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COMPROMISE AGREEMENT AND RELEASE
<br />City of Colton, a municipal corporation and Redevelopment Agency for the City of
<br />Colton, a public body, corporate and politic, hereinafter referred to as Plaintiff, and Allan
<br />Steward, aka Allan B. Steward and Kathleen M. Steward, individually and as trustees of the
<br />Steward December 1988 Trust, Steward & Associates, Inc., a California corporation, and Allan
<br />Steward, Inc., a California corporation, hereinafter referred to as Defendant, in consideration of
<br />the promises made herein, agree as follows:
<br />1. Nature and Effect of Agreement. This Agreement consists of a compromise and
<br />settlement by the parties of Plaintiff's claim against Defendant arising from the dispute described
<br />in paragraph 2 and a release given by Plaintiff to Defendant relinquishing Plaintiff's claims
<br />against Defendant. By executing this Agreement, each of the parties intends to and does hereby
<br />extinguish the obligations heretofore existing between them and arising from that dispute. This
<br />Agreement is not, and shall not be treated as, an admission of liability by either party for any
<br />purpose.
<br />2. Nature and Status of Dispute. On February 21, 2002, Plaintiff filed a complaint
<br />against Defendant and others in the Superior Court in and for San Bernardino County, designated
<br />as case number SCVSS087040 alleging political corruption and in particular, conflict of interest
<br />(Government Code § 1090), fraud, unfair business practices (Business & Professions Code §
<br />17200), civil Rico (18 USC § 1961), conspiracy, declaratory relief and constructive trust
<br />("Complaint"). On April 26, 2002, Defendant filed an Answer to the Complaint denying the
<br />allegations and asserting twenty-eight affirmative defenses. On July 24, 2002, this action was
<br />transferred to the Superior Court in and for Orange County, designated as case number
<br />02CC12345 and assigned to the Honorable Michael Brenner in Department C20 for all purposes.
<br />3. Compromise Agreement. In consideration of payment of $175,000 by
<br />Defendant to Plaintiff within 90 days after execution of this Agreement as described in paragraph
<br />4 and Defendant's cooperation with Plaintiff in connection with Plaintiff s prosecution of the
<br />Complaint, as described in paragraph 5 and subject to the good faith settlement order, as
<br />described in paragraph 6, Plaintiff hereby compromises and settles any and all past, present, or
<br />future claims, demands, obligations, or causes of action for compensatory or punitive damages,
<br />costs, losses, expenses, and compensation, whether based on tort, contract, or other theories of
<br />recovery, that Plaintiff now has or may hereafter have against Defendant, Defendant's
<br />predecessors and successors in interest, heirs, and assigns arising from the subject matter of the
<br />Complaint described in paragraph 2, and agrees that this compromise and settlement shall
<br />constitute a bar to all such claims. Upon Defendant's completion of the payment obligation
<br />described in paragraph 4, the cooperation obligation described in paragraph 5 and the good faith
<br />determination described in paragraph 6, Plaintiff agrees to dismiss with prejudice the Complaint
<br />against Defendant described in paragraph 2. Plaintiff and Defendant agree that this Agreement
<br />shall constitute a bar to all past, present, and future claims arising out of the subject matter of the
<br />Complaint described in paragraph 2.
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