SETTLEMENT AND RELEASE AGREEMENT 

This Settlement and Release Agreement ("Agreement") is made by, between, and among 

the following undersigned parties: 

The Plaintiff federal Deposit Insurance Corporation as Receiver for Colonial Bank 

("PDIC-R"); and VSG Bank, N.A. ("FSG") (the "Settling Defendant") (individually, the FDIC-R 

and the Settling Defendant may he referred to herein as "Party" and collectively as the "Parties"). 

RECITALS 

WHEREAS: 

Prior to August 14, 2009, Colonial Bank ("Colonial" or the "Bank") was a depository 

institution organized and existing under the laws of the State of Alabama. 

On August 14,2009, Colonial was closed by the Alabama State Banking Department and 

pursuant to 12 U.S.C. § l82l(c), the Federal Deposit Insurance Corporation was appointed 

Receiver. In accordance with 12 U.S.C. § 1821 (d), the FDIC-R succeeded to all rights, titles, 

powers and privileges of the Bank, including those with respect to its assets. 

Among the assets to which the FDIC-R succeeded were the Bank's claims, demands, and 

causes of action that arc the subject of this Agreement. 

The Bank provided funding for certain loans brokered, sold and/or delivered by FSG (the 

•'Loans"). A dispute has arisen between the Parties with respect to an outstand.ing demand for 

repurchase and/or indemnity. The PDIC-R claims that FSG breached representations and 

warranties in connection with the Loans and demands that FSG must repurchase or indemnify 

the FDlC-R from losses on the Loans related to breaches of the representations and warranties 

(the "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 of the promises, undertakings, payments, and 

releases stated herein, the sufficiency of which consideration is hereby acknowledged, the 
undersigned Pat1ics agree, each with the other, as follows: 

SECTION I: I)ayment to Ji'J>IC-R 

1\.. As an essential covenant and condition to this Agreement, the Settling Defendant 

agrees to pay the FDrC-R the sum of two hundred thousand dollars ($200,000) (''the Settlement 

Amount") within thirty (30) days of the }'DIC-R's execution of this Agreement, in settlement of 

the Claims. 

B. The Settling Defendant shall deliver the Settlement Payment to the FDIC-R by 

direct wire transfer into Mortgage Recovery Law Group LLP's Client Trust Account or by 

certified or cashier's check drawn upon a depository institution acceptable to FDIC-R. ln the 

event that the Settlement Payment is not delivered to the .FDIC-R (or its counsel) within the 

timeframc required in subsection A above, interest shall accrue on all unpaid amounts at the rate 

of 5% per annum from thirty (30) calendar days following the date the FDIC-R executes this 

Agreement until the date of payment. 

C. If the FDIC-R does not receive the Settlement Payment in full on or before the 

date determined by subsection A above, then the FDIC-R, in its sole discretion, shall have the 

right at any time prior to receipt of the Settlement Payment in full (including all accrued interest) 

to: 

l. Extend the period of time for the Settlement Payment, including interest 

accruing from the date determined by subsection A above, through the date of payment at a rate 

calculated in accordance with 26 U.S.C. § 6621 (a)(2); or 

2. Enforce this Agreement, in which event the Settling Defendant agrees to 

jurisdiction in United States District Court for the Central District of California and to pay all of 

the FDIC-R's reasonable attorney's fees and costs expended in enforcing the terms of this 

Agreement; or 

3. Terminate the Agreement and move to vacate any dismissal order, to 

which the Settling Defendant agrees tn consent and re-institute an action on the FDIC-R's 

claims. The Settling Defendant further agrees to waive any defense based on any statute of 

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limitations that would bar any of the FDJC-R's claims and waive aH objections, defenses, claims 

or counterclaims, and covenant and agree not to assert any objections, defenses, claims or 

counterclaims that did not exist or were otherwise unavailable as of the date this Agreement was 

fully executed; and/or 

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

Any extension of time under Section l.C.l for delivery ofthe Settlement Payment or 

acceptance of a portion of the Settlement Payment shall not prejudice the 'FDlC-R's rights to take 

any of the actions set forth in Section lC.2 through I.C.4 at any time prior to receipt of 

Settlement Payment (including all accrued interest) in full. 

SECTION II: Releases 

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

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

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

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

Civil Code§ 1542 and any other simi Jar statute or rule. 

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 docs 

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 of Cal(fornia Civil Code §1542 is that even if any Party should eventually suffer 

additional damag<.:s arising out of the Claims, the claims and causes of action that were or could 

have been asserted relating to the Claims, or any facts or circumstances 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 to 

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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 of whether that Party's lack of knowledge is the result of ignorance, oversight, 

error, negligence, or any other cause. 

A. JlwfDIC-R's Releases. 

Upon receipt of the Settlement .Payment in full and except as provided in Section lll.C., 

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

Defendant and its respective heirs, executors, trustees, administrators, representatives, 

successors, and assigns, from any and all claims, demands, obligations, damages, actions, and 

causes of action, direct or indirect, in law or in equity, belonging to the FDIC-R, that arise from 

or relate to the Claims. 

B. The Settling Defendant's Releases. 

Effective simultaneously with the release granted in Section III.A. above, the 

Settling Defendant, on behalf of itself and its respective heirs, executors, trustees, administrators, 

agents, representatives, attorneys, successors, and assigns, hereby releases and discharges the 

FDIC-R, and its employees, officers, directors, representatives, attorneys, successors and assigns, 

from any and all claims, demands, obligations, damages, actions, and causes of action, direct or 

indirect, in law or in equity, that arise from or relate to the Claims. 

C. Exceptions from Releases by FDJC-R. 

1. Notwithstanding any other provision of this Agreement, the FDIC-R does 

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

been executed, any claims or causes of action: 

a. Against the Settling Defendant or any other person or tmtity 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 entity, including without limitation any such claims acquired by FDIC-R as 

successor in interest to the Bank or any person or entity other than Bank; and 

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

in this Agreement. 

2. Notwithstanding any other provision of this Agreement, nothing in this 

Agreement shall be construed or interpreted as limiting, waiving, releasing, or compromising the 

jurisdiction and authority nfthc Federal Deposit Insurance Corporation in the exercise ofil<> 

supervisory or regulatory authority or to diminish its ability to institute administrative 

enforcement or other proceedings seeking removal, prohibition, or any other relief it is 

authorized to seek pursuant to its supervisory or regulatory authority against any person. 

3. Notwithstanding any other provision of this Agreement, this Agreement 

does not purport to waive, or intend to waive, any claims that could be brought by the United 

States through the Department of Justice, the United States Attorney's Office for any federal 

judicial district, or any other department or agency of the United States as defined by 18 U.S.C. § 

6. In addition, the foDlC-R specifically reserves the right to seek court-ordered restitution 

pursuant to the relevant provisions of the Mandatory Victims Restitution Act, 18 U. S.C. §§ 3322 

and 3663 et. ~ if appropriate. 

SECTION III: Representations and Acknowledgements 

A. Auth orizcd)~ ig_o_atories. All of the undersigned persons represent and warrant that 

they arc Parties hereto or arc authorized to sign this Agreement on behalf of the respective Party, 

and that they have the full power and authority to bind such Party to each and every provision of 

this Agreement. This Agreement shall be binding upon and inure to the benefit of the 

undersigned J)artics and their respective heirs, executors, trustees, administrators, representatives, 

successors and assigns. 

B. Advice of Counsel~ Each Party hereby acknowledges that he, she, or it has 

consulted with and obtained the advice of counsel prior to executing this Agreement, and that 

this Agreement has been explained to that Party by his or her counsel. 

SE(..'TJON IV: ncasonable Cooperation 

The Patties agree to cooperate in good faith to effectuate all the terms and conditions of 

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this Agreement, including doing, or causing their agents and attorneys to do, whatever is 

reasonably necessary to effectuate the signing, delivery, execution, filing, recording, and entry, 

of any documents necessary to conclude the Claims and to otherwise perform the terms of this 

Agreement. 

SECTION V: Other Matters 

A. No Admission of Liability. The undersigned Parties each acknowledge and agree 

that the matters set forth in this Agreement constitute the settlement and compromise of disputed 

claims and defenses, that this Agreement is not an admission or evidence or' 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 except to enforce its terms. 

B. Execution in CQ.\l_pjerparts. This Agreement may be executed in counterparts by 

one or more of the Parties and all such counterparts when so executed shall together constitute 

the final Agreement, as if one document had been signed by all Parties; and each such 

counterpart, upon execution and delivery, shall be deemed a complete original, binding the 

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

C. Choice ofLaw. This Agreement shall be interpreted, construed and enforced 

according to applicable feder-al law, or in its absence, the laws of the State of California. 

D. Notices. Any notices required hereunder shall be sent by registered mail, first 

class, return receipt requested, and by email, to the following: 

If to the FDIC-R: Andrew P. Baeza, Esq.; Mortgage Recovery Law Group LLP, 700 N. 

Brand Blvd., Suite 830, Glendale, CA 91203~ telephone: (8 18) 630-7900; email: 

(b)(6) ................................ jL.- ····· _···· ______ ___. 

If to FSG: Curtis J. Romig; Bryan Cave LLP, One Atlantic Center, Fourteenth Floor, 

1201 West Peachtree Street, NW, Atlanta, GA 30309; telephone: (404) 572-6726; Email: 

(b)(6) l--

E. Entire Agreement and Amendments. This Agreement constitutes the entire 

agreement and understanding between and among the undersigned Patties concerning the matters 

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set forth herein and supersedes any prior agreements or understandings. This Agreement may 

not be amended or modified, nor may any of its provisions be waived, except in writing signed 

by the Parties bound thereby, or by their respective authorized attorney(s), or other 

represcntati vc( s ). 

F. J.itl~s-~.n.d.C.~p-~j_Q.Q~. All section titles and captions contained in this Agreement 

arc for convenience only and shall not affect the interpretation of this Agreement. 

G. No Confidentiality. The undersigned Parties acknowledge that this Agreement 

shall not be confidential and will be disclosed pursuant to the Federal Deposit Insurance 

Corporation's applicable policies, procedures, and other legal requirements. 

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. 

Date: 

FEDERAL DEPOSIT INSURANCE CORPORATION AS 

RECEIVER FOR COLONIAL BANK 

BY: 

TITLE: 

PRINT NAME: T tfoM As ::r: o 'fSil.te ,.J 

FSG BANK, N.A. 

BY: 

TlTI,E: 

PRINT NAME: ------------------

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............ (~)(~) 
set forth herein and supersedes any prior agreements or understandings. This Agreement may 

not be amended or modified, nor may any of its provisions be waived, except in writing signed 

by the Parties bound thereby, or by their respective authorized attorney(s), or other 

representativc(s). 

F. Titles and Captions. All section titles and captions contained in this Agreement 

are for convenience only and shall not affect the interpretation of this Agreement. 

G. No Confidentiality. The undci·signcd Parties acknowledge that this Agreement 

shall not be confidential and wili be disclosed pursuant to the Fedel"dl Deposit Insurance 

Corporation's applicable pol icics, procedures, and other legal requiren1ents. 

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 . 

Date: 

. FEDERAL DEPOSIT INSURANCE CORPORATiON AS 

RECEIVER FOR COLONIAL BANK 

BY: 

TITLE: 

PRINT NAME: _______ _ 

BY: 

'riTLE: 

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