Contract analysis

I. PURPOSE AND SCOPE OF THIS MEMORANDUM This memorandum sets forth binding guidelines for the privilege review of documents collected in connection with the federal grand jury subpoena issued on November 18, 2022, by the United States Attorney's Office for the Southern District of New York ("USAO-SDNY"). The subpoena was issued under the authority of Grand Jury No. 22-GJ-4481 and was prepared by Assistant United Stat

II. GENERAL PRINCIPLES OF ATTORNEY-CLIENT PRIVILEGE A. Elements of the Privilege The attorney-client privilege is the oldest recognized privilege for confidential communications in the common law. Under both federal common law, which governs in grand jury proceedings, and New York state law, the privilege protects from compelled disclosure confidential communications between an attorney and a client made for the purp

1. A communication — The privilege protects communications, whether oral, written, or electronic. A "communication" for these purposes includes emails, letters, memoranda, text messages, voicemail messages, handwritten notes, and any other transmission of information between privileged persons.

2. Made between privileged persons — The communication must be between the client (or the client's authorized agent) and the attorney (or the attorney's authorized agent, including associates, paralegals, and other firm personnel acting under the attorney's direction). Communications between an attorney and a third-party agent of the client may also be privileged in certain limited circumstances, as discussed in Sect

3. In confidence — The communication must have been made with a reasonable expectation of confidentiality. Communications that are made in the presence of third parties who are not agents of the attorney or client, or that are subsequently disclosed to such third parties, generally lose their confidential character and are not privileged. The intent to maintain confidentiality at the time the communication was made i

4. For the purpose of seeking, obtaining, or providing legal assistance to the client — The communication must have a predominantly legal purpose. Business advice, personal opinions, or casual social communications between an attorney and a client are not privileged merely because the parties happen to stand in an attorney-client relationship. The privilege attaches only when the communication relates to the seeking

1. Calderwood & Harkness LLP (Current Counsel) Calderwood & Harkness LLP is Caldwell's current counsel in connection with this grand jury subpoena response. The attorneys and staff assigned to this engagement include Conrad Ashby (Partner, White Collar & Investigations), Bernard Crawford (Responsible Partner), Daniel Obi (Lead Associate, Banking & Finance), Lisa Morrow (Working Associate, Banking & Finance), and assi

2. Whitmore & Kessler LLP (Prior Commercial Counsel) Whitmore & Kessler LLP ("W&K"), specifically Patricia Sheldon, Partner, Commercial Real Estate, represented Caldwell in connection with the 2019 business dispute and separation negotiation with Marcus Stavros. Ms. Sheldon's office address is 277 Park Avenue, 40th Floor, New York, NY 10172. Communications between Caldwell and Ms. Sheldon (or other W&K attorneys and

3. Thornberg & Whitfield CPAs (Accounting Firm — Kovel Analysis Required) Thornberg & Whitfield CPAs ("T&W"), specifically Helen R. Thornberg, Senior Partner, is Caldwell's longstanding personal and business accounting firm, located at 521 Fifth Avenue, 17th Floor, New York, NY 10175. T&W communications present a more nuanced and complex privilege analysis because accountant-client communications are not independentl

III. WORK PRODUCT DOCTRINE A. Elements of Work Product Protection The work product doctrine, first recognized in Hickman v. Taylor, 329 U.S. 495 (1947), and codified in Federal Rule of Civil Procedure 26(b)(3), protects from disclosure materials prepared in anticipation of litigation or for trial by or for a party or its representative. Although Rule 26(b)(3) applies by its terms in civil litigation, the Second Circu

1. Calderwood & Harkness Work Product (Post-Engagement) All work product created by Calderwood & Harkness LLP in connection with this grand jury subpoena response, from the date of engagement (December 5, 2022) forward, is clearly protected by the work product doctrine. This includes internal memoranda, research, chronologies, strategy documents, interview notes, and all other materials prepared in anticipation of th

2. Whitmore & Kessler LLP Work Product (2019 Separation Negotiation) Work product created by Whitmore & Kessler LLP, specifically Patricia Sheldon, in connection with the 2019 separation negotiation with Stavros is also protected by the work product doctrine to the extent it was prepared in anticipation of potential litigation with Stavros over the disputed management fees of approximately $340,000 and the broader di

IV. SPECIFIC GUIDANCE: COMMUNICATIONS WITH WHITMORE & KESSLER LLP (PATRICIA SHELDON) A. Background. Jonathan R. Caldwell retained Whitmore & Kessler LLP, specifically Patricia Sheldon, Partner, Commercial Real Estate, in approximately October 2019. The retention arose in connection with a business dispute between Caldwell and Marcus W. Stavros. The dispute centered on approximately $340,000 in management fees that St

1. Direct Communications Between Caldwell and Patricia Sheldon / W&K Attorneys All direct communications between Caldwell and Patricia Sheldon, or other attorneys and staff at Whitmore & Kessler LLP acting under Sheldon's direction, in which Caldwell sought or received legal advice regarding the Stavros dispute, the management fee controversy, the negotiation and terms of the Separation Agreement, the buyout pricing,

2. Communications Discussing Negotiation Strategy, Stavros's Conduct, the Management Fee Dispute, and Buyout Pricing Communications between Caldwell and Sheldon in which the parties discussed negotiation strategy, the legal merits of Caldwell's claims regarding the unauthorized management fees, Stavros's conduct and potential liability, the appropriate valuation methodology for the buyout of Caldwell's interests, and

3. Draft Separation Agreements, Term Sheets, and Redlines Draft versions of the Separation Agreement, preliminary term sheets, and redlined revisions exchanged between Caldwell and Sheldon during the negotiation process are privileged to the extent they reflect attorney advice, legal judgment, or work product. This includes drafts containing Sheldon's commentary, marginal annotations, proposed revisions reflecting le

4. Communications Between Sheldon and Stavros's Counsel — NOT Privileged Communications between Patricia Sheldon (or other W&K attorneys) and Victor A. Reddick of Reddick, Sorrento & Hale LLP, or any other counsel representing Stavros or the Aegean Entities during the separation negotiation, are not privileged. These communications were, by definition, disclosed to an adverse party and therefore do not satisfy the co

V. SPECIFIC GUIDANCE: COMMUNICATIONS WITH THORNBERG & WHITFIELD CPAs (HELEN R. THORNBERG) A. Background. Thornberg & Whitfield CPAs ("T&W"), specifically Helen R. Thornberg, Senior Partner, is Caldwell's longstanding personal and business accounting firm. T&W's offices are located at 521 Fifth Avenue, 17th Floor, New York, NY 10175. T&W has provided the following accounting and tax services to Caldwell and his entiti

1. Routine Tax Preparation Communications — NOT PRIVILEGED Communications between Caldwell and T&W relating to routine tax preparation, including the exchange of K-1 schedules, draft tax returns, W-2 forms, 1099 forms, bookkeeping queries, requests for financial records, and the preparation of financial statements for business purposes, are not privileged. These are ordinary business communications between a taxpayer

2. Communications Where Thornberg Acted at the Direction of Legal Counsel — POTENTIALLY PRIVILEGED UNDER KOVEL Communications where Helen Thornberg was acting at the direction of Whitmore & Kessler LLP (Patricia Sheldon) in connection with the 2019 separation negotiation may be privileged under Kovel. Specifically, the following types of communications and work product may qualify: • Valuations of the Flatbush JV ($3

3. Personal Tax Planning Communications — NOT PRIVILEGED (Absent Counsel Direction) Communications in which Caldwell asked Thornberg to analyze the tax consequences of his Aegean investments or the distributions received from the Aegean fund vehicles (totaling approximately $2,505,000 in aggregate distributions over the Relevant Period) for purely personal tax planning purposes are not privileged unless there is affi

VI. COMMUNICATIONS WITH THIRD PARTIES — NO PRIVILEGE A. General Rule The attorney-client privilege exists to protect the confidentiality of communications between the client and the client's legal counsel. By definition, communications that have been shared with or disclosed to third parties who are outside the attorney-client relationship (and outside the Kovel framework) are not confidential and therefore are not p

1. If the forwarded version contains the full text of the privileged communication — The privilege has been waived as to that communication. The entire email chain, including the originally privileged segment, is no longer privileged and should be reviewed for responsiveness and produced if responsive.

2. If the privileged content was redacted, summarized, or not included in the forward — The underlying privileged communication retains its privilege. In such cases, the non-privileged forward should be produced if responsive, and the original privileged communication should be withheld. The two documents should be treated as separate items for privilege log and production purposes.

3. If the email chain contains interleaved privileged and non-privileged segments — The analysis must be conducted on a segment-by-segment basis. Portions of the chain that were not disclosed to third parties may retain their privilege, while portions that were disclosed are no longer privileged.

4. In all cases involving mixed communications, the document should be flagged for Ashby's review before a final coding decision is made. Mixed communications require careful, fact-specific analysis, and an erroneous determination could result in either an improper waiver or an improper withholding. These determinations should not be made unilaterally by the review team.

VII. THE CRIME-FRAUD EXCEPTION A. Statement of the Doctrine The crime-fraud exception is a well-established limitation on the attorney-client privilege. Under this exception, the privilege does not protect communications that were made in furtherance of an ongoing or future crime or fraud. In re Grand Jury Subpoena, 731 F.2d 1032, 1038 (2d Cir. 1984); Clark v. United States, 289 U.S. 1, 15 (1933). The rationale for t

VIII. PRIVILEGE LOG REQUIREMENTS A. Format. For every document withheld from production on privilege grounds, a corresponding entry must be recorded in the privilege log. The privilege log will be prepared in Microsoft Excel format and maintained within the Clearpath-hosted review platform. Each privilege log entry must contain the following fields: B. Description Standards The descriptions in the privilege log serve

IX. INADVERTENT DISCLOSURE / CLAWBACK A. Federal Rule of Evidence 502 Federal Rule of Evidence 502, enacted in 2008, provides important protections against the inadvertent waiver of attorney-client privilege and work product protection during document productions. Rule 502(b) provides that, in a federal proceeding, the disclosure of a privileged communication or work product does not constitute a waiver if: (1) the d

1. The individual who identifies the inadvertent production must immediately notify Conrad Ashby, regardless of the time of day or day of the week.

2. Ashby will review the document and confirm that it is privileged and that the production was inadvertent.

3. Ashby will promptly contact AUSA Goldfarb by telephone and in writing (letter or email) to: (a) identify the inadvertently produced document by Bates number; (b) assert the attorney-client privilege and/or work product protection over the document; (c) request the immediate return, sequestration, or destruction of all copies of the document in the government's possession; and (d) request confirmation that the docu

4. A formal follow-up letter will be sent to AUSA Goldfarb confirming the clawback request in writing, invoking the protections of Fed. R. Evid. 502(b), and reserving all rights.

5. The inadvertently produced document will be added to the privilege log with the appropriate privilege coding. Time is of the essence in any clawback situation. The longer the delay between production and the assertion of privilege, the weaker the argument that the holder took "prompt" steps to rectify the error. Any potential inadvertent disclosure must therefore be escalated immediately.

X. QUALITY CONTROL The accuracy and defensibility of the privilege review depend on rigorous quality control procedures. The following quality control measures will be implemented:

1. Random Sampling QC Check. Lisa Morrow will conduct a 10% random sampling quality control check of all privilege-coded documents. This sampling will verify that the privilege coding is consistent with the guidelines set forth in this memorandum. Documents found to be incorrectly coded during the QC check will be re-reviewed and re-coded, and any systemic errors will be brought to the attention of Ashby so that addi

2. Second-Level Review. All documents coded as privileged (AC, WP, or AC/WP) during the second-pass privilege review will receive a second-level review by Daniel Obi before finalization. Obi's second-level review will verify: (a) the correctness of the privilege designation; (b) the accuracy of the privilege log entry, including all metadata fields and the description; and (c) consistency with the guidelines in this

3. Escalation Review. Any documents flagged for escalation pursuant to the escalation protocol set forth in Section XI below will be reviewed by Conrad Ashby personally. Ashby will make the final privilege determination for all escalated documents and will direct the appropriate coding.

4. Final Privilege Log Review. Before the privilege log is delivered to the government, Ashby will conduct a final quality-control pass of the completed log. This review will check for completeness, accuracy, internal consistency, and compliance with the description standards set forth in Section VIII.B above. Any deficiencies identified during this final review will be corrected before delivery.

XI. ESCALATION PROTOCOL The following categories of documents must be escalated to Conrad Ashby for review and determination before a final privilege coding decision is made. Escalation should be made by tagging the document in the Clearpath review platform with the "ESCALATE — ASHBY" tag and simultaneously notifying Ashby by email with the document's Bates number and a brief description of the issue:

1. Unclear or Borderline Privilege Determinations. Any document where the privilege determination is unclear, borderline, or could reasonably be decided either way. When in doubt, escalate. It is far better to err on the side of escalation than to make an incorrect determination.

2. Kovel-Category Documents with Ambiguous Counsel Direction. Any document involving communications with Thornberg & Whitfield CPAs (Helen R. Thornberg) where the direction-of-counsel element necessary for Kovel protection is ambiguous, unclear, or not explicitly documented in the communication. As noted in Section V above, the Kovel privilege is narrow and fact-specific, and uncertain designations must be reviewed b

3. Potential Crime-Fraud Exception Documents. Any document that could arguably implicate the crime-fraud exception or suggest that Caldwell had awareness of, or involvement in, potentially fraudulent conduct by Stavros or any other party. This includes documents referencing inflated appraisals, fund diversions, unusual capital movements, or any other indicia of fraud. As stated in Section VII.C, reviewers must not ma

4. Mixed Communications Requiring Partial Production or Redaction. Any mixed communication (i.e., a document or email chain containing both privileged and non-privileged content) that may require a partial-production or redaction decision. These determinations involve complex judgments about the scope of waiver and must be reviewed by senior counsel.

5. Potential Joint-Defense or Common-Interest Communications. Any document involving communications with Reddick, Sorrento & Hale LLP (Victor A. Reddick, Stavros's counsel) that may have been shared in the context of a joint-defense or common-interest arrangement. Based on the information currently available to this firm, there is no known joint-defense agreement or common-interest arrangement between Caldwell and St

XII. TIMELINE AND DELIVERABLES The following timeline governs the privilege review and production schedule. All dates are based on the negotiated extended return date of January 20, 2023, which was confirmed by AUSA Goldfarb in correspondence dated December 9, 2022: The first-pass responsiveness review and the second-pass privilege review will proceed concurrently. Reviewers should prioritize the privilege review of

XIII. CONFIDENTIALITY REMINDER This memorandum is itself privileged and confidential attorney work product, prepared by Conrad Ashby in his capacity as supervising partner on this engagement. It reflects the legal analysis, mental impressions, and strategic judgments of counsel in connection with the grand jury subpoena response and the ongoing investigation. This memorandum is subject to the following distribution a