1035-00005 · Marguerite Delp · Expert Retention & Valuation

retention-letter-pinnacle-west.docx DOCUMENT M&A / Corporate

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CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED

CALDERWOOD & HARKNESS LLP Attorneys at Law 350 South Grand Avenue, Suite 4800 Los Angeles, California 90071 Telephone: (213) 555-8200 Facsimile: (213) 555-8201 www.calderwoodharkness.com

November 10, 2022

Dr. Sandra Fujimoto, ASA, CVA Pinnacle West Appraisal Group LLC 4100 MacArthur Boulevard, Suite 200 Newport Beach, California 92660

Re: Retention for Business Valuation and intellectual Property Appraisal Services In re Estate of Teodoro R. Fonseca, Deceased Los Angeles County Superior Court, Case No. 22STPB09714 Calderwood & Harkness LLP Matter No. 1035-00005

Dear Dr. Fujimoto:

1. Purpose and Background of Engagement

This letter confirms the retention of Pinnacle West Appraisal Group LLC ("Pinnacle West") to provide business valuation and intellectual property appraisal services in connection with the above-referenced contested probate proceeding pending before the Los Angeles County Superior Court. We write to set forth the terms of the engagement, describe the assets at issue, and establish the scope of work, deliverables, timeline, and fee arrangements that will govern our professional relationship.

Calderwood & Harkness LLP ("Calderwood & Harkness" or "the Firm") represents Marguerite D. Fonseca, the surviving spouse of the decedent Teodoro R. Fonseca and petitioner for letters of administration in the above-captioned estate proceeding. Teodoro R. Fonseca ("Mr. Fonseca" or the "decedent") died intestate on September 3, 2022, of cardiac arrest due to natural causes, at the age of sixty-two (62). The decedent and Ms. Fonseca were married on June 14, 2008, in Los Angeles County, California, and remained married continuously through the date of death. The decedent left no valid last will and testament, no revocable or irrevocable trust, and no other testamentary instrument.

On October 5, 2022, Ms. Fonseca filed a Petition for Letters of Administration with the Los Angeles County Superior Court, seeking appointment as administrator of the decedent's estate. A copy of that petition is enclosed with this letter for your review. The petition identifies certain significant assets of the decedent's estate, including membership interests in two California limited liability companies, a substantial portfolio of intellectual property rights, and residential real estate, as described in greater detail below.

The decedent's three adult children from a prior marriage — Rafael T. Fonseca, Isabela C. Fonseca-Greer, and Nicolás R. Fonseca (collectively, the "Contestants") — have filed an objection to Ms. Fonseca's petition through their counsel. The Contestants are represented by Damian R. Ortega of the firm Brennan, Ortega & Saldívar LLP, located at 1900 Avenue of the Stars, Suite 2100, Los Angeles, California 90067. In their objection, filed on November 14, 2022, the Contestants challenge Ms. Fonseca's rights as surviving spouse and dispute the characterization of certain assets as community property versus separate property of the decedent. A copy of the Contestants' Initial Objection is enclosed.

The community-versus-separate-property characterization dispute is central to this proceeding. As you will appreciate, the proper characterization of these assets has direct and substantial implications for the distribution of the estate among Ms. Fonseca and the Contestants. Accurate, defensible, and well-supported appraisals of the assets at issue will be critical to the resolution of this matter, whether through negotiated settlement, mediation, or trial.

It is against this backdrop that we are retaining Pinnacle West to provide the business valuation and intellectual property appraisal services described herein. We have selected your firm based on your demonstrated expertise in the valuation of closely held business interests and entertainment-industry intellectual property assets, and we are confident that your qualifications and experience will be invaluable to the successful prosecution of Ms. Fonseca's interests in this proceeding.

2. Assets to Be Appraised

The engagement encompasses the appraisal of the following assets of the decedent's estate. Each asset is described in detail below, together with relevant background information and the specific issues that the appraisal must address.

2.1 Lumiére Canyon Studios LLC — 50% Membership Interest

Lumiére Canyon Studios LLC ("Lumiére Canyon" or "LCS") is a California limited liability company formed on March 18, 2009, under California Secretary of State Filing No. 200906410337. LCS was co-founded by the decedent and Ms. Fonseca during their marriage. The company's principal office is located at 4200 West Olive Avenue, Burbank, California 91505.

LCS is a film and television production company engaged in the development, production, and distribution of original content for theatrical release, broadcast television, cable networks, and streaming platforms. Membership interests in LCS are held fifty percent (50%) by the decedent and fifty percent (50%) by Ms. Fonseca, pursuant to an Operating Agreement dated March 18, 2009. Ms. Fonseca has served, and continues to serve, as the company's Chief Creative Officer.

The most recent internal valuation of LCS, prepared as of December 31, 2021, placed the company's aggregate enterprise value at approximately Thirty-One Million Six Hundred Thousand Dollars ($31,600,000). Based on this internal valuation, the decedent's 50% membership interest carries a preliminary indicated value of approximately Fifteen Million Eight Hundred Thousand Dollars ($15,800,000). We emphasize that this internal valuation was not prepared for probate or litigation purposes, and the actual fair market value of the decedent's interest as of the date of death may differ materially.

The characterization of the decedent's membership interest in LCS is contested. The Contestants contend that this interest constitutes separate property of the decedent, alleging that LCS was funded with pre-marital capital and that any community property contributions were de minimis. Ms. Fonseca asserts that the interest is community property, having been formed during the marriage with community labor and capital. This dispute will require careful attention to the sourcing of initial capital contributions, the relative contributions of the parties, and the application of relevant California community property principles, including potential tracing and apportionment analyses.

Pinnacle West is retained to appraise the fair market value of the decedent's 50% membership interest in Lumiére Canyon Studios LLC as of the date of death, September 3, 2022. The appraisal should address all relevant valuation considerations, including but not limited to applicable discounts for lack of control and lack of marketability, the character and quantum of enterprise versus personal goodwill, and the impact of any restrictions on transferability set forth in the operating agreement.

2.2 Pacific Rim Narrative Partners LLC — 35% Membership Interest

Pacific Rim Narrative Partners LLC ("Pacific Rim" or "PRNP") is a California limited liability company formed in 2015 under California Secretary of State Filing No. 201518720492. PRNP operates as a media-focused investment fund with total assets under management of approximately Seventy-Eight Million Five Hundred Thousand Dollars ($78,500,000). The fund's managing member is Victor Sandoval, and its principal office is located at 8455 Beverly Boulevard, Suite 310, Los Angeles, California 90048.

The decedent held a thirty-five percent (35%) membership interest in PRNP. Based on the reported total assets under management, the preliminary indicated value of the decedent's 35% interest is approximately Twenty-Seven Million Four Hundred Seventy-Five Thousand Dollars ($27,475,000), calculated as $78,500,000 multiplied by 0.35. However, we caution that this figure is a simple pro rata calculation and does not account for the structure of the fund, the distinction between invested capital and assets under management, the terms of the operating agreement, carried interest provisions, management fee streams, or applicable valuation discounts. These factors may result in a fair market value that is materially different from the preliminary indicated value.

We have separately written to Mr. Sandoval requesting copies of the PRNP operating agreement, capital account statements, and distribution history for the decedent's interest. Upon receipt, we will promptly forward these materials to your office for review and analysis. We anticipate that the PRNP operating agreement may contain provisions affecting transferability, buy-sell arrangements, rights of first refusal, and other restrictions that will bear on the valuation.

The character of the decedent's membership interest in PRNP — whether community property, separate property, or a hybrid of both — is contested by the parties. The Contestants assert that the interest was acquired with the decedent's separate property funds and is therefore separate in character; Ms. Fonseca contends that the interest was acquired during the marriage with community funds and labor and is properly characterized as community property. The resolution of this dispute will require analysis of capital contributions, the terms of acquisition, and the relevant provisions of California family and probate law.

Pinnacle West is retained to appraise the fair market value of the decedent's 35% membership interest in Pacific Rim Narrative Partners LLC as of the date of death, September 3, 2022. As with the LCS appraisal, the valuation should consider all relevant factors, including applicable discounts, the structure and economics of the fund, and any restrictions on transferability.

2.3 intellectual Property Portfolio

The decedent maintained a significant portfolio of intellectual property rights encompassing fourteen (14) feature films and six (6) television series (collectively, the "IP Portfolio"). The IP Portfolio generates ongoing royalty streams and residual payments from various sources, including domestic and international theatrical distribution, home video and digital sales, broadcast and cable licensing, streaming platform licensing, and guild and union residual obligations (including but not limited to obligations under collective bargaining agreements with the Directors Guild of America, the Writers Guild of America, and the Screen Actors Guild–American Federation of Television and Radio Artists).

The intellectual property comprising the IP Portfolio was originated and/or developed during the marriage through Lumiére Canyon Studios LLC and, in certain instances, by the decedent individually. The royalty streams and residuals associated with the IP Portfolio constitute an ongoing income stream of considerable value that must be properly quantified and appraised as of the date of death.

The Contestants have raised claims that certain intellectual property assets within the IP Portfolio originated prior to the June 14, 2008 marriage date or were otherwise separate in character. Accordingly, the appraisal must include an identification and, to the extent feasible, a separate valuation of any intellectual property rights that originated or were substantially developed prior to the marriage, in order to address the Contestants' separate property claims and to support the tracing and apportionment analysis that may be required.

Pinnacle West is retained to determine the net present value of the royalty streams and residuals attributable to the IP Portfolio as of the date of death, September 3, 2022. The valuation should account for revenue trends, remaining useful life of the underlying works, projected future earnings, contractual arrangements, licensing agreements, distribution agreements, and guild and union residual obligations.

2.4 Real Property (Supplemental Scope, If Requested)

We wish to advise you that we may also request supplemental real property appraisal support in connection with this engagement. The estate includes two significant real property holdings:

(a) Beverly Hills Residence: 1847 Coldwater Canyon Drive, Beverly Hills, California 90210. The preliminary estimated fair market value of this property is approximately Eight Million Four Hundred Fifty Thousand Dollars ($8,450,000).

(b) Malibu Beach House: 27100 Pacific Coast Highway, Malibu, California 90265. The preliminary estimated fair market value of this property is approximately Six Million Two Hundred Thousand Dollars ($6,200,000).

Title records for both properties are maintained by Coastline Title & Escrow Co. The contact person at Coastline Title & Escrow is Andrea Solis, whose office is located at 9401 Wilshire Boulevard, Suite 720, Beverly Hills, California 90212.

We will confirm whether this supplemental scope of work is needed based on the evolution of the proceeding and will negotiate a separate fee arrangement with Pinnacle West if real property appraisal services are engaged. This supplemental scope is not included within the initial retention described in this letter unless and until expressly confirmed in writing.

3. Scope of Services

The scope of Pinnacle West's engagement encompasses the following categories of professional services:

3.1 Business Valuation

Pinnacle West shall prepare fair market value appraisals of the decedent's membership interests in (i) Lumiére Canyon Studios LLC (50% membership interest) and (ii) Pacific Rim Narrative Partners LLC (35% membership interest), in each case as of the valuation date of September 3, 2022 (the date of death).

The business valuations shall employ recognized valuation methodologies as appropriate, including but not limited to the income approach (e.g., discounted cash flow analysis, capitalization of earnings), the market approach (e.g., guideline public company method, guideline transaction method), and the asset-based approach (e.g., adjusted net asset value). Pinnacle West shall exercise professional judgment in determining which methodologies are most applicable to each entity and in weighting the results derived from each approach.

The valuations shall include consideration of applicable discounts, including discounts for lack of control (minority interest discounts) and discounts for lack of marketability, supported by empirical data and accepted valuation studies. The valuations shall also include an assessment of goodwill attributable to each entity, including an analysis distinguishing between personal goodwill (attributable to the decedent as an individual) and enterprise goodwill (attributable to the entity itself), to the extent such distinction is relevant to the community-versus-separate-property characterization dispute.

In preparing the business valuations, Pinnacle West shall review and analyze all relevant operating agreements, financial statements (audited and unaudited), federal and state income tax returns, capital account records, distribution histories, internal valuations, and such other documents and information as may be necessary or appropriate to support the valuation conclusions.

3.2 intellectual Property Valuation

Pinnacle West shall determine the net present value of the IP Portfolio's royalty and residual income streams as of September 3, 2022. The intellectual property valuation shall include:

(a) Analysis of historical revenue trends for each intellectual property asset within the IP Portfolio, including revenues from theatrical distribution, home video and digital sales, broadcast and cable licensing, streaming platform licensing, and guild and union residual obligations;

(b) Assessment of the remaining useful life of each intellectual property asset, taking into account the age, genre, commercial performance history, and market outlook for each work;

(c) Projection of future earnings attributable to each intellectual property asset, based on reasonable assumptions regarding revenue decay curves, market conditions, and industry trends;

(d) Consideration of all contractual arrangements affecting the IP Portfolio, including licensing agreements, distribution agreements, co-production agreements, profit participation arrangements, and guild and union collective bargaining agreements governing residual obligations;

(e) Identification and, to the extent feasible, separate valuation of any intellectual property rights that originated or were substantially developed prior to the June 14, 2008 marriage date, in order to address the Contestants' separate property claims; and

(f) Application of an appropriate discount rate reflecting the risk and uncertainty associated with the projected future income streams.

3.3 Expert Witness Services

In the event that this matter proceeds to trial or other contested hearing, Pinnacle West and Dr. Fujimoto shall be prepared to serve as expert witnesses on behalf of Ms. Fonseca. Expert witness services shall include, but not be limited to, the following:

(a) Preparation of expert reports compliant with the California Evidence Code and all applicable rules of the Los Angeles County Superior Court governing the submission of expert testimony and expert reports in probate proceedings;

(b) Availability for deposition by opposing counsel, including adequate preparation time in advance of any scheduled deposition;

(c) Availability for trial testimony, including direct examination, cross-examination, and any redirect or recross-examination, at such times as may be ordered by the court or agreed upon by the parties; and

(d) Consultation with Calderwood & Harkness attorneys in preparation for deposition and trial, including review of opposing expert reports and assistance in developing cross-examination strategies.

4. Deliverables

Pinnacle West shall deliver the following work product in connection with this engagement:

(a) Preliminary Valuation Reports. A preliminary valuation report for each asset category (i.e., one report addressing the business valuation of the LCS membership interest, one report addressing the business valuation of the PRNP membership interest, and one report addressing the IP Portfolio valuation), to be delivered within ninety (90) days of Pinnacle West's receipt of all necessary financial documentation for the applicable asset category.

(b) Final Comprehensive Valuation Reports. A final comprehensive valuation report for each asset category, incorporating any additional data, adjustments, or revisions resulting from supplemental document production, management interviews, or further analysis, to be delivered within forty-five (45) days of the issuance of the corresponding preliminary valuation report.

(c) Summary Memorandum. A summary memorandum, suitable for use in mediation or settlement discussions, presenting the key valuation conclusions, methodologies employed, and principal assumptions and limiting conditions in a concise and accessible format.

(d) Expert Witness Report. An expert witness report, if required, prepared in compliance with all court-ordered deadlines and in a format satisfying the requirements of the California Evidence Code and applicable court rules.

We wish to note that we anticipate the Contestants have retained their own appraiser in connection with this proceeding. Based on information available to us, the Contestants' appraiser is Hargrove & Linden Appraisals Inc., whose lead appraiser for this matter is Morton Linden, CFA, ASA, with offices at 2600 Michelson Drive, Suite 800, Irvine, California 92612. Pinnacle West should be prepared to review, analyze, and, if necessary, rebut the Contestants' valuation conclusions in any rebuttal report or trial testimony. We will share the Contestants' appraisal reports with you as they become available, subject to any applicable confidentiality or protective order restrictions.

5. Materials to Be Provided

Calderwood & Harkness will provide or facilitate access to the following documents and information in support of Pinnacle West's engagement:

(a) The Operating Agreement of Lumiére Canyon Studios LLC, dated March 18, 2009, together with any amendments thereto;

(b) Financial statements, federal and state income tax returns, and internal valuations for Lumiére Canyon Studios LLC, including the internal valuation as of December 31, 2021, for all available periods;

(c) The Operating Agreement of Pacific Rim Narrative Partners LLC, together with any amendments thereto, capital account statements for the decedent's membership interest, and distribution records for all available periods;

(d) Bank statements from Veltara Basin Bank, N.A., for accounts ending in -4782, -3091, and -6155, reflecting relevant transactions relating to the decedent's business and personal financial activity;

(e) Documentation pertaining to the IP Portfolio, including but not limited to contracts, licensing agreements, distribution agreements, co-production agreements, profit participation statements, and royalty statements for the fourteen (14) feature films and six (6) television series comprising the IP Portfolio;

(f) Real property records from Coastline Title & Escrow Co., if the supplemental real property appraisal scope is engaged as described in Section 2.4 above;

(g) Estate inventory, financial reconciliation materials, and tax planning workpapers as prepared by Ridgeway Accounting Partners LLP (lead accountant Dennis Chua, CPA), whose office is located at 515 South Flower Street, Suite 3600, Los Angeles, California 90071; and

(h) Any additional documents or information reasonably requested by Pinnacle West in the course of this engagement.

Calderwood & Harkness will use its best efforts to provide the initial document production to Pinnacle West within fourteen (14) days of the execution of this retention letter. We recognize that some documents, particularly those relating to Pacific Rim Narrative Partners LLC, may be in the possession of third parties and may require additional time to obtain. We will keep you apprised of any delays and will supplement the document production on a rolling basis as additional materials become available.

6. Timeline

The following timeline governs the engagement:

(a) Engagement Effective Date: The engagement shall become effective upon countersignature of this letter by Dr. Fujimoto on behalf of Pinnacle West.

(b) Initial Document Production: Calderwood & Harkness shall provide the initial document production to Pinnacle West within fourteen (14) days of the effective date of the engagement. The target date for the initial document production is November 24, 2022.

(c) Preliminary Valuation Reports: Pinnacle West shall deliver preliminary valuation reports within ninety (90) days of receipt of substantially complete documentation for the applicable asset category.

(d) Final Valuation Reports: Pinnacle West shall deliver final comprehensive valuation reports within forty-five (45) days of the issuance of the corresponding preliminary valuation reports.

(e) Expert Reports: Expert reports, if required, shall be prepared and delivered in accordance with court-ordered scheduling deadlines, which will be communicated to Pinnacle West as they become available.

We note that the contested probate proceeding is in its early stages. The Contestants' objection was filed on November 14, 2022, and we anticipate further proceedings in the months ahead, which may include case management conferences, potential mediation, discovery, and, if the matter is not resolved, trial. We will keep Pinnacle West informed of all scheduling developments that may affect the timeline for the appraisal work and the preparation of expert reports.

7. Fee Arrangement

Pinnacle West's services shall be billed on a time-and-materials basis at the Firm's standard hourly rates, as follows:

(a) Dr. Sandra Fujimoto (Lead Appraiser, ASA, CVA): Pinnacle West's standard hourly rate for Dr. Fujimoto's services, to be stated in Pinnacle West's fee estimate.

(b) Senior Analysts and Associate Appraisers: Pinnacle West's standard hourly rates for senior analysts and associate appraisers assigned to the engagement, to be stated in Pinnacle West's fee estimate.

Pinnacle West shall submit invoices to Calderwood & Harkness LLP on a monthly basis. All invoices shall reference Matter No. 1035-00005 and shall include a detailed description of the services rendered, the name and hourly rate of each timekeeper, and the number of hours billed by each timekeeper during the invoicing period. Invoices shall be payable within thirty (30) days of receipt by Calderwood & Harkness.

Out-of-pocket expenses incurred by Pinnacle West in connection with the engagement, including but not limited to travel expenses, copying and printing costs, database access fees, and similar charges, shall be billed at cost and shall be itemized on the monthly invoices.

We request that Pinnacle West provide a detailed fee estimate for the initial scope of work (business valuations of the LCS and PRNP membership interests and the IP Portfolio valuation) within ten (10) business days of the effective date of this engagement. The fee estimate should include projected hours by timekeeper category, applicable hourly rates, and an estimate of anticipated out-of-pocket expenses.

Expert witness testimony services, including preparation for and attendance at depositions and trial testimony, shall be billed at Pinnacle West's stated expert testimony rates, with a minimum engagement of four (4) hours per day of testimony. Expert testimony rates, if different from standard consulting rates, shall be specified in Pinnacle West's fee estimate.

All fees and costs incurred by Pinnacle West in connection with this engagement are the ultimate financial responsibility of the client, Marguerite D. Fonseca. Such fees and costs will be advanced by Calderwood & Harkness LLP as costs of the engagement and will be billed to the client in accordance with the Firm's engagement letter with Ms. Fonseca.

8. Confidentiality and Privilege

All communications, work product, draft and final reports, memoranda, notes, analyses, and other materials prepared by Pinnacle West in connection with this engagement are subject to the attorney-client privilege and the attorney work product doctrine. Pinnacle West's services are being retained at the direction of counsel for use in connection with pending litigation, and all work product generated in the course of this engagement is intended to be protected by these privileges to the fullest extent permitted by law.

Pinnacle West shall not disclose any information relating to this engagement — including but not limited to the fact of the engagement itself, the identity of the parties, the nature of the assets being appraised, any preliminary or final valuation conclusions, or any other substantive or procedural matter — to any person or entity without the prior written authorization of Calderwood & Harkness LLP. This obligation extends to all partners, employees, contractors, and agents of Pinnacle West who may have access to information relating to the engagement.

All documents and data provided to Pinnacle West by Calderwood & Harkness or obtained by Pinnacle West in the course of this engagement shall be maintained in strict confidence, stored securely, and returned to Calderwood & Harkness or destroyed upon completion of the engagement or upon written request by Calderwood & Harkness, at Calderwood & Harkness's election. Pinnacle West shall maintain appropriate physical and electronic security measures to prevent unauthorized access to engagement-related documents and data.

We emphasize that this matter involves highly sensitive personal and financial information regarding the decedent's estate, the members of the Fonseca family, and the decedent's business interests and associates. We expect Pinnacle West to treat all such information with the highest degree of care and discretion.

9. Independence and Conflicts

As a precondition to this engagement, we ask that Pinnacle West confirm that it has conducted a conflicts check and has identified no conflicts of interest with any party to this proceeding or any entity that may be affected by the appraisal conclusions. Specifically, Pinnacle West must confirm that it has no current or prior professional, financial, or personal relationship that would impair its independence or objectivity with respect to any of the following persons and entities:

• Marguerite D. Fonseca

• Rafael T. Fonseca

• Isabela C. Fonseca-Greer

• Nicolás R. Fonseca

• Claudette Marchetti

• Lumiére Canyon Studios LLC

• Pacific Rim Narrative Partners LLC

• Amber Light Documentary Films LLC

• Brennan, Ortega & Saldívar LLP

• Hargrove & Linden Appraisals Inc.

• Any related entity, affiliate, officer, director, managing member, or principal of any of the foregoing

Pinnacle West shall maintain full independence and objectivity in all valuation conclusions rendered in connection with this engagement. Pinnacle West's valuation opinions must be supportable, well-reasoned, and rendered without regard to the interests or preferences of any party to the proceeding. The credibility and persuasiveness of Pinnacle West's appraisal work will depend in significant part on its demonstrated independence and adherence to the professional standards governing the appraisal profession, including the Uniform Standards of Professional Appraisal Practice (USPAP) and the standards of the American Society of Appraisers (ASA).

10. Contacts

The following individuals shall serve as the primary contacts at Calderwood & Harkness LLP for purposes of this engagement:

Elliot Nguyen, Lead Associate Day-to-day coordination of the engagement, including scheduling, document production, and communication with Pinnacle West on routine matters. Telephone: (213) 555-8247

Email: enuguyen@calderwoodharkness.com

Grace Nakamura, Working Associate Document production and logistics, including assembly and transmission of financial records, coordination with Ridgeway Accounting Partners LLP, and tracking of outstanding document requests. Telephone: (213) 555-8263

Email: gnakamura@calderwoodharkness.com

Howard Quinn, Responsible Partner Strategic and substantive matters, including valuation methodology decisions, expert witness strategy, and coordination with the litigation team. Telephone: (213) 555-8210

Email: hquinn@calderwoodharkness.com

All correspondence, invoices, reports, and other communications from Pinnacle West should be directed to Calderwood & Harkness LLP at 350 South Grand Avenue, Suite 4800, Los Angeles, California 90071, and should reference Matter No. 1035-00005.

11. Acceptance and Countersignature

If the foregoing terms are acceptable to Pinnacle West, we respectfully request that Dr. Fujimoto countersign this letter in the space provided below and return a fully executed copy to our office at your earliest convenience, either by hand delivery, U.S. mail, or electronic transmission to Elliot Nguyen at the email address set forth above. The engagement shall become effective as of the date of countersignature.

We look forward to working with you on this matter. Please do not hesitate to contact me or any of the individuals identified above should you have any questions regarding the terms of this retention or the underlying proceeding.

Sincerely,

CALDERWOOD & HARKNESS LLP

By: ________

Elliot Nguyen Lead Associate Telephone: (213) 555-8247

Email: enuguyen@calderwoodharkness.com

Date: November 10, 2022

ACCEPTED AND AGREED

The undersigned hereby accepts the engagement described in this retention letter on the terms and conditions set forth herein and confirms that Pinnacle West Appraisal Group LLC has conducted a conflicts check and has identified no conflicts of interest with any party or entity listed in Section 9 above.

PINNACLE WEST APPRAISAL GROUP LLC

By: ________

Dr. Sandra Fujimoto, ASA, CVA Managing Principal

Date: ________

Enclosures:

1. Copy of Petition for Letters of Administration (filed October 5, 2022)

2. Copy of Contestants' Initial Objection (filed November 14, 2022)

3. Preliminary Asset Summary Table

cc:

Howard Quinn, Partner, Calderwood & Harkness LLP Grace Nakamura, Associate, Calderwood & Harkness LLP Marguerite D. Fonseca (client)

CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED
CALDERWOOD & HARKNESS LLP Attorneys at Law 350 South Grand Avenue, Suite 4800 Los Angeles, California 90071 Telephone: (213) 555-8200 Facsimile: (213) 555-8201 www.calderwoodharkness.com
November 10, 2022
Dr. Sandra Fujimoto, ASA, CVA Pinnacle West Appraisal Group LLC 4100 MacArthur Boulevard, Suite 200 Newport Beach, California 92660
Re: Retention for Business Valuation and intellectual Property Appraisal Services In re Estate of Teodoro R. Fonseca, Deceased Los Angeles County Superior Court, Case No. 22STPB09714 Calderwood & Harkness LLP Matter No. 1035-00005
Dear Dr. Fujimoto:
1. Purpose and Background of Engagement
This letter confirms the retention of Pinnacle West Appraisal Group LLC ("Pinnacle West") to provide business valuation and intellectual property appraisal services in connection with the above-referenced contested probate proceeding pending before the Los Angeles County Superior Court. We write to set forth the terms of the engagement, describe the assets at issue, and establish the scope of work, deliverables, timeline, and fee arrangements that will govern our professional relationship.
Calderwood & Harkness LLP ("Calderwood & Harkness" or "the Firm") represents Marguerite D. Fonseca, the surviving spouse of the decedent Teodoro R. Fonseca and petitioner for letters of administration in the above-captioned estate proceeding. Teodoro R. Fonseca ("Mr. Fonseca" or the "decedent") died intestate on September 3, 2022, of cardiac arrest due to natural causes, at the age of sixty-two (62). The decedent and Ms. Fonseca were married on June 14, 2008, in Los Angeles County, California, and remained married continuously through the date of death. The decedent left no valid last will and testament, no revocable or irrevocable trust, and no other testamentary instrument.
On October 5, 2022, Ms. Fonseca filed a Petition for Letters of Administration with the Los Angeles County Superior Court, seeking appointment as administrator of the decedent's estate. A copy of that petition is enclosed with this letter for your review. The petition identifies certain significant assets of the decedent's estate, including membership interests in two California limited liability companies, a substantial portfolio of intellectual property rights, and residential real estate, as described in greater detail below.
The decedent's three adult children from a prior marriage — Rafael T. Fonseca, Isabela C. Fonseca-Greer, and Nicolás R. Fonseca (collectively, the "Contestants") — have filed an objection to Ms. Fonseca's petition through their counsel. The Contestants are represented by Damian R. Ortega of the firm Brennan, Ortega & Saldívar LLP, located at 1900 Avenue of the Stars, Suite 2100, Los Angeles, California 90067. In their objection, filed on November 14, 2022, the Contestants challenge Ms. Fonseca's rights as surviving spouse and dispute the characterization of certain assets as community property versus separate property of the decedent. A copy of the Contestants' Initial Objection is enclosed.
The community-versus-separate-property characterization dispute is central to this proceeding. As you will appreciate, the proper characterization of these assets has direct and substantial implications for the distribution of the estate among Ms. Fonseca and the Contestants. Accurate, defensible, and well-supported appraisals of the assets at issue will be critical to the resolution of this matter, whether through negotiated settlement, mediation, or trial.
It is against this backdrop that we are retaining Pinnacle West to provide the business valuation and intellectual property appraisal services described herein. We have selected your firm based on your demonstrated expertise in the valuation of closely held business interests and entertainment-industry intellectual property assets, and we are confident that your qualifications and experience will be invaluable to the successful prosecution of Ms. Fonseca's interests in this proceeding.
2. Assets to Be Appraised
The engagement encompasses the appraisal of the following assets of the decedent's estate. Each asset is described in detail below, together with relevant background information and the specific issues that the appraisal must address.
2.1 Lumiére Canyon Studios LLC — 50% Membership Interest
Lumiére Canyon Studios LLC ("Lumiére Canyon" or "LCS") is a California limited liability company formed on March 18, 2009, under California Secretary of State Filing No. 200906410337. LCS was co-founded by the decedent and Ms. Fonseca during their marriage. The company's principal office is located at 4200 West Olive Avenue, Burbank, California 91505.
LCS is a film and television production company engaged in the development, production, and distribution of original content for theatrical release, broadcast television, cable networks, and streaming platforms. Membership interests in LCS are held fifty percent (50%) by the decedent and fifty percent (50%) by Ms. Fonseca, pursuant to an Operating Agreement dated March 18, 2009. Ms. Fonseca has served, and continues to serve, as the company's Chief Creative Officer.
The most recent internal valuation of LCS, prepared as of December 31, 2021, placed the company's aggregate enterprise value at approximately Thirty-One Million Six Hundred Thousand Dollars ($31,600,000). Based on this internal valuation, the decedent's 50% membership interest carries a preliminary indicated value of approximately Fifteen Million Eight Hundred Thousand Dollars ($15,800,000). We emphasize that this internal valuation was not prepared for probate or litigation purposes, and the actual fair market value of the decedent's interest as of the date of death may differ materially.
The characterization of the decedent's membership interest in LCS is contested. The Contestants contend that this interest constitutes separate property of the decedent, alleging that LCS was funded with pre-marital capital and that any community property contributions were de minimis. Ms. Fonseca asserts that the interest is community property, having been formed during the marriage with community labor and capital. This dispute will require careful attention to the sourcing of initial capital contributions, the relative contributions of the parties, and the application of relevant California community property principles, including potential tracing and apportionment analyses.
Pinnacle West is retained to appraise the fair market value of the decedent's 50% membership interest in Lumiére Canyon Studios LLC as of the date of death, September 3, 2022. The appraisal should address all relevant valuation considerations, including but not limited to applicable discounts for lack of control and lack of marketability, the character and quantum of enterprise versus personal goodwill, and the impact of any restrictions on transferability set forth in the operating agreement.
2.2 Pacific Rim Narrative Partners LLC — 35% Membership Interest
Pacific Rim Narrative Partners LLC ("Pacific Rim" or "PRNP") is a California limited liability company formed in 2015 under California Secretary of State Filing No. 201518720492. PRNP operates as a media-focused investment fund with total assets under management of approximately Seventy-Eight Million Five Hundred Thousand Dollars ($78,500,000). The fund's managing member is Victor Sandoval, and its principal office is located at 8455 Beverly Boulevard, Suite 310, Los Angeles, California 90048.
The decedent held a thirty-five percent (35%) membership interest in PRNP. Based on the reported total assets under management, the preliminary indicated value of the decedent's 35% interest is approximately Twenty-Seven Million Four Hundred Seventy-Five Thousand Dollars ($27,475,000), calculated as $78,500,000 multiplied by 0.35. However, we caution that this figure is a simple pro rata calculation and does not account for the structure of the fund, the distinction between invested capital and assets under management, the terms of the operating agreement, carried interest provisions, management fee streams, or applicable valuation discounts. These factors may result in a fair market value that is materially different from the preliminary indicated value.
We have separately written to Mr. Sandoval requesting copies of the PRNP operating agreement, capital account statements, and distribution history for the decedent's interest. Upon receipt, we will promptly forward these materials to your office for review and analysis. We anticipate that the PRNP operating agreement may contain provisions affecting transferability, buy-sell arrangements, rights of first refusal, and other restrictions that will bear on the valuation.
The character of the decedent's membership interest in PRNP — whether community property, separate property, or a hybrid of both — is contested by the parties. The Contestants assert that the interest was acquired with the decedent's separate property funds and is therefore separate in character; Ms. Fonseca contends that the interest was acquired during the marriage with community funds and labor and is properly characterized as community property. The resolution of this dispute will require analysis of capital contributions, the terms of acquisition, and the relevant provisions of California family and probate law.
Pinnacle West is retained to appraise the fair market value of the decedent's 35% membership interest in Pacific Rim Narrative Partners LLC as of the date of death, September 3, 2022. As with the LCS appraisal, the valuation should consider all relevant factors, including applicable discounts, the structure and economics of the fund, and any restrictions on transferability.
2.3 intellectual Property Portfolio
The decedent maintained a significant portfolio of intellectual property rights encompassing fourteen (14) feature films and six (6) television series (collectively, the "IP Portfolio"). The IP Portfolio generates ongoing royalty streams and residual payments from various sources, including domestic and international theatrical distribution, home video and digital sales, broadcast and cable licensing, streaming platform licensing, and guild and union residual obligations (including but not limited to obligations under collective bargaining agreements with the Directors Guild of America, the Writers Guild of America, and the Screen Actors Guild–American Federation of Television and Radio Artists).
The intellectual property comprising the IP Portfolio was originated and/or developed during the marriage through Lumiére Canyon Studios LLC and, in certain instances, by the decedent individually. The royalty streams and residuals associated with the IP Portfolio constitute an ongoing income stream of considerable value that must be properly quantified and appraised as of the date of death.
The Contestants have raised claims that certain intellectual property assets within the IP Portfolio originated prior to the June 14, 2008 marriage date or were otherwise separate in character. Accordingly, the appraisal must include an identification and, to the extent feasible, a separate valuation of any intellectual property rights that originated or were substantially developed prior to the marriage, in order to address the Contestants' separate property claims and to support the tracing and apportionment analysis that may be required.
Pinnacle West is retained to determine the net present value of the royalty streams and residuals attributable to the IP Portfolio as of the date of death, September 3, 2022. The valuation should account for revenue trends, remaining useful life of the underlying works, projected future earnings, contractual arrangements, licensing agreements, distribution agreements, and guild and union residual obligations.
2.4 Real Property (Supplemental Scope, If Requested)
We wish to advise you that we may also request supplemental real property appraisal support in connection with this engagement. The estate includes two significant real property holdings:
(a) Beverly Hills Residence: 1847 Coldwater Canyon Drive, Beverly Hills, California 90210. The preliminary estimated fair market value of this property is approximately Eight Million Four Hundred Fifty Thousand Dollars ($8,450,000).
(b) Malibu Beach House: 27100 Pacific Coast Highway, Malibu, California 90265. The preliminary estimated fair market value of this property is approximately Six Million Two Hundred Thousand Dollars ($6,200,000).
Title records for both properties are maintained by Coastline Title & Escrow Co. The contact person at Coastline Title & Escrow is Andrea Solis, whose office is located at 9401 Wilshire Boulevard, Suite 720, Beverly Hills, California 90212.
We will confirm whether this supplemental scope of work is needed based on the evolution of the proceeding and will negotiate a separate fee arrangement with Pinnacle West if real property appraisal services are engaged. This supplemental scope is not included within the initial retention described in this letter unless and until expressly confirmed in writing.
3. Scope of Services
The scope of Pinnacle West's engagement encompasses the following categories of professional services:
3.1 Business Valuation
Pinnacle West shall prepare fair market value appraisals of the decedent's membership interests in (i) Lumiére Canyon Studios LLC (50% membership interest) and (ii) Pacific Rim Narrative Partners LLC (35% membership interest), in each case as of the valuation date of September 3, 2022 (the date of death).
The business valuations shall employ recognized valuation methodologies as appropriate, including but not limited to the income approach (e.g., discounted cash flow analysis, capitalization of earnings), the market approach (e.g., guideline public company method, guideline transaction method), and the asset-based approach (e.g., adjusted net asset value). Pinnacle West shall exercise professional judgment in determining which methodologies are most applicable to each entity and in weighting the results derived from each approach.
The valuations shall include consideration of applicable discounts, including discounts for lack of control (minority interest discounts) and discounts for lack of marketability, supported by empirical data and accepted valuation studies. The valuations shall also include an assessment of goodwill attributable to each entity, including an analysis distinguishing between personal goodwill (attributable to the decedent as an individual) and enterprise goodwill (attributable to the entity itself), to the extent such distinction is relevant to the community-versus-separate-property characterization dispute.
In preparing the business valuations, Pinnacle West shall review and analyze all relevant operating agreements, financial statements (audited and unaudited), federal and state income tax returns, capital account records, distribution histories, internal valuations, and such other documents and information as may be necessary or appropriate to support the valuation conclusions.
3.2 intellectual Property Valuation
Pinnacle West shall determine the net present value of the IP Portfolio's royalty and residual income streams as of September 3, 2022. The intellectual property valuation shall include:
(a) Analysis of historical revenue trends for each intellectual property asset within the IP Portfolio, including revenues from theatrical distribution, home video and digital sales, broadcast and cable licensing, streaming platform licensing, and guild and union residual obligations;
(b) Assessment of the remaining useful life of each intellectual property asset, taking into account the age, genre, commercial performance history, and market outlook for each work;
(c) Projection of future earnings attributable to each intellectual property asset, based on reasonable assumptions regarding revenue decay curves, market conditions, and industry trends;
(d) Consideration of all contractual arrangements affecting the IP Portfolio, including licensing agreements, distribution agreements, co-production agreements, profit participation arrangements, and guild and union collective bargaining agreements governing residual obligations;
(e) Identification and, to the extent feasible, separate valuation of any intellectual property rights that originated or were substantially developed prior to the June 14, 2008 marriage date, in order to address the Contestants' separate property claims; and
(f) Application of an appropriate discount rate reflecting the risk and uncertainty associated with the projected future income streams.
3.3 Expert Witness Services
In the event that this matter proceeds to trial or other contested hearing, Pinnacle West and Dr. Fujimoto shall be prepared to serve as expert witnesses on behalf of Ms. Fonseca. Expert witness services shall include, but not be limited to, the following:
(a) Preparation of expert reports compliant with the California Evidence Code and all applicable rules of the Los Angeles County Superior Court governing the submission of expert testimony and expert reports in probate proceedings;
(b) Availability for deposition by opposing counsel, including adequate preparation time in advance of any scheduled deposition;
(c) Availability for trial testimony, including direct examination, cross-examination, and any redirect or recross-examination, at such times as may be ordered by the court or agreed upon by the parties; and
(d) Consultation with Calderwood & Harkness attorneys in preparation for deposition and trial, including review of opposing expert reports and assistance in developing cross-examination strategies.
4. Deliverables
Pinnacle West shall deliver the following work product in connection with this engagement:
(a) Preliminary Valuation Reports. A preliminary valuation report for each asset category (i.e., one report addressing the business valuation of the LCS membership interest, one report addressing the business valuation of the PRNP membership interest, and one report addressing the IP Portfolio valuation), to be delivered within ninety (90) days of Pinnacle West's receipt of all necessary financial documentation for the applicable asset category.
(b) Final Comprehensive Valuation Reports. A final comprehensive valuation report for each asset category, incorporating any additional data, adjustments, or revisions resulting from supplemental document production, management interviews, or further analysis, to be delivered within forty-five (45) days of the issuance of the corresponding preliminary valuation report.
(c) Summary Memorandum. A summary memorandum, suitable for use in mediation or settlement discussions, presenting the key valuation conclusions, methodologies employed, and principal assumptions and limiting conditions in a concise and accessible format.
(d) Expert Witness Report. An expert witness report, if required, prepared in compliance with all court-ordered deadlines and in a format satisfying the requirements of the California Evidence Code and applicable court rules.
We wish to note that we anticipate the Contestants have retained their own appraiser in connection with this proceeding. Based on information available to us, the Contestants' appraiser is Hargrove & Linden Appraisals Inc., whose lead appraiser for this matter is Morton Linden, CFA, ASA, with offices at 2600 Michelson Drive, Suite 800, Irvine, California 92612. Pinnacle West should be prepared to review, analyze, and, if necessary, rebut the Contestants' valuation conclusions in any rebuttal report or trial testimony. We will share the Contestants' appraisal reports with you as they become available, subject to any applicable confidentiality or protective order restrictions.
5. Materials to Be Provided
Calderwood & Harkness will provide or facilitate access to the following documents and information in support of Pinnacle West's engagement:
(a) The Operating Agreement of Lumiére Canyon Studios LLC, dated March 18, 2009, together with any amendments thereto;
(b) Financial statements, federal and state income tax returns, and internal valuations for Lumiére Canyon Studios LLC, including the internal valuation as of December 31, 2021, for all available periods;
(c) The Operating Agreement of Pacific Rim Narrative Partners LLC, together with any amendments thereto, capital account statements for the decedent's membership interest, and distribution records for all available periods;
(d) Bank statements from Veltara Basin Bank, N.A., for accounts ending in -4782, -3091, and -6155, reflecting relevant transactions relating to the decedent's business and personal financial activity;
(e) Documentation pertaining to the IP Portfolio, including but not limited to contracts, licensing agreements, distribution agreements, co-production agreements, profit participation statements, and royalty statements for the fourteen (14) feature films and six (6) television series comprising the IP Portfolio;
(f) Real property records from Coastline Title & Escrow Co., if the supplemental real property appraisal scope is engaged as described in Section 2.4 above;
(g) Estate inventory, financial reconciliation materials, and tax planning workpapers as prepared by Ridgeway Accounting Partners LLP (lead accountant Dennis Chua, CPA), whose office is located at 515 South Flower Street, Suite 3600, Los Angeles, California 90071; and
(h) Any additional documents or information reasonably requested by Pinnacle West in the course of this engagement.
Calderwood & Harkness will use its best efforts to provide the initial document production to Pinnacle West within fourteen (14) days of the execution of this retention letter. We recognize that some documents, particularly those relating to Pacific Rim Narrative Partners LLC, may be in the possession of third parties and may require additional time to obtain. We will keep you apprised of any delays and will supplement the document production on a rolling basis as additional materials become available.
6. Timeline
The following timeline governs the engagement:
(a) Engagement Effective Date: The engagement shall become effective upon countersignature of this letter by Dr. Fujimoto on behalf of Pinnacle West.
(b) Initial Document Production: Calderwood & Harkness shall provide the initial document production to Pinnacle West within fourteen (14) days of the effective date of the engagement. The target date for the initial document production is November 24, 2022.
(c) Preliminary Valuation Reports: Pinnacle West shall deliver preliminary valuation reports within ninety (90) days of receipt of substantially complete documentation for the applicable asset category.
(d) Final Valuation Reports: Pinnacle West shall deliver final comprehensive valuation reports within forty-five (45) days of the issuance of the corresponding preliminary valuation reports.
(e) Expert Reports: Expert reports, if required, shall be prepared and delivered in accordance with court-ordered scheduling deadlines, which will be communicated to Pinnacle West as they become available.
We note that the contested probate proceeding is in its early stages. The Contestants' objection was filed on November 14, 2022, and we anticipate further proceedings in the months ahead, which may include case management conferences, potential mediation, discovery, and, if the matter is not resolved, trial. We will keep Pinnacle West informed of all scheduling developments that may affect the timeline for the appraisal work and the preparation of expert reports.
7. Fee Arrangement
Pinnacle West's services shall be billed on a time-and-materials basis at the Firm's standard hourly rates, as follows:
(a) Dr. Sandra Fujimoto (Lead Appraiser, ASA, CVA): Pinnacle West's standard hourly rate for Dr. Fujimoto's services, to be stated in Pinnacle West's fee estimate.
(b) Senior Analysts and Associate Appraisers: Pinnacle West's standard hourly rates for senior analysts and associate appraisers assigned to the engagement, to be stated in Pinnacle West's fee estimate.
Pinnacle West shall submit invoices to Calderwood & Harkness LLP on a monthly basis. All invoices shall reference Matter No. 1035-00005 and shall include a detailed description of the services rendered, the name and hourly rate of each timekeeper, and the number of hours billed by each timekeeper during the invoicing period. Invoices shall be payable within thirty (30) days of receipt by Calderwood & Harkness.
Out-of-pocket expenses incurred by Pinnacle West in connection with the engagement, including but not limited to travel expenses, copying and printing costs, database access fees, and similar charges, shall be billed at cost and shall be itemized on the monthly invoices.
We request that Pinnacle West provide a detailed fee estimate for the initial scope of work (business valuations of the LCS and PRNP membership interests and the IP Portfolio valuation) within ten (10) business days of the effective date of this engagement. The fee estimate should include projected hours by timekeeper category, applicable hourly rates, and an estimate of anticipated out-of-pocket expenses.
Expert witness testimony services, including preparation for and attendance at depositions and trial testimony, shall be billed at Pinnacle West's stated expert testimony rates, with a minimum engagement of four (4) hours per day of testimony. Expert testimony rates, if different from standard consulting rates, shall be specified in Pinnacle West's fee estimate.
All fees and costs incurred by Pinnacle West in connection with this engagement are the ultimate financial responsibility of the client, Marguerite D. Fonseca. Such fees and costs will be advanced by Calderwood & Harkness LLP as costs of the engagement and will be billed to the client in accordance with the Firm's engagement letter with Ms. Fonseca.
8. Confidentiality and Privilege
All communications, work product, draft and final reports, memoranda, notes, analyses, and other materials prepared by Pinnacle West in connection with this engagement are subject to the attorney-client privilege and the attorney work product doctrine. Pinnacle West's services are being retained at the direction of counsel for use in connection with pending litigation, and all work product generated in the course of this engagement is intended to be protected by these privileges to the fullest extent permitted by law.
Pinnacle West shall not disclose any information relating to this engagement — including but not limited to the fact of the engagement itself, the identity of the parties, the nature of the assets being appraised, any preliminary or final valuation conclusions, or any other substantive or procedural matter — to any person or entity without the prior written authorization of Calderwood & Harkness LLP. This obligation extends to all partners, employees, contractors, and agents of Pinnacle West who may have access to information relating to the engagement.
All documents and data provided to Pinnacle West by Calderwood & Harkness or obtained by Pinnacle West in the course of this engagement shall be maintained in strict confidence, stored securely, and returned to Calderwood & Harkness or destroyed upon completion of the engagement or upon written request by Calderwood & Harkness, at Calderwood & Harkness's election. Pinnacle West shall maintain appropriate physical and electronic security measures to prevent unauthorized access to engagement-related documents and data.
We emphasize that this matter involves highly sensitive personal and financial information regarding the decedent's estate, the members of the Fonseca family, and the decedent's business interests and associates. We expect Pinnacle West to treat all such information with the highest degree of care and discretion.
9. Independence and Conflicts
As a precondition to this engagement, we ask that Pinnacle West confirm that it has conducted a conflicts check and has identified no conflicts of interest with any party to this proceeding or any entity that may be affected by the appraisal conclusions. Specifically, Pinnacle West must confirm that it has no current or prior professional, financial, or personal relationship that would impair its independence or objectivity with respect to any of the following persons and entities:
•  Marguerite D. Fonseca
•  Rafael T. Fonseca
•  Isabela C. Fonseca-Greer
•  Nicolás R. Fonseca
•  Claudette Marchetti
•  Lumiére Canyon Studios LLC
•  Pacific Rim Narrative Partners LLC
•  Amber Light Documentary Films LLC
•  Brennan, Ortega & Saldívar LLP
•  Hargrove & Linden Appraisals Inc.
•  Any related entity, affiliate, officer, director, managing member, or principal of any of the foregoing
Pinnacle West shall maintain full independence and objectivity in all valuation conclusions rendered in connection with this engagement. Pinnacle West's valuation opinions must be supportable, well-reasoned, and rendered without regard to the interests or preferences of any party to the proceeding. The credibility and persuasiveness of Pinnacle West's appraisal work will depend in significant part on its demonstrated independence and adherence to the professional standards governing the appraisal profession, including the Uniform Standards of Professional Appraisal Practice (USPAP) and the standards of the American Society of Appraisers (ASA).
10. Contacts
The following individuals shall serve as the primary contacts at Calderwood & Harkness LLP for purposes of this engagement:
Elliot Nguyen, Lead Associate Day-to-day coordination of the engagement, including scheduling, document production, and communication with Pinnacle West on routine matters. Telephone: (213) 555-8247
Email: enuguyen@calderwoodharkness.com
Grace Nakamura, Working Associate Document production and logistics, including assembly and transmission of financial records, coordination with Ridgeway Accounting Partners LLP, and tracking of outstanding document requests. Telephone: (213) 555-8263
Email: gnakamura@calderwoodharkness.com
Howard Quinn, Responsible Partner Strategic and substantive matters, including valuation methodology decisions, expert witness strategy, and coordination with the litigation team. Telephone: (213) 555-8210
Email: hquinn@calderwoodharkness.com
All correspondence, invoices, reports, and other communications from Pinnacle West should be directed to Calderwood & Harkness LLP at 350 South Grand Avenue, Suite 4800, Los Angeles, California 90071, and should reference Matter No. 1035-00005.
11. Acceptance and Countersignature
If the foregoing terms are acceptable to Pinnacle West, we respectfully request that Dr. Fujimoto countersign this letter in the space provided below and return a fully executed copy to our office at your earliest convenience, either by hand delivery, U.S. mail, or electronic transmission to Elliot Nguyen at the email address set forth above. The engagement shall become effective as of the date of countersignature.
We look forward to working with you on this matter. Please do not hesitate to contact me or any of the individuals identified above should you have any questions regarding the terms of this retention or the underlying proceeding.
Sincerely,
CALDERWOOD & HARKNESS LLP
By: ________
Elliot Nguyen Lead Associate Telephone: (213) 555-8247
Email: enuguyen@calderwoodharkness.com
Date: November 10, 2022
ACCEPTED AND AGREED
The undersigned hereby accepts the engagement described in this retention letter on the terms and conditions set forth herein and confirms that Pinnacle West Appraisal Group LLC has conducted a conflicts check and has identified no conflicts of interest with any party or entity listed in Section 9 above.
PINNACLE WEST APPRAISAL GROUP LLC
By: ________
Dr. Sandra Fujimoto, ASA, CVA Managing Principal
Date: ________
Enclosures:
1.  Copy of Petition for Letters of Administration (filed October 5, 2022)
2.  Copy of Contestants' Initial Objection (filed November 14, 2022)
3.  Preliminary Asset Summary Table
cc:
Howard Quinn, Partner, Calderwood & Harkness LLP Grace Nakamura, Associate, Calderwood & Harkness LLP Marguerite D. Fonseca (client)

CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED

CALDERWOOD & HARKNESS LLP

ACCEPTED AND AGREED

PINNACLE WEST APPRAISAL GROUP LLC

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