subsidiaries, parents, attorneys, representatives and assigns, conservators and/or
teceivers, and all persons or entities acting by, through, under, for, on behalf of, or in
concert with them, past or present, (such past and present parties, being hereinafter
referred to collectively as “LCN Releasces”), jointly and severally, from and against any
and all rights, claims, debts,demands, acts, agreements, liabilities, obligations, damages,
costs, fees (including, without limitation, those of attomeys), expenses, actions and/or
causes of action of every nature, character and description, or causes of liability, rights
and offset rights, whether at law or in equity, whether known or unknown, suspected or
unsuspected, asserted or unasserted, including without limitation injunctive or equitable
relief, any award of actual, consequential, incidental, liquidated, or other types or
Categories of damages, any award of punitive or exemplary damages, any claims for
attomeys’ fees, costs or expenses of litigation and any other type of relief which an y of
them have or may have arising out of, or in any way connected with or related to, the

Action, LCN's inspections and any other services related to: the: Marble Falls Property,

a (8) the. Property and/or the[———__| Property, or IndyMac’s
(6 —

(b)(4),(b) losses conceming the Marble Falls Property, the Property and/or the
8 4
{b)c4).¢b) Property.

(6)

5. Release by LCN, Subject to full performance of the obligations and
Tepresentations and warranties set forth in this Agreement, LCN, for itself and for each
and every one of its cuirent and former officers, directors, joint venturers, partners,
employees, servants, spouses, heirs, administrators, executors, predecessors, successors,
subsidiaries, parents, attorneys, representatives and assigns, conservators and/or

receivers, and all persons or entities acting by, through, under, for, on behalf of, or in

céncert with them, past or present, filly and forever releases, acquits and discharges

-5-
IndyMac v. LON


shall indemnify and hold harmless the non-breaching party from any and al! loss or
damage, including reasonable attorneys’ fees, incurred as a result of the breach of such
representation and warranty.

14. Attorneys’ Fees and Costs. IndyMac and LCN agree to pay their own
costs, attomeys’ fees and expenses incurred in connection with the Action. In the event
that any action, suit or other proceeding is instituted to remedy, prevent or obtain relief
from a breach of this Agreement, arising out of a breach of this Agreement, involving
claims. within the scope of the release contained in this Agreement or pertaining to a
declaration of rights under this Agreement, the prevailing party shal] recover its
reasonable attorneys’ fees incurred in each and every-such action, suit or other 7
préceeding, including any and all appeals or petitions therefrom.

15. Counterparts, This Agreement may be executed in one or more
counterparts, each of which when executed and delivered shall be an original, and all of
which when executed shall constitute one and the same instrament. Signatures on this
agreement, or any counterpart of this Agreement, transmitted by facsimile machine or
electronic mail in -pdf format shall have the same force and effect as original signatures.

IN WITNESS WHEREOF, the parties hereto have execuied this Agreenient on

the dates set forth below.

Dated: 12.2 2008 INDYMAC FEDERAL BANK, FSB

By:
Its: 2 :
—— rman Gomez -
Vice President
-10-

fndyMae-v, LON


“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.”
To the extent necessary to effectuate the Releases set forth herein, IndyMac and LCN
expressly waive the benefits and protection of Section 1542 of the California Civil Code.

1 Representations and Warranties. The parties represent and warrant to and
agree with each other as follows:

a. IndyMac and LCN hive received independent legal advice from attorneys
of their choice with respect to the advisability of entering into this
Agreement and of giving the releases provided herein.

b. Inconnection with-the execution of this Agreement and the -making of the
settlement provided for herein, no party to this Agreement has relied upon
any statement, representation or promise of any other party not expressly
contained herein.

ce. This Agreement is fully integrated and contains the entire agreement of
the parties hereto. There are no agreements or understandings between the
parties hereto relating to the matters and releases referred to in this
Agreement other than as set forth in this Agreement., and this Agreement
supersedes and replaces any and all prior negotiations and agreements
between the Parties hereto, whether written or oral.

ad. IndyMac and LCN have made such investigation of the facts pertaining to

-7-
IndyMac v, LON


(b)(4),(b)_

(b)(4),(b)

IndyMac and its current and former officers, directors, joirit venturers, partners,
employees, servants, spouses, heirs, administrators, executors, predecessors, successors,
subsidiaries, parents, attomeys, representatives and assigns, conservators and/or
teceivers, and all persons or entities acting by, throagh, imder, for, on behalf of, or in
concert with them, past or present, (such past and present parties, being hereinafter
referred to collectively as “IndyMac Releasees”), jointly and severally, from and against
any and all rights, claims, debts, demands, acts, agreements, liabilities, obligations,
damages, costs, fees (including, without limitation, those of attommeys), expenses, actions
and/or causes of action of every nature, character and description, or causes of liability,
rights and offset rights, whether at law or in equity, whether known or unknown,
suspected or unsuspected, asserted or unasserted, including without limitation injunctive
or equitable relief, any award of actual, consequential, incidental, liquidated, or other
types or categories of damages, any award of punilive or exemplary damages, any claims
for attomeys' fees, costs or expenses of Jitigation and any other type of relief which any
of them have or may have arising out of, or in any way connected with or related to, the

Action, LCN’s inspections and any other services related to the Marble Falls Property,

thet Property and/or the Property, and/or IndyMac’s
losses concering the Marble Falls Property, the| Property andlor the aa (b)
Property.

6. Waiver Under Section 1542 of Califomia Civil Code. This Agreement is
made by IndyMac and LCN freely and with independent legal advice and counsel, and
TadyMac and LCN are fully aware of the provisions of Section 1542 of the Civil Code of

the State of California, which reads as follows:

IndyMiue-v. LON


1600 Truxtun Avenue
Bakersfield, California 93301

To IndyMac Bank, F.S.B.:
John J. Kralik

Anastasia E. Bessey
Kralik & Jacobs LLP

301 North Lake Ave., Suite 202

Pasadena, CA 91101

9. Modifications. This Agreement may not be amended, canceled, revoked
or otherwise modified except by written agreement subscribed by all of the parties to be
charged with such modification,

10. Agreement Binding on Successors. This Agreement shall be binding
upon, and shall inure to the-benefit of, the parties hereto and their respective officers,
directors, joint venturers, partners, employees, agents, servants, heirs, administrators,
executors, successors, representatives and assigns.

il. Severability. In the event any provision of-this Agreement shall be held to
be void, voidable or unenforceable, the remaining provisions shall remain in full force
and effect,

12. Goveming Law, This Agreement shal] be construed in accordance with,
and be governed by, the laws of the State of California.

13. Warranty of Authority. Each party or attomey whose signature is affixed
hereto in a representative capacity represents and warrants that he or she is authorized to
execuie this Agreement on behalf of and to bind the entity on whose behalf his or her
signature is affixed. Each party specifically represents and warrants that no signatures
other than those made on this Agreement are necessary to bind the parties to all of the
obligati ons imposed by the Agreement. In the event that tliere is a breach of any
representation or warranty of authority to execute this Agreement, the breaching party

-9-
TudyMae ¥, LON


AGREEMENT: OF SETTLEMENT AND RELEASE

THIS AGREEMENT OF SETTLEMENT AND RELEASE (hereinafter, the
“Apreement”) is made and entered into by and between INDYMAC FEDERAL BANK,
FSB, which was formerly known as IndyMac Bank, F.S.B. and also did business as
IndyMac Bank Home Construction Lending, (“IndyMac”), a federally chartered savings
bank-with its principal place of business in Pasadena, California, and LENDERS
CHOICE NETWORK, INC. (“LCN”), a California Corporation with its principal place
of business in Arroyo Grande, California.

RECITALS

This Agreement is made with reference to the following facts:

A. On or about October 25, 2001, IndyMac and LCN entered into a written
Master Services Agreement Conceming Property Reports (the “Contract”) which
govemed the relationship of IndyMac and LCN in connection with the transactions
described herein that are the subject of this Agreement.

B. nor about August 2001, IndyMac agreed to fund a construction-to-

permanent loan to borrowers) regarding residential construction ata

property. located.at| farble Falls, TX 78654 (the “Marble

Falls Property”). Pursuant to the Contract, LCN prepared Property Inspection Reports, as
defined by the Contract, in connection with construction at the Marble Falls Property
between approximately October 2001 and March 2003.

Cc In or about March 2005, IndyMac agreed to fund construction loans to

borowef——— Cid regarding residential construction at twe

properties located.at- est Richland, Washington 99353 and

-1-
IndyMac ¥. LCN

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


EXHIBIT A


Dated: _1/ 7 2098

APPROVED AS TO FORM:

Dated: 12/2 _,2008

LENDERS CHOICE NETWORK, INC.

By,

Its: & Yeo Ee allot Mako

KRALIK & JACOBS LLP

a aay ae 2008

IndyMac v. LCN

By:

‘Anastasia/b, Bessey
Attomeys for IndyMac Bank, F.SB.

LAW OFFICES OF BORTON PETRINI, LLP

By: _]

“Roger A. Parkinson
Attomeys for Lenders Choice Network, Inc.

-ll-


the releases contained Kerein as they deem necessary.

e. The terms of this Agreement are contractual and are the result of
negotiation among the parties, Each party has cooperated in the drafting
and preparation of this Agreement. Hence, in any construction to be made
of this Agreement, the role of the party in drafting and preparation of the
Agreement shall not be referred to in order to construe the Agreement
against that party, and the canon of contractual interpretation shall not be
applied.

f, This Agreement has been carefully read by each of the parties and the
contents thereof are known and understood by each of the parties. This
Agreement is signed freely by each party executing it.

: g. The parties have not assigned or transferred any of their claims being
released herein..
8. Notices.

a. All notices required or permitted to be given hereunder shall be in wating
and mailed postage prepaid by certified or registered mail, return receipt
requested, or by personal delivery, to the appropriate address indicated
below ar at such other place or places as either party may, from time to
time, designate in a wrilten notice given to the.other.. Notices shall be
deemed served three (3) days after the date of mailing thereof or upon
personal delivery.

b. The designated notice addresses for LCN arid IndyMac are as follows:

To LCN:
Roger A. Parkinson.
Law Offices of Borton Petrini, LLP

-8-
IndyMac v. LON


that is contemplated by this Agreement, IndyMac and LCN agree as follows:

a, That IndyMac’ and LCN, through their respective counsel, will execute a

letter in the form attached hereto es Exhibit A, and addressed to}

Bupervisor, American Arbitration Association, 6795 Noxth Palm

Ave, 2nd Floor, Fresno, CA 93704, requesting that the Action case file be
closed by reason of settlement (the “Dismissal Letter”);

6. That LCN will deliver an executed copy of thé Dismissal Letter to
IndyMac's counsel at the address provided in Paragraph 8.b., below,
within the time period provided for making the Settlement Payment
described in Paragraph 2, above; and ;

c. That, promptly upon receipt of the Settlement Payment and the executed
Dismissal Letter from LCN, IndyMac will transmit the fully executed

Dismissal Letterto[——— ia electronic mail

and U.S. Mail at the address given in Paragraph

3.a.,, above.

4 Release by IndyMac of LCN. Subject to full performance of the

obligations and representations and warranties set forth in this Agreement, IndyMac, for
itself and for each and every one of its current and former officers, directors, joint
venturers, partners, employees, servants, spouses, heits, administrators, executors,
predecessors, successors, subsidiaries, parents, attormeys, representatives and assigns,
conservators and/or receivers, and all persons or entities acting by, through, under, for, on
behalf of, or in concert with them, past or present, fully and forever releases, acquits and

discharges LCN and its current and former officers, directors, joint venturers, partners,

employees, servants, spouses, heirs, administrators, executors, predecessors, successors,

-4.
IndyMac v, LON


other good, valuable and sufficient consideration, the parties hereto agree as follows:

1. No Admission of Liability. IndyMac acknowledges that this Agreement
does not constitute an admission by LCN as to the mezits of any claim that IndyMac has
asserted, or could have asserted, in the Action and that LCN has denied, and continues to
deny, that LCN has any liability to IndyMac as alleged in the Action. Likewise, LCN
acknowledges that this Agreement does not constitute an admission by IndyMac that any
asserted claim is or was in any Way lacking in merit, and LCN also acknowledges that
this Agreement does not constitute an admission by IndyMac as to the merits of any
claim that LCN has asserted, or could have asserted, in the Action. Nevertheless,
IndyMac and LCN have concluded that continued arbitration would be expensive and
protracted and that itis desirable that the Action be settled fully and finally as between

_ IndyMac and LCN in the manner and upon the terms and conditions set forth in this
Agreement.

2. Settlement Payment. No later than fifteen (15) days following full
execution of this Agreement, LCN shal] deliver to IndyMac's counsel of record in the
Action a check made payable to “IndyMac Federal Bank, FSB” in the amount of’ Twenty

_ Thousand Dollars and No Cents ($20,000.00) (the “Settlement Payment”). LCN shall
cause this check to be delivered as follows:

Kralik & Jacobs LLP

“301 North Lake Avenue, Suite 202

Pasadena, Califomia 91101.

IndyMac and LCN agree that timely receipt of the Settlement Payment is an essential

term of this Agreement, and a condition to the enforcement of this Agreement.

3. Dismissal of the Action. in order to effectuate the dismissal of the Action

-3-
IndyMac. LON


(b)(4),(b)..

(6)

West Richland, Washington 99353 (the “ Property” and.

“ Property,” tespectively, and the “Washington Properties,”

collectively), Pursuant to the Contract, LCN prepared Property Inspection Reports, as

defined by the Contract, in connection with construction at the Washington Properties
between approximately August 2005 and March 2006.

D. On or about October 19, 2007, in accordance with the Contract, IndyMac
submitted a Demand for Arbitration pursuant to the American Arbitration Association's
Commercial Arbitration Rules and thereby commenced the current arbitration
proceeding, IndyMac Bank Home Construction Lending v. Lenders Choice Network,
Inc., AAA Case No. 72-148-Y-001077-07 (the “Action”).. IndyMac alleged that LCN

awed it compensatory damages of $519,000.00 for harm IndyMac had suffered as‘n result

of negligent inspections by LCN related to the Marble Falls, |
a

B, LCN has defended and denied, and continues to deny, the validity of
IndyMac’s claims as described in Paragraph D, above.

F. IndyMac and LCN have agreed fully, finally and forever to settle and
compromise the claims and causes of action asserted in the Action, claims and causes
arising thérefrom, or any other claims and causes of action that might have been brought,
in this action. By this Agreement; IndyMac and LCN intendto memorialize the terms-of
such compromise and settlement, This Agreement is not intended by IndyMac or LCN to
telease or discharge any claims that IndyMac or LCN may have against any party other

than the signatories to this Agreement.

AGREEMENT AND MUTUAL RELEASE
In consideration of the mutual undertakings contained in this Agreement, and

-2-
lodyMiae v. LON

(b)(4).(b)

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


Kralik & Jacobs LLP

Law Offices

301 Nosth Lake Avenue, Suite 202
Pasadena, California 91101
TEL: 626.844.3505
FAX: 626.844.7643

December 3, 2008

Writer's Direct Dig: E-mail
a (0006)

By Electronic Mail (NoreenGarcia@adr.org) and U.S. Mail

Supervisor

American Arbitration Association
6795 North Palm Ave, 2nd Floor
Fresno, CA 93704

Re: IndyMac Bank Home Construction Lending v. Lenders Choice
Network, Inc., AAA Case No. 72-148-¥-001077-07

Request that Action Be Dismissed and Case File Closed

Dear

This office represents Claimant IndyMac Bank Home Construction

Lending in the above action pending before of the (b)(6)
American Arbitration Association. Respondent Lenders Choice Network,

Ine. is represented by the Law Offices of Borton Petrini, LLP.

Please note that the above action has been settled. Accordingly, please
close the above case file and refund any unused portion of the fees
remitted by the parties at your earliest convenience.

Thank you for your attention to this matter.

Sincerely,

Agreed:
KRAULIK & JACOBS LLP LAW OFFICES OF BORTON

PETRINI, LLP

(b)(6)
By: By}
Anastasia Kv Bessey Roger A. Parkinson

Dated: December 2 _, 2008 Dated: December “7?_, 2008

ce (by electronic mail only):