SCOPE OF WORK The problem to solve: General category of items to appraise: Ownership interest: Effective date of valuation:

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Emerald Houston
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1 SCOPE OF WORK The problem to solve: The appraiser was asked to examine a diamond ring from images and information provided by the client, and to provide a Retail Replacement Value appraisal. General category of items to appraise: Jewelry Ownership interest: The question of title was not an issue. As such, the appraiser did not do a title search. Effective date of valuation: May 10, 2011 Intended Use of the appraisal: Resale Intended user(s) of Appraisal: This appraisal may be used and relied upon by the client and a designated insurance company/agent/broker/underwriter/adjustor. Any other user is considered an unintended user. Type of value: Retail Replacement Value. Retail Replacement Value is defined as the highest value, usually for insurance purposes, defined as the highest amount in terms of US dollars that would be required to replace a property with another of similar age, quality, origin, appearance, provenance and condition within a reasonable length of time in an appropriate and relevant market. When applicable, sales and or import tax, commissions and premiums are included in this amount. Source for Definition of Value: American Appraiser s Association, 2010 Approach to value: has employed the market comparison approach to arrive at the appraised Retail Replacement Value. The income and cost approach are not applicable to this particular appraisal. General assignment conditions: The appraiser was allowed adequate time to research the article listed herein. The appraiser was given documentation for the jewelry item listed Specific Assignment Conditions (Extraordinary Assumptions): This report is limited to the information provided by the client. The appraiser was unable to examine the items to be appraised and therefore had to rely on information provided by the client. Information provided by the client is assumed to be true and correct. The appraiser assumes the items described and pictured herein are the pieces which are the subject of this appraisal and covered under the client s insurance policy. The appraiser assumes that these articles are not now nor will ever be substituted with other articles by the client in the event of a loss. Natural gemstones are processed from the time they are extracted from the earth by one or more traditionally accepted methods. Therefore, unless otherwise stated, all colored stones are presumed to have been subjected to a stable and possibly undetectable color/clarity enhancement process. Value conclusions are based on these universally practiced and accepted processes.

2 SCOPE OF WORK, cont. All pearls are assumed to be cultured or farmed unless accompanied by documentation supporting a natural origin. Marks on objects (trademarks, signatures, maker s marks, assay marks or serial numbers) may affect the value of a piece. For the purpose of this appraisal, the appraiser assumes that all markings are authentic, unless otherwise indicated. Appraisers are not authenticators. As such, in certain cases the appraiser may recommend authentication of specific marks, age or authorship. Authentication of this nature is not the responsibility of the appraiser. The appraiser assumes the client retains full title to works. The appraiser assumes these works were previously traded in an appropriate market without any unusual market stimuli affecting its sale or transactions. Specific Assignment Conditions (Limiting Conditions): This report is limited to the information provided by the client. The appraiser did not examine the items in person or perform laboratory tests on any item of jewelry listed herein. The appraisal is limited by what appears on the surface. The appraiser did not examine or test the workings of clocks for accuracy and precision. The appraiser did not test any metals for the silver/gold content. The appraiser relied on the validity /authenticity of the markings. The appraiser did not remove any stones from their mounts. The weight, grade, color and clarity may be limited by the in mount examination. As such, this appraisal is limited by what appears within the mount. The appraiser may be unable to ascertain the origin of pearls due to the limitations of portable equipment. As such, in some cases, expert analysis and X-ray procedures may be recommended. Determination of pearl origin is not the responsibility of the appraiser. When examining diamonds and colored stones, every reasonable effort has been made to determine the existence of a fracture filling, clarity, or color enhancement process. However, no binding representation can be made in all circumstances as to the existence or nonexistence of such process. Enhancement procedures are often undetectable through the use of a standard portable laboratory. Detection of enhancements is limited by the gemological equipment used. The appraiser is not a conservator or jewelry repair technician. As such, they did not prepare a condition report. This report is limited by the appraiser s visual inspection. No other condition report was supplied. Specific Assignment Conditions (Hypothetical Conditions): The appraiser was unable to examine the items in person. Information and images provided in this report is limited to that provided by the client. All information and documentation provided by the client is assumed to be true and correct. Method of Examination: The estimate of value of the property described in this report has been determined on the basis of the following procedures: Identification an essential and initial step in the appraisal of each item as to authenticity, origin, style, materials, period, provenance, when available Qualitative assessment after identification of the property has been completed, an assessment is made of quality of design, materials and workmanship, rarity, general attractiveness, suitability

3 SCOPE OF WORK, cont. In determining Retail Replacement Value, all relevant factors have been considered and employed by the appraiser. was provided with images, a laboratory certificate and previous appraisal for the item. The item in this appraisal was evaluated using the accepted standards of the jewelry industry and those of the Gemological Institute of America. The quality grade of any gemstone is restricted by various types of mountings, setting, and lighting conditions. This quality grade of any gem may differ if it is removed from a mounting and/or examined under a different light source. However, in order to standardize the examination environment, the jewelry industry has prescribed the use of special lighting. The prescribed light sources may not have been available in this examination. This includes both a diamondlite (north daylight equivalent) and a fiber optic probe (monochromatic light source). Additionally, when appropriate, a long and short wave ultraviolet (UV) fluorescence was used to aid in the authentication of diamonds and colored stones. Metal quality of finished jewelry cannot be conclusively established by the gemologist appraiser. Common industry practice suggests that metals be identified by acid testing, test needles and rub stones as well as confirming the authenticity of identification marks. The designer and/or manufacturer of a given piece of jewelry may be identified by extensive research and the authentication of trademarks, hallmarks and maker s marks. All measurements were provided by the client. Measurements are given to the nearest inch, millimeter, pennyweight (dwt) or one-hundredth of a carat. Unless otherwise stated, the weights of all mounted gemstones are estimated by using accepted gemological formulas, and should be within the accepted limitations of that method. Even when state-of-the-art gemological equipment was used, the actual weight of gemstones when unmounted may be different from the estimated weight by formula. No jewelry condition report was supplied. The gemologist appraiser assigned each piece a general condition comment: excellent, very good, good, fair, poor and qualification where appropriate. Condition refers to what is considered generally acceptable, with ordinary wear for its type, unless otherwise noted. Market Examined: The market comparison approach analyzes sales of comparable items at major international and regional auctions, private and public sales, shows and exhibitions, as well as prevailing prices at retail shops and galleries where the item may be normally traded. For this particular appraisal, the appraiser primarily examined the international and domestic jewelry retail and auction markets. Adjustments are then made for each article which consider age, condition, rarity, artistic merit, technical workmanship, current trends and availability of an item as compared to recent sales. When the item has no close comparables available, the appraiser chose objects which, in their opinion, bore as close comparison as possible to the one under consideration. Method of Research: Research was conducted in the offices of The office is equipped with a library of jewelry books, literature and auction catalogs. Additional research was conducted on the internet using standard search engines as well as pricing databases to

4 SCOPE OF WORK, cont. which subscribes. Appropriate galleries and auction houses were contacted for information when necessary. Specific sources and internet sites are listed below: M.S. Rau Antiques 1 st Dibs Tiffany & Co. Lang Antiques Type of Appraisal: This report is considered to be a current summary appraisal report according to the rules of USPAP (Uniform Standard of Professional Appraisal Practice). Comparable sales history is not included in the report. However, comparable sale information is kept in the client s file in the offices of and is available for the client or the insurance company (with the client s permission) to examine upon request. This information will be kept by for a minimal period of five (5) years after the date of issue or two (2) years after final disposition of any judicial proceedings involving the appraiser, whichever period expires last. USPAP Compliancy: The report was written by whose USPAP qualification is valid until This appraisal report follows the guidelines of USPAP in that the report provides all of the necessary information/analysis to satisfy the current report development requirements as defined in the Standard 7 (Personal Property, Development) and the writing requirements of a Summary Appraisal as defined in Standard 8 (Personal Property, Reporting) Authenticity: Although the appraiser is not an authenticator, the appraiser had no reason to doubt the authenticity of the items, except as noted and appraised accordingly. Photography: Digital images were supplied by the client. No modifications or alternations were made to the appraiser s photographs beyond acceptable lighting and cropping adjustments.

5 EXPLANATION OF FINE JEWELRY, DEFINITION OF TERMS DIAMONDS AND COLORED STONES All articles of fine jewelry with major stones are examined by a Graduate Gemologist and will be described and identified accordingly. Articles of vintage and/or collectible jewelry are examined and may be valued as antiques or collectible items rather than for their value in materials. Diamond and colored stones are valued based on the following criteria when significant: CARAT Diamonds and other gemstones are weighed in metric carats: one carat is equal to 0.2 grams. A carat is divided into 100 points. For example, a 50 point diamond weighs 0.50 carats. COLOR Diamonds are assigned a color grade based upon its degree of body color. The Gemological Institute of America s color grading scale for diamonds is the industry standard. Beginning with the letter D, representing the absence of color, the scale continues with increasing presence of color to the letter Z, or near-colorless. Each letter grade has a clearly defined range of color appearance. In most cases, diamonds are graded using a standardized light source equivalent to daylight. Many of these color distinctions are subtle, but slight differences can affect price. D E F G H I J K L M N O P Q R S T U V X Y Z Z+ COLORLESS NEAR COLORLESS FAINT COLOR VERY LIGHT COLOR LIGHT COLOR FANCY COLOR CLARITY Because diamonds formed deep within the earth, under extreme heat and pressure, they often contain unique characteristics, either internal (inclusions) or external (blemishes). Diamond clarity refers to the absence of these inclusions and blemishes. Diamonds without these characteristics are rare, and rarity affects a diamond s value. Using the GIA International Diamond Grading System, diamonds are assigned a clarity grade that ranges from flawless (FL) to diamonds with obvious inclusions (I3). In determining a clarity grade, the GIA system considers the size, nature, position, color or relief, and quantity of clarity characteristics visible under 10x magnification. FL IF VVS1 VVS2 VS1 VS2 SI1 SI2 I1 I2 I3 FLAWLESS INTERNALLY FLAWLESS VERY VERY SLIGHTLY INCLUDED VERY SLIGHTLY INCLUDED SLIGHTLY INCLUDED IMPERFECT. EYE VISIBLE INCLUSIONS CUT Cut refers both to the shape of a diamond and the precise arrangement of its facets. The most popular cuts are circular (or round brilliant), pear, marquise, emerald, oval, princess, and heart.

6 VALUATION 1 DIAMOND RING Set with an emerald-cut diamond, weighing approximately 4.03 carats, flanked on either side by tapered baguette-cut diamonds, mounted in platinum With report dated March 26, 2007 from the Gemological Institute of America stating J color, SI1 clarity (copy attached) 2 tapered baguette-cut diamonds, weighing approximately 0.37 carat total Gross weight approximately 4.68 dwt Very good condition $60,000 TOTAL RETAIL REPLACEMENT VALUE $60,000

USPAP DOES NOT DICTATE FORM, FORMAT OR STYLE

USPAP DOES NOT DICTATE FORM, FORMAT OR STYLE 2008 RETAIL REPLACEMENT VALUE INSURANCE SUMMARY APPRAISAL REPORT PAGE 1 OF 34 APPRAISERS CERTIFICATION APPRAISAL COMPANY NAME is a registered firm of appraisers qualified to appraise residential contents,