MUTUAL RELEASE OF ALL CLAIMS AND SETTLEMENT AGREEMENT

[CT 116]

1. This Mutual Release of All Claims and Settlement

Agreement is made between Church of Scientology International

(hereinafter "CSI") and Gerald Armstrong, (hereinafter

"Plaintiff") Cross-Complainant in Gerald Armstrong v. Church

of Scientology of California, Los Angeles Superior Court,

Case No. 420 153. By this Agreement, Plaintiff hereby

specifically waives and releases all claims he has or may have

from the beginning of time to and including this date,

including all causes of action of every kind and nature,

known or unknown for acts and/or omissions against the

officers, agents, representatives, employees, volunteers,

directors, successors, assigns and legal counsel of CSI as

well as the Church of Scientology of California, its officers,

agents, representatives, employees, volunteers, directors,

successors, assigns and legal counsel; Religious Technology

Center, its officers, agents, representatives, employees, legal counsel;

volunteers, directors, successors, assigns and

all Scientology and Scientology affiliated organizations and

entities and their officers, agents, representatives,

employees, volunteers, directors, successors, assigns and

legal counsel; Author Services, Inc., its officers, agents,

representatives, employees, volunteers, directors,

successors, assigns and legal counsel; L. Ron Hubbard, his

heirs, beneficiaries, Estate and its executor; Author's

Family Trust, its beneficiaries and its trustee; and Mary Sue

Hubbard, (all hereinafter collectively referred to as the

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[ CT 117]

"Releasees"). The parties to this Agreement hereby agree as

follows:

2. It is understood that this settlement is a compromise

of doubtful and disputed claims, and that any payment is not

to be construed, and is not intended, as an admission of

liability on the part of any party to this Agreement,

specifically, the Releasees, by whom liability has been and

continues to be expressly denied. In executing this

settlement Agreement, Plaintiff acknowledges that he has

released the organizations, individuals and entities listed

in the above paragraph, in addition to those defendants

actually named in the above lawsuit, because among other

reasons, they are third party beneficiaries of this Agreement.

3. Plaintiff has received payment of a certain monetary

sum which is a portion of a total sum of money paid to his

attorney, Michael J. Flynn. The total sum paid to Mr. Flynn

is to settle all of the claims of Mr. Flynn's clients.

Plaintiff's portion of said sum has been mutually agreed upon

by Plaintiff and Michael J. Flynn. Plaintiff's signature

below this paragraph acknowledges that Plaintiff is completely

satisfied with the monetary consideration negotiated with and

received by Michael J. Flynn. Plaintiff acknowledges that

there has been a block settlement between Plaintiff's

attorney, Michael J. Flynn, and the Church of Scientology

and Churches and entities related to the Church

of Scientology,concerning all of Mr. Flynn's clients who

were in litigation with any Church of Scientology or related

entity. Plaintiff has received a portion of this block

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[CT 118]

amount, the receipt of which he hereby acknowledges.

Plaintiff understands that this amount is only a portion of

the block settlement amount. The exact settlement sum

received by Plaintiff is known only to Plaintiff and his

attorney, Michael J. Flynn, and it is their wish that this

remain so and that this amount remain confidential.

[Signed] G. Armstrong
Signature line for Gerald Armstrong

4. For and in consideration of the above described

consideration, the mutual covenants, conditions and release

contained herein, Plaintiff does hereby release, acquit and

forever discharge, for himself, his heirs, successors,

executors, administrators and assigns, the Releasees,

including Church of Scientology of California, Church of

Scientology International, Religious Technology Center, all

Scientology and Scientology affiliated organizations and

entities, Author Services, Inc. (and for each organization or

entity, its officers, agents, representatives, employees,

volunteers, directors, successors, assigns and legal

counsel); L. Ron Hubbard, his heirs, beneficiaries, Estate

and its executor; Author's Family Trust, its beneficiaries

and trustee; and Mary Sue Hubbard, and each of them, of and

from any and all claims, including, but not limited to, any

claims or causes of action entitled Gerald Armstrong v.

Church of Scientology of California, Los Angeles Superior

Court, Case No. 420 153 and all demands, damages, actions and

causes of actions of every kind and nature, known or unknown,

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[CT 119]

for or because of any act or omission allegedly done by the

Releasees,from the beginning of time to and including the date

hereof. Therefore, Plaintiff does hereby authorize and direct

his counsel to dismiss with prejudice his claims now pending in

the above referenced action. The parties hereto will execute

and cause to be filed a joint stipulation of dismissal in the

form of the one attached hereto as Exhibit "A".

A. It is expressly understood by Plaintiff that this

release and all of the terms thereof do not apply to the

action brought by the Church of Scientology against Plaintiff

for Conversion, Fraud and other causes of action, which

action has already gone to trial and is presently pending

before the Second District, Third Division of the California

Appellate Court (Appeal No. B005912). The disposition of

those claims are controlled by the provisions of the

following paragraph hereinafter.

B. As of the date this settlement Agreement is executed,

there is currently an appeal pending before the California

Court of Appeal, Second Appellate District, Division 3,

arising out of the above referenced action delineated as

Appeal No. B005912. It is understood that this appeal arises

out of the Church of Scientology's complaint against

Plaintiff which is not settled herein. This appeal shall be

maintained notwithstanding this Agreement. Plaintiff

agrees to waive any rights he may have to take any further

appeals from any decision eventually reached by the Court of

Appeal or any rights he may have to oppose (by responding brief

or any other means) any further appeals taken by the Church of

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[CT 120]

Scientology of California. The Church of Scientology of

California shall have the right to file any further appeals it

deems necessary.

5. For and in consideration of the mutual covenants,

conditions and release contained herein, and Plaintiff

dismissing with prejudice the action Gerald Armstrong v.

Church of Scientology of California, Los Angeles Superior

Court, Case No.420153, the Church of Scientology of California

does hereby release, acquit and forever discharge for itself,

successors and assigns, Gerald Armstrong, his agents,

representatives, heirs, successors, assigns, legal counsel and

estate and each of them, of and from any and all claims,causes

of action, demands, damages and actions of every kind and

nature, known or unknown, for or because of any act or omission

allegedly done by Gerald Armstrong from the beginning of time to

and including the date hereof.

6. In executing this Agreement, the parties hereto, and

each of them, agree to and do hereby waive and relinquish all

rights and benefits afforded under the provisions of 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 does not know or suspect to exist in
his favor at the time of executing the release,
which if known by him must have materially affected
his settlement with the debtor."

7. Further, the undersigned hereby agree to the

following:

A. The liability for all claims is expressly denied by

the parties herein released, and this final compromise and

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[CT 121]

settlement thereof shall never be treated as an admission of

liability or responsibility at any time for any purpose.

B. Plaintiff has been fully advised and understands

that the alleged injuries sustained by him are of such

character that the full extent and type of injuries may not

be known at the date hereof, and it is further understood

that said alleged injuries, whether known or unknown at the

date hereof, might possibly become progressively worse and

that as a result, further damages may be sustained by

Plaintiff; nevertheless, Plaintiff desires by this document

to forever and fully release the Releasees. Plaintiff

understands that by the execution of this release no further

claims arising out of his experience with, or actions by,

the Releasees, from the beginning of time to and including

the date hereof, which may now exist or which may exist in

the future may ever be asserted by him or on his behalf,

against the Releasees.

C. Plaintiff agrees to assume responsibility for

the payment of any attorney fee, lien or liens, imposed

against him past, present, or future, known or unknown, by

any person, firm, corporation or governmental entity or agency

as a result of, or growing out of any of the matters referred

to in this release. Plaintiff further agrees to hold

harmless the parties herein released, and each of them, of and

from any liability arising therefrom.

D. Plaintiff agrees never to create or publish or

attempt to publish, and/or assist another to create for

publication by means of magazine, article, book or other

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[CT 122]

similar form, any writing or to broadcast or to assist

another to create, write, film or video tape or audio tape

any show, program or movie, or to grant interviews or discuss

with others, concerning their experiences with the Church of

Scientology, or concerning their personal or indirectly

acquired knowledge or information concerning the Church of

Scientology, L. Ron Hubbard or any of the organizations,

individuals and entities listed in Paragraph 1 above.

Plaintiff further agrees that he will maintain strict

confidentiality and silence with respect to his experiences

with the Church of Scientology and any knowledge or

information he may have concerning the Church of Scientology,

L. Ron Hubbard, or any of the organizations, individuals and

entities listed in Paragraph 1 above. Plaintiff expressly

understands that the non-disclosure provisions of this

subparagraph shall apply, inter alia, but not be limited, to

the contents or substance of his complaint on file

in the action referred to in Paragraph 1 hereinabove or any

documents as defined in Appendix "A" to this Agreement,

including but not limited to any tapes, films, photographs,

recastings, variations or copies of any such materials which

concern or relate to the religion of Scientology, L. Ron

Hubbard, or any of the organizations, individuals, or entities

listed in Paragraph 1 above. The attorneys for Plaintiff,

subject to the ethical limitations restraining them as

promulgated by the state or federal regulatory associations

or agencies, agree not to disclose any of the terms and

conditions of the settlement negotiations, amount of the

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[CT 123]

settlement, or statements made by either party during

settlement conferences. Plaintiff agrees that if the terms of

this paragraph are breached by him, that CSI and the other

Releasees would be entitled to liquidated damages in the

amount of $50,000 for each such breach. All monies received

to induce or in payment for a breach of this Agreement, or

any part thereof, shall be held in a constructive trust

pending the outcome of any litigation over said breach. The

amount of liquidated damages herein is an estimate of the

damages that each party would suffer in the event this

Agreement is breached. The reasonableness of the amount of

such damages, are hereto acknowledged by Plaintiff.

E. With exception to the items specified in Paragraph 7(L),

Plaintiff agrees to return to the Church of Scientology

International at the time of the consummation of this Agreement,

all materials in his possession, custody or control (or within

the possession, custody or control of his attorney, as well as

third parties who are in possession of the described documents),

of any nature, including originals and all copies or summaries

of documents defined in Appendix "A" to this Agreement,

including but not limited to any tapes, computer disks, films,

photographs, recastings, variations or copies of any such

materials which concern or relate to the religion of

Scientology, L. Ron Hubbard or any of the organizations,

individuals or entities listed in Paragraph 1 above, all

evidence of any nature, including evidence obtained from the

named defendants through discovery, acquired for the purposes of

this lawsuit or any lawsuit, or acquired for any other purpose

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[CT 124]

concerning any Church of Scientology, any financial or

administrative materials concerning any Church of Scientology,

and any materials relating personally to L. Ron Hubbard, his

family, or his estate. In addition to the documents and other

items to be returned to the Church of Scientology International

listed above and in Appendix "A", Plaintiff agrees to return the

following:

(a) All originals and copies of the manuscript for the

work "Excalibur" written by L. Ron Hubbard;

(b) All originals and copies of documents commonly known

as the "Affirmations" written by L. Ron Hubbard; and

(c) All documents and other items surrendered to the

Court by Plaintiff and his attorneys pursuant to Judge Cole's

orders of August 24, 1982 and September 4, 1982 and all

documents and other items taken by the Plaintiff from either

the Church of Scientology or Omar Garrison. This includes

all documents and items entered into evidence or marked

for identification in Church of Scientology of California v.

Gerald Armstrong, Case No. C 420 153. Plaintiff

and his attorney will execute a Joint Stipulation or such

other documents as are necessary to obtain these documents

from the court. In the event any documents or other items

are no longer in the custody or control of the Los Angeles

Superior Court, Plaintiff and his counsel will assist the

Church in recovering these documents as quickly as possible,

including but not limited to those tapes and other documents

now in the possession of the United States District Court

in the case of United States v. Zolin , Case No. CV

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[CT 125]

85-0440-HLH(Tx), presently on appeal in the Ninth Circuit Court

of Appeals. In the event any of these documents are currently

lodged with the Court of Appeal, Plaintiff and his attorneys

will cooperate in recovering those documents as soon as the

Court of Appeal issues a decision on the pending appeal.

     To the extent that Plaintiff does not possess or control

documents within categories A-C above, Plaintiff recognizes his

continuing duty to return to CSI any and all documents that fall

within categories A-C above which do in the future come into his

possession or control.

F. Plaintiff agrees that he will never again seek or

obtain spiritual counselling or training or any other service

from any Church of Scientology, Scientologist, Dianetics or

Scientology auditor, Scientology minister, Mission of

Scientology, Scientology organization or Scientology

affiliated organization.

G. Plaintiff agrees that he will not voluntarily

assist or cooperate with any person adverse to Scientology in

any proceeding against any of the Scientology organizations,

individuals, or entities listed in Paragraph 1 above.

Plaintiff also agrees that he will not cooperate in any

manner with any organizations aligned against Scientology.

H. Plaintiff agrees not to testify or otherwise

participate in any other judicial, administrative or

legislative proceeding adverse to Scientology or any of the

Scientology Churches, individuals or entities listed in

Paragraph 1 above unless compelled to do so by lawful

subpoena or other lawful process. Plaintiff shall not make

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[CT 126]

himself amenable to service of any such subpoena in a manner

which invalidates the intent of this provision. Unless

required to do so by such subpoena, Plaintiff agrees not to

discuss this litigation or his experiences with and

knowledge of the Church with anyone other than members of

his immediate family. As provided hereinafter in Paragraph

18(d), the contents of this Agreement may not be disclosed.

I. The parties hereto agree that in the event of any

future litigation between Plaintiff and any of the

organizations, individuals or entities listed in Paragraph 1

above, that any past action or activity, either alleged in

this lawsuit or activity similar in fact to the evidence that

was developed during the course of this lawsuit, will not be

used by either party against the other in any future

litigation. In other words, the "slate" is wiped clean

concerning past actions by any party.

J. It is expressly understood and agreed by Plaintiff

that any dispute between Plaintiff and his counsel as to the

proper division of the sum paid to Plaintiff by his attorney

of record is between Plaintiff and his attorney of record

and shall in no way affect the validity of this Mutual

Release of All Claims and Settlement Agreement.

K. Plaintiff hereby acknowledges and affirms that

he is not under the influence of any drug, narcotic,

alcohol or other mind-influencing substance, condition or

ailment such that his ability to fully understand the

meaning of this Agreement and the significance thereof is

adversely affected.

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[CT 127]

L. Notwithstanding the provisions of Paragraph 7(E)

above, Plaintiff shall be entitled to retain any artwork

created by him which concerns or relates to the religion of

Scientology, L. Ron Hubbard or any of the organizations,

individuals or entities listed in Paragraph 1 above provided

that such artwork never be disclosed either directly or

indirectly, to anyone. In the event of a disclosure in breach

of this Paragraph 7(L), Plaintiff shall be subject to the

liquidated damages and constructive trust provisions of

Paragraph 7(D) for each such breach.

8. Plaintiff further agrees that he waives and

relinquishes any right or claim arising out of the conduct of

any defendant in this case to date, including any of the

organizations, individuals or entities as set forth in

Paragraph 1 above, and the named defendants waive and

relinquish any right or claim arising out of the conduct of

Plaintiff to date.

9. This Mutual Release of All Claims and Settlement

Agreement contains the entire agreement between the parties

hereto, and the terms of this Agreement are contractual and

not a mere recital. This Agreement may be amended only by a

written instrument executed by Plaintiff and CSI. The

parties hereto have carefully read and understand the

contents of this Mutual Release of All Claims and Settlement

Agreement and sign the same of their own free will, and it is

the intention of the parties to be legally bound hereby. No

other prior or contemporaneous agreements, oral or written,

respecting such matters, which are not specifically

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[CT 128]

incorporated herein shall be deemed to in any way exist or

bind any of the parties hereto.

10. Plaintiff agrees that he will not assist or advise

anyone, including individuals, partnerships, associations,

corporations, or governmental agencies contemplating any

claim or engaged in litigation or involved in or

contemplating any activity adverse to the interests of any

entity or class of persons listed above in Paragraph 1 of

this Agreement.

11. The parties to this Agreement acknowledge the

following:

A. That all parties enter into this Agreement freely,

voluntarily, knowingly and willingly, without any threats,

intimidation or pressure of any kind whatsoever and

voluntarily execute this Agreement of their own free will;

B. That all parties have conducted sufficient

deliberation and investigation, either personally or through

other sources of their own choosing, and have obtained advice

of counsel regarding the terms and conditions set forth

herein, so that they may intelligently exercise their own

judgment in deciding whether or not to execute this

Agreement: and

C. That all parties have carefully read this Agreement

and understand the contents thereof and that each reference

in this Agreement to any party includes successors, assigns,

principals, agents and employees thereof.

12. Each party shall bear its respective costs with

respect to the negotiation and drafting of this Agreement and

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[CT 129]

all acts required by the terms hereof to be undertaken and

performed by that party.

13. To the extent that this Agreement inures to the

benefit of persons or entities not signatories hereto, this

Agreement is hereby declared to be made for their respective

benefits and uses.

14. The parties shall execute and deliver all documents

and perform all further acts that may be reasonably necessary

to effectuate the provisions of this Agreement.

15. This Agreement shall not be construed against the

party preparing it, but shall be construed as if both parties

prepared this Agreement. This Agreement shall be construed

and enforced in accordance with the laws of the State of

California.

16. In the event any provision hereof be unenforceable,

such provision shall not affect the enforceability of any

other provision hereof.

17. All references to the plural shall include the

singular and all references to the singular shall include the

plural. All references to gender shall include both the

masculine and feminine.

18. (A) Each party warrants that they have received

independent legal advice from their attorneys with respect to

the advisability of making the settlement provided for herein

and in executing this Agreement.

(B) The parties hereto (including any officer, agent,

employee, representative or attorney of or for any party)

acknowledge that they have not made any statement,

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[CT 130]

representation or promise to the other party regarding any

fact material to this Agreement except as expressly set forth

herein. Furthermore, except as expressly stated in this

Agreement, the parties in executing this Agreement do not rely

upon any statement, representation or promise by the other

party (or of any officer, agent, employee, representative or

attorney for the other party).

(C) The persons signing this Agreement have the full

right and authority to enter into this Agreement on behalf of

the parties for whom they are signing.

(D) The parties hereto and their respective attorneys

each agree not to disclose the contents of this executed

Agreement. Nothing herein shall be construed to prevent any

party hereto or his respective attorney from stating that

this civil action has been settled in its entirety.

(E) The parties further agree to forbear and refrain

from doing any act or exercising any right, whether existing

now or in the future, which act or exercise is inconsistent

with this Agreement.

19. Plaintiff has been fully advised by his counsel as

to the contents of this document and each provision hereof.

Plaintiff hereby authorizes and directs his counsel to

dismiss with prejudice his claims now pending in the action

entitled Gerald Armstrong v. Church of Scientology of

California, Los Angeles Superior Court, Case No. 420 153.

20. Notwithstanding the dismissal of the lawsuit

pursuant to Paragraph 4 of this Agreement, the parties hereto

agree that the Los Angeles Superior Court shall retain

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[CT 131]

jurisdiction to enforce the terms of this Agreement. This

Agreement may be enforced by any legal or equitable remedy,

including but not limited to injunctive relief or declaratory

judgment where appropriate. In the event any party to this

Agreement institutes any action to preserve, to protect or to

enforce any right or benefit created hereunder, the

prevailing party in any such action shall be entitled to the

costs of suit and reasonable attorneys fees.

21. This Agreement may be executed in two or more

counterparts, each of which shall be deemed to be a duplicate

original, but all of which, together, shall constitute one

and the same instrument.

IN WITNESS WHEREOF, the parties hereto have executed

this Agreement, on the date opposite their names.

[Image of signature page]

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[CT 132]

APPENDIX A

1. As used herein, the term "document" or " documents"

include but are not limited to all originals, file copies and

copies not identical to the original, no matter how prepared, of

all writings, papers, notes, records, books and other tangible

things including, by way of example and not of limitation, the

following:

a. Memoranda, notes, calendars, appointment books,

shorthand or stenographer's notebooks, correspondence, letters

and telegrams, whether received, sent, filed or maintained

internally;

b. Drafts and notes, whether typed, penciled or otherwise;

whether or not used;

c. Minutes, reports and summaries of meetings;

d. Contracts, agreements, understandings, commitments,

proposals and other business dealings;

e. Recordings, transcriptions and memoranda or notes made

of any telephone or face-to-face oral conversations between or

among persons;

f. Dictated tapes or other sound recordings;

g. Computer printouts or reports and the applicable program

or programs therefor;

h. Tapes, cards or any other means by which data are stored

or preserved electrically, electronically, magnetically or

mechanically, and the applicable program or program therefor

(from which plaintiff may reproduce or cause to be reproduced

such data in written form);

[CT 133]

i. Pictures, drawings, photographs, charts or other

graphic representations;

j. Checks, bills, notes, receipts, or other evidence of

payment:

k: Ledgers, journals, financial statements, accounting

records, operating statements, balance sheets and statements of

account.

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