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SETTLEMENT AGREEMENT At"D RELEASE 

This Settlement Agreement and Release C'Agreemene') is made as ofthis 13th day of 

September, 2012, by, between, and among the FederaL Deposit Insurance Corporation as 

Receiver for AmTrust Bank, Cleveland, Ohio ("FDIC-R"); Whitmore Brewster, an individual 

("Brewster"); and United American Mortgage Corporation, a California Corporation ("UAMC''). 

(Individually, the FDIC-R, Brewster, and UAMC may be referred to herein as a «Party/' and 

collectively as the ''Parties·'). 

WHEREAS: 

Prior to December 4, 2009, AmTrust Bank, Cleveland, Ohio, previously known as Ohio 

Savings Bank ("Bank}'), was a depository institution organized and existing under the laws of the 

United States. 

On December 4~ 2009, the Office ofThrift Supervision closed the Bank and appointed 

the Federal Deposit In.surance Corporation as its receiver. In accordance with 12 U.S.C. § 

l82l(d), the FD[C-R succeeded to all rights, titles, powers, and privileges ofthe Bank, including 

those with respect to its assets. 

On or about October 25,2006, Bank funded a mortgage loan to borrower! hn (b)(§.) 

the amount of$600,000 (the "Loan") in connection with[3purchaseofaresidentiaJ .. (1::>1(§) 

(b)(6). .propertylocated···atl· om •••••• lsan Clemente, California (hereinafter the "'Transaction").

Brewster prepared an appraisal in connection with the Transaction, while UAMC brokered the 

Loan to Bank in connection with the Transaction. (Brewster and UAMC arc collectively 

referred to herein as ~'Defendants".) 

On or about M.arch 7, 2012, FDIC-R filed an action against Defendants in the United 

States District Court for the Centrnl District of California, Case No. SA CV 12-358 JVS (JPRx) 
Page 2 

(the "District Court Action")} alleging that Brewster caused damages to the FDIC-R due to his 

breach ofcontract and negligent misn,-presentation, and further alleging that UAMC caused 

damages to the FDIC-R due to its breach ofcontract. 

A dispute has arisen between the Parties with respect to claims by the FDIC-R related to 

Defendants' actions as alleged in the District Court Action (hereinafter any and all claims by the 

FD[C-R against Defendants related to allegations made in the District Court Action are referred 

to as tl1e "Claims',). The Parties engaged in settlement negotiations as a result of the Claims. 

The Parties now deem it in their best interests to enter into this Agreement to avoid the 

uncertainty. trouble, and expense of litigation. 

NOW, THEREFORE, in consideration ofthe promises, undertakings, payments, and 

releases stated herein, the sufficiency ofwhich consideration is hereby acknowledged, the 

undersigned Parties agree, each with the other, as follows: 

SECTION I: Payment to FDIC·R 

A. As an essential covenant and condition to this Agreement, UAMC shall pay the 

FDIC-R the total sum of Sixty Thousand Dollars ($60,000) (the "UAMC Settlement Payment"). 

UAMC shall satisfy its payment obligation by rendering six installment payments as follows: a 

first payment in the amount ofTen Thousand Dollars ($1 0,000) «>be paid on or before October 

1. 2012, followed by five (5) additional payments, each in the amount ofTen Thousand Dollars 

($10,000)~ to be paid on or before the first day ofthe next five consecutive months, beginning on 

November 1, 2012 and concluding on March I, 2013. 

B. In addition, also as an essential covenant and condition to this Agreement, on or 

before October l, 20 L2, Brewster shaH pay the FDIC-R the total sum of Sixty Five Thousand 

Dollars ($65,000) (the "Brewster Settlement Payment"). (The UAMC Settlement Payment and 

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the Brewster Settlement Payment are referred to collectively herein as the "Settlement 

Payment''). The Settlement Payment shall be made either by: a) check made payable to ".FDIC 

as Receiver of AmTrust Bank" and shall include reference to "Brewster" in the memorandum, or 

b) wire transfer made payable to "Mortgage Recovery Law Group Client Trust Account," 

(b)(4) AccountNumbenJ ·· IRouting Number: I H fReference: AmTrust!Brew.ste.r... (b)(4)

Settlement. 

C. If the FDIC·R does .not receive the Settlement Payment in full on or befure the 

dates determined by subparagraphs A and B above ("Settlement Payment Due Dare"), then the 

FDIC-R, in its sole discretion, shall have the right to~ 

l. extend the period oftime for payment, including interest accruing from the 

Settlement Payment Due Date through the date ofpayment at a rate calculated in 

accordance with 26 U.S.C. § 6621 (b)(3); or 

2. enforce this Agreement and, in such event, Defendants agree to 

jurisdiction in Federal District Court in California and to pay all ofthe FDIC·R's 

reasonable attorney's fees and costs expended in enforcing the terms ofthis Agreement; 

or 

3. declare this Agreement null and void, move to vacate any dismissal order, 

to which Defendants agree to consent, and institute an action on the FDIC~R's claims, as 

to which Defendants waive any and all objections and defenses and covenant and agree 

not to assert any objections and defenses; and/or 

4. seek any other relief available to it in law or equity. 

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Any extension oftime for delivery ofthe Settlement Payment shall not prejudice the FDlC-R's 

right to take other action or seek any relief during or after such period ofextension, including the 

.right to bring an action to enforce the Agreement, or declare the Agreement null and void. 

D. In addition, ifthe FDIC-R does not receive the UAMC Settlement Payment in full 

on or before the dates dctennined by subparagraph B above, then the FDIC-R, in its sole 

discretion, shall also have the right to enforce a stipulated judgment against UAMC in the 

amount of One Hundred Thousand Dollars ($1 00,000) less any settlement payments made by 

UAMC following execution ofthis Settlement Agreement. In the instance that the FDIC-R 

pursues a stipulated judgment against UAMC for UAMC's failure to fully and timely pay in full 

the UAMC Settlement Payment, UAMC agrees not to oppose the entry or enforcement ofthe 

stipulated judgment and further agrees to compensate the FDIC-R for all costs, fees, and other 

expenses incurred in entering and enforcing this stipulated judgment. The FDIC-R agrees not to 

:file any stipulated judgment against UAMC without first providing UAMC with notice of non· 

payment and allowing UAMC fourteen (14) business days from the date such noti.ce is sent to 

cure non-payment. Any obligations by the FDlC-R to provide notice ofnon-payment will be 

satisfied by delivering notice ofnon-payment to UAMC's counsel via email or first class mail at 

the address designated in Section V below. 

SECTION II: Releases. 

Each Party acknowledges that this Agreement applies to all claims for injuries, damages, 

or losses of any type or nature (whether those injuries, damages. or losses are known or 

unknow11, foreseen or unforeseen. patent or latent) which that Party may have against another 

Party arising from the Claims. Each Party hereby expressly waives appHcation of California 

Civil Code §1542 and any other similar statute or rule. 

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Each Party certifies that they have read and understood the following provisions of 

California Civil Code §1542.. which states in pertinent part as follows: 

A general release does not extend to claims which the creditor does 

not know or suspect to exist in his or her favor at the time of 

executing the release, which if known by him or her must have 

materially affected his or her settlement with the debtor. 

Each Party understands and acknowledges that the significance and consequence of its 

waiver ofCalifornia Civil Code§ !542 is that even ifany Party should eventually suffer 

additional damages arising out of the Claims, the claims and causes ofaction that were or could 

have been asserted relating to the Claims, or any facts or ci.rcumstances related to the Claims, 

that Party will not be able to make any claim against the other Party for those damages. 

Furthermore, each Party acknowledges that it consciously intends these consequences even as ro 

claims for damages that may exist as of the date of this release but which that Party does not 

know exists, and which, if known, would materially affect that Party's decision to execute this 

release, regardless ofwhether that Party's lack ofknowledge is the result ofignorance, oversight, 

en·or~ negligence, or any other cause. 

A. The FDIC-R 's Release. 

Upon receipt ofthe Settlement Payment~ and except as provided in PARAGRAPH II.D., 

the FDIC-R, for itself and its successors and assigns, hereby releases and discharges Defendants 

and their respective employees, oflicers, directors, representatives~ heirs, executors, 

administrators~ successors and assigns, from any and all claims, demands, contracts, obligations~ 

damages, actions, and causes ofaction. direct or indirect, in law or in equity belonging to the 

FDIC-R, arising out ofor relating to the facts and circumstances giving rise to the Claims. 

B. Brewster's Release. 


Effective simultaneously with the release in PARAGRAPH ILA. above, Brewster, on 


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behalfof himself, and his respective employees, officers, directors, representatives, heirs, 

executors, administrators, successors and assigns, hereby releases and discharges the FDIC·R, 

and its employees~ officers, directors, representatives, successors and assigns, from any and all 

claims belonging to Brewster, arising out ofor relating to the facts and circumstances alleged by 

the Claims. 

C. UAMC's Release. 

Effective simultaneously with the release in PARAGRAPH II.A. above, UAM.C, on 

behalf of itself, and its respective employees, oflkers, directors, representatives, heirs, execut<)rs, 

administrators) successors and assigns, hereby releases and discharges the f'DlC-R> and its 

employees. ofticers, directors, representatives, successors and assigns, from any and all claims 

belonging m UAMC, arising out ofor relating to the facts and circumstances alleged by the 

Claims. 

D. Excel}tions to Release by FDIC~R. 

l. Notwithstanding any other provision ofthis Agreement. the FDIC-R does 

not release, and expressly preserves fully and to the same extent as ifthis Agreement had not 

been executed, any claims or causes ofaction: 

a. against Defendants or any other person or entity for liability, if 

any, incurred as the maker, endorser or guarantor of any promissory note or indebtedness 

payable or owed by them to FDIC-R, the Bank, other financial institutions, or any other person 

or enrity~ including without limitation any claims acquired by FDJC-R as successor in interest to 

the Bank or any person or entity other than Bank; 

b. against any person or entity not expressly released by the FDIC-R 

in this Agreement; or 

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c. which are not expressly released in PARAGRAPH II.A. above. 

2. Notwithstanding any other provision ofthis Agreement, nothing herein 

limits, waives, releases, diminishes or compromises the jurisdiction and authority ofthe Fedeml 

Deposit insurance Corporation in the exercise of iis supervisory or regulatory authority to 

institute administrative enforcement or other proceedings seeking removal, prohibition~ civil 

penalties, restitution or other relief it is authorized to seck pursuant to its supervisory or 

regulatory authority against any person~ or which may arise by operation of law, rule, or 

regulation. 

3. Notwithstanding any other provision ofthis Agreement, this Agreement 

does not waive any claims which could be brought by the United States through the Department 

ofJustice, the United States Attorney's Office for any federal judicial district. In addition, the 

FDIC-R specifically reserves the right to seek court ordered restitution pursuant to the relevant 

provisions ofthe Victim and Witness Protection Act. 18 U.S.C. § 3663, et. seq., ifappropriate. 

E. Dismissal. 

Upon the FDIC-R's counsel's receipt of the entire Settlement Payment, the FDlC-R shaH 

fiJe a stipulation for dismissal ofthe District Court Action with prejudice, and each Party shall 

bear their own costs and fees. Such dismissal shall include dismissal of any and all cross-claims 

nled in the District Court Action. The Parties shall cooperate with the FDIC-R to accomplish 

such stipulation for dismissal. 

SECTION III: Insolvency. 

A. Insolvency. 

Brewster warrant as io payrncnis made by or on his behalfthat at the time ofsuch 

pay:m.ent, Brewster is not insolvent nor will the payment made by or o.n his behalf render him 

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insolvent within the meaning and/or for the purposes of the United States Bankruptcy Code. 

This warranty is made by Brewster and not by his counseL 

UAMC warrants as to payments made by or on its behalf that at the time ofsuch 

payment, UAMC is not insolvent nor will the payment made by or on its behalf render it 

insolvent within the meaning and/or for the purposes of the United States Bankruptcy Code. 

This warranty is made by UAMC and not by its counsel. 

B. Preferences. 

[n the event that the FDIC-R is required to return any portion ofthe Settlement Payment 

due to a final order by a court that the transfer ofthe Settlement Payment or any portion thereof 

constituted a preference, voidable preference, fraudulent transfer or similar transaction, then, in 

its sole discretion, the FDIC-R may, without waiver of any other rights it may have in law or 

equity, pursue any ofthe rights and remedies set forth in paragraph I(C) above, and/or otherwise 

permitted by law. 

SECTION IV: Termination. 

[n the event the FDIC-R exercises its right to declare this Agreement null and void as 

provided herein, then, for the purposes ofany statute of 1 imitations or other time-based defense 

to any ofthe claims ofthe FDlC-R, the parties to this Agreement shall be deemed to have 

reverted to their respective status as of 5:00p.m. Pacific Time, August 14, 20 l2. 

SECTION V: Notices. 

Any notices required hereunder shaH be sent by registered mail, first class, return receipt 

requested, and may also be sent by email, to the following: 

lfto the FDIC~R: 

Michael Delbick 

Mortgage Recovery Law Group 

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700 North Brand Boulevard, Suite 830 


Glendale, California 91203 


(818) 630-7905 

If to Brewster: 

FrederickS. Reisz 


Meyers McConnell Reisz Sidennan 


11859 Wilshire Blvd.~ 4th Floor 


Los Angeles, CA 90025 


(31 0) 312-0772 

(b)(6)_ .. .........I..__HHH_··········-·············-·······_______. 


lfto UAMC: 

Dan Carlton 


Law Otlkcs ofDaniel C. Carlton 


19700 Fairchild Road, Suite 280 


Irvine, CA 92612 


(949) 757-0707 

(b )(6). ············ .....·····-··················· .. I 

SECTION VI: Other Matters. 

A. No Admission ofLiabilitv. 

The undersigned Parties each acknowledge and agree that the matters set forth in this 

Agreement constitute the settlement and compromise ofdisputed claims and defenses, that this 

Agreement is not an admission or evidence of liability or infirmity by any of them regarding any 

claim or defense, and that the Agreement shall not be offered or received in evidence by or 

against any Party hereto, except to enforce its tenns. 

B. Execution in Counterparts. 

This Agreement may be executed in counterparts by one or more ofthe Parties named 

herein and all such counterparts when so executed shall together constitute the final Agreement, 

as ifone document had been signed by all Parties hereto; and each such counterpart, upon 

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execution and delivery, shall be deemed a complete original, binding the Party or Parties 

subscribed thereto upon the execution by all Parties to this Agreement. 

C. Binding Effect. 

All of the undersigned persons represent and warrant that they are a Party hereto or are 

authorized to sign this Agreement on behalf ofthe respective Party, and that they have the full 

power and authority to bind such Party to each and every provision ofthis Agreement. This 

Agreement shaH be binding upon and inure to the benefit of the undersigned Parties and their 

respective heirs, executors, administrators, representatives, attorneys, successm-s and assigns. 

D. Entire Agreement. 

This Agreement constitutes the entire agreement and understanding between and among 

the undersigned Parties concerning the matters set forth herein and supersedes any prior 

agreements or understandings. No representations, warranties or inducements have been made to 

or relied on by any Party concerning this Agreement and its exhibits other than those contained 

therein. 

E. Amendments. 

Thi.s Agreement may not be amended or modified, nor may any of its provisions be 

waived, except in writing by the Party or Parties bound thereby, or by their respective authorized 

attorney(s) or other representative(s). 

F. Reasonable Cooperation. 

1. The undersigned Parties agree to cooperate in good faith to effectuate all 

the terms and conditions ofthis Agreement, inc.luding doing, or causing their agents and 

attorneys to do, whatever is reasonably necessary to effectuate the signing, delivery, execution, 

tiling, recording, and entry, of any documents necessary to perform the terms ofthis Agreement. 

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')

..... Further, Defendants agree to cooperate fully with the FDIC·R in 

connection with any action required under this Agreement. Any such cooperation that involves 

any out ofpocket costs is subject to reasonable reimburS<.'Tilent by the FDIC-R pursuant to its 

internal guidelines and policy for such reimbursement. Such cooperation shall consist of: 

a. producing all documents requested by the fDJC-R, without the 

necessity ofsubpoena, as detennined by the FDIC-R, in its sole discretion, to be relevant to the 

Bank~ 

b. making themselves available upon request by the FDlC·R at 

reasonable times and places for interviews regarding facts, as determined by the FDIC-R in its 

sole discretion, to be relevant to the Bank; 

c. appearing to testify, upon request by the FDIC~R, in any matter 

determined by the FDIC-R in its sole discretion, to be related to the Bank, without the necessity. 

of subpoena; 

d. signing truthful affidavits upon request by the FDIC·R, regarding 

any matter, as determined by the FDIC-R in its sole discretion, to be relevant to the Bank. 

G. Choice ofLaw. 

This Agreement shall be interpreted, construed and enforced ac<:ording to applicable 

federal law! or in its absence, the internal laws ofthe State of California, without regard to its 

conflicts ofJaws. 

H. Advice of Counsel. 

Each Party hereby acknowledges that he or it has consulted with and obtained the advice 

ofcounsel prior to executing this Agreement, and that this Agreement has been explained to that 

Party by his or its counsel. 

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J. Title and Captions. 

All section titles and captions contained in this Agreement are .tbr convenience only and 

shall not aftect the interpretation ofthis Agreement. 

K. Authorship/Construction. 

This Agreement sets forth tenns and agreements jointly negotiated hy the Parties. It is 

expressly agreed that this Agreement shall not be construed for or against any patty by reason of 

which party drafted it. 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed 

by each of them or thejr duly author.ized representatives on the dates hereinafter subscribed. 

FDIC as R~eiver for AmTrust Counsel for .FDJC-R (approval as BJ*, Clevel~nd1 Ohio to form) 

(b)(6) ·····································By: 1"-u__________. By: 

Name:~ fr,teK ;t1~ life_ tfw.'rk Name: --..-.......................... ___ _ 
 Title: Lov,.,.se_/ Date: 

' 

Date: /& ;jIHI)­

United American Mortgage Counsel for UAMC (approval as 

Corporation to form) 

By: By: 

Name: _______________________ Name: --------···························-··..... 

Title: Date: 

Date: 

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Page 13 

J. Title and Captions. 

All section titles and captions contained in this Agreement are for convenience only and 

shall not affect the intetpretation ofthis Agreement. 

K. Authorship/Construction. 

This Agreement sets forth terms a.OO agreements jointly negotiated by the Parties. It is 

expressly agreed that this Agreement shall not be construed for or against any party by reason of 

which party drafted it. 

IN WITNESS WHEREOF. the parties hereto have caused this Agreement to be executed 

by each of them or their duly authorized representatives on the dates hereinafter subscribed. 

FDIC as Receiver for AmTrust Counsel for FDIC-R (approval as 

Clevet:md, Ohio to form} 

(b)(6) (b)(6) By:·····......_!________, By: += 

Name: ~q,~ JhA Hf&lfu.:r/c Name: ...E.-f'1-:.....;·,'d:.-....;..:..:..~~JZ2~· ~~1/J.~~i£~·· _ 


Title: LDvnse.( Date: 


Date: L~ft h.,/J-


United American Mortgage Counsel for UAMC (approval as 

Corporation to form) 

By: By: 

Nrune: ____________________ Name: ----~-------------

Title: Date: 


Date: 


.12 

----- ---- -- --------- -------- ~ 

Page 14 

1. Title and Captions. 

All section titles and captions contained in this Agreement ate for convenience only and 

shall not affect the interpretation of this Agreement 

K. Authorsbi.R'CQ!Wroction. 

This greeme ~~ furth tetms and ~ments jointly ne&Qtiated by the Parties. It is 

e.xpressly agreed that this Agreement shall not be construed for or against any party by reason of 

which party drafted it. 

IN WITNESS WHEREOF. the parties hereto have caused this Agreement LObe executed 

b~ each of them or their duly authorized tep.resentativts on the dates re:inaft~r subscribed, 

FDIC as Rec:civer for AmTrust C()Uilsel for FDlC-R {appr oval u 

Bank, Cleveland. Ohio 1o fomt) 

By: 	 By: 

Name: Name:-- - --- ­

Title: Date: 

Date: 

Unite-d rtpgc 

Co 

.................... (b)(6)
 By: 

Name; D4LA/i.C/Z_ (-<~~ . /{(.,7{JJ/ 

Ti:le: eB.E::~UJ.Etil:._ ___ _ . Date: Yba z....-­ 7 Date: q~ 11 1~ 
___ _ 

·----·------­

WhitmoN Counsel for Brewster (approval nrewstcr 

tts t!bt'orm) <=::> · 

By: .__I:-----~-_..JI··························································(b)(6) 

ate: ---s.f_.,.._')..._'f~,._..:..._/Y Name: \;.Gt.'J' L•\1.. v<.\. <\ ... 

Date: t41 t"/ 11 '--­

13