SETTLEMENTAGREENmNT 

TIDS SETTLEMENT AGREEMENT ("Settlement Agreement") is entered into 

and made effective as of the 23rd day ofNovember 2011 ("Effective Date"), by and 

between FEDERAL DEPOSIT INSURANCE CORPORATION, as Receiver for 

INDYMAC BANK, F.S.B. ("FDIC") and CHARTER CAPITAL CORPORATION dba 

FIRST CAPITAL GROUP, INC. ("CHARTER CAPITAL"). The FDIC and CHARTER 

CAPITAL may hereinafter be referred to individually as a "Party" or collectively as the 

"Parties". 

1. RECITALS 

1.1 On or about January 5, 2011, the FDIC filed a lawsuit entitled FEDERAL 

DEPOSIT INSURANCE CORPORATION AS RECEIVER FOR INDYMAC BANK, 

F.S.B. v. CHARTER CAPITAL CORPORATION dba FIRST CAPITAL GROUP, INC., 

a California corporation, United States District Court for the Central District ofCalifornia 

Case No. CVll-00107-MAN (hereinafter "Action"). The FDIC sought damages from 

CHARTER CAPTIAL arising out of mortgage loans it made to Lynn and Aldridge Vida 

and Patrick and Tiffany Naeole. The Complaint included claims for breach ofcontract 

and negligence. In its answer, CHARTER CAPITAL denied they were liable to the 

FDIC for damages. 

1.2 On or about May 4, 2006, lndyMac Bank, F.S.B. ("IndyMac") and 

CHARTER CAPITAL entered into a business relationship governed by a written Seller 

Contract and e-MITS User Agreement (the "Agreement"). The FDIC contends the 

Agreement incorporates the Lending Guide and sets forth the terms by which IndyMac 

would purchase and/or fund residential loans secured by real property which were 

processed, packaged and submitted by CHARTER CAPITAL. 

1.3 The FDIC contends on June 18, 2007, CHARTER CAPITAL sold to 

IndyMac the loans to Patrick and Tiffany Naeole which were secured by the real property 

located at 91-740 Oneula Place, Ewa Beach, HI ("Naeole Loans"). The Naeole Loans 

failed to comply with the terms ofthe Agreement in that the borrower's income was 

misrepresented, the borrower's credit obligations were misrepresented, and the 

borrower's intent to occupy the property was misrepresented. The FDIC also contends 

on October 17, 2007, CHARTER CAPITAL sold to lndyMac the loans to Lynn and 

Aldridge Vida which were secured by the real property located at 211 Kahaila Ridge Dr., 

Lahaina, HI (''Vida Loans"). The Vida Loans failed to comply with the terms ofthe 

Agreement in that the borrower's income was misrepresented. Due to the these breaches, 

the FDIC sought indemnification ofits losses on the loans as called for in the Agreement. 

1.4 CHARTER CAPITAL denies the FDIC's claims. Specifically, and 

without limitation, CHARTER CAPITAL denies that (1) it breached the representations 

and warranties provisions ofthe Agreement and the Lending Guide; (2) it breached any 

duty owed to IndyMac or the FDIC; (3) the loan documentation prepared and submitted 

SEllUlMENT AGREEMENT Page I of7 
by CHARTER CAPITAL contained any misrepresentations; or (4) the FDIC and/or 

IndyMac suffered or will suffer any loss, damage, or cost related in any way to the 

Naeole Loans and the Vida Loans. 

1.5 The Parties desire and have agreed to settle all claims between the FDIC 

and CHARTER CAPITAL relating the Naeole Loans and the Vida Loans. By entering 

into this Settlement Agreement, the parties are not admitting the allegations as set forth in 

the Complaint 

2. AGREEMENT 

NOW, THEREFORE, in consideration of the mutual covenants and promises set 

forth herein, and for other good and valuable consideration, the receipt and sufficiency of 

which are hereby acknowledged by the Parties, the Parties, intending to be legally bound, 

agree as follows: 

2.1 Recitals. The Recitals set forth above are incorporated into the body of 

this Settlement Agreement as though fully set forth herein. 

2.2 Payment to the FDIC. Payment ofThree Hundred Thousand Dollars and 

no/cents ($300,000.00) (the "Settlement Funds") shall be paid on behalf of CHARTER 

CAPITAL to the FDIC. The initial payment (the "Initial Payment") shall be for Two 

Hundred Thousand Dollars and no/cents ($200,000.00) and shall be paid witbln 

fifteen (15) days of CHARTER CAPITAL's execution oftbis Settlement Agreement. 

CHARTER CAPITAL shall deliver the Initial Payment, and all payments to the FDIC clo 

Mortgage Recovery Law Group, LLP at 700 N. Brand Blvd, Suite 830, Glendale CA 

91203, Attn: Paul A. Levin and Andrew P. Baeza. The Initial Payment shall be paid by 

certified funds made payable to: Mortgage Recovery Law Group Trnst Account. 

Then, CHARTER CAPITAL shall make payments on tbe first of each month as 

follows: 

a. December 15, 2011 - $8,333.33; 

b. January 1, 2012- $8,333.33; 

c. February 1, 2012 - $8,333.33; 

d. March 1, 2012- $8,333.33; 

e. Aprill, 2012- $8,333.33; 

f. May 1, 2012- $8,333.33; 

g. June 1, 2012- $8,333.33; 

h. July 1, 2012- $8,333.33; 

SETILEMENT AGREEMENT Page2 of7 
(b)(4),(b)(6) 

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

i. August 1, 2012 - $8,333.33; 

j. September 1, 2012- $8,333.33; 

k. October 1, 2012- $8,333.33; 

I. November 1, 2012- $8,333.37;. 

2.3 Concurrently with the signing and delivery of this Settlement Agreement, 


CHARTER CAPITAL shall execute a Stipulation for Judgment in the form attached 


hereto as Exhibit A The Stipulation for The Stipulation for Judgment shall be held in 


trust by the FDIC's attorneys ofrecord and shall not be filed unless CHARTER 


CAPITAL breaches paragraph 2.2 above and fails to timely cure said breach after 


receiving written notice of default as provided in paragraph 2.4 below. Judgment shall 


not be entered so long as CHARTER CAPITAL pezfonns under the terms ofthis 


Settlement Agreement with respect to making the Payments required by paragraph 2.2 


above. 


2.4 In the event CHARTER CAPJTAL defaults by failing to make a timely 


payment to the FDIC as set forth in paragraph 2.2 above, the FDIC shall give written 


notice ofthe default and notice ofits intent to enter Judgment on the Stipulation for 


Judgment to CHARTER CAPITAL via e-mail and overnight mail to their attorney of 


record as follows: E · 4675 MacArthur Court, Suite 590, Newport Beach, 


(b)(4),(b)(6) _CA92660;tel hon - facsimil~ -- --I e-maild --- _ _ 

CHARTER CAPITAL shall have ten (10) business days 

l:-..:e=c=-=wn=tte=n-:::n..,.,ot""'tc'""e-o"1"""T=a::r.:'t is sent to Mr. Schiffer to cure the default. IfCHARTER 

CAPITAL fails to cure the default within ten (10) business days, the FDIC shall cause 

Judgment ( to be entered as set forth in Paragraph 2.3 above. 

2.5 Within ten (10) business days ofthe FDIC's receipt ofthe Initial Payment 

as set forth in paragraph 2.2, the FDIC's counsel shall file a request for dismissal of the 

entire Action with prejudice. 

2.6 Each Party agrees that Section 664.6 of the Code ofCivil Procedure of the 

State ofCalifornia shall apply to this Settlement Agreement and the Stipulation for 

Judgment and requests that the court retain jurisdiction over the Parties to enforce this 

Settlement Agreement and, if necessary, the Stipulation for Judgment. 

1.7 The Parties shall bear their own costs and attorneys' fees incurred in the 

Action. 

3. pLEASE 

3.1 Known and Unknown Claims. The FDIC and CHARTER CAPITAL 

acknowledge and agree that the release they give to each other upon executing this 

SETILEMENT AGREEMENT Page3of7 
Settlement Agreement applies to all claims for injuries, damages, or losses ofany type or 

nature (whether those injuries, damages, or losses are known or unknown, foreseen or 

unforeseen, patent or latent) arising from or in conjunction with or related to the facts and 

circumstances giving rise to the Action, along with any and all loans sold, brokered, or 

otherwise delivered by CHARTER CAPITAL to IndyMac or any other legal matters 

arising from any and all agreements between CHARTER CAPITAL and IndyMac 

including, but not limited to, the Agreement and Lending Guide, as defined in paragraph 

1.2 above, (the "Non-Action Matters''). 

3.2 The Parties hereby expressly waive application of California Civil Code 

§1542 as it relates to the Action and the Non-Action Matters. The Parties certify 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 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. 

3.3 The Parties understand and acknowledge that the significance and 

consequence ofits waiver ofCalifornia Civil Code §1542 is that even ifeither Party 

should eventually suffer additional damages arising from or in conjunction with the 

Action or Non-Action Matters or any facts or circumstances related to the Action or NonAction Matters, that Party will not be able to make any claim against any other Party for 

those damages. Furthermore, each Party acknowledges that they consciously intend these 

consequences even as to claims for damages that may exist as ofthe date of this release 

relating to the Action or Non-Action Matters, but which that Party does not know exists, 

and which, ifknown, would materially affect that Party's decision to execute this release, 

regardless ofwhether that Party's lack ofknowledge is the result ofignorance, oversight, 

error, negligence, or any other cause. 

3.4 Except for the rights, duties, and obligations set forth in this Settlement 

Agreement, the Parties each hereby fully, finally, and forever release and discharge the 

other Parties, and any and all ofits respective, employees, brokers, investors, members, 

partners, joint venturers, independent contractors, attorneys, accountants, insurers, agents, 

investors, representatives, officers, directors, and any corporation, partnership or limited 

liability company which was or is at any time the parent or whoUy owned subsidiary of 

suc:h entity, and ~y such corporation's, partnership's or limited liability company's 

officers, directors, employees and/or agents, or any corporation, partnership or limited 

liability company which was or is an affiliate ofsuch entity by virtue ofcommon 

ownership or contro~ and any such corporation's, partnership's or limited liability 

company's, officers, directors, employees and/or agents ofand from any and all actions, 

causes of action, claims, demands, damages, debts, losses, costs, expenses, attorney fees 

or other liabilities ofevery kind and nature whatsoever, whether legal or equitable and 

whether known or unknown, arising out of, resulting from, or relating to, in any manner, 

SETTLEMENT AGREEMENT Pa~4of7 
to any damages, loss, or liability arising from, in conjunction with, or related to the 


Action or any facts or circumstances related to the Action. 


3.5 Notwithstanding any other provision ofthis Settlement Agreement, the 

FDIC does not release, and expressly preserves fully and to the same extent as ifthe 

Settlement Agreement had not been executed any claims against CHARTER CAPITAL 

arising out of existing or failed financial institutions other than IndyMac. The FDIC 

represents that it retains the rights to pursue any claims arising out ofor related to the 

Naeole Loans and the Vida Loans against third parties other than CHARTER CAPITAL 

and any and all ofits officers, directors, employees . 

4. MIS_CELLANEOUS 

4.1 Conditions of Execution. Each Party acknowledges and warrants that its 

execution ofthis Settlement Agreement is free and voluntary. 

4.2 No Admission. It is agreed that no Party hereto admits liability or 

wrongdoing of any nature, and that this Settlement Agreement is made as a compromise 

of disputed claims. 

4.3 Fair Meaning. The Parties hereto further agree that the language of all 

parts of this Settlement Agreement shall in all cases be construed as a whole, according to 

its fair meaning, and not strictly for or against any of the Parties 

4.4 Governing Law. The Parties agree to submit to the Courts ofthe City . 


and County ofLos Angeles, california, for any dispute arising out of this Settlement 


Agreement, or related thereto, and consent to the jurisdiction ofsaid Courts and further 


agree that any and all matters ofdispute shall be adjudicated, govemed and controlled 


tmder California law. 


4.5 Attorneys Fees and Costs. Should any action be commenced to enforce, 

interpret, or seek damages, injunctive relief, or specific performance for violation of this 

Settlement Agreement, the prevailing party shall, in addition to any other available relief, 

be entitled to an award ofreasonable attorney's fees and litigation expenses incurred in 

the prosecution or defense of the action, including any appeal. 

4.6 Severability. The Parties hereto agree that ifany provision of this 

Settlement Agreement is declared by any court to be illegal or invalid, the validity ofthe 

remaining parts, terms or provisions shall not be affected thereby, and such illegal or 

invalid part, tenn or provision shall be deemed not to be part of this Settlement 

Agreement. 

4.7 Binding Effect. This Settlement Agreement shall be binding upon and 

inure to the benefit of the Parties and their respective heirs, personal representatives, 

successors, and assigns. 

SETILEMENT AGREEMENT PageS of7 
4.8 Review and Understanding. The Parties have entered into this 

Settlement Agreement voluntarily, having fully read and fully understood the meaning 

and effect ofall ofits tenns and provisions, and fully understanding its and their costs 

and risks. Each of the Parties has consulted with legal counsel concerning this Settlement 

Agreement and has conducted such inquiry as they deem necessary and advisable prior to 

entering into this Settlement Agreement. The Parties enter into this Settlement 

Agreement understanding that facts or other circumstances may exist which are presently 

unknown or undisclosed, or which are different from or other than those which they 

believe to be the case, and the Parties voluntarily asswne all risks attendant to such 

unknown, undisclosed, different, or additional facts or other circumstances. 

4.9 Number. Whenever applicable, the singular shall include the plural, and 

the plural shall incJude the singular. 

4.10 Counterparts/Execution. This Settlement Agreement may be executed 

in one or more counterparts, all ofwhich shall form a single agreement. A Party's 

signature on this Settlement Agreement by facsimile or e-mail shall be valid and effective 

for all purposes as an original signature, provided, however, that the original signature 

shall be produced upon request. 

4.11 Waiver. No tenn or condition ofthis Settlement Agreement shall be 

deemed to have been waived, nor shall there be an estoppel against the enforcement of 

any provision ofthis Settlement Agreement, except by written instruments signed by the 

Party charged with the waiver or estoppel. No written waiver shall be deemed a 

continuing waiver unless specifically stated therein, and the written waiver shall operate 

only as to the specific term or condition waived, and not for the future or as to any other 

act than that specifically waived. 

4.12 Headings. The headings ofparagraphs herein are intended solely for the 

convenience ofreference and shall not control the meaning or interpretation ofany ofthe 

provisions ofthis Settlement Agreement. 

4.13 Subsequent Agreements. The Parties agree that, upon the reasonable 

request ofthe other Party, they shall execute, acknowledge, and deliver any additional 

instruments or documents that may reasonably be required to carry out the intentions of 

this Settlement Agreement, including such instruments as may be required by the laws of 

any jurisdiction, now in effect or hereinafter enacted, that may affect the rights ofthe 

Parties as between themselves or others with respect to their rights and obligations 

created by this Settlement Agreement. 

4.14 Entire Agreement. The Parties hereto further agree and promise that this 

Settlement Agreement sets forth the entire agreement between and among the Parties and 

fully supersedes any and all prior negotiations, agreements or understandings made 

between or among the Parties. This Settlement Agreement shall not be modified except 

in a writing signed by the Parties or their authorized representatives. 

SETTLEMENT AGREEMENT Page 6of7 
IN WITNESS WHEREOF, and intending to be legally bound hereby, the Parties 

have executed this Settlement Agreement as of the date set forth in the opening paragraph 

of this Settlement Agreement. 

DATED: November_, 2011 SCHIFFER & BUUS APC 

APPROVED AS TO FORM 

By: 

DATED: November_,2011 

DATED: November_, 2011 

APPROVED AS TO FORM 

DATED: November!¥, 2011 

Eric M. Schiffer 

Attorneys for Defendant CHARTER CAPITAL 

CORPORATION dba FIRST CAPITAL GROUP, INC. 

CHARTER CAPITAL GROUP dba FIRST CAPITAL 

GROUP, INC. 

By: 

Signature 

Type/Print Name and Title 

SNIPPER WAINER & MARKOFF 

By: 

Maurice Wainer 

Attorneys for Plaintiff FEDERAL DEPOSIT 

INSURANCE CORPORATION, as Receiver for 

INDYMAC BANK, F.S.B. 

FEDERAL DEPOSIT INSURANCE 

CORPORATION, as Receiver for INDYMAC 

BANK, F.S.B. 

By: L____________--;1----(b)(6) 

Type/Print Name and Title 

191461.1 SETTLEMENT AGREEMENT Pagc7or? 
IN WITNESS WHEREOF, and intending to be legally bound hereby, the Parties 

have executed this Settlement Agreement as ofthe date set forth in the opening paragraph 

of this Settlement Agreement 

DATED: NovembeP\K, 2011 SCHIF;:=..:F:...=E:..:.R.:...:&=B-=UU-=-=-S.:..:AP=-=-C_________, 

APPROVED AS TO FORM (b)(6)

l ,/ DATED: November :) , 2011 CHARTER CAPITAL GROUP dba FIRST CAPITAL 

OR•'. (b)(6) 

DATED: November_, 20Il SNIPPER WAJNER & MARKOFF 

APPROVED AS TO FORM 

By: 

DAJED: November__, 2011 

Maurice Wainer 

Attorneys for PlaintiffFEDERAL DEPOSIT 

il'I'SURANCE CORPORATION, as Receiver for 

INDYMAC BANK, F.S.B. 

FEDERAL DEPOSIT INSURANCE 

CORPORATION, as Receiver for INDYMAC 

BANK. F.S.B. 

By: 

Signature 

Type!PrintNaine imd title 

SEITLEMENT AGREEMENT Pagc7of7