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97-009 C.G. Uhlenberg & Co. audit of financial statementsMcDONOUGH, HOLLAND & ALLEN A PROFESSIONAL CORPORATION ATTORNEYS STEPHEN L.GOFF Kim Smith, City Clerk City of Cupertino 10300 Torre Avenue Cupertino, CA 95014-3255 555 CAPITOL MALL, 9" FLOOR SACRAMENTO, CALIFORNIA 95814 916% 444-3900 TELECOPIER: 916) 444-8334 January 29, 1997 YUBA CITY OFFICE 422 CENTURY PARK DRIVE, SUITE A P.O. BOX 776 YUBA CITY, CALIFORNIA 9 599 2-07 7 6 (916) 674-9761 TELECOPIER: (916) 671-0990 BAY AREA OFFICE 1999 HARRISON STREET, SUITE 1300 OAKLAND, CALIFORNIA 94612 (SIO) 273-8780 TELECOPIER: (510) 839-9104 Re: City of Cupertino v. Dean Witter Reynolds, et al. Santa Clara County Superior Court Case No. CV746356 Dear Kim: Enclosed is the original Full Release and Settlement Agreement in the above -captioned matter. Please have it executed by the City of Cupertino and return it to me. Very truly yours, teph L. Goff , SLG:fb Enc. FULL RELEASE Alda. SETTLEMENT AGREEMENT 1. This Full Release and Settlement Agreement ("Agreement") is entered into by and between the following parties: THE CITY of CUPERTINO, a California Municipal Corporation ("CITY") and C.G. UHLENBERG & CO., a General Partnership ("UHLENBERG"). _RECIT-Aps AND DEFXNITIOMS z. CITY has. Sued UHLENBERG in an action now -pending in the Superior Court of the State of California for the County of Santa Clara, case number CV 746356. CITY has claimed and alleged, inter alfa, that UHLENBERG negligently audited CITY's financial statements by failing to discover and inform CITY that three of CITY's investments (a mutual fund denominated the Dean Witter U.S.. Government Trust and two Government National Mortgage Association [°GNMA"j certificates) were illegal and/or unsuitable under section 53601 of the California Government Code and/or CITY's written investment policies. UHLENBERG has denied these allegations, and it has also denied causing CITY any damage or losses. 3. As used in this Agreement, the term "LAWSUIT" shall mean the above -referenced action, currently pending in the Superior Court of the State of California for the County of Santa Clara, cage number CV 746356. /J/ FULL RELEASE AND SETTLEMENT AGREEMENT Page 2 City of Cupertino v. C. G. Uhlenberg & Co. 4. , As used in this Agreement, the term "INVESTMENTS" shall mean Lhe mutual fund denominated the Dean Witter U.S. Government Trust, and the two GNMA certificates, mentioned in the Complaint on file in the LAWSUIT. 5. As used in this Agreement, the term "FINANCIAL STATEMENTS" sha11 mean CITY I& financial statements as -of, and for the years ended: June 30, 1990; June 30, 1991; June 30, 1992; June 30, 1993; and June.3Q, 1994. 6. As used in this Agreement, the term "SUBJECT CLAIMS,, shall mean all claims, causes of action, or demands which in any way relate, refer, or pertain to any of the following: the LAWSUIT; the FINANCIAL STATEMENTS; and the INVESTMENTS. 7. The parties to this Agreement desire to fully and finally settle and resolve all disputes related to the SUBJECT CLAIMS. NOW, THEREFORE, for goad and valuable consideration, the parties hereby agree as follows: OETTLEM&NT PAYMENT S. UHLENBERG (through its insurer, CAMICO Mutual Insurance Company) shall pay TWO HUNDRED THOUSAND DOLLARS ANb No CENTS ($200,00o) to CITY by a check made payable to "The City of. Cupertino". Said payment shall be sent to Stephen L. Goff, Esq., Of McDonough, Holland & Allen (CITY's counsel of record). Said payment is expressly conditioned on the full and complete execution of this Agreement by CITY's authorized agent; the FULL RELEASE AND SETTLEMENT AGREEMENT Pa9e.3 City of Cupertino v. C. G. Uhlenberg & Co. forwarding of the original of the fully executed Agreement to either Farley J. Neuman or Jayson T. Javitz, at Jenkins, Goodman & Neuman, Two Embarcadero Center, Suite 1780, San Francisco, CA 94111; and the dismissal of the LAWSUIT with prejudice. Within 15 days of the receipt of the fully executed Agreement mentioned above, as well as the receipt of an endorsed -filed copy of a request for dismissal with prejudice, UHL$NBERG's counsel shall forward to CITY's counsel the above-described settlement draft. RELEASE 9. CITY hereby releases and forever discharges UHLENBERG, including.UHLENHERG's.agents, partners, employees, insurers and affiliated entities, from all claims, demands, actions, and causes of action arising out of, or -in any way connected with, the SUBJECT CLAIMS, INVESTMENTS, FINANCIAL STATEMENTS, and LAWSUIT. 10, This is a full and final release of any and all claims arising out of the matters related to, and embraced by, this Agreement, and CITY expressly agrees, as a further consideration and inducement for this compromise and settlement, that this Agreement and said release shall apply to all unknown and unanticipated.damages, losses, or injuries. CITY hereby expressly waives and relinquishes any rights it may have pursuant to section 1542 of the Civil Code of the State of California, which provides as follows: "A general release does not extend to claims which the creditor docs not know or suspect FULL RELEASE AND SETTLEMENT AGREEMENT Page 4 City of Cupertino v. C. G. Uhlenberg & Co. to exist in his favor at the time of executing the release, which if known by him must have materially affected the settlement with the debtor . " 11. This release is freely and voluntarily entered into, and CITY hereby agrees to enter a dismissal with prejudice of. the LAWSUIT. Each.party to this Agreement shall bear its own costs and attorneys' fees with respect to the LAWSUIT, NO ADM233ION OF LIABIT,ITY 12.. It is understood and agreed that this is a compromise settlement of disputed claims and the consideration for this Agreement and release shall not be deemed or construed as an admission of liability or fault by UHLENBERG. w�►RR.nrrrx 13. CITY hereby affirmatively represents to UHLENBERG that no claim, cause -of action, or demand released pursuant to paragraphs 9 and 10 hereof has been assigned, transferred, alienated, or hypothecated to any pereon or entity, and CITY agrees to indemnify, defend and hold harmless UJHLENBERG from any loss, cost, expense, liability, or damage, including but not limited to -attorneys' tees, resulting from a breach of the representations in this paragraph. REPRESENTATxON By COUNSgL 14. CITY hereby acknowledges and warrants that it has consulted with its own lawyers regarding the Germs of this Agreement; and this Agreement has not been procured by duress, undue influence, fraud, or menace. FULL RELEASE AND SETTLEMENT AGREEMENT Page 5 City of Cupertino v. C. G. Uhlenberg & Co. MISCILLANEOUS 15. Iavalidity. If any provision of this Agreement is held, determined, or -adjudged to be invalid, for any reason, the remainder of the Agreement's terms and provisions shall not be deemed invalid, and shall remain fully enforceable. 16. binding lEffect. This Agreement shall be binding upon the parties and their respective legal representatives, successors -in -interest, and assigns. 17. ParaaraD)-} Headingg. The paragraph and section headings in this Agreement are for purposes of convenience and ease of reference only and shall not be construed to limit or otherwise affect the meaning of any part of this Agreement. 18. Nntire Agreement. This AgreemeiiL constitutes the entire agreement among the parties hereto relating to.the subject matter hereof. All prior or contemporaneous agreements, correspondence, discussions, representations, and understandings of the partiee, whether oral or written, are merged herein and made a part hereof, with the intention of the parties hereto that this Agreement shall serve as the final and complete statement of the Agreement's terms, and the.parties' intent thereon, No amendment, waiver or modification of this Agreement shall be valid unless in writing, signed by an authorized agent of the party to be affected. This Agreement shall be construed and interpreted as a completely integrated agreement, and no evidence shall be admitted to add to, vary, or modify any term(s) or FULL RELEASE AND SETTLEMENT AGREEMENT City of Cupertino v. C. G. Uhlenberg & Co. Page 6 provision(a) of this Agreement; or to interpret the meaning of any terms) or provision(s), regardless of whether such evidence is characterized as parol or extrinsic. 19. Governing Law and J-,risdi.ction. This Agreement shall be governed and construed according to the laws of the State of California. 20. Attorneys Fees. If either party to this Agreement brings an action at law, or in equity, against the other party arising out of, or in connection with, or enforcement of, this Agreement, the prevailing party shall be entitled to recover from the other party the costs of suit incurred, including but not limited to reasonable attorneys' fees. 21. Confidentiality. CITY shall not issue any press release or otherwise invite publicity about this Agreement, or any of the its terms. If CITY becomes required to disclose this Agreement, or any term thereof, it shall do so in a manner that •will not suggest that UHLEi�T'3ERG was at fault and/or liable for any damage or losses alleged in the LAWSUIT. 22. Authority of signatory. CITY warrants and represents that this Agreement has been approved by the Cupertino City Council, and tha.L the person who hdS signed this Agreement is CITY's agent, with the express authority to legally bind CITY to the terms of this Agreement. 1// FULL RELEASE AND SETTLEMENT AGREEMENT City of Cupertino v. C. G. Uhlenberg & Co. The undersigned has hereby executed this Release and Settlement Agreement, DATED: 3 �9 City Clerk Page 7 CITY OF CUPERTINO, a California Municipal Corporation By: Print name John Bautista Title: Mayor, City of Cupertino This Agreement was reviewed by, and executed under the advise and direction of: McDonough, Holland & Allen Ste en _ Goff iz. Attorneys for t City of Cupertino, a California Municipal Corporation