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 IndyMac Bank, 

F.S.B. ("FDIC-R''), and Franklin First Financial, Ltd. ("Defendant"), (individually, the FDIC-R 

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

RECITALS 

WHEREAS: 

Prior to July 11, 2008, IndyMac Bank, F.S.B. CBank") was a depository institution 

organized and existing under the laws of the United States; 

On July 11, 2008, the Office of Thrift Supervision closed the Bank and pursuant to 

12 U.S.C. § 1821(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 certain of the Bank's claims, 

demands, and causes of action against mortgage brokers and loan sellers; · 

On July 2, 2014, the FDIC-R filed n complaint for money damages against Defendant. 

This claim for damages is now pending in the United States District Court for the Central District 

of California in Federal Deposit Insurance Corporation as Receiver for JndyMac Bank, F.S.B., 

v. Franklin First Financial, Ltd.> Case Number 2; 14-CV 05149-GW -AGR ("Action"). 

Defendant has denied liability in the Action. 

The undersigned Patties deem it in their best interests to enter into this Agreement to 

avoid the uncertainty and expense of further litigation. 

NOW, THEREFORE, in consideration of the promises, undertakings, payments, and 

releases stated herein> the sufficiency of which consideration is hereby acknowledged, the 

undersigned Parties agree, each with the other, as follows; 
SECTION 1: Payment to FDIC-R 

A. As an essential covenant and condition to this Agreement, the Defendant agrees to 

pay the .FDIC-R the sum of two hundred thousand dollars ($200,000.00) ("the Settlement 

Payment"), as follows: 

1. Fifty thousand dollars ($50,000.00) to be paid on or before June 30, 20 15; 

2. One hWldred fifty thousand dollars ($150,000.00) to be paid in 

installments of six thousand two hundred fifty dollars ($6,250.00) per month, commencing on or 

bt:fore July 15, 2015 and continuing for the ensuing twenty four (24) months, due on or before 

the fifteenth (151h) day of the month. The Settlement Payment shall be paid in full no later than 

June 30, 2017. 

B. Defendant shall deliver the Settlement Payment to the FDIC-R by direct wire 

transfer into an account designated by FDIC-R by notice to the attomeys for the Defendant or by 

certified or cashier's check drawn upon a depository institution acceptable to FDIC-R and made 

payable to Mortgage Recovery I ,aw Group Client Trust Account. 

In the event that any of the installments of the Settlement Payment are not 

delivered to the FDIC~R (or its counsel) by the due dates set forth in Section l.A, above, interest 

shall accrue on all unpaid amounts at the rate of 5% per annum from such due date until the date 

of payment. However, if said Settlement Funds are not delivered to the FDIC-R by the due date, 

as a result of the FDIC-R's failure to execute this Agreement, no interest shall accrue until five 

days after the FDIC-R executes the Agreement. 

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

the date(s) 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: 

1. Extend the peliod of time for the Settlement Payment, including interest 

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

calculated in accordance with 26 U.S.C. § 662l(a)(3); or 

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

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

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

Agreement; or 

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

the Defendant agrees to consent, and re-institute an action on the FDIC-R's claims. The 

Defendant further agrees to waive any defense based on any statute of limitations that would bar 

any of the FDIC-R's claims and waive all 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. Seek any other relief available to it in law or equity. 

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

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

any of the actions set forth in Section 1.C.2 through I.C.4 at any time ptior to receipt of 

Settlement Payment (including all accrued interest) in full. 

SECTION IT: Stipulations and Dismissal 

Within ten business days after the latter of (I) full execution of this Agreement by all of 

the Parties, and (2) full execution of the Stipulation for Entry of Judgment set forth below, the 

FDIC-R shall file a stipulation of dismissal with prejudice, executed by the attorneys for all 

Parties hereto, in the Action. 

Within ten businc..<>s days of the execution of this Agreement, the Parties agree to execute 

a Stipulation for Entry of Judgment for the total Settlement Payment due, less payments already 

made. If Defendant defaults on any installment payment, FDIC-R may seek to enforce the 

Judgment in the United States Dh;trict Court for the Central District of California on an ex parte 

basis by filing the Stipulation for Entry of Jud~;,rment and Proposed Stipulated Judgment, subject 

to the Federal Rules of Civil Procedure and the Local Rules of the United States District Court 

for the Central District of California. However, the Parties agree that Defendant shall have a 

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grace period often (10) days in which to cure the default. FDIC~R shall be entitled to recover 

reasonable attorney fees and costs incurred in connection with enforcing the Judgment, upon 

motion, in an runount not to exceed twenty five thousand dollars ($25,000). 

SECTION III: Releases 

A. The FDIC-R,s Releases. 

Upon receipt of the Settlement Payment in full and except as provided in Section ill.D., 

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

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

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

causes of action, direct or indhect, in law or in equity, known or unknown, belonging to the 

FDIC-R, that arise from or relate to the causes of action alleged in the Action. 

B. The Defendant's Release. 

Effective simultaneously with the release granted in Section liLA. above, the Defendant, 

on behalf of itself individually, 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, known or unknown, that arise from or relate to the causes of action 

alleged in the Action. 

C. Exceptions from Releas es~ FDIC-R. 

I. 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 Defendant 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 

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or entity, including without limitation any such claims acquired by FDIC-R as successor in 

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

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 of the Federal Deposit Insurance Corporation in the exercise of its 

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 

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

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

and 3663 et. seq., if appropriate. 

SECTION IV: Representations and Acknowledgements 

A. Authorized Signatories. All of the undersigned persons represent and warrant that 

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

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 Parties 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. 

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SECTION V: Reasonable Cooperation 

A. The Parties agree to cooperate in good faith to effectuate all the terms and 

conditions of 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 Action and to otherwise perform the 

tenns of this Agreement. 

SECTION VI: 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 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 except to enforce its tenus. 

B. Execution in CounterP.~rt~. This Agreement may be executed in counterpmis 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 of Law. This Agreement shall be interpreted, construed and enforced 

according to applicable federal 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 r eceipt requested, and by email, to the following: 

If to the FDIC-R: 

Paul A. Lev in, Esq. 

Mortgage Recovery Law Group 

700 N. Brand Blvd., Suite:: 830 

Glendale, CaJifomia 91203 

(818) 630-7901 

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If to the Defendant: 

Jeremy Johnson, Esq. 

Bremer 'Nhyte Brown & O'Meara, LLP 

20320 S.W. Birch Street 2nd Floor 

Newport Beach, CA 92660 

(949) 221-1000 

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

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

set fOJih herein and supersedes any prior agreements or Wlderstandings. 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 attorocy(s), or other 

reprcsentati ve( s). 

P. Titles and Captions. 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. 

H. California Civil Code § 1542. 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 unknown, foreseen or unforeseen, patent or latent) which that 

Party may have against another Party arising from causes of action alleged in the Action. Each 

Party hereby expressly waives application of California Civil Code § 1542 and any other similar 

statute or rule. 

Each Party certifies that it has read and understood the following provisions of California 

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

A general r elease 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. 

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

California Civil Code § 1542 is that even if any Party should eventually suffer additional 

damages arising out of the causes of action alleged in the Action that were or could have been 

asserted relating to the causes of action alleged in the Action, or any facts or circumstances 

related to the causes of action a] I eged in the Action, that Party will not be able to make any claim 

against the other Party for damages. Furthermore, each Party acknowledges that it consciously 

intends these consequences even as to 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 Patiy'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. 

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

by c::ach of them or their duly authori~ed representatives on the dates hereinafter subscribed. 

FEDERAL DEPOSIT INSURANCE CORPORATION AS 

RECEIVER FOR INDYMAC BANK, F.S.B. 

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TITLE: C o u N Sc:.- \ 

PRINT NAME: R \ c::.. 'v. t:t \/~ s > & \-U_ 

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