SETTLEMENT AGREEMENT AND RELEASE 

This Settlement Agreement and Release ("Agreement") is entered into this ___ day of 

March, 2013, by, between, and among Plaintiff, FEDERAL DEPOSIT INSURANCE 

CORPORATION as Rcc~iver for AMTRUST BANK flk/a OHIO SAVINGS BANK ("FDIC'"), 

and Defendants, A.J. CAPCO, LLC dba AJ CAPITAL MORTGAGE, AJ CAPCO FUNDING, 

INC., ANTHONY A. CIAGLIA, and JOSEPH G. CIAGLIA ("Defendants"), for the mutual 

consideration and purposes herein expressed. (Individually, the FDIC and Defendants may be 

referred to herein as a "Party," and collectively as the "Parties.") 

PRELIMINARY STATEMENTS 

WHEREAS, prior to December 4, 2009, AmTrust Bank, previously known as Ohio 

Savings Bank ("Am Trust"), was a depository institution organized and existing under the laws of 

the United States. 

On December 4, 2009, the Office of Thrift Supervision closed Am Trust and appointed 

the FDIC as its receiver. In accordance with 12 U.S.C. § 182l(d), the FDIC succeeded to all 

rights, titles, powers, and privileges of AmTrust, including those with respect to its assets. 

On January 24, 2002, AmTrust and Defendants entered into a purchase agreement 

("Contract") under which AmTrust agreed to purchase loans from the Defendants. AmTrust 

purchased several loans from Defendants under the Contract which Amtrust claims were 

originated through fraud, forgery, negligent oversight, and which did not otherwise comply with 

the Fannie Mae guidelines (which compliance was required by the Contract), and which resulted 

in defaults. Among the loans purchased by AmTrust from Defendants, and which are the subject 

(b)(4).(b) or tht·s ll.tt.gatt.on u'efie loan numbers I .......................................... ··········································· (6) ............... ························ .········· ......... ,... . ....... . ..... . . ····L..------------------....1 

~~~(4),.{l?1J ..... _ ..... -------------------------1 

(b)(4)1{P1lL..m-········-· _______________ ___.I( collectively, the "Loan Transactions"). 

(6) 

Page 1 
AmTrust demanded that the Defendants repurchase the non-conforming loans, as 

provided for in the Contract. After the repurchase demand was rejected, AmTrust filed a lawsuit 

for breach of contract, negligence, concealment, fraud, and declaratory relief (hereinafter any and 

all present and future claims by the FDIC against Defendants, or any directors, representative, 

employees, staff, or insurer(s) of AJ. CAPCO, LLC dba AJ CAPITAL MORTGAGE, AJ 

CAPCO FUNDING, INC., in connection with the Loan Transactions are referred to as the 

"Claims") in the Eighth Judicial District Court of the State of Nevada, in and for the County of 

Clark, entitled Amtrust Bank jka Ohio Savings Bank v. A.J. Capco LLC dba AJ Capital 

Mortgage, et al., Case No. A554339 (hereinafter referred to as the "Action"). 

Defendants have responded to Plaintifrs allegations and have generally and specifically 

denied such allegations and have set forth various affirmative defenses. 

After litigating this Action for more than five (5) years, the Parties were ordered to attend 

a Mandatory Settlement Conference. The Parties engaged in settlement negotiations as a result 

of the Claims and the Action and reached a settlement agreement to resolve these disputed 

claims. 

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 

A. As an essential covenant and condition to this Agreement, within thirty (30) days 

following Defendants' insurer, Philadelphia Insurance Companies, rtceipt of the FDIC's 

executed counterpart of this Agreement, Defendants shall pay the FDIC the total sum of Three 

Hundred Nighty-Five Thousand Dollars ($395,000.00) (the "Settlement Payment"). The 

Settlement Payment shall be made by check, payable to the FDIC as Receiver for AmTrust 

Pa~c 2 
(b)( 4.) ...................... J3ank,Taxldentifieation .... NumberL..I ___ _.l and sent by overnight delivery to Patrick M. 

McGuirk, Counsel, Federal Deposit Insurance Corporation, 3501 Fairfax Drive, Room B-7004, 

Arlington, VA 22226. 

B. If the FDlC does not receive the Settlement Payment in full within the timeframe 

determined by subparagraph A above ("Settlement Payment Due Date"), then the FDIC, in its 

sole discretion, shaU have the right to: 

1. extend the period of time for payment, including interest accruing from the 

Settlement Payment Due Date through the date of payment at a rate calculated in accordance 

with 26 U.S.C. § 662l(b)(3); or 

2. enforce this Agreement and, in such event, the Parties agree to jurisdiction 

in Clark County District Court and to pay the prevailing parties' reasonable attorney's fees and 

costs expended in in such proceeding; or 

3. seek any other relief available to it in law or equity. Any cxtcru:;ion of 

time for delivery of the Settlement Payment shall not prejudice the FDIC's right to take other 

action or seck any relief during or after such period of extension, including the right to bring an 

action to enforce the Agreement. 

SECTION II: Releases 

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(ies) arising from the Claims. 

Page 3 
A. The FDIC's Release. 

Upon receipt of the Settlement Payment, and except as provided in Paragraph II(C), the 

FDIC, for itself and its successors and assigns, hereby releases and discharges Defendants, their 

affiliates, management companies, partners, associates, agents and their respective employees, 

officers, directors, representatives, heirs, executors, administrators, successors and assigns, 

parents, subsidiaries and affiliates, from any and all claims, demands, contracts, obligations, 

damages, actions, and causes of action, direct or indirect, in law or in equity belonging to the 

FDIC, arising out of or relating to the Claims. 

B. Defendants' Release. 

Effective simultaneously with the release in Paragraph II(A), above, Defendants, on 

behalf of themselves, and their respective employees, officers, directors, representatives, heirs, 

executors, administrators, successors and assigns, hereby releases and discharges the FDIC, and 

its employees, officers, directors, representatives, successors and assigns, from any and all 

claims belonging to Defendants, arising out of or relating to the Claims. 

C. Exceptions to Release by FDIC. 

1. Except relating to the claims made herein by Plaintiffs (which are 

resolved, released and forever discharged as set forth herein, notwithstanding any other provision 

of this Agreement, the FDIC 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 Defendants 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, AmTrust, other financial institutions, or any other person or 

entity, including without limitation any claims acquired by FDIC as successor-in-interest to 

Am Trust or any person or entity other than Am Trust. 

Page 4 
b. against Defendants or any other person or entity arising out of any 

existing or failed financial institutions other than Am Trust; 

c. against any person or entity not expressly released by the FDIC in 

this Agreement; or 

d. which are not expressly released in Paragraph II(A), above. 

2. Except relating to the claims made herein by Plaintiff (which are resolved, 

released and forever discharged as set forth herein), notwithstanding any other provision of this 

Agreement, nothing herein limits, waives, releases, diminishes or compromises the jurisdiction 

and authority of the FDIC in the exercise of its supervisory or regulatory authority to institute 

administrative enforcement or other proceedings seeking removal, prohibition, civil penalties, 

restitution or other relief it is authorized to seek pursuant to its supervisory or regulatory 

authority against any person, or which may arise by operation oflaw, rule, or regulation. 

3. Except relating to the claims made herein by Plaintiff (which arc resolved, 

released and forever discharged as set forth herein), notwithstanding any other provision of this 

Agreement, this Agreement does not waive any claims which could be brought by the United 

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

judicial district. In addition, the FDIC specifically reserves the right to seek court ordered 

restitution pursuant to the relevant provisions of the Victim and Witness Protection Act, 18 

U.S. C. § 3663, et. seq., if appropriate. 

D. Dismis!;al. 

Upon the FDIC's receipt of the entire Settlement Payment, counsel for the FDIC shall 

immediately file a stipulation for dismissal of the Action with prejudice, and each Party shall 

bear their own costs and fees. Defendants shall cooperate with the FDIC to accomplish such 

Pa2e 5 
stipulation for dismissal. The FDIC shall provide counsel for Defendants with a conformed copy 

of the dismissal as soon as possible. 

SECTION Ill: Insolvency 

A. Insolvency. 

Defendants warrant as to payments made by or on their behalf that at the time of such 

payment, the insurer(s) of Defendants are not insolvent nor will the payment made by or on their 

behalf render them insolvent within the meaning and/or for the purposes of the United States 

Bankruptcy Code. This warranty is made by Defendants and not by their counsel. 

B. Preferences. 

In the event that the FDIC is required to rctum any portion of the Settlement Payment due 

to a final order by a court that the transfer of the Settlement Payment or any portion thereof 

constituted a preference, voidable preference, fraudulent transfer or similar transaction, then, in 

its sole discretion, the FDIC may, without waiver of any other rights it may have in law or 

equity, pursue any of the rights and remedies set forth in Paragraph I(B) above, and/or otherwise 

permitted by law. 

SECTION IV: Termination. 

In the event the FDIC exercises its right to declare this Agreement null and void as 

provided herein, then, for the purposes of any statute of limitations or other time-based defense 

to any ofthe claims of the FDIC, the Parties to this Agreement shall be deemed to have reverted 

to theirrespective status as of5:00 p.m., Pacific Time, February 6, 2013. 

Page 6 
SECTION V: Notices. 

Any notices required hereunder shall be sent by registered mail, first class, return receipt 

requested, and may also be sent by email, to the following: 

If to the FDIC: 

Gregg A. Hubley, Esq. 

PlTE DUNCAN, LLP 

701 East Bridger Avenue, Suite 700 

Las Vegas, Nevada 89101 

Facsimile: (702) 685-6342 

(b )(6.).._.,.,.,.,.,,_., ,m, ''''''' .......................................... mmmEmail:( ................................ 

( b ) ( 6).. .............................. . 

If to the Defendants: 

Thomas J. Lincoln, Esq. 

LINCOLN, GUSTAFSON & CERCOS 

3960 Howard Hughes Parkway, Suite 200 

Las Vegas, Nevada 89169 

Facsimile: (702) 257-2203 

.................................................. . .. Email:L-1·_ ....... _ ....... _ ... _ ....... _ ...... _ ....... ....... _ _ .....____ ....... 

It shall be the responsibility of each Party to give written notice of any change of address 

for purpose of noti ce per 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 cl aims and defenses, that this 

Agreement is not an admission or evidence of liability or infirmity by any of them regardi ng any 

claim or defense, and that the Agreement shall not be offered or received in evidence by or 

against any Party hereto, except to enforce its terms. 

B. Execution in Countemarts. 

This Agreement may be executed in counterparts by one or more of the Parties named 

herein and all such counterparts when so executed shall together constitute the final Agreement, 

Page 7 
as if one document had been signed by all Parties hereto; and each such counterpart, upon 

execution and delivery, shall be deemed a complete original, binding the Party or Parties 

subscribed thereto upon the execution by all Parties to this Agreement. 

C. Binding Effect. 

All of the undersigned persons represent and warrant that they are a Party 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 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, administrators, representatives, attorneys, parents, subsidiaries, 

successors and assigns. 

D. Entire Agreement. 

This Agreement constitutes the entire agreement and understanding between and among 

the undersigned Parties concerning the matters set forth herein and supersedes any prior 

agreements or understandings. No representations, warranties or inducements have been made to 

or relied on by any Party concerning this Agreement and its exhibits other than those contained 

therein. 

E. Amendments. 

This Agreement may not be amended or modified, nor may any of its provisions be 

waived, except in writing by the Party or Parties bound thereby, or by their respective authorized 

attorney(s) or other represcntativc(s). 

F. Reasonable Cooperation. 

The undersigned 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, 

Pa~e8 
whatever is reasonably necessary to effectuate the signing, delivery, execution, filing, recording, 

and entry, of any documents necessary to perfonn the tenns of this Agreement. 

G. Choice of Law. 

This Agreement shall be interpreted, construed and enforced according to the laws of the 

State of Nevada. 

H. Advice of Counsel. 

Each Party hereby acknowledges that he 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 its counsel. 

I. Title and Captions. 

All section titles and captions contained in this Agreement are for convenience only and 

shall not affect the interpretation of this Agreement. 

J. Authorship/Construction. 

This Agreement sets forth tenns and agreements jointly negotiated by the Parties. It is 

expressly agreed that this Agreement shall not be construed for or against any party by reason of 

which party drafted it. 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be ellecuted 

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

AGREED TO and MADE EFFECTIVE as of the date of this agreement, by and 

between the following Parties: 

(SIGNATURE PAGES TO FOLLOWJ 
(b )(6) 

~ A,.; 

DATED this _{_day ofMareli> 2013. 

FDIC as Receiver for AMTRUST 

BANK t 

By: 

I ....... ·lb)(6) 

-~~----------------------~~ 

Name: fi fc, "e' ~ k · /he 1£ ...,.,· / ( 

Title: Cavy~(ef 

STATE OF VIRGINIA ) 

) ss: 

COUNTY OF ARLINGTON ) 

On Aer,/1~2t!.]Jefore me, _J....A..!...1 ;_lt!..,;,.~ce_\'\_t_· _IJ_A_.!....P_~____c1~r/ ____ , (name of Notary), a 

Notary Public, personally appeared f cdflc.J~. i'J, A~ ( Gc.c; (K J 

, as 

Gt..u'Oe ( (title) of the FDIC, who proved to me on the basis of satisfactory 

evidence to be the person whose name is subscribed to the within instrument and 

acknowledgement to me that he/she executed the same in his/her authorized capacity, and that by 

his/her signature on the instrument the person, or the entity upon behalf of which the person 

acted, executed the instrument. 

WITNESS my hand and ·al seal. 

(Seal) 

Page 10 

Mllllcen1 K1pl1n Commonwealth or VIrginia 

Notary Public 

Commission No. 7389422 

My Commission Expires 613012015 
11 4-J,.; I 

DATED this k_ day of.Mafdr, 2013. 

A.J. CAPCO, LLC d/b/a AJ 

CAP IT Al;}0f>.RT#Atl-~--= £ 4 

STATE OF NEVADA ) 

) ss: 

COUNTY OF CLARK ) 

, (name of Notary), a 

Notary Public, personally appeared __ )~__,_-!_1_w'_r1_V.,_· _ _ C_,_o~ ... (+_.(_(,_·c,._·'-- _ _ ______ , as 

-t- ~ j 

_ _ C_._S_O ___ (title) of A.J. Capco, LLC d/b/a AJ Capital Mortgage, who proved to me 

on the basis of satisfactory evidence to be the per:son whose name is subscribed to the within 

instrument and acknowledgement to me that he/she executed the same in his/her authorized 

capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of 

which the person acted, executed the instrument. 

WITNESS my han~ ,;nd official seal. 

(b)(6.) -----~ L 

J \ (Signature) 

J 

(Seal) 

Page II 
DATED this ___k_ day of.~, 2013. 

l(bJ(6) 

Name: ~{1..:.:..:11....:...:.1h....:....:o....:....::n-+y-C~; C<.~JU-!j,-=·tL~­

Title: fJreS. /den-fSTATE OF NEVADA ) 

) ss: 

COUNTY OF CLARK ) 

On /jpo/ 2 before me, Ve1· e () ,·~ 4 .... s. fy()..A'1(J ' (name of Notary). a 

Notary Public, personally appeared a.r,-ft, on Y (' /c?J/ 1tA- , as 

I 

Presid€/}+- (title) of AJ Capco Funding, Inc .• who proved to me on the basis of 

satisfactory evidence to be the person whose name is subscribed to the within instrument and 

acknowledgement to me that he/she executed the same in his/her authorized capacity, and that by 

his/her signature on the instrument the person, or the entity upon behalf of which the person 

acted, executed the instrument. 

WITNESS my hand and official seal. 

(b)(6}l ) I 

7! (Signahirc) 

() 

(Seal) 

... NOTARY PUBLIC 

.;, STATE OF NBVADA · . · County of Clerk 

• • YESENIA PASTRANO . . • .. ~pp_t ... ~. 09-11017-1 

IIIY-.ElWII'MA&ID.14.2013 
tJ ~,.;J DATED this __ L- day of~, 2013. --··-----·-· ANTHOKf'Y_A .... GI 

.......... ..C.P. . .(.6) 

By· 

~------~----~--~~------~ 

Name: anfhonv /c-...qf/?\... T v 

STATE OF NEVADA ) 

) ss: 

COUNTY OF CLARK ) 

. (name of Notary), a 

Notary Public, personally appeared Anthony A. Ciaglia. who proved to me on the basis of 

satisfactory evidence to be the person whose name is subscribed to the within instrument and 

acknowledgement to me that he executed the same in his authorized capacity, and that by his 

signature on the instrument the person, or the entity upon behalf of which the person acted, 

executed the instrument. 

WITNESS my hand a: ~d official seal. 

(b) ( 6) ..................... ,........... . ................................................................... .. 

() 

(Seal) 

Page 13 

.. 

NOTARY .. UBLIC 

STAT~ Of'" NEVADA 

County of Ct•rl< 

YESENIA PASTRANO 

.. ~Ppt~,...?· OSI-11017·1 M'l-. EJ~P~retAuo. 14, 2013 
(b )(6). ...... 

DATED this .1:_ day of~, 2013. 

JOSEPH .G. CIAGLIA 

........................................................................................................ " ...... ).(6) 

STATE OF NEVADA ) 

) ss: 

COUNTY OF CLARK ) 

On /}po / 2 before me, i./e;;. e.-.11 c'CA- P ~fy.V\.-11. () , (name of Notary), a 

Notary Public, personally appeared Joseph G. Ciaglia, who proved to me on the basis of 

satisfactory evidence to be the person whose name is subscribed to the within instrument and 

acknowledgement to me that he executed the same in his authorized capacity, and that by his 

signature on the instrument the person, or the entity upon behalf of which the person acted, 

executed the instrument. 

WITNESS my hand ffici al seal. 

I-- (Seal) L...--....:or {J-----r.v.----------1 

Page 14 

.. 

NOTARY PU.LIC 

STATE 0~ NEVADA 

County of Clark 

YESENIA PASTRANO 

.. ~pt No 0~ ~ 1017- 1 

MY /\DOt. Exrires .MilO. 14. 2013