WESLEY WEST FLEXIBLE PARTNERSHIP, a Texas general partnership;
WESLEY WEST LONG TERM PARTNERSHIP, LTD., a Texas limited partnership;
WESLEY WEST MINERALS, LTD., a Texas limited partnership;


No. ________





I, Stuart W. Stedman, being duly sworn, state as follows:

1. My Name is Stuart W. Stedman. I am over the age of 21 and am competent to testify to the matters set forth herein. I reside at 3432 Overbrook, Houston, Texas ?????. Unless otherwise noted, this Declaration is based on my personal knowledge.

2. I am a Plaintiff in the above-captioned lawsuit. I make this Declaration in support of Plaintiffs' request for preliminary relief and expedited discovery, filed concurrently with the Complaint in the above-captioned lawsuit.

3. At all times relevant herein, I have acted as the sole manager of Wesley West Investment Company, LLC, a Texas limited liability company ("West Investment"). West Investment, in turn, is the sole managing general partner of a number of family investment partnerships, including (a) the Wesley West Flexible Partnership, a Texas general partnership (the "West Flexible Partnership"); (b) the Wesley West Long Term Partnership, Ltd., a Texas limited partnership (the "West Long Term Partnership"); and (c) Wesley West Minerals, Ltd., a Texas limited partnership (the "West Minerals Partnership"). The West Flexible Partnership, the West Long Term Partnership, and the West Minerals Partnership are collectively referred to as the "West Partnerships". None of the current partners of the West Partnerships is a citizen of California.

4. I am one of three trustees of the Neva and Wesley West Foundation, a charitable organization founded by my grandparents Neva and Wesley West (the "West Foundation"). The other trustees of the foundation are my mother Betty Ann Stedman and my family's financial advisor, Randolph L. Pullin, and I have the consent of each of those trustees to bring this lawsuit on behalf of the West Foundation. None of the West Foundation trustees is a citizen of California. The West Partnerships, the West Foundation, and I are collectively referred to in this Declaration as the "West Entities". The West Entities are the Plaintiffs herein.

5. I have known the Defendant herein, Reed E. Slatkin ("Slatkin"), since 1997. In or about February 1997, I approached Slatkin about undertaking to invest funds of the West Entities.

6. As discussed in detail below, the total funds invested over time on behalf of all of the West Entities equal $18,400,000. Over that same time period, the West Entities paid Slatkin $994,967 in management fees for services rendered under the investment agreements described below.


7. Of the total invested funds of $18,400,000, $9,940,000 was invested with Mr. Slatkin individually pursuant to arrangements he called "nominee accounts". This total amount of $9,940,000 was invested at the following times, by the following persons and in the following amounts:

(a) Pursuant to a letter agreement dated February 26, 1997 (a copy of which is attached as Ex. A), I invested my personal/community property funds as follows: $150,000 in March 1997, $200,000 in September 1998, and $100,000 in February 1999, for a total investment of $450,000. In January 1999, I asked Mr. Slatkin to transfer $150,000 of this total amount invested to a separate account managed by him that was treated for my personal/separate property investments. I invested another $150,000 into this personal/separate property account in February 1999.
(b) In my capacity as the sole manager of the general partner of each of the three West Partnerships, I directed the following investments: (i) the West Flexible Partnership invested $2,860,000 with Mr. Slatkin in a nominee account in December 1998, which investment was governed by the terms of a letter agreement dated December 21, 1998, a copy of which is attached hereto as Ex. B; (ii) the West Long Term Partnership invested $4,230,000 with Mr. Slatkin in a nominee account in December 1998 and another $750,000 in June 2000, which investments were governed by the terms of a letter agreement dated December 21, 1998, a copy of which is attached hereto as Ex. C; and (iii) the West Foundation invested $2,270,000 with Mr. Slatkin in a nominee account in December 1998, which investment was governed by the terms of a letter agreement dated December 21, 1998, a copy of which is attached hereto as Ex. D.

8. The terms of the above-described nominee account letter agreements are identical in all respects material to this lawsuit. Each authorizes Slatkin to make investment decisions with respect to the West Partnerships, the West Foundation, and my own funds, and each requires him promptly to honor withdrawal requests (as I discuss in greater detail below).


9. In my capacity as the sole manager of the general partner of the West Flexible Partnership and the West Long Term Partnership and in my capacity as a trustee of the West Foundation, I directed those two West Partnerships and the West Foundation to become limited partners in Reed Slatkin Investment Club, L.P., a California limited partnership (the "Partnership") of which Mr. Slatkin serves as the sole general partner. The West Flexible Partnership invested $2,700,000 in exchange for its limited partner interest. The West Long Term Partnership invested $4,800,000 in exchange for its limited partner interest. The West Foundation invested $1,750,000 in exchange for its limited partner interest. The Partnership was governed by an Agreement of Limited Partnership dated as of March 1, 1990 (the "Partnership Agreement"). A copy of the Partnership Agreement is attached as Ex. E. Mr. Slatkin informed me that custody arrangements with Imperial Trust Company, subsequently acquired by Union Bank of California, N.A., would be set up to reflect the investments in the Partnership. I have continued to receive statements from the Union Bank of California, but the custody accounts do not contain cash and securities, but rather only the limited partner interest in the Reed Slatkin Investment Club, L.P.


10. In my capacity as the sole manager of the general partner of the West Minerals Partnership, I directed the West Minerals Partnership to invest in the "Reed Slatkin Technology Fund". Beginning in December 1999 through September 2000, the West Minerals Partnership made eight investments in this technology fund, aggregating a total of $3,000,000. These investments are governed by a letter agreement dated November 9, 1999, a copy of which is attached hereto as Ex. F.

11. According to records provided by Mr. Slatkin, as of December 31, 2000, the fair market value of the relevant accounts managed by Slatkin for me personally or in my representative capacities totaled $34,222,935, as follows:

(a) West Long Term Partnership: $14,576,610;
(b) West Flexible Partnership: $7,163,154;
(c) Stedman "Separate Estate" Account: $481,537;
(d) Stedman "Community" Account: $675,015;
(e) West Minerals Partnership: $3,850,365; and
(f) The West Foundation: $7,476,254.

These balances were the last ones reported to me by Slatkin. Copies of Slatkin's statements showing these balances are attached as Ex. 3. Slatkin is justly indebted to Plaintiffs in these amounts. Slatkin has never suggested that these amounts are in dispute or not owing.

12. Pursuant to our agreements, upon request by me, Slatkin was required to return to me (personally or on behalf of the other West Entities I have described above, as the case may be) any uninvested portion of the funds managed by him, and to transfer to me the relevant securities to the extent the funds were invested. Slatkin was expressly obligated to honor any such request either within 30 days (with respect to withdrawals pursuant to the Partnership Agreement) or within a reasonable time, but in any case "as promptly as possible" (with respect to the nominee accounts and the technology fund investment).

13. On or about December 22, 2000, I wrote to Slatkin requesting, among other things, a withdrawal of $2 million from the investment accounts maintained by Slatkin for the West Flexible Partnership. Slatkin questioned whether I needed the money at that instant or whether he could have more time to honor the withdrawal request. At Slatkin's request, I agreed to give him two months to restructure his money management business and return the requested amounts.

14. Approximately two months later, I left a phone message with Slatkin asking him to call me about the prior $2 million withdrawal request. When Slatkin did not return that message, on March 6, 2001 I faxed and mailed a withdrawal request in the total amount of $3.5 million from the two West Flexible Partnership accounts maintained by Slatkin.

15. Before I made my withdrawal request in December 2000, I had made one prior withdrawal request in or about April 1999 from the West Flexible Partnership accounts. The requested withdrawal amount totaled approximately 1.5 million, and Slatkin processed it within five days. At this point, I became concerned and made informal inquiries to others who I knew had invested with Slatkin. From these inquiries I came to understand that other investors were having trouble getting their money back from Slatkin as well.

16. Over the course of the next three weeks, despite my repeated attempts to discuss the West Flexible Partnership withdrawal matter with Slatkin, I was only able to speak with him briefly by phone. During the second of those conversations, on or about March 27, 2001, Slatkin told me for the first time that there was a "knot" in his distribution process, but assured me that my withdrawal request was "in the queue". He said that the portfolio was hedged and that the bear market prevented him from unwinding these positions without losing 1/4 to 1/2 a point by selling into an illiquid market.

17. On or about March 29, 2001, I spoke again with Slatkin briefly. Slatkin told me that he would have lunch in two hours with my family's long-time money management consultant, Joe Meyer, to explain why he had not honored our withdrawal request. Slatkin told me he was unable to honor our withdrawal request because he had exhausted a line of credit that he used to meet such requests. Furthermore, he told me that he had $20 million of investors' money in a bank account in Santa Barbara. He said that this money came from Switzerland, where he kept his investors' funds, and that the money in the Santa Barbara account had been frozen because U.S. authorities were scrutinizing all funds transferred from certain countries in Europe in an effort to prevent money laundering activities. When I told him that those explanations were inconsistent with the explanation he had given me two days before, he told me the problem was really "a combination of things".

18. Two hours after I spoke to Slatkin on March 29, 2001, Meyer and Slatkin had lunch in Los Angeles. I am aware of what took place at this meeting because Mr. Meyer promptly reported his conversation with Slatkin to me following the lunch. During that lunch meeting, Slatkin indicated that the investment funds were in two Swiss bank accounts and that the assents in these accounts had been frozen since December 2000 pursuant to a money laundering investigation by _European_ authorities (By contrast, as stated aove, Slatkin told me that the money laundering investigation was being conducted by _U.S._ authorities). Slatkin indicated that the balances in the two Swiss accounts were $180 million and $200 million. Slatkin showed Meyer statements from a European bank purporting to show these balances. Slatkin agreed to produce documentation sufficient to confirm these balances and to trace the various West investments to the Swiss accounts. Also at this lunch meeting, Slatkin showed Meyer a bank statement from Union Bank of California (Santa Barbara) and a statement from Credit Suisse First Boston (Santa Barbara). Each of these accounts had stated balances of approximately $20 million. Contradicting the description of these accounts he gave to me only two hours earlier, Slatkin claimed that these accounts contained his personal funds. Slatkin never sent me or Joe Meyer copies of the two Santa Barbara statements, and I later learned via Slatkin's attorneys that Slatkin has since spent the funds in _both_ accounts.

19. Slatkin provided my consultant with some, but not all, of the promised documentation with respect to the Swiss accounts. In particular, Slatkin caused to be forwarded to my consltant (and I have since reviewed):

(a) A letter dated October 10, 2000 on letterhead of a company called "N.A.A." purportedly located at the Regus Business Center in Zurich, Switzerland. The N.A.A. letter indicated that the two Swiss "beneficiary accounts established on (Slatkin's) behalf" were the subject of a money laundering investigation by the Swiss bank holding the accounts, Union Bank of Switzerland ("UBS"). The letter recited that the accounts had not yet been frozen, however, and that the situation was expected to be "resolved quickly" and "should not cause any undue alarm". A copy of the October 10, 2000 N.A.A. letter is attached as Ex. H.
(b) A letter dated October 12, 2000, also from N.A.A., advising that the two Swiss accounts at UBS were "set up under the name of N.A.A. with Reed Slatkin as the assigned beneficiary". A copy of the October 12, 2000 N.A.A. letter is attached as Ex. I.
(c) A letter dated December 4, 2000 from N.A.A. indicating that, based on purported discussions with UBS representatives, any transfers with respect to the two accounts would be delayed pending the issuance of findings related to the money laundering investigation. A copy of the December 4, 2000 N.A.A. letter is attached as Ex. J.
(d) N.A.A.'s December 4 letter attached a December 1, 2000 letter purporting to have been sent by a "Jacques Lejeune," "Financial Advisor" at UBS Bank in Zurich. This letter was offered by N.A.A. as an explanation of the money laundering investigation, and described in general terms the procedures relating to money laundering investigations pursuant to the Financial Action Task Force on money laundering organized under the auspices of the 1989 G-7 Summit. A copy of the purported UBS letter is attached as Ex. K.
(e) Documents purporting to be UBS statements and "inter-bank" communications purporting to depict the balances in each of the two accounts as well as recent transfers into the accounts (together with the corresponding transfer authorizations). Copies of these documents are attached as Ex. L.

20. After reviewing this information, I directed Joe Meyer to make inquiries in Zurich, Switzerland to verify the existence of N.A.A. and the UBS accounts, as well as other facts proffered by Slatkin. Meyer quickly reported to me that his contacts informed him the accounts did not exist and that N.A.A. did not maintain an office at the address shown on its letterhead, and indeed never had been at that location.

21. On or about April 6, 2001, attorneys and investigators working on my behalf similarly reported that:
(a) the Swiss account numbers proffered by Slatkin could not be matched with any valid UBS accounts;
(b) the account numbers given in fact were incomplete (i.e., lacking two digits);
(c) the phone number given for the relevant UBS branch was incorrect;
(d) the inter-bank communications between UBS and a second bank did not appear authentic, in part because the second bank listed in the communication confirmed to our Swiss investigators that it had nothing to do with the transactions described in those communications;
(e) no record of N.A.A. could be found anywhere in Switzerland (in fact, the address shown on N.A.A.'s letterhead is not accurate because, while the address is for a real building in Zurich, the building manager said that N.A.A. was not, and never had been, a tenant);
(f) no listing or registration could be found in any of the locations listed on the N.A.A. letterhead, nor was N.A.A. listed or registered in Monaco, an additional location orally provided by Slatkin;
(g) none of the individuals whose names appear in the N.A.A. correspondence could be located;
(h) an entity called "R.I.T." in the bank statement copies proffered by Slatkin could not be found at the Monaco address provided for it;
(i) the signer of the December 1, 2000 UBS letter attached to N.A.A.'s December 12, 2000 Letter, "Jacques Lejeune," was unknown at UBS' Zurich and Geneva offices and his purported title, "Financial Advisor," was not one used within UBS; and
(j) the head of UBS' legal department confirmed that UBS' December 1, 2000 letter could not be authentic because its subject matter was inconsistent with UBS' practice and was not signed by two bank officials, as required by UBS policy.

22. Slatkin's explanations of events have been inconsistent, false, and/or unverifiable. In particular, his proffered explanation of funds being "frozen" in Switzerland and in the United States has changed over time and has been based in large part on fraudulent documents. Based on recent events as I have described them herein -- in particular, Slatkin's protracted failure to honor a request for withdrawal of a relatively small portion of the tens of millions of dollars invested with him, his alleged inability to do so, due possibly to illegal activity, and the apparent falsity of the information he provided to verify his ability to repay the money he owes under our agreements -- I am gravely concerned that the funds I have invested with Slatkin, both personally and on behalf of the West Entities, either have been or are about to be dissipated.

23. For the same reasons, I believe there is a substantial danger that property belonging to Slatkin which may be necessary for the execution of any judgment Plaintiffs obtain in this lawsuit would be concealed, substantially impaired in value, or otherwise made unavailable to levy if issuance of an attachment order and other preliminary relief were delayed until the matter could be heard on notice. In fact, Slatkin's counsel told my counsel less than 48 hours ago that the $40 million on deposit in the two Santa Barbara accounts had been spent to repay debts.

24. Upon information and belief, the property sought to be attached is not exempt from attachment.

<signature of Stuart W. Stedman>
Stuart W. Stedman

Subscribed and sworn to before me this 13th day of April, 2001.
<signature of Paula Doerr>
Notary Public