(b)(2) 

D 

(b)(6) 

(b)(6) 

(b)(6) 

(b)(6) 

(b)(6) 

(b)(6) 

(b)(6) 

(b)(6) 

(b)(6) 

(b)(6) 

(b)(6) 

(b)(6) 

SETTLEMENT AGREEMENT 

THIS SETTLEMENT AGREEMENT ("Settlement Agreement") is entered 

into and made effective as of the 112 day of November 2009 ("Effective Date"), by 

and between FEDERAL DEPOSIT INSURANCE CORPORATION, as Receiver for 

INDYMAC BANK, F.S.B. ("FPICIINDYMAC"), MEGA CAPITAL FUNDING, INC. 

("MEGA CAPITAL") and MEGA CAPITAL's President and sole shareholder YONG 

SOK NA. FDICIINDYMAC, MEGA CAPITAL and YONG SOK NA may hereinafter 

be referred to individually as a "Party" or collectively as the "Parties". 

1. RECITALS 

1.1 On or about January 10,2006, FDIC/INDYMAC and MEGA CAPITAL 

entered into a business relationship governed by a Mortgage Loan Purchase and Interim 

Servicing Agreement (hereinafter "Agreement"). 

1.2 Pursuant to the terms ofthe Agreement, MEGA CAPITAL sold to 

FDIC/INDYMAC the following five (5) loans identified by borrower name, loan 

number(s), principal amount(s) and address: 

. . (a) BLANCAS LOAN-The loan to I lin the principal amount 

. . of $4 77,000, secured by real propertv-located a~·· ·- · ·· ·· · ~ La Puente, 

. California, 91744 (Loan No.I ~and which was submitted and sold to 

FDICIINDYMAC on or about June 4, 2007. 

(b) FLORES LOAN~ The loan td- lin the principai amount of 

$.352,000.00, socuredlby:alp:~located atl·. ·· · · · I CoD)pton, California (Loan No. .. · · and which was submitted and sold to 

FDICIINDYMAC on or a out prill6, 2007. ' . 

CARMONA LOAN- The loan t L-~~------~~ 

- · (d) FiNNEY ~OAN -The loan tol· ···· -·· lin the principal amount 

of $324,QOO, sec1Jred hv real yroperty located~.. · · ··· ·· I Concord, CA 

94521 (Loan No. · · · J and which was submitted and sold to FDICIINDYMAC on 

or about January 24, 2007. 

. .. -(e)- -LOZANO LOAN -The loan tol lin the principal amount 

_ of$ 57 5, 000, sec.ured by real property located ar..,.~ ------------'------.,1 Anahein:t, California 

76I6I3.1 5662-070 

SETTI.EMENT AGREEMENr 

Page I of9 

(b)(6) 

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

92804 (Loan No.I ~ and which was submitted and sold to FDICIINDYMAC on 

or about October 20, 2006. 

1.3 The five (5) loans described in paragraph 1.2.above are collectively 

referred to herein as the "SUBJECT LOANS". 

1.4 FDICIINDYMAC claims that the SUBJECT LOANS were an Early 

Payment Default as defined by Section 3.05 ofthe Agreement and that MEGA CAPITAL 

breached the Agreement by refusing to repurchase the SUBJECT LOANS after receiving 

demands from INDYMAC to do so. · 

1.5 MEGA CAPITAL disputes FDICIINDYMAC's claims relating to the 

SUBJECT LOANS. 

1.6 On or about July 24, 2009, FDICIINDYMAC filed a lawsuit entitled 

FEDERAL DEPOSIT INSURANCE CORPORATION as Receiver for INDYMAC BANK, 

FSB v. MEGA CAPITAL FUNDING, INC., a California corporation in the United States 

District Court, Central District of California, Case No. CV09-05431 (hereinafter 

"Action") seeking damages arising out of the SUBJECT LOANS. The Complaint 

included six (6) separate claims for relief- five (5) for breach of contract and one (1) for 

specific perfonnance. 

1.7 FDIC/INDYMAC filed a Notice of Motion and Motion for Writ of 

Attachment. The Motion for Writ of Attachment came on for hearing on October 19, 

2009 before the Hon. Patrick J. Walsh in Courtroom B of the United States District 

Court, Central District of California. After reviewing the moving, opposing and reply 

pap~rs, and hearing oral argument, the court granted FDICIINDYMAC's motion and 

issued a right to attach order. 

1.8 On October 21, 2009, the levying officer served a writ of attachment on 

MEGA CAPITAL's bank account at Nara Bank in Los Angeles, California. The levied 

funds in the amount of$853,301.34 are currently being held by the levying officer, the 

U.S. Marshal's Service. · 

1.9 The Parties desire and have agreed to settle all claims relating to the 

SUBJECT LOANS described in paragraph 1.2 of this Settlement Agreement. 

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 boun.d, 

agree as follows: 

SETILEMENT AGREEMENT 

· Page 2of9 

761613.1 5662-070 
(b)(4) 

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

this Settlement Agreement as though fully set forth he~ein. 

2.2 Payment to FDICIINDYMAC. Payment of Four Hundred Thousand 

Dollars and no/cents ($400,000.00) (the "Settlement Funds") shall be paid on behalf of 

MEGA CAPITAL to FDICIINDYMAC. 

(a) Of the Settlement Funds, the initial payment (the "Initial 

Payment") shall be for Two Hundred Thousand Dollars and no cents ($200,000.00). 

Pursuant to the Stipulation of the Parties and order ofthe Court thereon, the Initial 

Payment shall be paid to FDICIINDYMAC directly from the funds levied as a result of 

the Writ of Attachment and which are currently held by the levying officer. The levying 

officer shall deliver the sum of Two Hundred Thousand Seventy-One Dollars and no 

cents ($200,071.00) to FDICIINDYMAC c/o Anderson, McPharlin & Conners, LLP at 

444 S. Flower Street, 3181 Floor, Los Angeles, California, 90071, Attn: Vanessa H. 

Widener. The Initial Payment shall be paid by certified funds made payable to Anderson, 

McPharlin & Conners Trust Account. FDICIINDYMAC and MEGA CAPITAL stipulate 

and agree that the funds distributed to the FDICIINDYMAC shall include the SeventyOne Dollar ($71.00) fee paid by FDICIINDYMAC to the levying officer for relating to 

the processing and service of the Writ of Attachment. The remainder of the levied funds 

totaling Six Hundred Fifty Three Thousand Two Hundred Thirty Dollars and Thirty-Four· 

Cents ($653,230.34) shall be returned by the levying officer to MEGA CAPITAL c/o 

YONG SOK NA, 5000 N. Parkway Calabasas #100, Calabasas, CA 91302. 

(b) The remaining Settlement Funds totaling Two Hundred Thousand Dollars 

and no cents ($200,000.00) shall be paid by MEGA CAPITAL to FDICIINDYMAC in 

ten equal payments of Twenty Thousand Dollars and no cents ($20,000.00) beginning on 

February 1, 2010 ("Monthly Payments") and continuing on the first of each month 

thereafter until paid in full. The Monthly Payments shall be made by wiring the funds as 

follows: 

Bank City National Bank 

City Los Angeles 

ABA 

Account: [] 

2.3 The Monthly Payments shall be personally guaranteed by YONG SOK 

NA in a form attached hereto as Exhibit 1. Concurrently with the signing and delivery of 

this Settlement Agreement, MEGA CAPITAL and YONG SOK NA shaH execute a 

Stipulation for Entry of Judgment in the amount of Two Hundred Thousand Dollars and 

no cents ($200,000.00) less any amounts received pursuant to paragraph 2.2(b}, against 

MEGA CAPITAL and YONG SOK NA, jointly and severally, in the fonn attached 

761613.1 5662-070 

SETILEMENT AGREEMENT 

Pagc3 of9 
(b)(4),(b)(6) 

hereto as Exhibit 2. The Stipulation for Entry ofJudgment incorporates by reference the 

Judgment(Pursuant to Stipulation), attached to the Stipulation as Exhibit A: Both the 

Stipulation and Judgment are incorporated by reference herein and their terms made a . 

part of this Settlement Agreement. The Stipulation and Judgment shall be held in trust by 

FDICIINDYMAC'S attorneys of record and shall not be filed unless MEGA CAPITAL 

breaches paragraph 2.2(b) above and fails to timely cure said breach pursuant to 

paragraph 2.5 after receiving FDICIINDYMAC notice of default as provided in 

paragraph 2.4. The Judgment (Pursuant to Stipulation) shall not be entered so long as 

MEGA CAPITAL performs under the tenns of this Settlement Agreement with respect to 

making the Monthly Payments required by paragraph 2.2(b) above. 

2.4 In the event MEGA CAPITAL defaults by failing to make a timely 

payment to FDICIINDYMAC as set forth in paragraphs 2.2(b) above, FDICIINDYMAC 

shall giv~ written notice ofthe default and notice of its intent to enter Judgment (Pursuant 

to Stipulation) to MEGA CAPITAL and YONG SOK NA via mail and facsimile as 

follows: (1) Yong Sok Na, President, Mega Ca ital Fundin Inc., 5000 N. Parkwav 

Cahibasas #100, Calabasas, CA 91302, Voice: - - - . and Fax: ._I ____ __, 

and (2) Thomas J. Ryu, Ryu Law Group, APC. 0, Los 

Angeles, California, .90010, Voice:J._· _· ·_·_· _· ·__ __, 

2.5 MEGA CAPHAL shall have five (5) business days from receipt of the 

notice of default to cure the default. If :MEGA CAPITAL fails to cure the default within 

five (5) business days, FDICIINDYMAC shall·retain all consideration it received, and it 

may, in its sole discretion, seek to enter the Judgment (Pursuant to Stipulation) against 

MEGA CAPITAL and YONG SOK NA, jointly and severally, and enforce said 

Judgment against MEGA CAPITAL and YONG SOK NA, jointly and sev·erally. 

Judgment may be entered by ex parte application (without testimony or trial-and MEGA 

CAPITAL and YONG SOK NA further waive the right to a court and/or jury trial) with 

notice given to MEGA CAPITAL and YONG SOK NA and Thomas J. Ryu, Esq. by 

facsimile and telephone at the facsimile and phone numbers listed in paragraph 2.4 

above. 

2.6 Within five (5) busitiess days ofFDICIINDYMAC's counsel's receipt of 

the fully executed Settlement Agreement and Stipulation for Entry of Judgment, 

FDICIINDYMAC's counsel shall file a request for dismissal of the entire Action with 

prejudice. 

2.7 Each Party agrees that Section 664.6 ofthe Code of Civil Procedure ofthe 

State of California shall apply to this Settlement Agreement and requests that the court 

retain jurisdiction over the Parties to enforce this Settlement Agreement and, if necessary, 

the Judgment (Pursuant to Stipulation). 

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

Action. 

7.Sl6l~.l 5662-070 

SETILEMENT AGREEMENT 

Page 4 of9 

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

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

(b)(4),(b)(6) 
3. RELEASE 

3.1 Unknown Claims. FDIC!INDYMAC and MEGA CAPITAL 

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

Settlement 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 they may have against each other arising from or in 

conjunction with the SUBJECT LOJ\NS described in paragraph 1.2 of this Settle':llent 

Agreement. 

3.2 The Parties acknowledge and agree that MEGA CAPITAL processed, 

packaged and/or sold other mortgage loans to FDICIINDYMAC which are not described 

in paragraph 1.2 of this Settlement Agreement and that this Settlement Agreement and 

the Release does not apply to mortgage loans not described herein.- FDICIINDYMAC 

expressly reserves its rights to pursue any and all claims and causes of action it may have 

·in law or equity against MEGA CAPITAL arising out of any mortgage loan which is not 

described herein. 

3.3 The Parties hereby expressly waive application of California Civil Code 

§1542 with respect to the SUBJECT LOANS. The Parties certify that they have read and 

understand 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. 

3.4 The Parties understand and acknowledge that the significance and 

consequence cif its waiver of California Civil Code § 1542 is that even if either Party 

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

SUBJECT LOANS or any facts or circumstances related to the SUBJECT LOANS, that 

Party will not be able to make any claim for those damages. Furthermore, each Party 

acknowledges that they consciously intend these consequences even as to claims for 

damages that may exist as of the date of this release relating to the SUBJECT LOANS, 

but which that Party does not know exists, and which, if known: would materially affect 

that Party's decision to execute this release, regardless of whether that Party's lack of 

knowledge is the result of ignorance, oversight, error, negligence, or any other cause. 

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

Agreement and Stipulation for Entry of Judgment, the Parties each hereby fully, finaJiy, 

and forever release and discharge the other Party, and any and all of its respective, 

employees, brokers, investors, members,"partners,joint venturers, independent 

761613.1 5662-070 

SETTLEMENT AGREEMENT 

Page 5 of9 
contractors, attorneys, insurers, agents, investors, representatives, officers, directors, 

shareholders, independent contractors, and any corporation, partnership or limited 

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

such entity, and any 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 of such entity by virtue of common 

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

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

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

or other liabilities of every kind and nature whatsoever, whether legal or equitable and 

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

the SUBJECT LOANS. 

3.6 Express Reservation from Releases by FDIC. Notwithstanding any 

other provision, by this Settlement Agreement, the FDIC does not release, and expressly 

preserves fully and to the same extent as if the Settlement Agreement had not been 

executed, (a) any claims or causes of action that do not arise from or relate to the 

SUBJECT LOANS, or the defense ofthe same, or (b) any action taken by any other 

federal agency. As of the execution of this Settlement Agreement, the FDIC is not aware 

of any action taken or claims held by another federal agency arising from or related to the 

SUBJECT LOANS. In addition, this Settlement Agreement does not purport to waive, or 

intend to waive, any claims which could be brought by the United States through either 

the Department of Justice or the United States Attorney's Office in 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. 

4. MISCELLANEOUS 

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

execution of this Settlement Agreement and Stipulation for Entry of Judgment 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 any dispute arising out of 

this Settlement Agreement, or related thereto, to the Courts of the City and County of Los 

Angeles, California or the United States District Court, Central District of California, 

761613.1 5662-070 

SETTLEMENT AGREEMENT 

Page 6 of9 
consent to the jurisdiction of said Courts and further agree that any and all matters of 

dispute shall be adjudicated, governed and controlled under California law. . 

4.5 Attorneys Fees and Costs. Should any action be commenced t~ 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 of reasonable 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 if any provision of this 

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

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

invalid part, term 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. 

4.8 Review and Understanding. The Parties have entered into this 

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

and effect of all of its terms 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 assume all risks attendant to such 

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

4.9 Approval, Authority, and Nonassignment. The Parties represent and 

warrant to one another that the approval of this Settlement Agreement has been 

undertaken in a proper and lawful manner arid that they have the requisite power and 

authority to enter into and to perform their obligations under this Settlement Agreement, 

and further warrant and represent that they have not sold, assigned, granted or transferred 

to any other person, corporate or natural, or to any entity, any claim, action, demand, or 

cause of action released by this Settlement Agreement. 

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

the plural shall include the singular. · 

4.11 Counterparts/Execution. This Settlement Agreement may be executed 

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

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

761613.1 5662-070 

SETILEMENT AGREEMENT 

Page7of9 
for all purposes as an original signature, provided, however, that the original signature 

shall be produced upon request. 

4.12 Waiver. No term or condition of this Settlement Agreement shall be 

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

any provision of this 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. 

4.13 Headings. The headings of paragraphs herein are intended solely for the 

convenience of reference and shall not control the meaning or interpretation of any of the 

provisions of this Settlement Agreement. · 

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

request of the 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 of the 

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

created by this Settlement Agreement. 

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

Settlement Agreement sets forth the entire agreement between and among tJie 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. · 

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: NovemberZ-'Z;-2009 

APPROVED AS TO FORM 

RYULAWGROUP,APC 

By: '-----=:------::-=-------::=----cr---------_j..L_· --

Thomas J. Ryu, Es(. 

Attorneys for Defendant, MEGA CAPITAL 

FUNDING, INC. 

[SIGNATURES c;oNTINUE ON FOLLOWING PAGE] 

r 

761613.1 5662-070 

SETILEMENf AGREEMENT 

PageR of9 

(b)(6) 
DATED: November J3_, 2009 

DATED: November B._, 2009 

DATED: November_, 2009 

APPROVED AS TO FORM 

DATED: November__, 2009 

761613.1 5662..070 

MEGA CAPITAL FUNDING, INC. 

By: 

By: 

a . (b)(6J 

tdent ofMEGA CAPITAL FUNDING, 

c. 

(b)(6) 

ANDERSON, McPHARLIN & CONNERS LLP 

By: 

VANESSA H. WIDENER 

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: 

Signature 

Type/Print Name and Title 

SETILEMENT AGREEMENT 

Page 9 of9 

(b)(6) 
DATED: November_, 2009 

DATED: November_, 2009 

DATED: November ___J 2009 

APPROVED AS TO FORM 

DATED: November Jl, 2009 

761613.1 5662-070 

MEGA CAPITAL FUNDING, INC. 

By: 

YongSokNa 

President ofMEGA CAPITAL FUNDING, 

INC. 

By: 

YongSokNa 

ANDERSON, McPHARLIN & CONNERS LLP 

By: 

VANESSA H. WIDENER 

Attorneys for Plaintiff, 

FEDERAL DEPOSIT INSURANCE 

CORPORATION, as Receiver for INDY MAC BANK, 

F.S.B. 

FEDERAL DEPOSIT INSURANCE CORPORATION 

AS RECEIVER FOR JNDYMAC BANK, F.S.B. 

By: 

~ignature 

Type/Print Name and Title 

SETTLEMENT AGREEMENT 

Page 9of9 

-I (b)(6) 
(b)(6) 

DATED: November_, 2009 MEGA CAPITAL FUNDING, INC. 

. DATED: November_, 2009 

DATED: November 25 2009 

APPROVED AS TO FORM 

DATED: November_,2009 

761613.1 5662-070 

By: 

By; 

YongSokNa 

President of MEGA CAPITAL FUNDING, 

INC . 

Yong SokNa 

ANDERSON, McPHARLIN & CONNERS LLP 

Attorneys for laintiff, 

FEDERAL POSIT INSURANCE 

CORPORATION, as Receiver for INDYMAC BANK, 

F.S.B. . 

FEDERAL DEPOSIT INSURANCE CORPORATION 

AS RECEIVER FOR INDYMAC BANK, F.S.B. 

By: 

Signature 

. Type/Print Name and Title 

SETILEMENT AGREEMENT 

Page9of9 
(b)(6) 

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(b)(6) 

(b)(6) 

(b)(6) 

(b)(6) 

(b)(6) 

(b)(6) 

(b)(6) 

(b)(6) . 

(b)(6) 

AGREEMENT OF GUARANTY 

. This Agreement of Guaranty (herein the "Guaranty") is made by YONG SOK NA 

("Guarantor") for the benefit of the Federal Deposit Insurance Corporation as Receiver for 

Indy Mac Bank, FSB, (FDICIINDYMAC). 

RECITALS 

1.1 On or about January 10, 2006, FDICIINDYMAC and MEGA CAPITAL 

FUNDING INC. ("MEGA CAPITAL") entered into a business relationship governed by a 

Mortgage Loan Purchase and Interim Servicing Agreement (hereinafter "Agreement"). 

1.2 Pursuant to the terms of the Agreement, MEGA CAPITAL sold to 

FDIC/INDYMAC the following five (5) loans identifieq by borro~er name, loan number(s), 

principal amount(s) and address: 

(a} · · BLANCAS LOAN -The loan to I I in the principal amount of 

$477,000.

1 

secured bv raLprop~rty located a~l- · · ·· ·· !La Puente, California, 91744 

(Loan No.. ... _ and whtch was submttted and sold to FDICIINDYMAC on or about June 

4, 2007. . . 

{b) - - FLORES LOAN..:.The loanlJ lin the principal amount of 

$352,000,00, secured by reaLproperty located a~ ... m • . I Compton, California 

. _(Loan No.I· . . p and which was submitted and sold to FDICIINDYMAC on or about April 

16,2007 . 

.. · (c) CARMONA LOAN'-.The loan td · - · · .... I in the principal amo~t of 

u $384,000, fecured by real prop~rty located ai · · ··· !HeSPeria, California, 92345 . 

(Loan No. _: · · · J and whtch was submttted and sold to FDIC/INDYMAC on or about Aprtl· 

10,.2007. 

{d) FINNEY LOAN- The loan t~l lin ,e principal amount of 

$324,000, secured by real propertY located a(bJ(6l, Concord, CA 94521 (Loan 

No~ . I and which was submitted and sold to FDIC/INDYMAC on or about January 24, 

2007. 

(e) LOZANO LOAN- The loan t~ lin the principal amount of 

$575,000, secured by real property locat-ed a~ I Anaheim, California 92804 

(Loan No.I ~ and which was submitted and sold to FDICIINDYMAC on or about 

October 20, 2006. 

1.3 The five (5) loans described in paragraph 1.2 above are collectively referred to 

herein as the "SUBJECT LOANS". 

1.4 FDICIINDYMAC claims that the SUBJECT LOANS were an Early Payment 

Default as defined by Section 3.05 ofthe Agreement and that MEGA CAPITAL breached the 

Agreement by refusing to repurchase the SUBJECT LOANS after receiving demands from 

INDYMAC to do so. 

761630.1 EXHIBIT I 
1.5 MEGA CAPITAL disputes FDICIINDYMAC's claims relating to the SUBJECT 

LOANS. 

1.6 On or about July 24, 2009, FDICIINDYMAC filed a lawsuit entitled FEDERAL 

DEPOSIT INSURANCE CORPORATION as Receiver for INDYMAC BANK, FSB v. MEGA 

CAPITAL FUNDING, INC., a California corporation in the United States District Court, Central 

District of California, Case No. CV09-0543l (hereinafter "Action") seeking damages arising out 

of the SUBJECT LOANS. The Complaint included six (6) separate claims for relief- five (5) 

. for breach of contract and one (l) for specific performance. 

1.7 FDICIINDYMAC. filed a Notice of Motion and Motion for Writ of Attachment. 

The Motion for Writ of Attachment came on for hearing on October 19, 2009 before the Han. 

Patrick J. Walsh in Courtroom B of the United States District Court, Central District of 

California. After reviewing the moving, opposing and reply papers, and hearing oral argliment, 

the court granted FDICIINDY~C's motion and issued a right to attach order. 

1.8 · On October 21, 2009, the levying officer served a writ of attachment on MEGA 

CAPITAL's bank account at Nara Bank in Los Angeles, California. The levied funds in the 

amount of $853,301.34 are currently being held by the levying officer, the U.S. Marshal's 

Service. · 

1.9 The Parties desire and have agreed to settle all claims relating to the Action and 

the SUBJECT LOANS described in paragraph 1.2, and have e~tered into a Settlement 

Agreement in addition to this Guaranty. Pursuant to the Settlement Agreement, MEGA 

CAPITAL agrees to pay to FDICIINDYMAC the total sum ofFour Hundred Thousand Dollars 

and no/cents ($400,000.00) which payments are personally guaranteed by YONG SOK NA and 

paid as follows: Two Hundred Thousand Dollars and no/cents ($200,000.00) paid immediately 

and Two Hundred Thousand Dollars and no/cents ($200,000.00) paid over ten (10) months 

beginning February I, 2010. 

AGREEMENT 

THEREFORE, in consideration ofthe foregoing, and for other good and valuable 

consideration, the receipt and adequacy of which is hereby acknowledged, and to induce 

FDICIINDYMAC to settle its claims against MEGA CAPITAL in the Action relating to the 

SUBJECT LOANS, Guarantor hereby covenants, warrants and represents as follows: 

2.1 Reliance. Guarantor agrees and acknowledges that this Guaranty is given to 

induce FDICIINDYMAC to settle its claims against MEGA CAPITAL in the Action related to 

the SUBJECT LOANS. Absent execution and delivery of this Guaranty, FDICIINDYMAC 

would not have entered into the Settlement Agreement. 

2.2 Guaranteed Oblieations. Guarantor hereby unconditionally guarantees to 

FDICIINDYMAC the full and prompt payment of all obligations on the part of MEGA 

CAPITAL to be paid, as and when due, in connection with the Settlement Agreement. All 

obligations of MEGA CAPITAL herein guaranteed are referred to as the "Guaranteed 

Obligations." In the event of any default by MEGA CAPITAL in the payment of any ofthe 

Guaranteed Obligations, Guarantor shall promptly pay the same, upon demand: 

761630.1 EXBIBITl 
2.3 Continuing Guaranty. This Guaranty shall be unconditional, continuing and 

absolute and shall not be affected or impaired by any modification, extension or amendment of 

the Settlement Agreement or any other agreement now or hereafter executed between MEGA 

CAPITAL and FDIC/INDYMAC. . 

2.4 Direct Liability. The liability of Guarantor hereunder is direct and unconditional 

and may be enforced without requiring FDICIINDYMAC first to exercise, enforce or exhaust 

·any right or remedy against MEGA CAPITAL, and such liability shall continue in full force and 

effect until all Guaranteed Obligations have been fully paid. Upon any default by MEGA 

CAPITAL relating to the Settlement Agrement, FDICIINDYMAC may, at its option, proceed 

directly and at once against Guarantor to collect the full amount of Guarantor's liability 

hereunder, or any portion thereof, without first proceeding against any person, corporation, 

partnership or other entity. 

2.5 Waivers. Guarantor hereby: 

a) Waives presentment, demand, protest, and notice of acceptance, notice of 

demand, notice of protest, notice of dishonor, notice of default, notice of nonpayment, and all 

other notices to which Guarantor might otherwise be entitled; 

b) Waives all claims or defenses relating to lack of diligence or delays in 

collection or enforcement; or any other indulgence or forbearance with respect to any obligations 

relating to the Settlement Agreement or the Guaranteed Obligations, and any defense which 

Guarantor may have by reason of any defense which MEGA CAPITAL may have against 

FDIC/INDYMAC, other than payment of the Guaranteed Obligations; 

c) Waives any right, title or interest in, or claim to, whether by subrogation 

or otherwise, any collateral or assets of MEGA CAPITAL, until all Guaranteed Obligations have 

been fully paid; and 

d) Waives any defense or claim that resort must ftrst be had to MEGA 

CAPITAL, and waives any defense or claim relating to the marshalling of assets or any 

requirement to proceed against any parties or collateral in any particular order. 

2.6 Expiration. The liabilities, duties and obligations of Guarantor hereunder shall 

continue until all Guaranteed Obligations have been fully paid and satisfied. 

2. 7 Costs and Attorneys' Fees. Guarantor agrees, in addition to the liability above 

assumed, to reimburse FDICIINDYMAC for all costs and expenses, including reasonable 

attorneys' fees, which FDICIINDYMAC may incur (a) in the collection of the Guaranteed 

Obligations or any part thereof, (b) for the enforcement of any of the Settlement Agreement or 

any term, agreement, covenant, provision, obligation or duty arising thereunder, or (c) in the 

enforcement of this Guaranty or any term, agreement, covenant, provision, obligation or duty 

hereurtder. Guarantor shall promptly reimburse FDIC/INDYMAC to the extent that payment of 

such attorneys' fees, costs and disbursements are due from, and not paid by, MEGA CAPITAL. 

2.8 Statute of Limitations; Bankruptcy. Guarantor shall remain liable with respect 

to the payment, perfonnance, observance, compliance or satisfaction of the Guaranteed 

761630.1 E:xmBITl 
. Obligations or any part thereof irrespective of whether a recovery upon the same may have been 

barred by any statute of limitations. In the event of any proceeding by or against MEGA 

CAPITAL, or Guarantor under the provisions of the Federal Bankruptcy Code, or any other 

bankruptcy, insolvency or receivership proceeding, Guarantor expressly waives any right to seek 

extension of the obligations of this Guaranty under any provisions of such Code or any laws or 

rules applicable to any such proceedings, and hereby agrees that FDICIINDYMAC may proceed 

immediately to collect any amounts or demand immediate and strict performance due under the 

terms of this Guaranty. 

2.9 Notices. Except for any notice requirements expressly stated in the Settlement 

Agreement, all notices and demands of every kind and nature are .hereby waived by Guarantor. If 

FDICIINDYMAC shall desire to give any notice or make any demand upon Guarantor, such 

notice or demand may be given or made by a writing addressed to the Guarantor and mailed 

postage prepaid to the last address of Guarantor known to FDIC/INDYMAC. No such notice 

shall operate to waive any rights ofFDICIINDYMAC or create a duty to give any other notice. 

2.10 No Loan Commitment. Nothing contained herein shall be construed as an 

undertaking on the part ofFDICIINDYMAC to make any loan or advances to MEGA 

CAPITAL. 

2.11 Investi&ation. Guarantor delivers this Guaranty based solely upon Guarantor's 

independent investigation of the financial condition of MEGA CAPITAL and in no part upon 

any representation or statement ofFDICIINDYMAC with respect thereto. Guarantor is in a · 

position to and does hereby assume full responsibility for obtaining any additional information 

concerning MEGA CAPITAL's financial condition as the Guarantor may deem material to its 

obligations hereunder, and Guarantor is not relying upon, nor expecting FDICtlNDYMAC to 

furnish, any information in FDICIINDYMAC's possession concerning MEGA CAPITAL's 

financial condition. FDIC/INDYMAC and Guarantor agree that Guarantor hereby knowingly 

accepts the full range of risks encompassed within this Guaranty. This Guaranty will be effective 

when delivered to.FDICIINDYMAC without need for acceptance or any other formality. 

2.12 Successors. This Guaranty shall be binding upon Guarantor, Guarantor's heirs, 

personal representatives, successors and assigns, and shall inure to FDIC/INDYMAC's benefit 

and to the ~enefit ofFDICIINDYMAC's successors and assigns. · 

2.13 Integration; Waiver. This Guaranty contains the sole and entire understanding 

and agreement of the. parties and supersedes all prior negotiations and understandings. This 

Guaranty may not be terminated or otherwise amended, changed or modified, nor a waiver by 

FDICIINDYMAC provided, except by a written instrument signed by FDICIINDYMAC. No 

waiver, express or implied, by FDIC/INDYMAC of any default hereunder shall be deemed a 

waiver of any other or succeeding default hereunder. 

2.14 Interpretation. This Guaranty and the rights and obligations of the 

FDICIINDYMAC and the Guarantor hereunder shall be governed and construed in accordance 

with the laws ofthe State of California. This Guaranty has been submitted to the scrutiny of all 

parties hereto and shall be given a fair and reasonable interpretation in accordance with the · 

words hereof, without consideration or weight being given to its having been drafted by any 

761630.1 ExmBIT 1 
party hereto or such party's counsel. It is not the intent of the parties hereto to violate any 

applicable laws, including, without limitation, any laws relating to usury. If for any reason any 

provision of this Guaranty does violate any such laws or is not fully enforceable in accordance 

with the terms and provisions h~reof, this Guaranty shall be limited or construed to comply with 

such laws and shall be enforced to the full extent permitted by such laws. 

2.15. Rights Cumulative. The rights and remedies ofFDICIINDYMAC herein are 

cumulative and not exclusive of any other rights or remedies available to FDICIINDYMAC at 

law or in equity. 

This Guaranty has been executed and delivered effective as of the I "' day of 

November, 2009. 

761630.1 

GUARANTOR:YONGSOKNA 

(b)(6) 

ress: sooo 1'-l • etrll(.UU( CalahtsAs # 1°D 

c ttlo..\:> Q.?JC...$ . c A- c, 1,30 ;;t 

EXHIBIT I ,, 

(b)(6)