1028-00001 · Client 1028 · Engagement

engagement-letter-ef.docx DOCUMENT Litigation

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CALDERWOOD & HARKNESS LLP Attorneys at Law

One Market Plaza, Suite 3600 San Francisco, California 94105 Telephone: (415) 392-7800 Facsimile: (415) 392-7801 www.calderwoodharkness.com

April 1, 2022

VIA HAND DELIVERY AND ELECTRONIC MAIL

Priya Chattopadhyay, Esq. General Counsel Estuary Foundation 1440 Embarcadero Way, Suite 300 San Francisco, California 94107

Re: Engagement of Calderwood & Harkness LLP by Estuary Foundation — Declaratory Judgment Action Concerning Donor Grant Restrictions on Restricted Funds (Approximately $4.7 Million); Bay Area Teacher Residency Initiative C&H Matter No.: 1028-00001 Case No.: CGC-22-599481 (Superior Court of California, County of San Francisco)

Dear Ms. Chattopadhyay:

We are pleased that Estuary Foundation has selected Calderwood & Harkness LLP to serve as its counsel in the above-referenced matter. This engagement letter sets forth the terms and conditions under which the firm will provide legal services to Estuary Foundation. We ask that you review this letter carefully and, if the terms are acceptable, execute and return a signed copy to our offices so that we may proceed with the representation.

1. Purpose and Confirmation of Engagement

This letter confirms that Estuary Foundation ("EF" or the "Foundation"), a California nonprofit public benefit corporation organized under Section 5110 et seq. of the California Corporations Code (Employer Identification Number: 94-3127856), has engaged Calderwood & Harkness LLP ("C&H" or the "Firm") to represent EF as plaintiff in a declaratory judgment action to be filed in the Superior Court of California, County of San Francisco.

The matter concerns approximately Four Million Seven Hundred Thousand Dollars ($4,700,000) in restricted grant funds originally dedicated to the Bay Area Teacher Residency Initiative ("BATRI"), a teacher preparation and placement program that EF operated from 2018 through 2021 and that has since been wound down following the expiration of certain program partnerships. The underlying dispute involves The Whitfield-Garner Family Trust ("WGFT"), a California irrevocable trust, and concerns the interpretation and enforceability of donor-imposed grant restrictions under a Gift Instrument and Grant Agreement between EF and WGFT dated June 15, 2018 (the "Gift Instrument").

As you have informed us, WGFT, through its counsel at Pratchett, Huang & Solano LLP, has demanded the return of One Million Seven Hundred Thousand Dollars ($1,700,000) in unexpended and undisbursed grant funds, asserting that a reversion clause in the Gift Instrument entitles the trust to the return of those funds upon the wind-down of the BATRI program. EF disputes WGFT's interpretation of the reversion clause and seeks judicial clarification that the restricted funds may be redirected to EF's broader educational mission under the doctrines of cy pres and equitable deviation as recognized under California law, including the Uniform Prudent Management of Institutional Funds Act (Cal. Prob. Code §§ 18501–18510) and applicable equitable principles.

This letter sets forth the complete terms and conditions governing the engagement between EF and C&H with respect to this matter.

2. Scope of Representation

Calderwood & Harkness LLP will represent Estuary Foundation in connection with the following:

(a) Filing and Prosecution of the Complaint. The preparation, filing, and prosecution of a Complaint for Declaratory Relief in the Superior Court of California, County of San Francisco, which has been assigned Case Number CGC-22-599481, seeking a judicial determination of the parties' respective rights and obligations under the Gift Instrument and related grant documents.

(b) Defense of Cross-Claims and Counterclaims. The defense of any cross-claims, counterclaims, or affirmative claims that may be asserted by The Whitfield-Garner Family Trust or its counsel, Pratchett, Huang & Solano LLP, in connection with the declaratory judgment action, including but not limited to claims for breach of fiduciary duty, breach of contract, constructive trust, or restitution.

(c) Pre-Litigation Correspondence and Negotiations. All pre-litigation correspondence and negotiations with opposing counsel, including demand letters, tolling agreements, and any informal resolution discussions that may precede or occur parallel to the filing of the complaint.

(d) Alternative Dispute Resolution. Representation in mediation or other alternative dispute resolution proceedings, if such proceedings are pursued by agreement of the parties or ordered by the court.

(e) discovery, Motion Practice, Trial Preparation, and Trial. All aspects of discovery (both written and oral), including propounding and responding to interrogatories, requests for production of documents, requests for admissions, and depositions; all motion practice, including demurrers, motions to compel, motions for summary judgment or summary adjudication, and motions in limine; trial preparation, including witness preparation, exhibit preparation, and preparation of trial briefs; and trial, if the matter is not resolved prior to trial.

(f) Appellate Proceedings. Any appellate proceedings arising from the declaratory judgment action, provided that appellate representation shall be the subject of a separate engagement letter and separate fee arrangement to be agreed upon by the parties in writing before any appellate work is undertaken.

The scope of this engagement encompasses representation concerning the total approximately $4,700,000 in restricted BATRI funds, the composition of which is as follows:

(i) Whitfield-Garner Family Trust Funds — $1,700,000. This amount comprises Seven Hundred Thousand Dollars ($700,000) in funds that were disbursed to EF under the Gift Instrument but remain unexpended following the wind-down of the BATRI program, and One Million Dollars ($1,000,000) in undisbursed Tranche 4 funds that were committed under the Gift Instrument but not yet transferred to EF at the time the BATRI program was wound down.

(ii) Cascabel Education Fund Funds — $2,000,000. Restricted grant funds received by EF from the Cascabel Education Fund pursuant to a separate grant agreement for the support of the BATRI program.

(iii) Newhall-Sievert Foundation Funds — $1,000,000. Restricted grant funds received by EF from the Newhall-Sievert Foundation pursuant to a separate grant agreement for the support of the BATRI program.

While the primary dispute at issue involves the demand by WGFT, the declaratory judgment action may address the broader question of EF's authority to redirect all restricted BATRI funds to the Foundation's general educational mission, including funds attributable to the Cascabel Education Fund and the Newhall-Sievert Foundation, to the extent that resolution of the WGFT dispute has implications for those funds.

Limitations on Scope. The scope of this engagement does not extend to the provision of tax advice, including advice regarding the tax consequences of any resolution of the dispute or the tax treatment of restricted versus unrestricted funds; regulatory compliance matters unrelated to the litigation; or representation of EF in any unrelated matters. Should EF require legal services outside the scope described herein, those services will be addressed under a separate engagement letter or an amendment to this engagement letter. Any expansion of the scope of this engagement will be confirmed in a writing signed by both parties.

3. Staffing and Responsible Attorneys

The following attorneys have been assigned to this matter and will be primarily responsible for the representation:

Douglas Carmichael — Partner, Litigation (General). Mr. Carmichael will serve as the Responsible Partner for the engagement and will have overall responsibility for the strategic direction of the matter, court appearances, and client communication. Mr. Carmichael will serve as the primary point of contact for EF and may be reached at (415) 392-7812 (direct) or dcarmichael@calderwoodharkness.com.

Francesca Morano — Partner, Litigation (General). Ms. Morano will serve as the Billing Partner for the engagement and will assist with case strategy, review and approval of key filings and submissions, and billing oversight.

Simone Laroche — Senior Associate, Litigation (General). Ms. Laroche will manage the day-to-day litigation tasks associated with the matter, including legal research, drafting of pleadings, briefs, and correspondence, discovery management, and coordination of filings with the court.

Jeffrey Park — Associate, Litigation (General). Mr. Park will assist with legal research, document review, drafting, and other tasks as assigned by the senior members of the litigation team.

From time to time, other attorneys, paralegals, legal assistants, or support staff within Calderwood & Harkness LLP may be assigned to work on this matter as the needs of the engagement require. The Firm will make reasonable efforts to ensure continuity of staffing and will promptly inform EF of any significant changes to the composition of the team, including the addition or departure of any attorney with a material role in the representation.

4. Fees and Billing Rates

Legal services rendered by Calderwood & Harkness LLP in connection with this engagement will be billed on an hourly fee basis. The current hourly billing rates for the attorneys assigned to this matter, effective for calendar year 2022, are as follows:

Hourly rates for paralegals, legal assistants, and other support staff assigned to this matter will be communicated to EF as applicable and will generally range from $225.00 to $375.00 per hour depending on the experience level and role of the individual.

The Firm's hourly billing rates are subject to annual adjustment, which typically takes effect on January 1 of each calendar year. C&H will provide EF with advance written notice of not less than thirty (30) days prior to the effective date of any rate increase. Any rate increase will apply only to services performed on or after the effective date of the adjustment.

In addition to fees for professional services, the Firm reserves the right to charge EF for reasonable out-of-pocket expenses and disbursements incurred in connection with the representation. Such expenses may include, without limitation:

• Court filing fees and service of process costs;

• Messenger and courier charges;

• Photocopying, printing, and document reproduction costs;

• Travel expenses, including airfare, lodging, ground transportation, and meals, incurred in connection with the matter;

• Expert witness and consultant fees and expenses;

• Mediator fees;

• Court reporter fees and transcript costs;

• Electronic legal research charges (e.g., Westmark Data Systems, Sundial Solutions); and

• Any other costs reasonably and necessarily incurred in the prosecution or defense of the matter.

Expenses will be billed at cost or, where applicable, at the Firm's standard internal charge for such services (for example, the Firm's standard per-page charge for internal photocopying). The Firm will endeavor to obtain EF's prior approval before incurring any individual expense item in excess of Five Thousand Dollars ($5,000.00), although the Firm cannot guarantee that such advance approval will be feasible in all circumstances, particularly where time-sensitive filings or discovery deadlines are involved.

5. Billing and Payment Terms

C&H will render invoices to EF on a monthly basis, generally within the first fifteen (15) days of the month following the month in which services were performed. All invoices are due and payable within thirty (30) days of the date of the invoice.

Each invoice will include a description of the services rendered during the billing period, the name and position of the attorney or staff member who performed each task, the time expended (in increments of one-tenth of an hour), the applicable hourly rate for each timekeeper, and an itemized summary of disbursements and out-of-pocket expenses incurred during the billing period. The Firm will provide sufficient detail in its invoice descriptions to permit EF to evaluate the reasonableness and necessity of the services rendered and expenses incurred.

Payments should be directed to:

Calderwood & Harkness LLP One Market Plaza, Suite 3600 San Francisco, California 94105

Attention: Accounts Receivable

Payment may also be made via electronic wire transfer. Wire transfer instructions are available upon request from the Firm's accounting department at (415) 392-7800, extension 200.

In the event that any invoice is not paid within thirty (30) days of the invoice date, the Firm reserves the right to charge interest on the overdue balance at the rate of one percent (1.0%) per month, which is equivalent to twelve percent (12%) per annum. Interest will accrue from the thirty-first (31st) day after the invoice date until the date of payment in full. The Firm's right to charge interest on overdue balances shall not be construed as an extension of credit or a waiver of the Firm's right to terminate the engagement for non-payment.

In the event of a billing dispute, EF agrees to promptly notify C&H in writing, specifying the nature of the dispute and the amount at issue. The parties will use good-faith efforts to resolve any billing dispute in an expeditious manner. Amounts not in dispute shall remain due and payable in accordance with the terms set forth above.

6. Retainer

No advance retainer or security deposit is required at the commencement of this engagement. The Firm is willing to begin work on the matter based on the billing and payment arrangements described in Sections 4 and 5 above.

The Firm reserves the right to request an advance retainer or security deposit at any time during the engagement if, in the Firm's reasonable judgment, the matter requires significant additional resources beyond what was originally anticipated, or if EF's invoices become substantially past due (i.e., any invoice remains unpaid for more than sixty (60) days beyond the invoice date). Any advance retainer received by the Firm will be deposited into the Firm's client trust account and applied against outstanding invoices as they become due. The Firm will provide EF with an accounting of any retainer funds held and applied.

7. Client Responsibilities

The success of the representation depends in significant part on the full and timely cooperation of EF with the legal team at C&H. EF agrees to cooperate fully with C&H in all aspects of this engagement, including but not limited to the following:

(a) Access to Documents and Records. EF will provide C&H with timely access to all documents, records, correspondence, financial data, board minutes, and other materials relevant to the declaratory judgment action, including the Gift Instrument and Grant Agreement dated June 15, 2018, all grant agreements with the Cascabel Education Fund and the Newhall-Sievert Foundation, all internal memoranda and board resolutions relating to the BATRI program, and all correspondence with WGFT, Pratchett, Huang & Solano LLP, and the other donors.

(b) Access to Personnel. EF will make its officers, directors, employees, and agents available for interviews, witness preparation, depositions, and testimony as reasonably requested by C&H.

(c) Designation of Client Contacts. The key client contacts for this matter will be Priya Chattopadhyay, General Counsel, and Margot Ellison-Yee, Executive Director. C&H will direct its communications regarding this matter to Ms. Chattopadhyay as the primary client contact unless otherwise instructed by EF. Ms. Ellison-Yee will serve as an additional authorized contact for strategic decision-making and settlement discussions.

(d) Notification of Developments. EF will promptly inform C&H of any developments that may affect the litigation or the Firm's representation, including any communications received from The Whitfield-Garner Family Trust, Pratchett, Huang & Solano LLP, the Cascabel Education Fund, the Newhall-Sievert Foundation, or any other party relating to the BATRI funds or the declaratory judgment action. EF will also inform C&H of any changes in EF's leadership, governance, financial condition, or organizational status that may be relevant to the representation.

(e) Decision-Making Authority. All strategic decisions relating to the litigation, including but not limited to the authority to accept or reject any settlement offer, the decision to proceed to trial or to pursue alternative dispute resolution, and the decision to appeal an adverse ruling, will be made by EF. C&H will provide its professional advice and recommendations regarding such decisions, but the client retains ultimate decision-making authority in all respects.

8. Confidentiality and Privilege

All communications between C&H and EF in connection with this engagement are intended to be, and shall be treated as, protected by the attorney-client privilege and the work product doctrine to the fullest extent permitted by applicable law. The Firm will maintain the confidentiality of all client information received in connection with this engagement in accordance with the California Rules of Professional Conduct, Rule 1.6, and all other applicable ethical obligations.

EF should take care to clearly designate any communications that are intended to be privileged — for example, by marking written communications as "Privileged and Confidential — Attorney-Client Communication" — and should avoid unnecessary disclosure of privileged communications or attorney work product to third parties, as such disclosure may result in a waiver of the privilege. In particular, EF should consult with C&H before sharing any privileged communications or legal memoranda with third parties, including EF's auditors, consultants, or the other donors involved in the BATRI program.

C&H acknowledges that EF may need to share certain information regarding the litigation with its Board of Directors, officers, and senior staff who have a need to know in order to fulfill their governance and fiduciary responsibilities. Communications made within the scope of the corporate attorney-client privilege — that is, communications shared with individuals within EF who are authorized to receive legal advice on behalf of the Foundation — should not result in a waiver of the privilege, but EF should limit the dissemination of privileged materials to those individuals who have a genuine need for the information.

9. Conflicts of Interest

Prior to accepting this engagement, C&H conducted a thorough conflicts check in accordance with its standard procedures and the requirements of the California Rules of Professional Conduct. Based on that review, the Firm has identified no existing conflicts of interest that would prevent it from representing EF in this matter, and the Firm is not currently representing, and has not previously represented, The Whitfield-Garner Family Trust, any trustee or beneficiary of The Whitfield-Garner Family Trust, or Pratchett, Huang & Solano LLP in any matter.

If a conflict of interest arises during the course of the representation — whether due to the Firm's acceptance of a new client or matter, a change in circumstances, or otherwise — C&H will promptly notify EF and take appropriate action in accordance with the California Rules of Professional Conduct, including, where applicable, seeking EF's informed written consent to continue the representation or, if the conflict cannot be waived, withdrawing from the engagement.

EF confirms that, to its knowledge, it is not aware of any existing conflict of interest involving Calderwood & Harkness LLP that would preclude the Firm from representing EF in this matter.

10. Termination of Engagement

Either party may terminate this engagement at any time upon written notice to the other party, subject to the following terms:

(a) Termination by EF. If EF elects to terminate the engagement, EF will be responsible for the payment of all fees for professional services rendered and all expenses and disbursements incurred through the date of termination, in accordance with the billing and payment terms set forth in this letter.

(b) Withdrawal by C&H. If C&H determines that withdrawal from the engagement is necessary or appropriate — for example, due to a conflict of interest that cannot be waived, a material breach by EF of its obligations under this letter, or non-payment of fees — the Firm will take reasonable steps to protect EF's interests, including providing reasonable advance notice of the withdrawal, cooperating in the orderly transition of the matter to successor counsel, and, where required by court rules or orders, obtaining the court's permission to withdraw as counsel of record.

(c) Return of Client Documents. Upon termination of the engagement, whether by EF or by C&H, the Firm will promptly return to EF all original documents and property belonging to EF that are in the Firm's possession. The Firm's own internal work product, including internal memoranda, research files, and attorney notes, will be retained by the Firm subject to applicable law, including the client's right to copies of work product for which the client has paid.

The termination of this engagement shall not affect the parties' rights and obligations with respect to fees, expenses, and disbursements accrued prior to the date of termination, nor shall it affect the Firm's obligations of confidentiality, which shall survive the termination of the engagement.

11. Document Retention

Upon the conclusion of this matter — whether by final judgment, settlement, or otherwise — C&H will retain the file for this engagement in accordance with the Firm's standard document retention policies, which currently provide for the retention of closed matter files for a period of ten (10) years from the date the file is closed.

Prior to the closing or destruction of any file, EF will be given the opportunity to retrieve any original documents or other property belonging to EF that remain in the Firm's possession. The Firm will provide EF with written notice of its intent to close or destroy the file and will allow a reasonable period of not less than sixty (60) days for EF to request the return of any materials. If EF does not request the return of materials within that period, the Firm may destroy the file in accordance with its standard policies.

12. Governing Law and Dispute Resolution

This engagement letter shall be governed by and construed in accordance with the laws of the State of California, without regard to principles of conflicts of law.

In the event of any dispute arising out of or relating to this engagement letter or the Firm's representation of EF, including any dispute regarding fees, the parties agree to attempt in good faith to resolve the dispute through informal negotiation. If informal negotiation is unsuccessful, the parties agree that the dispute shall be resolved through binding arbitration conducted in San Francisco, California, in accordance with the rules of a mutually agreed-upon arbitration provider (such as JAMS or the American Arbitration Association), except to the extent that such arbitration would be prohibited by the California Rules of Professional Conduct or other applicable law or regulation governing the resolution of attorney-client fee disputes. Nothing in this provision shall limit EF's right to seek fee arbitration through the San Francisco Bar Association or any other mandatory fee arbitration program to which EF may be entitled under California Business and Professions Code Section 6200 et seq.

13. No Guarantee of Outcome

Calderwood & Harkness LLP will use its best professional efforts and judgment on behalf of Estuary Foundation in all aspects of this engagement. However, consistent with our ethical obligations, we must advise you that no assurance or guarantee can be given regarding the outcome of the declaratory judgment action or any other aspect of this matter.

The results of the litigation will depend on numerous factors, many of which are beyond the control of the Firm or EF, including but not limited to the court's interpretation of the Gift Instrument and Grant Agreement dated June 15, 2018; the applicability of the cy pres and equitable deviation doctrines under California law to the specific facts of this case; the positions taken by The Whitfield-Garner Family Trust and its counsel; any positions that may be taken by the California Attorney General pursuant to its supervisory authority over charitable trusts and nonprofit organizations; and the facts and evidence as they develop during discovery and at trial. Any expressions of opinion or assessments of the merits that C&H may provide during the course of the representation are based on the Firm's professional judgment and the information available at the time and should not be construed as guarantees or predictions of outcome.

14. Entire Agreement and Amendments

This engagement letter constitutes the entire agreement between Calderwood & Harkness LLP and Estuary Foundation with respect to the terms and conditions of the Firm's engagement in the matter referenced herein. This letter supersedes all prior oral or written communications, understandings, or agreements between the parties relating to the subject matter of this engagement.

No amendment, modification, or waiver of any provision of this engagement letter shall be effective unless set forth in a writing signed by both C&H and EF. The failure of either party to enforce any provision of this letter shall not constitute a waiver of that provision or of any other provision.

We ask that you review this engagement letter carefully and, if the terms are acceptable to Estuary Foundation, sign and return one copy of this letter to the undersigned at your earliest convenience. Upon receipt of the executed letter, we will proceed promptly with the preparation and filing of the Complaint for Declaratory Relief.

We look forward to working with Estuary Foundation on this important matter. Please do not hesitate to contact Douglas Carmichael at (415) 392-7812 or dcarmichael@calderwoodharkness.com if you have any questions regarding this letter or any aspect of the engagement.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Douglas Carmichael Partner Calderwood & Harkness LLP

By: ________

Francesca Morano Partner Calderwood & Harkness LLP

ACKNOWLEDGMENT AND ACCEPTANCE

The undersigned, on behalf of Estuary Foundation, a California nonprofit public benefit corporation, hereby acknowledges receipt of this engagement letter, confirms that the undersigned has read and understands its terms, and agrees to the terms and conditions set forth herein.

ACKNOWLEDGED AND AGREED:

ESTUARY FOUNDATION

By: ________

Name: Priya Chattopadhyay, Esq.

Title: General Counsel

Date: ________

By: ________

Name: Margot Ellison-Yee

Title: Executive Director

Date: ________

Enclosures: None

cc: Margot Ellison-Yee, Executive Director, Estuary Foundation cc: Dr. Kenneth Oguike, Board Chair, Estuary Foundation

Attorney	Position	2022 Hourly Rate
Douglas Carmichael	Partner	$895.00
Francesca Morano	Partner	$850.00
Simone Laroche	Senior Associate	$625.00
Jeffrey Park	Associate	$525.00

CALDERWOOD & HARKNESS LLP Attorneys at Law
One Market Plaza, Suite 3600 San Francisco, California 94105 Telephone: (415) 392-7800 Facsimile: (415) 392-7801 www.calderwoodharkness.com
April 1, 2022
VIA HAND DELIVERY AND ELECTRONIC MAIL
Priya Chattopadhyay, Esq. General Counsel Estuary Foundation 1440 Embarcadero Way, Suite 300 San Francisco, California 94107
Re: Engagement of Calderwood & Harkness LLP by Estuary Foundation — Declaratory Judgment Action Concerning Donor Grant Restrictions on Restricted Funds (Approximately $4.7 Million); Bay Area Teacher Residency Initiative C&H Matter No.: 1028-00001 Case No.: CGC-22-599481 (Superior Court of California, County of San Francisco)
Dear Ms. Chattopadhyay:
We are pleased that Estuary Foundation has selected Calderwood & Harkness LLP to serve as its counsel in the above-referenced matter. This engagement letter sets forth the terms and conditions under which the firm will provide legal services to Estuary Foundation. We ask that you review this letter carefully and, if the terms are acceptable, execute and return a signed copy to our offices so that we may proceed with the representation.
1. Purpose and Confirmation of Engagement
This letter confirms that Estuary Foundation ("EF" or the "Foundation"), a California nonprofit public benefit corporation organized under Section 5110 et seq. of the California Corporations Code (Employer Identification Number: 94-3127856), has engaged Calderwood & Harkness LLP ("C&H" or the "Firm") to represent EF as plaintiff in a declaratory judgment action to be filed in the Superior Court of California, County of San Francisco.
The matter concerns approximately Four Million Seven Hundred Thousand Dollars ($4,700,000) in restricted grant funds originally dedicated to the Bay Area Teacher Residency Initiative ("BATRI"), a teacher preparation and placement program that EF operated from 2018 through 2021 and that has since been wound down following the expiration of certain program partnerships. The underlying dispute involves The Whitfield-Garner Family Trust ("WGFT"), a California irrevocable trust, and concerns the interpretation and enforceability of donor-imposed grant restrictions under a Gift Instrument and Grant Agreement between EF and WGFT dated June 15, 2018 (the "Gift Instrument").
As you have informed us, WGFT, through its counsel at Pratchett, Huang & Solano LLP, has demanded the return of One Million Seven Hundred Thousand Dollars ($1,700,000) in unexpended and undisbursed grant funds, asserting that a reversion clause in the Gift Instrument entitles the trust to the return of those funds upon the wind-down of the BATRI program. EF disputes WGFT's interpretation of the reversion clause and seeks judicial clarification that the restricted funds may be redirected to EF's broader educational mission under the doctrines of cy pres and equitable deviation as recognized under California law, including the Uniform Prudent Management of Institutional Funds Act (Cal. Prob. Code §§ 18501–18510) and applicable equitable principles.
This letter sets forth the complete terms and conditions governing the engagement between EF and C&H with respect to this matter.
2. Scope of Representation
Calderwood & Harkness LLP will represent Estuary Foundation in connection with the following:
(a) Filing and Prosecution of the Complaint. The preparation, filing, and prosecution of a Complaint for Declaratory Relief in the Superior Court of California, County of San Francisco, which has been assigned Case Number CGC-22-599481, seeking a judicial determination of the parties' respective rights and obligations under the Gift Instrument and related grant documents.
(b) Defense of Cross-Claims and Counterclaims. The defense of any cross-claims, counterclaims, or affirmative claims that may be asserted by The Whitfield-Garner Family Trust or its counsel, Pratchett, Huang & Solano LLP, in connection with the declaratory judgment action, including but not limited to claims for breach of fiduciary duty, breach of contract, constructive trust, or restitution.
(c) Pre-Litigation Correspondence and Negotiations. All pre-litigation correspondence and negotiations with opposing counsel, including demand letters, tolling agreements, and any informal resolution discussions that may precede or occur parallel to the filing of the complaint.
(d) Alternative Dispute Resolution. Representation in mediation or other alternative dispute resolution proceedings, if such proceedings are pursued by agreement of the parties or ordered by the court.
(e) discovery, Motion Practice, Trial Preparation, and Trial. All aspects of discovery (both written and oral), including propounding and responding to interrogatories, requests for production of documents, requests for admissions, and depositions; all motion practice, including demurrers, motions to compel, motions for summary judgment or summary adjudication, and motions in limine; trial preparation, including witness preparation, exhibit preparation, and preparation of trial briefs; and trial, if the matter is not resolved prior to trial.
(f) Appellate Proceedings. Any appellate proceedings arising from the declaratory judgment action, provided that appellate representation shall be the subject of a separate engagement letter and separate fee arrangement to be agreed upon by the parties in writing before any appellate work is undertaken.
The scope of this engagement encompasses representation concerning the total approximately $4,700,000 in restricted BATRI funds, the composition of which is as follows:
(i) Whitfield-Garner Family Trust Funds — $1,700,000. This amount comprises Seven Hundred Thousand Dollars ($700,000) in funds that were disbursed to EF under the Gift Instrument but remain unexpended following the wind-down of the BATRI program, and One Million Dollars ($1,000,000) in undisbursed Tranche 4 funds that were committed under the Gift Instrument but not yet transferred to EF at the time the BATRI program was wound down.
(ii) Cascabel Education Fund Funds — $2,000,000. Restricted grant funds received by EF from the Cascabel Education Fund pursuant to a separate grant agreement for the support of the BATRI program.
(iii) Newhall-Sievert Foundation Funds — $1,000,000. Restricted grant funds received by EF from the Newhall-Sievert Foundation pursuant to a separate grant agreement for the support of the BATRI program.
While the primary dispute at issue involves the demand by WGFT, the declaratory judgment action may address the broader question of EF's authority to redirect all restricted BATRI funds to the Foundation's general educational mission, including funds attributable to the Cascabel Education Fund and the Newhall-Sievert Foundation, to the extent that resolution of the WGFT dispute has implications for those funds.
Limitations on Scope. The scope of this engagement does not extend to the provision of tax advice, including advice regarding the tax consequences of any resolution of the dispute or the tax treatment of restricted versus unrestricted funds; regulatory compliance matters unrelated to the litigation; or representation of EF in any unrelated matters. Should EF require legal services outside the scope described herein, those services will be addressed under a separate engagement letter or an amendment to this engagement letter. Any expansion of the scope of this engagement will be confirmed in a writing signed by both parties.
3. Staffing and Responsible Attorneys
The following attorneys have been assigned to this matter and will be primarily responsible for the representation:
Douglas Carmichael — Partner, Litigation (General). Mr. Carmichael will serve as the Responsible Partner for the engagement and will have overall responsibility for the strategic direction of the matter, court appearances, and client communication. Mr. Carmichael will serve as the primary point of contact for EF and may be reached at (415) 392-7812 (direct) or dcarmichael@calderwoodharkness.com.
Francesca Morano — Partner, Litigation (General). Ms. Morano will serve as the Billing Partner for the engagement and will assist with case strategy, review and approval of key filings and submissions, and billing oversight.
Simone Laroche — Senior Associate, Litigation (General). Ms. Laroche will manage the day-to-day litigation tasks associated with the matter, including legal research, drafting of pleadings, briefs, and correspondence, discovery management, and coordination of filings with the court.
Jeffrey Park — Associate, Litigation (General). Mr. Park will assist with legal research, document review, drafting, and other tasks as assigned by the senior members of the litigation team.
From time to time, other attorneys, paralegals, legal assistants, or support staff within Calderwood & Harkness LLP may be assigned to work on this matter as the needs of the engagement require. The Firm will make reasonable efforts to ensure continuity of staffing and will promptly inform EF of any significant changes to the composition of the team, including the addition or departure of any attorney with a material role in the representation.
4. Fees and Billing Rates
Legal services rendered by Calderwood & Harkness LLP in connection with this engagement will be billed on an hourly fee basis. The current hourly billing rates for the attorneys assigned to this matter, effective for calendar year 2022, are as follows:
Hourly rates for paralegals, legal assistants, and other support staff assigned to this matter will be communicated to EF as applicable and will generally range from $225.00 to $375.00 per hour depending on the experience level and role of the individual.
The Firm's hourly billing rates are subject to annual adjustment, which typically takes effect on January 1 of each calendar year. C&H will provide EF with advance written notice of not less than thirty (30) days prior to the effective date of any rate increase. Any rate increase will apply only to services performed on or after the effective date of the adjustment.
In addition to fees for professional services, the Firm reserves the right to charge EF for reasonable out-of-pocket expenses and disbursements incurred in connection with the representation. Such expenses may include, without limitation:
•  Court filing fees and service of process costs;
•  Messenger and courier charges;
•  Photocopying, printing, and document reproduction costs;
•  Travel expenses, including airfare, lodging, ground transportation, and meals, incurred in connection with the matter;
•  Expert witness and consultant fees and expenses;
•  Mediator fees;
•  Court reporter fees and transcript costs;
•  Electronic legal research charges (e.g., Westmark Data Systems, Sundial Solutions); and
•  Any other costs reasonably and necessarily incurred in the prosecution or defense of the matter.
Expenses will be billed at cost or, where applicable, at the Firm's standard internal charge for such services (for example, the Firm's standard per-page charge for internal photocopying). The Firm will endeavor to obtain EF's prior approval before incurring any individual expense item in excess of Five Thousand Dollars ($5,000.00), although the Firm cannot guarantee that such advance approval will be feasible in all circumstances, particularly where time-sensitive filings or discovery deadlines are involved.
5. Billing and Payment Terms
C&H will render invoices to EF on a monthly basis, generally within the first fifteen (15) days of the month following the month in which services were performed. All invoices are due and payable within thirty (30) days of the date of the invoice.
Each invoice will include a description of the services rendered during the billing period, the name and position of the attorney or staff member who performed each task, the time expended (in increments of one-tenth of an hour), the applicable hourly rate for each timekeeper, and an itemized summary of disbursements and out-of-pocket expenses incurred during the billing period. The Firm will provide sufficient detail in its invoice descriptions to permit EF to evaluate the reasonableness and necessity of the services rendered and expenses incurred.
Payments should be directed to:
Calderwood & Harkness LLP One Market Plaza, Suite 3600 San Francisco, California 94105
Attention: Accounts Receivable
Payment may also be made via electronic wire transfer. Wire transfer instructions are available upon request from the Firm's accounting department at (415) 392-7800, extension 200.
In the event that any invoice is not paid within thirty (30) days of the invoice date, the Firm reserves the right to charge interest on the overdue balance at the rate of one percent (1.0%) per month, which is equivalent to twelve percent (12%) per annum. Interest will accrue from the thirty-first (31st) day after the invoice date until the date of payment in full. The Firm's right to charge interest on overdue balances shall not be construed as an extension of credit or a waiver of the Firm's right to terminate the engagement for non-payment.
In the event of a billing dispute, EF agrees to promptly notify C&H in writing, specifying the nature of the dispute and the amount at issue. The parties will use good-faith efforts to resolve any billing dispute in an expeditious manner. Amounts not in dispute shall remain due and payable in accordance with the terms set forth above.
6. Retainer
No advance retainer or security deposit is required at the commencement of this engagement. The Firm is willing to begin work on the matter based on the billing and payment arrangements described in Sections 4 and 5 above.
The Firm reserves the right to request an advance retainer or security deposit at any time during the engagement if, in the Firm's reasonable judgment, the matter requires significant additional resources beyond what was originally anticipated, or if EF's invoices become substantially past due (i.e., any invoice remains unpaid for more than sixty (60) days beyond the invoice date). Any advance retainer received by the Firm will be deposited into the Firm's client trust account and applied against outstanding invoices as they become due. The Firm will provide EF with an accounting of any retainer funds held and applied.
7. Client Responsibilities
The success of the representation depends in significant part on the full and timely cooperation of EF with the legal team at C&H. EF agrees to cooperate fully with C&H in all aspects of this engagement, including but not limited to the following:
(a) Access to Documents and Records. EF will provide C&H with timely access to all documents, records, correspondence, financial data, board minutes, and other materials relevant to the declaratory judgment action, including the Gift Instrument and Grant Agreement dated June 15, 2018, all grant agreements with the Cascabel Education Fund and the Newhall-Sievert Foundation, all internal memoranda and board resolutions relating to the BATRI program, and all correspondence with WGFT, Pratchett, Huang & Solano LLP, and the other donors.
(b) Access to Personnel. EF will make its officers, directors, employees, and agents available for interviews, witness preparation, depositions, and testimony as reasonably requested by C&H.
(c) Designation of Client Contacts. The key client contacts for this matter will be Priya Chattopadhyay, General Counsel, and Margot Ellison-Yee, Executive Director. C&H will direct its communications regarding this matter to Ms. Chattopadhyay as the primary client contact unless otherwise instructed by EF. Ms. Ellison-Yee will serve as an additional authorized contact for strategic decision-making and settlement discussions.
(d) Notification of Developments. EF will promptly inform C&H of any developments that may affect the litigation or the Firm's representation, including any communications received from The Whitfield-Garner Family Trust, Pratchett, Huang & Solano LLP, the Cascabel Education Fund, the Newhall-Sievert Foundation, or any other party relating to the BATRI funds or the declaratory judgment action. EF will also inform C&H of any changes in EF's leadership, governance, financial condition, or organizational status that may be relevant to the representation.
(e) Decision-Making Authority. All strategic decisions relating to the litigation, including but not limited to the authority to accept or reject any settlement offer, the decision to proceed to trial or to pursue alternative dispute resolution, and the decision to appeal an adverse ruling, will be made by EF. C&H will provide its professional advice and recommendations regarding such decisions, but the client retains ultimate decision-making authority in all respects.
8. Confidentiality and Privilege
All communications between C&H and EF in connection with this engagement are intended to be, and shall be treated as, protected by the attorney-client privilege and the work product doctrine to the fullest extent permitted by applicable law. The Firm will maintain the confidentiality of all client information received in connection with this engagement in accordance with the California Rules of Professional Conduct, Rule 1.6, and all other applicable ethical obligations.
EF should take care to clearly designate any communications that are intended to be privileged — for example, by marking written communications as "Privileged and Confidential — Attorney-Client Communication" — and should avoid unnecessary disclosure of privileged communications or attorney work product to third parties, as such disclosure may result in a waiver of the privilege. In particular, EF should consult with C&H before sharing any privileged communications or legal memoranda with third parties, including EF's auditors, consultants, or the other donors involved in the BATRI program.
C&H acknowledges that EF may need to share certain information regarding the litigation with its Board of Directors, officers, and senior staff who have a need to know in order to fulfill their governance and fiduciary responsibilities. Communications made within the scope of the corporate attorney-client privilege — that is, communications shared with individuals within EF who are authorized to receive legal advice on behalf of the Foundation — should not result in a waiver of the privilege, but EF should limit the dissemination of privileged materials to those individuals who have a genuine need for the information.
9. Conflicts of Interest
Prior to accepting this engagement, C&H conducted a thorough conflicts check in accordance with its standard procedures and the requirements of the California Rules of Professional Conduct. Based on that review, the Firm has identified no existing conflicts of interest that would prevent it from representing EF in this matter, and the Firm is not currently representing, and has not previously represented, The Whitfield-Garner Family Trust, any trustee or beneficiary of The Whitfield-Garner Family Trust, or Pratchett, Huang & Solano LLP in any matter.
If a conflict of interest arises during the course of the representation — whether due to the Firm's acceptance of a new client or matter, a change in circumstances, or otherwise — C&H will promptly notify EF and take appropriate action in accordance with the California Rules of Professional Conduct, including, where applicable, seeking EF's informed written consent to continue the representation or, if the conflict cannot be waived, withdrawing from the engagement.
EF confirms that, to its knowledge, it is not aware of any existing conflict of interest involving Calderwood & Harkness LLP that would preclude the Firm from representing EF in this matter.
10. Termination of Engagement
Either party may terminate this engagement at any time upon written notice to the other party, subject to the following terms:
(a) Termination by EF. If EF elects to terminate the engagement, EF will be responsible for the payment of all fees for professional services rendered and all expenses and disbursements incurred through the date of termination, in accordance with the billing and payment terms set forth in this letter.
(b) Withdrawal by C&H. If C&H determines that withdrawal from the engagement is necessary or appropriate — for example, due to a conflict of interest that cannot be waived, a material breach by EF of its obligations under this letter, or non-payment of fees — the Firm will take reasonable steps to protect EF's interests, including providing reasonable advance notice of the withdrawal, cooperating in the orderly transition of the matter to successor counsel, and, where required by court rules or orders, obtaining the court's permission to withdraw as counsel of record.
(c) Return of Client Documents. Upon termination of the engagement, whether by EF or by C&H, the Firm will promptly return to EF all original documents and property belonging to EF that are in the Firm's possession. The Firm's own internal work product, including internal memoranda, research files, and attorney notes, will be retained by the Firm subject to applicable law, including the client's right to copies of work product for which the client has paid.
The termination of this engagement shall not affect the parties' rights and obligations with respect to fees, expenses, and disbursements accrued prior to the date of termination, nor shall it affect the Firm's obligations of confidentiality, which shall survive the termination of the engagement.
11. Document Retention
Upon the conclusion of this matter — whether by final judgment, settlement, or otherwise — C&H will retain the file for this engagement in accordance with the Firm's standard document retention policies, which currently provide for the retention of closed matter files for a period of ten (10) years from the date the file is closed.
Prior to the closing or destruction of any file, EF will be given the opportunity to retrieve any original documents or other property belonging to EF that remain in the Firm's possession. The Firm will provide EF with written notice of its intent to close or destroy the file and will allow a reasonable period of not less than sixty (60) days for EF to request the return of any materials. If EF does not request the return of materials within that period, the Firm may destroy the file in accordance with its standard policies.
12. Governing Law and Dispute Resolution
This engagement letter shall be governed by and construed in accordance with the laws of the State of California, without regard to principles of conflicts of law.
In the event of any dispute arising out of or relating to this engagement letter or the Firm's representation of EF, including any dispute regarding fees, the parties agree to attempt in good faith to resolve the dispute through informal negotiation. If informal negotiation is unsuccessful, the parties agree that the dispute shall be resolved through binding arbitration conducted in San Francisco, California, in accordance with the rules of a mutually agreed-upon arbitration provider (such as JAMS or the American Arbitration Association), except to the extent that such arbitration would be prohibited by the California Rules of Professional Conduct or other applicable law or regulation governing the resolution of attorney-client fee disputes. Nothing in this provision shall limit EF's right to seek fee arbitration through the San Francisco Bar Association or any other mandatory fee arbitration program to which EF may be entitled under California Business and Professions Code Section 6200 et seq.
13. No Guarantee of Outcome
Calderwood & Harkness LLP will use its best professional efforts and judgment on behalf of Estuary Foundation in all aspects of this engagement. However, consistent with our ethical obligations, we must advise you that no assurance or guarantee can be given regarding the outcome of the declaratory judgment action or any other aspect of this matter.
The results of the litigation will depend on numerous factors, many of which are beyond the control of the Firm or EF, including but not limited to the court's interpretation of the Gift Instrument and Grant Agreement dated June 15, 2018; the applicability of the cy pres and equitable deviation doctrines under California law to the specific facts of this case; the positions taken by The Whitfield-Garner Family Trust and its counsel; any positions that may be taken by the California Attorney General pursuant to its supervisory authority over charitable trusts and nonprofit organizations; and the facts and evidence as they develop during discovery and at trial. Any expressions of opinion or assessments of the merits that C&H may provide during the course of the representation are based on the Firm's professional judgment and the information available at the time and should not be construed as guarantees or predictions of outcome.
14. Entire Agreement and Amendments
This engagement letter constitutes the entire agreement between Calderwood & Harkness LLP and Estuary Foundation with respect to the terms and conditions of the Firm's engagement in the matter referenced herein. This letter supersedes all prior oral or written communications, understandings, or agreements between the parties relating to the subject matter of this engagement.
No amendment, modification, or waiver of any provision of this engagement letter shall be effective unless set forth in a writing signed by both C&H and EF. The failure of either party to enforce any provision of this letter shall not constitute a waiver of that provision or of any other provision.
We ask that you review this engagement letter carefully and, if the terms are acceptable to Estuary Foundation, sign and return one copy of this letter to the undersigned at your earliest convenience. Upon receipt of the executed letter, we will proceed promptly with the preparation and filing of the Complaint for Declaratory Relief.
We look forward to working with Estuary Foundation on this important matter. Please do not hesitate to contact Douglas Carmichael at (415) 392-7812 or dcarmichael@calderwoodharkness.com if you have any questions regarding this letter or any aspect of the engagement.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Douglas Carmichael Partner Calderwood & Harkness LLP
By: ________
Francesca Morano Partner Calderwood & Harkness LLP
ACKNOWLEDGMENT AND ACCEPTANCE
The undersigned, on behalf of Estuary Foundation, a California nonprofit public benefit corporation, hereby acknowledges receipt of this engagement letter, confirms that the undersigned has read and understands its terms, and agrees to the terms and conditions set forth herein.
ACKNOWLEDGED AND AGREED:
ESTUARY FOUNDATION
By: ________
Name: Priya Chattopadhyay, Esq.
Title: General Counsel
Date: ________
By: ________
Name: Margot Ellison-Yee
Title: Executive Director
Date: ________
Enclosures: None
cc: Margot Ellison-Yee, Executive Director, Estuary Foundation cc: Dr. Kenneth Oguike, Board Chair, Estuary Foundation
Attorney | Position | 2022 Hourly Rate
Douglas Carmichael | Partner | $895.00
Francesca Morano | Partner | $850.00
Simone Laroche | Senior Associate | $625.00
Jeffrey Park | Associate | $525.00

CALDERWOOD & HARKNESS LLP Attorneys at Law

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CALDERWOOD & HARKNESS LLP

ACKNOWLEDGMENT AND ACCEPTANCE

ACKNOWLEDGED AND AGREED:

ESTUARY FOUNDATION

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