(b)(2) 

COMPROMISE, SETTLEMENT AND RELEASE AGREEMENT 

TIIIS COMPROMISE, SEITLEMENT AND RELEASE AGREEMENT ("Agreement") 

is made and entered into effective October 30, 2009, by and between plaintiff, THE FEDERAL I < ... b)i)· _ DEPOSIT INSURANCE CORPORATION AS RECEIVER FOR DOWNEY SAVINGS AND 

LOAN ASSOCIATION, F.A. ("FDIC as Receiver") and defendant, CHARTER CAPITAL '---------~ 

CORPORATION, DBA FIRST CAPITAL GROUP, INC. ("Charter"). 

RECITALS 

A. On or about May 29,2008, DOWNEY SAVINGS AND LOAN ASSOCIATION, 

F.A. ("Downey'') filed a complaint in which it named as defendant, among others, Charter, in 

Orange County Superior Court, Case No. 30-2008-00107287 {the "Complaint"). On or about 

July 3, 2008, Charter filed an answer to the Complaint ("Answer11). Hereinafter, the Complaint 

and Answer and all matters arising therefrom shall be referred to as the "Action." Thereafter, on 

November 21,2008, the Office of Thrift Supervision declared Downey insolvent, and appointed 

the Federal Deposit Insurance Corporation Downey's Receiver. 

B. The FDIC as Receiver and Charter wish to resolve the Action in full and intend 

the settlement, compromise and release provided for in this Agreement to be the complete and 

final resolution of all claims, differences and disputes regarding the Action. 

NOW, THEREFORE, for and in consideration of the releases herein contained and the 

consideration set forth herein, the receipt and adequacy of which is hereby acknowledged, it is 

agreed as follows: 

AGREEMENT 

Section 1. Payment. Charter shall cause to he paid to the FDIC as Receiver, in full 

settlement of the Action as to all parties, the sum of Seventy-Five Thousand Dollars and 00/100 

(the "Payment"). The Payment is to be made payable to the "Federal Deposit Insurance 

Corporation" and the FDIC as Receiver instructs Charter to mail the Payment to its counsel of 

record, Case, Knowlson & Jordan LLP, 2029 Century Park East, Suite 2500, Los Angeles, 

California 90067 c/o Patrick Walsh ("Attorney") no later than 10 days after the FDIC as Receiver 

delivers a signed copy of this Agreement to Charter's attorney of record. 

Section 2. Dismissal With Prejudice. The FDIC as Receiver shall cause Attorney 

to sign and file with the Court a request for dismissal, with prejudice, of the entire Action as to 

all parties (the "Dismissal") within five days after Attorney receives the Payment. The FDIC as 

Receiver shall cause Attorney to forward a conformed copy of the entry of the Dismissal to 

Charter's attorney of record immediately upon his receipt of same from the Court. 

. Section 3. Release. Effective immediately upon receipt of the Payment by Attorney, 

the FDIC as Receiver, on behalf of itself, Downey and on behalf of Downey's successors, 

assigns, and agents (hereinafter collectively referred to as "Releasers"), fully and forever release 

and discharge Charter and its present and past officers, directors employees, as well as its 

successors, assigns, independent contractors, insurance companies, insurance adjusters, third 

760901.1 - 1-
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party administrators, attorneys and agents (hereinafter collectively "Releasees") and covenants 

not to sue or otherwise institute, cause to be instituted, maintain or in any way participate in, any 

legal proceeding against the Releasees, and any combination thereof, with respect to any matter 

arising out of, relating to, or connected with. the Action, including, but not limited to, all claims 

or causes of action of every kind and description which heretofore existed or may exist, 

including any matter, cause or thing arising out of. or relating to, or COlllJected with, the Action, 

with the exception of the obligations created by this Agreement. 

Section 4. Waiver of Civil Code Section 1542. In addition, and in further 

consideration of the foregoing, Releasers, and each of them, hereby expressly waive any and all 

rights and benefits conferred by the provisions of Section 1542 ofthe Civil Code of the State of 

California, as to the matters arising from the Complaint, which states 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. 

Notwithstanding the foregoing, this release does not and is not intended to release the. 

Releasees from claims or actions, if any, arising from or relating to properties or transactions 

other than those that are described in the Complaint and/or were at issue in the Action 

Section 5. Ownership to Rights of Action. The FDIC as Receiver represents and 

warrants to Charter that it is the sole owner of all of its and Downey's rights arising out of or 

relating to the Action and has not sold, transferred or hypothecated, in any way, those rights. 

Section 6. No Admission of Liability. In further consideration of the foregoing, the 

parties acknowledge and agree that nothing contained in this Agreement shall constitute or be 

treated as an admission of liability or wrongdoing by the other party. 

Section 7. Additional Documentation. The parties agree to execute or deliver any 

instruments, furnish any information or perform any other acts that are necessary, appropriate 

and/or reasonable to carry out the provisions of this Agreement without undue delay or expense. 

Section 8. Governing Law. The parties agree this Agreement is entered into in the 

State of California and its terms shall be construed and interpreted in accordance with the laws of 

that state. 

Section 9. ~· The parties hereto agree that any suit, action or proceeding 

arising out of or relating to this Agreement, or other documentation related hereto, shall be 

submitted to the jurisdiction or venue of the Orange County Superior Court. 

Section 10. Invalidity. If any provision of this Agreement is held by a court of 

competent jurisdiction to be invalid, void or unenforceable, the remaining provisions shall 

nevertheless remain in full force and effect without being impaired or invalidated in any way. 

760907.1 -2-
Page 61 

Section 11. Amendment. No change, amendment or modification of this Agreement 

shall be valid unless the same is in writing and signed by the parties hereto. 

Section 12. Waiver. No waiver of any breach of any term, condition or provision of 

this Agreement shall constitute a waiver of any other breach of any other term, condition or 

provision and no consent of one party to any departures of the other shall be effective unless 

such waiver shall be in writing and signed by both the waiving and non-waiving party or a duly 

authorized agent thereof and same shall be effective only for the period, on the condition and for 

the specific instance and pmpose specified in such writing. No notice to or demand on the 

non-waiving party in any case shall entitle the non-waiving party to any other or future notice or 

demand if under similar or other circumstances. 

Section 13. Successors and Assigns. The covenants and agreements contained in 

this Agreement shall be binding upon, and shall inure to the benefit of, the heirs, successors and 

assigns of the parties hereto. However, this Agreement may not be assigned by any party 

without the express written consent of all of the others. 

Section 14. Entire Agreement The parties acknowledge and agree that no promises 

or representations were made that do not appear written herein and that this Agreement contains 

the entire agreement between t}le parties. This Agreement cannot be modified or amended 

except in writing signed by all parties. 

Section 15. Release Interpretation. In the event of a dispute hereunder, the parties 

agree that this Agreement shall be interpreted in accordance with its fair meaning and shalJ not 

be interpreted for or against either party hereto on the ground that any such party drafted or 

caused to be drafted this Agreement, or any part hereof. 

Section 16. Counterparts/Facsimile/E-mail Signatures. This Agreement may be 

executed in one or more counterparts, all of which shall be deemed originals and shall constitute 

one and the same Agreement, binding on all of the parties hereto, notwithstanding that all ofthe 

parties are not signatories to the same counterpart. Further, the parties agree that facsimile 

and/or e-mail signatures of each party shall be deemed original signatures and shall be binding 

on the party whose signature is by facsimile and/or e-mail as if it were their original signature. 

Section 17. Attorneys' Fees and Costs. The parties to this Agreement shall be 

responsible for their own attorneys' fees and court costs incurred in connection with the Action 

and shall not seek compensation therefor either by any further action or proceeding against each 

other. 

Section 18. Advice of Counsel. The parties, and each of them, represent and declare 

that in executing this Agreement, they have relied upon independent advice of counsel, or upon 

their own good judgment as attorneys, with respect to the terms hereof. 

Section 19. Enforcement. The parties hereto agree that any party wishing to enforce 

the terms and conditions of this Agreement may do so pursuant to California Code of Civil 

Procedure Section 664.6 and that the Orange County Superior Court retains jurisdiction of this 

matter for such enforcement. 

760907.1 -3-
(b)(6) 

Page 62 

Sectlon20. A.uthorlty to Sign. The fndivldua:ls signing this Agreement on behalf of 

!he business and govemmentaf repre.seat I hat !hey arc AUthorlzed to do so. Tbo parties t11 Ibis 

Agreement represent thai they have obtained all necessary consents, approvals and permission of 

rwety kind or nature requir1:d in connection with the execution ofthis Agreement and 

petfonnancc of the obllgatlons hereunder. · 

In witness whereof, the undersigned have executed this Agreement on the day and year 

first set forth above. 

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