(4) Immediately after Closing, Schmieder, at their own cost, shall duly record the
Mortgage,

Section 7. Closing. Closing shall take place at the office of Plaintiff's counsel at
420 Lexington Avenue, New York, New York 10170 on or about June 1, 2009, bat no
later than June 30, 2009, where the following documents will be executed and/or
delivered:

(1) The parties will execute or deliver:
(a) A Stipulation of Dismissal, as provided in Section 1(3); and

(b) Mutual Releases, as provided in Section 1(4);

QE ___ vill execute and deliver:

(a) Personal guaranty, as provided in Section 5(1):
(b) A mortgage, as provided in Section 5(2);
(3) A title policy, as provided in Section 6(2),

(4) All costs, expenses, taxes and fees related to the issuance of the title policy
and the recordation of the Mortgage shall be borne by Schmieder. Each party shall bear
fees of their own counsel for counsel’s services in connection with the Closing.

(8) Closing by June 30, 2009 is a condition Limitation. If closing does not take
place for any reasons, this Agreement shall be deemed automatically terminated at the
end of the business hours of that day.

Section 8. Event of Defauit, The occurrence of any of the following shall
constitute an “Event of Default” under this Agreement:

(1) If any of the representations and warranties made by Schmieder in this
Agreement or in ay other documents or instrument executed in connection with this
Agreement are or become materially untrue, incorrect or misleading:

(2) The failure of Schinieder to comply with, or breach by Schmieder of, any
terms, covenants or conditions contained in this Agreement or in any other document or
instrument executed in connection with this Agreement,

(3) The occurrence of any filing by Schmieder or an involuntary filing against
Schmieder under Title 11 of the U.S. Code, as amended, or seeking any reorganization,
atrangement, composition, readjustment, liquidation or similar relief under state laws;
and


(c) Requesting that the Court impose a non-custodial sentence upon
Douglas Schmieder, in view of Schmieder’s and monetary settlement
with Plaintiff in the Civil Action.

(2) Plaintiff’s failure to make the submission in a timely manner (within ten days
after a written request) shall make this agreement null and void in its entirety. However,
plaintiff shail be given a reasonable opportunity to cure.

Section 4. Waiver of Statute of Limitations, In the event of Default, Schmieder
agrees that Plaintiff may reinstate or commence an action for the same claims that
Plaintiff made against Schmieder in the Civil Action, provided that such action may be
bought within three years of the date of this Agreement. Sehmieder HEREBY WAIVES
THEIR RESPECTIVE RIGHTS TO RAISE THE DEFENSE OF STATUTE OF
LIMITAIONS IN SUCH ACTION BROUGHT BY PLAINTIFF WITHIN THE
THREE-YEAR PERIOD. The three-year period will be extended in a circumstance
which constitutes an event of tolling the statute of limitations as a matter of statute or
common law,

Section. 5. Security, As conditions subsequent to this Agreement, Schmieder
shall provide the following to secure their obligations to pay the Settlement Amount and
any default interest under this Agreements

(1) An absolute and unconditional guaranty by in the form,
attached hereto as Exhibit C; and

(b)(6)

b)(6)

2A mortgage (the “Mortgage”) on the property at
(the “Property”), executed in the form attached as Exhibit D, to
secure her obligations as the guarantor.

(3) Plaintiff shall first seek to exhaust its remedies on the Mortgage, before
seeking to enforce the guarantec.ageinst[—-—- for any deficiency.

Section 6. Title Insurance.

(ly Schmieder represents that the title to the Property is vested solely in

(b)(4),(b)
(6)

(2) At Closing, Schmmieder, at their own cost, shall provide a clean policy of a title
insurance issued to Plaintiff | ]which

will insure, among others, the Mortgage as a valid lien in the amount of $200,000.00.

(3) Schmieder shall have the insurance carrier provide a tithe commitment to
Plaintiff no later than five business days prior fo Closing.


(4) If any payment under this Agreement is determined by a court or other
tribunal having jurisdiction to have been a voidable preferential transfer or payment or a
fraudulent transfer or conveyance under federal or state law and if any portion of the
payments of the Settlement Amount is undone and all or any part thereof must be
returned to Schmieder,

Section 9. Remedies. In the event of Default Plaintiff will provide Schmieder
with written notice of his default. If the default is not cured within five days of the date
of the notice, the entire amount owing under this Agreement will become immediately
due and payable to Plaintiff and Plaintiff will have the right to pursue any and. all
remedies to collect those amounts including without limitation the remedies set forth in
the Mortgage. Plaintiff shal! be entitled to collect attorney fees and costs incurred in
collection, regardless of whether it institutes formal legal proceedings to enforce its right
to payment under this Agreement, Plainsiff will further be entitled to interest on from the
date of default on the entire remaining unpaid amounts at a default interest rate of 12%.
Each right, power and remedy of Plaintiff provided for in this Agreement shall be
cumulative and shall be in addition to any other right, power or remedy existing at law or
in equity or by statute. Exercise by Plaintiff of any right, power or remedy shall not
preclude the simultaneous or later exercise by Plaintiff of any other rights, powers or
remedies,

Section 10. Notices. By fax and mail to the attorneys:

Attorney for IndyMac Bank Ene Weinstein
Feldman Weinstein & Smith LLP
420 Lexington Averue
New York, New York 1170
Tel; 212 931 8701

Attorney for Douglas Schmieder Michael L. Macklowitz
299 Broadway, Suite 14043
New York, New York 10007
Tel: 242 227 6655
Pax: 212 732 6972

Seetion 1. Subrogation and Indemnity. Schmieder will not assert and hereby
waives subrogation tights or indemnity claims against any other party related to the
claims or to the payments made under the terms of this Agreement.

Section 12. Legal Advice; Construction: Governing Law. The Parties
acknowledge that they have sought and obtained independent legal advice, to the extent
they deemed ‘necessary, prior to the execution of this Agreement. Further, the Parties
acknowledge that they have read this Agreement in its entirety, understand fully its
consequences, and agree freely and voluntarily with its contents prior to the execution of
this Agreement. Any rule of construction to the effect that ambiguities are to be resolved
against the drafting Party, shail not apply to the interpretation of this Agreement. This



SETTLEMENT AGREEMENT

OLL-
This Agreement dated as of the 44\ day of RAY” 2009, between the Federal Deposit
Insurance Corporation, in the capacity as Receiver of IndyMac Bank, FSB (“Plaintiff”)
and Douglas Schmieder, residing at[ ]
and Douglas Construction and Development Corporation, a New York corporation, with
its principal place of business also at 45 Douglas Court, Hampton Bays, New York 11946
(jointly and severally, and hereinafter collectively, “Schmieder”).

WITNESSETH:

WHEREAS, indyMaze Bank, F.S.B. made claims against Schmieder in a pending
litigation in the Supreme Court of the State of New York, County of Suffolk, entitled
IndyMac Bank, F.S.B, v. Equity Seitlement Services, Inc., et al. (Index No. 04/15833) (the
“Civil Action”);

WHEREAS, on July 11, 2008, the United States Office of Thrift Supervision
closed IndyMac Bank, F.S.B., appointed the Federal Deposit Insurance Corporation as
Receiver, and authorized the charter of a successor institution, IndyMac Federal Bank,
FSB, to which the Federal Deposit Insurance Corporation was appointed Conservator;

WHEREAS, Federal Deposit Insurance Corporation, as Receiver, pursuant to 12
U.S.C. § 1821(d), has succeeded to all rights, titles, powers, and privileges of the closed
bank;

WHEREAS, under a certain Purchase and Assumption Agreement between
Federal Deposit Insurance Corporation as Receiver of the closed bank and the same
Corporation as Conservator of IndyMac Federal Bank, F.S.B., Plaintiff, being the former
Receiver, owns these claims against Schmieder in the Civil Action;

WHEREAS, Douglas Schmieder is a defendant in a pending criminal action in
the United States District Court for the Eastern. District of New York entitled United
States v. Shannon Ferguson, et al. (2:04-cr-00989-DRH) (the “Criminal Action”);

WHEREAS, Douglas Schmieder deposited cash of $100,000.00 as an appearance
bail bond in the Criminal Action (the “Cash Bail”);

WHEREAS, to induce this Agreement, Schmieder represents that the Cash Bail
was made out of Douglas Schmieder’s own pocket, that title, ownership and interest in
the Cash Bail presently belong soiely to him, and that the Cash Bail is not subject to any
fien, asserted claim, or other encumbrances:

WHEREAS, it is expected that Douglas Schmieder will soon be sentenced in the
Criminal Action for an undetermined term of imprisonment,


Agreement shatl be construed as a whole in accordance with its fair meaning and in
accordance with the laws of the United States of America, and to the extent that state law
would apply the state of New York, The language of this Agreement shall not be
construed for or against any particular Party.

Section 13. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto, their respective heirs, legal representatives, successors
and assigns, Each party hereto and the persong signing below warrant that the person
signing below on such party’s behalf is authorized to do so and to bind such party to the
terms of this Agreement.

Section. 14. Separate Counterparts. This Agreement may be executed in one or
more coutterparts, each of which shall be deemed an original document, and all of which,
when taken together, shall be deemed to constitute a single document, Fax signatures and
electronically transmitted signatures (for example: pdf files} shall constitute original
signatures for the purpose of this Agreement.

IN WITNESS WHEREOF, the undersigned have executed this Settlement
Agreement as of the day and year first above written.

Douglas Schmieder| R he Federal Deposit Insurance Corporation,
or)

4s Conservator for IndyMac Federal Bank,
FSB.

(by)

Dale. sta? 2 geo?

By:

Douglas Construction and Developaient Printed Name: Reel wth S. ¢ LY

(b)(6) CormorationlO l

Tite C Ary nese
Date & - 4" 04



WHEREAS, Plaintiff and Schmieder desire to settle and discontinue the Civil
Action as to Schmieder, without intending that this Agreement shall cover or inure to the
benefit of any other defendants in the Civil Action; and

WHEREAS, as inducement to enter into this Agreement,

| is willing to provide ]personal. aay of

Schmicder’s payment obligations under this Aerewment and erant a mortgage on the
home. att lo
secure her guaranty obligations;

NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties, intending to be legally bound, agree as
follows:

Section |. Settlement.

(1) Schmieder shall pay $200,000.00 to Plaintiff (the “Settlement Amount”) in a
manner provided in Section 2 below.

(2) Douglas Schmieder shalt make himself available for a discussion with
Plaintiff's counsel and a representative of Plaintiff, at counsel's office at 420 Lexington
Avenue, New York, New York 10170, immediately after Closing provided in Section 7
herein (“Closing”). At such time, Schmieder shall provide Plaintiff with (@) full
cooperation in Plaintiff's efforts to discover the facts in the Civil Action, (ii) full
disclosure of all relevant facts known to him in response to counsel’s examination, and
(iii) all documents in his possession, custody or control. Schmieder’s obligations in this
subsection are conditions subsequent to this Agreement, If Schmieder fails to provide his
cooperation ia good faith, this Agreement shall become null and void upon prompt notice
by Plaintiff to Schnuieder’s counsel,

(3) Upon Closing, the Civil Action will be discontinued as to against Schmieder
without prejudice and. without costs fo any party by filing a Stipulation of Dismissal in
the form attached hereto as Exhibit A.

(4) Upon full payment of the Settlement Amount, the parties will exchange
Mutual Releases in the forms attached hereto as Exhibit B. Plaintiff's counsel (the firm
Feldman Weinstein & Smith LLP) will keep the executed original Releases in escrow and
release them to the parties upon Plaintiff's receipt of the full payment,

Section 2. Payment of Settlement Amount.

{1) Subject to subsection (2) below, and Plaintiff's compliance with Section 3,
infra, Schmieder hereby assigns and transfers his title, ownership and interests in the
Cash Bail to Plaintiff. Schmieder shall provide full cooperation to Plaintiff in obtaining

the court’s release of the Cash Bail to Plaintiff, including, but not limited fo, execution of


all documents and taking all actions that may be necessary to carry out the assignment
and obtain the court’s release to Plaintiff. All resulting cash proceeds of the Cash Bail
will be credited against the Settlement Amount to the extent of the amount of such
proceeds paid to Plaintiff.

(2) The parties understand that, notwithstanding the assignment of the Cash Bail
under Section 2(1) above, the court in the Criminal Action may order that the Cash Bail
be paid over to the United States Attorney to be applied to the payment of any
assessment, fine, restitution, or penalty imposed upon Schmieder, Any resulting payment
to Plaintiff out of the Cash Bail pursuant to such order will be deemed payment under
subsection (1) above and will be credited against the Settlement Amount. Nevertheless,
this subsection shall not be construed as a waiver of Plaintiff's entitlement to restitution
as 4 victim and any cancellation or termination of this Agreement will not affect.
Plaintiffs ownership of the payments resulting from the court’s restitution order.

(3) Schmieder shall pay an additional $100,000.00 in 25 (Wwenty five) monthly
installments in the amount of $4,000.00 due on or before the 1 day of each and every
month for the 25-month contiguous period, starting from the fourth month after the
month when Douglas Sciunieder reveives a sentence of no imprisonment in the Criminal
Action or when, if he receives an imprisonment sentence, he is released from prison.
Schmieder will have a 15-day grace period each month in which to make the monthly

payments,

(4) Any remaining outstanding balance of the Settlement Amount, whether any
eredit in whatsoever amount is realized or not under subsections (1) and (2) for whatever
reagons, shall be due and payable on or before the 1° day of the month immediately
following the 25-month peried provided in subsection (3).

(5) All payments to Plaintiff shall be made to “{FDIC in. care of FWS].”

Section 3, Submission to Sentencing Court.

(1) At Douglas Schmieder’s request which will be made prior to his being
sentenced in the Criminal Action but will be made only after the occurrence of closing as
provided in section 7 hereef, plaintiff will submit a letter to the Hon. Denis Hurley,
United States District Judge in the Criminel Action, setting forth the following and
making the following requests of the sentencing Court:

(a) Advising the Court that Plaintiff and Schmieder have settled all claims
made against them in the Civil Action:

(b) Advising the Court that the settlement agreement is for full
satisfaction of all claims asserted agairist Schmieder, and that Plaintiff
seeks restitution from Schmieder out of the Cash Bail, the title to and
ownership of which Schmieder assigned and transferred to Plaintiff,
and seeks no other restitution; and