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SETTLEMENT AND RELEASE AGREEMENT 

This Settlement and Relca.-;e Agreement ("Agreement") is made by, between, and among 

the following undersigned parties· 

The Plaintiff Federal Deposit Insurance Corporation as Receiver for Am Trust Bank 

("FDIC-R"); and First Priority financial, Inc. (the "Settling Defendant") (individually, the FDICR and the Settling Defendant may be referred to herein as "Party·· and collectively as the 

"Parties''). 

RECITALS 

WHEREAS: 

Prior to December 4, 2009, AmTrnst Bank ("Bank") ,.vas 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 ,vas appointed Receiver. In 

accordance with 12 U. S.C. ~ 1821 ( d), the FDIC-R succeeded to a11 rights. titles, pov,'ers and 

privileges oft he Bank, including those with respect to its assets. 

Among the assets to which the FDlC-R succeeded ,,:ere the Bank's claims. demands, and 

causes of action that are the subject of this Agreement. 

On or about August 27. 2004. the Bank and Settling Defendant entered into a Master 

Broker Agreement setting forth the terms and conditions pursuant to \Vhich the Bank would 

purchase certain residential mortgage loans originated andfor submitted by Settling Defendant 

("2004 MBA"). On or about February 12. 2007, the Bank and Scltling Defendant entered into a 

second Master Broker Agreement setting forth the tem1s and conditions pursuant to v,'hich the 

Bank \Vould thereafter purchase certain residential mortgage loans originated and/or submitted 

by Settling Defendant ("2007 MBA"). (The 2004 '.v1BA and 2007 MBA are collectively referred 

to herein as the "MBA'") 

On December 2, 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 State:; 
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District Court for the Eastern Dlstnct of California in Federal Deposit Jmurance Corporation as 

Receiver_!Or Am Trust Bank v. First Priority Financial, Inc .. Case i"io. 2: l 5-eY-02507-JAM-KJN 

(the "Action"). [n the Action. the FDIC-R has asserted claims agairrnt Settling Defendant arising 

out of the loans identified in the Complaint (the "Claims") The Settling Defendant has denied 

liability in the Action. 

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

avoid the uncertainty and expense of further litigation. 

NOW, THEREFOIU'.. 111 cons1deratlon of the promises. undertakings, payments, and 

releases stated herein, the sufficiency ofv.-hich cons1dcration is hereby acknowledged. the 

undersigned Parties agree, each with the other. as fol\ow:c.: 

SECTION I: l'aJmcnt to FDIC-R 

A. As an e~scntial CO\'enant and condition tn this Agreement. the Settling Defendant 

agree:,; to pay the FDlC-R the Slltn of three hundred eighty-seven thousand and seven hundred 

and twelve dollars ($387.712) ( .. the Settlemcn1 Payment"). to be paid \V1thm thirty (30) days 

after the FDIC-K execute:-; this Agreement: 

R. The .Settling Defendant shall deliver the Settlement Payment to the FD[C-R by 

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

Defendant or by certified or cashier· s check <lra\\·O upon a depository institution acceptable to 

FDIC-R. 

In the event that the Settlement Payment 1s not deliwrcd 10 the FDIC-R (or its counsel) 

by the <lL1e date set forth in Section I.A. abow. interest shall accrue 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 docs not receive the Settlement Payment in full on or before the 

date determined by Section I.A above. then the FDIC-R, m its sole discretion, shall have the right 

at any time prior to receipt of the Settlement Payment in full (including all accrued interest) to: 

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Extend the period of time for the Settlement Pa)'1nent, including interest 

accruing from the dates deten11ined by Section I.A abo'\·C, through the date of payment at a rate 

calculated in accordance with Section I.A; or 

2. Enforce this Agreement. in which e'\·cnt the Sctt1ing Defendant agrees to 

jurisdiction in enited States Dlstnct Court for the Eastern District of California and to pay all of 

the FDIC-R's reasonable attorney· s fees and costs expended in enforcing the terms ofthis 

Agreement; or 

3. Terminate the Agreement and mow to vacate any dismissal order, to 

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

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

limitations that would bar any ofrbe FDIC-R's claims and v,;aives all ohjections, deknscs. 

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

or counterclaims that did not exist or were otherwise unavculable as of the date this Agreement 

was l'ully executed: or 

4. Seek any other relief a\·a1lable to 1l in law or cqt1ity 

Any extension of time under Section J.C I for dcliYery nfthc St:tllcmcnt Payment or 

acceptance of u portion of the Settlement Payment shall not prejudice the H)!C-Ws rights to take 

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

Settlement Payment (including all accrm:d interest) m full. 

SECTION II: Stipulations and Dismissal 

Within ten business days after the latter of 0) 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 1⁄2ith prejudice in the Action. whereby the Court shall retain jurisdiction to hear and 

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

attorneys for all Parties hereto. 

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SECTION UI: Releases 

A. The FDIC-R's Releases. 

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

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

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

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 FDTC-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 bv FDIC-R. 

1. Notwithstanding any other provision of this Agreement, the FDlC-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 Deicndant 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 1,uch 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 

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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. 

3. Notwithstanding any other proYision of this Agreement, this Agrecmem 

does not purport to \Vaive, or intend to waive, any claims that could be brought hy the l/nited 

States through the Department of Justice, the United States Attorney's Office for any federal 

judicial district many other department or agency of the L;nited States as defined by 18 ll.S.C. 

§ 6. In addition, the FDIC-R specifically rescrws the nght to scck court-ordered restitution 

pursuant to the relevant provisions of the Mandatory Victims Restitution Act 18 U.S.('. S§ 3322 

and 3663, et. seq., if appropriate. 

SECTION IV: Representations and Al'knowledgcmcnts 

A. Authonzed Signatones. All ofthc undersigned persons represent and ,varnmt that 

they arc Parties hereto or are authori1.e<l to sign this r\grecment on hchalf ol'the respective Party, 

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 respecti\'e heirs. executors. trustees. administrators, representatives, 

successors and assigns. 

B. Advice oiTounsel. Each Party hereb) acknowledges that he. she, or it has 

consulted with and obtained the advice of counsel pnor to e:,,ecuting this Agreement. and that 

this Agreement has been exp laincd to that Party by his or her counsel. 

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

imcstigating Settling Defendant or any of its officers. directors. and employees in regards to any 

additional claims arising from the iv1BA. nor is it presently aware of any additional claims arising 

from the MBA Senling Defendant acknov,;lcdges that this proYision does not limit, waive, 

release, or compromise: (1) the exceptions to FDIC-R's release set forth in Section lll.C above, 

and (2) FD1C~R's right to assert any additional claims discoYcred after the execution of this 
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Agreement arising from the MBA against Settling Defendant or any of its officers. directors, and 

employees. FDIC-R acknowledges that this proYision does not hmit. \vaive, release, or 

compromise any defenses that Settling Defendant or any of its ot1icers. directors, and employees 

may have to any additional claims FDIC-R may assert after execution of this Agreement. 

SECTION V: Reasonable Cooperation 

The Parties agree to cooperate in good faith to effectuate all the tenns and conditions of 

this Agreement, including doing. or causing their agents and attorneys to do, \Vhatt:ver is 

reasonably necessary to cfk:cruatc the signing. delivi:ry, execution, filing, recording. and entry. 

of any documt.:nts necessary to conclude the Action and to otherwise perform the terms or this 

Agreement. 

SECTION VI: Other Matters 

A. :,..lo Adnuss10n ()f Liahilitv. The undersigned Panics each acknowledge and agree 

that the nwtters set forth in this Agreement constitute the settlement and compromise of disputed 

claims nnd defenses, that this Abrrcement 1s not an admis~10n or C"\1dcncc of liability or infirmity 

by ,my of them regarding any claim or defense. and that the Agreement shall not he offered or 

received in evidence hy or against an: Party except to enforce its tcm1s. 

8. Execution in Countcwart~. l11is Agreement may be executed m counterparts by 

one or more of the Parties and all such counterparts \vhen so executed shall together constitute 

the final Agreement. as it- one document had been signed by all Parties: and each such 

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

Panics subscribed thereto upon the execution hy all Parties to this Agreement. 

C Choice of La\V. 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. Notice~. Any notices required hereunder shall he sent by registered mail. first 

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

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(b)(6) 

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If to the FDIC-R: Michael Delbick, Esq., Mortgage Recovery Law Group, 700 N. Brand 

Blvd., Suite 830, Glendale, CA 91203; Tel.: (818) 630-7900; Email: ~------__J (b)(61 

Ifto the Settling Defendant: Randy Sullivan, Patton & Sullivan LLP, 6600 Koll Center 

Park\vay, Suite 250, Pleasanton, California 94566; Tel. (925) 249-3405; Email: 

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

agreement and understanding bct\vecn and among the undersigned Parties concerning the matters 

set fiirth herein and supersedes any prior agreements or undcrstamlings. Th1s Agreement may 

not be ,.unended or moditied, nor may any of its provisions be waived. except in writing signed 

by the Partie~· bound thereby. or by their respective authorized attorney(s), or other 

representative( s). 

f. Tith:s and Captions. All section titles and captions contained in this Agreement 

arc for convenience only and shall not nffoct the interpretation of this Agreement. 

Ci. No Confidentiality. The undersigned Parties acknov..-ledge 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. 

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FEDERAL DEPOSIT !NSU~'ICE CORPORATION AS 

::CEIVER F(l . Try ., U' .. . · I 

TITLE Lovv\'S~ \ , Le.c,e-.\ \:S;vi<;,lfV\ ' ' J 

PIUNTNAME: So.V"'ve..l b_ LuLLc.. 

(b)(6) 

xan• e>'CTA l, Jb,}C 

Date: 

FIRST PRl1 

BY . ~ TITLE: L-c11._,",C::-o::::-. ____ _j 

(b)(6) 

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