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SETTLEMENT AND RELEASE AGREEMENT 

This Settlement and Release Agreement ("Agreement") is made by, between, and among 

the following undersigned patties: 

The Plaintiff Federal Deposit Insurance Corporation as Receiver for ArnTrnst Bank 

("FDIC-R"); and AK.T. American Capital, Inc. (the "Settling Defendant") (individually, the 

FDIC-Rand the Settling Defendant may be refened to herein as "Party" and collectively as the 

''Parties"). 

RECITALS 

WHEREAS: 

Prior to December 4, 2009, Am Trust Bank ("Bank") was a depository institution 

organized and existing under the laws of the United States; 

On December 4, 2009, 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 

accordat1ce 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 the Banlc's claims, demands, and 

causes of action that are the subject of this Agreement. 

On or about August 1, 1998, the Bank and Settling Defendant entered into a Master 

Co1Tespondent Loan Purchase Agreement setting forth the tem1s and conditions pursuant to 

which the Battle would purchase certain residential mortgage loans originated and/or submitted 

for purchase by Settling Defendant ("MCLPA"). 

On December 3, 2015, the FDIC-R filed a complaint for money damages against the 

Settling Defendant ("Complaint"). 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 AmTrusr Bank v. A.K. T. American Capital, Inc., Case No. 2:15-cv-09363-ODW-E 

(the "Action"). In the Action, the FDIC-R has asserted claims against Settling Defendant arising 
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out of the loans identified in the Complaint (the "Claims"). The Settling Defendant has denied 

liability in the Action. 

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

avoid the uncetiainty and expense of fu1iher 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 I: Payment to FDIC-R 

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

agrees to pay the FDIC-R the sum of one hundred eighty-five thousand dollars ($185,000) ("the 

Settlement Payment"), to be paid within sixty (60) days after the FDIC-R executes this 

Agreement; 

B. The Settling Defendant shall deliver the Settlement Payment to the FDIC-R by 

wire transfer into an account designated by FDIC-R by notice to the attorneys for the Settling 

Defendant or by certified or cashier's check drawn upon a depository institution acceptable to 

FDIC-R. 

In the event that the Settlement Payment is not delivered to the FDIC-R ( or its counsel) 

by the due date set forth in Section I.A, above, interest shall accrne on all unpaid amounts at the 

rate of 5% per annum from the date that payment was required by Section I.A until the date of 

payment. 

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

date detemllned by Section I.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 accrned interest) to: 

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

accrning from the dates detennined by Section I.A above, through the date of payment at a rate 

calculated in accordance with 26 U.S.C. § 662J(a)(2); or 

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

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

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

Agreement; or 

3. Te1minate the Agreement and move to vacate any dismissal order, to 

which the Settling Defendant agrees to consent and re-institute an action on the FDIC-R's 

claims. The Settling Defendant further agrees to waive any defense based on any statute of 

limitations that would bar any of the FDIC-R's claims and waives all objections, defenses, 

claims or counterclaims, and covenants and agrees not to assert any objections, defenses, claims 

or cow1terclaims that did not exist or were otherwise unavailable as of the date this Agreement 

was fully executed; or 

4. Seek any other relief available to it in law or equity. 

Any extension of time under Section 1.C. l for delivery of the Settlement Payment or 

acceptance ofa p01iion of the Settlement Payment shall not prejudice the FDIC-R's rights to take 

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

Settlement Payment (including all accrued interest) in full. 

SECTION II: Stipulation and Dismissal 

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

the Parties, and (2) receipt of the Settlement Payment, the FDIC-R shall file a stipulation of 

dismissal with prejudice in the Action, \vhereby the Comt shall retain jurisdiction to hear and 

dete1mine all matters related to the Action and to enforce this Agreement, executed by the 

attorneys for all Parties hereto. 

A. 

SECTION III: Releases 

The FDIC-R's Releases. 

Upon receipt of the Settlement Payment in full and except as provided in Section 111.C, 

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

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

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assigns, from any and all claims, demands, obligations, damages, actions, and causes of action, 

direct or indirect, in law or in equity, belonging to the FDIC-R, that arise from the Claims. 

B. The Settling Defendant's Releases. 

Effective simultaneously with the release granted in Section III.A above, the Settling 

Defendant, on behalf of itself and its heirs, executors, trustees, administrators, 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, that arise from the Claims. 

C. Exceptions from Releases by FDIC-R. 

1. 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 Settling 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 or entity, including without limitation any such claims acquired by FDIC-Ras 

successor in interest to the Bank 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 

authorized to seek pursuant to its supervisory or regulatory authority against any person. 

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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 of the Mandatory Victims Restitution Act, 18 U.S.C. §§ 3322 

and 3663, et.~. if appropriate. 

SECTION IV: Representations and Acknowledgements 

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

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

and that they have the full power and authority to bind such Paity 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 ai1d obtained the advice of counsel prior to executing this Agreement, and that 

this Agreement has been explained to that Paity by his or her counsel. 

C. Status ofFDIC-R Investigation. FDIC-R represents that it is no longer 

investigating Settling Defendant in regards to any additional claims arising from the MCLPA, 

nor is it presently aware of any additional claims arising from the MCLPA that it intends to 

asse1t against Settling Defendant. Settling Defendant acknowledges that this provision does not 

limit, waive, release, or compromise: (I) the exceptions to FDIC-R's release set fo1ih in Section 

III.C above, and (2) FDIC-R's right to assert any additional claims discovered after the execution 

of this Agreement arising from the MCLPA against Settling Defendant. 

SECTION V: Reasonable Cooperation 

The Paities agree to cooperate in good faith to effectuate all the te1ms and conditions of 

this Agreement, including doing, or causing their agents and attorneys to do, whatever is 

[497354/1] 5 
(b )(6) 

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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 terms of this 

Agreement. 

SECTION VI: Other Matters 

A. No Admission of Liability. The undersigned Pm1ies each aclmowledge and agree 

that the matters set f011h 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 terms. 

B. Execution in Counterparts. This Agreement may be executed in counterparts by 

one or more of the Pm1ies 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 

counterpat1, upon execution and delivery, shall be deemed a complete original, binding the 

Pm1ies 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 Ohio. 

D. Notices. Any notices required hereunder shall be sent by registered mail, first 

class, return receipt requested, and by email, to the following: 

Ifto the FDIC-R: Paul Levin, Esq.; M011gage Recovery Law Group, 700 N. Brand Blvd., 

Suite 830, Glendale, CA 91203; Tel.: (818) 630-7900; Email,_ _____ __, (b)(6) 

Ifto the Settling Defendant: James W. Brody; American Mortgage Law Group, P.C., 75 

Rowland Way, Suite 350, Novato, CA 94945; Tel.: (415) 878-0030; Email: 

E. Entire Agreement and Amendments. 111is Agreement constitutes the entire 

agreement and understanding between and among the undersigned Pm1ies concerning the matters 

set fo11h herein and supersedes any prior agreements or understandings. This Agreement may 

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not be amended or modified, nor may any of its provisions be waived, except in writing signed 

by the Pa1ties bound thereby, or by their respective authorized attorney(s), or other 

representative( s ). 

F. Titles and Captions. All section titles and captions contained in this Agreement 

are 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. 

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

each of them or their duly authorized representatives on the dates hereinafter subscribed. 

Date 5 I Z. S \ t.or1 

Date: ------

[497354/1] 

FEDERAL DEPOSIT INSURANCE CORPORATION AS 

RECEIVER FOR AMTRUST BANK 

BY: _.___I ~____,I 

TITLE: LmMst\ , l _,, 3..,\ Divisi<M 

PRINT NAME: 5.,..,,,\/(, t \.). Wt.. 

A.K.T. AMERJCAN CAPITAL, INC. 

BY: 

TITLE: 

PRINT NAME: _________ _ 

7 

(b)(6) 
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not be amended or mridified_ nvr ma; an; r,fits pro..-isions be wai\ed. except in \\Titing signed 

by the Parties bound thereb;. orb) thei, ;especti\ e authorized anJmey(.sJ. or other 

representative( s·1. 

F Titles and Captions_ All section titles and captior.s contained in this Agreement 

are for convenience onl} and shall not affect the interpretation of this Agreement. 

G. No ConfidemialitY. The undersigned Parties acknowledge that this Agreement 

shall not be confidential and ,,-ill be disclosed pursuant to the federal Deposit Insurance 

Corporatlon·s applicable policies. procedures, a:-id other legal requirements. 

f'\ \VfI'.\.'ESS WHEREOF. the Parties heret0 ha\·e caused this Agreement to be executed by 

each of them or their dul} authorized representatiws on the dates hereinafter subscribed. 

Date: ______ _ 

Dat~. 7 ( - / 7 

FEDER-.\L DEPOSIT f\:SLRc\.NCE CORPOR',. TTON AS 

RECEIVER FOR A\1TRLST BA:\K 

BY, 

TITLE 

PR..r.\T ~A'.'v!E: 

:-\. LT. A_\fERfCA .... '\ CAPITAL f:\"C. 

BY 

--:-{TLE: r 

PR[\T ~- -\\lE 

I (b )(6)