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PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION

CALDERWOOD & HARKNESS LLP 375 Park Avenue, 42nd Floor New York, NY 10152 Tel: (212) 554-7000

Fax: (212) 554-7001

www.calderwoodharkness.com

March 1, 2023

ADDENDUM TO ENGAGEMENT LETTER — TAX ADVISORY SERVICES

Reference: Base Engagement Letter dated February 15, 2023 Matter No.: 1034-00004 Billing Code: 78412-JRC

This Addendum to Engagement Letter — Tax Advisory Services (this "Addendum") is entered into as of March 1, 2023, by and between Calderwood & Harkness LLP, a New York limited liability partnership with offices at 375 Park Avenue, 42nd Floor, New York, NY 10152 ("C&H" or the "Firm"), and Jonathan Robert Caldwell, an individual residing at 418 East 72nd Street, Apt. 14A, New York, NY 10021 (the "Client"). This Addendum supplements, and is to be read in conjunction with, the Base Engagement Letter dated February 15, 2023 (the "Base Engagement Letter"), under which C&H was retained to provide comprehensive generational estate planning services to the Client. The date of this Addendum coincides with the completion of the asset inventory and preliminary tax analysis performed by the Firm in connection with the Client's estate plan.

1. INTRODUCTORY RECITALS

WHEREAS, Calderwood & Harkness LLP ("C&H" or the "Firm") and Jonathan Robert Caldwell (the "Client") entered into an engagement letter dated February 15, 2023 (the "Base Engagement Letter"), pursuant to which C&H was retained to provide comprehensive generational estate planning services to the Client, including the design, structuring, documentation, and implementation of an integrated estate plan encompassing trust, gift, charitable, insurance, and related planning structures;

WHEREAS, the Base Engagement Letter contemplated, in Section 3.4 thereof, the engagement of specialist tax advisory resources within C&H to support the design and implementation of the Client's estate plan, and provided that a separate addendum would be executed to describe in detail the scope, deliverables, and coordination framework for such tax advisory services;

WHEREAS, this Addendum supplements, and is to be read in conjunction with, the Base Engagement Letter, and, to the extent of any conflict or inconsistency between the terms of this Addendum and the terms of the Base Engagement Letter, the terms of this Addendum shall govern with respect to the Tax Advisory Services described herein;

WHEREAS, the responsible partner for the engagement is Victoria Chambers, Partner, Calderwood & Harkness LLP, and the billing partner is Howard Quinn, Partner, Calderwood & Harkness LLP, both of the Firm's White Collar & Investigations practice, as designated in the Base Engagement Letter;

WHEREAS, Sylvia Hartwell, Partner, Tax Practice Group, Calderwood & Harkness LLP, has been identified as the specialist tax advisor who will lead the Tax Advisory Services workstream described in this Addendum, and who will serve as the primary point of contact for the Client and for all third-party advisors on matters within the scope of this Addendum; and

WHEREAS, the Client's accountants and tax advisors, Strathmore Corporation & Greaves LLP (contact: Martin J. Prescott, CPA, Senior Partner, Private Client Group, 600 Third Avenue, 28th Floor, New York, NY 10016), will coordinate with C&H on certain tax compliance and filing matters as described herein, and will serve as the Client's tax return preparer with respect to all federal and state tax returns referenced in this Addendum.

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual agreements set forth herein, the parties agree as follows:

2. SCOPE OF TAX ADVISORY SERVICES

2.1 Overview. Sylvia Hartwell, Partner, Tax Practice Group, Calderwood & Harkness LLP, and the C&H tax advisory team will provide the Tax Advisory Services described in this Section 2 in connection with the Caldwell generational estate plan (the "Estate Plan"). The Estate Plan encompasses the following structures, each as identified and described in the Base Engagement Letter:

(a) three Grantor Retained Annuity Trusts ("GRATs"), designated herein as the Caldwell 2023 Securities GRAT ("GRAT A"), the Caldwell 2023 Realty GRAT ("GRAT B"), and the Caldwell 2023 Carried Interest GRAT ("GRAT C");

(b) the Caldwell Family Dynasty Trust (the "Dynasty Trust");

(d) the Caldwell Family Insurance Trust (the "ILIT"), an irrevocable life insurance trust;

(e) the Caldwell Revocable Trust (the "Revocable Trust"), including the credit shelter trust and marital qualified terminable interest property ("QTIP") trust provisions thereunder; and

(f) related testamentary instruments, powers of attorney, and ancillary documents as contemplated in the Base Engagement Letter.

The Tax Advisory Services described in this Addendum are advisory and structuring in nature. The Firm will provide tax analysis, memoranda, computational models, draft returns, and strategic recommendations as set forth below. Final tax return preparation and filing will be coordinated with and performed by Strathmore Corporation & Greaves LLP, the Client's accountants and tax return preparers, unless otherwise expressly specified in this Addendum. All services described herein are subject to the limitations and qualifications set forth in Section 8 of this Addendum.

2.2 GRAT Design and Annuity Calculations

The C&H tax advisory team will provide the following services with respect to the design, structuring, and tax analysis of three zeroed-out GRATs to be established and funded under Internal Revenue Code ("IRC") § 2702 and the Treasury Regulations thereunder:

2.2.1 GRAT Structures. C&H will design and structure the following three GRATs, each intended to qualify as a "zeroed-out" GRAT such that the value of the retained annuity interest equals the value of the property transferred to the trust, resulting in a taxable gift of zero for federal gift tax purposes:

(a) Caldwell 2023 Securities GRAT (GRAT A):

• Corpus: $60,000,000 in publicly traded securities, to be transferred from the Client's individual brokerage accounts at Havensbrook Wealth Advisors LLC.

• Term: Two (2) years.

• Annuity Payment: Calculated to produce a taxable gift of $0.00, using the applicable § 7520 rate for the month of funding.

• Funding Date: April 15, 2023.

(b) Caldwell 2023 Realty GRAT (GRAT B):

• Corpus: $80,000,000 in membership interests in Stonecrest Realty Holdings LLC, a Delaware limited liability company, representing approximately 59.7% of the total outstanding membership interests. The total fair market value of Stonecrest Realty Holdings LLC, as a going concern, is estimated at $134,000,000.

• Term: Three (3) years.

• Valuation discounts: The membership interests will be subject to a combined lack-of-marketability and lack-of-control discount of 25%, resulting in a funded fair market value for federal gift tax purposes of $60,000,000.

• Annuity Payment: Calculated to produce a taxable gift of $0.00, using the applicable § 7520 rate for the month of funding.

• Funding Date: May 1, 2023.

• Corpus: $38,000,000 in limited partnership ("LP") interests and carried-interest positions in the following Caldwell Ridgeline Capital funds:

• Caldwell Ridgeline Capital Fund IV LP interests: $12,000,000

• Caldwell Ridgeline Capital Fund V LP interests: $14,000,000

• Caldwell Ridgeline Capital Fund VI carried interest: $12,000,000

• Term: Three (3) years.

• Valuation discounts: Blended discounts of 35% on LP interests and 30% on carried interest, resulting in a post-discount fair market value of $25,300,000.

• Annuity Payment: Calculated to produce a taxable gift of $0.00, using the applicable § 7520 rate for the month of funding.

• Funding Date: June 1, 2023.

2.2.2 Annuity Payment Computations. C&H will compute the annuity payment amounts for each GRAT using the applicable § 7520 rates published by the Internal Revenue Service, the IRS actuarial tables set forth in Treasury Regulation § 20.2031-7 and IRS Publication 1457, and the Client's age at the time of each GRAT's creation (age 67; date of birth March 14, 1956). Based on the Firm's preliminary analysis, the annuity payment amounts are as follows:

(a) GRAT A: $32,195,122 per year for the two-year annuity term, based on a § 7520 rate of 5.0% for March 2023 (the month in which the applicable rate will be elected for GRAT A, which is funded in April 2023, with the Client electing the prior month's rate as permitted under IRC § 7520(a)).

(b) GRAT B: $29,375,859 per year for the three-year annuity term, based on a § 7520 rate of 5.0% for April 2023.

The foregoing amounts are preliminary and will be finalized upon confirmation of the applicable § 7520 rates for the relevant months, completion of the independent appraisals by Ashford Valuation Group LLC, and execution of the GRAT instruments. C&H will prepare detailed annuity payment schedules for each GRAT reflecting the payment amounts, due dates, and payment-in-kind provisions, if applicable.

2.2.3 Section 7520 Rate Analysis and Rate-Locking Strategy. C&H will analyze the § 7520 rate environment in connection with the timing of GRAT funding, with a view toward optimizing the annuity calculation under the most favorable available rate. The Firm confirms that the applicable § 7520 rates for March, April, and May 2023 are each 5.0%, and will advise the Client as to the election of the current month's rate or the prior month's rate under IRC § 7520(a) in connection with each GRAT funding. The Firm will monitor the § 7520 rate for June 2023 and advise the Client promptly if a rate change would affect the GRAT C funding calculations.

2.2.4 Zeroed-Out GRAT Compliance. C&H will verify that each GRAT satisfies the requirements for zeroed-out status under IRC § 2702 and Treasury Regulation § 25.2702-3, such that the value of the Client's retained annuity interest equals the value of the property transferred to the trust, resulting in no taxable gift upon funding. The Firm will confirm compliance with the "qualified interest" requirements, including the fixed annuity amount, the payment timing requirements, and the prohibition on additional contributions during the annuity term.

2.2.5 Mortality Risk Analysis. Given the Client's age (67 at the time of GRAT creation) and the annuity term durations (two years for GRAT A and three years for GRAT B and GRAT C), C&H will prepare a mortality risk analysis addressing the consequences of the Client's death during the annuity term of any GRAT, including the estate tax inclusion rules under IRC § 2036(a) and the impact on the wealth transfer objectives of the Estate Plan. The analysis will consider the use of the Client's remaining estate tax exemption and the interplay with the ILIT death benefit proceeds in mitigating the financial impact of mortality during the GRAT terms.

2.2.6 Grantor Trust Status and Income Tax Reporting. C&H will analyze the grantor trust status of each GRAT during its annuity term under IRC §§ 671–679, confirm that each GRAT is treated as a grantor trust for federal income tax purposes during the annuity period, and advise on the income tax reporting implications for the Client. During the annuity term, the Client, as grantor, will report all income, deductions, and credits of each GRAT on his individual federal and state income tax returns. The Firm will coordinate with Strathmore Corporation & Greaves LLP on the proper reporting of grantor trust income and will provide the necessary trust identification and structural information to facilitate accurate tax return preparation.

2.2.7 Asset Selection Analysis. C&H will prepare an analysis and recommendations regarding the suitability of the asset classes selected for GRAT funding, including an assessment of the expected return characteristics, volatility, liquidity, and valuation considerations for each category of funded assets. The analysis will address the relative advantages and risks of funding GRATs with publicly traded securities (GRAT A), illiquid real estate membership interests (GRAT B), and private equity LP interests and carried interest (GRAT C), with particular attention to the ability of each asset class to outperform the § 7520 hurdle rate and generate excess appreciation for transfer to the remainder beneficiaries.

2.2.8 Annuity Payment Schedules. C&H will prepare detailed annuity payment schedules for each of GRATs A, B, and C, specifying the annuity payment amounts, payment due dates, payment methods (cash, in-kind distribution, or a combination thereof), and any applicable provisions for substitution of assets. The schedules will be delivered to the Client, to the GRAT trustees, and to Strathmore Corporation & Greaves LLP for coordination with income tax reporting and trust accounting.

2.2.9 Sensitivity Analysis. C&H will prepare a comprehensive sensitivity analysis modeling the projected wealth transfer under each GRAT across a range of annual return assumptions, including 4%, 6%, 8%, and 10% annual returns on the GRAT corpus. The sensitivity analysis will project, for each GRAT and in the aggregate, the expected excess appreciation transferred to the remainder beneficiaries upon expiration of the annuity term. Based on the Firm's preliminary modeling, the projected aggregate excess appreciation transfer across all three GRATs is estimated at $35,000,000 to $50,000,000, assuming outperformance of the § 7520 hurdle rate by approximately 4% annually. The sensitivity analysis will be presented in a modeling workbook format and will be included in the deliverables set forth in Section 5 of this Addendum.

2.3 Valuation discount Analysis and Coordination

2.3.1 discount Analysis. C&H will analyze the supportable valuation discounts applicable to the assets transferred to GRATs B and C, including the following:

(a) Stonecrest Realty Holdings LLC Membership Interests (GRAT B): A combined lack-of-marketability and lack-of-control discount of 25%, reflecting the absence of a public trading market for the membership interests, the restrictions on transfer set forth in the Stonecrest operating agreement, and the Client's minority (though significant) membership interest position following the GRAT transfer. The Firm will analyze the appropriateness of this discount level in light of applicable Tax Court precedent, including Mandelbaum v. Commissioner, 91 T.C.M. (CCH) 1002 (2006), Estate of Weinberg v. Commissioner, T.C. Memo 2000-51, and relevant Revenue Rulings and IRS guidance.

(b) Caldwell Ridgeline Capital Fund IV and Fund V LP Interests (GRAT C): A combined lack-of-marketability and lack-of-control discount of 35%, reflecting the illiquidity of the LP interests, the restrictions on transfer under the partnership agreements, the limited duration of the fund terms, and the absence of a secondary market for the interests. The Firm will evaluate the discount level against comparable transactions in the secondary private equity market and applicable Tax Court and appellate court authority.

(c) Caldwell Ridgeline Capital Fund VI Carried Interest (GRAT C): A lack-of-marketability discount of 30%, reflecting the contingent and speculative nature of carried-interest compensation, the restrictions on assignment, and the dependency on future fund performance. The Firm will assess the discount methodology in light of emerging IRS guidance and academic literature on the valuation of carried-interest positions.

2.3.2 Appraisal Review. C&H will review and evaluate the independent appraisal reports to be prepared by Ashford Valuation Group LLC (contact: Dr. Leonard K. Whitfield, ASA, Managing Partner, 1120 Avenue of the Americas, Suite 3500, New York, NY 10036) for reasonableness and IRS defensibility. The Firm's review will address the appraiser's qualifications, the valuation methodology employed, the comparability of selected market data, the appropriateness of the discount levels applied, and the consistency of the appraisal conclusions with fair market value as defined under IRC § 2512 and Treasury Regulation § 25.2512-1.

2.3.3 Coordination with Ashford Valuation Group. C&H will coordinate with Ashford Valuation Group LLC regarding the appraisal engagement instructions, valuation standards (fair market value under IRC § 2512), relevant valuation dates (April 15, 2023, for GRAT A securities; May 1, 2023, for GRAT B Stonecrest interests; and June 1, 2023, for GRAT C LP interests and carried interest), and the scope and format of the appraisal reports. The Firm will prepare and transmit a letter to Ashford Valuation Group setting forth the engagement instructions and valuation parameters.

2.3.4 Internal Review Memorandum. C&H will prepare an internal review memorandum evaluating Ashford Valuation Group's discount conclusions against relevant Tax Court precedent, IRS guidance (including IRS Audit Technique Guides for valuation), and the Firm's own analysis of supportable discount ranges. The memorandum will identify any areas of potential IRS challenge and recommend adjustments to the appraisal methodology or discount levels, if warranted, prior to the filing of the Form 709.

2.4 Generation-Skipping Transfer Tax (GST) Exemption Allocation Strategy

2.4.1 Overall GST Strategy. C&H will analyze and recommend a comprehensive GST exemption allocation strategy across the structures comprising the Estate Plan, with the objective of maximizing the amount of wealth that may pass to skip persons (grandchildren and more remote descendants) free of the generation-skipping transfer tax imposed under IRC §§ 2601–2664.

2.4.2 Dynasty Trust GST Allocation. C&H will advise on the allocation of $5,000,000 of the Client's GST exemption to the initial cash funding of the Caldwell Family Dynasty Trust. This allocation will result in the Dynasty Trust having an inclusion ratio of zero (0) with respect to the initial funding, ensuring that all future distributions to skip persons from the Dynasty Trust are entirely exempt from the generation-skipping transfer tax.

2.4.3 Estate Tax Inclusion Period (ETIP) Analysis. C&H will analyze the application of the Estate Tax Inclusion Period ("ETIP") rules under IRC § 2642(f) to the GRAT remainder interests. Under the ETIP rules, the Client's GST exemption cannot be allocated to the GRAT remainder interests during the GRAT annuity terms, because the GRAT assets would be included in the Client's gross estate under IRC § 2036(a) if the Client were to die during the annuity period. Accordingly, the allocation of GST exemption to the GRAT remainder interests must be deferred until the ETIP ends upon the expiration of each GRAT's annuity term. The Firm will advise on the timing, mechanics, and reporting of the post-ETIP GST exemption allocations.

2.4.4 GST Exemption Tracking. C&H will track the Client's available GST exemption throughout the engagement, commencing with the 2023 GST exemption amount of $12,920,000 and accounting for all prior allocations and current-year allocations. The Firm will coordinate with Strathmore Corporation & Greaves LLP to confirm the Client's GST exemption history and to ensure accurate reporting on the Form 709.

2.4.5 Reverse QTIP Election. C&H will consider the advisability of a reverse QTIP election under IRC § 2652(a)(3) in connection with the credit shelter trust and marital QTIP trust provisions under the Caldwell Revocable Trust. A reverse QTIP election, if made, would treat the Client as the transferor of the marital QTIP trust for GST purposes, permitting the allocation of the Client's GST exemption to the QTIP trust property. The Firm will analyze the implications of this election in the context of the overall GST exemption allocation strategy and will advise the Client and Eleanor V. Caldwell accordingly.

2.4.6 Coordination with Gift Tax Return. C&H will coordinate the GST exemption allocation elections with the preparation of the federal gift tax return (Form 709) and will provide all necessary allocation schedules and computational support to Strathmore Corporation & Greaves LLP for inclusion in the filed return.

2.5 Gift Tax Exemption Tracking and Gift Tax Return Coordination

2.5.1 Lifetime Gift Tax Exemption Tracking. C&H will track the Client's lifetime gift tax exemption throughout the engagement as follows:

The foregoing tracking reflects the Client's cumulative use of the unified credit against gift tax under IRC § 2505 and is subject to confirmation of the Client's prior gift tax return history with Strathmore Corporation & Greaves LLP.

2.5.2 ILIT Premium Gift Analysis. C&H will analyze the gift tax treatment of the annual premium payments on the life insurance policy held by the ILIT. The annual premium for Beacon Life Assurance Company Policy No. BLA-2023-77419 is $187,500. The ILIT provides Crummey withdrawal rights to three beneficiaries — Thomas R. Caldwell, Katherine C. Hartfield, and Olivia G. Caldwell — with each beneficiary receiving a withdrawal right of $5,000 per year. The annual exclusion under IRC § 2503(b) for 2023 is $17,000 per donee, providing total annual exclusion coverage of $51,000 (three beneficiaries × $17,000 each). The balance of the annual premium, $136,500, will utilize the Client's lifetime gift tax exemption. C&H will prepare the Crummey notice analysis and coordinate with the ILIT trustee (Northgate Trust Company of Delaware) on the notice procedures and documentation.

2.5.3 Foundation Contribution Analysis. C&H will analyze the gift tax treatment of the $10,000,000 joint cash contribution to The Caldwell Family Foundation. The contribution will be treated as a joint gift by Jonathan R. Caldwell and Eleanor V. Caldwell, with $5,000,000 attributable to each spouse. As a transfer to a qualified charitable organization, the contribution is not subject to federal gift tax. The charitable deduction for income tax purposes is addressed in Section 2.7 of this Addendum.

2.5.4 Draft Federal Gift Tax Return (Form 709). C&H will prepare a draft federal gift tax return (Form 709) for the 2023 tax year, reporting the following transfers:

(a) GRAT A funding transfer: $60,000,000 in publicly traded securities; zeroed-out GRAT; gift value $0.00.

(b) GRAT B funding transfer: $80,000,000 (pre-discount) / $60,000,000 (post-discount) in Stonecrest Realty Holdings LLC membership interests; zeroed-out GRAT; gift value $0.00.

(c) GRAT C funding transfer: $38,000,000 (pre-discount) / $25,300,000 (post-discount) in LP interests and carried interest; zeroed-out GRAT; gift value $0.00.

(d) $5,000,000 taxable gift to the Caldwell Family Dynasty Trust.

(e) $5,000,000 charitable gift (Client's share) to The Caldwell Family Foundation.

(f) ILIT premium gifts of $187,500, with Crummey power reporting, annual exclusion of $51,000, and remaining $136,500 applied against lifetime exemption.

(g) GST exemption allocation elections, including the $5,000,000 allocation to the Dynasty Trust and any other elections required for the current year.

2.5.5 Coordination with Strathmore Corporation & Greaves LLP. C&H will coordinate with Martin J. Prescott, CPA, Senior Partner, Private Client Group, at Strathmore Corporation & Greaves LLP for the review, finalization, and filing of the Form 709. The Firm will transmit to Strathmore Corporation & Greaves the draft Form 709 and all supporting schedules, including Ashford Valuation Group appraisal summaries, § 7520 computation worksheets, annuity payment schedules, Crummey notice documentation, GST exemption allocation worksheets, and the Client's lifetime gift tax exemption tracking schedule. Strathmore Corporation & Greaves LLP will be responsible for the final review, preparation, and filing of the Form 709 with the Internal Revenue Service.

2.6 Federal Estate Tax Projections

2.6.1 Comparative Estate Tax Analysis. C&H will prepare a quantitative analysis comparing the Client's current federal estate tax exposure (absent the Estate Plan) with the projected estate tax exposure under the proposed Estate Plan. The analysis will be based on the following assumptions and parameters:

Baseline Scenario (No Estate Plan):

• Gross estate: $300,000,000

• Remaining applicable exclusion amount: $6,170,000

• Taxable estate: $293,830,000

• Federal estate tax rate: 40%

• Estimated federal estate tax liability: approximately $117,532,000

Projected Scenario (With Estate Plan):

• Removal of estimated $35,000,000 to $50,000,000 in excess GRAT appreciation from the gross estate upon successful completion of GRAT annuity terms

• $10,000,000 charitable deduction attributable to the Foundation contribution

• $15,000,000 ILIT death benefit excluded from the gross estate

• Additional reductions attributable to the Dynasty Trust funding and other plan elements

• Projected federal estate tax savings: approximately $24,000,000 to $30,000,000

2.6.2 Tax Cuts and Jobs Act Sunset Analysis. C&H will discuss the sensitivity of the foregoing projections to potential changes in the federal estate tax exemption amount following the scheduled sunset of the Tax Cuts and Jobs Act ("TCJA") provisions after December 31, 2025. Under current law, the basic exclusion amount is scheduled to revert to approximately $5,000,000 (adjusted for inflation) in 2026. The Firm will model the impact of a reduced exemption on the Client's estate tax exposure and will advise on strategies to mitigate the increased tax liability, including the potential for additional gifting prior to the sunset date.

2.6.3 Asset Breakdown. For reference, the Client's gross estate is comprised of the following asset categories:

2.7 Private Foundation Excise Tax Compliance

2.7.1 Foundation Overview. C&H will provide tax advisory services regarding the compliance requirements for The Caldwell Family Foundation (EIN: 88-3021547), a New York not-for-profit corporation incorporated on March 20, 2023 (NYS Department of State Filing No. 230320-001847), with a registered address at 330 Madison Avenue, Suite 2401, New York, NY 10017. The Foundation has been organized and will operate as a private foundation within the meaning of IRC § 509(a).

2.7.2 Excise Tax on Net Investment Income (§ 4940). C&H will advise on the excise tax imposed under IRC § 4940 on the Foundation's net investment income, including interest, dividends, rents, and capital gains. The Firm will calculate the estimated excise tax liability for the Foundation's initial taxable year and will coordinate with Strathmore Corporation & Greaves LLP on the reporting of the excise tax on the Foundation's annual information return (Form 990-PF).

2.7.3 Self-Dealing Prohibitions (§ 4941). C&H will analyze the self-dealing prohibitions under IRC § 4941 and will identify all "disqualified persons" with respect to the Foundation. Disqualified persons include the following individuals and entities:

(a) Jonathan R. Caldwell (substantial contributor; foundation manager)

(b) Eleanor V. Caldwell (spouse of substantial contributor; foundation manager)

(d) Katherine C. Hartfield (daughter of substantial contributor)

(e) Olivia G. Caldwell (daughter of substantial contributor)

(f) Family members and spouses of the foregoing individuals, as defined under IRC § 4946(d)

(g) Caldwell Ridgeline Capital LLC (entity in which the Client holds a substantial interest)

(h) Stonecrest Realty Holdings LLC (entity in which the Client holds a substantial interest)

(i) Any other entities in which the foregoing individuals or entities hold a 35% or greater interest, as determined under IRC § 4946(a)(1)(E)–(G)

C&H will advise on the prohibition against compensation to family-member directors of the Foundation and will review the Foundation's governance documents and policies for compliance with the self-dealing rules. The Firm will coordinate with Monica Reyes and Elliot Nguyen on the drafting of a conflict-of-interest policy and related governance documents from a tax compliance perspective.

2.7.4 Minimum Distribution Requirement (§ 4942). C&H will advise on the minimum distribution requirement under IRC § 4942, which requires the Foundation to distribute annually an amount equal to at least 5% of the fair market value of its net investment assets. Based on the Foundation's initial corpus of $10,000,000, the Year 1 minimum distribution target is estimated at $500,000. The Firm will advise on the calculation of qualifying distributions, the treatment of set-asides, and the consequences of failure to meet the minimum distribution requirement.

2.7.5 Excess Business Holdings (§ 4943). C&H will analyze the restrictions on excess business holdings under IRC § 4943 and will advise on the Foundation's permissible holdings in any business enterprise in which the Foundation and all disqualified persons together hold more than a permitted percentage of voting stock or profits interests.

2.7.6 Jeopardizing Investments (§ 4944). C&H will advise on the prohibition against jeopardizing investments under IRC § 4944 and will review the Foundation's investment policy for compliance with the applicable standards of prudent investment.

2.7.7 Taxable Expenditures (§ 4945). C&H will advise on the rules governing taxable expenditures under IRC § 4945, including the restrictions on lobbying, political campaign activities, grants to individuals, and grants to organizations other than public charities without the exercise of expenditure responsibility.

2.7.8 Form 1023 Review. C&H will review the Foundation's Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code (IRS Form 1023), filed on May 15, 2023, for tax compliance accuracy and consistency with the Foundation's organizational documents and operational plans. The Firm will monitor the status of the application and will coordinate with the IRS, if necessary, to respond to any requests for additional information.

2.7.9 Charitable Deduction Analysis. C&H will advise on the charitable deduction limitations applicable to the Client's contributions to the Foundation. Under IRC § 170(b)(1)(B), cash contributions to a private foundation are deductible up to 30% of the donor's adjusted gross income ("AGI"). Based on the Client's estimated 2022 AGI of $22,500,000, the maximum charitable deduction for the initial year is $6,750,000. The remaining $3,250,000 of the Client's $10,000,000 contribution ($5,000,000 attributable to the Client under the gift-splitting election) will be carried forward and deducted over the succeeding five taxable years, subject to the annual 30%-of-AGI limitation in each year. C&H will coordinate with Strathmore Corporation & Greaves LLP on the reporting of the charitable deduction and the carryforward schedule.

2.7.10 Governance and Compliance Calendar. C&H will coordinate with the engagement team — specifically Monica Reyes, Lead Associate, and Elliot Nguyen, Working Associate — on the preparation of a compliance calendar for the Foundation's annual filing and distribution obligations, a conflict-of-interest policy for the Foundation's board of directors, and related governance documents, each reviewed from a tax compliance perspective.

2.8 ILIT Tax Analysis

C&H will provide the following tax advisory services with respect to the Caldwell Family Insurance Trust (established March 15, 2023):

2.8.1 Trust and Policy Details. The ILIT is an irrevocable trust established for the benefit of the Client's descendants. The trustee is Northgate Trust Company of Delaware, with its principal office at 1201 North Market Street, Suite 1600, Wilmington, DE 19801. The ILIT holds Beacon Life Assurance Company Policy No. BLA-2023-77419, a second-to-die life insurance policy on the lives of Jonathan R. Caldwell and Eleanor V. Caldwell, with a face amount (death benefit) of $15,000,000. The annual premium for the policy is $187,500.

2.8.2 Estate Tax Exclusion. C&H will confirm that the ILIT is structured to exclude the life insurance policy proceeds from both the Client's and Eleanor V. Caldwell's federal gross estates under IRC §§ 2042 and 2035. The Firm will review the ILIT trust instrument, the policy ownership and beneficiary designation, and the trust's administrative provisions to verify that the Client and Eleanor V. Caldwell have not retained any incidents of ownership in the policy within the meaning of IRC § 2042(2).

2.8.3 Three-Year Lookback Rule. C&H will analyze the application of the three-year lookback rule under IRC § 2035 to the assignment of the life insurance policy to the ILIT. If the Client transfers an existing policy to the ILIT and dies within three years of the transfer, the policy proceeds will be included in the Client's gross estate. The Firm will advise on mitigation strategies, including the possibility that the ILIT applied for and has always owned the policy (as opposed to receiving a transfer from the Client), which would avoid the three-year lookback issue. The Firm will confirm the facts regarding the policy application and ownership history with Nathan C. Freed, SVP, Private Client Division, at Glenmore Insurance Brokerage LLC.

2.8.4 Crummey Withdrawal Right Analysis. C&H will analyze the Crummey withdrawal rights provided under the ILIT trust instrument for the following three beneficiaries:

(a) Thomas R. Caldwell — $5,000 annual withdrawal right

(b) Katherine C. Hartfield — $5,000 annual withdrawal right

The annual gift tax exclusion under IRC § 2503(b) for 2023 is $17,000 per donee. The total annual exclusion coverage for the three beneficiaries is $51,000 ($17,000 × 3). The remaining $136,500 of the annual premium ($187,500 − $51,000) will be applied against the Client's remaining lifetime gift tax exemption.

2.8.5 Lapse of Crummey Powers. C&H will analyze the tax consequences of the lapse of Crummey withdrawal powers under IRC §§ 2041 and 2514, including the application of the "5-and-5" power limitation. Under IRC § 2041(b)(2) and § 2514(e), the lapse of a general power of appointment is treated as a taxable transfer to the extent the lapsed amount exceeds the greater of $5,000 or 5% of the trust corpus from which the power could be satisfied. Because each beneficiary's withdrawal right is limited to $5,000 per year, the lapse will fall within the 5-and-5 safe harbor, and no portion of the lapsed power will be treated as a taxable transfer by the beneficiary. The Firm will confirm this analysis and advise on any modifications to the Crummey provisions that may be warranted.

2.9 State Income Tax Planning

2.9.1 Delaware Situs — Dynasty Trust. C&H will analyze the state income tax implications of the Caldwell Family Dynasty Trust's establishment under Delaware situs, with Northgate Trust Company of Delaware serving as trustee. Under Delaware law, an irrevocable trust administered by a Delaware corporate trustee, with no Delaware-resident beneficiaries and no Delaware-source income, is not subject to Delaware income tax on its undistributed income. C&H will advise on the conditions necessary to maintain the Dynasty Trust's exemption from Delaware state income tax, including restrictions on the appointment of Delaware-resident beneficiaries and limitations on the trust's investment in Delaware-source income-producing assets.

2.9.2 New York Source Income. C&H will analyze the New York State income tax implications for the Dynasty Trust, including the treatment of trust income derived from New York-source assets and the tax obligations of trust beneficiaries who are residents of New York. The Firm will advise on strategies to minimize or avoid New York State income tax on Dynasty Trust income, including the structuring of trust investments and distributions.

2.9.3 Grantor Trust — New York Income Tax. C&H will analyze the impact of the GRATs' grantor trust status on the Client's New York State income tax obligations during the GRAT annuity terms. Because the GRATs are treated as grantor trusts for federal income tax purposes, all income of the GRATs will be reported on the Client's individual New York State income tax return. The Firm will advise on the New York State income tax treatment of the GRAT annuity payments, the disposition of GRAT assets, and the termination of grantor trust status upon the expiration of each GRAT's annuity term.

2.9.4 DING Trust Considerations. C&H will evaluate the potential use of a Delaware incomplete non-grantor trust ("DING trust") structure as an alternative or supplement to the existing Dynasty Trust structure. A DING trust, if properly structured, may permit the Client to transfer assets to an irrevocable trust that is treated as a non-grantor trust for state income tax purposes, thereby removing the trust's income from the Client's New York State income tax base, while remaining an incomplete gift for federal gift tax purposes. The Firm will advise on the feasibility, benefits, and risks of a DING trust structure in the context of the Client's overall Estate Plan.

2.9.5 Coordination with Strathmore Corporation & Greaves LLP. C&H will coordinate with Strathmore Corporation & Greaves LLP on the state income tax filing obligations for all trust entities established under the Estate Plan, including the Dynasty Trust, the GRATs (during and after the annuity terms), the ILIT, and the Foundation. The Firm will provide Strathmore Corporation & Greaves with the structural and tax analysis necessary to support the preparation and filing of all required state income tax returns.

2.10 Credit Shelter Trust / Marital QTIP Trust Tax Analysis

2.10.1 Revocable Trust Overview. C&H will provide tax advisory services with respect to the Caldwell Revocable Trust (originally established October 3, 2010, and restated February 6, 2023, effective April 1, 2023), including the credit shelter trust (also referred to as the bypass trust or family trust) and the marital qualified terminable interest property ("QTIP") trust provisions thereunder.

2.10.2 Credit Shelter Trust. The credit shelter trust will be funded at the Client's death in an amount equal to the Client's remaining applicable exclusion amount for federal estate tax purposes. C&H will analyze the optimal funding formula, the selection of assets for funding, and the tax consequences of the funding, including the allocation of the Client's GST exemption to the credit shelter trust.

2.10.3 Marital QTIP Trust. The marital QTIP trust will be funded with the balance of the Client's probate and non-probate estate (after funding of the credit shelter trust and other specific bequests). Eleanor V. Caldwell will be the sole income beneficiary of the marital QTIP trust and will hold a general power of appointment over the trust corpus. C&H will analyze the qualification of the marital QTIP trust for the federal estate tax marital deduction under IRC §§ 2056(b)(7) and 2044, including the requirement that Eleanor V. Caldwell receive all income from the trust for life, paid at least annually.

2.10.4 Portability Election. C&H will advise on the portability election under IRC § 2010(c)(5)(A), which permits the surviving spouse to use the deceased spouse's unused exclusion amount ("DSUE amount"). The Firm will analyze the interaction between the portability election and the credit shelter trust funding formula, and will advise on whether the portability election should be made in the Client's estate (or, if Eleanor V. Caldwell predeceases the Client, in her estate) to maximize the combined estate tax exemption available to the surviving spouse.

2.10.5 Interplay with Other Plan Elements. C&H will analyze the interplay between the credit shelter trust and marital QTIP trust, on the one hand, and the Dynasty Trust, GRATs, ILIT, and Foundation, on the other hand. The Firm will ensure that the overall Estate Plan operates in a coordinated manner to minimize federal and state estate, gift, generation-skipping transfer, and income taxes, and will advise on any adjustments to the Revocable Trust provisions that may be warranted to optimize the tax efficiency of the plan.

2.10.6 Post-2025 Sunset Considerations. C&H will analyze the impact of the potential post-2025 sunset of the TCJA provisions on the credit shelter trust and marital QTIP trust design, including the possibility that a reduced exemption amount may alter the optimal funding formula and the desirability of alternative planning strategies.

3. TAX ADVISORY TEAM

The following individuals at Calderwood & Harkness LLP will comprise the Tax Advisory Services team for this engagement:

Sylvia Hartwell — Partner, Tax Practice Group, Calderwood & Harkness LLP. Ms. Hartwell will serve as the lead tax advisor for all services described in this Addendum. She will have primary responsibility for GRAT annuity calculations, § 7520 rate analysis, GST exemption allocation strategy, federal estate tax projections, private foundation excise tax compliance advisory, and gift tax return coordination with Strathmore Corporation & Greaves LLP. Ms. Hartwell will serve as the primary point of contact for the Client and for all third-party advisors on matters within the scope of this Addendum.

Elliot Nguyen — Working Associate, Calderwood & Harkness LLP. Mr. Nguyen will provide research, computational support, drafting of tax memoranda, sensitivity analyses, and document preparation under Sylvia Hartwell's direction. Mr. Nguyen will assist with the preparation of the draft Form 709, annuity payment schedules, and all quantitative modeling workbooks.

Victoria Chambers — Responsible Partner, Calderwood & Harkness LLP. Ms. Chambers will provide overall engagement supervision and coordination, and will serve as the senior responsible partner for all aspects of the Caldwell engagement, including the tax advisory workstream. Ms. Chambers will review all major tax memoranda and deliverables prior to their delivery to the Client.

Monica Reyes — Lead Associate, Calderwood & Harkness LLP. Ms. Reyes will coordinate with the tax advisory workstream on structural and drafting matters, including the integration of tax analysis into the trust instruments, foundation governance documents, and related estate planning documents.

Howard Quinn — Billing Partner, Calderwood & Harkness LLP. Mr. Quinn will serve as billing partner and will oversee all billing and administrative matters for the engagement, including the tax advisory workstream. All invoices will be reviewed and approved by Mr. Quinn prior to issuance.

4. COORDINATION WITH THIRD PARTIES

4.1 Strathmore Corporation & Greaves LLP

C&H's tax advisory team will coordinate with Martin J. Prescott, CPA, Senior Partner, Private Client Group, at Strathmore Corporation & Greaves LLP, 600 Third Avenue, 28th Floor, New York, NY 10016, on the following matters:

(a) Gift tax return (Form 709) preparation, review, and filing for the 2023 tax year, including the transmittal of draft returns, supporting schedules, appraisal summaries, and computational worksheets;

(b) Income tax return implications of grantor trust status during the GRAT annuity terms, including the reporting of trust income on the Client's individual federal and New York State income tax returns;

(c) State income tax filings for all trust entities established under the Estate Plan, including the Dynasty Trust, the GRATs, the ILIT, and the Foundation;

(d) Financial data and valuation support for GRAT funding schedules, including the fair market value of publicly traded securities, Stonecrest membership interests, and Caldwell Ridgeline fund interests as of the applicable funding and valuation dates;

(e) Prior gift tax return history, including the confirmation of $6,750,000 in prior cumulative taxable gifts and the Client's remaining lifetime gift tax exemption;

(f) Charitable deduction computations and carryforward tracking, including the 30%-of-AGI limitation and the five-year carryforward schedule for the Foundation contribution;

(g) The Client's 2022 AGI ($22,500,000) and projected 2023 AGI for purposes of charitable deduction limitation calculations; and

(h) GST exemption allocation reporting and coordination.

4.2 Ashford Valuation Group LLC

C&H will coordinate with Dr. Leonard K. Whitfield, ASA, Managing Partner, at Ashford Valuation Group LLC, 1120 Avenue of the Americas, Suite 3500, New York, NY 10036, on the following matters:

(a) Appraisal engagement instructions, including the scope of the appraisals, the applicable valuation standard (fair market value under IRC § 2512), and the relevant valuation dates (April 15, May 1, and June 1, 2023);

(b) Valuation methodology guidance, including the appropriateness of income, market, and asset-based approaches for the various asset categories;

(c) Review of draft and final appraisal reports for the Stonecrest Realty Holdings LLC membership interests, the Caldwell Ridgeline Capital Fund IV and Fund V LP interests, the Caldwell Ridgeline Capital Fund VI carried interest, and art and collectibles ($9,000,000); and

(d) Discussion of discount conclusions and their defensibility in the context of potential IRS examination.

4.3 Havensbrook Wealth Advisors LLC

C&H will coordinate with Diana R. Linden, CFP®, Managing Director, Family Office Services, at Havensbrook Wealth Advisors LLC, 900 Third Avenue, 18th Floor, New York, NY 10022, on the following matters:

(a) Investment data and asset allocation information for the Client's liquid securities portfolio;

(b) Portfolio valuations for the GRAT A securities portfolio as of the applicable funding and valuation dates;

(d) Historical and projected investment performance data for all asset classes within the Client's portfolio.

4.4 Northgate Trust Company of Delaware

C&H will coordinate with Philip A. Rossiter, SVP, Trust Administration, at Northgate Trust Company of Delaware, 1201 North Market Street, Suite 1600, Wilmington, DE 19801, on the following matters:

(a) Trust tax reporting requirements for the Caldwell Family Dynasty Trust and the Caldwell Family Insurance Trust;

(b) Fiduciary income tax return preparation (Form 1041) for trust entities administered by Northgate;

(d) Administrative coordination regarding Crummey notice procedures, distribution records, and trust accounting.

4.5 Glenmore Insurance Brokerage LLC and Beacon Life Assurance Company

C&H will coordinate with Nathan C. Freed, SVP, Private Client Division, at Glenmore Insurance Brokerage LLC, 44 Wall Street, Suite 1200, New York, NY 10005, on the following matters:

(a) Policy details for Beacon Life Assurance Company Policy No. BLA-2023-77419, including the policy application history, ownership and beneficiary designations, premium structure, and death benefit provisions;

(b) Confirmation of whether the ILIT applied for and has always owned the policy (relevant to the three-year lookback analysis under IRC § 2035);

(d) Any policy modifications, riders, or amendments that may affect the ILIT tax analysis.

5. DELIVERABLES

C&H's tax advisory team will produce the following specific deliverables under this Addendum. Each deliverable will be prepared under Sylvia Hartwell's supervision and reviewed by Victoria Chambers prior to delivery to the Client:

1. Estate Planning Strategy Memorandum (Tax Components) — A comprehensive memorandum setting forth the tax advisory team's analysis, conclusions, and recommendations with respect to the tax components of the Caldwell Estate Plan.

2. Federal Estate and Gift Tax Analysis (Quantitative Workbook) — A detailed quantitative workbook presenting the Client's federal estate and gift tax analysis, including current exposure, projected exposure under the Estate Plan, and sensitivity analyses.

3. GRAT Structuring Memorandum — A technical memorandum addressing the annuity calculations for GRATs A, B, and C, § 7520 rate analysis, asset selection recommendations, zeroed-out GRAT compliance, mortality risk, and grantor trust status.

4. GRAT Sensitivity Analysis — Return Scenarios (Modeling Workbook) — A modeling workbook presenting the projected wealth transfer under each GRAT across the 4%, 6%, 8%, and 10% annual return assumptions.

5. Valuation discount Analysis Memorandum — A memorandum analyzing the supportable valuation discounts for Stonecrest membership interests, Caldwell Ridgeline LP interests, and carried interest, with reference to Tax Court precedent and IRS guidance.

6. Generation-Skipping Transfer Tax Allocation Memorandum — A memorandum setting forth the recommended GST exemption allocation strategy, ETIP analysis, and reverse QTIP election considerations.

PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION
CALDERWOOD & HARKNESS LLP 375 Park Avenue, 42nd Floor New York, NY 10152 Tel: (212) 554-7000
Fax: (212) 554-7001
www.calderwoodharkness.com
March 1, 2023
ADDENDUM TO ENGAGEMENT LETTER — TAX ADVISORY SERVICES
Reference: Base Engagement Letter dated February 15, 2023 Matter No.: 1034-00004 Billing Code: 78412-JRC
This Addendum to Engagement Letter — Tax Advisory Services (this "Addendum") is entered into as of March 1, 2023, by and between Calderwood & Harkness LLP, a New York limited liability partnership with offices at 375 Park Avenue, 42nd Floor, New York, NY 10152 ("C&H" or the "Firm"), and Jonathan Robert Caldwell, an individual residing at 418 East 72nd Street, Apt. 14A, New York, NY 10021 (the "Client"). This Addendum supplements, and is to be read in conjunction with, the Base Engagement Letter dated February 15, 2023 (the "Base Engagement Letter"), under which C&H was retained to provide comprehensive generational estate planning services to the Client. The date of this Addendum coincides with the completion of the asset inventory and preliminary tax analysis performed by the Firm in connection with the Client's estate plan.
1. INTRODUCTORY RECITALS
WHEREAS, Calderwood & Harkness LLP ("C&H" or the "Firm") and Jonathan Robert Caldwell (the "Client") entered into an engagement letter dated February 15, 2023 (the "Base Engagement Letter"), pursuant to which C&H was retained to provide comprehensive generational estate planning services to the Client, including the design, structuring, documentation, and implementation of an integrated estate plan encompassing trust, gift, charitable, insurance, and related planning structures;
WHEREAS, the Base Engagement Letter contemplated, in Section 3.4 thereof, the engagement of specialist tax advisory resources within C&H to support the design and implementation of the Client's estate plan, and provided that a separate addendum would be executed to describe in detail the scope, deliverables, and coordination framework for such tax advisory services;
WHEREAS, this Addendum supplements, and is to be read in conjunction with, the Base Engagement Letter, and, to the extent of any conflict or inconsistency between the terms of this Addendum and the terms of the Base Engagement Letter, the terms of this Addendum shall govern with respect to the Tax Advisory Services described herein;
WHEREAS, the responsible partner for the engagement is Victoria Chambers, Partner, Calderwood & Harkness LLP, and the billing partner is Howard Quinn, Partner, Calderwood & Harkness LLP, both of the Firm's White Collar & Investigations practice, as designated in the Base Engagement Letter;
WHEREAS, Sylvia Hartwell, Partner, Tax Practice Group, Calderwood & Harkness LLP, has been identified as the specialist tax advisor who will lead the Tax Advisory Services workstream described in this Addendum, and who will serve as the primary point of contact for the Client and for all third-party advisors on matters within the scope of this Addendum; and
WHEREAS, the Client's accountants and tax advisors, Strathmore Corporation & Greaves LLP (contact: Martin J. Prescott, CPA, Senior Partner, Private Client Group, 600 Third Avenue, 28th Floor, New York, NY 10016), will coordinate with C&H on certain tax compliance and filing matters as described herein, and will serve as the Client's tax return preparer with respect to all federal and state tax returns referenced in this Addendum.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual agreements set forth herein, the parties agree as follows:
2. SCOPE OF TAX ADVISORY SERVICES
2.1 Overview.  Sylvia Hartwell, Partner, Tax Practice Group, Calderwood & Harkness LLP, and the C&H tax advisory team will provide the Tax Advisory Services described in this Section 2 in connection with the Caldwell generational estate plan (the "Estate Plan"). The Estate Plan encompasses the following structures, each as identified and described in the Base Engagement Letter:
(a) three Grantor Retained Annuity Trusts ("GRATs"), designated herein as the Caldwell 2023 Securities GRAT ("GRAT A"), the Caldwell 2023 Realty GRAT ("GRAT B"), and the Caldwell 2023 Carried Interest GRAT ("GRAT C");
(b) the Caldwell Family Dynasty Trust (the "Dynasty Trust");
(c) The Caldwell Family Foundation (the "Foundation"), a New York not-for-profit corporation;
(d) the Caldwell Family Insurance Trust (the "ILIT"), an irrevocable life insurance trust;
(e) the Caldwell Revocable Trust (the "Revocable Trust"), including the credit shelter trust and marital qualified terminable interest property ("QTIP") trust provisions thereunder; and
(f) related testamentary instruments, powers of attorney, and ancillary documents as contemplated in the Base Engagement Letter.
The Tax Advisory Services described in this Addendum are advisory and structuring in nature. The Firm will provide tax analysis, memoranda, computational models, draft returns, and strategic recommendations as set forth below. Final tax return preparation and filing will be coordinated with and performed by Strathmore Corporation & Greaves LLP, the Client's accountants and tax return preparers, unless otherwise expressly specified in this Addendum. All services described herein are subject to the limitations and qualifications set forth in Section 8 of this Addendum.
2.2 GRAT Design and Annuity Calculations
The C&H tax advisory team will provide the following services with respect to the design, structuring, and tax analysis of three zeroed-out GRATs to be established and funded under Internal Revenue Code ("IRC") § 2702 and the Treasury Regulations thereunder:
2.2.1 GRAT Structures. C&H will design and structure the following three GRATs, each intended to qualify as a "zeroed-out" GRAT such that the value of the retained annuity interest equals the value of the property transferred to the trust, resulting in a taxable gift of zero for federal gift tax purposes:
(a) Caldwell 2023 Securities GRAT (GRAT A):
•  Corpus: $60,000,000 in publicly traded securities, to be transferred from the Client's individual brokerage accounts at Havensbrook Wealth Advisors LLC.
•  Term: Two (2) years.
•  Annuity Payment: Calculated to produce a taxable gift of $0.00, using the applicable § 7520 rate for the month of funding.
•  Funding Date: April 15, 2023.
(b) Caldwell 2023 Realty GRAT (GRAT B):
•  Corpus: $80,000,000 in membership interests in Stonecrest Realty Holdings LLC, a Delaware limited liability company, representing approximately 59.7% of the total outstanding membership interests. The total fair market value of Stonecrest Realty Holdings LLC, as a going concern, is estimated at $134,000,000.
•  Term: Three (3) years.
•  Valuation discounts: The membership interests will be subject to a combined lack-of-marketability and lack-of-control discount of 25%, resulting in a funded fair market value for federal gift tax purposes of $60,000,000.
•  Annuity Payment: Calculated to produce a taxable gift of $0.00, using the applicable § 7520 rate for the month of funding.
•  Funding Date: May 1, 2023.
(c) Caldwell 2023 Carried Interest GRAT (GRAT C):
•  Corpus: $38,000,000 in limited partnership ("LP") interests and carried-interest positions in the following Caldwell Ridgeline Capital funds:
•  Caldwell Ridgeline Capital Fund IV LP interests: $12,000,000
•  Caldwell Ridgeline Capital Fund V LP interests: $14,000,000
•  Caldwell Ridgeline Capital Fund VI carried interest: $12,000,000
•  Term: Three (3) years.
•  Valuation discounts: Blended discounts of 35% on LP interests and 30% on carried interest, resulting in a post-discount fair market value of $25,300,000.
•  Annuity Payment: Calculated to produce a taxable gift of $0.00, using the applicable § 7520 rate for the month of funding.
•  Funding Date: June 1, 2023.
2.2.2 Annuity Payment Computations. C&H will compute the annuity payment amounts for each GRAT using the applicable § 7520 rates published by the Internal Revenue Service, the IRS actuarial tables set forth in Treasury Regulation § 20.2031-7 and IRS Publication 1457, and the Client's age at the time of each GRAT's creation (age 67; date of birth March 14, 1956). Based on the Firm's preliminary analysis, the annuity payment amounts are as follows:
(a) GRAT A: $32,195,122 per year for the two-year annuity term, based on a § 7520 rate of 5.0% for March 2023 (the month in which the applicable rate will be elected for GRAT A, which is funded in April 2023, with the Client electing the prior month's rate as permitted under IRC § 7520(a)).
(b) GRAT B: $29,375,859 per year for the three-year annuity term, based on a § 7520 rate of 5.0% for April 2023.
(c) GRAT C: $13,953,759 per year for the three-year annuity term, based on a § 7520 rate of 5.0% for May 2023.
The foregoing amounts are preliminary and will be finalized upon confirmation of the applicable § 7520 rates for the relevant months, completion of the independent appraisals by Ashford Valuation Group LLC, and execution of the GRAT instruments. C&H will prepare detailed annuity payment schedules for each GRAT reflecting the payment amounts, due dates, and payment-in-kind provisions, if applicable.
2.2.3 Section 7520 Rate Analysis and Rate-Locking Strategy. C&H will analyze the § 7520 rate environment in connection with the timing of GRAT funding, with a view toward optimizing the annuity calculation under the most favorable available rate. The Firm confirms that the applicable § 7520 rates for March, April, and May 2023 are each 5.0%, and will advise the Client as to the election of the current month's rate or the prior month's rate under IRC § 7520(a) in connection with each GRAT funding. The Firm will monitor the § 7520 rate for June 2023 and advise the Client promptly if a rate change would affect the GRAT C funding calculations.
2.2.4 Zeroed-Out GRAT Compliance. C&H will verify that each GRAT satisfies the requirements for zeroed-out status under IRC § 2702 and Treasury Regulation § 25.2702-3, such that the value of the Client's retained annuity interest equals the value of the property transferred to the trust, resulting in no taxable gift upon funding. The Firm will confirm compliance with the "qualified interest" requirements, including the fixed annuity amount, the payment timing requirements, and the prohibition on additional contributions during the annuity term.
2.2.5 Mortality Risk Analysis. Given the Client's age (67 at the time of GRAT creation) and the annuity term durations (two years for GRAT A and three years for GRAT B and GRAT C), C&H will prepare a mortality risk analysis addressing the consequences of the Client's death during the annuity term of any GRAT, including the estate tax inclusion rules under IRC § 2036(a) and the impact on the wealth transfer objectives of the Estate Plan. The analysis will consider the use of the Client's remaining estate tax exemption and the interplay with the ILIT death benefit proceeds in mitigating the financial impact of mortality during the GRAT terms.
2.2.6 Grantor Trust Status and Income Tax Reporting. C&H will analyze the grantor trust status of each GRAT during its annuity term under IRC §§ 671–679, confirm that each GRAT is treated as a grantor trust for federal income tax purposes during the annuity period, and advise on the income tax reporting implications for the Client. During the annuity term, the Client, as grantor, will report all income, deductions, and credits of each GRAT on his individual federal and state income tax returns. The Firm will coordinate with Strathmore Corporation & Greaves LLP on the proper reporting of grantor trust income and will provide the necessary trust identification and structural information to facilitate accurate tax return preparation.
2.2.7 Asset Selection Analysis. C&H will prepare an analysis and recommendations regarding the suitability of the asset classes selected for GRAT funding, including an assessment of the expected return characteristics, volatility, liquidity, and valuation considerations for each category of funded assets. The analysis will address the relative advantages and risks of funding GRATs with publicly traded securities (GRAT A), illiquid real estate membership interests (GRAT B), and private equity LP interests and carried interest (GRAT C), with particular attention to the ability of each asset class to outperform the § 7520 hurdle rate and generate excess appreciation for transfer to the remainder beneficiaries.
2.2.8 Annuity Payment Schedules. C&H will prepare detailed annuity payment schedules for each of GRATs A, B, and C, specifying the annuity payment amounts, payment due dates, payment methods (cash, in-kind distribution, or a combination thereof), and any applicable provisions for substitution of assets. The schedules will be delivered to the Client, to the GRAT trustees, and to Strathmore Corporation & Greaves LLP for coordination with income tax reporting and trust accounting.
2.2.9 Sensitivity Analysis. C&H will prepare a comprehensive sensitivity analysis modeling the projected wealth transfer under each GRAT across a range of annual return assumptions, including 4%, 6%, 8%, and 10% annual returns on the GRAT corpus. The sensitivity analysis will project, for each GRAT and in the aggregate, the expected excess appreciation transferred to the remainder beneficiaries upon expiration of the annuity term. Based on the Firm's preliminary modeling, the projected aggregate excess appreciation transfer across all three GRATs is estimated at $35,000,000 to $50,000,000, assuming outperformance of the § 7520 hurdle rate by approximately 4% annually. The sensitivity analysis will be presented in a modeling workbook format and will be included in the deliverables set forth in Section 5 of this Addendum.
2.3 Valuation discount Analysis and Coordination
2.3.1 discount Analysis. C&H will analyze the supportable valuation discounts applicable to the assets transferred to GRATs B and C, including the following:
(a) Stonecrest Realty Holdings LLC Membership Interests (GRAT B): A combined lack-of-marketability and lack-of-control discount of 25%, reflecting the absence of a public trading market for the membership interests, the restrictions on transfer set forth in the Stonecrest operating agreement, and the Client's minority (though significant) membership interest position following the GRAT transfer. The Firm will analyze the appropriateness of this discount level in light of applicable Tax Court precedent, including Mandelbaum v. Commissioner, 91 T.C.M. (CCH) 1002 (2006), Estate of Weinberg v. Commissioner, T.C. Memo 2000-51, and relevant Revenue Rulings and IRS guidance.
(b) Caldwell Ridgeline Capital Fund IV and Fund V LP Interests (GRAT C): A combined lack-of-marketability and lack-of-control discount of 35%, reflecting the illiquidity of the LP interests, the restrictions on transfer under the partnership agreements, the limited duration of the fund terms, and the absence of a secondary market for the interests. The Firm will evaluate the discount level against comparable transactions in the secondary private equity market and applicable Tax Court and appellate court authority.
(c) Caldwell Ridgeline Capital Fund VI Carried Interest (GRAT C): A lack-of-marketability discount of 30%, reflecting the contingent and speculative nature of carried-interest compensation, the restrictions on assignment, and the dependency on future fund performance. The Firm will assess the discount methodology in light of emerging IRS guidance and academic literature on the valuation of carried-interest positions.
2.3.2 Appraisal Review. C&H will review and evaluate the independent appraisal reports to be prepared by Ashford Valuation Group LLC (contact: Dr. Leonard K. Whitfield, ASA, Managing Partner, 1120 Avenue of the Americas, Suite 3500, New York, NY 10036) for reasonableness and IRS defensibility. The Firm's review will address the appraiser's qualifications, the valuation methodology employed, the comparability of selected market data, the appropriateness of the discount levels applied, and the consistency of the appraisal conclusions with fair market value as defined under IRC § 2512 and Treasury Regulation § 25.2512-1.
2.3.3 Coordination with Ashford Valuation Group. C&H will coordinate with Ashford Valuation Group LLC regarding the appraisal engagement instructions, valuation standards (fair market value under IRC § 2512), relevant valuation dates (April 15, 2023, for GRAT A securities; May 1, 2023, for GRAT B Stonecrest interests; and June 1, 2023, for GRAT C LP interests and carried interest), and the scope and format of the appraisal reports. The Firm will prepare and transmit a letter to Ashford Valuation Group setting forth the engagement instructions and valuation parameters.
2.3.4 Internal Review Memorandum. C&H will prepare an internal review memorandum evaluating Ashford Valuation Group's discount conclusions against relevant Tax Court precedent, IRS guidance (including IRS Audit Technique Guides for valuation), and the Firm's own analysis of supportable discount ranges. The memorandum will identify any areas of potential IRS challenge and recommend adjustments to the appraisal methodology or discount levels, if warranted, prior to the filing of the Form 709.
2.4 Generation-Skipping Transfer Tax (GST) Exemption Allocation Strategy
2.4.1 Overall GST Strategy. C&H will analyze and recommend a comprehensive GST exemption allocation strategy across the structures comprising the Estate Plan, with the objective of maximizing the amount of wealth that may pass to skip persons (grandchildren and more remote descendants) free of the generation-skipping transfer tax imposed under IRC §§ 2601–2664.
2.4.2 Dynasty Trust GST Allocation. C&H will advise on the allocation of $5,000,000 of the Client's GST exemption to the initial cash funding of the Caldwell Family Dynasty Trust. This allocation will result in the Dynasty Trust having an inclusion ratio of zero (0) with respect to the initial funding, ensuring that all future distributions to skip persons from the Dynasty Trust are entirely exempt from the generation-skipping transfer tax.
2.4.3 Estate Tax Inclusion Period (ETIP) Analysis. C&H will analyze the application of the Estate Tax Inclusion Period ("ETIP") rules under IRC § 2642(f) to the GRAT remainder interests. Under the ETIP rules, the Client's GST exemption cannot be allocated to the GRAT remainder interests during the GRAT annuity terms, because the GRAT assets would be included in the Client's gross estate under IRC § 2036(a) if the Client were to die during the annuity period. Accordingly, the allocation of GST exemption to the GRAT remainder interests must be deferred until the ETIP ends upon the expiration of each GRAT's annuity term. The Firm will advise on the timing, mechanics, and reporting of the post-ETIP GST exemption allocations.
2.4.4 GST Exemption Tracking. C&H will track the Client's available GST exemption throughout the engagement, commencing with the 2023 GST exemption amount of $12,920,000 and accounting for all prior allocations and current-year allocations. The Firm will coordinate with Strathmore Corporation & Greaves LLP to confirm the Client's GST exemption history and to ensure accurate reporting on the Form 709.
2.4.5 Reverse QTIP Election. C&H will consider the advisability of a reverse QTIP election under IRC § 2652(a)(3) in connection with the credit shelter trust and marital QTIP trust provisions under the Caldwell Revocable Trust. A reverse QTIP election, if made, would treat the Client as the transferor of the marital QTIP trust for GST purposes, permitting the allocation of the Client's GST exemption to the QTIP trust property. The Firm will analyze the implications of this election in the context of the overall GST exemption allocation strategy and will advise the Client and Eleanor V. Caldwell accordingly.
2.4.6 Coordination with Gift Tax Return. C&H will coordinate the GST exemption allocation elections with the preparation of the federal gift tax return (Form 709) and will provide all necessary allocation schedules and computational support to Strathmore Corporation & Greaves LLP for inclusion in the filed return.
2.5 Gift Tax Exemption Tracking and Gift Tax Return Coordination
2.5.1 Lifetime Gift Tax Exemption Tracking. C&H will track the Client's lifetime gift tax exemption throughout the engagement as follows:
The foregoing tracking reflects the Client's cumulative use of the unified credit against gift tax under IRC § 2505 and is subject to confirmation of the Client's prior gift tax return history with Strathmore Corporation & Greaves LLP.
2.5.2 ILIT Premium Gift Analysis. C&H will analyze the gift tax treatment of the annual premium payments on the life insurance policy held by the ILIT. The annual premium for Beacon Life Assurance Company Policy No. BLA-2023-77419 is $187,500. The ILIT provides Crummey withdrawal rights to three beneficiaries — Thomas R. Caldwell, Katherine C. Hartfield, and Olivia G. Caldwell — with each beneficiary receiving a withdrawal right of $5,000 per year. The annual exclusion under IRC § 2503(b) for 2023 is $17,000 per donee, providing total annual exclusion coverage of $51,000 (three beneficiaries × $17,000 each). The balance of the annual premium, $136,500, will utilize the Client's lifetime gift tax exemption. C&H will prepare the Crummey notice analysis and coordinate with the ILIT trustee (Northgate Trust Company of Delaware) on the notice procedures and documentation.
2.5.3 Foundation Contribution Analysis. C&H will analyze the gift tax treatment of the $10,000,000 joint cash contribution to The Caldwell Family Foundation. The contribution will be treated as a joint gift by Jonathan R. Caldwell and Eleanor V. Caldwell, with $5,000,000 attributable to each spouse. As a transfer to a qualified charitable organization, the contribution is not subject to federal gift tax. The charitable deduction for income tax purposes is addressed in Section 2.7 of this Addendum.
2.5.4 Draft Federal Gift Tax Return (Form 709). C&H will prepare a draft federal gift tax return (Form 709) for the 2023 tax year, reporting the following transfers:
(a) GRAT A funding transfer: $60,000,000 in publicly traded securities; zeroed-out GRAT; gift value $0.00.
(b) GRAT B funding transfer: $80,000,000 (pre-discount) / $60,000,000 (post-discount) in Stonecrest Realty Holdings LLC membership interests; zeroed-out GRAT; gift value $0.00.
(c) GRAT C funding transfer: $38,000,000 (pre-discount) / $25,300,000 (post-discount) in LP interests and carried interest; zeroed-out GRAT; gift value $0.00.
(d) $5,000,000 taxable gift to the Caldwell Family Dynasty Trust.
(e) $5,000,000 charitable gift (Client's share) to The Caldwell Family Foundation.
(f) ILIT premium gifts of $187,500, with Crummey power reporting, annual exclusion of $51,000, and remaining $136,500 applied against lifetime exemption.
(g) GST exemption allocation elections, including the $5,000,000 allocation to the Dynasty Trust and any other elections required for the current year.
2.5.5 Coordination with Strathmore Corporation & Greaves LLP. C&H will coordinate with Martin J. Prescott, CPA, Senior Partner, Private Client Group, at Strathmore Corporation & Greaves LLP for the review, finalization, and filing of the Form 709. The Firm will transmit to Strathmore Corporation & Greaves the draft Form 709 and all supporting schedules, including Ashford Valuation Group appraisal summaries, § 7520 computation worksheets, annuity payment schedules, Crummey notice documentation, GST exemption allocation worksheets, and the Client's lifetime gift tax exemption tracking schedule. Strathmore Corporation & Greaves LLP will be responsible for the final review, preparation, and filing of the Form 709 with the Internal Revenue Service.
2.6 Federal Estate Tax Projections
2.6.1 Comparative Estate Tax Analysis. C&H will prepare a quantitative analysis comparing the Client's current federal estate tax exposure (absent the Estate Plan) with the projected estate tax exposure under the proposed Estate Plan. The analysis will be based on the following assumptions and parameters:
Baseline Scenario (No Estate Plan):
•  Gross estate: $300,000,000
•  Remaining applicable exclusion amount: $6,170,000
•  Taxable estate: $293,830,000
•  Federal estate tax rate: 40%
•  Estimated federal estate tax liability: approximately $117,532,000
Projected Scenario (With Estate Plan):
•  Removal of estimated $35,000,000 to $50,000,000 in excess GRAT appreciation from the gross estate upon successful completion of GRAT annuity terms
•  $10,000,000 charitable deduction attributable to the Foundation contribution
•  $15,000,000 ILIT death benefit excluded from the gross estate
•  Additional reductions attributable to the Dynasty Trust funding and other plan elements
•  Projected federal estate tax savings: approximately $24,000,000 to $30,000,000
2.6.2 Tax Cuts and Jobs Act Sunset Analysis. C&H will discuss the sensitivity of the foregoing projections to potential changes in the federal estate tax exemption amount following the scheduled sunset of the Tax Cuts and Jobs Act ("TCJA") provisions after December 31, 2025. Under current law, the basic exclusion amount is scheduled to revert to approximately $5,000,000 (adjusted for inflation) in 2026. The Firm will model the impact of a reduced exemption on the Client's estate tax exposure and will advise on strategies to mitigate the increased tax liability, including the potential for additional gifting prior to the sunset date.
2.6.3 Asset Breakdown. For reference, the Client's gross estate is comprised of the following asset categories:
2.7 Private Foundation Excise Tax Compliance
2.7.1 Foundation Overview. C&H will provide tax advisory services regarding the compliance requirements for The Caldwell Family Foundation (EIN: 88-3021547), a New York not-for-profit corporation incorporated on March 20, 2023 (NYS Department of State Filing No. 230320-001847), with a registered address at 330 Madison Avenue, Suite 2401, New York, NY 10017. The Foundation has been organized and will operate as a private foundation within the meaning of IRC § 509(a).
2.7.2 Excise Tax on Net Investment Income (§ 4940). C&H will advise on the excise tax imposed under IRC § 4940 on the Foundation's net investment income, including interest, dividends, rents, and capital gains. The Firm will calculate the estimated excise tax liability for the Foundation's initial taxable year and will coordinate with Strathmore Corporation & Greaves LLP on the reporting of the excise tax on the Foundation's annual information return (Form 990-PF).
2.7.3 Self-Dealing Prohibitions (§ 4941). C&H will analyze the self-dealing prohibitions under IRC § 4941 and will identify all "disqualified persons" with respect to the Foundation. Disqualified persons include the following individuals and entities:
(a) Jonathan R. Caldwell (substantial contributor; foundation manager)
(b) Eleanor V. Caldwell (spouse of substantial contributor; foundation manager)
(c) Thomas R. Caldwell (son of substantial contributor)
(d) Katherine C. Hartfield (daughter of substantial contributor)
(e) Olivia G. Caldwell (daughter of substantial contributor)
(f) Family members and spouses of the foregoing individuals, as defined under IRC § 4946(d)
(g) Caldwell Ridgeline Capital LLC (entity in which the Client holds a substantial interest)
(h) Stonecrest Realty Holdings LLC (entity in which the Client holds a substantial interest)
(i) Any other entities in which the foregoing individuals or entities hold a 35% or greater interest, as determined under IRC § 4946(a)(1)(E)–(G)
C&H will advise on the prohibition against compensation to family-member directors of the Foundation and will review the Foundation's governance documents and policies for compliance with the self-dealing rules. The Firm will coordinate with Monica Reyes and Elliot Nguyen on the drafting of a conflict-of-interest policy and related governance documents from a tax compliance perspective.
2.7.4 Minimum Distribution Requirement (§ 4942). C&H will advise on the minimum distribution requirement under IRC § 4942, which requires the Foundation to distribute annually an amount equal to at least 5% of the fair market value of its net investment assets. Based on the Foundation's initial corpus of $10,000,000, the Year 1 minimum distribution target is estimated at $500,000. The Firm will advise on the calculation of qualifying distributions, the treatment of set-asides, and the consequences of failure to meet the minimum distribution requirement.
2.7.5 Excess Business Holdings (§ 4943). C&H will analyze the restrictions on excess business holdings under IRC § 4943 and will advise on the Foundation's permissible holdings in any business enterprise in which the Foundation and all disqualified persons together hold more than a permitted percentage of voting stock or profits interests.
2.7.6 Jeopardizing Investments (§ 4944). C&H will advise on the prohibition against jeopardizing investments under IRC § 4944 and will review the Foundation's investment policy for compliance with the applicable standards of prudent investment.
2.7.7 Taxable Expenditures (§ 4945). C&H will advise on the rules governing taxable expenditures under IRC § 4945, including the restrictions on lobbying, political campaign activities, grants to individuals, and grants to organizations other than public charities without the exercise of expenditure responsibility.
2.7.8 Form 1023 Review. C&H will review the Foundation's Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code (IRS Form 1023), filed on May 15, 2023, for tax compliance accuracy and consistency with the Foundation's organizational documents and operational plans. The Firm will monitor the status of the application and will coordinate with the IRS, if necessary, to respond to any requests for additional information.
2.7.9 Charitable Deduction Analysis. C&H will advise on the charitable deduction limitations applicable to the Client's contributions to the Foundation. Under IRC § 170(b)(1)(B), cash contributions to a private foundation are deductible up to 30% of the donor's adjusted gross income ("AGI"). Based on the Client's estimated 2022 AGI of $22,500,000, the maximum charitable deduction for the initial year is $6,750,000. The remaining $3,250,000 of the Client's $10,000,000 contribution ($5,000,000 attributable to the Client under the gift-splitting election) will be carried forward and deducted over the succeeding five taxable years, subject to the annual 30%-of-AGI limitation in each year. C&H will coordinate with Strathmore Corporation & Greaves LLP on the reporting of the charitable deduction and the carryforward schedule.
2.7.10 Governance and Compliance Calendar. C&H will coordinate with the engagement team — specifically Monica Reyes, Lead Associate, and Elliot Nguyen, Working Associate — on the preparation of a compliance calendar for the Foundation's annual filing and distribution obligations, a conflict-of-interest policy for the Foundation's board of directors, and related governance documents, each reviewed from a tax compliance perspective.
2.8 ILIT Tax Analysis
C&H will provide the following tax advisory services with respect to the Caldwell Family Insurance Trust (established March 15, 2023):
2.8.1 Trust and Policy Details. The ILIT is an irrevocable trust established for the benefit of the Client's descendants. The trustee is Northgate Trust Company of Delaware, with its principal office at 1201 North Market Street, Suite 1600, Wilmington, DE 19801. The ILIT holds Beacon Life Assurance Company Policy No. BLA-2023-77419, a second-to-die life insurance policy on the lives of Jonathan R. Caldwell and Eleanor V. Caldwell, with a face amount (death benefit) of $15,000,000. The annual premium for the policy is $187,500.
2.8.2 Estate Tax Exclusion. C&H will confirm that the ILIT is structured to exclude the life insurance policy proceeds from both the Client's and Eleanor V. Caldwell's federal gross estates under IRC §§ 2042 and 2035. The Firm will review the ILIT trust instrument, the policy ownership and beneficiary designation, and the trust's administrative provisions to verify that the Client and Eleanor V. Caldwell have not retained any incidents of ownership in the policy within the meaning of IRC § 2042(2).
2.8.3 Three-Year Lookback Rule. C&H will analyze the application of the three-year lookback rule under IRC § 2035 to the assignment of the life insurance policy to the ILIT. If the Client transfers an existing policy to the ILIT and dies within three years of the transfer, the policy proceeds will be included in the Client's gross estate. The Firm will advise on mitigation strategies, including the possibility that the ILIT applied for and has always owned the policy (as opposed to receiving a transfer from the Client), which would avoid the three-year lookback issue. The Firm will confirm the facts regarding the policy application and ownership history with Nathan C. Freed, SVP, Private Client Division, at Glenmore Insurance Brokerage LLC.
2.8.4 Crummey Withdrawal Right Analysis. C&H will analyze the Crummey withdrawal rights provided under the ILIT trust instrument for the following three beneficiaries:
(a) Thomas R. Caldwell — $5,000 annual withdrawal right
(b) Katherine C. Hartfield — $5,000 annual withdrawal right
(c) Olivia G. Caldwell — $5,000 annual withdrawal right
The annual gift tax exclusion under IRC § 2503(b) for 2023 is $17,000 per donee. The total annual exclusion coverage for the three beneficiaries is $51,000 ($17,000 × 3). The remaining $136,500 of the annual premium ($187,500 − $51,000) will be applied against the Client's remaining lifetime gift tax exemption.
2.8.5 Lapse of Crummey Powers. C&H will analyze the tax consequences of the lapse of Crummey withdrawal powers under IRC §§ 2041 and 2514, including the application of the "5-and-5" power limitation. Under IRC § 2041(b)(2) and § 2514(e), the lapse of a general power of appointment is treated as a taxable transfer to the extent the lapsed amount exceeds the greater of $5,000 or 5% of the trust corpus from which the power could be satisfied. Because each beneficiary's withdrawal right is limited to $5,000 per year, the lapse will fall within the 5-and-5 safe harbor, and no portion of the lapsed power will be treated as a taxable transfer by the beneficiary. The Firm will confirm this analysis and advise on any modifications to the Crummey provisions that may be warranted.
2.9 State Income Tax Planning
2.9.1 Delaware Situs — Dynasty Trust. C&H will analyze the state income tax implications of the Caldwell Family Dynasty Trust's establishment under Delaware situs, with Northgate Trust Company of Delaware serving as trustee. Under Delaware law, an irrevocable trust administered by a Delaware corporate trustee, with no Delaware-resident beneficiaries and no Delaware-source income, is not subject to Delaware income tax on its undistributed income. C&H will advise on the conditions necessary to maintain the Dynasty Trust's exemption from Delaware state income tax, including restrictions on the appointment of Delaware-resident beneficiaries and limitations on the trust's investment in Delaware-source income-producing assets.
2.9.2 New York Source Income. C&H will analyze the New York State income tax implications for the Dynasty Trust, including the treatment of trust income derived from New York-source assets and the tax obligations of trust beneficiaries who are residents of New York. The Firm will advise on strategies to minimize or avoid New York State income tax on Dynasty Trust income, including the structuring of trust investments and distributions.
2.9.3 Grantor Trust — New York Income Tax. C&H will analyze the impact of the GRATs' grantor trust status on the Client's New York State income tax obligations during the GRAT annuity terms. Because the GRATs are treated as grantor trusts for federal income tax purposes, all income of the GRATs will be reported on the Client's individual New York State income tax return. The Firm will advise on the New York State income tax treatment of the GRAT annuity payments, the disposition of GRAT assets, and the termination of grantor trust status upon the expiration of each GRAT's annuity term.
2.9.4 DING Trust Considerations. C&H will evaluate the potential use of a Delaware incomplete non-grantor trust ("DING trust") structure as an alternative or supplement to the existing Dynasty Trust structure. A DING trust, if properly structured, may permit the Client to transfer assets to an irrevocable trust that is treated as a non-grantor trust for state income tax purposes, thereby removing the trust's income from the Client's New York State income tax base, while remaining an incomplete gift for federal gift tax purposes. The Firm will advise on the feasibility, benefits, and risks of a DING trust structure in the context of the Client's overall Estate Plan.
2.9.5 Coordination with Strathmore Corporation & Greaves LLP. C&H will coordinate with Strathmore Corporation & Greaves LLP on the state income tax filing obligations for all trust entities established under the Estate Plan, including the Dynasty Trust, the GRATs (during and after the annuity terms), the ILIT, and the Foundation. The Firm will provide Strathmore Corporation & Greaves with the structural and tax analysis necessary to support the preparation and filing of all required state income tax returns.
2.10 Credit Shelter Trust / Marital QTIP Trust Tax Analysis
2.10.1 Revocable Trust Overview. C&H will provide tax advisory services with respect to the Caldwell Revocable Trust (originally established October 3, 2010, and restated February 6, 2023, effective April 1, 2023), including the credit shelter trust (also referred to as the bypass trust or family trust) and the marital qualified terminable interest property ("QTIP") trust provisions thereunder.
2.10.2 Credit Shelter Trust. The credit shelter trust will be funded at the Client's death in an amount equal to the Client's remaining applicable exclusion amount for federal estate tax purposes. C&H will analyze the optimal funding formula, the selection of assets for funding, and the tax consequences of the funding, including the allocation of the Client's GST exemption to the credit shelter trust.
2.10.3 Marital QTIP Trust. The marital QTIP trust will be funded with the balance of the Client's probate and non-probate estate (after funding of the credit shelter trust and other specific bequests). Eleanor V. Caldwell will be the sole income beneficiary of the marital QTIP trust and will hold a general power of appointment over the trust corpus. C&H will analyze the qualification of the marital QTIP trust for the federal estate tax marital deduction under IRC §§ 2056(b)(7) and 2044, including the requirement that Eleanor V. Caldwell receive all income from the trust for life, paid at least annually.
2.10.4 Portability Election. C&H will advise on the portability election under IRC § 2010(c)(5)(A), which permits the surviving spouse to use the deceased spouse's unused exclusion amount ("DSUE amount"). The Firm will analyze the interaction between the portability election and the credit shelter trust funding formula, and will advise on whether the portability election should be made in the Client's estate (or, if Eleanor V. Caldwell predeceases the Client, in her estate) to maximize the combined estate tax exemption available to the surviving spouse.
2.10.5 Interplay with Other Plan Elements. C&H will analyze the interplay between the credit shelter trust and marital QTIP trust, on the one hand, and the Dynasty Trust, GRATs, ILIT, and Foundation, on the other hand. The Firm will ensure that the overall Estate Plan operates in a coordinated manner to minimize federal and state estate, gift, generation-skipping transfer, and income taxes, and will advise on any adjustments to the Revocable Trust provisions that may be warranted to optimize the tax efficiency of the plan.
2.10.6 Post-2025 Sunset Considerations. C&H will analyze the impact of the potential post-2025 sunset of the TCJA provisions on the credit shelter trust and marital QTIP trust design, including the possibility that a reduced exemption amount may alter the optimal funding formula and the desirability of alternative planning strategies.
3. TAX ADVISORY TEAM
The following individuals at Calderwood & Harkness LLP will comprise the Tax Advisory Services team for this engagement:
Sylvia Hartwell — Partner, Tax Practice Group, Calderwood & Harkness LLP. Ms. Hartwell will serve as the lead tax advisor for all services described in this Addendum. She will have primary responsibility for GRAT annuity calculations, § 7520 rate analysis, GST exemption allocation strategy, federal estate tax projections, private foundation excise tax compliance advisory, and gift tax return coordination with Strathmore Corporation & Greaves LLP. Ms. Hartwell will serve as the primary point of contact for the Client and for all third-party advisors on matters within the scope of this Addendum.
Elliot Nguyen — Working Associate, Calderwood & Harkness LLP. Mr. Nguyen will provide research, computational support, drafting of tax memoranda, sensitivity analyses, and document preparation under Sylvia Hartwell's direction. Mr. Nguyen will assist with the preparation of the draft Form 709, annuity payment schedules, and all quantitative modeling workbooks.
Victoria Chambers — Responsible Partner, Calderwood & Harkness LLP. Ms. Chambers will provide overall engagement supervision and coordination, and will serve as the senior responsible partner for all aspects of the Caldwell engagement, including the tax advisory workstream. Ms. Chambers will review all major tax memoranda and deliverables prior to their delivery to the Client.
Monica Reyes — Lead Associate, Calderwood & Harkness LLP. Ms. Reyes will coordinate with the tax advisory workstream on structural and drafting matters, including the integration of tax analysis into the trust instruments, foundation governance documents, and related estate planning documents.
Howard Quinn — Billing Partner, Calderwood & Harkness LLP. Mr. Quinn will serve as billing partner and will oversee all billing and administrative matters for the engagement, including the tax advisory workstream. All invoices will be reviewed and approved by Mr. Quinn prior to issuance.
4. COORDINATION WITH THIRD PARTIES
4.1 Strathmore Corporation & Greaves LLP
C&H's tax advisory team will coordinate with Martin J. Prescott, CPA, Senior Partner, Private Client Group, at Strathmore Corporation & Greaves LLP, 600 Third Avenue, 28th Floor, New York, NY 10016, on the following matters:
(a) Gift tax return (Form 709) preparation, review, and filing for the 2023 tax year, including the transmittal of draft returns, supporting schedules, appraisal summaries, and computational worksheets;
(b) Income tax return implications of grantor trust status during the GRAT annuity terms, including the reporting of trust income on the Client's individual federal and New York State income tax returns;
(c) State income tax filings for all trust entities established under the Estate Plan, including the Dynasty Trust, the GRATs, the ILIT, and the Foundation;
(d) Financial data and valuation support for GRAT funding schedules, including the fair market value of publicly traded securities, Stonecrest membership interests, and Caldwell Ridgeline fund interests as of the applicable funding and valuation dates;
(e) Prior gift tax return history, including the confirmation of $6,750,000 in prior cumulative taxable gifts and the Client's remaining lifetime gift tax exemption;
(f) Charitable deduction computations and carryforward tracking, including the 30%-of-AGI limitation and the five-year carryforward schedule for the Foundation contribution;
(g) The Client's 2022 AGI ($22,500,000) and projected 2023 AGI for purposes of charitable deduction limitation calculations; and
(h) GST exemption allocation reporting and coordination.
4.2 Ashford Valuation Group LLC
C&H will coordinate with Dr. Leonard K. Whitfield, ASA, Managing Partner, at Ashford Valuation Group LLC, 1120 Avenue of the Americas, Suite 3500, New York, NY 10036, on the following matters:
(a) Appraisal engagement instructions, including the scope of the appraisals, the applicable valuation standard (fair market value under IRC § 2512), and the relevant valuation dates (April 15, May 1, and June 1, 2023);
(b) Valuation methodology guidance, including the appropriateness of income, market, and asset-based approaches for the various asset categories;
(c) Review of draft and final appraisal reports for the Stonecrest Realty Holdings LLC membership interests, the Caldwell Ridgeline Capital Fund IV and Fund V LP interests, the Caldwell Ridgeline Capital Fund VI carried interest, and art and collectibles ($9,000,000); and
(d) Discussion of discount conclusions and their defensibility in the context of potential IRS examination.
4.3 Havensbrook Wealth Advisors LLC
C&H will coordinate with Diana R. Linden, CFP®, Managing Director, Family Office Services, at Havensbrook Wealth Advisors LLC, 900 Third Avenue, 18th Floor, New York, NY 10022, on the following matters:
(a) Investment data and asset allocation information for the Client's liquid securities portfolio;
(b) Portfolio valuations for the GRAT A securities portfolio as of the applicable funding and valuation dates;
(c) GRAT return projections for use in the sensitivity analysis modeling; and
(d) Historical and projected investment performance data for all asset classes within the Client's portfolio.
4.4 Northgate Trust Company of Delaware
C&H will coordinate with Philip A. Rossiter, SVP, Trust Administration, at Northgate Trust Company of Delaware, 1201 North Market Street, Suite 1600, Wilmington, DE 19801, on the following matters:
(a) Trust tax reporting requirements for the Caldwell Family Dynasty Trust and the Caldwell Family Insurance Trust;
(b) Fiduciary income tax return preparation (Form 1041) for trust entities administered by Northgate;
(c) Delaware situs tax implications and compliance requirements; and
(d) Administrative coordination regarding Crummey notice procedures, distribution records, and trust accounting.
4.5 Glenmore Insurance Brokerage LLC and Beacon Life Assurance Company
C&H will coordinate with Nathan C. Freed, SVP, Private Client Division, at Glenmore Insurance Brokerage LLC, 44 Wall Street, Suite 1200, New York, NY 10005, on the following matters:
(a) Policy details for Beacon Life Assurance Company Policy No. BLA-2023-77419, including the policy application history, ownership and beneficiary designations, premium structure, and death benefit provisions;
(b) Confirmation of whether the ILIT applied for and has always owned the policy (relevant to the three-year lookback analysis under IRC § 2035);
(c) Premium gift calculations and annual premium payment schedules; and
(d) Any policy modifications, riders, or amendments that may affect the ILIT tax analysis.
5. DELIVERABLES
C&H's tax advisory team will produce the following specific deliverables under this Addendum. Each deliverable will be prepared under Sylvia Hartwell's supervision and reviewed by Victoria Chambers prior to delivery to the Client:
1.  Estate Planning Strategy Memorandum (Tax Components) — A comprehensive memorandum setting forth the tax advisory team's analysis, conclusions, and recommendations with respect to the tax components of the Caldwell Estate Plan.
2.  Federal Estate and Gift Tax Analysis (Quantitative Workbook) — A detailed quantitative workbook presenting the Client's federal estate and gift tax analysis, including current exposure, projected exposure under the Estate Plan, and sensitivity analyses.
3.  GRAT Structuring Memorandum — A technical memorandum addressing the annuity calculations for GRATs A, B, and C, § 7520 rate analysis, asset selection recommendations, zeroed-out GRAT compliance, mortality risk, and grantor trust status.
4.  GRAT Sensitivity Analysis — Return Scenarios (Modeling Workbook) — A modeling workbook presenting the projected wealth transfer under each GRAT across the 4%, 6%, 8%, and 10% annual return assumptions.
5.  Valuation discount Analysis Memorandum — A memorandum analyzing the supportable valuation discounts for Stonecrest membership interests, Caldwell Ridgeline LP interests, and carried interest, with reference to Tax Court precedent and IRS guidance.
6.  Generation-Skipping Transfer Tax Allocation Memorandum — A memorandum setting forth the recommended GST exemption allocation strategy, ETIP analysis, and reverse QTIP election considerations.
7.  Private Foundation Compliance Memorandum (§§ 4940–4946) — A memorandum addressing the excise tax and compliance requirements for The Caldwell Family Foundation under IRC §§ 4940–4946.
8.  ILIT Structure and Crummey Notice Memorandum (Tax Aspects) — A memorandum analyzing the tax treatment of the Caldwell Family Insurance Trust, including estate tax exclusion, the three-year lookback rule, Crummey withdrawal rights, and lapse of powers.
9.  Marital Trust / Credit Shelter Trust Design Memorandum (Tax Aspects) — A memorandum analyzing the tax design of the credit shelter trust and marital QTIP trust provisions under the Caldwell Revocable Trust, including portability election considerations and post-2025 sunset analysis.
10.  State Income Tax Planning Memorandum (Delaware Situs) — A memorandum addressing the state income tax implications of the Dynasty Trust's Delaware situs, New York source income considerations, and DING trust alternatives.
11.  Annuity Payment Schedules for GRATs A, B, and C — Detailed schedules specifying the annuity payment amounts, due dates, and payment methods for each GRAT.
12.  Draft Form 709 and Supporting Schedules/Valuation Summaries — A complete draft of the 2023 federal gift tax return (Form 709) with all required schedules, appraisal summaries, § 7520 computation worksheets, and GST exemption allocation elections.
13.  Review Memorandum of Ashford Appraisal Reports — An internal memorandum evaluating the Ashford Valuation Group appraisal reports for reasonableness, IRS defensibility, and consistency with applicable valuation standards and Tax Court precedent.
14.  Letter to Ashford Valuation Group with Appraisal Engagement Instructions — A formal letter to Ashford Valuation Group LLC setting forth the engagement instructions, scope of appraisals, valuation standards, and valuation dates.
15.  Letter to Strathmore Corporation & Greaves LLP for Gift Tax Return Coordination — A formal letter to Strathmore Corporation & Greaves LLP transmitting the draft Form 709, supporting schedules, and all related documentation for review, finalization, and filing.
6. FEES AND BILLING
The fees for the Tax Advisory Services described in this Addendum are included within the overall engagement fee estimate of $1,850,000 and the fee cap of $2,100,000 as set forth in Section 7 of the Base Engagement Letter. No additional fees or fee adjustments are required as a result of this Addendum.
The tax advisory workstream described herein is estimated to comprise approximately 35% to 40% of total engagement fees, based on the Firm's current assessment of the scope and complexity of the services to be provided. The actual allocation may vary depending on the nature and extent of the services ultimately rendered.
All services under this Addendum will be billed at the blended hourly rates established in the Base Engagement Letter. Time records will be maintained by each member of the tax advisory team in accordance with the Firm's standard timekeeping practices and will be reported on detailed monthly invoices.
All invoices for the Tax Advisory Services will be issued under C&H Billing Code 78412-JRC and Matter No. 1034-00004, consistent with the billing arrangements set forth in the Base Engagement Letter.
Howard Quinn, Partner, Calderwood & Harkness LLP, serves as billing partner for the engagement and will oversee all billing matters, including the review and approval of invoices, the monitoring of fees against the engagement estimate and fee cap, and the resolution of any billing inquiries.
7. TIMELINE
The Tax Advisory Services described in this Addendum will be performed in accordance with the overall engagement timeline established in the Base Engagement Letter. The following milestones are specifically relevant to the tax advisory workstream:
The foregoing timeline is subject to adjustment based on circumstances outside the Firm's control, including delays in receipt of appraisal reports, IRS processing times, and the availability of third-party advisors and the Client.
8. LIMITATIONS AND QUALIFICATIONS
The Tax Advisory Services described in this Addendum are subject to the following limitations and qualifications:
8.1 Current Law. The tax advisory services are based on current federal and New York State tax law, regulations, rulings, and judicial authority as of the date of this Addendum. Tax law is complex and subject to differing interpretations, and the Firm's analysis and recommendations reflect its professional judgment based on the authorities in effect as of the date hereof. The Tax Advisory Services do not constitute a guarantee of any particular tax outcome, and no assurance can be given that the Internal Revenue Service or any state taxing authority will not challenge one or more positions taken in connection with the Estate Plan.
8.2 Valuation. C&H does not render opinions on the valuation of assets. The Firm's role with respect to valuation is limited to reviewing the reasonableness of independent appraisals prepared by Ashford Valuation Group LLC, advising on supportable discount levels in light of applicable law and precedent, and coordinating with the appraiser on engagement instructions and methodology. The Client acknowledges that the valuation of closely held business interests, carried interest, and other illiquid assets is inherently subjective and may be the subject of IRS challenge.
8.3 Changes in Law. The Client acknowledges that tax law is subject to change by legislative, regulatory, judicial, and administrative action, and that such changes may be retroactive in effect. In particular, the Client acknowledges the potential sunset of the Tax Cuts and Jobs Act provisions after December 31, 2025, which could materially affect the Client's estate tax exemption and the overall effectiveness of the Estate Plan. C&H does not undertake to monitor changes in tax law following the completion of the engagement or to advise the Client of the impact of any such changes unless a separate engagement is entered into for that purpose.
8.4 Tax Return Preparation. C&H does not serve as the Client's tax return preparer. That role is fulfilled by Strathmore Corporation & Greaves LLP. C&H's preparation of the draft Form 709 and supporting schedules is advisory in nature and is intended to facilitate Strathmore Corporation & Greaves LLP's review, finalization, and filing of the return. The Client acknowledges that Strathmore Corporation & Greaves LLP is solely responsible for the accuracy and timely filing of all federal, state, and local tax returns.
8.5 Reliance on Information. The Tax Advisory Services are based on information provided by the Client, Strathmore Corporation & Greaves LLP, Havensbrook Wealth Advisors LLC, Caldwell Ridgeline Capital LLC (contact: Gregory S. Fenton, CFO), and Stonecrest Realty Holdings LLC (contact: Robert M. Sinclair, COO). C&H has not independently verified the accuracy or completeness of such information and is entitled to rely on it without independent investigation. The Client is responsible for the accuracy and completeness of all information provided to the Firm and to any third-party advisors engaged in connection with the Estate Plan.
9. CONFIDENTIALITY AND PRIVILEGE
9.1 Reaffirmation. The confidentiality and attorney-client privilege protections set forth in Section 10 of the Base Engagement Letter are hereby reaffirmed and shall apply in full to all communications, memoranda, analyses, work product, and documents prepared or exchanged in connection with the Tax Advisory Services described in this Addendum.
9.2 Tax-Related Privilege Considerations. The Client is advised that tax-related communications may be subject to distinct privilege considerations under applicable law. In particular, the tax practitioner-client privilege under IRC § 7525 applies only to tax advice provided by a federally authorized tax practitioner in noncriminal tax matters before the IRS and in noncriminal tax proceedings in federal court, and is narrower in scope than the attorney-client privilege. To the extent that C&H's Tax Advisory Services constitute legal advice provided by an attorney in the course of the attorney-client relationship, such communications are protected by the attorney-client privilege and the work product doctrine. To the extent that any communications involve the participation of Strathmore Corporation & Greaves LLP or other non-attorney tax advisors, such communications may be protected under a Kovel arrangement, as described in United States v. Kovel, 296 F.2d 918 (2d Cir. 1961), pursuant to which the Client's accountants and tax advisors may be included in privileged communications when their participation is necessary to facilitate the provision of legal advice. The Firm will advise the Client on the establishment and documentation of any Kovel arrangement that may be advisable in connection with the Tax Advisory Services.
10. GENERAL PROVISIONS
10.1 Incorporation by Reference. All terms and conditions of the Base Engagement Letter not expressly modified or superseded by this Addendum are hereby incorporated by reference and shall continue in full force and effect. This Addendum is supplemental to, and not a replacement of, the Base Engagement Letter.
10.2 Governing Law. This Addendum shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflict of laws principles.
10.3 Amendment. This Addendum may be amended, modified, or supplemented only by a written instrument signed by both Calderwood & Harkness LLP and the Client.
10.4 Counterparts. This Addendum may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.
10.5 Entire Agreement. This Addendum, together with the Base Engagement Letter and any other addenda or amendments thereto, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous understandings, agreements, representations, and warranties, both written and oral, with respect to such subject matter.
11. EXECUTION
By signing below, the Client confirms that he has read and understands the scope of Tax Advisory Services described in this Addendum, and agrees to the terms and conditions set forth herein. The Client acknowledges that this Addendum supplements the Base Engagement Letter dated February 15, 2023, and that all rights, obligations, and responsibilities established under the Base Engagement Letter remain in full force and effect.
CALDERWOOD & HARKNESS LLP
By: ________
Name: Victoria Chambers
Title: Partner
Calderwood & Harkness LLP 375 Park Avenue, 42nd Floor New York, NY 10152
Date: ________
ACKNOWLEDGED AND AGREED:
________________________________________
Jonathan R. Caldwell 418 East 72nd Street, Apt. 14A New York, NY 10021
Date: ________
ENCLOSURES

PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION

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