The Firm will advise the Client on any anomalies, concerns, or negotiation points arising from the financial review, including any impact on the base year structure or the controllable expense cap.

G. Corporate Authorization Documents — Estimated $20,000 – $30,000

This phase covers the preparation and coordination of the corporate authorization documents required in connection with the execution and delivery of the lease and ancillary documents. Specifically, the Firm will:

(a) Prepare board resolutions of Aurelius Media Holdings Inc. authorizing the execution and delivery of the Agreement of Lease and all ancillary documents, including the Guaranty, the SNDA, and all closing deliverables;

(b) Coordinate with the Client's legal department regarding Aurelius Global Media Group PLC board approval of the Guaranty of Lease and the overall US lease commitment, which is expected to be considered at the PLC board meeting currently scheduled for May 15, 2023;

(d) Prepare the Tenant officer's certificate to be delivered at closing; and

(e) Coordinate requests for good standing certificates from the Delaware Secretary of State for Aurelius Media Holdings Inc. (Delaware File No. 7318294) and from Companies House for Aurelius Global Media Group PLC (Company No. 04291837).

H. Closing Deliverables and Administration — Estimated $40,000 – $50,000

The closing of a commercial lease transaction of this scale involves the coordination and preparation of a substantial number of deliverables, each of which must be reviewed, finalized, and properly executed and delivered. Calderwood & Harkness will handle the following closing-related tasks:

Master Closing Checklist. The Firm will prepare and maintain a comprehensive master closing checklist tracking all deliverables, responsible parties, target dates, and status updates. The checklist will be circulated to all parties at regular intervals and updated as deliverables are completed or deadlines are adjusted.

Letter of Credit Issuance. The Firm will coordinate the issuance of the irrevocable standby letter of credit by Caledonian National Bank PLC (London, New York branch) in the initial face amount of $5,180,000, in accordance with the form of letter of credit attached to the lease as Exhibit D. The Firm will prepare the letter of credit transmittal letter and coordinate delivery of the original letter of credit to the Landlord or its designated agent.

Insurance Certificates. The Firm will coordinate the transmittal of insurance certificates evidencing the Tenant's compliance with the lease's insurance requirements, including commercial general liability and property coverage from Northbridge Mutual Insurance Company and umbrella coverage from Sovereign Assurance Group PLC. All carriers must meet the minimum A.M. Best rating of A-VIII as required under the lease. Insurance placement is being coordinated through Caldecott Risk Advisors Ltd., the Client's insurance broker. Calderwood & Harkness will review the certificates for compliance with the lease requirements and coordinate any necessary revisions with the broker.

Commencement Date Confirmation. The Firm will prepare the Commencement Date confirmation letter memorializing the Commencement Date, the Rent Commencement Date, and the expiration date of the initial lease term.

Possession Delivery and Punchlist. The Firm will prepare the possession delivery and punchlist letter in connection with the Landlord's delivery of the demised premises.

File Memorandum and Post-Closing Summary. Upon completion of the closing, the Firm will prepare an internal closing completion and file memorandum for Calderwood & Harkness's records, as well as a comprehensive post-closing summary letter to the Client. The post-closing summary will include an index to the closing binder, a summary of all key dates and deadlines under the lease (including option exercise dates, renewal notice deadlines, and letter of credit renewal dates), a description of ongoing obligations, and a calendar of critical dates for the Client's reference.

I. Client Communications and Project Management — Estimated $30,000 – $40,000

Throughout the engagement, the Firm will maintain regular and proactive communications with the Client's team, including Tariq Nassar (General Counsel), Vivienne Caldwell (SVP Global Real Estate & Facilities), and Eleanora Voss (Chief Financial Officer), as needed. The Firm will also coordinate closely with Blackmoor Advisory Group LLC (Dennis Rourke), the Tenant's broker, regarding deal-related matters, scheduling, and commercial negotiation points.

This phase also encompasses the Firm's internal team management, work allocation, and quality review processes, as well as the preparation and delivery of periodic status update letters and calls to the Client throughout the negotiation period. It is the Firm's practice to provide written status updates at regular intervals, typically bi-weekly or as circumstances warrant, summarizing the current status of negotiations, outstanding items, and anticipated next steps.

J. Contingency / Unanticipated Issues — Estimated $40,000 – $15,000

This contingency allocation provides a buffer for unanticipated negotiation issues, additional rounds of markup beyond those assumed in the estimate, or emerging issues not currently foreseen. In any complex commercial lease transaction, it is prudent to maintain a contingency reserve to account for the unpredictable nature of multi-party negotiations and the possibility of issues arising during the due diligence process that require additional legal analysis or documentation.

If material new issues arise during the course of the engagement—for example, the discovery of significant title defects requiring curative action, the identification of environmental conditions requiring remediation, the need for complex zoning variance proceedings, or the emergence of disputes with third parties holding competing rights in the Building—Calderwood & Harkness will promptly advise the Client and provide a revised fee estimate reflecting the additional scope of work required.

V. Fee Estimate Summary Table

The following table summarizes the estimated fee range for each phase of the engagement:

Note: All amounts are exclusive of disbursements and third-party costs, which are estimated separately in Section VII below.

VI. Key Assumptions Underlying the Estimate

The fee estimates set forth in this memorandum are based on the following key assumptions. If any of these assumptions prove to be inaccurate or if the circumstances of the transaction change materially, the Firm will promptly advise the Client, and actual fees may differ from the estimates provided herein.

1. Lease negotiations will involve approximately three to four (3–4) complete rounds of markups and redlines exchanged between Calderwood & Harkness and Pemberton Locke & Strauss LLP before the parties reach agreement on the final form of the Agreement of Lease and all exhibits thereto.

2. SNDA negotiations will involve approximately two to three (2–3) rounds of comments exchanged among Calderwood & Harkness, Pemberton Locke & Strauss LLP, and Halsted & Brinkley LLP (counsel to Atlas Continental Bank, N.A.).

3. The Phase I Environmental Site Assessment to be prepared by Greenfield Environmental Sciences LLC will not reveal Recognized Environmental Conditions ("RECs") requiring additional investigation, remediation, or other material follow-up work.

4. The title commitment to be issued by Commonwealth Fidelity Title Insurance Co. will not reveal material title defects requiring litigation, complex curative action, or protracted negotiations with third parties holding encumbrances on the property.

5. No condemnation proceedings, pending or threatened litigation, or special regulatory approvals will be required in connection with the transaction, beyond the standard landlord approvals customarily required for tenant signage and construction.

6. The lease will be governed by the laws of the State of New York, and any disputes arising under or in connection with the lease will be resolved in New York State Supreme Court, County of New York.

7. The estimated timeline for the engagement runs from the matter opening date (April 6, 2023) through the anticipated closing and occupancy date, with a target closing in August 2023.

8. The estimate does not cover the future exercise of expansion options or renewal options, nor does it cover any post-closing disputes, litigation, or advisory work arising after the closing of the initial lease transaction.

VII. Disbursements and Third-Party Costs

The fee estimate set forth in this memorandum is exclusive of out-of-pocket disbursements incurred by the Firm in connection with the engagement. Disbursements will be billed to the Client at cost and may include, without limitation, the following:

• Title search and examination fees;

• Recording fees and filing charges;

• Overnight courier and messenger charges;

• Travel expenses, if any (e.g., in connection with in-person meetings, property inspections, or closing);

• Photocopying and document production charges;

• Online legal research database charges (Westmark Data Systems, Sundial Solutions, and similar services); and

• Other miscellaneous administrative expenses directly attributable to the engagement.

Based on our experience with comparable transactions, the Firm estimates that total disbursements will be in the range of $8,000 to $15,000, which amount is separate from and in addition to the legal fees estimated above.

Third-party professional fees—including fees payable to the environmental consultant (Greenfield Environmental Sciences LLC), the project architect, the construction manager, the title insurer (Commonwealth Fidelity Title Insurance Co.), the insurance broker (Caldecott Risk Advisors Ltd.), and any other consultants or professionals retained by the Client—are engaged directly by Aurelius and are not included in Calderwood & Harkness's fee estimate. The Firm will, of course, coordinate with such third-party professionals as necessary in connection with the transaction, and the time spent on such coordination is reflected in the applicable phase estimates set forth above.

VIII. Billing and Invoicing Procedures

Monthly invoices will be submitted to Tariq Nassar at Aurelius Global Media Group PLC, 14 Cavendish Square, London W1G 0DW, United Kingdom, or to such other address or attention as the Client may designate from time to time in writing. Invoices will be transmitted via email, with a hard copy to follow by international courier upon request.

Each invoice will itemize, for each timekeeper who recorded time during the billing period, the date and description of each task performed and the hours and fees attributable thereto. Disbursements will be itemized separately on each invoice.

Payment is due within thirty (30) days of the invoice date, in accordance with the terms of the engagement letter. Payments may be made by wire transfer to Calderwood & Harkness's designated operating account, the details of which are set forth in the engagement letter.

Angela Fontaine will serve as the primary contact for all billing inquiries, fee discussions, and any questions regarding invoicing or payment. Ms. Fontaine can be reached at the contact information set forth below.

IX. Conclusion and Contact Information

Calderwood & Harkness is prepared to commence work immediately upon confirmation of the engagement and receipt of the Landlord's initial draft lease. We are enthusiastic about the opportunity to represent Aurelius in this significant transaction and are committed to providing the highest quality legal services in connection with the negotiation, documentation, and closing of the headquarters lease at Greystone Tower.

Should you have any questions regarding this fee estimate, the scope of work described herein, or any other aspect of the engagement, please do not hesitate to contact me directly. Questions regarding the substantive legal strategy for the transaction may also be directed to Douglas Fairchild, who serves as the responsible partner on the engagement.

We look forward to working with you and the Aurelius team on this important matter.

Respectfully submitted,

CALDERWOOD & HARKNESS LLP

By: ________

Angela Fontaine Partner, Real Estate Calderwood & Harkness LLP 425 Park Avenue, 18th Floor New York, NY 10022 Telephone: (212) 555-4800

Email: a.fontaine@calderwoodharkness.com

cc: Douglas Fairchild, Partner, Real Estate, Calderwood & Harkness LLP

cc: Vivienne Caldwell, SVP Global Real Estate & Facilities, Aurelius Global Media Group PLC

Timekeeper	Role	Hourly Rate
Douglas Fairchild	Responsible Partner	$1,450
Angela Fontaine	Billing Partner	$1,450
Rafael Dominguez	Lead Associate	$895
Cynthia Ho	Working Associate	$895
Phase	Low Estimate	High Estimate
A. Lease Negotiation & Drafting	$225,000	$275,000
B. Guaranty of Lease	$25,000	$35,000
C. SNDA Negotiation	$40,000	$55,000
D. Title & Survey Review	$30,000	$40,000
E. Environmental Due Diligence	$15,000	$20,000
F. Landlord Financial Diligence	$10,000	$15,000
G. Corporate Authorization	$20,000	$30,000
H. Closing Deliverables	$40,000	$50,000
I. Client Communications & PM	$30,000	$40,000
J. Contingency	$40,000	$15,000
Total	$475,000	$575,000

MEMORANDUM
From: Angela Fontaine, Billing Partner, Real Estate — Calderwood & Harkness LLP
To: Tariq Nassar, General Counsel — Aurelius Global Media Group PLC, 14 Cavendish Square, London W1G 0DW, United Kingdom
Date: April 7, 2023
Re: Fee Estimate — Headquarters Lease at 787 Seventh Avenue, New York, NY 10019
Matter No.: 1017-00009
PRIVILEGED & CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION
I. Introduction and Purpose
This memorandum is submitted in connection with the engagement letter executed on April 6, 2023, between Calderwood & Harkness LLP, with offices at 425 Park Avenue, 18th Floor, New York, NY 10022 ("Calderwood & Harkness" or the "Firm"), and Aurelius Global Media Group PLC ("Aurelius" or the "Client"). The purpose of this memorandum is to provide the Client with a detailed fee estimate for the negotiation, documentation, and closing of a long-term headquarters lease at the building commonly known as Greystone Tower, located at 787 Seventh Avenue, New York, NY 10019 (the "Building").
As set forth in the engagement letter, the tenant under the proposed lease will be Aurelius Media Holdings Inc., a Delaware corporation and wholly owned subsidiary of Aurelius Global Media Group PLC (the "Tenant"). The landlord under the proposed lease will be Greystone Metropolitan Realty LLC, a Delaware limited liability company (the "Landlord").
The transaction, as currently contemplated, involves a lease of approximately 185,000 rentable square feet ("RSF") of Class A commercial office space across Floors 34 through 38 of the Building, for a primary lease term of fifteen (15) years. Based on the deal summary provided by the Client's real estate team, the approximate aggregate deal value over the initial term is $90,000,000. The transaction is of considerable scale and complexity, encompassing not only the core lease itself but also a parent company guaranty, subordination and non-disturbance arrangements with the Building's existing mortgage lender, title and environmental diligence, and a comprehensive suite of closing deliverables.
Douglas Fairchild, a partner in the Firm's Real Estate Department, serves as the responsible partner on this engagement and will provide overall strategic direction and senior-level review of all principal transaction documents. I serve as the billing partner and will be responsible for ongoing fee management, budget tracking, and all billing-related communications with the Client. The day-to-day engagement team consists of Rafael Dominguez, a senior associate in the Real Estate Department, who will serve as the lead associate responsible for drafting, negotiation, and coordination of the lease and ancillary documents, and Cynthia Ho, a mid-level associate in the Real Estate Department, who will serve as the working associate and will support Mr. Dominguez across all phases of the engagement.
This fee estimate has been prepared based on our understanding of the transaction as described in the preliminary term sheet and letter of intent provided by the Client, as well as discussions with the Client's internal team and tenant's broker. As with any significant commercial lease negotiation, the actual fees incurred will depend on a number of variables, including the complexity and pace of negotiations, the responsiveness of opposing counsel and third parties, and the emergence of any currently unforeseen issues. The estimate set forth below represents our best good-faith assessment of the likely range of fees, taking into account our extensive experience with comparable transactions in the New York City Class A office market.
II. Summary Fee Estimate
Based on the scope of work described in detail in Section IV below, the Firm's total estimated legal fees for the representation of Aurelius in connection with the negotiation, documentation, and closing of the headquarters lease at the Building are:
Total Estimated Legal Fees: $475,000 – $575,000 Exclusive of Disbursements and Third-Party Costs
The range set forth above reflects the inherent variability associated with a transaction of this nature, including the anticipated complexity of the core lease negotiation, the expected number of negotiation rounds with Landlord's counsel, and the scope of ancillary documents that will require separate negotiation and documentation, including the Subordination, Non-Disturbance and Attornment Agreement ("SNDA") with the Building's existing first mortgagee, the parent guaranty of lease, title and environmental review, and the full suite of closing deliverables.
The following important qualifications apply to this estimate:
(a) This estimate does not include fees for any future exercise of expansion options, renewal option negotiations, or dispute resolution matters arising under or in connection with the lease following the closing of the initial lease transaction.
(b) This estimate is not a fee cap or maximum fee agreement. Actual fees will be billed on the basis of time expended by the engagement team at the applicable billing rates set forth in Section III below. The estimate represents the Firm's good-faith projection of the likely range of fees, but is not a guarantee that fees will fall within the stated range.
(c) Calderwood & Harkness will endeavor to manage the engagement efficiently and to stay within the estimated range to the extent consistent with the provision of high-quality legal services. If, at any point during the engagement, circumstances suggest that fees may exceed the high end of the estimated range, the Firm will promptly advise the Client and discuss the reasons for the potential variance and any available alternatives.
III. Billing Rates
The following billing rates will apply to the engagement:
The rates set forth above are Calderwood & Harkness's standard 2023 rates for timekeepers in the Firm's Real Estate Department. No rate increase is anticipated during the projected timeline of this matter, which is expected to run from April 2023 through August 2023. In the event that the matter extends beyond calendar year 2023, any rate adjustments effective January 1, 2024 would apply to time recorded on or after that date, in accordance with the terms of the engagement letter.
All time will be billed in increments of one-tenth (0.1) of an hour. Invoices will be rendered on a monthly basis, and payment is due within thirty (30) days of the invoice date. Detailed billing and invoicing procedures are set forth in Section VIII of this memorandum.
It is anticipated that the bulk of the time on this engagement will be recorded by the associate team—Mr. Dominguez and Ms. Ho—with partner involvement concentrated in the areas of strategic negotiation, client-facing communications, senior review of final document drafts, and resolution of critical deal points. This allocation is designed to deliver the benefit of experienced partner oversight while managing the overall cost of the engagement through the effective use of associate resources.
IV. Scope of Work and Fee Breakdown by Phase
The following sets forth a detailed description of the scope of work to be performed by the Firm in connection with the headquarters lease transaction, organized by phase. Each phase includes an estimated fee range, a summary of the work to be performed, and a discussion of the key issues and assumptions applicable to that phase.
A. Lease Negotiation and Drafting — Estimated $225,000 – $275,000
This phase represents the core of the engagement and is expected to account for the largest portion of the overall fee estimate. It encompasses the full cycle of lease negotiation and documentation, from initial receipt and review of the Landlord's form lease through execution of the final agreed-upon document.
Review of Landlord's Initial Draft Lease. It is anticipated that Landlord's counsel, Pemberton Locke & Strauss LLP (lead partner: Diane Ashford), will deliver an initial draft Agreement of Lease based on the Landlord's institutional form. Calderwood & Harkness will conduct a comprehensive review and analysis of the initial draft, identifying all provisions requiring modification, supplementation, or clarification to protect the Client's interests. The initial review will include a detailed summary memorandum or annotated issues list for the Client's review and discussion prior to the preparation of the Firm's first markup.
Preparation of Initial Comment Letter and Redline Markup. Following the Client's review and approval of the Firm's issues summary, the engagement team will prepare a detailed first markup of the Landlord's draft lease, addressing all substantive provisions. Where appropriate, the Firm will also prepare a cover letter or comment letter to accompany the redline, highlighting the Client's principal concerns and proposed deal terms for the benefit of Landlord's counsel.
Key Negotiation Issues Anticipated. Based on the preliminary term sheet and our discussions with the Client's real estate team, the following issues are expected to be among the most significant and time-intensive elements of the lease negotiation:
Assignment and Subletting Provisions. The negotiation of the assignment and subletting article is expected to be of critical importance to Aurelius. In particular, the Client requires a change of control assignment right permitting assignment of the lease to a successor entity without the Landlord's consent upon a change of control of either Aurelius Media Holdings Inc. (the Tenant) or Aurelius Global Media Group PLC (the ultimate parent), subject to negotiated net worth requirements and guaranty replacement provisions. Given the Client's publicly traded parent company structure and the potential for future mergers, acquisitions, or corporate reorganizations, this provision will require careful drafting to ensure the broadest possible flexibility for the Client while addressing the Landlord's customary credit and operational concerns. The negotiation of this provision is expected to involve multiple rounds of discussion, including consideration of partial assignment and subletting rights, recapture provisions, and profit-sharing mechanics.
Expansion Option for Floors 39 and 40. The term sheet contemplates an expansion option covering Floors 39 and 40 of the Building (approximately 74,000 RSF). Key terms to be negotiated include the exercise window (both the initial notice date and the outside exercise date), the determination of fair market rent (including any floor or ceiling), the co-terminous term requirement, and the conditions to exercise (including financial condition and default cure status). The expansion option terms will be documented in a separate exhibit (Exhibit E) to the lease and will require coordination with the fair market rent determination procedure set forth in Exhibit G.
Right of First Offer on Floors 30–33. The Client has negotiated a right of first offer ("ROFO") covering Floors 30 through 33 of the Building. A significant aspect of this negotiation will be the subordination of the Client's ROFO to the existing rights of Kestrel Insurance Holdings Inc., which currently occupies a portion of those floors and holds its own preferential leasing rights. The Firm will need to carefully review the terms of the Kestrel rights (to the extent disclosed by the Landlord) and negotiate appropriate protections to ensure that the Client's ROFO becomes operative upon the lapse or waiver of any superior rights. The ROFO terms will be documented in Exhibit F to the lease.
Parent Guaranty Terms. The Landlord has required that Aurelius Global Media Group PLC provide a guaranty of the Tenant's obligations under the lease. The Client has negotiated a cap on the guaranty in the amount of $18,000,000, together with release mechanics upon a change of control of the Tenant or the guarantor. The negotiation of the guaranty is addressed separately in Phase B below, but the interplay between the guaranty and the lease provisions regarding assignment, subletting, and change of control will require careful coordination during the lease negotiation phase.
Security Deposit Structure. The lease contemplates a security deposit in the form of an irrevocable standby letter of credit, with a burn-down schedule permitting periodic reductions in the face amount of the letter of credit based on the passage of time and the Tenant's compliance with the lease. The negotiation of the letter of credit terms will include the form of the letter of credit (to be attached as Exhibit D), the identity of the issuing bank, the burn-down trigger dates and amounts, the Landlord's draw rights, and the replacement and transfer mechanics.
Tenant Improvement Allowance Provisions. The Landlord has agreed to provide a tenant improvement allowance of $85.00 per RSF, totaling $15,725,000 in the aggregate. In addition, the Client has the option to elect an excess tenant improvement allowance of up to $15.00 per RSF, totaling $2,775,000, which would be amortized over the initial lease term at an interest rate of 7.5% per annum and repaid as additional rent. The Work Letter Agreement (Exhibit C) will require detailed negotiation regarding the scope of base building work, the Tenant's construction process (including approval rights, construction management, and lien waiver requirements), the disbursement mechanics for the tenant improvement allowance, and the amortization and repayment terms for any excess TI election.
Operating Expense and Real Estate Tax Escalation Provisions. The lease will include a base year (Calendar Year 2023) escalation structure for both operating expenses and real estate taxes. The Client's proportionate share is expected to be 12.76%, based on 185,000 RSF divided by the total building area of approximately 1,450,000 RSF. Key negotiation points will include the definition of operating expenses (including customary exclusions and "gross-up" provisions for years in which the Building is not fully occupied), the treatment of capital expenditures, the controllable expense cap (both the annual percentage increase and the base to which it applies), audit rights, and the interaction between the base year and any rent abatement or free rent periods that may affect the Landlord's reported expenses during the base year.
Renewal Options. The lease is expected to include two (2) consecutive five-year renewal options at fair market rent. The negotiation will address the exercise mechanics, the determination of fair market rent (including the process set forth in Exhibit G), the conditions to exercise, and the treatment of tenant improvements and base building condition upon renewal.
Signage Rights. The Client has negotiated signage rights in three locations: the Building lobby, the elevator bank serving the Client's floors, and an exterior building-top sign. Each category of signage will require separate negotiation regarding design approval, installation and removal obligations, compliance with applicable law (including New York City signage regulations and landmark designations, if any), and exclusivity.
Use Clause. The permitted use clause will be negotiated to ensure that the Client's full range of headquarters activities are covered, including general office use, studio and production use (consistent with the Client's media and entertainment operations), and ancillary uses consistent with a global media, entertainment, and e-commerce headquarters, such as cafeteria and food service, fitness facilities, event and conference space, and similar amenities.
Number of Negotiation Rounds. The Firm's fee estimate for this phase is based on the assumption that there will be approximately three to four (3–4) full rounds of redlines and markups exchanged between Calderwood & Harkness and Pemberton Locke & Strauss LLP before the parties reach agreement on the final lease form. Each round will involve preparation and review of a comprehensive lease redline, together with review of the opposing party's responsive markup. If additional rounds are required, fees for this phase may trend toward the upper end of the estimated range or, in the case of protracted negotiations, exceed the estimate.
Conference Calls and Negotiation Sessions. Throughout the lease negotiation process, the Firm anticipates participating in multiple conference calls and in-person or virtual negotiation sessions with Landlord's counsel (Diane Ashford of Pemberton Locke & Strauss LLP), the Client's internal team (including Vivienne Caldwell, SVP Global Real Estate & Facilities, and Tariq Nassar, General Counsel), and the Tenant's broker, Blackmoor Advisory Group LLC (Dennis Rourke). These sessions are an essential part of the negotiation process and are included in the fee estimate for this phase.
Preparation and Negotiation of Lease Exhibits. In addition to the body of the lease, the Firm will prepare or negotiate the following exhibits, each of which involves its own substantive issues and drafting requirements:
•  Exhibit A — Floor Plans (certification page confirming the demised premises and measurement methodology);
•  Exhibit B — Rules and Regulations (review and negotiation of the Building's standard rules and regulations, with modifications as appropriate for the Client's operations);
•  Exhibit C — Work Letter Agreement (detailed construction and tenant improvement provisions, as discussed above);
•  Exhibit D — Form of Letter of Credit (form of irrevocable standby letter of credit acceptable to both parties and the issuing bank);
•  Exhibit E — Expansion Option Terms (terms and conditions governing the Client's option to expand into Floors 39 and 40);
•  Exhibit F — Right of First Offer Terms (terms and conditions governing the Client's ROFO on Floors 30–33, subject to the existing rights of Kestrel Insurance Holdings Inc.); and
•  Exhibit G — Fair Market Rent Determination Procedure (the procedure for determining fair market rent for purposes of the expansion option and renewal options, including any appraisal or arbitration mechanics).
B. Guaranty of Lease — Estimated $25,000 – $35,000
This phase encompasses the drafting and negotiation of the Guaranty of Lease to be executed by Aurelius Global Media Group PLC, as guarantor, in connection with the headquarters lease. As noted above, the Landlord has required a parent guaranty of all obligations of the Tenant under the lease, subject to a negotiated cap of $18,000,000.
The principal areas of negotiation for the Guaranty are expected to include the scope of the guaranteed obligations, the enforceability and waiver provisions, the cap amount and its application (including whether the cap applies to the aggregate of all claims or to each individual claim), and—critically—the change of control release mechanics and replacement guaranty provisions. Given that the guarantor is an English public limited company, the Firm will also review and advise on cross-border enforceability considerations relating to an English PLC guarantying obligations under a New York-governed lease, including choice of law, service of process, and recognition of judgments.
The Guaranty will be negotiated in parallel with the core lease negotiations, as the guaranty provisions are closely interrelated with the assignment, subletting, and change of control provisions of the lease itself. Coordination between the two workstreams is essential and is reflected in the fee estimates for both this phase and Phase A.
C. SNDA Negotiation — Estimated $40,000 – $55,000
This phase covers the negotiation of the Subordination, Non-Disturbance and Attornment Agreement ("SNDA") with Atlas Continental Bank, N.A., which holds the existing first mortgage on the Building. Based on information provided by the Landlord, the outstanding balance of the mortgage is approximately $620,000,000, and the mortgage was recorded on January 15, 2019. Atlas Continental Bank's outside counsel for the SNDA negotiation is Halsted & Brinkley LLP, with Thomas Brinkley serving as the lead attorney.
The key substantive issues in the SNDA negotiation are expected to include the scope and specificity of the non-disturbance protections afforded to the Tenant in the event of a foreclosure, deed-in-lieu of foreclosure, or other exercise of remedies by the lender; the Tenant's right to cure defaults and receive notices; the treatment of insurance and condemnation proceeds; the lender's obligation to honor the Landlord's commitments under the lease (including the tenant improvement allowance, security deposit, and letter of credit); and the Tenant's right to offset or deduct from rent in certain circumstances.
The SNDA is a condition precedent to the Commencement Date of the lease. Accordingly, timely completion of the SNDA negotiation is critical to maintaining the overall transaction timeline.
The Firm's fee estimate for this phase is based on the assumption that there will be approximately two to three (2–3) rounds of comments exchanged among Calderwood & Harkness, Pemberton Locke & Strauss LLP (on behalf of the Landlord), and Halsted & Brinkley LLP (on behalf of Atlas Continental Bank). We note that this phase may trend toward the higher end of the estimated range—or in some cases exceed it—given that lender negotiations frequently involve institutional form resistance, multi-party coordination challenges, and slower response times due to the lender's internal approval processes.
D. Title and Survey Review — Estimated $30,000 – $40,000
Calderwood & Harkness will conduct a comprehensive review of the leasehold title commitment to be issued by Commonwealth Fidelity Title Insurance Co. for the Tenant's leasehold interest at Block 1024, Lot 18, Borough of Manhattan, New York County, New York. The title review will include the following:
(a) Identification and analysis of all permitted exceptions, including any mortgages, liens, easements, restrictions, and encumbrances affecting the Building and the demised premises;
(b) Determination of any required endorsements for the leasehold title insurance policy, including endorsements for contiguity, access, zoning, survey, and such other endorsements as may be appropriate for a leasehold interest of this nature and value;
(c) Preparation of a title objection letter, if warranted, identifying any exceptions that are unacceptable or require curative action by the Landlord; and
(d) Review and analysis of the ALTA/NSPS land title survey of the Building and surrounding property.
In addition, the Firm will conduct a zoning analysis to confirm that the Tenant's intended use—as a global media, entertainment, and e-commerce headquarters, including general office, studio and production, and ancillary uses—is a permitted use under the New York City Zoning Resolution for the applicable zoning district.
The Firm will coordinate with Commonwealth Fidelity Title Insurance Co. regarding the requirements for issuance of a leasehold title insurance policy, including any affidavits, certifications, or indemnities required from the Tenant or the Landlord.
E. Environmental and Physical Due Diligence Review — Estimated $15,000 – $20,000
The Firm will review and prepare a summary of the Phase I Environmental Site Assessment ("ESA") to be conducted by Greenfield Environmental Sciences LLC (Dr. Nadine Bertram, P.E.) in accordance with ASTM Standard E1527-21. The summary will highlight any Recognized Environmental Conditions ("RECs"), Historical Recognized Environmental Conditions ("HRECs"), or Controlled Recognized Environmental Conditions ("CRECs") identified in the Phase I ESA, together with any business environmental risks or de minimis conditions noted by the consultant.
In addition, the Firm will analyze the Landlord's environmental representations and indemnification provisions in the lease, with particular attention to pre-existing environmental conditions and the Landlord's obligations with respect to asbestos-containing materials and any abatement requirements in connection with the Tenant's construction of tenant improvements.
No Phase II Environmental Site Assessment is currently anticipated based on the preliminary due diligence information available. However, if the Phase I ESA identifies RECs that warrant further investigation, or if the Tenant otherwise elects to proceed with a Phase II assessment, the Firm's fees for review of the Phase II ESA and related analysis would be in addition to the estimate set forth above, and the Firm would provide a supplemental estimate at that time.
F. Landlord Financial Diligence — Estimated $10,000 – $15,000
Calderwood & Harkness will review the building-level financial statements and operating expense history provided by Greystone Metropolitan Realty LLC, to the extent made available by the Landlord or its counsel. This review is important for two principal reasons: first, to assess the Landlord's financial condition and the financial stability of the Building's operations; and second, to evaluate the historical and projected operating expense and real estate tax escalation trends that will directly affect the Tenant's cost of occupancy over the lease term.
The Firm's review will include an analysis of historical controllable and uncontrollable operating expenses, real estate tax escalation trends, and the implications of the base year (Calendar Year 2023) for the Tenant's proportionate share of escalation charges. As noted above, the Tenant's proportionate share is expected to be 12.76%, calculated as 185,000 RSF divided by 1,450,000 RSF (the total rentable area of the Building). The Firm will advise the Client on any anomalies, concerns, or negotiation points arising from the financial review, including any impact on the base year structure or the controllable expense cap.
G. Corporate Authorization Documents — Estimated $20,000 – $30,000
This phase covers the preparation and coordination of the corporate authorization documents required in connection with the execution and delivery of the lease and ancillary documents. Specifically, the Firm will:
(a) Prepare board resolutions of Aurelius Media Holdings Inc. authorizing the execution and delivery of the Agreement of Lease and all ancillary documents, including the Guaranty, the SNDA, and all closing deliverables;
(b) Coordinate with the Client's legal department regarding Aurelius Global Media Group PLC board approval of the Guaranty of Lease and the overall US lease commitment, which is expected to be considered at the PLC board meeting currently scheduled for May 15, 2023;
(c) Prepare an extract of the PLC board minutes reflecting approval of the Guaranty and the US lease commitment;
(d) Prepare the Tenant officer's certificate to be delivered at closing; and
(e) Coordinate requests for good standing certificates from the Delaware Secretary of State for Aurelius Media Holdings Inc. (Delaware File No. 7318294) and from Companies House for Aurelius Global Media Group PLC (Company No. 04291837).
H. Closing Deliverables and Administration — Estimated $40,000 – $50,000
The closing of a commercial lease transaction of this scale involves the coordination and preparation of a substantial number of deliverables, each of which must be reviewed, finalized, and properly executed and delivered. Calderwood & Harkness will handle the following closing-related tasks:
Master Closing Checklist. The Firm will prepare and maintain a comprehensive master closing checklist tracking all deliverables, responsible parties, target dates, and status updates. The checklist will be circulated to all parties at regular intervals and updated as deliverables are completed or deadlines are adjusted.
Letter of Credit Issuance. The Firm will coordinate the issuance of the irrevocable standby letter of credit by Caledonian National Bank PLC (London, New York branch) in the initial face amount of $5,180,000, in accordance with the form of letter of credit attached to the lease as Exhibit D. The Firm will prepare the letter of credit transmittal letter and coordinate delivery of the original letter of credit to the Landlord or its designated agent.
Insurance Certificates. The Firm will coordinate the transmittal of insurance certificates evidencing the Tenant's compliance with the lease's insurance requirements, including commercial general liability and property coverage from Northbridge Mutual Insurance Company and umbrella coverage from Sovereign Assurance Group PLC. All carriers must meet the minimum A.M. Best rating of A-VIII as required under the lease. Insurance placement is being coordinated through Caldecott Risk Advisors Ltd., the Client's insurance broker. Calderwood & Harkness will review the certificates for compliance with the lease requirements and coordinate any necessary revisions with the broker.
Commencement Date Confirmation. The Firm will prepare the Commencement Date confirmation letter memorializing the Commencement Date, the Rent Commencement Date, and the expiration date of the initial lease term.
Possession Delivery and Punchlist. The Firm will prepare the possession delivery and punchlist letter in connection with the Landlord's delivery of the demised premises.
File Memorandum and Post-Closing Summary. Upon completion of the closing, the Firm will prepare an internal closing completion and file memorandum for Calderwood & Harkness's records, as well as a comprehensive post-closing summary letter to the Client. The post-closing summary will include an index to the closing binder, a summary of all key dates and deadlines under the lease (including option exercise dates, renewal notice deadlines, and letter of credit renewal dates), a description of ongoing obligations, and a calendar of critical dates for the Client's reference.
I. Client Communications and Project Management — Estimated $30,000 – $40,000
Throughout the engagement, the Firm will maintain regular and proactive communications with the Client's team, including Tariq Nassar (General Counsel), Vivienne Caldwell (SVP Global Real Estate & Facilities), and Eleanora Voss (Chief Financial Officer), as needed. The Firm will also coordinate closely with Blackmoor Advisory Group LLC (Dennis Rourke), the Tenant's broker, regarding deal-related matters, scheduling, and commercial negotiation points.
This phase also encompasses the Firm's internal team management, work allocation, and quality review processes, as well as the preparation and delivery of periodic status update letters and calls to the Client throughout the negotiation period. It is the Firm's practice to provide written status updates at regular intervals, typically bi-weekly or as circumstances warrant, summarizing the current status of negotiations, outstanding items, and anticipated next steps.
J. Contingency / Unanticipated Issues — Estimated $40,000 – $15,000
This contingency allocation provides a buffer for unanticipated negotiation issues, additional rounds of markup beyond those assumed in the estimate, or emerging issues not currently foreseen. In any complex commercial lease transaction, it is prudent to maintain a contingency reserve to account for the unpredictable nature of multi-party negotiations and the possibility of issues arising during the due diligence process that require additional legal analysis or documentation.
If material new issues arise during the course of the engagement—for example, the discovery of significant title defects requiring curative action, the identification of environmental conditions requiring remediation, the need for complex zoning variance proceedings, or the emergence of disputes with third parties holding competing rights in the Building—Calderwood & Harkness will promptly advise the Client and provide a revised fee estimate reflecting the additional scope of work required.
V. Fee Estimate Summary Table
The following table summarizes the estimated fee range for each phase of the engagement:
Note: All amounts are exclusive of disbursements and third-party costs, which are estimated separately in Section VII below.
VI. Key Assumptions Underlying the Estimate
The fee estimates set forth in this memorandum are based on the following key assumptions. If any of these assumptions prove to be inaccurate or if the circumstances of the transaction change materially, the Firm will promptly advise the Client, and actual fees may differ from the estimates provided herein.
1.  Lease negotiations will involve approximately three to four (3–4) complete rounds of markups and redlines exchanged between Calderwood & Harkness and Pemberton Locke & Strauss LLP before the parties reach agreement on the final form of the Agreement of Lease and all exhibits thereto.
2.  SNDA negotiations will involve approximately two to three (2–3) rounds of comments exchanged among Calderwood & Harkness, Pemberton Locke & Strauss LLP, and Halsted & Brinkley LLP (counsel to Atlas Continental Bank, N.A.).
3.  The Phase I Environmental Site Assessment to be prepared by Greenfield Environmental Sciences LLC will not reveal Recognized Environmental Conditions ("RECs") requiring additional investigation, remediation, or other material follow-up work.
4.  The title commitment to be issued by Commonwealth Fidelity Title Insurance Co. will not reveal material title defects requiring litigation, complex curative action, or protracted negotiations with third parties holding encumbrances on the property.
5.  No condemnation proceedings, pending or threatened litigation, or special regulatory approvals will be required in connection with the transaction, beyond the standard landlord approvals customarily required for tenant signage and construction.
6.  The lease will be governed by the laws of the State of New York, and any disputes arising under or in connection with the lease will be resolved in New York State Supreme Court, County of New York.
7.  The estimated timeline for the engagement runs from the matter opening date (April 6, 2023) through the anticipated closing and occupancy date, with a target closing in August 2023.
8.  The estimate does not cover the future exercise of expansion options or renewal options, nor does it cover any post-closing disputes, litigation, or advisory work arising after the closing of the initial lease transaction.
VII. Disbursements and Third-Party Costs
The fee estimate set forth in this memorandum is exclusive of out-of-pocket disbursements incurred by the Firm in connection with the engagement. Disbursements will be billed to the Client at cost and may include, without limitation, the following:
•  Title search and examination fees;
•  Recording fees and filing charges;
•  Overnight courier and messenger charges;
•  Travel expenses, if any (e.g., in connection with in-person meetings, property inspections, or closing);
•  Photocopying and document production charges;
•  Online legal research database charges (Westmark Data Systems, Sundial Solutions, and similar services); and
•  Other miscellaneous administrative expenses directly attributable to the engagement.
Based on our experience with comparable transactions, the Firm estimates that total disbursements will be in the range of $8,000 to $15,000, which amount is separate from and in addition to the legal fees estimated above.
Third-party professional fees—including fees payable to the environmental consultant (Greenfield Environmental Sciences LLC), the project architect, the construction manager, the title insurer (Commonwealth Fidelity Title Insurance Co.), the insurance broker (Caldecott Risk Advisors Ltd.), and any other consultants or professionals retained by the Client—are engaged directly by Aurelius and are not included in Calderwood & Harkness's fee estimate. The Firm will, of course, coordinate with such third-party professionals as necessary in connection with the transaction, and the time spent on such coordination is reflected in the applicable phase estimates set forth above.
VIII. Billing and Invoicing Procedures
Monthly invoices will be submitted to Tariq Nassar at Aurelius Global Media Group PLC, 14 Cavendish Square, London W1G 0DW, United Kingdom, or to such other address or attention as the Client may designate from time to time in writing. Invoices will be transmitted via email, with a hard copy to follow by international courier upon request.
Each invoice will itemize, for each timekeeper who recorded time during the billing period, the date and description of each task performed and the hours and fees attributable thereto. Disbursements will be itemized separately on each invoice.
Payment is due within thirty (30) days of the invoice date, in accordance with the terms of the engagement letter. Payments may be made by wire transfer to Calderwood & Harkness's designated operating account, the details of which are set forth in the engagement letter.
Angela Fontaine will serve as the primary contact for all billing inquiries, fee discussions, and any questions regarding invoicing or payment. Ms. Fontaine can be reached at the contact information set forth below.
IX. Conclusion and Contact Information
Calderwood & Harkness is prepared to commence work immediately upon confirmation of the engagement and receipt of the Landlord's initial draft lease. We are enthusiastic about the opportunity to represent Aurelius in this significant transaction and are committed to providing the highest quality legal services in connection with the negotiation, documentation, and closing of the headquarters lease at Greystone Tower.
Should you have any questions regarding this fee estimate, the scope of work described herein, or any other aspect of the engagement, please do not hesitate to contact me directly. Questions regarding the substantive legal strategy for the transaction may also be directed to Douglas Fairchild, who serves as the responsible partner on the engagement.
We look forward to working with you and the Aurelius team on this important matter.
Respectfully submitted,
CALDERWOOD & HARKNESS LLP
By: ________
Angela Fontaine Partner, Real Estate Calderwood & Harkness LLP 425 Park Avenue, 18th Floor New York, NY 10022 Telephone: (212) 555-4800
Email: a.fontaine@calderwoodharkness.com
cc: Douglas Fairchild, Partner, Real Estate, Calderwood & Harkness LLP
cc: Vivienne Caldwell, SVP Global Real Estate & Facilities, Aurelius Global Media Group PLC
Timekeeper | Role | Hourly Rate
Douglas Fairchild | Responsible Partner | $1,450
Angela Fontaine | Billing Partner | $1,450
Rafael Dominguez | Lead Associate | $895
Cynthia Ho | Working Associate | $895
Phase | Low Estimate | High Estimate
A. Lease Negotiation & Drafting | $225,000 | $275,000
B. Guaranty of Lease | $25,000 | $35,000
C. SNDA Negotiation | $40,000 | $55,000
D. Title & Survey Review | $30,000 | $40,000
E. Environmental Due Diligence | $15,000 | $20,000
F. Landlord Financial Diligence | $10,000 | $15,000
G. Corporate Authorization | $20,000 | $30,000
H. Closing Deliverables | $40,000 | $50,000
I. Client Communications & PM | $30,000 | $40,000
J. Contingency | $40,000 | $15,000
Total | $475,000 | $575,000

MEMORANDUM

CALDERWOOD & HARKNESS LLP

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