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SETTLEMENT STANDSTILL AGREEMENT

IN THE MATTER OF THE ESTATE OF TEODORO R. FONSECA, DECEASED

Los Angeles County Superior Court, Probate Division Case No. 22STPB09714

Effective Date: April 28, 2023

SETTLEMENT STANDSTILL AGREEMENT

This Settlement Standstill Agreement (this "Agreement") is entered into as of April 28, 2023 (the "Effective Date"), by and among the following parties:

MARGUERITE D. FONSECA ("Petitioner"), an individual residing at 1847 Coldwater Canyon Drive, Beverly Hills, California 90210, the surviving spouse of the Decedent (as defined below);

and

RAFAEL T. FONSECA, an individual residing at 502 Olive Avenue, Unit 3, Burbank, California 91502; ISABELA C. FONSECA-GREER, an individual residing at 78 Eucalyptus Lane, Santa Monica, California 90402; and NICOLÁS R. FONSECA, an individual residing at 1190 Elm Street, Apt. 4B, Palo Alto, California 94301 (collectively, the "Contestants"), adult children of the Decedent from a prior marriage.

Petitioner and Contestants are sometimes referred to herein individually as a "Party" and collectively as the "Parties."

RECITALS

WHEREAS, Teodoro R. Fonseca (the "Decedent") died intestate on September 3, 2022, while a resident of Los Angeles County, California, leaving an estate of substantial value comprised of real property, interests in limited liability companies, financial accounts, an intellectual property portfolio, and personal property;

WHEREAS, Marguerite D. Fonseca, the surviving spouse of the Decedent, filed a Petition for Letters of Administration on October 5, 2022, in the Los Angeles County Superior Court, Probate Division, and the petition was assigned Case No. 22STPB09714 (the "Proceeding");

WHEREAS, Rafael T. Fonseca, Isabela C. Fonseca-Greer, and Nicolás R. Fonseca, adult children of the Decedent from a prior marriage to the late Cecilia R. Fonseca, filed an initial objection to the Petition for Letters of Administration on November 14, 2022, challenging, among other things, the appointment of Petitioner as administrator of the Estate and disputing the community property characterization of certain Estate assets;

WHEREAS, Contestants filed an amended objection on January 9, 2023, adding claims regarding the existence and enforceability of a premarital agreement allegedly executed by the Decedent and Petitioner on May 30, 2008, and asserting that certain media-related assets, including the Decedent's interests in Lumiére Canyon Studios LLC and Pacific Rim Narrative Partners LLC, constitute the Decedent's separate property;

WHEREAS, Petitioner is represented by Calderwood & Harkness LLP (Howard Quinn, Esq., Responsible Partner), with offices at 350 South Grand Avenue, Suite 4800, Los Angeles, California 90071;

WHEREAS, Contestants are represented by Brennan, Ortega & Saldívar LLP (Damian R. Ortega, Esq., Lead Attorney), with offices at 1900 Avenue of the Stars, Suite 2100, Los Angeles, California 90067;

WHEREAS, on March 10, 2023, the Parties stipulated to mediation before the Honorable Constance Adler (Ret.) of the Westside Dispute Resolution Center, located at 11400 West Olympic Boulevard, Suite 550, Los Angeles, California 90064, for the purpose of exploring the potential resolution of the disputes in the Proceeding;

WHEREAS, on March 22, 2023, the Parties further stipulated to the appointment of Ashford Fiduciary Services Inc. (Gerald Whitmore, Principal Officer), with offices at 600 Wilshire Boulevard, Suite 1450, Los Angeles, California 90017, as the neutral administrator of the Estate pending resolution of the dispute (the "Neutral Administrator"), and the Court entered an order approving such appointment on March 24, 2023;

WHEREAS, a mediation session was conducted on April 12, 2023, before the Honorable Constance Adler (Ret.), at the offices of the Westside Dispute Resolution Center, which session, while productive in narrowing certain issues, did not result in a full resolution of the dispute between the Parties;

WHEREAS, the Parties recognize that the Proceeding involves complex issues relating to the characterization of marital and separate property, the validity and enforceability of the alleged premarital agreement, the valuation of closely held business interests, and individual claims asserted by certain Contestants, and that a meaningful resolution of these issues will require additional time, investigation, information exchange, and negotiation;

WHEREAS, the Parties now desire to enter into this Settlement Standstill Agreement to pause active litigation in the Proceeding, toll all applicable deadlines, preserve the status quo of the Estate, and create a structured framework for continued settlement negotiations in the interest of reaching an amicable resolution;

WHEREAS, the estimated probate estate is valued at approximately Seventy-One Million One Hundred Twelve Thousand Dollars ($71,112,000) per Petitioner's preliminary estimate, or approximately Sixty-Eight Million Seven Hundred Fifty Thousand Dollars ($68,750,000) per Contestants' preliminary estimate, comprising, among other assets, the Decedent's interests in Lumiére Canyon Studios LLC and Pacific Rim Narrative Partners LLC, real property located in Beverly Hills and Malibu, financial accounts held at Veltara Basin Bank, N.A., an intellectual property portfolio, and personal property, all as more particularly described in Exhibit A attached hereto; and

WHEREAS, the Parties believe that a period of standstill and continued negotiation is in the best interests of all Parties and the Estate, and will promote the efficient administration and preservation of Estate assets during the pendency of settlement efforts.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, the forbearances and commitments of the Parties contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each Party, the Parties agree as follows:

ARTICLE I — DEFINITIONS

As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not defined in this Article I shall have the meanings ascribed to them elsewhere in this Agreement.

Section 1.1 — "Agreement." "Agreement" means this Settlement Standstill Agreement, including all exhibits attached hereto and all amendments, supplements, or modifications hereto made in accordance with Section 7.5.

Section 1.2 — "Parties." "Parties" means, collectively, Petitioner and Contestants. "Party" means any one of them individually.

Section 1.3 — "Petitioner." "Petitioner" means Marguerite D. Fonseca, an individual residing at 1847 Coldwater Canyon Drive, Beverly Hills, California 90210, the surviving spouse of the Decedent and the petitioner in the Proceeding.

Section 1.4 — "Contestants." "Contestants" means, collectively, (a) Rafael T. Fonseca, an individual residing at 502 Olive Avenue, Unit 3, Burbank, California 91502; (b) Isabela C. Fonseca-Greer, an individual residing at 78 Eucalyptus Lane, Santa Monica, California 90402; and (c) Nicolás R. Fonseca, an individual residing at 1190 Elm Street, Apt. 4B, Palo Alto, California 94301, each an adult child of the Decedent from a prior marriage, and the contestants in the Proceeding.

Section 1.5 — "Court." "Court" means the Los Angeles County Superior Court, Probate Division, or any successor court having jurisdiction over the Proceeding.

Section 1.6 — "Proceeding." "Proceeding" means Case No. 22STPB09714, In re Estate of Teodoro R. Fonseca, Deceased, pending in the Court, together with any and all motions, petitions, objections, claims, counterclaims, cross-petitions, and other matters filed or pending therein.

Section 1.7 — "Estate." "Estate" means the probate estate of Teodoro R. Fonseca, Deceased, including all assets, rights, interests, claims, and obligations comprising the probate estate, as more particularly described in Exhibit A hereto.

Section 1.8 — "Neutral Administrator." "Neutral Administrator" means Ashford Fiduciary Services Inc., a California corporation, with its principal office at 600 Wilshire Boulevard, Suite 1450, Los Angeles, California 90017, Gerald Whitmore serving as Principal Officer, appointed by the Court as the neutral administrator of the Estate pursuant to the Stipulation for Appointment of Neutral Administrator filed March 22, 2023, and the Court's order entered March 24, 2023.

Section 1.9 — "Mediator." "Mediator" means the Honorable Constance Adler (Ret.), serving through the Westside Dispute Resolution Center, located at 11400 West Olympic Boulevard, Suite 550, Los Angeles, California 90064.

Section 1.10 — "Standstill Period." "Standstill Period" means the period commencing on the Effective Date and ending on the Expiration Date, as such Expiration Date may be extended pursuant to Article V of this Agreement.

Section 1.11 — "Effective Date." "Effective Date" means April 28, 2023, which is the date on which this Agreement becomes effective upon execution by all Parties.

Section 1.12 — "Initial Expiration Date." "Initial Expiration Date" means October 28, 2023, which is six (6) calendar months from the Effective Date. References to the "Expiration Date" shall mean the Initial Expiration Date or, if this Agreement has been renewed pursuant to Section 5.2, the then-applicable expiration date following such renewal.

Section 1.13 — "Settlement Discussions." "Settlement Discussions" means any and all communications, whether oral, written, or electronic, between or among the Parties, their respective counsel, the Mediator, or any other person participating in settlement negotiations at the direction of the Parties, relating to the potential resolution, compromise, or settlement of the Proceeding or any claims, disputes, or issues arising therein, including all proposals, counterproposals, term sheets, draft agreements, memoranda, position statements, and other materials prepared in connection with such negotiations.

Section 1.14 — "Petitioner's Counsel." "Petitioner's Counsel" means Calderwood & Harkness LLP, with offices at 350 South Grand Avenue, Suite 4800, Los Angeles, California 90071, Howard Quinn, Esq. serving as the Responsible Partner.

Section 1.15 — "Contestants' Counsel." "Contestants' Counsel" means Brennan, Ortega & Saldívar LLP, with offices at 1900 Avenue of the Stars, Suite 2100, Los Angeles, California 90067, Damian R. Ortega, Esq. serving as the Lead Attorney.

ARTICLE II — TOLLING OF LITIGATION DEADLINES AND STANDSTILL OBLIGATIONS

Section 2.1 — Tolling of Deadlines. Effective as of the Effective Date and continuing for the duration of the Standstill Period, all litigation deadlines in the Proceeding shall be tolled. The deadlines subject to tolling under this Section include, but are not limited to, deadlines for filing responsive pleadings, motions, amended pleadings, petitions, objections, and other papers; deadlines for propounding and responding to discovery, including interrogatories, requests for production of documents, requests for admission, and deposition notices; deadlines for pretrial submissions, including witness lists, exhibit lists, and pretrial statements; and any other deadlines imposed by the California Code of Civil Procedure, the California Probate Code, the California Rules of Court, the local rules of the Los Angeles County Superior Court, or any order of the Court. Upon the termination or expiration of this Agreement, all such tolled deadlines shall recommence with the same number of days remaining as existed on the Effective Date. For the avoidance of doubt, if a Party had ten (10) days remaining to file a responsive pleading as of the Effective Date, such Party shall have ten (10) days from the date of termination or expiration of this Agreement to file such responsive pleading.

Section 2.2 — Prohibition on New Filings. During the Standstill Period, no Party shall file any new motion, petition, objection, amended pleading, cross-petition, claim, or other pleading or paper in the Proceeding without the prior written consent of all other Parties, except as expressly permitted under Section 2.4 of this Agreement. Any filing made in violation of this Section 2.2 shall be deemed a breach of this Agreement, and the non-breaching Party or Parties shall be entitled to seek all available remedies, including but not limited to a motion to strike the improperly filed pleading and an award of attorneys' fees and costs incurred in connection with addressing such breach.

Section 2.3 — Prohibition on discovery. During the Standstill Period, no Party shall serve, propound, or issue any discovery in connection with the Proceeding without the prior written consent of all other Parties. The prohibition set forth in this Section 2.3 extends to, but is not limited to, interrogatories, requests for production of documents, requests for admission, deposition notices (whether for oral or written deposition), subpoenas duces tecum, subpoenas for testimony directed at third parties, and any other form of formal or informal discovery under the California Code of Civil Procedure or applicable rules. Nothing in this Section 2.3 shall prohibit the voluntary exchange of information between the Parties' counsel in connection with Settlement Discussions, provided that any such voluntary exchange shall be subject to the confidentiality provisions of Article IV.

Section 2.4 — Permitted Actions. Notwithstanding the prohibitions set forth in Sections 2.2 and 2.3 of this Agreement, the following actions are expressly permitted during the Standstill Period without the prior consent of any other Party:

(a) Filings that are required to preserve jurisdictional or statutory rights of any Party that cannot be tolled by private agreement of the Parties, including but not limited to any filing necessary to prevent the loss of standing or the running of a non-waivable statutory period;

(b) Filings that are necessary to protect the Estate from imminent dissipation, waste, loss of value, or destruction of Estate assets, provided that the filing Party shall provide the other Parties with at least forty-eight (48) hours' prior written notice of its intent to make such filing, except in circumstances where such notice is impracticable due to the emergent nature of the threat;

(c) Filings required to comply with any court order entered prior to the Effective Date that, by its terms, requires action during the Standstill Period, including but not limited to the Court's order of March 24, 2023, approving the appointment of the Neutral Administrator;

(d) Joint stipulations or agreed orders submitted by all Parties for the Court's consideration and approval, including stipulations extending or modifying deadlines, stipulations relating to the Neutral Administrator, and stipulations relating to the administration of the Estate;

(e) Filings related to the ongoing administration of the Estate by the Neutral Administrator in the ordinary course of its duties, including accountings, inventories, reports, and fee applications, provided that such filings are consistent with the terms of this Agreement and the Stipulation for Appointment of Neutral Administrator.

Section 2.5 — Preservation of Claims and Defenses. Nothing in this Agreement shall be construed as a waiver, release, abandonment, or prejudice of any claim, defense, right, or remedy of any Party in the Proceeding or otherwise. All claims, defenses, rights, and remedies of the Parties as of the Effective Date are expressly reserved and preserved in full, including but not limited to all claims and defenses identified in Exhibit B attached hereto. The entry into this Agreement shall not create any estoppel, laches defense, or other impediment to any Party's assertion of any claim or defense upon the termination or expiration of this Agreement.

Section 2.6 — Statute of Limitations. The Parties agree that any statute of limitations, statute of repose, prescriptive period, or other time-based legal defense or time bar applicable to any claim asserted or that could be asserted in the Proceeding, or arising out of or relating to the same facts, circumstances, transactions, or occurrences at issue in the Proceeding, shall be tolled for the duration of the Standstill Period. Each Party agrees not to assert the expiration of any such time-based defense as a bar to any claim to the extent that such expiration occurred during the Standstill Period and would not have occurred but for the tolling provided by this Section 2.6. This Section 2.6 shall be given the broadest possible construction consistent with applicable law in order to effectuate the Parties' intent to preserve all claims and defenses during the Standstill Period.

ARTICLE III — CONTINUED NEUTRAL ADMINISTRATION OF THE ESTATE

Section 3.1 — Continuation of Neutral Administrator. Ashford Fiduciary Services Inc. shall continue to serve as the Neutral Administrator of the Estate during the Standstill Period, in accordance with the terms and conditions of the Stipulation for Appointment of Neutral Administrator filed with the Court on March 22, 2023, the Court's order approving such appointment entered on March 24, 2023, and any supplemental court orders issued in connection therewith. The Neutral Administrator's duties and obligations under this Agreement are in addition to, and not in limitation of, the duties and obligations set forth in the Stipulation and the Court's order. In the event of any conflict between the terms of this Agreement and the terms of the Stipulation or Court order, the Court's order shall control.

Section 3.2 — Scope of Administration. During the Standstill Period, the Neutral Administrator shall exercise its fiduciary duties in a prudent and commercially reasonable manner and shall, at a minimum, perform the following functions:

(a) Maintenance and Preservation of Estate Assets. Maintain, preserve, protect, and safeguard all Estate assets, including but not limited to:

(i) Real property located at 1847 Coldwater Canyon Drive, Beverly Hills, California 90210 (the "Beverly Hills Residence"), and 27100 Pacific Coast Highway, Malibu, California 90265 (the "Malibu Beach House"), including maintaining all applicable insurance coverage, paying property taxes when due, and arranging for necessary maintenance, repairs, and security;

(ii) The Decedent's fifty percent (50%) membership interest in Lumiére Canyon Studios LLC, a California limited liability company (California Secretary of State Filing No. 200906410337), including monitoring the operations and financial performance of the company and exercising the Decedent's rights as a member in the ordinary course of business;

(iii) The Decedent's thirty-five percent (35%) membership interest in Pacific Rim Narrative Partners LLC, a California limited liability company (California Secretary of State Filing No. 201518720492), including monitoring the operations and financial performance of the company and exercising the Decedent's rights as a member in the ordinary course of business;

(iv) Financial accounts held at Veltara Basin Bank, N.A., including the brokerage account ending in -4782, the checking account ending in -3091, and the money market account ending in -6155, and any other accounts identified during the course of administration;

(v) The intellectual property portfolio, consisting of royalties and residuals associated with fourteen (14) feature films and six (6) television series, as more particularly described in Exhibit A;

(vi) Personal property of the Decedent, including art, vehicles, and furnishings, as inventoried by the Neutral Administrator.

(b) Collection of Income. Collect all income, rents, royalties, residuals, distributions, dividends, interest, and other amounts attributable to Estate assets in the ordinary course of business, and deposit all such amounts into an Estate account or accounts maintained by the Neutral Administrator at Veltara Basin Bank, N.A., or such other financial institution as the Neutral Administrator may determine to be appropriate.

(c) Payment of Expenses. Pay ordinary and necessary expenses of the Estate in the ordinary course, including but not limited to real property taxes, homeowners' insurance premiums, property maintenance costs, utility bills, vehicle insurance and registration fees, storage fees, professional fees incurred in the ordinary course of Estate administration, and any other expenses reasonably necessary to preserve and protect Estate assets.

(d) Tax Compliance. Prepare, or cause to be prepared, and timely file all required federal, state, and local tax returns for the Estate, including but not limited to fiduciary income tax returns (IRS Form 1041 and California Form 541), in coordination with Ridgeway Accounting Partners LLP (Dennis Chua, CPA), with offices at 515 South Flower Street, Suite 3600, Los Angeles, California 90071. The Neutral Administrator shall provide copies of all draft tax returns to Petitioner's Counsel and Contestants' Counsel for review and comment at least fifteen (15) days prior to the applicable filing deadline.

(e) Quarterly Reporting. Provide detailed quarterly written reports to Petitioner's Counsel and Contestants' Counsel, with copies to both Petitioner and Contestants upon request, detailing the status of all Estate assets, all income received, all expenses paid, all distributions made (if any), and any material developments relating to the Estate or its assets. Such reports shall be delivered within thirty (30) days following the end of each calendar quarter during the Standstill Period, with the first such report covering the period from the Effective Date through June 30, 2023.

Section 3.3 — Restrictions on the Neutral Administrator. During the Standstill Period, the Neutral Administrator shall not, without the prior written consent of all Parties or further order of the Court, take any of the following actions:

(a) Sell, transfer, convey, assign, exchange, encumber, pledge, hypothecate, lease (other than short-term leases of ninety (90) days or less on terms consistent with prior practice), or otherwise dispose of any Estate asset, whether real, personal, tangible, or intangible;

(b) Make any distribution from the Estate to any Party, any beneficiary, any heir, or any third party, other than payments of ordinary and necessary expenses of administration as described in Section 3.2(c);

(c) Enter into any contract, agreement, commitment, or arrangement on behalf of the Estate that involves consideration, obligations, or exposure exceeding Twenty-Five Thousand Dollars ($25,000) in value, whether in a single transaction or a series of related transactions;

(d) Incur, assume, guaranty, or otherwise become obligated for any indebtedness on behalf of the Estate, including but not limited to loans, lines of credit, promissory notes, or credit agreements.

For the avoidance of doubt, the restrictions set forth in this Section 3.3 are not intended to prevent the Neutral Administrator from taking emergency actions necessary to protect Estate assets from imminent loss or destruction, provided that the Neutral Administrator shall promptly notify all Parties and their counsel of any such emergency action taken.

Section 3.4 — Administration Fees and Costs. The Neutral Administrator shall be compensated for its services at the rate of Eight Thousand Five Hundred Dollars ($8,500) per month, plus fifteen one-hundredths of one percent (0.15%) of assets under administration per annum (the "AUA Fee"), as set forth in the Stipulation for Appointment of Neutral Administrator. Such fees and costs shall be allocated and paid as follows:

(a) Petitioner's Share. Petitioner shall pay Four Thousand Two Hundred Fifty Dollars ($4,250) per month toward the monthly administration fee.

(b) Contestants' Share. Contestants shall pay, jointly and severally, Four Thousand Two Hundred Fifty Dollars ($4,250) per month toward the monthly administration fee.

(c) Timing of Payments. Monthly fee payments shall be made directly to the Neutral Administrator by the fifth (5th) business day of each calendar month during the Standstill Period. The first monthly payment shall be due on or before the fifth (5th) business day of May 2023.

(d) AUA Fee. The per-annum AUA Fee (0.15% of assets under administration) shall be calculated on a quarterly basis using the fair market value of assets under administration as of the last day of the applicable calendar quarter, as determined by the Neutral Administrator in its reasonable judgment. The AUA Fee shall be invoiced quarterly and shall be payable within fifteen (15) business days of receipt of the Neutral Administrator's invoice. The AUA Fee shall be allocated equally between Petitioner and Contestants.

(e) Reimbursable Costs. In addition to the fees set forth above, the Neutral Administrator shall be entitled to reimbursement for reasonable out-of-pocket costs incurred in the performance of its duties, including but not limited to costs of insurance, appraisals, professional consultants, legal counsel to the Neutral Administrator, postage, filing fees, and travel. All reimbursable costs exceeding Five Thousand Dollars ($5,000) in any calendar quarter shall require prior notice to Petitioner's Counsel and Contestants' Counsel.

Section 3.5 — Failure to Pay Administration Fees. If either Petitioner or Contestants (treated as a group for purposes of this Section) fails to timely pay its share of the Neutral Administrator's monthly fees for two (2) consecutive months, the non-defaulting Party shall have the following remedies, exercisable in its sole discretion:

(a) Advancement. The non-defaulting Party may advance the defaulting Party's share of the fees directly to the Neutral Administrator, and the amount so advanced shall be treated as an administrative expense of the Estate and shall be reimbursed to the advancing Party from the Estate prior to any distribution to the defaulting Party, with interest at the rate of five percent (5%) per annum from the date of each advancement until repaid; or

(b) Termination. The non-defaulting Party may terminate this Agreement upon ten (10) days' prior written notice to the defaulting Party, delivered in accordance with Section 7.3. The defaulting Party shall have the right to cure the default by paying all arrearages, including any late fees, within the ten (10)-day notice period, in which case the termination notice shall be deemed withdrawn and this Agreement shall continue in full force and effect.

ARTICLE IV — CONFIDENTIALITY

Section 4.1 — Confidentiality of Settlement Discussions. All Settlement Discussions between or among the Parties, their respective counsel, the Mediator, or any other person participating in settlement negotiations at the direction of the Parties, whether occurring before, on, or after the Effective Date and during the Standstill Period, shall be and remain strictly confidential. No Party shall disclose, publish, disseminate, or communicate the substance, content, terms, or status of any Settlement Discussion to any person or entity that is not a Party to this Agreement, nor to any attorney, advisor, consultant, expert, or other agent of any Party not directly involved in the Settlement Discussions, without the prior written consent of all other Parties. The foregoing prohibition shall not apply to disclosures required by applicable law, regulation, court order, or subpoena, provided that the disclosing Party shall provide prompt written notice to all other Parties prior to making any such required disclosure and shall cooperate in seeking a protective order or other appropriate remedy to limit the scope of such disclosure.

Section 4.2 — Inadmissibility. All Settlement Discussions, and all documents, communications, proposals, counterproposals, memoranda, position statements, term sheets, draft agreements, and other materials prepared or exchanged in connection with Settlement Discussions, shall be inadmissible in any judicial, arbitral, administrative, or other proceeding, whether pending or future, for any purpose, including but not limited to proof of liability, fault, the validity or invalidity of any claim or defense, or the amount of any damages or award. The inadmissibility protections set forth in this Section 4.2 are intended to be in addition to, and not in limitation of, the protections afforded by California Evidence Code Section 1152 (compromise offers and negotiations), Federal Rule of Evidence 408 (compromise offers and negotiations), and California Evidence Code Sections 1115 through 1128 (mediation confidentiality), all of which the Parties expressly invoke and rely upon. No Party shall seek to compel the Mediator or any other neutral to testify regarding any Settlement Discussion.

Section 4.3 — Confidential Information. All financial information, valuation data, appraisal reports, business records, tax returns, operating statements, balance sheets, membership interest agreements, intellectual property schedules, and other non-public information exchanged between or among the Parties or their counsel in connection with Settlement Discussions, the mediation process, or this Agreement (collectively, "Confidential Information") shall be treated as confidential and shall not be used for any purpose other than the Settlement Discussions and the potential resolution of the Proceeding. Upon the termination or expiration of this Agreement, each Party shall, at the request of the producing Party, promptly return or destroy all Confidential Information received from the other Party, provided that counsel for each Party may retain one archival copy of all Confidential Information in its litigation files, subject to the continuing confidentiality obligations of this Article IV.

Section 4.4 — Court Filings. The Parties shall not file this Agreement, any amendment hereto, or any exhibit or attachment hereto with the Court or any other tribunal without the prior written consent of all Parties, except where such filing is required by court order, applicable statute, or applicable rule of court. In the event that filing is required, the filing Party shall first confer with all other Parties regarding the possibility of filing under seal or with appropriate redactions to preserve the confidentiality of Settlement Discussions and Confidential Information.

Section 4.5 — Survival. The confidentiality obligations set forth in this Article IV, including without limitation the obligations set forth in Sections 4.1, 4.2, 4.3, and 4.4, shall survive the termination, expiration, or breach of this Agreement and shall remain in full force and effect indefinitely, unless modified or waived by written agreement of all Parties.

ARTICLE V — TERM, RENEWAL, AND TERMINATION

Section 5.1 — Initial Term. This Agreement shall commence on the Effective Date, April 28, 2023, and shall continue in full force and effect until the Initial Expiration Date, October 28, 2023, unless earlier terminated in accordance with this Article V or renewed in accordance with Section 5.2.

Section 5.2 — Renewal. This Agreement may be renewed for successive periods of six (6) calendar months each (each a "Renewal Period") by mutual written consent of all Parties. The written consent to renew must be executed by all Parties, or by their authorized counsel on their behalf, not later than five (5) business days prior to the then-applicable Expiration Date. Each renewal shall be documented by a written amendment to this Agreement signed by all Parties or their authorized counsel, which amendment shall specify the new Expiration Date and any modifications to the terms of this Agreement agreed upon in connection with such renewal. In the absence of a timely written renewal, this Agreement shall expire on the then-applicable Expiration Date without further action by any Party.

Section 5.3 — Termination by Mutual Consent. This Agreement may be terminated at any time, including prior to the Expiration Date, by written agreement of all Parties. Such written agreement shall specify the effective date of termination and shall address any transitional matters, including the recommencement of tolled deadlines and the continued role of the Neutral Administrator.

Section 5.4 — Termination by Unilateral Notice. Any Party may terminate this Agreement upon thirty (30) days' prior written notice to all other Parties and their counsel, delivered in accordance with Section 7.3 of this Agreement. Following delivery of such notice, the Standstill Period shall continue in full force and effect for the thirty (30)-day notice period, and all obligations of the Parties under this Agreement shall remain binding during such period. All tolled deadlines shall recommence on the day immediately following the expiration of the thirty (30)-day notice period. The terminating Party shall act in good faith in exercising its right under this Section 5.4 and shall not terminate this Agreement for the purpose of gaining a tactical advantage in the Proceeding.

Section 5.5 — Effect of Termination or Expiration. Upon the termination or expiration of this Agreement, whether by mutual consent, unilateral notice, lapse of the Standstill Period, or otherwise, the following provisions shall apply:

(a) Recommencement of Deadlines. All litigation deadlines tolled pursuant to Section 2.1 shall recommence with the same number of days remaining as existed on the Effective Date, calculated from the date of termination or expiration, as provided in Sections 2.1 and 5.4;

(b) Survival of Confidentiality Obligations. All obligations of the Parties under Article IV (Confidentiality) shall survive the termination or expiration of this Agreement and shall remain in full force and effect in accordance with Section 4.5;

(c) Continuation of Neutral Administrator. The Neutral Administrator shall continue to serve in its capacity as neutral administrator of the Estate until further order of the Court or written agreement of all Parties providing for the appointment of a successor or the assumption of administrative duties by a court-appointed personal representative;

(d) Preservation of Claims and Defenses. No Party shall be deemed to have waived, released, abandoned, or prejudiced any claim, defense, right, or remedy by virtue of entering into, performing under, or terminating or permitting the expiration of this Agreement. All claims, defenses, rights, and remedies of the Parties as of the Effective Date, and as may have accrued during the Standstill Period, are expressly reserved and preserved.

ARTICLE VI — REPRESENTATIONS AND ACKNOWLEDGMENTS

Section 6.1 — Authority. Each Party represents and warrants that he or she has the full legal capacity and authority to enter into this Agreement and to perform his or her obligations hereunder. Each Party further represents that no consent, approval, or authorization of any third party is required in connection with the execution, delivery, or performance of this Agreement by such Party, other than any court approvals that may be required for the implementation of a final settlement of the Proceeding.

Section 6.2 — Voluntary Execution. Each Party acknowledges and represents that this Agreement is entered into voluntarily, freely, and without duress, coercion, fraud, mistake, or undue influence of any kind. Each Party has had a reasonable opportunity to review and consider the terms of this Agreement before executing it, and each Party is satisfied with the terms and provisions hereof.

Section 6.3 — Advice of Counsel. Each Party acknowledges that he or she has been advised by independent legal counsel regarding the terms, consequences, and legal effect of this Agreement, and that each Party has had the full benefit of such counsel's advice prior to executing this Agreement. Petitioner has been advised by Calderwood & Harkness LLP, through Howard Quinn, Esq. Contestants have been advised by Brennan, Ortega & Saldívar LLP, through Damian R. Ortega, Esq. Each Party acknowledges that his or her execution of this Agreement is informed and voluntary.

Section 6.4 — No Admission. This Agreement, the Parties' entry into this Agreement, and the Parties' performance under this Agreement shall not be construed as, and do not constitute, an admission of liability, fault, wrongdoing, or the validity or invalidity of any claim or defense by any Party. This Agreement is entered into solely for the purpose of promoting settlement and preserving the status quo during settlement negotiations and shall not be offered or received in evidence in the Proceeding or any other proceeding for any purpose, except to enforce the terms of this Agreement itself.

Section 6.5 — Preservation of Estate. Each Party represents and warrants that, as of the Effective Date, he or she is not aware of any circumstances constituting an imminent threat of dissipation, waste, destruction, or loss to any Estate assets. Each Party further agrees to promptly notify all other Parties and the Neutral Administrator in writing if, during the Standstill Period, such Party becomes aware of any such threat.

ARTICLE VII — GENERAL PROVISIONS

Section 7.1 — Governing Law. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of California, including without limitation the California Probate Code and the California Evidence Code, without regard to California's conflict of laws principles or choice of law rules that would require or permit the application of the laws of any other jurisdiction.

Section 7.2 — Jurisdiction and Venue. The Parties irrevocably consent to the exclusive jurisdiction and venue of the Los Angeles County Superior Court, Probate Division, in connection with Case No. 22STPB09714, for the resolution of any dispute arising out of or relating to this Agreement, including but not limited to any dispute concerning the interpretation, enforcement, breach, or validity of this Agreement. Each Party waives any objection to such jurisdiction or venue, including any objection based on inconvenient forum.

Section 7.3 — Notices. All notices, requests, demands, consents, waivers, and other communications required or permitted under this Agreement shall be in writing and shall be deemed effectively delivered and received: (a) upon personal delivery to the addressee or its authorized agent; (b) one (1) business day after deposit with a nationally recognized overnight courier service (such as Sundial Data Systems or Harborline Partners LLC) with next-business-day delivery requested, prepaid; or (c) three (3) business days after deposit in the United States mail, postage prepaid, certified mail, return receipt requested, in each case addressed as follows:

If to Petitioner:

Marguerite D. Fonseca c/o Calderwood & Harkness LLP

Attn: Howard Quinn, Esq.

350 South Grand Avenue, Suite 4800 Los Angeles, California 90071 Telephone: (213) 555-8200

Email: hquinn@calderwoodharkness.com

If to Contestants:

Rafael T. Fonseca, Isabela C. Fonseca-Greer, and Nicolás R. Fonseca c/o Brennan, Ortega & Saldívar LLP

Attn: Damian R. Ortega, Esq.

1900 Avenue of the Stars, Suite 2100 Los Angeles, California 90067 Telephone: (310) 555-4100

Email: dortega@boslawfirm.com

If to the Neutral Administrator (for informational copies only):

Ashford Fiduciary Services Inc.

Attn: Gerald Whitmore, Principal Officer

600 Wilshire Boulevard, Suite 1450 Los Angeles, California 90017 Telephone: (213) 555-6500

Email: gwhitmore@ashfordfiduciary.com

Any Party may change its address for notices by providing written notice of such change to all other Parties in accordance with this Section 7.3. Notice to Contestants' Counsel shall constitute notice to all Contestants.

Section 7.4 — Entire Agreement. This Agreement, together with all exhibits attached hereto and any written amendments hereto made in accordance with Section 7.5, constitutes the entire agreement between and among the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous oral or written agreements, understandings, negotiations, representations, warranties, and communications relating to the subject matter hereof, including but not limited to any oral or written discussions regarding standstill arrangements conducted prior to the Effective Date. No Party has relied upon any representation or warranty not expressly set forth in this Agreement.

Section 7.5 — Amendments. This Agreement may be amended, modified, or supplemented only by a written instrument specifically identified as an amendment to this Agreement and signed by all Parties or by their authorized counsel acting on their behalf. No oral modification, amendment, or waiver of any provision of this Agreement shall be effective for any purpose.

Section 7.6 — Waiver. No waiver of any term, condition, or provision of this Agreement shall be effective unless made in writing and signed by the Party against whom the waiver is sought to be enforced. No failure or delay by any Party in exercising any right, power, or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power, or remedy preclude any other or further exercise thereof or the exercise of any other right, power, or remedy. No waiver of any breach of this Agreement shall constitute a waiver of any subsequent breach, whether of the same or a different provision.

Section 7.7 — Severability. If any provision of this Agreement, or the application thereof to any person, Party, or circumstance, is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired, and such remaining provisions shall continue in full force and effect. In the event any provision is so held to be invalid, illegal, or unenforceable, the Parties shall negotiate in good faith to replace such provision with a valid, legal, and enforceable provision that, to the maximum extent possible, achieves the Parties' original intent.

Section 7.8 — Counterparts. This Agreement may be executed in any number of counterparts, including by electronic transmission (including PDF, Brightwater Software, or similar electronic signature platform), each of which shall be deemed an original, and all of which, when taken together, shall constitute one and the same instrument. Electronic or facsimile signatures shall be deemed original signatures for all purposes of this Agreement and shall be sufficient to bind the Parties.

Section 7.9 — Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective heirs, executors, administrators, personal representatives, successors, and assigns. No Party may assign or transfer this Agreement or any rights or obligations hereunder without the prior written consent of all other Parties.

Section 7.10 — Construction. This Agreement has been jointly drafted and negotiated by the Parties and their respective counsel. The language of this Agreement shall be construed as a whole, according to its fair meaning, and not strictly for or against any Party as the drafter. Each Party acknowledges that it has participated in the drafting of this Agreement and that no ambiguity shall be construed against any Party on the ground that such Party or its counsel drafted or proposed the language in question.

Section 7.11 — Headings. The article and section headings contained in this Agreement are for convenience of reference only and shall not affect the meaning, interpretation, or construction of any provision of this Agreement.

[SIGNATURE PAGE FOLLOWS]

SIGNATURE PAGE TO SETTLEMENT STANDSTILL AGREEMENT

IN RE ESTATE OF TEODORO R. FONSECA, DECEASED

Case No. 22STPB09714

IN WITNESS WHEREOF, the Parties have executed this Settlement Standstill Agreement as of the Effective Date first written above.

PETITIONER:

________________________________________

MARGUERITE D. FONSECA

Date: April 28, 2023

CONTESTANTS:

________________________________________

RAFAEL T. FONSECA

Date: April 28, 2023

________________________________________

ISABELA C. FONSECA-GREER

Date: April 28, 2023

________________________________________

NICOLÁS R. FONSECA

Date: April 28, 2023

APPROVAL AND ACKNOWLEDGMENT PAGE

APPROVED AS TO FORM:

________________________________________

HOWARD QUINN, ESQ. Calderwood & Harkness LLP 350 South Grand Avenue, Suite 4800 Los Angeles, California 90071 Counsel for Petitioner

Date: April 28, 2023

________________________________________

DAMIAN R. ORTEGA, ESQ. Brennan, Ortega & Saldívar LLP 1900 Avenue of the Stars, Suite 2100 Los Angeles, California 90067 Counsel for Contestants

Date: April 28, 2023

ACKNOWLEDGED:

________________________________________

GERALD WHITMORE Principal Officer Ashford Fiduciary Services Inc. 600 Wilshire Boulevard, Suite 1450 Los Angeles, California 90017 Neutral Administrator

Date: April 28, 2023

EXHIBIT A

IDENTIFIED ESTATE ASSETS

Schedule of Estate Assets Subject to Administration by the Neutral Administrator During the Standstill Period

The following schedule sets forth the Estate assets identified as of the Effective Date that are subject to the administration and oversight of the Neutral Administrator during the Standstill Period. This schedule is based on information available to the Parties as of the date hereof and is subject to revision as additional information becomes available.

Total Estimated Probate Estate (Petitioner's Estimate): $71,112,000

Total Estimated Probate Estate (Contestants' Estimate): $68,750,000

Note Regarding Non-Probate Assets: Life insurance proceeds from Meridian Mutual Life Insurance Co. (Policy No. GH-TL-2019-05582, face amount $3,000,000) and Commonwealth Fidelity Assurance Corp. (Policy No. GH-WL-2014-01247, face amount $2,000,000) are non-probate assets with designated beneficiaries and are not included in the Estate for purposes of this Agreement. Such proceeds are not subject to administration by the Neutral Administrator hereunder. The characterization and disposition of such proceeds are subject to Petitioner's Petition for Preliminary Distribution of Non-Probate Assets (filed January 18, 2023), which is preserved and tolled in accordance with Article II and Exhibit B.

Note Regarding Valuations: The values set forth in this Exhibit A are preliminary estimates based on information available to the Parties as of the Effective Date and do not constitute agreed-upon, stipulated, or adjudicated values. The Parties expressly reserve all rights to dispute the valuation of any Estate asset in the Proceeding or in any Settlement Discussion. Petitioner's valuations are based on the preliminary findings of Pinnacle West Appraisal Group LLC (Dr. Sandra Fujimoto, ASA, CVA), retained by Petitioner's Counsel. Contestants have retained Hargrove & Linden Appraisals Inc. (Morton Linden, CFA, ASA) for independent valuation of Estate assets, and Contestants' valuation work is ongoing as of the Effective Date. The discrepancy between Petitioner's and Contestants' aggregate estate valuations reflects, among other things, differing methodologies and assumptions regarding the valuation of the Decedent's interests in Lumiére Canyon Studios LLC and Pacific Rim Narrative Partners LLC, including the application of minority interest and marketability discounts.

EXHIBIT B

PENDING CLAIMS

Schedule of Pending Claims Asserted in the Proceeding, All of Which Are Preserved and Tolled During the Standstill Period

The following schedule identifies all pending claims, petitions, objections, and other matters asserted in the Proceeding as of the Effective Date. All such claims are expressly preserved and tolled during the Standstill Period in accordance with Article II of this Agreement. No claim, defense, or right of any Party with respect to any of the matters identified below is waived, released, or prejudiced by entry into this Agreement.

1. Petitioner's Petition for Letters of Administration

Filed: October 5, 2022. Marguerite D. Fonseca, the surviving spouse of the Decedent, seeks appointment as administrator of the Estate pursuant to California Probate Code Section 8461 and related provisions. Petitioner asserts priority of appointment as the surviving spouse of the Decedent and contends that she is the appropriate person to serve as administrator of the Estate. The petition identifies the Decedent's heirs at law and provides a preliminary estimate of Estate assets.

2. Contestants' Initial Objection to Petition for Letters of Administration

Filed: November 14, 2022. Rafael T. Fonseca, Isabela C. Fonseca-Greer, and Nicolás R. Fonseca object to the appointment of Marguerite D. Fonseca as administrator of the Estate. The objection challenges Ms. Fonseca's fitness to serve as administrator, disputes the community property characterization of certain Estate assets (including, specifically, the Decedent's interests in Lumiére Canyon Studios LLC and Pacific Rim Narrative Partners LLC), and asserts that the appointment of a neutral third-party administrator would better serve the interests of the Estate and its beneficiaries.

3. Contestants' Amended Objection

Filed: January 9, 2023. The amended objection supplements the initial objection by adding a claim regarding the existence and enforceability of a premarital agreement allegedly executed by Teodoro R. Fonseca and Marguerite D. Fonseca on May 30, 2008, prior to their marriage on August 15, 2008. Contestants assert that the premarital agreement provides that all media-related assets, including the Decedent's interests in Lumiére Canyon Studios LLC, Pacific Rim Narrative Partners LLC, and the intellectual property portfolio, constitute the Decedent's separate property and are not subject to community property division. Contestants contend that the premarital agreement substantially alters the distribution of the Estate and affects the appropriate appointment of an administrator. Petitioner has not conceded the existence, validity, or enforceability of the alleged premarital agreement.

4. Isabela C. Fonseca-Greer's Individual Claim — Promissory Note

Asserted in connection with the Contestants' filings. Isabela C. Fonseca-Greer asserts an individual creditor's claim against the Estate in the amount of One Million Two Hundred Thousand Dollars ($1,200,000) in principal, plus accrued interest at the rate of three and one-half percent (3.5%) per annum from January 15, 2020, to the date of payment (total claimed amount: approximately One Million Three Hundred Ten Thousand Four Hundred Sixty Dollars ($1,310,460) as of the Effective Date). The claim is based on an alleged promissory note dated January 15, 2020, executed by the Decedent in favor of Amber Light Documentary Films LLC, a California limited liability company (California Secretary of State Filing No. 201912360185), of which Ms. Fonseca-Greer is the sole managing member and assignee of the note. Ms. Fonseca-Greer contends that the funds were advanced by Amber Light Documentary Films LLC to the Decedent for the development of a documentary film project and that the Decedent failed to repay the obligation prior to his death. Petitioner disputes the validity and enforceability of the alleged promissory note and reserves all defenses thereto.

5. Nicolás R. Fonseca's Individual Claim — Educational Expense Reimbursement

Asserted in connection with the Contestants' filings. Nicolás R. Fonseca asserts an individual claim against the Estate in the amount of Three Hundred Eighty-Seven Thousand Five Hundred Dollars ($387,500) for educational expense reimbursement. The claim is based on an alleged oral promise made by the Decedent to Nicolás R. Fonseca to reimburse all educational expenses incurred by Nicolás R. Fonseca in connection with his graduate studies at Stanford University, including tuition, fees, housing, and living expenses, for the academic years 2019-2020 through 2022-2023. Mr. Fonseca contends that the Decedent made partial payments during his lifetime but failed to fully satisfy his promise prior to his death. Petitioner disputes the existence and enforceability of the alleged oral promise and reserves all defenses thereto, including but not limited to the statute of frauds.

6. Petitioner's Petition for Preliminary Distribution of Non-Probate Assets

Filed: January 18, 2023. Marguerite D. Fonseca seeks a court order confirming that life insurance proceeds from Meridian Mutual Life Insurance Co. (Policy No. GH-TL-2019-05582, face amount $3,000,000) and Commonwealth Fidelity Assurance Corp. (Policy No. GH-WL-2014-01247, face amount $2,000,000) are non-probate assets payable directly to Petitioner as the named beneficiary under such policies, and that such proceeds are not subject to probate administration or claims by the Contestants. Contestants have not conceded that Petitioner is the sole designated beneficiary of all life insurance policies and reserve all rights to challenge the beneficiary designations.

The foregoing schedule is intended to be comprehensive but may not identify every claim, defense, or issue that may arise in the Proceeding. The omission of any claim, defense, or issue from this schedule shall not be construed as a waiver or release thereof. All claims, defenses, rights, and remedies of the Parties, whether or not identified herein, are expressly preserved and reserved.

[End of Settlement Standstill Agreement]

No.	Asset	Description	Estimated Value
1	Beverly Hills Residence	1847 Coldwater Canyon Drive, Beverly Hills, CA 90210; single-family residence, approximately 7,200 sq. ft., on 1.2-acre lot	$8,450,000
2	Malibu Beach House	27100 Pacific Coast Highway, Malibu, CA 90265; oceanfront residence, approximately 3,800 sq. ft.	$6,200,000
3	Lumiére Canyon Studios LLC (50% interest)	Decedent's 50% membership interest in Lumiére Canyon Studios LLC, a California limited liability company; CA SOS Filing No. 200906410337	$15,800,000
4	Pacific Rim Narrative Partners LLC (35% interest)	Decedent's 35% membership interest in Pacific Rim Narrative Partners LLC, a California limited liability company; CA SOS Filing No. 201518720492	$27,475,000
5	Veltara Basin Bank Brokerage Account	Brokerage account at Veltara Basin Bank, N.A., account ending -4782; diversified portfolio of equities, fixed income, and alternative investments	$5,120,000
6	Veltara Basin Bank Checking Account	Checking account at Veltara Basin Bank, N.A., account ending -3091	$342,000
7	Veltara Basin Bank Money Market Account	Money market account at Veltara Basin Bank, N.A., account ending -6155	$1,875,000
8	Intellectual Property Portfolio	Royalties and residuals associated with 14 feature films and 6 television series created, produced, or co-produced by the Decedent	$4,600,000 (NPV)
9	Personal Property	Art collection, vehicles (including 2021 Porsche Taycan, 2019 Range Rover Autobiography, and 1967 Ford Mustang Shelby GT500), furnishings, jewelry, and other personal effects	$1,250,000

SETTLEMENT STANDSTILL AGREEMENT
IN THE MATTER OF THE ESTATE OF TEODORO R. FONSECA, DECEASED
Los Angeles County Superior Court, Probate Division Case No. 22STPB09714
Effective Date: April 28, 2023
SETTLEMENT STANDSTILL AGREEMENT
This Settlement Standstill Agreement (this "Agreement") is entered into as of April 28, 2023 (the "Effective Date"), by and among the following parties:
MARGUERITE D. FONSECA ("Petitioner"), an individual residing at 1847 Coldwater Canyon Drive, Beverly Hills, California 90210, the surviving spouse of the Decedent (as defined below);
and
RAFAEL T. FONSECA, an individual residing at 502 Olive Avenue, Unit 3, Burbank, California 91502; ISABELA C. FONSECA-GREER, an individual residing at 78 Eucalyptus Lane, Santa Monica, California 90402; and NICOLÁS R. FONSECA, an individual residing at 1190 Elm Street, Apt. 4B, Palo Alto, California 94301 (collectively, the "Contestants"), adult children of the Decedent from a prior marriage.
Petitioner and Contestants are sometimes referred to herein individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, Teodoro R. Fonseca (the "Decedent") died intestate on September 3, 2022, while a resident of Los Angeles County, California, leaving an estate of substantial value comprised of real property, interests in limited liability companies, financial accounts, an intellectual property portfolio, and personal property;
WHEREAS, Marguerite D. Fonseca, the surviving spouse of the Decedent, filed a Petition for Letters of Administration on October 5, 2022, in the Los Angeles County Superior Court, Probate Division, and the petition was assigned Case No. 22STPB09714 (the "Proceeding");
WHEREAS, Rafael T. Fonseca, Isabela C. Fonseca-Greer, and Nicolás R. Fonseca, adult children of the Decedent from a prior marriage to the late Cecilia R. Fonseca, filed an initial objection to the Petition for Letters of Administration on November 14, 2022, challenging, among other things, the appointment of Petitioner as administrator of the Estate and disputing the community property characterization of certain Estate assets;
WHEREAS, Contestants filed an amended objection on January 9, 2023, adding claims regarding the existence and enforceability of a premarital agreement allegedly executed by the Decedent and Petitioner on May 30, 2008, and asserting that certain media-related assets, including the Decedent's interests in Lumiére Canyon Studios LLC and Pacific Rim Narrative Partners LLC, constitute the Decedent's separate property;
WHEREAS, Petitioner is represented by Calderwood & Harkness LLP (Howard Quinn, Esq., Responsible Partner), with offices at 350 South Grand Avenue, Suite 4800, Los Angeles, California 90071;
WHEREAS, Contestants are represented by Brennan, Ortega & Saldívar LLP (Damian R. Ortega, Esq., Lead Attorney), with offices at 1900 Avenue of the Stars, Suite 2100, Los Angeles, California 90067;
WHEREAS, on March 10, 2023, the Parties stipulated to mediation before the Honorable Constance Adler (Ret.) of the Westside Dispute Resolution Center, located at 11400 West Olympic Boulevard, Suite 550, Los Angeles, California 90064, for the purpose of exploring the potential resolution of the disputes in the Proceeding;
WHEREAS, on March 22, 2023, the Parties further stipulated to the appointment of Ashford Fiduciary Services Inc. (Gerald Whitmore, Principal Officer), with offices at 600 Wilshire Boulevard, Suite 1450, Los Angeles, California 90017, as the neutral administrator of the Estate pending resolution of the dispute (the "Neutral Administrator"), and the Court entered an order approving such appointment on March 24, 2023;
WHEREAS, a mediation session was conducted on April 12, 2023, before the Honorable Constance Adler (Ret.), at the offices of the Westside Dispute Resolution Center, which session, while productive in narrowing certain issues, did not result in a full resolution of the dispute between the Parties;
WHEREAS, the Parties recognize that the Proceeding involves complex issues relating to the characterization of marital and separate property, the validity and enforceability of the alleged premarital agreement, the valuation of closely held business interests, and individual claims asserted by certain Contestants, and that a meaningful resolution of these issues will require additional time, investigation, information exchange, and negotiation;
WHEREAS, the Parties now desire to enter into this Settlement Standstill Agreement to pause active litigation in the Proceeding, toll all applicable deadlines, preserve the status quo of the Estate, and create a structured framework for continued settlement negotiations in the interest of reaching an amicable resolution;
WHEREAS, the estimated probate estate is valued at approximately Seventy-One Million One Hundred Twelve Thousand Dollars ($71,112,000) per Petitioner's preliminary estimate, or approximately Sixty-Eight Million Seven Hundred Fifty Thousand Dollars ($68,750,000) per Contestants' preliminary estimate, comprising, among other assets, the Decedent's interests in Lumiére Canyon Studios LLC and Pacific Rim Narrative Partners LLC, real property located in Beverly Hills and Malibu, financial accounts held at Veltara Basin Bank, N.A., an intellectual property portfolio, and personal property, all as more particularly described in Exhibit A attached hereto; and
WHEREAS, the Parties believe that a period of standstill and continued negotiation is in the best interests of all Parties and the Estate, and will promote the efficient administration and preservation of Estate assets during the pendency of settlement efforts.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, the forbearances and commitments of the Parties contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each Party, the Parties agree as follows:
ARTICLE I — DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not defined in this Article I shall have the meanings ascribed to them elsewhere in this Agreement.
Section 1.1 — "Agreement." "Agreement" means this Settlement Standstill Agreement, including all exhibits attached hereto and all amendments, supplements, or modifications hereto made in accordance with Section 7.5.
Section 1.2 — "Parties." "Parties" means, collectively, Petitioner and Contestants. "Party" means any one of them individually.
Section 1.3 — "Petitioner." "Petitioner" means Marguerite D. Fonseca, an individual residing at 1847 Coldwater Canyon Drive, Beverly Hills, California 90210, the surviving spouse of the Decedent and the petitioner in the Proceeding.
Section 1.4 — "Contestants." "Contestants" means, collectively, (a) Rafael T. Fonseca, an individual residing at 502 Olive Avenue, Unit 3, Burbank, California 91502; (b) Isabela C. Fonseca-Greer, an individual residing at 78 Eucalyptus Lane, Santa Monica, California 90402; and (c) Nicolás R. Fonseca, an individual residing at 1190 Elm Street, Apt. 4B, Palo Alto, California 94301, each an adult child of the Decedent from a prior marriage, and the contestants in the Proceeding.
Section 1.5 — "Court." "Court" means the Los Angeles County Superior Court, Probate Division, or any successor court having jurisdiction over the Proceeding.
Section 1.6 — "Proceeding." "Proceeding" means Case No. 22STPB09714, In re Estate of Teodoro R. Fonseca, Deceased, pending in the Court, together with any and all motions, petitions, objections, claims, counterclaims, cross-petitions, and other matters filed or pending therein.
Section 1.7 — "Estate." "Estate" means the probate estate of Teodoro R. Fonseca, Deceased, including all assets, rights, interests, claims, and obligations comprising the probate estate, as more particularly described in Exhibit A hereto.
Section 1.8 — "Neutral Administrator." "Neutral Administrator" means Ashford Fiduciary Services Inc., a California corporation, with its principal office at 600 Wilshire Boulevard, Suite 1450, Los Angeles, California 90017, Gerald Whitmore serving as Principal Officer, appointed by the Court as the neutral administrator of the Estate pursuant to the Stipulation for Appointment of Neutral Administrator filed March 22, 2023, and the Court's order entered March 24, 2023.
Section 1.9 — "Mediator." "Mediator" means the Honorable Constance Adler (Ret.), serving through the Westside Dispute Resolution Center, located at 11400 West Olympic Boulevard, Suite 550, Los Angeles, California 90064.
Section 1.10 — "Standstill Period." "Standstill Period" means the period commencing on the Effective Date and ending on the Expiration Date, as such Expiration Date may be extended pursuant to Article V of this Agreement.
Section 1.11 — "Effective Date." "Effective Date" means April 28, 2023, which is the date on which this Agreement becomes effective upon execution by all Parties.
Section 1.12 — "Initial Expiration Date." "Initial Expiration Date" means October 28, 2023, which is six (6) calendar months from the Effective Date. References to the "Expiration Date" shall mean the Initial Expiration Date or, if this Agreement has been renewed pursuant to Section 5.2, the then-applicable expiration date following such renewal.
Section 1.13 — "Settlement Discussions." "Settlement Discussions" means any and all communications, whether oral, written, or electronic, between or among the Parties, their respective counsel, the Mediator, or any other person participating in settlement negotiations at the direction of the Parties, relating to the potential resolution, compromise, or settlement of the Proceeding or any claims, disputes, or issues arising therein, including all proposals, counterproposals, term sheets, draft agreements, memoranda, position statements, and other materials prepared in connection with such negotiations.
Section 1.14 — "Petitioner's Counsel." "Petitioner's Counsel" means Calderwood & Harkness LLP, with offices at 350 South Grand Avenue, Suite 4800, Los Angeles, California 90071, Howard Quinn, Esq. serving as the Responsible Partner.
Section 1.15 — "Contestants' Counsel." "Contestants' Counsel" means Brennan, Ortega & Saldívar LLP, with offices at 1900 Avenue of the Stars, Suite 2100, Los Angeles, California 90067, Damian R. Ortega, Esq. serving as the Lead Attorney.
ARTICLE II — TOLLING OF LITIGATION DEADLINES AND STANDSTILL OBLIGATIONS
Section 2.1 — Tolling of Deadlines. Effective as of the Effective Date and continuing for the duration of the Standstill Period, all litigation deadlines in the Proceeding shall be tolled. The deadlines subject to tolling under this Section include, but are not limited to, deadlines for filing responsive pleadings, motions, amended pleadings, petitions, objections, and other papers; deadlines for propounding and responding to discovery, including interrogatories, requests for production of documents, requests for admission, and deposition notices; deadlines for pretrial submissions, including witness lists, exhibit lists, and pretrial statements; and any other deadlines imposed by the California Code of Civil Procedure, the California Probate Code, the California Rules of Court, the local rules of the Los Angeles County Superior Court, or any order of the Court. Upon the termination or expiration of this Agreement, all such tolled deadlines shall recommence with the same number of days remaining as existed on the Effective Date. For the avoidance of doubt, if a Party had ten (10) days remaining to file a responsive pleading as of the Effective Date, such Party shall have ten (10) days from the date of termination or expiration of this Agreement to file such responsive pleading.
Section 2.2 — Prohibition on New Filings. During the Standstill Period, no Party shall file any new motion, petition, objection, amended pleading, cross-petition, claim, or other pleading or paper in the Proceeding without the prior written consent of all other Parties, except as expressly permitted under Section 2.4 of this Agreement. Any filing made in violation of this Section 2.2 shall be deemed a breach of this Agreement, and the non-breaching Party or Parties shall be entitled to seek all available remedies, including but not limited to a motion to strike the improperly filed pleading and an award of attorneys' fees and costs incurred in connection with addressing such breach.
Section 2.3 — Prohibition on discovery. During the Standstill Period, no Party shall serve, propound, or issue any discovery in connection with the Proceeding without the prior written consent of all other Parties. The prohibition set forth in this Section 2.3 extends to, but is not limited to, interrogatories, requests for production of documents, requests for admission, deposition notices (whether for oral or written deposition), subpoenas duces tecum, subpoenas for testimony directed at third parties, and any other form of formal or informal discovery under the California Code of Civil Procedure or applicable rules. Nothing in this Section 2.3 shall prohibit the voluntary exchange of information between the Parties' counsel in connection with Settlement Discussions, provided that any such voluntary exchange shall be subject to the confidentiality provisions of Article IV.
Section 2.4 — Permitted Actions. Notwithstanding the prohibitions set forth in Sections 2.2 and 2.3 of this Agreement, the following actions are expressly permitted during the Standstill Period without the prior consent of any other Party:
(a) Filings that are required to preserve jurisdictional or statutory rights of any Party that cannot be tolled by private agreement of the Parties, including but not limited to any filing necessary to prevent the loss of standing or the running of a non-waivable statutory period;
(b) Filings that are necessary to protect the Estate from imminent dissipation, waste, loss of value, or destruction of Estate assets, provided that the filing Party shall provide the other Parties with at least forty-eight (48) hours' prior written notice of its intent to make such filing, except in circumstances where such notice is impracticable due to the emergent nature of the threat;
(c) Filings required to comply with any court order entered prior to the Effective Date that, by its terms, requires action during the Standstill Period, including but not limited to the Court's order of March 24, 2023, approving the appointment of the Neutral Administrator;
(d) Joint stipulations or agreed orders submitted by all Parties for the Court's consideration and approval, including stipulations extending or modifying deadlines, stipulations relating to the Neutral Administrator, and stipulations relating to the administration of the Estate;
(e) Filings related to the ongoing administration of the Estate by the Neutral Administrator in the ordinary course of its duties, including accountings, inventories, reports, and fee applications, provided that such filings are consistent with the terms of this Agreement and the Stipulation for Appointment of Neutral Administrator.
Section 2.5 — Preservation of Claims and Defenses. Nothing in this Agreement shall be construed as a waiver, release, abandonment, or prejudice of any claim, defense, right, or remedy of any Party in the Proceeding or otherwise. All claims, defenses, rights, and remedies of the Parties as of the Effective Date are expressly reserved and preserved in full, including but not limited to all claims and defenses identified in Exhibit B attached hereto. The entry into this Agreement shall not create any estoppel, laches defense, or other impediment to any Party's assertion of any claim or defense upon the termination or expiration of this Agreement.
Section 2.6 — Statute of Limitations. The Parties agree that any statute of limitations, statute of repose, prescriptive period, or other time-based legal defense or time bar applicable to any claim asserted or that could be asserted in the Proceeding, or arising out of or relating to the same facts, circumstances, transactions, or occurrences at issue in the Proceeding, shall be tolled for the duration of the Standstill Period. Each Party agrees not to assert the expiration of any such time-based defense as a bar to any claim to the extent that such expiration occurred during the Standstill Period and would not have occurred but for the tolling provided by this Section 2.6. This Section 2.6 shall be given the broadest possible construction consistent with applicable law in order to effectuate the Parties' intent to preserve all claims and defenses during the Standstill Period.
ARTICLE III — CONTINUED NEUTRAL ADMINISTRATION OF THE ESTATE
Section 3.1 — Continuation of Neutral Administrator. Ashford Fiduciary Services Inc. shall continue to serve as the Neutral Administrator of the Estate during the Standstill Period, in accordance with the terms and conditions of the Stipulation for Appointment of Neutral Administrator filed with the Court on March 22, 2023, the Court's order approving such appointment entered on March 24, 2023, and any supplemental court orders issued in connection therewith. The Neutral Administrator's duties and obligations under this Agreement are in addition to, and not in limitation of, the duties and obligations set forth in the Stipulation and the Court's order. In the event of any conflict between the terms of this Agreement and the terms of the Stipulation or Court order, the Court's order shall control.
Section 3.2 — Scope of Administration. During the Standstill Period, the Neutral Administrator shall exercise its fiduciary duties in a prudent and commercially reasonable manner and shall, at a minimum, perform the following functions:
(a) Maintenance and Preservation of Estate Assets. Maintain, preserve, protect, and safeguard all Estate assets, including but not limited to:
(i) Real property located at 1847 Coldwater Canyon Drive, Beverly Hills, California 90210 (the "Beverly Hills Residence"), and 27100 Pacific Coast Highway, Malibu, California 90265 (the "Malibu Beach House"), including maintaining all applicable insurance coverage, paying property taxes when due, and arranging for necessary maintenance, repairs, and security;
(ii) The Decedent's fifty percent (50%) membership interest in Lumiére Canyon Studios LLC, a California limited liability company (California Secretary of State Filing No. 200906410337), including monitoring the operations and financial performance of the company and exercising the Decedent's rights as a member in the ordinary course of business;
(iii) The Decedent's thirty-five percent (35%) membership interest in Pacific Rim Narrative Partners LLC, a California limited liability company (California Secretary of State Filing No. 201518720492), including monitoring the operations and financial performance of the company and exercising the Decedent's rights as a member in the ordinary course of business;
(iv) Financial accounts held at Veltara Basin Bank, N.A., including the brokerage account ending in -4782, the checking account ending in -3091, and the money market account ending in -6155, and any other accounts identified during the course of administration;
(v) The intellectual property portfolio, consisting of royalties and residuals associated with fourteen (14) feature films and six (6) television series, as more particularly described in Exhibit A;
(vi) Personal property of the Decedent, including art, vehicles, and furnishings, as inventoried by the Neutral Administrator.
(b) Collection of Income. Collect all income, rents, royalties, residuals, distributions, dividends, interest, and other amounts attributable to Estate assets in the ordinary course of business, and deposit all such amounts into an Estate account or accounts maintained by the Neutral Administrator at Veltara Basin Bank, N.A., or such other financial institution as the Neutral Administrator may determine to be appropriate.
(c) Payment of Expenses. Pay ordinary and necessary expenses of the Estate in the ordinary course, including but not limited to real property taxes, homeowners' insurance premiums, property maintenance costs, utility bills, vehicle insurance and registration fees, storage fees, professional fees incurred in the ordinary course of Estate administration, and any other expenses reasonably necessary to preserve and protect Estate assets.
(d) Tax Compliance. Prepare, or cause to be prepared, and timely file all required federal, state, and local tax returns for the Estate, including but not limited to fiduciary income tax returns (IRS Form 1041 and California Form 541), in coordination with Ridgeway Accounting Partners LLP (Dennis Chua, CPA), with offices at 515 South Flower Street, Suite 3600, Los Angeles, California 90071. The Neutral Administrator shall provide copies of all draft tax returns to Petitioner's Counsel and Contestants' Counsel for review and comment at least fifteen (15) days prior to the applicable filing deadline.
(e) Quarterly Reporting. Provide detailed quarterly written reports to Petitioner's Counsel and Contestants' Counsel, with copies to both Petitioner and Contestants upon request, detailing the status of all Estate assets, all income received, all expenses paid, all distributions made (if any), and any material developments relating to the Estate or its assets. Such reports shall be delivered within thirty (30) days following the end of each calendar quarter during the Standstill Period, with the first such report covering the period from the Effective Date through June 30, 2023.
Section 3.3 — Restrictions on the Neutral Administrator. During the Standstill Period, the Neutral Administrator shall not, without the prior written consent of all Parties or further order of the Court, take any of the following actions:
(a) Sell, transfer, convey, assign, exchange, encumber, pledge, hypothecate, lease (other than short-term leases of ninety (90) days or less on terms consistent with prior practice), or otherwise dispose of any Estate asset, whether real, personal, tangible, or intangible;
(b) Make any distribution from the Estate to any Party, any beneficiary, any heir, or any third party, other than payments of ordinary and necessary expenses of administration as described in Section 3.2(c);
(c) Enter into any contract, agreement, commitment, or arrangement on behalf of the Estate that involves consideration, obligations, or exposure exceeding Twenty-Five Thousand Dollars ($25,000) in value, whether in a single transaction or a series of related transactions;
(d) Incur, assume, guaranty, or otherwise become obligated for any indebtedness on behalf of the Estate, including but not limited to loans, lines of credit, promissory notes, or credit agreements.
For the avoidance of doubt, the restrictions set forth in this Section 3.3 are not intended to prevent the Neutral Administrator from taking emergency actions necessary to protect Estate assets from imminent loss or destruction, provided that the Neutral Administrator shall promptly notify all Parties and their counsel of any such emergency action taken.
Section 3.4 — Administration Fees and Costs. The Neutral Administrator shall be compensated for its services at the rate of Eight Thousand Five Hundred Dollars ($8,500) per month, plus fifteen one-hundredths of one percent (0.15%) of assets under administration per annum (the "AUA Fee"), as set forth in the Stipulation for Appointment of Neutral Administrator. Such fees and costs shall be allocated and paid as follows:
(a) Petitioner's Share. Petitioner shall pay Four Thousand Two Hundred Fifty Dollars ($4,250) per month toward the monthly administration fee.
(b) Contestants' Share. Contestants shall pay, jointly and severally, Four Thousand Two Hundred Fifty Dollars ($4,250) per month toward the monthly administration fee.
(c) Timing of Payments. Monthly fee payments shall be made directly to the Neutral Administrator by the fifth (5th) business day of each calendar month during the Standstill Period. The first monthly payment shall be due on or before the fifth (5th) business day of May 2023.
(d) AUA Fee. The per-annum AUA Fee (0.15% of assets under administration) shall be calculated on a quarterly basis using the fair market value of assets under administration as of the last day of the applicable calendar quarter, as determined by the Neutral Administrator in its reasonable judgment. The AUA Fee shall be invoiced quarterly and shall be payable within fifteen (15) business days of receipt of the Neutral Administrator's invoice. The AUA Fee shall be allocated equally between Petitioner and Contestants.
(e) Reimbursable Costs. In addition to the fees set forth above, the Neutral Administrator shall be entitled to reimbursement for reasonable out-of-pocket costs incurred in the performance of its duties, including but not limited to costs of insurance, appraisals, professional consultants, legal counsel to the Neutral Administrator, postage, filing fees, and travel. All reimbursable costs exceeding Five Thousand Dollars ($5,000) in any calendar quarter shall require prior notice to Petitioner's Counsel and Contestants' Counsel.
Section 3.5 — Failure to Pay Administration Fees. If either Petitioner or Contestants (treated as a group for purposes of this Section) fails to timely pay its share of the Neutral Administrator's monthly fees for two (2) consecutive months, the non-defaulting Party shall have the following remedies, exercisable in its sole discretion:
(a) Advancement. The non-defaulting Party may advance the defaulting Party's share of the fees directly to the Neutral Administrator, and the amount so advanced shall be treated as an administrative expense of the Estate and shall be reimbursed to the advancing Party from the Estate prior to any distribution to the defaulting Party, with interest at the rate of five percent (5%) per annum from the date of each advancement until repaid; or
(b) Termination. The non-defaulting Party may terminate this Agreement upon ten (10) days' prior written notice to the defaulting Party, delivered in accordance with Section 7.3. The defaulting Party shall have the right to cure the default by paying all arrearages, including any late fees, within the ten (10)-day notice period, in which case the termination notice shall be deemed withdrawn and this Agreement shall continue in full force and effect.
ARTICLE IV — CONFIDENTIALITY
Section 4.1 — Confidentiality of Settlement Discussions. All Settlement Discussions between or among the Parties, their respective counsel, the Mediator, or any other person participating in settlement negotiations at the direction of the Parties, whether occurring before, on, or after the Effective Date and during the Standstill Period, shall be and remain strictly confidential. No Party shall disclose, publish, disseminate, or communicate the substance, content, terms, or status of any Settlement Discussion to any person or entity that is not a Party to this Agreement, nor to any attorney, advisor, consultant, expert, or other agent of any Party not directly involved in the Settlement Discussions, without the prior written consent of all other Parties. The foregoing prohibition shall not apply to disclosures required by applicable law, regulation, court order, or subpoena, provided that the disclosing Party shall provide prompt written notice to all other Parties prior to making any such required disclosure and shall cooperate in seeking a protective order or other appropriate remedy to limit the scope of such disclosure.
Section 4.2 — Inadmissibility. All Settlement Discussions, and all documents, communications, proposals, counterproposals, memoranda, position statements, term sheets, draft agreements, and other materials prepared or exchanged in connection with Settlement Discussions, shall be inadmissible in any judicial, arbitral, administrative, or other proceeding, whether pending or future, for any purpose, including but not limited to proof of liability, fault, the validity or invalidity of any claim or defense, or the amount of any damages or award. The inadmissibility protections set forth in this Section 4.2 are intended to be in addition to, and not in limitation of, the protections afforded by California Evidence Code Section 1152 (compromise offers and negotiations), Federal Rule of Evidence 408 (compromise offers and negotiations), and California Evidence Code Sections 1115 through 1128 (mediation confidentiality), all of which the Parties expressly invoke and rely upon. No Party shall seek to compel the Mediator or any other neutral to testify regarding any Settlement Discussion.
Section 4.3 — Confidential Information. All financial information, valuation data, appraisal reports, business records, tax returns, operating statements, balance sheets, membership interest agreements, intellectual property schedules, and other non-public information exchanged between or among the Parties or their counsel in connection with Settlement Discussions, the mediation process, or this Agreement (collectively, "Confidential Information") shall be treated as confidential and shall not be used for any purpose other than the Settlement Discussions and the potential resolution of the Proceeding. Upon the termination or expiration of this Agreement, each Party shall, at the request of the producing Party, promptly return or destroy all Confidential Information received from the other Party, provided that counsel for each Party may retain one archival copy of all Confidential Information in its litigation files, subject to the continuing confidentiality obligations of this Article IV.
Section 4.4 — Court Filings. The Parties shall not file this Agreement, any amendment hereto, or any exhibit or attachment hereto with the Court or any other tribunal without the prior written consent of all Parties, except where such filing is required by court order, applicable statute, or applicable rule of court. In the event that filing is required, the filing Party shall first confer with all other Parties regarding the possibility of filing under seal or with appropriate redactions to preserve the confidentiality of Settlement Discussions and Confidential Information.
Section 4.5 — Survival. The confidentiality obligations set forth in this Article IV, including without limitation the obligations set forth in Sections 4.1, 4.2, 4.3, and 4.4, shall survive the termination, expiration, or breach of this Agreement and shall remain in full force and effect indefinitely, unless modified or waived by written agreement of all Parties.
ARTICLE V — TERM, RENEWAL, AND TERMINATION
Section 5.1 — Initial Term. This Agreement shall commence on the Effective Date, April 28, 2023, and shall continue in full force and effect until the Initial Expiration Date, October 28, 2023, unless earlier terminated in accordance with this Article V or renewed in accordance with Section 5.2.
Section 5.2 — Renewal. This Agreement may be renewed for successive periods of six (6) calendar months each (each a "Renewal Period") by mutual written consent of all Parties. The written consent to renew must be executed by all Parties, or by their authorized counsel on their behalf, not later than five (5) business days prior to the then-applicable Expiration Date. Each renewal shall be documented by a written amendment to this Agreement signed by all Parties or their authorized counsel, which amendment shall specify the new Expiration Date and any modifications to the terms of this Agreement agreed upon in connection with such renewal. In the absence of a timely written renewal, this Agreement shall expire on the then-applicable Expiration Date without further action by any Party.
Section 5.3 — Termination by Mutual Consent. This Agreement may be terminated at any time, including prior to the Expiration Date, by written agreement of all Parties. Such written agreement shall specify the effective date of termination and shall address any transitional matters, including the recommencement of tolled deadlines and the continued role of the Neutral Administrator.
Section 5.4 — Termination by Unilateral Notice. Any Party may terminate this Agreement upon thirty (30) days' prior written notice to all other Parties and their counsel, delivered in accordance with Section 7.3 of this Agreement. Following delivery of such notice, the Standstill Period shall continue in full force and effect for the thirty (30)-day notice period, and all obligations of the Parties under this Agreement shall remain binding during such period. All tolled deadlines shall recommence on the day immediately following the expiration of the thirty (30)-day notice period. The terminating Party shall act in good faith in exercising its right under this Section 5.4 and shall not terminate this Agreement for the purpose of gaining a tactical advantage in the Proceeding.
Section 5.5 — Effect of Termination or Expiration. Upon the termination or expiration of this Agreement, whether by mutual consent, unilateral notice, lapse of the Standstill Period, or otherwise, the following provisions shall apply:
(a) Recommencement of Deadlines. All litigation deadlines tolled pursuant to Section 2.1 shall recommence with the same number of days remaining as existed on the Effective Date, calculated from the date of termination or expiration, as provided in Sections 2.1 and 5.4;
(b) Survival of Confidentiality Obligations. All obligations of the Parties under Article IV (Confidentiality) shall survive the termination or expiration of this Agreement and shall remain in full force and effect in accordance with Section 4.5;
(c) Continuation of Neutral Administrator. The Neutral Administrator shall continue to serve in its capacity as neutral administrator of the Estate until further order of the Court or written agreement of all Parties providing for the appointment of a successor or the assumption of administrative duties by a court-appointed personal representative;
(d) Preservation of Claims and Defenses. No Party shall be deemed to have waived, released, abandoned, or prejudiced any claim, defense, right, or remedy by virtue of entering into, performing under, or terminating or permitting the expiration of this Agreement. All claims, defenses, rights, and remedies of the Parties as of the Effective Date, and as may have accrued during the Standstill Period, are expressly reserved and preserved.
ARTICLE VI — REPRESENTATIONS AND ACKNOWLEDGMENTS
Section 6.1 — Authority. Each Party represents and warrants that he or she has the full legal capacity and authority to enter into this Agreement and to perform his or her obligations hereunder. Each Party further represents that no consent, approval, or authorization of any third party is required in connection with the execution, delivery, or performance of this Agreement by such Party, other than any court approvals that may be required for the implementation of a final settlement of the Proceeding.
Section 6.2 — Voluntary Execution. Each Party acknowledges and represents that this Agreement is entered into voluntarily, freely, and without duress, coercion, fraud, mistake, or undue influence of any kind. Each Party has had a reasonable opportunity to review and consider the terms of this Agreement before executing it, and each Party is satisfied with the terms and provisions hereof.
Section 6.3 — Advice of Counsel. Each Party acknowledges that he or she has been advised by independent legal counsel regarding the terms, consequences, and legal effect of this Agreement, and that each Party has had the full benefit of such counsel's advice prior to executing this Agreement. Petitioner has been advised by Calderwood & Harkness LLP, through Howard Quinn, Esq. Contestants have been advised by Brennan, Ortega & Saldívar LLP, through Damian R. Ortega, Esq. Each Party acknowledges that his or her execution of this Agreement is informed and voluntary.
Section 6.4 — No Admission. This Agreement, the Parties' entry into this Agreement, and the Parties' performance under this Agreement shall not be construed as, and do not constitute, an admission of liability, fault, wrongdoing, or the validity or invalidity of any claim or defense by any Party. This Agreement is entered into solely for the purpose of promoting settlement and preserving the status quo during settlement negotiations and shall not be offered or received in evidence in the Proceeding or any other proceeding for any purpose, except to enforce the terms of this Agreement itself.
Section 6.5 — Preservation of Estate. Each Party represents and warrants that, as of the Effective Date, he or she is not aware of any circumstances constituting an imminent threat of dissipation, waste, destruction, or loss to any Estate assets. Each Party further agrees to promptly notify all other Parties and the Neutral Administrator in writing if, during the Standstill Period, such Party becomes aware of any such threat.
ARTICLE VII — GENERAL PROVISIONS
Section 7.1 — Governing Law. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of California, including without limitation the California Probate Code and the California Evidence Code, without regard to California's conflict of laws principles or choice of law rules that would require or permit the application of the laws of any other jurisdiction.
Section 7.2 — Jurisdiction and Venue. The Parties irrevocably consent to the exclusive jurisdiction and venue of the Los Angeles County Superior Court, Probate Division, in connection with Case No. 22STPB09714, for the resolution of any dispute arising out of or relating to this Agreement, including but not limited to any dispute concerning the interpretation, enforcement, breach, or validity of this Agreement. Each Party waives any objection to such jurisdiction or venue, including any objection based on inconvenient forum.
Section 7.3 — Notices. All notices, requests, demands, consents, waivers, and other communications required or permitted under this Agreement shall be in writing and shall be deemed effectively delivered and received: (a) upon personal delivery to the addressee or its authorized agent; (b) one (1) business day after deposit with a nationally recognized overnight courier service (such as Sundial Data Systems or Harborline Partners LLC) with next-business-day delivery requested, prepaid; or (c) three (3) business days after deposit in the United States mail, postage prepaid, certified mail, return receipt requested, in each case addressed as follows:
If to Petitioner:
Marguerite D. Fonseca c/o Calderwood & Harkness LLP
Attn: Howard Quinn, Esq.
350 South Grand Avenue, Suite 4800 Los Angeles, California 90071 Telephone: (213) 555-8200
Email: hquinn@calderwoodharkness.com
If to Contestants:
Rafael T. Fonseca, Isabela C. Fonseca-Greer, and Nicolás R. Fonseca c/o Brennan, Ortega & Saldívar LLP
Attn: Damian R. Ortega, Esq.
1900 Avenue of the Stars, Suite 2100 Los Angeles, California 90067 Telephone: (310) 555-4100
Email: dortega@boslawfirm.com
If to the Neutral Administrator (for informational copies only):
Ashford Fiduciary Services Inc.
Attn: Gerald Whitmore, Principal Officer
600 Wilshire Boulevard, Suite 1450 Los Angeles, California 90017 Telephone: (213) 555-6500
Email: gwhitmore@ashfordfiduciary.com
Any Party may change its address for notices by providing written notice of such change to all other Parties in accordance with this Section 7.3. Notice to Contestants' Counsel shall constitute notice to all Contestants.
Section 7.4 — Entire Agreement. This Agreement, together with all exhibits attached hereto and any written amendments hereto made in accordance with Section 7.5, constitutes the entire agreement between and among the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous oral or written agreements, understandings, negotiations, representations, warranties, and communications relating to the subject matter hereof, including but not limited to any oral or written discussions regarding standstill arrangements conducted prior to the Effective Date. No Party has relied upon any representation or warranty not expressly set forth in this Agreement.
Section 7.5 — Amendments. This Agreement may be amended, modified, or supplemented only by a written instrument specifically identified as an amendment to this Agreement and signed by all Parties or by their authorized counsel acting on their behalf. No oral modification, amendment, or waiver of any provision of this Agreement shall be effective for any purpose.
Section 7.6 — Waiver. No waiver of any term, condition, or provision of this Agreement shall be effective unless made in writing and signed by the Party against whom the waiver is sought to be enforced. No failure or delay by any Party in exercising any right, power, or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power, or remedy preclude any other or further exercise thereof or the exercise of any other right, power, or remedy. No waiver of any breach of this Agreement shall constitute a waiver of any subsequent breach, whether of the same or a different provision.
Section 7.7 — Severability. If any provision of this Agreement, or the application thereof to any person, Party, or circumstance, is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired, and such remaining provisions shall continue in full force and effect. In the event any provision is so held to be invalid, illegal, or unenforceable, the Parties shall negotiate in good faith to replace such provision with a valid, legal, and enforceable provision that, to the maximum extent possible, achieves the Parties' original intent.
Section 7.8 — Counterparts. This Agreement may be executed in any number of counterparts, including by electronic transmission (including PDF, Brightwater Software, or similar electronic signature platform), each of which shall be deemed an original, and all of which, when taken together, shall constitute one and the same instrument. Electronic or facsimile signatures shall be deemed original signatures for all purposes of this Agreement and shall be sufficient to bind the Parties.
Section 7.9 — Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective heirs, executors, administrators, personal representatives, successors, and assigns. No Party may assign or transfer this Agreement or any rights or obligations hereunder without the prior written consent of all other Parties.
Section 7.10 — Construction. This Agreement has been jointly drafted and negotiated by the Parties and their respective counsel. The language of this Agreement shall be construed as a whole, according to its fair meaning, and not strictly for or against any Party as the drafter. Each Party acknowledges that it has participated in the drafting of this Agreement and that no ambiguity shall be construed against any Party on the ground that such Party or its counsel drafted or proposed the language in question.
Section 7.11 — Headings. The article and section headings contained in this Agreement are for convenience of reference only and shall not affect the meaning, interpretation, or construction of any provision of this Agreement.
[SIGNATURE PAGE FOLLOWS]
SIGNATURE PAGE TO SETTLEMENT STANDSTILL AGREEMENT
IN RE ESTATE OF TEODORO R. FONSECA, DECEASED
Case No. 22STPB09714
IN WITNESS WHEREOF, the Parties have executed this Settlement Standstill Agreement as of the Effective Date first written above.
PETITIONER:
________________________________________
MARGUERITE D. FONSECA
Date: April 28, 2023
CONTESTANTS:
________________________________________
RAFAEL T. FONSECA
Date: April 28, 2023
________________________________________
ISABELA C. FONSECA-GREER
Date: April 28, 2023
________________________________________
NICOLÁS R. FONSECA
Date: April 28, 2023
APPROVAL AND ACKNOWLEDGMENT PAGE
APPROVED AS TO FORM:
________________________________________
HOWARD QUINN, ESQ. Calderwood & Harkness LLP 350 South Grand Avenue, Suite 4800 Los Angeles, California 90071 Counsel for Petitioner
Date: April 28, 2023
________________________________________
DAMIAN R. ORTEGA, ESQ. Brennan, Ortega & Saldívar LLP 1900 Avenue of the Stars, Suite 2100 Los Angeles, California 90067 Counsel for Contestants
Date: April 28, 2023
ACKNOWLEDGED:
________________________________________
GERALD WHITMORE Principal Officer Ashford Fiduciary Services Inc. 600 Wilshire Boulevard, Suite 1450 Los Angeles, California 90017 Neutral Administrator
Date: April 28, 2023
EXHIBIT A
IDENTIFIED ESTATE ASSETS
Schedule of Estate Assets Subject to Administration by the Neutral Administrator During the Standstill Period
The following schedule sets forth the Estate assets identified as of the Effective Date that are subject to the administration and oversight of the Neutral Administrator during the Standstill Period. This schedule is based on information available to the Parties as of the date hereof and is subject to revision as additional information becomes available.
Total Estimated Probate Estate (Petitioner's Estimate): $71,112,000
Total Estimated Probate Estate (Contestants' Estimate): $68,750,000
Note Regarding Non-Probate Assets: Life insurance proceeds from Meridian Mutual Life Insurance Co. (Policy No. GH-TL-2019-05582, face amount $3,000,000) and Commonwealth Fidelity Assurance Corp. (Policy No. GH-WL-2014-01247, face amount $2,000,000) are non-probate assets with designated beneficiaries and are not included in the Estate for purposes of this Agreement. Such proceeds are not subject to administration by the Neutral Administrator hereunder. The characterization and disposition of such proceeds are subject to Petitioner's Petition for Preliminary Distribution of Non-Probate Assets (filed January 18, 2023), which is preserved and tolled in accordance with Article II and Exhibit B.
Note Regarding Valuations: The values set forth in this Exhibit A are preliminary estimates based on information available to the Parties as of the Effective Date and do not constitute agreed-upon, stipulated, or adjudicated values. The Parties expressly reserve all rights to dispute the valuation of any Estate asset in the Proceeding or in any Settlement Discussion. Petitioner's valuations are based on the preliminary findings of Pinnacle West Appraisal Group LLC (Dr. Sandra Fujimoto, ASA, CVA), retained by Petitioner's Counsel. Contestants have retained Hargrove & Linden Appraisals Inc. (Morton Linden, CFA, ASA) for independent valuation of Estate assets, and Contestants' valuation work is ongoing as of the Effective Date. The discrepancy between Petitioner's and Contestants' aggregate estate valuations reflects, among other things, differing methodologies and assumptions regarding the valuation of the Decedent's interests in Lumiére Canyon Studios LLC and Pacific Rim Narrative Partners LLC, including the application of minority interest and marketability discounts.
EXHIBIT B
PENDING CLAIMS
Schedule of Pending Claims Asserted in the Proceeding, All of Which Are Preserved and Tolled During the Standstill Period
The following schedule identifies all pending claims, petitions, objections, and other matters asserted in the Proceeding as of the Effective Date. All such claims are expressly preserved and tolled during the Standstill Period in accordance with Article II of this Agreement. No claim, defense, or right of any Party with respect to any of the matters identified below is waived, released, or prejudiced by entry into this Agreement.
1. Petitioner's Petition for Letters of Administration
Filed: October 5, 2022. Marguerite D. Fonseca, the surviving spouse of the Decedent, seeks appointment as administrator of the Estate pursuant to California Probate Code Section 8461 and related provisions. Petitioner asserts priority of appointment as the surviving spouse of the Decedent and contends that she is the appropriate person to serve as administrator of the Estate. The petition identifies the Decedent's heirs at law and provides a preliminary estimate of Estate assets.
2. Contestants' Initial Objection to Petition for Letters of Administration
Filed: November 14, 2022. Rafael T. Fonseca, Isabela C. Fonseca-Greer, and Nicolás R. Fonseca object to the appointment of Marguerite D. Fonseca as administrator of the Estate. The objection challenges Ms. Fonseca's fitness to serve as administrator, disputes the community property characterization of certain Estate assets (including, specifically, the Decedent's interests in Lumiére Canyon Studios LLC and Pacific Rim Narrative Partners LLC), and asserts that the appointment of a neutral third-party administrator would better serve the interests of the Estate and its beneficiaries.
3. Contestants' Amended Objection
Filed: January 9, 2023. The amended objection supplements the initial objection by adding a claim regarding the existence and enforceability of a premarital agreement allegedly executed by Teodoro R. Fonseca and Marguerite D. Fonseca on May 30, 2008, prior to their marriage on August 15, 2008. Contestants assert that the premarital agreement provides that all media-related assets, including the Decedent's interests in Lumiére Canyon Studios LLC, Pacific Rim Narrative Partners LLC, and the intellectual property portfolio, constitute the Decedent's separate property and are not subject to community property division. Contestants contend that the premarital agreement substantially alters the distribution of the Estate and affects the appropriate appointment of an administrator. Petitioner has not conceded the existence, validity, or enforceability of the alleged premarital agreement.
4. Isabela C. Fonseca-Greer's Individual Claim — Promissory Note
Asserted in connection with the Contestants' filings. Isabela C. Fonseca-Greer asserts an individual creditor's claim against the Estate in the amount of One Million Two Hundred Thousand Dollars ($1,200,000) in principal, plus accrued interest at the rate of three and one-half percent (3.5%) per annum from January 15, 2020, to the date of payment (total claimed amount: approximately One Million Three Hundred Ten Thousand Four Hundred Sixty Dollars ($1,310,460) as of the Effective Date). The claim is based on an alleged promissory note dated January 15, 2020, executed by the Decedent in favor of Amber Light Documentary Films LLC, a California limited liability company (California Secretary of State Filing No. 201912360185), of which Ms. Fonseca-Greer is the sole managing member and assignee of the note. Ms. Fonseca-Greer contends that the funds were advanced by Amber Light Documentary Films LLC to the Decedent for the development of a documentary film project and that the Decedent failed to repay the obligation prior to his death. Petitioner disputes the validity and enforceability of the alleged promissory note and reserves all defenses thereto.
5. Nicolás R. Fonseca's Individual Claim — Educational Expense Reimbursement
Asserted in connection with the Contestants' filings. Nicolás R. Fonseca asserts an individual claim against the Estate in the amount of Three Hundred Eighty-Seven Thousand Five Hundred Dollars ($387,500) for educational expense reimbursement. The claim is based on an alleged oral promise made by the Decedent to Nicolás R. Fonseca to reimburse all educational expenses incurred by Nicolás R. Fonseca in connection with his graduate studies at Stanford University, including tuition, fees, housing, and living expenses, for the academic years 2019-2020 through 2022-2023. Mr. Fonseca contends that the Decedent made partial payments during his lifetime but failed to fully satisfy his promise prior to his death. Petitioner disputes the existence and enforceability of the alleged oral promise and reserves all defenses thereto, including but not limited to the statute of frauds.
6. Petitioner's Petition for Preliminary Distribution of Non-Probate Assets
Filed: January 18, 2023. Marguerite D. Fonseca seeks a court order confirming that life insurance proceeds from Meridian Mutual Life Insurance Co. (Policy No. GH-TL-2019-05582, face amount $3,000,000) and Commonwealth Fidelity Assurance Corp. (Policy No. GH-WL-2014-01247, face amount $2,000,000) are non-probate assets payable directly to Petitioner as the named beneficiary under such policies, and that such proceeds are not subject to probate administration or claims by the Contestants. Contestants have not conceded that Petitioner is the sole designated beneficiary of all life insurance policies and reserve all rights to challenge the beneficiary designations.
The foregoing schedule is intended to be comprehensive but may not identify every claim, defense, or issue that may arise in the Proceeding. The omission of any claim, defense, or issue from this schedule shall not be construed as a waiver or release thereof. All claims, defenses, rights, and remedies of the Parties, whether or not identified herein, are expressly preserved and reserved.
[End of Settlement Standstill Agreement]
No. | Asset | Description | Estimated Value
1 | Beverly Hills Residence | 1847 Coldwater Canyon Drive, Beverly Hills, CA 90210; single-family residence, approximately 7,200 sq. ft., on 1.2-acre lot | $8,450,000
2 | Malibu Beach House | 27100 Pacific Coast Highway, Malibu, CA 90265; oceanfront residence, approximately 3,800 sq. ft. | $6,200,000
3 | Lumiére Canyon Studios LLC (50% interest) | Decedent's 50% membership interest in Lumiére Canyon Studios LLC, a California limited liability company; CA SOS Filing No. 200906410337 | $15,800,000
4 | Pacific Rim Narrative Partners LLC (35% interest) | Decedent's 35% membership interest in Pacific Rim Narrative Partners LLC, a California limited liability company; CA SOS Filing No. 201518720492 | $27,475,000
5 | Veltara Basin Bank Brokerage Account | Brokerage account at Veltara Basin Bank, N.A., account ending -4782; diversified portfolio of equities, fixed income, and alternative investments | $5,120,000
6 | Veltara Basin Bank Checking Account | Checking account at Veltara Basin Bank, N.A., account ending -3091 | $342,000
7 | Veltara Basin Bank Money Market Account | Money market account at Veltara Basin Bank, N.A., account ending -6155 | $1,875,000
8 | Intellectual Property Portfolio | Royalties and residuals associated with 14 feature films and 6 television series created, produced, or co-produced by the Decedent | $4,600,000 (NPV)
9 | Personal Property | Art collection, vehicles (including 2021 Porsche Taycan, 2019 Range Rover Autobiography, and 1967 Ford Mustang Shelby GT500), furnishings, jewelry, and other personal effects | $1,250,000

SETTLEMENT STANDSTILL AGREEMENT

IN THE MATTER OF THE ESTATE OF TEODORO R. FONSECA, DECEASED

SETTLEMENT STANDSTILL AGREEMENT

RECITALS

SIGNATURE PAGE TO SETTLEMENT STANDSTILL AGREEMENT

IN RE ESTATE OF TEODORO R. FONSECA, DECEASED

PETITIONER:

MARGUERITE D. FONSECA

CONTESTANTS:

RAFAEL T. FONSECA

ISABELA C. FONSECA-GREER

NICOLÁS R. FONSECA

APPROVAL AND ACKNOWLEDGMENT PAGE

APPROVED AS TO FORM:

ACKNOWLEDGED:

EXHIBIT A

IDENTIFIED ESTATE ASSETS

EXHIBIT B

PENDING CLAIMS

Record

Parties

Dates

Amounts