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HomeMy WebLinkAbout11/1/2000 - STAFF REPORTS (5) DATE: November 1, 2000 TO: City Council FROM: Director of Finance &Treasurer RE: Settlement Agreement re Assessment District No. 155 Litigation Recommendation: It is recommended that the City Council approve the settlement agreement with the City and Stone& Youngberg as plaintiffs and Brown & Diven as defendants in the Assessment District No. 155 litigation. Background: AD No. 155 was formed in July, 1989 to pay for the street, roads, utilities and other infrastructure improvements in the area centered on Ramon Road and Gene Autry Trail. About half of the district was on unimproved Indian owned land which was leased. The leaseholders were not able to develop the land, and the leases were eventually cancelled. However, the bond owners expected to be paid, and threatened legal action. The City and issue's underwriter, Stone & Youngberg (S&Y), refinanced the debt and took responsibility for repayment. When the issue's bond counsel, Brown & Diven, declined to participate in the cost of the refinancing, the City and S&Y initiated legal action against them. The Settlement Agreement is the result of eighteen months of negotiations and the major points are: 1.) The City will receive a $250,000 payment from Brown & Diven within two weeks of the approval of this agreement. 2.) Brown & Diven will pursue, at their cost, legal action against their insurance carrier. 3.) Any settlement received from the insurance carrier will be split according to the formula described in Section 8 of the agreement. For purposes of illustration, Exhibit C show the split between the City, S&Y, and Brown & Diven if the proceeds are $1 million. If the Settlement Agreement is approved,the City will receive at least$250,000 and possibly as much as $500,000. The legal costs of pursuing the AD 155 litigation will be ended. rh A Minute Order approving the Settlement Agreement is attached. Thomas M. Kanarr Director of Finance & Treasurer Approved David H. Ready City Manager Attachments: Settlement Agreement Minute Order 50A Nov-01-00 11:13am From-ROTAN d TUCKER LLP, + T-367 P.02/19 F-627 U 4,L� SETTLEMENT AGREEMENT AND STIPULATION TO JUDGMENT ✓W- 2 Plaintiffs CITY OF PALM SPRINGS, a California municipality ("City") and STONE & r f Zy YOUNGBERG, LLC ("S&Y"), on the one hand (collectively referred to herein as "Plaintiffs") and Defendants BROWN & DIVEN, a law partnership or professional corporation ("B&D") F. MACKENZIE 13ROWN ("Brown"), WARREN B. DIVEN ("Diven'), on the other hand (collectively herein referred to as"Defendants")hereby stipulate and agree as follows: RECITALS A. In or around July, 1989, the City formed Assessment District No. 155 ("AD 155'). Pursuant to AD 155's formation, the City issued 1915 Act Improvement Bonds ("Bonds") to fund certain infrastructure improvements (the "Improvements") benefiting approximately 857 acres of undeveloped land within the boundaries of AD 155, This improved area also included approximately 80 acres owned by members of the Agua Caliente Indian Tribe. The City issued$7,638,119.64 of the Bonds. B. S&Y acted as underwriter for the issuance and sale of the Bonds. B&D acted as bond counsel to the City. Additionally,pursuant to S&Y's underwriting agreement with the City and pursuant to B&D's engagement as bond counsel to the City,B&D rendered a"Supplemental Legal Opinion" to S&Y relating to, among other things, the adequacy of disclosure in the Official Statement ('OS'), commonly referred to as a "10(b)5 Opinion." Also pursuant to S&Y's underwriting agreement with the City and B&D's engagement by the City, B&D issued S&Y a "Reliance Letter" wherein it advised S&Y that S&Y could rely on B&D's opinion attesting to the validity of the proceedings and issuance of the Bonds in the same manner as if the opinion were addressed to S&Y. C. Part of B&D's charge as bond counsel was to conduct the proceedings for AD 155 and to insure on behalf of the City that there was full and accurate disclosure in the OS concerning risks inherent in investing in AD 155 bonds. Similarly,Defendants' Reliance Letter and 10(b)(5) opinion to S&Y was intended to assure S&Y as to the validity of the AD 155 proceedings and that there was full and accurate disclosure in the OS concerning the formation of the assessment district, issuance of the AD 155 bonds, and the risks inherent in investing in the AD 155 bonds. D. As of March, 1998, $5,590,000 of the Bonds remained outstanding. As structured, principal and interest due on the Bonds was to be paid through assessments imposed upon certain fee properties, contributions from the City's Airport Enterprise Fund and assessments imposed upon certain possessory interests in leascholds of Indian land within AD 155 which received the benefits of the Improvements. E. Pursuant to federal law, assessment liens may not be maintained against the fee interest in Indian-owned lands. However, where an Indian allottee leases Indian land to a third person, The possessory interest in the leasehold can serve as security for assessments based upon the benefit conferred by the improvements upon the Indian land. Thus, when an assessment 31VOWB+0115 119961 05 411Al/W Nov-01-00 11:14am From-RUTAN L TUCKER LLP. + T-367 P 03/18 F-827 district is formed which includes leaseholds of Indian-owned land, the sole security for the assessment is the lessees' possessory interests. In the event of an assessment payment default, only the leasehold can be foreclosed,the underlying fee cannot. F. Approximately 18% of the original assessments were supposed to be secured by a lien on The possessory interest in a lease between an Indian allottee and the Wessman Development Company. An additional 31% of the original assessments were supposed to be secured by a lien on the possessory interest in a lease between another Indian allottee and Knutson Capital Investment,Inc. Consequently,The assessment on possessory interests in Indian leases represented almost 50%of the total security for the AD 155 bond issuance. G. Plaintiffs alleged that B&D failed to follow statutory requirements for levying assessments on possessory interests in the leaseholds of Indian lands, failed to take adequate and necessary precautions to coordinate the City's obligation to foreclose upon this security interest with The encumbrancer provisions in the leases, and failed to take steps to preserve the security interest in the event of a default on the Indian allottee leases. Thus, unbeknownst to The City or S&Y, as alleged by bondholders, the OS failed to disclose problems presented by utilizing leaseholds on Indian lands as security for assessment district debt. Specifically, as alleged by the bondholders, the OS failed to discuss The issue of Indian (lessor) sovereign immunity, and that the liens on possessory interests constituting security for The assessments could be eliminated. Equally importantly, as the bondholders contended, the lease termination procedures were not properly structured and were not properly disclosed in the OS. For example, nowhere in the OS is it disclosed that the leases could be unilaterally terminated if the lessee did not make installment payments. Plaintiffs also contended that B&D did not advise the City or S&Y that the OS did not disclose that lease termination on default will invariably precede the City's deadline for commencing foreclosure. Similarly, Plaintiff's alleged that B&D did not advise the City or S&Y that the OS did not articulate that the City is under no legal obligation to foreclose pending depletion of the Reserve Fund, thus rendering the foreclosure remedy identified in the OS futile. Lastly, Plaintiffs alleged that B&D did not advise The City or S&Y that the OS also failed to explain that in the event of lease termination, the lien on the possessory interest terminates, future lessees are not obligated to pay assessments, and as a consequence, bondholders would lose security for approximately 50% of The principal amount of the unpaid assessments. H. Subsequent to the creation of AD 155, the Lessees on the Indian leases went into default, and the leases were terminated effectively terminating the liens on the possessory interests thereby adversely affecting the City's ability to pay principal and interest on the Bonds and,consequently,the market value of The Bonds. I. As a result of this default and ensuing adverse consequences, Allstate Insurance Company ("Allstate"), which had purchased a substantial portion of the Bonds on original issuance, as a principal purchaser and bondholder of the Bonds, asserted certain claims related to the creation and administration of AD 155, the issuance of the Bands and disclosure in the OS. Specifically, Allstate contended that the OS did not fully disclose the risks presented by securing assessments with possessory or leasehold interests in Indian lands, including, among others, that the leases can be terminated if the lessee does not pay assessments, that lease termination may precede the City's deadline for commencing foreclosure, Thus making the mandatory obligation 34s,oWW1is 119161 05 411MIM -2- Nov-01-00 11:15am From-RUTAN A TUCKER LLP. + T-367 P.04/19 F-827 meaningless, and that in the event of lease termination, future lessees are not obligated to pay assessments and bondholders will lose security for approximately 50% of the principal amount of the unpaid assessments. In summary, Allstate contended that the OS was materially misleading as to the risks the bondholders undertook upon investing in AD 155 related securities and that the bond issuance was structured improperly. J. As a result of B&D's alleged misfeasance, the City contended it faced general fund liability, a peril B&D expressly assured against in the Bond indenture, and in legal opinions coincident with the creation of AD 155. Further, the City and S&Y contended that B&D's negligence breached its 10(b)(5) opinion that the OS contained no material misrepresentations or omissions. K. Ultimately, in response to the imminent filing of a lawsuit by Allstate, the City entered into a Settlement Agreement (attached hereto and incorporated herein by reference as Exhibit A) with Allstate in March of 1998. Pursuant to the Settlement Agreement, the City agreed to restructure the AD 155 debt. By virtue of entering into this Settlement Agreement,the City suffered damages, including but not &ruited to, the acquisition of approximately$1,030,000 of non-recourse debt and expending in excess of$150,000 as a cost of issuance of new bonds for purposes of removing the AD 155 Bonds from the market. In connection with the settlement, S&Y agreed to reimburse the City for a portion of its expenses. Allstate also agreed that it would not bring any claims against S&Y in connection with the OS if S&Y purchased its unsecured AD 155 bonds over a period of time. S&Y has incurred damages by payments to the City of $36,000, and has incurred (or will do so in the future) additional damages of approximately $1,030,000 from a purchase of unsecured AD 155 bonds from Allstate. All totaled, therefore, as of the date of the restructuring of the AD 155 Bonds pursuant to the settlement with Allstate,Plaintiffs were damaged in the amount of approximately$2.2 million. L. In or around February of 1999, Plaintiffs filed suit against Defendants (the "Litigation'). A true and correct copy of the Complaint which initiated this Litigation is attached hereto as Exhibit "A"- Incident to the Litigation, Plaintiffs sought in excess of$2.2 million and their attorneys fees related to the Litigation. M. In connection with Plaintiffs assertion of claims against Defendants, Defendants alerted Their malpractice insurance carrier, Golden Eagle Insurance Company ("GEIC"). Specifically, on October 11, 1996, Defendants tendered defense of any potential claim to GEIC. On or about August 14, 1997, GEIC denied coverage and Defendants made a request for reconsideration. On or about October 17, 1997, GEIC issued a re-denial of Defendants tender. On or about May 10, 1999, after Plaintiffs filed litigation regarding AD 155, Defendants re- tendered the claim to GEIC. On or about July 21, 1999, GEIC denied the re-tender. GEIC was placed into a conservatorship pursuant to Insurance Commissioner of the State of California v. Golden Eagle Insurance Company, San Francisco County Superior Court Case No. 984502. Consequently, on or about August 20, 1999, Defendants filed a proceeding within The conservatorship action seeking coverage for the Litigation under the GEIC issued insurance policy (the"Insurance Proceeding"). N. Prior and subsequent to the filing of the Litigation Plaintiffs and Defendants engaged in intensive efforts to settle. These efforts included multiple and extended negotiations 34MMs"us 1196e1_05 a1NtIW -3- Nov-01-00 11:16am From-RUTAN 6 TUCKER LLP, + T-36T P 05/10 F-627 amongst lawyers and no fewer than three (3) face-to-face meetings amongst the principals, including a full day mediation conducted by retired Supreme Court Justice Edward Panelli under The auspices of JAMS/ENDISPUTE. The mediation before Justice Panelli occurred on February 23, 2000 and eventually resulted in a series of offers and counter offers culminating in the settlement reflected herein which was ultimately negotiated in a face-to-face meeting amongst the parties which occurred on September 13,2000. WHEREFORE, the parties hereto agree as follows: 1. Effective Date. The Effective Date of this Settlement Agreement shall be Oetebev--November 2000(the"Effective Date"), 2. Stipulation to Judgment. The parties stipulate and agree that judgment in the Litigation may be entered in favor of Plaintiffs and against Defendants in the amount of $1,000,000. Specifically, the parties stipulate and agree to entry of the judgment attached hereto as Exhibit`B"(the"Judgment'). 3. Covenant not to Execute. Except as provided for herein, Plaintiffs covenant and agree not to execute on the Judgment against any asset or property of Defendants. Plaintiffs further covenant and agree not to file the Judgment for recordation at any recorder's office or in the office of any secretary of stare, so that it shall not appear as a lien of record against any real or personal property interest of Defendants. 4. Assignment of Claims Against Defendants Insurer. Defendants hereby assign and transfer to Plaintiffs all right, title and interest in any claims and/or causes of action Defendants may now have or hereafter acquire against GEIC, its successor, or any other liability insurer which claims or causes of action arise out of or are related to the Litigation and/or the Insurance Proceeding, including but not limited to claims based upon or related to GEIC's failure and refusal to settle with Plaintiffs, GEIC's failure and refusal to defend and/or indemnify Defendants regarding all claims and/or causes of action asserted in the Litigation, including the amounts set forth in the Judgment, as well as any and all claims or causes of action which are or shall be asserted as part of the Insurance Proceeding, All Claims assigned herein shall hereafter be collected referred to as the"Assigned Claims". 5, Plaintiffs Retention of DFI&S. The law firm of Daniels, Fine, Israel & Schoubuch, LLP (hereafter "DFI&S") is currently counsel of record in the Insurance Proceeding relating to Defendants' claim that GEIC wrongfully refused to provide a defense to Defendants in the Litigation. DFI&S hereby agrees to represent Plaintiffs, as Defendants' assignees, in continuing to prosecute this pending claim seeking recovery of all costs and expenses relating to the defense of the Litigation. DFI&S further agrees to take all steps necessary to prosecute, on behalf of Plaintiffs as assigu=s, all claims and/or causes of action for indemnification under Defendants' insurance policy with GEIC, including the recovery of amounts set forth in the Judgment against Defendants. DFI&S and Defendants acknowledge that Plaintiffs have assumed those rights previously held by Defendants under the GEIC insurance policy at-issue in the Insurance Proceeding and that Plaintiffs are now entitled to any monetary recovery associated with GEIC's failure to defend and/or indemnify Defendants with respect to the Lhigarionjubjecr to parsleraph 8. DFI&S agrees to prosecute such and any other Assigned 34EMJgOp 115 119Cc1 u5 sl IMI/O9 -4- Nov-01-00 11:17am From-RUTAN & TUCKER LLP, + T-367 P 06/18 F-827 Claims on Plaintiffs' behalf as part of the Insurance Proceeding and to otherwise undertake whatever legal actions are necessary to obtain at final adjudication of GFIC's or any other insurers liability for these Assigned Claims. DFI&S also agrees to undertake all actions reasonably necessary to enforce and collect upon any judgment or other final adjudication concerning the Assigned Claims. All fees, costs and expenses associated with DFI&S' prosecution of, and recovery upon, Assigned Claims shall be home by Defendants jointly and/or severally._-,SHblect tQ the .limitation srLfmh in 5.1 belgw. Plaintiffs shall not under any circumstance be responsible for any such fees, costs and expenses. Moreover, the refusal and/or failure of Defendants to .fulfill the obligation to fund the prosecution of the Assigned Claims shall not excuse DFI&S from its obligation to prosecute the aforementioned Assigned Claims against GEIC or any other insurer to a final adjudication lit the.trial vmt, I2FI&S retains the right-to withdraw as counsel for good cause in toe even( of pq aR➢edl• In the event DFI&S withdraws or is removed as counsel or cannot otherwise proceed as counsel regarding the prosecution of Assigned Claims, Plaintiffs may retain substitute counsel at Defendants expense. All parties consent to DFI&S' representation of Plaintiffs notwithstanding DFI&S' prior representation of Defendants. M RMY5.0blivation to Fund an.Apptal by Plaintiffs. ;n the event either (City or S&Y desires to appeal (other than a crass-aapgy ) a Onpl trial coprt 1114fFmenr Or 1%V flppl gdittdivatlou in jk Laurancc Proceeding. and V&D disagrees witp t{te®eFisj9p to gppeal. P&p sbgll not bLOJjg&4J )uO sgvh ;RPM prnyid&ASA"emQnsiratr_that the party desiring to anngpl noes not have a good faith bglief that tpFh prmFal dg6 p reasonable probability of success. Any disagrecipent as to the good NO of thr party desirinz TQ.aRReal shall be resolved.thrimizil a bittdia arbitration htarigg before a third Party neutral conversant with insurance Mattirs pppolptelt pprSpant to the rples of the ATnerlgan.ArbjtraJl Association. Such arbitration shall be cxpgdited and conducted s*lv based on writteq matfrials (briefs gild dFFl1rati9lt4.and. Qral_ariliMfitt• . In this reward. ipfh grb]UgIltln shall be.ctttlrlYete�as a."law and motlop matter" without gnv live tc4jMQuy.and shall not entitle Fltber side to do t(ilcovgrvr ThS RarS1t 4R11..>QQnsr�te tp igsure_Jhat Such hearing 0 Fompleted jn advance of the time for filin an appeal. The arbitrator shall be required to lsvVe Pii rplipg jr"MFIli_aOJy noon con, cludinglhe bearing, In the events dccisiQu by the arbitrator cannot bF had prior to.lax— radlilK rglatiye IQ an seine!,.PFI&S &ball takv all steps accessary rp preserve The rig4T T9 apt;gl RgndiHR.§Uch decisiop, in the event Rf g deci�ioo ads Tver�e ro the party desiring to apueal, such appeal t11av still continue but R&P 1Pa11 be rellt'P€d Rf thF 4bllgatl98 tp fOudlUb appeal. 6_ Defendants CoveTmT of Cooperation. Defendants covenant and agree to cooperate to the full extent necessary for Plaintiffs to successfully prosecute the Assigned Claims to a final adjudication, including but not limited to testifying in any legal proceeding related thereto, and executing any documentation reasonably required by Plaintiffs to evidence, establish or enforce the Assigned Claims. 7. Payment by Defendants to City. Defendants,jointly and severally, agree to pay City the stun of$250,000 within two (2) weeks of the Effective Date of this Agreement. In the event Defendants fail to timely pay City this settlement sum, City shall have the right to execute an the Judgment up to the amount of$250,000 plus interest at The legal rate until paid. S&Y has assigned to City any right it would otherwise have to any portion of this settlement sum 1190105 01XIM -5- Nov-01-00 11:1Ram From-RUTAN i TUCKER LLP, + T-36T P.07/I9 F-827 in order to facilitate the settlement, subject to paragraph 8. S&Y is not otherwise obligated to make such an assignment. 8. Plaintiffs Covenant to Distribute Proceeds From the Insurance Company. The parties further agree that any monies recovered pursuant to the Insurance Proceeding, or any related action in pursuit of Assigned Claims, shall be divided as follows: (1) all monies up to the first$375,000 shall be divided two-thirds to S&Y and one-third to Defendants; (2) all monies in excess of the first $375,000, up to a total of$750,000, shall be divided one-third to City, one- third to S&Y and one-third to Defendants; (3) all monies in excess of$750,000 shall be divided equally by and between City and S&Y. For demonstrative purposes, attached hereto as Exhibit"C" is a chart showing how such monies would be divided in the event of a $1,000,000 recovery in the Insurance Proceeding. In regard to the prosecution of Assigned Claims, AFT&S' clients are City and S&Y, not Brown, Divert or B&D. City and S&Y alone shall have sole discretion to direct the conduct of the Insurance Proceeding or any related action in pursuit of Assigned Claims. All decisions concerning such proceedings, including whether, and at what amount, to settle shall require the mutual consent of City and S&Y. 9. Authority. Each individual executing this Settlement Agreement on behalf of an entity represents and warrants that he or she is a duly authorized representative of that entity with full power and authority to bind it to each term and condition hereof. 10. Further Acts_ Each of the Parties hereto agrees promptly to execute all other documents and take all other actions reasonably necessary to effectuate all of this Settlement Agreement's terms and conditions. 11. Interpretation or Enforcement: Attorneys' Fees. In the event that any legal action is necessary to enforce or interpret any provision of this Settlement Agreement (or any documentation delivered pursuant thereto or in connection therewith), by way of motion or otherwise, that action will be brought in a court of competent jurisdiction located in the County of Orange, and the Parties to this Settlement Agreement consent to personal jurisdiction and venue in such a court. The prevailing party in any such action shall recover its costs and reasonable attorneys' fees. 12, Successors. This Settlement Agreement shall bind the successors, assigns, heirs and personal representatives of each of the Parties hereto. 13_ Parties Represented. Each party to this Settlement Agreement has been advised and represented by counsel they deem competent in connection with the negotiation and preparation hereof, and each shall be deemed its co-author for purposes of the Settlement Agreement's construction. 14. Integrated Writing. This Settlement Agreement (along with the other documentation specifically called for herein) constitutes the whole and only existing and binding agreement between the Parties hereto on the subject matter hereof, superseding all prior statements and understandings,whether written or oral. Other than the representations expressly stated as such in this Settlement Agreement, there are no warranties, promises or representations 34M:4064-0115 119861 as Al 1101 too -6- NOV-01-00 11:1Gam From-RUTAN 6 TUCKER LLP, + T-367 P.08/19 F-827 of any kind, express or implied, upon which either parry has relied in entering into this Settlement Agreement, or as to the future relations or dealings of the Parties. 15. Represetnatlons and Warranties Regarding Assignment. Defendants represent and warrant that there has been no previous assignment, hypothecation, division, encumbrance, mortgage or other transfer, in whole or in part, of any Assigned Claim except the assignment set forth herein. Defendants moreover represent and warrant that they are aware of no procedural, contractual or other impediment to the assignment or prosecution of the Assigned Claims. Defendants further represent and warrant that there are no liabilities which do or will accrue to Plaintiffs, City and/or S&Y, because of or in connection with the assignment or prosecution of Assigned Claims . For instance, Plaintiffs will not incur any obligation to pay monies (as prevailing parry attorneys fees or for any other reason) to GEIC or any other party as a result of the prosecution of Assigned Claims, even in The event of a Judgment adverse to the insured and in favor of the insurer. Regardless, Defendants B&D, Brown, and Divert will pay any and all costs, fees, expenses and/or damages associated with the Insurance Proceeding and otherwise associated with the prosecution of the Assigned Claims. Defendants shall indemnify Plaintiffs and hold Plaintiffs harmless from any and all loss or damage related to any breach of these representations and warranties. 16. Counterparts. This Settlement Agreement may be executed in one or more counterparts, each of which shall be deemed an original,but all of which together shall constitute one and the same instrument. 17. Amendments. This Settlement Agreement may be modified or amended only by a writing signed by all Parties hereto. 18. No Waiver. The waiver by any patty hereto of any right, privilege, covenant or condition hereunder will not operate as or indicate a continuing waiver of the same or any other right,privilege, covenant or condition hereunder. 19. Choice of Law. This Settlement Agreement shall be governed by the laws of the State of California applicable to contracts executed and to be wholly performed in that state. 20. Notices and/or Pavments. Any notice required or permitted under this Settlement Agreement and any payment to be made pursuant to this Settlement Agreement shall be considered given or made upon delivery to counsel for the affected party as identified herein below. As to notices, such notice may be delivered personally,via facsimile or by U.S. mail. In The case of payments, delivery shall be via check, in good and sufficient funds payable to the appointed law firm in trust for the party to be paid, and effected via personal or overnight delivery. To CITY: Rum & Tucker, LLP 611 Anton Boulevard, Suite 1400 Costa Mesa,California 92626 Ann: Layne H.Melzer, Esq. 348u].wer-0115 119861.us al lureW -7- Nov-01-00 II:I9am From-RUTAN 6 TUCKER LLP. + T-367 P.09/19 F-827 Facsimile: 714.546.903 5 Telephone: 714,641.5100 With a copy to: 3200 F. Tahquitz Canyon Way Palm Springs, California 92263 Atm: Tom Kanarr Facsimile: 760,323,8320 Telephone: 760.323,8221 To S&Y: Kirkpatrick&Lockhart 100 Pine Street, Suite 3200 San Francisco, California 94111.5218 Attn: R. David Mishel,F-sq. Facsimile: 415.249.1001 Telephone: 415,249,1015 To Defendants: Daniels,Fine,Israel& Schonbuch,LLP 1801 Century Park East, 9`b Floor Las Angeles, California 90067 Attn: Paul Fine,Esq, Facsimile No.: 310,556.2807 Telephone: 310.55 6.7900 Either party may change its address and/or its designated recipient for notice or payment for purposes of this Settlement Agreement by giving notice of such change in accordance herewith. 349tOi O&"j 1S 119161 Q5 Iimlco -8. Nov-01-00 11:20am From-RUTAN G TUCKER LLP, + T-367 P.10/10 F-627 IN WITNESS WHEREOF, the parries hereto have executed this Settlement Agreement as of The date set forth above. Dated: September November 2000 CITY OF PALM SPRINGS, a California municipality By; Its:Mayor Dated:&eptember Noygmhgr_, 2000 STONE &YOUNGBERG, LLC By; Its; Managing Member Dated:Septetttbet NpyyMhc 2000 BROWN & DIVEN, a law partnership or professional By: Its:Managing Partner Dated.September November_, 2000 F.MACKENZIE BROWN By: F. MacKenzie Brown, individually and as a member of B&D Dated: September November 2000 WARREN B. DiVEN By: Warren B. Divert, individually and as a member of B&D Dated:Septert3ber November—, 2000 DANIELS, FINE,ISRAEL& SCHONBUCH, LLP By: Paul Fine Its:Managing Partner 3411014054-0115 119351 05.111011DQ '9'