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RELEASE AND SETTLEMENT AGREEMENT THIS RELEASE AND SETTLEMENT AGREEMENT (“Release”) is made by and among Stockyard Road Investments, LLC (hereinafter “Plaintiff” or “applicant”) and Defendants, City of Missoula, a duly existing body politic and corporate formed and acting under the laws of the State of Montana, Roger Millar in his official capacity as Director of the City of Missoula Office of Planning and Grants, and Steve King in his official capacity as Director of the City of Missoula Public Works Building Department (hereinafter “Defendants”). Recitals: WHEREAS, on or about November 20, 2006, Plaintiff submitted a subdivision application (“application”) to the City of Missoula, pursuant to which it sought approval of a subdivision preliminary plat within the City of Missoula to be known as the Ranch Subdivision; WHEREAS, on or about May 19, 2008, the Missoula City Council approved the preliminary plat application subject to thirty-eight (38) conditions of approval; WHEREAS, at the time of approval, the application complied with then governing zoning regulations in the City of Missoula codified at Title 19; WHEREAS, on or about October 28, 2009, Defendant, City of Missoula, forwarded correspondence to the Plaintiff, a true and exact copy of which is attached hereto as Exhibit WHEREAS, on or about October 5, 2009, Defendant, City of Missoula, adopted a new set of Zoning Regulations (hereinafter referred to as the “New Regulations”), Title 20, with an effective date of November 4, 2009, which, thereafter, it applied to the Ranch Subdivision; WHEREAS, on December 7, 2009, Defendant, Roger Millar in his official capacity as Director of the Missoula Office of Planning and Grants advised the Plaintiff that despite the fact that the subdivision preliminary plat application had been conditionally approved while Title 19 zoning regulations were in effect on or about May 19, 2008, building permit applications for lots within the three phase subdivision must comply with zoning setbacks and other requirements imposed by Title 20 zoning regulations if the applications for building permits are submitted after the effective date of Title 20; WHEREAS, under the express terms of Sections A and B of §20.01.110 of Title 20: “20.01.110 Transitional Provisions The provisions of this section address the transition from the previous zoning ordinance (the one in effect before the effective date specified in 20.01.020) and this zoning ordinance. A. Applications Submitted Before November 4, 2009 Development applications that were submitted in complete form and are pending approval on the effective date specified in 20.01.020 must be ---PAGE BREAK--- Release and Settlement Agreement 2 reviewed wholly under the terms of the zoning ordinance in effect immediately before the effective date specified in 20.01.020. B. Site-Specific Development Plans Approved Before November 4, 2009 1. Permits may be issued for previously approved, unexpired site- specific development plans in accordance with the approved plan. Site-specific development plans approved before November 4, 2009 will remain valid until November 4, 2011 unless a phasing plan or different lapse of approval date was approved at the time the site-specific development plan received final approval. 2. The zoning officer is authorized to grant up to one time extension for no more than one additional year if the zoning officer determines that the extension is necessary to address delays beyond the reasonable control of the applicant. After the lapse of approval date, no permits or other approvals may be issued except in accordance with the standards and procedures of this zoning ordinance. 3. For purposes of this section, “site-specific development plans” are plans or plats submitted by landowner or landowner’s authorized representative describing with reasonable certainty the type and intensity of development to be carried out on a specific parcel and that have been approved by the planning board, board of adjustment, or city council. Such plans may be in the form of preliminary subdivision plats or plans, final subdivision plats, planned unit developments, or other similar development plans, as determined by the zoning officer.” WHEREAS, on or about January 26, 2010, the Plaintiff commenced an action (hereinafter referred to as the “Action”) against the City of Missoula, Roger Millar in his official capacity as Director of the City of Missoula Office of Planning and Grants, and Steve King in his official capacity as Director of the City of Missoula Public Works Building Department, in the Montana Fourth Judicial District Court, Missoula County, Cause No. DV-10-95, pursuant to which Plaintiff sought, inter alia, compensatory damages against the City of Missoula and by which Plaintiff sought to enjoin Defendants, and each of them, from applying the New Regulations to the application, to compel building permits to be issued with respect to each of the conditionally approved lots, declaratory and other affirmative relief; WHEREAS, the Plaintiff and Defendants have engaged in good faith negotiations to resolve the Action to, inter alia, avoid the costs, expenses and vagaries attendant to litigation and to further the parties’ shared interest in the fair, equitable and transparent application of municipal regulations enacted within the City of Missoula; WHEREAS, the parties are desirous of resolving the Action on the following terms and under the following conditions: ---PAGE BREAK--- Release and Settlement Agreement 3 1. Aside from as set forth in Exhibit hereto, the New Regulations will not apply to the building permit applications for Ranch Planned Unit Development (PUD) as identified by Exhibit and the parties agree that the applications are governed by and subject only to the terms articulated in Exhibit Ranch Planned Unit Development (PUD). 2. The zoning of Ranch Planned Unit Development (PUD) as identified by Exhibit will be titled the Ranch Planned Unit Development (“PUD”) in the City of Missoula consistent with the terms and conditions set forth in Exhibit attached hereto and expressly incorporated herein by reference. In the event that issuance of building permits is delayed due to an act or event within the control of the Defendants, or any of them, for more than thirty (30) days in the aggregate, the applicant at issue will be immediately free to pursue any judicial remedy available to it. 3. Defendants covenant and agree that Plaintiff will be accorded timely processing and treatment to which any other applicant would be entitled and affirmatively agree and covenant that they will do so in good faith, in conformity with governing statutory and regulatory authority, without retaliatory conduct and consistent with the methods and bases for evaluation and ultimate decision-making applicable to subdivision, zoning compliance, and building permit applications submitted by strangers to the Action. 4. The Defendants stipulate, covenant and agree that, absent applicant assent as expressed in this Settlement Agreement, the applicant will be treated by all City agents, representatives and employees pertaining to the Ranch Subdivision as being subject to the City subdivision regulations in effect as of October 2, 2006 and zoning regulations for the Ranch PUD pursuant to Exhibit hereto. 5. The parties stipulate and agree to take all appropriate actions to stay the Action pending the issuance of the last building permit for the final phase of the subdivision (“final building permit”) being issued for Phases 1, 2 and 3 only as identified in the Ranch PUD, Exhibit and the parties further stipulate and agree that once the final building permit has been issued for the Ranch PUD identified in Exhibit the parties will execute any and all documents appropriate and reasonably necessary to dismiss the Action with prejudice without costs and waiving all rights of appeal including, but not limited to, a stipulation of dismissal pursuant to M.R.Civ.P. 41. (“Stipulation of Dismissal”). 6. Once final building permits have been issued for Phases 1, 2 and 3 of the Ranch PUD, exhibit and assuming that prior to the issuance of same no motion alleging breach or default of any stipulation, covenant or agreement of this Settlement Agreement filed by the Plaintiff is pending in the District Court, Plaintiff fully and forever releases and discharges Defendants, and each of them, their agents, servants, representatives, employees, affiliates, subsidiaries, officers, directors, successors, predecessors in interest and insurers from any and all actions, claims, causes of action, demands, or expenses for damages or injuries, whether asserted or unasserted, known or unknown, foreseen or unforeseen, in any way related to or arising out of the submission of the application to the Defendants or to Defendants’ acts or omissions in processing it. Provided, however, that nothing set forth herein shall be construed to constitute a waiver or release of Plaintiff’s rights to bring an ---PAGE BREAK--- Release and Settlement Agreement 4 action for breach of this Agreement or to bring an action arising out of conduct on Defendants’ part that has yet to occur on the date of execution of this Release and Settlement Agreement. 7. It is expressly understood that the Release and Settlement Agreement is accepted as the sole consideration for full and final satisfaction and accord to compromise disputed claims, that neither the settlement nor the negotiations for settlement shall be considered as an admission of liability by Defendants, or any of them, and that the Defendants expressly deny any liability for any injury or damages of any kind or nature to any other party hereto. 8. If Exhibit is not approved and ratified by the Defendant, City of Missoula, this Release and Settlement Agreement is null and void and of no further force and effect. 9. The parties have carefully read the foregoing, discussed its legal effect with each of their attorneys, understand the contents thereof, and sign the same of their own free will and accord. 10. This Release shall be binding upon each party’s agents, agencies, political subdivisions, servants, representatives, employees, heirs, successors, personal representatives and assigns. 11. The parties agree that no promise or inducement that is not herein expressed has been made to them and that in executing this Release and Settlement Agreement they do not rely upon any statement or representation made by any person, firm or corporation hereby released or by any agent, attorney, insurer or other person representing the parties. 12. The Parties agree and acknowledge that the terms of this Release and Settlement Agreement are contractual and not a mere recital. 13. The Release and Settlement Agreement is deemed to be made in the State of Montana and it and the legal relations amongst the parties shall be governed and construed according to the laws of the State of Montana. 14. The parties agree that the provisions of the Release and Settlement Agreement are severable and that if any provision is found to be contrary to law or otherwise invalid all remaining provisions shall remain in full force and effect. 15. With regard to the subject matter stated herein, this Release and Settlement Agreement constitutes the entire, final and integrated agreement between the parties and fully supersedes all prior understandings, representations and warranties. This Agreement may only be modified in a written agreement signed by all parties. 16. This Release and Settlement Agreement and all instruments or documents in accordance herewith may be executed in one or more counterparts or duplicates, and via electronic facsimile, each of which shall be deemed to be an original copy of this Agreement and all of which, when taken together, shall be deemed to constitute one and the same Release and Settlement Agreement. ---PAGE BREAK--- Release and Settlement Agreement 5 17. The Release and Settlement Agreement will become effective upon its execution by all parties to the Action and their respective counsel. 18. Any party hereto who is compelled to seek judicial intervention to seek compliance by any other party in default or breach of any of the terms and conditions of the Release and Settlement Agreement will be entitled to seek all judicial relief available to it in the Action including, but not limited to, damages, interest, and the recovery of his, hers or its reasonable attorney’s fees and costs proximately incurred thereby. 19. The parties expressly acknowledge and agree that time is of the essence with respect to the Release and Settlement Agreement. [rest of page intentionally blank] ---PAGE BREAK--- Release and Settlement Agreement 6 DATED this day of 2010. CAUTION: READ BEFORE SIGNING! CITY OF MISSOULA, MONTANA By: Its: Roger Millar, in his official capacity as Director of the City of Missoula Office of Planning and Grants Steve King, in his official capacity as Director of the City of Missoula Public Works Building Department APPROVED BY: Jim Nugent, Esq. City Attorney CAUTION: READ BEFORE SIGNING! STOCKYARD ROAD INVESTMENTS, LLC, By: Dave Manookian Its: President APPROVED BY: Terance P. Perry, Esq. Attorneys for Plaintiff