SEW.EMENT AGREEMENJ AND MUTUAL REI.fjASES 

Thls Settlement Agreement and Mutual Releases (<4Agreemeof') are made this cl-~ L 

day of ,/Uw-e- 0. 2013 by, between and among the following undersigned Parties: the 

Plaintiff, Federal Deposit Insurance Corporation. solely in its limited capacity as receiver for 

Am Trust Bank ("FDIC-R") (which does oot include the Federal Deposit Insurance Corporation, 

generally or in any other capacity, nor does it include agencies and departments of the United 

States government, including without limitation, the United States Department of Justice) and the 

Defendant Morningstar Abstract, LLC ("Morningstar"), parties in a case captioned FDIC as 

Receiver for Am Trust Bank v. Hodge, et aJ., Case No: 09-CV -3234 in the United States District 

Court for the Eastern District of New York ("The Litigation"). 

WHEREAS, In July, 2009, AmTrust Bank C'AmTrustn) initiated The Litigation against 

Morningstar, several of Am Trust's mortgage brokers, its closing attorney, and other individuals 

and entities alleged to be involved in a purported mortgage fraud scheme concerning twenty (20) 

loans, including c1aims for conspiracy, fraud and negligence against Morningstar arising from its 

actions as title agent; 

WHEREAS, on December 4, 2009, AmTrust was closed by the Office of Thrift 

Supervision and~ pursuant to 12 U.S.C. § 182l(c), the Federal Deposit Insurance Corporation 

was appointed receiver. In accordance with 12 U.S.C. § 182l(d), the FDIC-R succeeded to all 

rights, titles, powers, and privileges of Am Trust, including those with respect to its assets and all 

of AmTrust's claims. demands. and causes of action, including those claims asserted in The 

Litigation; 

WHEREAS, Morningstar has denied all allegations asserted against it in the Litigation; 

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WHEREAS, without any admission of liability by any of the undersigned Parties. the 

Parties deem it to be in their respective best interests to end their disputes arising out of and 

related to The Litigation, and avoid further costs and risks associated with The Litigation and 

e.nter into this Agreement. 

NOW, TIIEREFORE, in consideration of the promises, Wldertakings and releases stated 

herein, the sufficiency of which consideration is hereby acknowledged, the w1elersigned Parties 

agree as follows: 

Section I: Payment to the FDIC-R. 

A. As an essential covenant and condition to this Agreement. Morningstar agrees to 

pay the FDIC-R the sum of Three Hundred Thousand Dollars ($300,000.00) (the "Settlement 

Funds") to be paid within 30 days of execution by all parties of this Agreement. The FDIC-R and 

Morningstar agree that the Settlement Funds shall be allocated to the losses sustained by the 

FDIC-R relating to the following Subject Loans: ( l) borrower I --floan.J :-;;l~)ffl.~ )( ) 

(b)( 4 ).~) ·········-·········-"""' .pamaica,NY.;(2)borrower. .... f ....................... ltoan ._I _ ._ .......... _ ........... __. .. ···l.jL-__ ····················...J ··· ,,,~,m ll. l.! .. b )(6) 

(b)( ,(~~ Lawelt<>I4''~¥;··{3)borrow.jiioanf······················ I ............................................. jJamaica,NY;and ........... ~).( ) 

(b)(4) ,(~1~ (4. ,, 1J0fl9W«I . ..--·]!()~· f ..................................... !Hempstead, NY. 

B. Upon the execution of an original, or originals in counterparts, of this Agreement 

by each of the undersigned Parties, but no later than 30 days after the execution of this 

Agreement, Morningstar shall deliver the Settlement Funds to the FDIC-R by direct wire transfer 

into an account designated by FDIC-R or by certified or cashier's check drawn upon a depository 

institution acceptable to FDIC-R.. 

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C. Without waiving any other rights that FDIC-R may ba~ in the event that the 

Settlement Funds are not paid to the FDIC-R by Morningstar in the respective amounts described 

above, and within 30 days of the execution of this Agreement. then the FDIC-R shall have the 

right, in its sole discretio~ prior to the receipt of any delinquent payment by Morningstar, to 

declare this Agreement null and voi~ extend this Agreement for the period of time until the 

FDIC-R receives all of the Settlement Funds and/or enforce this Agreement. 

Section 2: Stipulations and Dismissals. 

Upon execution of this Agreement by each of the undersigned Parties and upon receipt of 

the Settlement Funds by the FDIC-R in the amount specified in Section 1 above from 

Morningstar, the FDlC-R shall dismiss with prejudice all of its claims in the Litigation against 

Morningstar. A stipulation of dismissal with prejudice as to these claims shall be prepared by 

the FDIC-R and executed by Morningstar within 30 days after receipt of the Settlement FWlds by 

the FDIC-R from Morningstar. 

Section 3: Mutual Releases. 

A. Release of Morningstar by the FDIC-R. 

Effective upon payment of the Settlement Funds in the amount specified in Section I 

above, the FDIC-R hereby releases and discharges Morningstar, its representatives, officers, 

directors, employees, shareholders, members, successors, assigns attorneys and insurers. from 

any and all claims, demands, obligations, damages, actions. causes of action, direct or indirect, in 

law or in equity, belonging to the FDIC-R that arise from or relate to the Litigation, including 

those that were asserted or could have been asserted in The Litigation, including, but not limited 

to, any rights of subrogation. 

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B. Release of the FDIC-R by Morningstar. 

Effective simultaneously with the release in Section JA above, Morningstar on its own 

behalf. and on behaJf of its representatives, successors., assigns and attorneys hereby releases and 

discharges the FDIC-R from any and all claims, demands, obligations, damages, actions, causes 

of action, direct or ~ iD law or in equity, that arise from or relate to The Litigatio~ 

including those that were asserted or could have been asserted in The Litigation, including, but 

not limited to. any rights of subrogation. 

C. Express Reservation of Releases By The FDIC-R. 

Notwithstanding any other provision, by this Agreement. the FDIC-R does not release 

and expressly preserves fully and to the same extent as if the Agreement had not been executed, 

any rights, claims or causes of action against any other party in the Litigation not expressly 

released by this Agreement. 

Section 4: Representations and Acknowledgments 

A. No Admission of Liability. The undersigned Parties each acknowledge and agree 

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

claims previously defined and that this Agreement is not an admission or evidence ·of any 

1iabi1ity of any of them regarding any claim. 

B. Execution in Countetpart:s. 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 fmal Agreement, as if one document bad 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. 

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(b)(6) 

C. Binding Effect Each of the undersigned persons represents and warrants that 

they are a Party hereto or are authorized to sign this Agreement on behalf of a 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, administtators, representatives, successors, assigns 

and attorneys. 

D. Choice of Law. This Agreement shall be interpreted, construed and enforced 

according to applicable federal Jaw, or in its absence, the laws of the State of New York. 

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

agreement and understanding between and among the wtdersigned Parties concerning the matters 

set forth herein. This Agreement may not be amended or modified except by another written 

instrwnent signed by the parties to be bound thereby, or by their respective authorized attorneys 

or other representatives. 

F. Advice of CounseL Each Party hereby acknowledges that it bas consulted with 

and obtained the advice of counsel prior to executing this Agreemen~ and that this Agreement 

has been explained to that Party by his or her counsel. 

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

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

............................................... ············r 

Date: 3/)_ ;;z;;;;~ > 

Federal Deposit Insurance Corporatio~ as 

Receiver for Am Trust Bank 

................................................... IL.........r--_ ........................................ _... -~ 

Morningstar Abstract, LLC 

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ByjL---_uo--_----t}--- (b)(6) 

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