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REQUEST TO TAKE JUDICIAL NOTICE- 1

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JOHN E. BOUZANE, SBN: 79804 .

LAW OFFICES OF JOHN E. BOUZANE 634 OAK COURT

SAN BERANRDINO, CA 92410

(909) 889-5151

FAX: 909-889-3900

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Attorneys for Plaintiff

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SUPERIOR COURT, STATE OF CALIFORNIA COUNTY OF STANISLAUS

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) Case No.: 648068 ) ) )

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U.S. BANK NATIONAL ASSOCIATION, etc. et al

PLAINTIFF, U.S. BANK NATIONAL ASSOCIATION, etc. REQUESTS THAT THE COURT TAKE mOICIAL NOTICE

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Plaintiff

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vs.

TRIAL DATE: 9/2/10 TIME: 8:30 A.M. DEPT: 22

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ANTHONY J. MARTIN,

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Defendants

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TO ALL INTERESTED PARTIES AND TO THEIR ATTORNEYS OF RECORD:

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Plaintiff, U.S. BANK NATIONAL ASSOCIATION, etc. et al., requests that the trial

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court take Judicial Notice of the following documents:

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1. Deed of Trust

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2. Notice of Default and Election to Sell Under Deed of Trust;

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3. Notice of Trustee's Sale;

4. Trustee's Deed Upon Sale

5. Office of Thrift Supervision dated 9/5/08 Order to Cease and Desist directed to

Downey Financial Corp.

6. Stipulation and Consent to Issuance of Order to Cease and Desist dated 915/08

7. Affidavit of Federal Deposit Insurance Corporation dated 10/28/09

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8. Purchase and Assumption Agreement dated 11121108

9. Loan Sale Agreement dated 11121/08 between the FDIC and U.S. Bank National

Association.

This request to take Judicia] Notice is made pursuant to Evidence Code § 451 & 452.

Dated: '0-- 3 (-/0

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REQUEST TO TAKE JUDICIAL NOTICE- 2

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DEED OF TRUST

, CSl:!JJo OOX£~uJ!52--,

R 1"<"0' ding R equesied By: l"owney 5a-vings and Loan As90ciation. F.A. RC11lrnTO

Dovnsy Savin9~ and Loan A3sociation. F.A.

P"O. Bo~ 6060, ]50] JamI:x>n ... Rd, lcI"'"'P<'r t lktach. CA 92658-6060

11111111111111111111" UIIIIIIIHllli fllf , 11111 III

Stanislaus, County Recorder

l ee lundr ig2n Co Rrcorder Off let DOC- 2006-0028155-00

A~(t .0~-(o~t~r Cu~to~~~~

ThLl~sday FEB 2] 2006 10: 10:46

Ttl Pd $168.00' Nbr-0002023179

OAU/R2/1-27

Prepar-ed By:

Downey S, .... in'l'~ and Lo ao A.3soci-ation, F_A_

p·.O. Box 6060. 350l Jamboree Rd, Newpm1 Be~ch, GA 92658-6060

Tille Order No": 600000205 Escrow No.: 0198'11

APN:

DEFINITIONS

Words Used in rnelriple secrioos of Ihi~ docum~m ar r defined below and" olher words ar e orflned in Sections 3. II, IJ. 18.20 and 21. Certain rules regarding 'he u~e of words used in lhis document arc also provided in Srclion 16.

lA) ·'SttllrilylnSlrumrnl"'me-ans ,his document, which is dared February 9. 2006 10gether wiah all Riders 10 ''';$ document

IB)··B<>rro~·<r" is ANTHOll1" s . M1U1TJN :4ii:MJo."Q1l JED t"AN.

&'nO- ..... -eis address 's )312 ~OUR TOWN" I..J&..NE ~od.e!!lto CA 95.357

Borro w er is. the Irusw·, undr , lhr~ Secvr iry lnste umr nr (e) "Lende e ' i~. DO'l'I1ey Sa ..... .i n q e :3~C Lo a rr A~ s oco e L; on. F 'A.

'....Cr.dEl is 2. feder~lJy c be r t e r e-d e a c i nc s a e s oc d a t. i ors

organiird :3nd £:'''II~slinb': under the laws of the Uri a t.e d St.ates o f AJDe:ricn

904:1]58661

C .. L·IFORN1/i.-Singl(' F.amily-F a annie .... ;ile/fr~dd;1I! M;( UNIFOH~ IN51 RU~ E._h:'

,,',- :

... ~" .' " ...

L~ndcr'5 eddress is 3S01 Jambo.n.e Roz>d. l"e"POrt Be"ch, CJ>. 92660

Lend", is Inc. b • -oefrc i ... y under this Securiry lnstr urnenr.

(D)·'Tr .. strr"i~DSL Service Co~any~ ~ Ce j j f o r-n i.a Corporation

I () "Not." means the promissory note signed by Borrow er and dared P'ebn'.ary 9, 2006

Th<: NOle S1a1~ Ih .. Borrower Owe Lender t.hree hundred "event)' t.houaand four hundred

and 00/100 Doll ar >

[U.S. S ]10,400. 00 ) plus interest. Borrower has promised 10 pay this debt in «gular Per iodic

Payments and 10 p2y rhe debi in full nOI lal .. than March 1, 2036

IF) "Prnpe .... y .. means the property Ihal is described bdow under the' heading "Transfer of Righll In the Property."

IC) "Loan" means the debt evidenced by the Note. plus irueresr. ::my prepayment charges and late drargn due under the Note. and all sums due under this Security lnsnument, plus inkr<S1.

(H) ··Aitl~~·· rncnns all Riders 10 this Security I"mument lh., are executed by Borrower. The follow;ng R idus are 10 be executed by Borrower [check brut as appficable].

·0 Condominium W,de> 0 Second Home Ridct

o Planned Unit Development Rid er [iJ 1e4 Family Rider

o Biw«~ly Paymern Ride, CiJOlhnf~} [specify] Rider to Promissory Note and Security lns trument

II) ··APJ>Jiobl. LB .. ·· means all controllir.t applicable federal, srate and local srannes. regulations, ordinances ami administrative rules and OfdNS (!h"1 have rbc effect of law) as wcll as all applicable r,nal, non.apJ>Ul.ble judirra] opinions.

(J) "Communi,), As<ociBlio .. Duo. Fro. .nd A5s"'<mrnU",rie8ns all dues. fees, assessments' and other charges thai an imposed On Borrower or the Property by • condominium associarion, homeowners assccierion Or similar ofg811iznlion.

(K) "Etecrronir fupd.Tr»nsh,·· means any Ir.",f", of funds. other Than a transaction miginale<! by (hed. draft. or similar paper 'nSl,u""'nt. which is initiated through an electronic lerminal, leicphanic insu urrem, computer, or magnetic rapt so as 10 order, instruct, or authorize 3 tinan£laJ instinnion 10 debit 0' credit an account SIOch tum includ~, but is nor limited 10. poinl-Or-s.ale transfers, automated lelk. machine nansacrions, transfers initiated by lelf:phonc~ witt' 'ransfels.,. and ;)UTOffi8I('1} dcati'-'ghou!oc trans Ier s ,

GU Adjustable R,,< Rider n Balloon Rider

C VA Rider

(L) ~T-!o{,.,;n" Jlf"m~" mCl11~ those items lhaJ ar e descr ibed m Section. 3.

fMJ "Mi~<tJl~~tnU~ Pr ece edv" means Any ccmoensanoo, sculcment, award of damages, or proceed, paid by any Ihird parry (olher than insurance pr oceeds p.id under Ih< coverages described in Section S) for: (i) damage 10. or desuuction of, Ihc Prope rt v : (il) condcm·"~rion or other t""in~ of all o. ~y part of ,he Properry; {iii) conveyance i~} lieu or c( .. «denmarion Or 4l':) 'n~-srt'prcsc.i1ta1jon~ of, or omissions as to, the value- and/or conduion or the Property,

I{':} "Mong:Bf:_f In!!Aunlnt('''' means insur arce pr::::teail"'!!! ~e-n..jet ~g:::t~n~l the- nonpavrneru of. 01 default 011, the Loan.

(0) "Ptri"J'. Pa ym r nt" rr''''!n! the rcg"larl,· schrduled amount due for Ii) principal and ,nle''''1 under the Note, plu~ (ii) any amounts under Section :; of rhis Security lnsuurneru.

If} "R(SPA" means lh< Real Esra re Senlcm~nr Pr occdurcs AC1 (12 U.S.c. Section 2601,1 seq) and it~ implemen'ing regulalion, IlcgulaJion X (24 C. F. R. Parr 3500). as they mighl be amended Ir orn lime. 10 i';ml;' _ 01 any addt:io~~ cr succes sor lC'Hl~l:lti()p Or teguhlt;on lhat govern~ 'he same subject mann .• lI.$ used in lh1~ Sc-ClJrilY :n~lrulT;Cr'H. ··RESP'A" ,cf~~ 10 ~n rcouir crnerus wd rcs1IiC1~OnS ~hal are imposed in regard

~'&IOJ '''''' '"

90421S8661

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10. -faler.lIl' .d:lled mort~agc loan" even if [he Loan doe> nol qualify as • -kder.lly rclared mortgage loan- under R ESPA_

(Q) ''SU<CC5~OT ;n InIH..,1 of Borrower" means any parry thar has tax en lille 10 [he Property, wnelher 0' nol Ihat party has assumed Borrowers obligarioos under the NOl. andlor Ihi~ $<-curil} lnstrument,

TRANSFER OF RIGH"TS IN THE PROPE.RTY

This Security I"s'rumenl secures 10 Lender: (i) Ihe repayment of the Loan. and all renewals, extensions and modifieanons of the NOlc; and Iii) the performance of Borrower' s covenants and agrcrment> under ihis Stturif)' lnsrrument and she N01e. For Ihis purpose, Borrower irrevocably grants and conveys 10 Trustee. lfl rrusr, with power of sale, thc following described property loaned in [he

County of S:rANISLAUS

LOT 6 IN BLOCII. 150.11. AS SHOWN ON THE M1U' WTJTLED, THE CAROl-lNAS, FlLEJ) f"OR ru;CORD FEBlnJARl 29, ::100.0., TN 00011 311 OF MAJ>S, PAGl. 96_ ~TIFlCA"IT OF CORRECTION RECORDED JULy 24, 20.0.0., DOCUHENT NO_ 59888, OFFICIAL RECORDS

Parcel tD Number:

1 31;! ll.ARBoUfl TOWN LANE HOD1:'.:STO

( .. Property A ddress .. ):

IC'.yI, Cali for nia 9535"1

which curr ently has !he address of 1~:r'U:ll IZipCO<l·1

TOGE.THER WITH all rhe improvement' ',ow Of hereafter erected on the properly, and al] easements appuuenare es and r'~lu'o nOw or hcrcafie r' a pan of the property. All ,cplattrM"l~ and O>dditions shall also be covered by Ihi, Secur iry lnsnumem. All of [t.. rOlr;going is r cfereed 10 in II>;S 5tluriiY Insrr umern a3_ the "Property."

BORROWER COVENANTS tJ181 Borrower is lawfully seised of the estate her<by conveyed and ho.!' [he right 1(> gran! a1'G convey lhe Property and thai th. Property i, unencumbered, oc<:p[ fOl enrumbrancr-s of record. Borrower warr.m~ and Will dH''''dg",,<ral1y tbe title 10 the ProperTy again'l all claims and demands. subject to any encumbrance; of record.

THIS SECURITY tt-..'STRUMENT combines uniform cove nanrs for narional US<' and non-undorrn co v enams wllh l~m;it:d var iarions b~ jurt~drC1if)n- 10 const iune a uniform 5t"CU1;ty insirurneru covering real property.

UNIFORM COVENANTS_ Borrower and Lender covenant and 3!!rCC as follows:

I. P:>ym<nl or Prindp~l, Inlrr~l, Escrow 11rms.. Prep.ym.nl Ch9'l!o, and Lat. Ch • .-gcs_ Borrower shall PO} "-he,, due !n! principal or. and ime,,",' on, the debt evidenced by Ihc Nolc and any prepayment charges and lare ::h;:<rgl."! due under Ihe Note. Borrower shall also pay funds for Escrow l;£~>s purstrant 10 Secnon J Payments due under lhe NOI~ and this Security tnsnurnem shall Ix mOOc in U.S 90421SB667

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curreocy. However, il any rbeck or DIne, instrument received by Lender as payment und er the Note or Ihis Securuy lnstrurnen] il rdmnrxl to Lender unpaid. Lender may require tbar any 0' all subsequent paymems due under tnc Note and this Security lnstrumenr be mBdr in O'1r or more of the following for'ns, as selected by Lender: (3) cash; (b) money order; (e) certified check. bank check, treasurer: ~ cnrrk or cas hier' 5 check, provided an~ such check is drawn upon an insrinnion whose deposits arc insured by ~ (edual agency, insirumemaluy, oremiry; or (d) Elecrronic Fuoos Transfer.

Payments are deemed 'cceind by Lender when received at the locanon designared in the NOTe Or at such other 10000lion as may be designated by Lender in accordance with the notice provisions in Section 15 Lender may return any payment or panial payment if thc payment Or partial payments arc insufficient 10 bring the Loan current. Lender may accepl any paymt:n! or partial paymem insufficient to bring the Loan currenl, wilhout waiv er of any "ghls hereunder or prejudice 10 il~ r ights 10 refuse such paymenl or parti.1 paymml5 in the future, bUI Leoda is nOI obligated to apply such payments aI lhe. rime such payments 81e ocr:ept..:l. If each Periodic Payment is applied 35 of its scheduled due dale. then Lender need not p~y interest on unapplied funds. Lender rrury holrl such unapplied funds onti l Borrower makes payment to bring Ihe Loan current. If Borrower does not do 50 within a reasonable period of time, Lender shall either apply such funds 0' return ihern to Borrower. If nol applied earlier. such funds will be applied 10 thr: outSLmding princ.ipal balance und er the Note .mmedialdy prior 10 foreclosure No offset or claim whirh Borrower might have oow 01 in the fuiur e again51 Lender shall relieve Borruwer From making paymcnl5 doc under the Norc and this Scc.urity lnsn urnem 0' performing the covenants and "~Ieeme",s secured by this Secur ity ~nSlfUJT1("nt.

1. Appi;aHion ,,' PD'ymenl~ (It' Prueeeds, E~crpl as otherwise described in this Section 2, all paymentS accepred.and appliCt'Lb),-Lrnder shalLbe.applied in Ihc following order of priority: (a) imerest due under the No!;';. (b) principa] due under the Note; (e) amounts due under Section J. Such payrnems shull be applied to C'1ICh Periodir Paymf'nl in the order in which ir became due, An~ remaining amounts shell be appli..,j Ii,S! 10 lalc chargu, second to any olhe, lIITJOunt< due under this Security Jnstrvmenr, and then to reduce the principal ba·lantt of the NOIe.

tf Lender receives" paymenl from Borrower for a delinqoent Periodic Payment which includes a sufficient arnounrte pay any I" re charge due, the payment may be applied to the delinquenl payment and the late charge. If more than one Pniodic Payment is oUl"and;ng. Lender may apply any payment received from Borrowe« TO IIx repayment of the Periodic. P"ymCn15 if, and to the exrent thar, each .pa~mf'nI can be paid in full. To the: e>letlt that any excess .. isIS afier IIx paymen1 is applied TO Ihe fulf payrrxnt of one or more P",iodic Pal'lTlO1tS, such excess ma.)' be a.ppli..:l·1O any late charges due. Voluntary prepayments shall be applied firsl 10 My prepayment charges and theri. as described in rhe NOI,.

Any appl1c.aI·'on of paymems, insurance proceeds, or Mi""dlanrom Proceeds 10 principal due under lhe Note shaU not .~tend OJ postpone the due date, OJ chang e Th e amount, 01 the Periodic J'"ym."t5.

JT fUIHi·5 fo"r (~·nn .. .: htm"sc Borrowe shaH .p3Y 10 Lender On the day PClj.od~(· Payments are due undc' the NOI~, un.ti'! the Note ;5 paid iri- full. a sum (rhe "F uods") 10 provide for payinem of amounts due lor' (a) taxes and assessments and otb er items which can anain priority over this ~urily In51rument as a lien or encurnbr.ance 0>1 lilt' Property; (b) leasehold payments 0, 8'ouncl r crns on the Property. if any; (e) rlemium~ for any and all insurana: required by Lender under Section 5; and (d) Mor1g~< Insurance premiums, if any, or any sums payable by Borrower 10 Lend". in lieu of 'he payritcril of lvIorl&"!;r Insurance premiums in aHordanee wilh the provisions of Section 10. These items ar e called "£5[00'>" hems." A~ origination 0" P.l any Time during 1m: term of the Loan, Lender may require That Community Association Dues. fees, and Assessments. 11 i:l!ly, be cs.oowru by Bcnf)wt"J, and such dues, tees and assessments shall be an £500w lrr m. Borrower shall promptly furnish 10 Lender .11 noti= of amounts 10 be paid under this Section. Borrower shall pay Lender rhc f und~ for E_..:row Irerns unless Lender waives Bonowers oblig~li{)n '0 pay the Funw for any or ~I! Es[row Ilcm~, Lender lTIily waive Boreower ~ obliganon io pay TO Under Funds fo! any or al] Escrow ~H:rn~ ill any r~rr;C"·. Any such waiver may en!), b~

~orm JOO~ 1101-

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io wriling. I" me <,~nl or such waiv~'. Borrower shall pay di'('"Clly. when and whn~ payable, [he amounts d .... for any E,crow lien" for which paymenl of Fund, has h«n waived by Lender and. if Lender requires shall fu,ni5h '0 Lender ,tCt:ipls evidencing such paymeru within sur h Ii"", pel iod as Lender maY'e-qui, e. Borrowers obligation 10 mal« such payments and to provide receipts ,hall for .11 purposes be deemed 10 be a covenant and. "I!r=><"1T contained in this ~urity instrument, as Ihe phrase "covenant and agreernenr' is used in Section 9. If Borrower is obligated to pay Escrow 1.<= dirf'Ctly. PUIS""'" to • waiver, and 9o,rower fails 10 pay the amount due for an Escrow ltern, Lender may e xcrr i se it, r ights under Section ') and PBY ,och amount ;md BoHOWe, shall Ihen be obligated under Section 9 10 ~pay to Lender any such amount. Lender may .. "oke the waiver as 10 any or all Escrow trerns at any lime by a notice givrn in accordance with Section I) and, upon sueh revocation, Borrower 'hall pay 10 Lender all Fund" and in sueh amounts, [hal arc then required under rhis Section J.

Lend.." mar. at any time, collect and hold Funds in an amount (a) sulf,cicnlTO permit Lender 10 apply the Funds al tbc time specified under RESPA, and (b) not 10 Ol'C«! the maximum amount a lender <an require under RESPA. Lender shan estimate ibe amoUI1l of Funds due on the ba-si. of current dab and reasonable estimates of c.pcod'lUr~ of future Escrow hems or olherwi~ in ;)(.(.()r<l3JO<C wilh Applicable Law.

The Funds shal] be held in an insliruli .. :m w hose depo,il". ar c insur ed by a Federal agcnt:y, msrrurnentalitj-, 0. <nliry 'including Lender, if Lender is an institurion whose deposits an' SO inswed) or in any Federal Home Loan BanI c. Lender shall apply the Funds 10 pay the Escrow Items no later than the lime specified uode. RESPA. Lender shall nor c-har1)~ Borrower fo, holding and .ppl~ci"g the Funds, annually analyzinc Ihe I:SCro,.. account, Or vrrifying the Escrow Items, unltss Lender pays Borrower interest on the Funds and Applicable Law permits Lendn 10 make such a charge. Unless an agreemenl is made in "'litinB or Applicable La ... requires i"I.,.-f'5I 10 be paid on ibe Fur>ds., Lender shall no! be '«turfed to pay &>rrown ally Inlcresl or rnmings on 11'1(" f unds. Borrower and Lender can ~rc-( in ~'Tiljng.. hoWCVCf. [hal ;r.tcresl sh.U be paid on the Fund~ Lender shall give 10 Borrower, without cha'lle, an annual occounring of the funds as requir ed by R ESP}\.

I r Ihere is a sur plus of F unds held in escrow, as defined under R£SP A. Lender shall account to 9ocrowa for Ill" c>= funds in accordance wilh R£SPA. If there is a shortage of Funds held in escrow, as ddinOO. under R[5PA, Lender shall nOlify Borrow er as required by RESPA, and Borrower shall pay 10 Lender me amounl necessary 10 make up the shoru.gc in accordance with· R.£SPA but in. no more than 12 mon~hl)' p:!yme"fs. If Ibue is a deficjency of Fund, held in escrow, "-' defined under RESPA, Lender shall notifY Borrower as 'equir«:i by RESPA, and Borrower ~hall pay 10 Lender ih. amount n""..".sary 10 make up the deficiency in accos dancr wiTh R ESPA, but in no more than 12· moruhly payments.

Upon payment in lull or all suins secured by Ihis Secur iry lnsrrumem; Lender shaH promptly refund 10 Borrower ;tnt Funds heM by Lender.

4. Ch-&rgl'::5~ Lit.Ds. Borrowe r shall pay all 1a'XC1, assessments. charges. f"i;.n~. and -rnpositior» auributable 10 the Property which can anain pr ioriry o v cr this Sccur ity f nsrrurnem , lcaschctd paym c nts OJ ground rents' on [he Pr opcny, if any, and CommunilY Association Dues, Fees, and Assessments if any. To Inc e-xtent that these items aft' E5-cfOW II-ern.s! Borrower shall pay f he rn in rhe manner provided in Section 3_

Borrower shall pr.omplly disch'''Ec any l·icIT which has primi!)' over rhis Secur iry Insrrumem unl= r3ot)rrO\oIIf'J= (d) agf~ in u'Tilln_g ~o the paymf'n~ of .he obligerion secur ed by zhc lien in a manner acceptable 10 t.ender, bUI only so long'" Borrower i~ p<:rforming such agreement: (b) contests the lien in good Ianh by. or defends a!;HinSI enforcemcrn of Ihc lien in. legal proceedings which in L.~d.r' s opinion opera" 10 pr evcm the enforcement of the hen whi.e those proceed.ngs are pending, but only umilsurh proceeding5 ar r concluded; or (c) =ur"5 from rhe holder of Itl, lien an agreement satisfactory 10 Lender subordinating 'he lim 10 this SCClJ,ily InS"umcnl. If Lender determines .hal any p~Jl 01 rhe Property is subject TO a lien

· .... -hich em nnain pr)orjl)" over this Srrtl,il)· I nstr urnent Lender may givr-- f30lfowrl ~ nOlia: ldcn~iry;ng Ihc

C-iIOII1"") '"

9042158667

hen. Within 10 d:ays of the date on whi-ch IN!II norir e is given, Borrower shan satt:sfy lht JtCTJ Of l:akf one Or mal. of the "C1ion~ SC' forth above in this Section 4.

Lcndr:r may require Borrower 10 pay it one-rime charge for a real esiare ~aJC ..... erificarion and/or (epani,,!: service used by Lender in conned ion wi,h this Loan.

S. Pnlpt'rty IA~u.-..nrr. Borrower shall k~ the improvements now cxis;ing or hereafter erected on 'he PTOpe"y in.",.d '4;al05t 10 ss by Ii re, hazard. i"duded willJin .he term "extended coverage. - and My orher hazard. including, but no1 limited '0, earthquakes and floods, for which Lender requires insurance. This insurance shall be maimaioed in the amounlS (including deductible 1cYd.<) and for !he periods that Lender requires, Whal Lender requires pur suam 10 tbe precriling sentences can change during Ihe term of Ihe Loan. T..., in5urai>c<: ClInic.' providing the insurance shaU be chosen by Borro"",. ,ubjecl 10 Lcoder' s right to disapprove Bonower' 5 choice, which righl shall nOi be exercised unreasonably. Lender may require BOJlow er 10 pay, in (:Oll11tJC1;On with .his Loan, eirber: la) a one-lime charge for (lood zone determination, cel1if1ca1;on and tracking services; arCh) a one-rime charge Ior (load zone determinancn and Urlifn.:al;on services and subsequent charges each lime rcmllppings Or 5imilar changes occur which !.-asonably mighl .fred such detcrmii\alion Of ur1ifiC3tion. Borrower shal] also be responsible for the paymwt of any f= imposed by Ihe federal Emergency Managemeru Agency in connection wilh In.: re vir w of any flood zone desenninarion resuhing !lorn an objection by Bon 0......-.

If Borrower fail~ 10 maintain any of the coverages described above, Lender may obtain insurance (.Overage, at Lender. oplion and Borrowers expense, Lender is IJJldClno obligarion 10 purchase any particular lYpe 01 arno"nl or coverage. Tberrfor e, such coverage shall covel Lender, bul might 01 mighl nOI protect Bprrowcr,Bonowc'- ~ equity in tbe Propetl)', or [he cornents of the Property, against any risk. hazard 0. liabil~ty and mighl provide I!teal!'r or Idsf. coverage than was previously in effect. Borrower ;v::kllOwledgcs lhatih< WsI of the insurance coverage so obtained mighl signif,uIlIly exceed the 005' cf insurance .nal Borrower could have obtained Any amounlSdtsbursed by LendCI under this section S shall become addi'ionai &bl of Borrowe, Secured by lhis S-Od",hy IhSlrumtm. These ampunlS $ha.llbcru in'eJe>1 ,1 rhe Note rate from the dme of dis!Ju'5Cmcnl and shal] be payable, with such intaesl, upon notice from Lender '0 Borrower reqocst~ng paymenl.

All insurnnct policies required by Lender and renewals of such policies shall be subject 10 Lender's' ,igh. 10 disapprove such policies, shall include a standard mortgage clause, and 5hall name. LcndQ as mortgagee an~ilo. M an additional 10'''' payee and Borrower further agrccs 10 ~eOCTalI)' a$ign rights to insurance proc.ct-d~ to the bolder of lhe Nole up 10 the amount of the outstanding loan bslaoce. Lender shall have the right 10 hold the policies and ,<:ncw"1 certificates. H Lender: .eqlj:ir~s, Borrower shall prOn.>plly give 10 Lender all rccr.ipls of paid premioms and renewal notices. If Borrow .. obtains any form of insur arlee CO" erage, n01 orberwise required by Lende t.; for damage 10, 0< deshuc.;on of, the Property, such policy shall include. stsndard mbng<!gc claesc and shaHnant(" Under as mortgagee and/or as an ai4lilional loss payee and eorrowcr funha ag~ees .ogcnc,allyassigll .ighl' ro insurance proceeds 10 the holder of the NOlc lip 10 thc amount of the oUI~i.ndi ilg lOOn balance,

In the event of loss, Borrower sh"lIg;vc PJOmp' nol;£"< to the insu,.ancr carrier and Lencler. Lende: may make proof of I~ if not mad. pr'omptly by Borrower. Unless Lender and Borrowe otherwise asj,« in writing, sny i"su.anc<' proceeds. whether or nOI lhe underlying insurance was required by Lender, shall be applied 10 r estoraaion or rcpai. of rbe Property, if the resiorarion or repair is l"funomi.c.aHy feasible and Lcndcrs security is no, lessened. During such repair and restoration period, Leoder ,hall have ,nt rig·hl'o hold such ins,--,nme< proceeds u"liI Lender h"-S. hM an 0pp<:tnunily 10 ;n.pecI. such Property 10 en5u.r,';[hc work has been completed 10 Lender', S-lIJi,f3C1;Oll, p.ovided ilial such' ;Jispeni'ori shan· be undertaken promptly. Lender may disburse proceeds It)! the repair s and rester arion i~ a ~in£" payment Q, in • ~.in of p>og'e:ss payments as the work is completed. Unless an agreemenl i, made in wriling or Apphceble Law iequir es iruer es: 10 be paid on such insurance proceeds, Lende. shal·1 nQl be required '0 pay Borrowe. IDly ;nle,e>t or earnings on such proceeds. F ecs for puhli( ..djuS1ers, 0.- other third panies, ,etained by Borrower .<hall no, be paid 0"[ of Iht insurance proceeds and ~hHJI be the sole obliga1ion of Barr o wer, I r the .<510.31;on or repair is not ecooornically feasible or Lender' 5 security would be lesscn.:d, the insurance prCCITd~ shall be applied '0 the sums secured by ibis Securil)' l nsn umeru whe.h •• D' [1(>1 !hen due. ~;th

9042158661

~D-nn )OO~ lIO'

• t

fhe en<:s~, if any, paid '" Borr ower. Such i",,,rano:- proceeds shall be applied in the order provided (or In Sectjon ?

Jf Borrower abandons Ihe Property, Lender may file, negotiate and ~r1I< any available insur ancr r Iaim and re laied malt"". If Borrower does not respond within )0 days 10 a notice ftom Lender that the in'Ulan~ car rier has ofT.,,,,, 10 settle • claim. rben Lender may negotiate and settle the daim. The JO--d.;V period will Ixgin when the notice is given, In eilhcl e"em, or ir Lender acquires' lhi: Property under Section 22 or olhnwisc, Borrower hereby assigns 10 Lender (a) Bo"owu', righls 10 My insurance proceeds in an amounl not 10 exceed Ih. amounlS unpaid uoder rhe Note or this Security [nstrumcnt, and (b) any olhn of BolIo~r's rignlS (o.her than the righ. 10 any refund of unearned premiums paid by Borrower) under all insurance policies covering lhe Property, insofar as such lighi5 are .pplioililc 10 the covcr"E~ of the Property. Lender may use the insurance proceeds eil her 10 repa; r or .<SIOT< IlK Property OJ 10 pay 3IDOUn.lS unpaid under the N.oI. at this Security IflSl,umenl, wbetberor 001 then due.

6. Ocrup"nc}". Borrowe) shall occupy, establish, and use the Property as Bon-own', principal residence within 60 days aftcr The execanion of Ihis· Security l-nsrrum~nl and .hal·1 continue 10 OCCupY the ProperTy as Borrower' s principal residence for ~I leas! one Y""' after !.he dale of occupancy. unless Lcndcl othe-rwise agT= in wriTing. which conSCI11 shall nor be unreasonably withheld, D' unless eXlcnualing ci,cum5lilllCC~ exist which 31t: beyond Borrower' s control.

7. Pre;~rvlil;on. Ma;olcm,,,u 2nd Prol.-,clion of 'ht. Propu1y; In.ptd;ons. Borrower shal] no. desuoy, damage or impair rhe Property, allow the Property ro deteriorate or commit wasl.c On Tnc P'opcJ1y, Wh~ther Or nOl BonowtJ is .residing in the Property, Borrower sl]all maintain the Property in order 10 prevent the Property From dClerior:;rling or deereasiog in value due 1.0 its condition. Unless ~I is determined pU'5u..,,1 TO Section ) that repair or n:sl.on>lion is nOI economically fe.asiblr, Borrowl'f'>haJi· prornprlv repair rilt Property i j damlllled 10 3"Qid. fon·hcr dc:reriornlion 01 d3JJ@gc If insurance or condemnation prbc...d-o arc paid in connection with damage 10, 01 the taking of, the Property, Borrower shall be responsible fo' repairing Of Ie-sloring the Property only if Lend rr hes released p.rx::ud> for such purposes. Lender mal' disburse proceeds fOT Ihe repairs and restoration in a single paYfll(!f11 or in • series of progress p:;Iymenls as the work is completed, H thc insurance OJ condemnation proceeds an: nor sufficient 10 repair or rcstmc the Property, Borrower is not relieved of Borrower' s Obligation for lhe eornplcrion of such repair 01 resrorerion,

Lender or i . .IS agem ",ay make reasonable entries upon end inspco ions of lh. Property. If iT has reasonable cause, Lender may iosptd Ihe interior of til<: improvcmenrs 00 the Property. Lender shall ~iv< Borrower notjce ar The lime of or prior io such an interior inspection specifying such reasonable' nu!oC.

II. (I_nr",~~r's Loan Applj~I'on, Borrower shall be in d~fauh if, during !he Loan application pr0CC5S,. Borrower or any De.rsom or l:ntitics acting at I.h~ direction of Borrower or wirh Bo!fO ...... U· s knowledg .• or COA5f'nl g"'" male,ially false, mjsl~jhg. or jnaccurare informal ion or statements '0 Lend e r [0' rail",] 10 provide Lender with mal"rial information) in c ooncct ion ",ilh The Loan. Material rrpresemations include, bUI are nor limited To, rcpresentanons concerning Borrow .. r s occupancy of 1m Properry as Borr ower" 5 principal residence.

9. Pro' ...... li .. " or lrndtr's InluHI in Ill. p_~ .... r1~ u"d Rights Und<.r this Srtutily tMlnrm.nl. If (3) BOlfowe,faiblopeIform.lhe<:ovcnaD1S 'Wd~rQ;m~nto: coruained in. lhi~ S<o'p~{jry Inslrument, (II) lhcr. is a legal prOc<e-ding that mighl significanTly affect Lend e rs ioreresr in ihe Pr operry and/or ,ighl5 und" this Sccuruy lnsrr urrcnt (such as a proc=liflg in bankruptcy, probate, for condemnation or forfeilure, fOT rnfnrcemem of a lien which may anain priorily over this Security Instrument OT 10 enforce la~ 01 rtgula!ion~). or (c) Borrower has abandoned Ihe Properly. then Le oder "];Oy do and po: (e" whatever i< reasonabte Or appropr iare 10 protect Lender' 5 interest in !It. Property and righu under this Securiry lncttumcru, including prOlect;ng aodlo. """",s;ng the value of the Property, and securing ""dlo'· '''Pairing rbe P,opcJ1y. Lender' s actions can indude. but are not Iirnned '0: (a) paying any sums secured by a lien which ~~ priorilY over this Security lnsrrurnent. (b) appearing in court; and (c) p:1ying reasonable

90t2158661

fo-n-n 300:!! 110~

• •

attorneys' fees 10 prOUxl irs iou~.r~1 in rhe Properly JJldJOf ri:ghlS under rhi5 Security Jns.trumcn~ includtng il5 ,ccurni position in a bankruplcy proceeding. ~"ring th. Property includes. but is not limited 10. enrer ing tbe Property ro rnal<~ repairs. change loeb. r eplace Or board up doors and windows, drain _r., from pip<:'>, diminalt buildin!; or other cod. ~iol"'ions or dangerous condinons, and have utilities turned on 0, ofT. Although under may rake action under this S=tion 9. Le-nder does not have 10 do so and is I10l under My ouly or obl.igaljon to do <,0. It is agreed thar Lender incurs no liabilny for not !:al.ing .n)' or .11 actions aulho.i2ed un<l~J thi~ Section 9.

Any amounts disbursed by Lender under [his Section 9 shall become additional debt of Bonower secured by this Secur iryInsnurnent. These amounts s".11 bear interest aI the Note rare from Ill. dare of disbursement and shall be payable, with such irueresr, upon notirr: from Lender 10 Borrower req"tSIing payment.

If Ihis Secur il)' Instrument is on a leasehold, 8o t row" shall comply with all the provisions of the lease, Ir Borrower .cqui.e5 fee lille 10 the Property, tbe leasehold and rhe fee lilk shall not merge unlf:>5 Lender 3£lct~ to the m'''grr in wrilil)g.

10. M.IJr:r.,gr Insunt ... ~r. If Lend ... required Mortgage lnsurance as a condition of making the Loan, Borrower shal.IWYlhe premiums required [Qmai,,""in the Marlgilte InsUrart!:C in effect. If, for any reason, the Morlgage Insurance coverage required by Lender ceases 10 be available from the mortgag. insuru lhaJ previously provided such insurance and Borrower was required to make separately dcsign3led paymenrs toward the pr"",iurm lor Mortgage Insurance. Borrower shall pay the premiums required 10 obtain cov~rag~substirililllly equivalent 10 ·thr MOrlgng~ Insurance previou·sJy in cfJ<XI, ar a oosr substanlially eqeivalem 10 rhe COSI to 139rtowcr of the MOrlgnge lnsur ance previously in effect, from an alt"J\8[C morrgagc insure. selected by Lender. If substantially equivalent Mortgage Insurance coverage is nOI .vail;thl.e, aolTb~~r>hall continue 10 payto Lender the amO\lnr of the sq~Jl'Idy dpignalrrl p<tymenL< that were d.i:.re when the insurance coverage ceased 10 be in c1Tm Lender will =j)I, use and retain these payments liSa non-, .. f"ndiible·loss rcscrvr-m--im. of Mongagr lnsurance. Such loss 'cY;"" shall lxnorH.tr""dahl., ·nQrw:iIhSw>('I'rg Ine. fOCI l~ rI:re Loan is ultirna!.t:ly paid i.n full, and Lender shall not be required 10 pay Borrower any interest Or earnings on soch loss reserve. Lender can no longo require loss reservepeymeots if Mortg~~ insurance coverage (in the amount and for the period rh:ll Lender requires] provided by an in", • ." ~1~ed b.y Lender ..:gioin becomes available. is. oblPined, andl<nd" requires scpar",dy dcsigrmtcd payments loward the pr~rriiu"'" [or Mortgage. Insuraric<:. If Lender .equifedMbfigag~ Insurance as a condition of ",alting the LOOn and Borrower ""as required 10 malic scpai3ldy drsignaled payrrxnts 10ward The premiums far MortgaCe: Insurance, Borrower shall pay the premiums required 10 rnaimai n Mong&gt Insurance in elTttt, or 10 provide 3 non-refondablc loss reserve, until lender's requiremem for MOrl·&3g~ Insurance ends in accordence w;l'h any wr.in.en "S.ct:n)enl between Borrower and Lender .p."v;ding fors.och termination or umil Itrmineiion is required by Applicabie Law, Nothing in this Section 10 .ff_, 8000"'':'' s ohligarioh to pay iruerestar lilt rare providM ;nlhe NOI,t.

Morigage Insurancc reimburses Leeder {or any enlil), I"'" purchases the NOlc) for certain I",se, ir may ineu. if Borrower does not repay lhe Loan as "Ilrcrd Borrower is not a parry 10 the Mortgage lnsuranre,

Mottg~e iO£l1l(rs evaluate lhdJ t,or,a·J ,is:ll, on all such. ;~uranc~ in force from l-i-rTI(:" to rime. and rnav enter in'oag'T'CCf!lt:tJ~ with ~"hCT parries thai sh#ire' 0.' mod.itY Iheir r'.,s~~ OJ reduce losses, Tbese il~.ft::cITrCn1~~ are on terms and conditions tha.1 are !>3tisfllClory 10 the mbiij;at;e insure, and the olhe:r party (·01 part"s) 10 these ag.bem.e~ls. TIi<:$< ag·'ccmenl.5 may ,o::<!uir~ rhe mortJ:'\8e insurer 10 mak.c payments using any SOUTC. of funds that lhe mongage insurer may have available (wliicli may include funds obtained 1T0m MOrlga~e

I""u~. premiums). .. .. . . .. .... . ... .

As ,; result of ihts( ag ... ·emCIiI.5. Under, any .purcha<er of the NOle. another insurer" any <.inSurer.

any other <nli1)', 01 any arfiliar. of any of the ror~oing. mEY receive (dirr:nly Or 'ndirl'rtly) arrourns that drr ive from (or mighr be- characterized "') a portion of BoITQwu' S payments for Morlgage lnsuraece, in nchang. for sh ar in!' flr modifying the mortgage i~sure'-, risk, or ",1ucing 1QS5CS. H such agra:mcnl provides Ih~1 311 .ffilial' of Lender takes a share of the insurer' s risk in exchange for a share of the pr erniurns paidte tbe ;nsUfl'r~ lh~ arrangement is often I{"rmro "captive- reinsurance. - Further:

(o) Any such "grct:ment, will not .flul Ih' amounts Ih., ...... r ruwer has Bgrnd to pay for MOf1g.gr losu"o<<., or .oy Olh.r tenn, or Ih. Lean. Such BC ..... ments will not in(~ ... Ih. >mounl Sorrowtr ... ~II 010< lor MOrlg.gr In,unnrt, 0· .. .1 Iht} will root (01;11. &""wrr !u ~n)" .-.fIlP!l.

9042158661

(b) AR~' !l.U~J' 3g~mfnb win nol .. "«I rhe righu Bo ... ro ..... e r h.30 T i' any ~ w"h .-r.i-pnl to rhr MO>1g~g. '"SlOn,,« lIml er Ih. HorntOwn e rs Prolrction Act of 1998 0, 3ny otb e r b_. Th<Y nghu m:il)' includr .hif nCbt Iu rf'Cr-;v(, [Tr1~in dBc'Ojiur6., HI n'luot .nd obl.in OtD..-dl:atio-n of tht Mongsgr Ins,u'1tl)('t., 10 have Ibi: MOf1g_:agt Insura1lu Irnnin;alr-d au lom .. tioU,. IIndJor 10 receive • .... rund of ~ny MOrlt"g' Ins" .... "u prtmlums Th~, we re un ....... ed 31 Ihe lim. of such [& .... II.lion or Irr'min,l;u1t.

I J. Assignmtnt ul Misctllanmu, Proa ... Is: forfeitur e. All Misccll""('OU5 Proceeds are hereby assigned 10 and shal] be paid to Lender.

If the rroperty is d"rnlIgc:<i. such Mi=llanrous Proceeds shall be applied to restor anon Or repair of ibe Property, if the rcsl()l1!liqn or repair is ecooornically feasible and Lender s security is not lessened, During such. repair and restor-Ilion period, Lmder shall have the "ghl to hold such MisccHan('Ous Proceeds until Lende, has had an opporruniry 10 inspeo su~h PlOpa1Y 10 ensure lhe W{).k has been completed to l.ender" s satisfaction, prov.idro dw such inspection shall be undertaken promptly. und<:r may pay for the repairs an 11 rc:storation in 3 single di~butsen1enl or ina 5CrlCS ofprog.rCSSp"yn-renlS as lb. work i, completed, Unl~ an agtcenxnl is mad. in writing or Applicable Law requires interest 10 be p<lid on such Miscellaneous Proceeds, Leildh shall not IX ":quired ropey Borrower any inteial or earnings on such MiK.Cllancous Proceeds. If the resreraiion or repair is nOI economically feasible or Lender's security would 1>< lessened, the MisceJlanl'l)u5 Proceeds shall be applied to the sums secured by .his Secur iry Instrument, ,,'h..u.cr or nOI then due, ",;Ih ibe excess, if any, paid 10 Borrower. Such Miscellaneous Proceeds shall IX applied in the ord er provided (Of in Sectinn 2.

In the event of a total I;lki.ng. destruction, or loss in value of the Property, the Mi5(:dl3f1rous Proceeds shall be applied 10 the sums secured by thi, Security Instrument, whether or nOI then doe, with

the. excess, if any , paid 10 BorroW~J: . .

In the event of 2 partialtaking, desrrucnon, or loss in value of the Property rn which the ra;r markei valoe of The Propeny immed,ately befQre tht partiBl ta!in8, desnucnon, or loss in value is equal 10 or gr~'cr lhan Ih~ amount of Ihr sums S<':CtI,f(! by this Securi!)' InSlru~nl immcili,ndy before Ihe partial taking, destruction, 01. los> in value. unless Borrower and Lender otherwise agree in Wriling, the sums secured by this Security [nstrument shall be reductd by the amount of the Miscellaneous Proceeds muh'p.l.ed by the fOllo",ng f'<lCliQn: (a) the IOIaI amount of the Swns seemed immciliBl~ly before the p811ial tahing, destruction," or loss iri value divided by (b) the Iair lTiar.kC1 value of Ih. PtopCrty immedi81dy before the partjal taking, di:stfUCI;on. or 1055 in value, Any baI~ shall IX ~d 10 Borrower.

In the [Vent of a panid taking, d<srrudion, 01 loss in valtH' of the Property in w b,eh IIx: f";. matk'" value of tlx: I'ropcrl)l irnmcil:iatdy berm. the parrial taking, desnection, or IOS5 in vahk is less than Ih. amount of rhe siu'n< secured imnir:di31t1y bciof[ rhe partial taking, desrrocnon, Ot loss in value, unless Borrower and Lcoder otherwise agJp' ; n "",il;ng. the Miscellaneous P,oettds sh311 be "I'plicillo the sums secured by Ihis Sautily IflSlrUm"n' wh.ther 0; not. ihe sums arethen due,

I(Ihe Property i5abar\dOhcd by Borrower, 01 if, aftc. noriee by Lender to Borrower thai the OpposingPany fa> ddinc,j in the nexl sentence) offers H) mak .• an .~w'\l'd to senle a claim for d"",,,&cs, 80<'0"' ...... fai.is 10 ,<spond '" Lender \'I'i,hin 30 days alk. the dare lh. notia: is g;'co, Lender i! auiborized 10 cotloo and apply lfu Misa:llancoU! Proceeds 61her '0 restoration or repair of the Property or 10 the sums secured by Ihis. $<:cu. if)' Insnumerrt, whcther Or nol thendue. "OppOSing Party" means ,ht third party Ih.I owes Bor-wWa Miscellaeeous Proceeds or the pIIr1.y agains: whom Borrower has & ,i·gh, of selion in rcgaTd 10 Mi5Cellar!<"oll' Proceeds;

Borro"".r shatl be in default if any action or procecdirg, whetber civil or criminal, is begun that, in Lew!!::'·, juq&rncnl, could resull in Ior feuure of the Property or other rnater ial impairment of Lend,,"~ ,nlucSl in·,hi· T'roj>(·rly or tfg.J1iS urlaer·Rii~, SeclJf'iry Insrrumenr, Borrowercan CUI< such a d~faull an.d. if .""deration has occurred, reinstarc a$ provided in Section 19. by causing the act-on or pr oceeding to be dismissed wuh a .uling thai. in Lenders judgment, precludes forfeiture ol the Property 01 orher marer ial impairment of Lender's imer esr in the Proper:!)' 01 ,ights under this Secur iry lnssrumem. The proceeds of any award Or claim for darnages thai a"r anributab!e to til. impairment of Lender's interest in the Propeny are hen:by a'Ssi:gntd and shallbe paid 10 Lender.

All Mi~dlanro,,~ Proceeds that are nOI applied 10 restoration 0' re pair of rhe Property shall be applied in the order provided fOT in Section 2.

12. Bor ruwer Nol Rrluscil; Forbeeranee B,- under Nct • W.iYeF_ Extension of the lim< for payment D' ",odiflCJtion of IIm(H1ilO11ion of tbe sums "secured by this Security lnsnurnrnt gr.nled by Lender

90421 ~Bf>61

~orm )O-{l~ n01

10 l3ouown 0' any Succ:::f'.SS.Or in EnlCICSI of Bor rower s.haH net operate to release the liabi.li.ty of Borro ...... cr or any Successor, in 101"",1 of Borrower. L~nde. shal} not be required 10 commence proceedings against any Successor in Inl~.~1 or Bono", .. or 10 refuse 10 extend lime for p3y,-".,nl 0' otherwise modify amornzetion of the sums secured by .his Secer iry Instlumenl by reason of any demand made by ,he Onein"1 Borrower or any $uO:CS50'S in InrnCSl of Borrower Any forbearance by Lender in oe.cising ""y righl or mncdy induding, wi,hOUI limuauon, Lrruler's acceptance of paymcnl5 from third persons, <111i,i., or Sue""",,,,r, in Inle.cs, of Borrower or in amounts 1= than {he amount then due, shall nol bea wa;vn ofor pr eclude the exercise of any right OJ "mody.

B. Joinl and S .. u"J Liabilily; Co-,itntn; Succt:Sson .nd ASsign. Do.nd. Bonowcr covenants and ~rrtS rharBorrowers obligarjons and liability sball be joinl and several. However, any Borrower who co signs rhis Security lnsrruroent bUI does nol execute the Note (a "ctrsigner");(aJ is co-signing this Sccu.iry Insuument. only 10 mongage, granl and convey Ihc ctrsigncJ'. irnerest in the Property under the t"'115 of thi~ Sccurirylnsrrument; (b) is nOl personally obligated 10 P"Y rhe sums secured by this Security InstlUmenl; and (c) agrees that Lender and ""y oine. Borrower can ag,ee to t~end, modify, for·bear 0, make any accommodations wnh .egard 10 the terms of this SecurilY Instrument or the Nole 'vilhout the co- S'gntt" 5 consent.

Subject to 1It< provisions of Section 18, any Successor in Jntuest of Borrower who assumes Borrowers oblig .. ions undo this Securuy lnstrument in wriling, and is approved by Lender, shari obrain .J.] of Borrower', r,g'''' and benefits under this Security Insrrurnent. Borrowet shall 1101 be released from Borrower' 5 obligation, and liabililY under ibis Security Instrument unless Lender agrees ·10 such release in "';I;ng. The COvenants and agreemerus of this Security ImlruI1lOI1 shall bind (excepl as provided in Section ]O} and bcncfilthc successors and :lSsign. of Lender

I~. Lo9.,! th'1:ts. Lender may charge Borrower Ices for services pc. fanned in CQnnrctipn. wilh 8orrow."·s defauh, ror the purpose of protCcling Lender'< ;nle":;1 in. 'h< Property and righls under this Secur il)' InslHllnenl, induding, bUI. nol limited 10, anorneys' Iees., propcrT)' inspecrion and valti:lIion leo. In .cgaJd 10 any oIlt', reb, the abscitcc of tl<P'CSS au,hority in IhisSe:curily 1nS11iJmi:nllo<:hargc.~ wer;lf.c fee toBorrower shall nol be construed as a probibition on II.. chruging of such fcc. Lender lTlBy no' charge fees ,h., an opft:Ssl)' I',ohibil.-.:l bylhi.Secu.ity Instrumenl or by Appli!'3bTc Law,

If Ihc Loan is subject 10 a law which sets maximum loan chargrs. and ilml·law is finally interpreted so that the inierest 01 other loan charges collecsed or lobe collected in connection with lhe Loan exceed the pe r rnittcd limi", 'hen: (a) any such loan chnrge shall be reduced by the amount nea:ssary 10 reduce Ihe Charge 10 lh<= perrnined limil; and {b} any sums "heady collected from Borrower whichel<crcdal pamilled limi'~ will be re funded to Borrower. Lender ma), choose to make ibis Jefund by redUcingJ))' principal owed under lit. No,. or by making a dirert p"yment 10 Borrower. If 8 • efund rcdtictS.Cj>l:incipal, the sed'uction will be tr .. nted as • partial prcI'3ynienl without any p'~pay)lJt:nI charge (.whclhp or nOl & prepaym<nl char.g. i. provided for under the Note). BorrO'¥er's acctpi3rx-c of ""y. suCh tduitd made by direct paym¢otlO Borrower will constitute a 'waiver of any right of =1ion Borrower migh, have . .rising out of 50<10 0" ocharge

IS. f'lulif"," All nouccs given by 00170_' 01 LcncXl in coneeetionwith rhis Security l nstrumcrit must be in v..')'iting . .Any notic-e ~0 8o.rt:O~f ,-I) connection ...: v i'h this St:cur.rly Ins:1jumc-r::.'~ sh~U '-f,(!!~ to have been given 10 Borrower when mant;'{) by rirs, class mail or when actually delivered 10 Borrower' 5 nonce address if sen! by OIncr means. NOli"" to an)' on. Borrou>c, shall constitute notice 10 all Borrowers u"I~, Applicable Law ~~p",:".,ly 'equi,C5 otherwise The no,ireaddrns shall be Iht Properly Add)~. unle:ss Bono.""", h1B .. designated a subsmutc nOI;ce addrcsv by notice '0 Lender, 90"0-, shaH promptly nOlify U·nde. of Ooi,ow~f5 chang~ of address. If Lender 5preifl.~ .ap'o<:q;ll!r~ r,Qf r~P:Qojj!!1:.l3pr~o,\,.er' s c hanpc of address, thrn BOIIo,,"cr shall only report " chang. of addrt:!'~ through Ihal sp<C,fred procedure. There may be. only On. designated notice addros under this Security In,"u.n.n' 81 any 0"': tim<'. Any no,in to Lender shall be givcn by ddivt:Tint 'lor by mailing .1 by firS! class mail 10 L.nder', address stared herein unless Lender has dcsignaud another ~cid.= bv not;cc to Borrower. Anv notice in connection wilh this Security lnsn ument shal] no. be deemed '0 h~ve been gi~en 10 Lrnoo u'ntil actually received by Lender. If any notice required by this Security lnstrumern i •• 1,0 required under Applicable La",', the ... pplicable I ....... requi,emenl will ~i,fy the corresponding requirernern under mi. Secoriry InSHUm(:rH_

!W42158661

Form )005 "11(11

• •

16. Gn'Vt,rni:l1e Law; St,· e nllbi'i.y; Rul.fj. of Cons.trucliDn. This Security l nstr umcnt s .... all be (;ovcrned by federal law and lhe law of the jurisdicrion in which the Property i~ located. All r,igilts and oblig3lion' conlained in Ihis Security InS1rumml arc subject 10 ;my requirements and limil~ions of Applicable Law, Applicable law might e:xplicitly or implicitly allow the parties 10 agree by connect or ;1 mighl be silent, bUI such srlence shall n01 be construed as ~ prohibition against agreemenl by contract. In rhe event Ihall'ny provision ordau5c of lhisScclJJiry Instrument or the NOI<: conflicts with Applicable u"'. sIkh confliCl ·shall not affeet: Oi·her provisions ol this Security lnstrumem or the Note which can be

given effect wirbour tho conflicting provision. .

A5 used in Ihis Sumity Instrumenl: (3) words of the masculine gender shall mean and ioclude corresponding. ncurer words or words of the feminine gender; (b) words in the sing"'''' shall mean and include the plursl 3I1d vice versa; and (c) the word "may· gins sole discretion witboin any obhgsrion 10 take any ~ion.

11, Bonuwu', ClJPY. Borrower shall be given one copy of the Note and oflhi~ Security lnsrrument, 18. Tr~JlSftr of the Prnpt·rty Or .. lkrit:fJ"'''' IntLrtil in Borrowu. As used ," II,is Section 18, "Interest in Ih" Property" means any legal Or beneficial interest in the Property, including. bin not limilro io, rhose beridii:ial inltres1.!'ltaruf"r,edin a bond for deed. corsraci for deed, inslaI.lrnei11 sales rontr act or escrow agreement. the in lent ofwh'.ch is the transfer oftill~ by Borrower 31 a future dare to a p~chaseL

If "n or any par1 of the Property or any Intertil In Ih. Propat)' IS sold or transferred [or I{ Borrower is not a 1131ural person and a beneficial inlenoSI in Borrower is sold Or transfen ed] without Lender's prior wri"e" consent. Lender may requireImrnediare payment in fu.JI of all sums secured by this $qUJily In>r.umenl. However, [his oprion shall 001 be exercised b~ Lender if such .,.rci"" is prohibited by Applicable Law.

If Lt""dr:, exercises this option, Lcndf:' shall give Borrower noriceof acceleratien. The nOliceshlill provide a period of notless than. 30 days from the date the notice is given in accordance: with $eerion I) w,lhin which Bbrrowa must paj all Sun1S secured by thh Sc:cu,ily lnstrumem, If BouowerTails 10 pay Ih=: su,,* priorwthe e,xpiraltoA ofthis pc.';od, La.d.ct maY invoke any remedies permuted by Ihis Security Instrumtnt without fur1~r notice or demand on Borrower

19. &r""w"'~ RighI to Rcin.llIlt' AIl.u A cce] .... I"on. If Borrower meets certain conditions.

Borrow"r shal1h3"e 1·1>< right '0 have cnfoT"canc:,,' of ibis Securil)' lnsrrumersdisceminoed 111 any .im. pr ie, 10 the car liCS1 of; ("Jfive days bc:forc S31~ of the PrDpCrty pur suanr 10 any power of sale contained in Ihis Security InsQomlent: (b} such otlltr period as Applicable Law might sp«ify for lhc tCl"minalion of Borr o ..... ,·s righl lor.insfal<:; or (c) "'ltry of a judgm,m[ enforcing this Security Instrument. Those condirions life th31 Bcrrower: (II) pays Linder an sums which then would be due undcr [hi.5 Secur iry !nsrrumcnI and [he Narc as if no lICCilc"'tion had occurred; (b) cores any default of any other covenants or ~iee~ts: (f) NYs all expenses ir"Jurtid in enfor6ng Ihis. Seem ily In~trumcnl inClu4ing. but no[limitcd 10. 'easo<!:ibi c atto'ncy~' rees. property i~~ion a!xl ""ILJ<Il;on fees, and other r~ incurred for the purposrof ptwccling Le~der'5 inler~ in fhe Property andrighlSunder IhisS=irilY Instrument; and (d) takes s.x:lt 3C1 iim as Ll:ilder m~y r~'Y req\.ilre 10 ~w~ ili:.t t.ehder's inl"er'<.S1 in r~ P. oPCrl), and righl5under Ihis secu.;!}, 'nsuum.;nI.and Borrower" 5 obl.igarion 10 pay the s.um~ secured by th .• ' Sec",i,y lnste emcnt, shall eonrinuc ,inc!m: n _gett tender fflity rtq",rdhllt BO.-roWi:, pay. such .. :if!S[3·lemml sums and expenses in one 01 mor~ or the tollowin_g f01:ms. as sc·ll'e1ed by Lender fa) cash; [b) rooney order; (e) certified check, bank check, Ir~ur~r' sche:d Olcashic( 5 check, provided any such check is df3\O'n upon an inSlitulion wbose deJ>O!.·its 31<: ;%u.rd bya fcik",l "8P'cy. instrumc:nl>llity or erniry; OJ (d) E)lXlwn.i< Fund, r,anskr. Upon l<inS1::demcnl by Borrower, Ihi, Security lrisuurnent and obligations secured hereby shall. r~!)'lllin [ull)' CfI(1;1'vr. ~ if ~9 llU~l,cE!!:ipf}had occurred. However. this rig~1 10 reinstate shall not apply in 11,. case of ocrelerarion under SccIion 18"

10. 5»JI' or Nete ; Ch:angl: 01 Loan Servjcer-; Notice of G.rll:'·.&ncc. The NOH; Or e patL]~i inferl"'Sl in Ih< NOle (logcthCl" with thi~ Sr:curily InSlrumcm) am be sold one or more rimes without prior notio, 10 Bon ow er , 1\ !'21c mi.ght r esult in a change in rhe enriry (known as the "Loan Servicer") thai collects Periodic Payments due under Ihe N01e and this Security lnstrurnem and performs other mortgage loan servicing obligations under the Nore, this Security In,:uumcm, and Applicable Law. Th." .1$0 migh, be one or more changcs of 'lie. Loan Servicer unrelated to a sale of rhe Note. If 'here is a change of the loan Servicer, Borrower will be given wri"e" nolice of Inc change which will stalr In, name and. address of Ihr new Loan Servicer, 'he address 10 which payments should be mad, and any other in format,on R ESP ,\

9042]58661

p.ll ... ,. t-' :~

Form 30D~ 1_01

)

requires in connect ion \A,o'lth a »oricc of transrtl of servicing. If me Noie i~ sold and thereafter I~ Loan i:r;. serviced by a Loan Strvim OI""r .han the purdl~r of Ihe Noie, the mor1g3ge loan ;..crvicing obligations 10 &",o",<r "'ill remain wiih rbe Loan Service, or be uansferr ed 10 3 successor Loan Servicer and arc not assumed by rbe NOH pureh<ISCt <1111= otherwise provided by thr Note purchaser.

Neilher Borrower nor Lender may commence, join. or be joined -10 any judicial action (as either an individual liliganl or Ihe member of a class) !hal arises from the OTher party's actions pursuant 10 this SecU1i,y lnsn ume n! (II u,>I slleges ,hal Ihe other Par1Y has breached any provision of, or IDl)' dul)' owed by reason of. this Sox",;.), 1"",um<l1l. until such Borrower or Lender has norified the olhe, parry {wilh such notice (;ive;, in compliance wilh the requirements of Section 15) of such alleged breach .nd affordedlh. orkr part)' bercro ~ reasonable period after rhe giving of soch notice to lah corrective scrio». If Applicable Law provides. lim< period which must elapse before certain action can be taken, lhal time pa;od will be deemed 10 be reascnable for purposes of this paragraph, The notice of acceleration and opportunity to cure givCrl 10 Borrower pursuant to Section 2] and .he oorice of aco:kralion given 10 El<>rrowcr pursuant 10 Section 18 shall be deemed '0 satislY ihe notice and opponunity 10 take corrective anion provisions of .hi~ Section 20.

11. H"z:ordo", S.IIslJtnce<. A~ used in .his $cc1ion 21: (oJ "Hazardous Substances" are those substances defined a!' loxic Or hazardous subsrances, pollutants, or wastes by Em'ironmentaJ Law and lhe following substanixs: gllSOline, kerosene. OIhu flammable 01 10';C peTrol_e:uin products, 10' ie pesiiciees and berbicides, vol .. ;k-o,()h,~nt~, materials .roril';ning asbestos 01 formaldehyde. and radioactive maler iah; (b) ·E",'i'on"""nt~1 Law' means fwe"" la~ and laws of ihe jurisdiction where Ihe Prepcrry is Ioeared thaI rdale 10 health, 5<lfet)' 0' environmental protection; (e) "Environrneme] Cleanop" includes aily response aaion, remedial >tct'on, Of removal action. as defined in Environmental Law; and (d) an "Envuoornenral Condition" rneans a condition ihal can cause, conrribuie \0. or otherwise trigger an En v irornnenral Clt:antlp.

Borrower shall no! cause or pr'rmit the preseoce, 1.l5C. dispasal, storage, or release of any Hazardous Suossances, Or Ihrr,,,en 10 release ""Y Hazardous Substances, on or in the Property. Borrower shall nOt do, not allow anyone .1~ '0 do, 3/J}'Ihing alTeoing the Property (a) !hal i~ in violation of an)' Environmemal La ...... , III) which creates an Env;ronmwl.a"l Condition, or Ie) which. due '0 the presence. use. at release of 3 Hazardous SubSTlince, creases • a:mdilion Ihal adversely affects the value of the Property. The precerling !WO sentences shall not apply 10 the presence, use, or storage on the Properly of srnal] quantities of I~azardous Suhstances thaI arc generally r«:ogfliZtil ro be appropriate to normal r esideruial uses and 10 rnaimeeance of II>, Property (indudi"l!n bOI nor limited '0. bazar dous substances in consumer products)

Boeruwer shal! promptly give Lender wr inen »otic-e of (a) any invt"Slig.31'Jjn. claim, demand, lawsuit o. other action by any govemmental d. r'1tulalory agency 0' priv",. party involving lhc Property and any Hazardous Subsance or Environmernal Law of which Borrowe r has actual kno",ledgc, (b] any Environmenlal Condition, iriclodingbUt (,01 limiredto, any 5pilhng, leaking, discharge. release or threat of T,I"""" of 3/1)' Hazardous Substance and (c) any condirion (3u5e(j by the P'cscr>Cc, U5C or r elease of a Hazardous Substance which advcrsely affects the value of rhc Property. If Borrower 1=_ or is noli fled by any governmental or regulatory authority, or My privHtc parry: Ihal any removal OJ Other remedial ion of 3J1)' Hazardous Substance afTecting the Property is neces .... 'ary, Borrower shall p,omp,ly lak. oil necessary remedial actions in accordance w"h Environmental L-aw. NOIl>ing he.ein shall cr ea re any obligation on L.ender Ior an En. if onmerual C lcanup.

... ... ,.$

9042159667

Fnrrn lDD~ "01

NON· UNIFORM COVENANTS. Borrower and Lender further covenant and "&'«; as follow"

21. Acctlu"lIliun: RI'.ntdiD. lAndlff ~h.U givr noli.ct to 8turt)wtr prior 10 .c:cdcnllton fonowin~ lJ·or-rowr's brf'Jlrh o' ;.Iny co",rn:IJn~ 0'- agrHmf'm ill tbis- $..e-curiry In:S!.nJmr:nf (bu. ltOI prior '0 .Htltnliu" .. "d e r $fi,lion 18 unlo, A"pl;~bl. L2w ,,""ido olh<rw~). Th. Dolier 5h3115p«ify: (a) the dth .. lt: (b) Ih< >clioll required 10 tu re lb. d.bull: [c) ~ dalt., nol 1= ,"sn 30 d"y' from th. d.,. II ... n<il;u is ginn 10 SOrTo ..... , by whifh II .. d~·hll1iinll~l bt- cur-ed; an·d.(d) 1"h"1 bilu,", ID· [lin: the dfbulr on Ot brIo" Ihr dalt 5ptc:ifinJ in Ihr DU1j.CI: m;ilY Tf"'5ull in u:c,d:t..-,tion of U ... : ,n'ln! SU'un'-d by Ihis Stellrily Inslrllm ... 1 ,,,.d s.:ol. of II •• ProPfrt)'. The noli ce 5h.1I fut1hu inrorm So""""""r of Ih. rigbl 10 ,",i,nlilt .flu )£«lnlllion snd Ih. rilj:bI 10 bring. <Ollrt 8(lion 10 .",.rt Ih. non-nisl.nc. of

• dd ... 1t or ,.y ~ilotr dtrrnS'<: of Bor r ·10 lud"nlio;' ."d $>i·le. Iflh. dd~uUu n.ol eured on or

before Iht dal< ,p.:dr-,M in the notice nd e r 0' it> option mOJ require immrdiBl. p-ym.,IOI in run of

.11 >urn' sKu .... d bylhis Salnil)" Inslrument ",jlbf)ulrurlh<r ".m~nd aed may in"o~t Ih., pow<r of ,,,I. and "ny olb.r nmo.-dit3 Pfnnilt.d by Appllribli:LlI"' ...... "dt,. .hl! II< tnl;Htd 10 00111"<:1 "n <>p'n= inn,,",,, in p,,~uin.c Ibt rtmrdio.pro~idtd in Ihis SHltOn 11, inrlDding, bul "ollimilnt '0, rCJI)ol)pblr .-"oOl,y,· fres ~nid ~OSli or I~TIt: rv.dtn£r..

If Ltn" .. invok~ lb. pow.r "r .. Ir, Lend e r ,h.n .,,,.ul·, or <ou"e Tru,t ee 10 tl«"lt s "rillen notic e or 110. occurrence or an event or drbuh and of LtDdu', "cdio~ 10 COll5< Iht Prol"'rty 10 II< 'old. Tn·SIH sh·,,"llo"'5< Ihis noliu ·10 b< r'rton.ltd in u.~hq)."h'y in whi<he o.1'yp •. rt oJ I~. Pr<wtrt)' is lou Int. Lend et or Trus' ... 5b.1I ",.il copies of 110. no,i« DS pr1'SCrib«i by Applicable Llw I" Bonow.r ... d 10 Ih. olh e r persons pres<:rib..d· by AIlP'idbl. Low. Trust ee ,103-11 CiY~ public notict of ~~l. hI lb. P<<5on •• tld inlh. m.":nner p~ril:!rd .by Applipbl e . I_..o.w. Aft~r I.h. tilP,t nq .. iml by ... pplie~M. Low, T rustee, w il·houl· d~mnd on Ber ro ........ 10,,11 ~J1 tb e Pro.pc.rty 81 p"b·li[ ,,"[liOO 10 Ih. h;g·""" "bIdd.,r _.1 thr lim.' :ond· pl»u •. ,,·dlln.) •• , the Iq'nu .)o.ig'''''tol in Ih' Bolit .. f>f" S9'k i.· on.' o. mOfTpori::'Uiod i. loliy urile. TrcuHR t1~ltrnoints. TruJ~tt m"'J postpone s.ll., Q{"I'Q~"!oY P!I.-ulor Ih. Pm.,.".1,. 1>,. publi. " .... ouncrm~ .. 1 II I·b. ~im •• nd pb.tt or ony I'rn·jou~ly uhtol.led .. , e, wdn ." ;,S do.ignu m"J' pYr<b"sr rbe Pro}>(rty ., "'''Y ",t...

Tn.ln ,h"H ddivtr 10 Iht "U~h5t~ Tru,lu', deed cun ve ying Ihe PTIlJ>C.rt1 ... itloo .. 1 ""Y [O~''''DI or .. "rnnty, .. pressed or implinl. The rc<:ibb i. Ilor Trusl.H" deed sb"U II< prima faci • e ~id.nc. or lb. I .... h or th. '''Inn'nt' m.d •. Ih~n:in. Trust ee sh.n "pply lb. p,rotttd~ of Ihe 5;.-1" io

lb. foUmwi·ng omtr: 1»).10 • .11 nJKn·sn of Ih. nl., 'n.dordi"g. bUI nlll Ihriil.d 10, ..... "0 "1. T~ltr"

and _nomrys' r.~;. (b) 1.0 all sum~ ...cuud by t·hi5 S<curity In5Irnmc.nt; ""d (e) y UCD< 10 lb.

1' er-son or p<~.,. 1<g~lIy cnlill.d 10 ir.

2). ReronvcYlnu. Upon paymenl of all sums secured by Ihi~ Secur iry lnsteumcnt, Lend er 5han '.equtSl Trustee 10 recooYey the p·'op<:rry and ~hBIl surrender this Securi,y lnstrumers and .1.1 /){}I~ tv;denetng ddt! secured by this Securily Insrrumem 10 T r ustee. T.USlC< 5h,,].1 rttOn"q' the Properly w"hou' war ramy to Ihe per son 0' persons IrSJlJ.Jy cnl;lled EO it. Lender may charge ,such person or persons a reasonable Iec for reeonveying the Properry, bUI only if the fee is paid 10 a fhird parry (sIXh asrbe Tru~IC<) fo' service ,ende,,·.d and the charging of Ihc fee is permined uooer Applicable Law. If the ((1" charged does 001 exceed 'he tee set by Applicable Law. Ihr fee is conclusively presumed 10 be reasonable.

24. SU.h!'t1h~n T~sj'tt~ Lender, 31 hs option; may From 1-.ir:ne 10 lime appoint a seccessor trustee 10 an:- Tru51ff appoinled hereunder by an ;OSlrument e,ceutcd and acknowled.ged b). Lender and recorded in I h< omt,· of the Recorder of the counryin which the f'mpt'rty ;$ 100001ed. T'h. i_,umenl shall contain lhe "".me ,,' the OIiginal Lender, Truslee and Borrower, Ihe book and page where thj~ Secur'ly Instrument is -ecorded and the name and addr e-ss of the successor trustee. Wilhout conveyance of the Property. Ihe successr» uusiee shall succeed to all ,Ix lilte, PO""" and dulies conferred upo;, Ihe Trustee herein and by !\Dpiic:1blc. La~. This p"oecdme for ~ubslilulion of !Ju,tt ... ,hall gO"tf" t(> Ih. oelusion of all Olhcr provisions fOJ SubS:I~lurion.

25. SUlrmrnl of Oblig~lion f .... Lend .. may colleCl " fee nol Ie 6ccro the maximum amOum pcr n1it1cd by ."'ppliC2bk I_~w for furnishing Ihe ,lalt'll"lCnl of obligation M provided by Section 2943 of lhe Civil Cod~ oi Calirornia.

90421~a667

Form JOD!! 1101

••

BY SIGNING BELOW, Borrower eccepts and agr<'t"5 to the terms and covenants contained in Ihi, Secur;,y lns1rumc"t and in any Rider executed by Borrower and recorded with it.

(Seal)

(Seal)

-(lOrTOWI'E

(Seal)

9042159661

rorm JOO!J 1101

(Seal)

-Bono\rCJ

(Seal)

(Seal)

(Seal}

(Seal)

·lkJrto ..... ~1

SI:JI1r or C.3Jiforn.:iI

County of F K E.5 ND

On 10 fe.brv..Xt . _')ooL..

} ".

WerU'J ?"b,'::,on. fb t~n~ ~L!.{_ ,

personal I)' appear ed

before me,

~HONY J. HAR1I~

, personally known to me (or proved 10 me on the basis of satisfactory evidence) 10 be lhc persorqs) whose ~s) is/are subscribed ro Ihc wi.hin instrument and acknowledged to me thar hdsbclthey executed Iht same in hislha/lheir all.hori:wJ Olpacily(ies), and Ihal by hislherlthcir signa,urqs) on the inSlrumcr\1 rbe perscrus) or lhe entity upon behalf of which rhe person(s) acted, executed rhe instrurnern.

WITNESS my hand and official seal.

9042159667

• ,

ADJUSTABLE RATE RJDER

THIS ADJUSTABLE RATIO RIDER is made this 9th day of

fcbrtr.ry ,1p06, and is incorporated imo and shall be deemed 10 amend and 5upptcmcnllh< MOl1g.Ce, Deedof Trust or Sccuriry Deed [the "Suurily Instrumenr") of 'he sam. dare given by Iht undersigned (Ihe "Borrower") 10 secure Borrower's Adju5l11blc Ratr N01< (I". -No""' 10

Downey S",..;ng5 .nd Loan A5Socialion, F.A.

(rhe "Lender"] of the same dare and covering the Property described in 'he Secvriry lnsrrumen: and located

IJI1 HARBOUR TOWN LANE., MODESTO, CA 9535;

I p,0pn"1}" Ad<lr<:s> J

THE NOH CONT)l.INs-PROVISf01VSTHAT WILL CHAN(;£ THE INT~R£ST RAIE. AND TIU': MQNTHLY PAYMENT TH(:.RE. MAY B.I: A I,.IMIT ON TH [ AMOUNT TI:IA T THfM()NTHLY PA Yj'>1£N"T CAN II'KRE.AS£ on OECR[Ast. THE P!UNCIPAL AMOUNT TO R[PAY COUI,.D BE GiUAHR THAN THE AMOUNT ORICiNALL Y BORROWEO. BUT NOT MORE. THAN THE. LIMn 5T An:o INTH[ NOTL

ADDITIONAL COVENANTS. In addition 10 the covenan.15 and agreements made in the Security Instrument, Borrow" and lender funher covenant and agree as follows

,.. INTERE.ST HATt Al'IO MONTHLY PAYMENT CI'IANGES

The NOlt provides for changes in the interest I"31~ and the mOhlhly payrne nts , as follows:

1. INTEREST (A)Ir;ltrt$1 R8U

101""SI will 1>£ charged. On unpeid Principal until 'he full Dl1l0un' of Principal has been paid. Limil II,. r,~t day of lh. C>l1i:"d~J month Ihal imrnediare ly precede-s ,n.,' fl~1 payment dale HI forth in Section 3( .... ) below, 1 will pay i.nlere'l. at a yearly 1111e of 7.196 'I •. Thereafter, unlit Inc n~1 lnrerc st Chan~c DaU' (a5 defined in S<:Clion US) 1>£10 w ). I will pay imerevr at a yurly rare of '.500 '10. The i","ot ra ,~ I wil', pay may change

The interest rare ~q\J.n:d by Lh;~ Section ") i~ the rate I WtU pay both be lore and after any dtfauh dr'>C,il>ed i'n Section 7(8) of ,hi, Note.

90421~8(,.h7

AI(}() IPH[PAY)

"?6RI urr (("I1JIO]IIO~gl \'C

t)OI

rat! I or~

IS) '"'Ottsl eh&"t< DllIn

The interest rate I will pay may changr on rhe f,~r day of April , 2006 ,

and on that day evuy monrh Ihereafter. Each date on which my irncresr rarecould change i$. coiled an -'ntfl~51 Chante D.' e. - The new rate of ;nle~" wil! become effective on cacb lnteresr Change 0..1<.

ee) Inlrrl'.:'ll R.I£ Urnil

Mv ,meresl rail' ,\·ill nne, be grc.l rr rhan 10.950 %.

fD)lndn

Beginning with rhc fin' Imeres, Chan.ge Darr, my ,",<",SI rare will be based on an Indu. The "Indo' is rh, monthly w6ghled average COSI of !o3vings, borrowings and advances of members of the rede",' Home Loon B"". of San Francisco (Ihc "Bank"), as made evailahle by the Bank. The most recem Indo r'gurf available 8S o( the dare lj d.ys before each Interesl Change Dare is called rbe "Current Indr . x ."

lfrhr lndcx is nO Ion;;" available, the NOI' Holder ... ·ill choose. new Inf.ln 1".' is based upon comparable informal ion The NOI. Holder ... ill g'vr me norice of this choice ,

IE) C.kulJOl'on o' Inll"t..<1 R.I. ehlonf!r;.

Before ea'ih InkreS' Chalige Oa·t~. the NOIe Hold er will calcu late my new ;nterrSI rare by adding

four percentage point(')

4.0110 % to the C~".rnl Jndex SubjC:CIIO In. limi' stared in

S:ulion :"lee) above, th, resull of Ih~ addition will be my new inlclUl ra " until the not lmerest Change Oa re.

J. PA YM[NTS

("" Time "nd Pl. e e of P~ym.nls

I .. ill pay Principal and interest by making a payment tv.ry month.

I will make my monlhly payments on rhe flrsl day of each month beginning.on

.~ pr i! I 2006 I will. make Ihese p.ym<:1115 every month unril J have paid .11 the Pri acipal and imeres] and any othercharges described below thai I moy 0,,'( under .thi,. No1e. My monthly payments will Ix applied 10 interest before Principal. If, on

Manh 1,11)36 , I slill owe amounts under this NOI., I will pay these amounts in Iull On thar

date. whicb is called th. "Malu,ity Dare."

I \Y1H make mv m0111h~v pavmenrs 3'1 P.O. Dn2 61}6fL 35.01 J20lborr~ Rd, N.f'Np0,., Oo:.d1,

C A nr.58c60MI ,. . -

0; III ~ fj;-fkrrnl pt2L-r if required by Ihe- Nnrc Holder-.

(B) Amount n! M,' fU~r;3' MOtnhly Paymtnt!O

8"h ofmv ;nilial monthly payments will oc U.s. S

1.178.33

Thi:s. amount

m.,y ch.angt_

reI P8yrn~'" Ch.n!!c 0., ..

Mv monlilly navrne nr may COM!;' iI5 r ecuired ~y Seer-on ~(D) be low beginning on the first day of

.~ pr;! 1007 . ~nd on In.' day evcry 121h month rhereefrer. tach of thf~f

A I 00 (PR[I'A \')

1"-.lJ."p:] IJrF ~(~n'l.mlrlO.8J\t v(

l nitials

9041158667

l/(l!

• •

daie s is called a ·Paymwt Chang( 0,,,,.- My monthly paymenl also will <:han~~ at any time Secrion 3(F) 0< }(G) Ixl,,'" reqoires me l"ray a difTucnl monlhly paymenL

I will pay Iht 3"'00", 0 my new mom"l), paymenl each monlh beginning on uch Payment Chngt Dale or >s provided .in Sec.ion 3{f) or 3(G).bdow.

(0) Calculalioll of Monrhly 1'2ymfn, Ch.nstj

Befoee C-llch Paymenl Change Date, Ihe Nore Holdtl will calculalc Ihc: amount of the monthly payment thBlwouljj be suHkientlO rt;plJyrhe urijJl!id P"nc:ip.al tII~1 I "meJrp«led 10 0"'0' 31 the p:!ymtnt Challgf Dale III full on the Marur;t)' Date in substantially equal insUlllmwts al the inw~t rale effecrive during ·ihe month pr;eccding thc I'aymcnl Chjl"~' pale. The re5ull Qf II1;s cak.lllalion is C311~d the -F"II P8~·mi::n1.· Unless Stel;"" J(D or 3(6) &,ow Itqoirts me 10 pay a different amount. my new montMy paymenl w ill be in the amounl of mt FuHI'>oymellt, e~cepl that my new monthly PIIymem will be limited 10 an amolint !hat will nOI be more than 7.5% grearer or less than Ihe amount of my last monthly paymen\ due befo re me Parmi»t Chance Dl!IC.

IE) Additions I" My Unpaid Principal

My mOnIllIy paymenl could be k§~ than Ine amount of the intHesl portion of J.hc momhly pay men, mat woutd In: sutf.cieN IQ rep~y!l!e unpaid Prine ipall owe al Iht mQflthly~)'me'" dart. in full <in !he M2Wriry Dale in subsl"ti,iiJlly equal puymt'i1t5. If so •. c:ach month thaI my moodily payment i5 less Ihanthe ihten:sl portion, the N~I< Hohler will subtract Ihe amoum of my monr.hlypaymCDI from the amoum of Ihe inle=1 portion and will a4d the difference '0 my unpaid PrinCipal. The Nore Holder also will 3dd interesi o» Ihe amoum of 11,.., difference. 10 my Ullpaid ·J>r'ndpal esdi month. The interest rare on the ;Titerest added 10 P,;ncipal will be Ihe <ale requ'n:dby Section 2 abo ve :.

(F) Limit on My UnpaidJ'tim:;p.j; lncHul'd Monlhlyl'aym.n,

My unpaid Principal .-.an neve, exceed a mllJ<inium amount equal 10 one hundRd ten

percent ( II 0 %)

of rhe P,ine ipal a mount I originally borrowed. My unpaid Princip"', could exceed mal max irnurn amoum due 10 Ihc lim;led pa),f1)cnls and ;nl""," ""e increases. If so, OIl me dase Ihel my paying my momhly paymmr would tllUs.r me Ii> exceed thai limit, I .... ill instead pay a new monlhly paymenl. The new mOsitltll' paymcflI will be in "" amount Ihal would be sullie;"", to repay my men unpaid Principal in full on th. MalU,iry Dare al my CUIRIlI irtlEre~I rate in 5ubsl"olia·lty equal paymj:nrs.

Ie) R~qoind Full ".ymenl

On the 51h P1!)'lllell.1 Change Date and on each socrtt<iing 51h Paymenl Ch"l)ge Dare then:alkr. I will beginp._yi,,!; II>. F,,'II Paymenl as. my monthly payrne'lI until my monthly payment £han~cs 3ga.\·0. ! also ,,·i11 begin paying the Full Payment", my monthly payment on the fin.1 Poyme", Change Dale.

i. NOTICE OF CHANGES

Th< N",. HoW .. · will dd~vv or mail to me • nOlin of all)' changes in lhe amo,-,,,, of my monthly paym<II' before !he tlTeCl;v£ OBlr of any change. The notice will include infonnalion required by 13W to be

9042158667

A 100 tpR(I'" Y)

I'%RJ urr ,("QJIQ1, ,{)J;1t vc

lirl!

• •

given me and also the till< and telephone number of a penon who will answ<r any qutllion ma~. have regarding the notice.

8. TRANSFER OF THE PROP£RTY OR A BEN[nCJA L INTEREST IN BORROWER Uniform Covenant 18 o(I"~ Security lnstrument is amended [0 read as follows:

Tr.n5ru or lb. Propc:.r'y Dr. ~ndid,,1 Inltrol in Bor+ower. As used in this Secrien 18, -JnJercsJ in the ~P!"ny- means anY 1~3J 01 beneficial int(rC$1 in the Property, induding, bUI nOI limited to. ,hos< bentlkial interests muisreiTirlina bond fOl deed, contraCI for deed, inS)lIlInitill sales conrraci '" escrow agreemem, the inrem o{whi!'h is the Irdnsfer of lit It by BOrrower ar 8 future dare to a purchaser.

If all or any pan of the Properiyor aily imeres[ in 'he Prop&ry is sold Or tnnsfcrtro(orif Borrower is nol a natural person and a beneficial interest in Borrower is sold 01 lr3ns{em:d) without under'S prior wrinen consent, lender may require immediate paymem in fun of all Sums secured by [his Security Instrument. However. this oplion shall n01 be exercised by lender if exercise ·is prohibiled by Applicable Law.u·ndct also shall not exercise Ihis opl.ion d: ·(a) Borrower caU$<5 10 be submitted 10 Lender information teq~in:d by lender [0 evajuare the intended transferee. as if a new loan were bein!; made 10 Ih< transferee; and (b) lender rcasonably determines that Lender's security will nOI be impaired by tht loan assumption "nc:! t:1i.at the risk of a breach of any covenant or agreement in this Security lnstrume ru is aueptioblt. 10 Lender,

To Ihe exrent permiur d by Appl·;ea.bl. Law, Len""r may charge··a--r.asooable fcc-as-a-wndilion 10._ lender's consem 10 Jhe loan assumprjon. Lender may alS(Jn:q"iir rhe transferee to sign an as~um!>1 ion agreemenl lim is acceprabte to Lender and lhal obligates Ihe transferee 10 keep all the pTQlt)iscs and agreements mad. in the Nore and in !his Security Instrument. Borrowe •. will conlinue 10 be oblig81ed under rhe NOI< and [his Securirv I nstru"'cnlulliess Lender ~kascs Borrow er in writjn~,

If 4nder exercises fhc optiente require immcdiai~. paymenl in fuJI, Lender shall give Borrower notice of eccelerarion. The notice shall provide a pt60d of 'lOt less than )0 days from til. d.u the notice is detivered Or mailed within which Borrower mU51 pay aU sums secured by this Security 1J>51nJmenl. Ir Borrower r.ils [0 pay these sums prim 10 the expiranon of Ihis period, lender may invoke any remedies permitted by this Security Instrument withoul further nonce 0. demand on Borrower.

9042158667

AIOO{PH[PAY]

1/01

!~9t1R4n-~- ~(\4Q}rnl, la~,II! vr

,

BY SIGNING BELOW, Borrower accepts and agrees 10 the rr rrns and co v enams c.onl.;nea it> this Adjustable Rare Rid".

.~ 100 (PR[P .... Y)

1)I%R5 un: f)~J04nfJO.r! 1"'065 L~

(Sc.al) (Sui)
-Borrc ... -n ·I)r;m::r\lou
(Seal) (S",I)
-!J.Orn:)Y"(,1 -Boerov'c-
(Seal) (S,.I)
-8(w-r-O"'"(1 . Bon,}wt:7
{Seal} [S r a I)
Bo1T1"l'lllr('1 ·BonO'w~' ISign Original Only]

9041158667

• t

1-4 FAMILY RIDER

(Assigriment of Rents]

THIS l~ FAMIL Y RIDER is made this 9th day 01 February,2006, and is mcorporatec inlO and shal.1 be deemed [0 amend and supplemenlthe MOr1gage; Deed 01 Trust, or SecUlity Deed (the ·Seculity instrurrenr") ot the same date gi¥en by !he ufld~r.;jgned (the "Borrower") to secure

Borrower's Note to Downey Savings and Loan Association, F.A.

(the "Lender"] 01 the same date and covering the Property described in the Security Instrument and located at:

1J12 HARBOUR TOWN LANE, MODESTO, CA 95357

1--4FAMIL Y COVENANTS. In addition. to the covenants and <lgr~ments made in the Security Instrument. BOHoWer and Lender lurther covenant and agree as ·follows:

A. ADDITIONAL PROPERTY S.UB,lECT TO mE SECURITY INSTRUMENT. In addition to the Property deSCribe<) in IheSecurity in~Wmerll the folimO,tingilerns 'lOW or hereafter a.ltached 10 the Properly )0 the extent they are fi)lfuf~~ are added io !he Property description, and shall also constiMe the' Property covered by the Security Inslrumen!: building malenaIS,. appliances and goods 01 every nature whatsoever now or hereafter located 'In, on, or used. or intended to be used in connection with the Properly, inCluding. but nqt limile(j to. those lor the purposes of supplying or disttJbul!ng healing, COOling. electricity; gas, waler, air and f'9hl. lire prevention and extinguishing appar.llus .. securily and access. con!fOl apparatus, plumbing, balh lubs, waler heaters, "'ater d~els.5in~s, ranges, stoves, reh"igern!Qf$, distJW<ls/:lers.disposals. washer>";, dry~.awning$. storm windows, storm doors. screeps.blinds. shades. curtains aniJ cUrlain rods. aitached mirrors, C<!t:i!~ts.paneliog. <Ind a.ttached fiQ¢r cov~rings, all 01 Which,induding replacements and addinons thereto, shall bE' deemed to tie an.a remain a pan 01 the P'q:le-rty colieredby the Security Ins1rumentAil or the IOfegoing logetne, .with the Property described in the Security tnStfUrnent(Or the lea.sehQld estate if the Security. Instrutti¢nl IS on a leasehold) are referred 10 in this 1-4 Family Rider and the Security Insl,ument as the "Property"

9OA1158667

Page 1 013

D057R1A.UFF "l as k 107<7 OW9/o2 JS

• ,

B. USE OF PROPERTY; COMPLIANCE WITI:i LAW. Borrower shall nol seek. agree 10 or make a change in the use of !he Property or its :zoning classification. unless Lender has agreed in writing to the challge_ Borrower shall comply wilh all laws. ordinances. regulations and requirements 01 any govemmenlal body applicable to !he Property.

C. SUBORDINATE LIENS. Except as permitted by tederallaw. Borrower shall '101 allow any lien inferior 10 the Securily Inslrumenl 10 be perfected against the Property withl;JUI Lender's prio' wrinen permission

THE FOLLOWING TERM.S AND PROVISIONS shalt be applicable only al such lime as the Property is no longer owner-occupied.

D. OCCUPANCY. Section 6 of the Security Instrument is deleled

E. ASSIGN~ENT OF LEASES. Upon lender's request after default, Borrower shall assign to Lender all leases Of the Property aM all security deposits made in ronnection with leases 01 the Property. Upon the assignment. tender shall have Ihe righl to modify. exlend 01 terminate Ihe existing leases and 10 execute new leases, in Lender's Sole discretion. As used in this paragraph

f. the w:ord ··'ease:·sball mean "sublease" ilthe: PE:'curily Il1$lrumenl is on a leasehold.

F. A~SJGNM~NJ Of RENTS; APPOINTMENT OF RJ:;CElVER; LENDE;R iN POSSESSION. ~rrowe,abS()lotely and um:ondjliQ~llyasS'!lns ;:mdtransiers to Lender anthe r{ln.!s al:ldreve.nues ( Renls~·) 01 the Property, regardlesspJlo whom the Rents. of the ProJlerty are .payable. 'ElOO:QWer aulhonz es lender or lenders agents 10 coiled the Rents. and agrees thai each tenant 01 the Proper1;y shalt pay.the Rents to Lender or lenders agen~. H"""ever, BQmJWer s!1a" receive Ihe Rents ul")lit Ii} tender has'gillen Sorrower notice 0.1 delaullp\.!r$.lJ;Jnllo Section 22 01 the SeCttrily Instrument. arid (il) lender hasgl!len oobceJo Ihe tenanl(s) thai !he Rents are. 10 be paid 10 Lender or lenders 3gent Thisassigilr)lent 01 Rents constitutes an absolute assignmenl and not an assignment for additional 5eCurilyonly.

If lender gives notice. of default 1~.aon:Qwer: [i] all Rents received by Borrower shall be held by Borrower as lrusteelor the blineftl 0'1 lender only, to be applied to the sumS secored by Ihe Security Ins!rurmmt [ii)lender ~h<l" be en~to collect and receive aU of !he Rents 01 the Propefty: [iii) Borrower agfeeslhalear;ihtenanl 01 the Prpperty s!1aJI pay all Rents due and unpaid 10 lender or lender's agenJsupon lender's wril1en demand to the tenant, (iv) unless aPPlicable law prOvides, otheli"/iljse,all HenlS collected.by Leodet or Lenl1els agenls. sh.all ~.appliedi first to the costs 0' taking c60trpl oland managin!:1lhe Property and colJeClingthe Rents. including, ?UI not "mil~ to. altorn~y·s fees, receiver's tees. p:-¢miums on '?a!i,,~s Whd~, r:epa\i <1M maIntenance costs. insurance premiu~, taxes. assessments and olher charges c:inllJe Property. and then to rhe sums secured by the Security Instrument: (v) lender. le(laE:'(s agents OJ any Judicially appointed receiver sI1a,lI be liable 10 account for only .thoseRepts actually ~iv~: and (vi) Lender shall b'e entitled to have a receiver appointed to lake possession of and manage the Properly and collect the Renls ann profits derived from the Property without any showing as to the .nadequaq of Ihe Preperty as security

90-42158667

P>ge2ot3

DC~7R2JI.lJ~~ !Orl1)llJ.<) CR7OJ16 RG

• •

II the Rents of the Property are not sufficienl 10 cove. the costs ot taking conner of and man3ging Ihe Property and of c.ollec1ing the Rents, any funds expended by lender fOI such purposes shall become indebtedness of Borrower 10 lender secured by the Security Instrument pursu~ntloSectilJn 9 of !he.S,.~~ity In.s!rU,~nl

BOrroWer represents and warrants that Borrower has not executed any prior assignmenl 01 the Rents and has nol perf()(med, and will not pertorrn, any act that would prevent lender from exercising its rights urider !his paragraph.

lender, or lender'S 3genls or a judiciallY appojnted receiver, shall not be required 10 enter upon, take control Cif or main~in ;file Property before or afier giving nollce or detault to Borrower. HOwever, Lender, or lenders agent!l or ajl!f1ic~lly appointed receiver. rTl<!y do so <l13n·y time when a detault occurs, Any application ol.Rents shall .001 cure or waive any delaut! or invalidate any other nght or rernep), Of l,e,~fir This. assignmenlot ReJ)lsol the PHlperty shall lerminale when al! tile sums secured by the SeOJrity Instrument are paid in lull.

G. CR0SSCOEFAUlT PR()VJSK)N, e.orrowe(s de.tautt or breach under any note or agreement in which lender has an interest shan be a breach under the Security Instrument and lender may invoke any of Ihe remedies permitted by the Security Instrument.

BY SIGNING BELOW, Borrower accepts and agrees to the terms and provisions contained in this 1-4 Family Hider.

iSeaQ

• Borl'QYw-er

iSeal) -Bccowe

(Seal) -Borrower

(Seal)

. . Bof1OWf!r

(Seal) -Borrower

(Seal) ·8on6'wer

(Sear)

·BonOW~1

9()41158667

• ,

RIDER TO PR·OMISSORY NOTE AND SECURITY INSTRUMENT

loan Number: 904n 58667 Dale: F9bruary 9, 1006

Property Aooress; ] 311 HARBOUJI TOWN l.JI.NE, M:IDESTO, C.II. 95357

This Rider is he'ebyiflCO{Por.!Ied inlO thaI certain dl!ed of lrvsUmor19a!1e (Securily Instwmenll. and Ihal certain promisSoty note (NoIe). both dated the. same dateas this R.pe. execu1ed lIy Borrower in fay,," 0' ,Downer Savings and Loan .A.ssrx:iation. F .A. (Lencler or Note Holder). Anyone who takes the Not. by f.'''r)srer arldwh6i5e'ntill~to·.eceivep8yrnerit$o.intie, IheNpleis$ocaU~Ih.e",o'e ~e!. AD capitaliz eel lerrns used I:lt.ol not defined in this J'lidershan have. the same meaning as sel 10M in the NOlI' -and Seoirily Instru~nt To theeJ1~!hal a;ny p~is~ns in this: Ride' are incpnsist~n' with Ihe Security Instrumenl andior the Noll.'. Ihis Ri(ler Shall prevail, This Ridel is secured bylhe Securiry Instrument

1I!l1eFede.alfIDme loan Mor1gage Corporation (FHLMC). the Federal National Mortgage Association (FNMA) or any Other iriV1!storbliifS aD 01 some of Lender's ti9ht~ undCflheSl!!;uriry Instrument and the Note. tl]ejllpvisio"sql this Rilje •.. may. al the inveslors disaelion, no long.,.. have any force or ekect.. II thCfeafte. FHlMC Or FNMA 0' any o1her owner f>hould rel'ansfe.the SeoJriIy Inslrument andNoleloL,,,,ncler p, Le:?C!te:(~su~S~t in interes], then !his Ride' :>hatl thereupon be automaficaDy

reinst)ied, w~hoUl any addi\iOhalwriting·o, dOcumenl .

1. LATE CH.A~GES ard AccfiuEO tNTERES1.

If any insl<Jllment is no! reo::e-iited try Not." HOlde. wj.thjnfdl~n Il5) d"ys ;'!~~I irs d!.le <1"1", Bon~r shal pay Note Holdet a lale charge in an amount. equal to si. percenl (6.QO!)%) of the ifl~'allmenl d~ lha) ~ .. app,ica,* 10 lhep<1y!"ent p' .prinqpal and it)!erest. 01 $5.00, whichever is g,eat.,... If the fJIIe(!n day pe;riOlj. erI!ls 9"" .. ee~eJ'ld 01 a I19lidil)'. Iheperiod is erlel)!led W I~enerl b~siness d"y 6QirPwer .,q..~""19es ~al11 wP~\d be diffiojilaoo impr'acti«;al to fuc~fe Holder's adlialdam~ges arising mil 01 a"Yl;Jtl! pay""",' and'!hal IheJoregoing'late paymenl dlarll" is 3 reasonabJees!imate 01 the same 3rd Shall bj! P!t~~ lil be the act.<Hilar:i1<:>Unl The provisrons of this paragraph .;;haD not . !imili'lole Holder's. l'ighl. Undel thB Secuoiy !~:>IrurllI!nt or othe,.,.,;se. 10 compel prompt perlpmnan£jCund,er I~e Note. Upolldelault, acc:r\J1!d and unpaid inte'e~t shallurtller bear inte,est at the !hen applicable ililer&';tfate until Paid

II Borrowevi~ aSJ.l!S~d·a tare j;;I)arg~ah!lsulfrcien!fIJ":d5~r~ no! ;nIajiable in BClfTowe(s che~~ng account wIlenlende' !»tempts lo~b:~BO(.ro.,.¢<'s loanpilymanl !rom Borrower's des.gnaled chedlmg account. a ",elurned. i1em charge- will be assessed in "dd~.on 10 the lale charge.

1. INTEREST ON PAS1 DUE SUMS

If 3ny sorn d~ under tile Note is notP3i!1 '<) accordance .... ith .lhe lenns oflhe t'lole, jf)QLIc:li~ acrumula1ed inleres!,th¢n \hesumt,.j no! .pajd fhall ~ ,ille'est al the '"me rare as II]'; prin¢pal. or sixpercern (6.0%) plus I~ Elll!'i<.ot Am~'f'1irne <ale as pubficly anIlounq,dby the Banko' America NatiO!)al Tii)sla,," SavingsA~3tion,a NiitionalAss~llon as rrs 'Rejetenced ~j!le', ~",e. is higher. in order 10 compensate Leno¢i 10' its enforcement costs , .. ;sinyirom ihe defauK. In the e"'em [he I;'de~ ceases 10 be publi~tied, then Note Holde. may select a simitar anemative pubtished inde> o.v ... · which Ihe Noll.' Holder haS no control. ,n which case such "n .. rnanve 'n(le. sh;;11 become the ~nd~)'

904115S661

3. NOTE HOLDER'S TREATMENT OF PAYIvIENTS

brepl as olh_ise required by taw. Nole Holder m~y awly all paymenls accepted by Note Holder 10 any oul~larnling obIigalion. of Borrower und", the l.oan Docornents in any order Of. prk>rlty Note Hold", elects in its Sole and absolute disuetion. N""e Hold ... may dis'.egard any desig"ation 01

no. 1 ... 91;.,0. ~Y .. " B"'."row .. e. 101"".'. Y.'.O. oe .. acting on.·.80" ........ e.(. b."hall} '''. 10 how 8 parmI'. nt i510. b.e a pjil.ied .... by. Note H<*Ier. II N~e' HOlder ele"!::!. 001 10 accept 8 P""Iment ...... perminedunder Seaion'1 oj .the

SecuriIy In_"nL !W)leHoid,,' inByre1um ihepaymenl 10 Borri>wer reg"rdlE:~ 01 who lendered paymenl a';,(j in. such ev.enl. NoIe Holde< shall·rlal hav .. "nyliability 10 8oItuwe. Or any th;'dparty as a re!>~ •• jl>e'1'Ql.B<lI'R"'~ shall.~demniIJ.d.tend. pIOled and hold No1e Holde. harmless, from and agains! aU·daiin., damages. eiiperiSes.!Os'ses and, ~abilities. in Wtlalever 'Iomi. surte.ed ()I inoJned by' Nole Holde. as a ,e.ull 01 No1e HOlde(s return 01 a paymenl 10 Borrower.

4 EVENlS OF DEF .... Ul T: REMEDIES.

The lollowing shall """slit""e additional events 01 delauH under Ih. Security tnSlrument

IA) Any per&<:>l1's 'aTlempll0 ",Co""ey Nole Hotder's inle.e,1 in lhe Property wilhoul Nole Holde(. prior wriIIen consent:

18) A"'J persoo's a"~prIP have the Nole, SeOJriry Ins1Nm<'nl. this Roder or "fly of the other loan DOcurrieni. ded",ed';nva~d or uneriloroeable:

te) r",lure 10 pay 'wh"n oue any sum cue under any of the Loan Oocornems:

~O) Any deiaull under any provision at tl>e Security lnstNmen~ 01

~f) Borrower. ""laun unoe. any other dee<! 01 trust or olt>e. instrument secured by the Property.

NOle Holde. ""11 use in-house COunsel Of retain' oulside l""'Yers 10 analyu and respond to any evenl. 01 de"',,", and Nple Holder may charge BorrOW1'r reawnable "norneys' lee. and costs. lot such analysiS and response .. N91e Holde, may add these le9al r.petI.5e5 to the No1e and/o. dernar.d immedi.ale reinibVG.,m~nltrom 8QtrQWer, Bo·n.,...er'sl3ilu<., 10 promptly .";mb"P.>e Nole Holdel shan arso crin.~lule ~i1 evfril ol·deta"n underU,., Security r".I~menl:

Upon the occun:eQ<.e. 01 "ny events.' 01 dela"h. all "pm. 'ea.r<ed by the Security Instrument rtnduding aN olNole HokJe(. aIlotneys'I""""and C1;IsI5.l ~l)al!!.'I~!, tJ~.,. doe and payable althe ·000000at Note Hold." with .01 "'''tI>OUI f>rio' iIOI~ by NoIe . HOId~ ""d. ega.d""';' 01 "nypm lorbe8ian:oe. In sud> even! Nol. HOid¢f. ""~s ppOOn, mayl""n P' 1hereafte. deliver IOU,¢ T rusree ",...,;nen decla(a1oon 01 "elaun and de(r">and to s.e" til<! Pr:open, Oind stlall, cause Ip I!!! f.le~ 01 .ecnrd" ~rit)~n nolaot delaull and elllClion to Pluse I"'" property 1;' bie,!.Oid. Note HoId"r sh"lIalso<!epos~ ··wilhtlie. lni>;l~e lhe 5ecutil» Instr"mel)l end. iOny ootes an(j "ndoaJfl"'h~""idenpng experidil",e.~~red .he.epy. All'" ,!h.e tapse 01 ."""1;me,, s.. rhen maybe i~uired bylaw lon;,w;"9 recon:lallon(j! >;.,rn nonce 01 del3un. an<! no~ .~ ""Ie l"l.ovirigheen 9","'" iH;' then ",QUOTed by law. ,Ihe Trustee , .. ilhoUi de,!,,,"d on SIJff_"'. ,s~an sel. the P",perly althe 1i<ne""d place spedfi~ by suCh. T iyslee "hueh notoce 01 ""'le. or iIt the lime 10 which S!Jd'r nolJce(! salf> .has been duly poSlpOned .. at ,public ".udion 10 the higE1e;Slbidd." lor cash "' ...... ul money ot lhe lJn~ejl 51,,11". payable a! lime c)I.s""'.e.cepllhal Not"H~er ma) oedit bid "'I Ih e.sa '" 10 .the eJdentot Ih" "rnountowing unde' the loan Docume .......

• ndW"'9""thil'··TI1J$I""·~sfee".-.d·',,.pense, s, T,,,,,, lQl",,,,,.may. ~n the P,operty".s." wl>Dk.0' in 5ep~~te parcels i.r. ther!! is more than one parcel. subjecrto 5UOlf~gh,s.,;]5 BOtrOW. ,e., m.··ay haY. _e. _ by taw 10 d.red Ihe manne. or oldel ot sale, 01 by such other manner or ;,ale which is aulhor·jz·ed by law. Th. "l .u~ree rroay P<>sjp""B Ihe s.leol ,,1101 anyporlion of th~ P'"per1y. by public declaration made by the 1 (uS." .. ar the lime and "lacela>;1 I'pppin'ed .19' ~Ie It ihe Pibperl)' is SOld. the T rusjee shaH de liv", 10 the purchaser a deed' conveY~9 the- Pfoperty. so -s.otd., but Vifflh_out ar!y covenant or wao anty , expres s or rlTlplied. The ,edtal in such deed of any maners 0' fad shan be condusive proot o] Ihe l"'thfuJ.ne~ ''-'et'eof

g042158667

Any person, including 8onowe. !he T rustee Of Noll' Holder may. purchase at such sale. After deducting aH cosll.. lees ,md e. pe nses 01 the T rustee, including costs 01 evidence 01 lille in connection w~h such sate, the Trustee shan apply the remaining proceeds 01 sale firsl to payment of atl sums expended under the terms 01 Ihe Security InslIumenl no! yel ,epaid. wiltl accrued interest al !he role then payable unde, the Note Of notes secured thereby. and Ihen to payment 01 an other sums secured lhe·,eby·(induding.!I;ei Note). 11 'thltre be any proceeds ,emaining, the T rustee shall dismbute them 10 Ihe person or persons legaity enlitled lherelo.

5 HAZARD OR PROPERT'f INSURANCE.

Unle .... Note Holder and B.OfIo.<oer otherwise agree in wriling. any iIlsurance proceeds shall be applied ~rT.I 10 reinibuMeNoie ~I lor CO!,t~and expenses incurred., coon.ection with ~a!tiin9l3ny sU<:h 'nSur3nce proceeds, and then. a1. No1e Holdef$ opllon, in such order and propoition as it may delermine in 11$ soI¢ and abSolute dis!:retion, aoo r~lesso' any impairmehlof security Of lad ther.eat {i) tOI.1le . sums .. seruredby the $ep..IriI)'. Instrument, wbethoror J10t Il)en due, ;llJd 10 suctl coinp(iOeh1s thereOf a.NoieHo!de', may deterinirie ,,,,:its sole <ind abs.olUle diseretir:il:i;aild/()< r.l10 Bonl)Wer 10 .pay !he co~s, ande.penses ~ n~5B!'Y 'ep"irs or restoralion 01 Ihe Property 10 a conditio.n satis'acioryIONotet--kJidet. tlBo"ov.rera.ba!ld.pn:;lh~ H@,,&,or~s .rKl1a~!=, ,~i!hin )() days a notice hom Note HOlder thai the. insutalll::e carri~r ha3 oIIeredto settle B daim.then Note Holde; may collect the in~UI1lr>Cl'; p'Oi:eeds. Note t'l1>kI.er may, ir) its sole and absohne disCretion. 900 regardless of any irnpannent 01 security or lack lIl.ereal, use the p<.oceeds 10· repair or restore tJ:>e Pro.pe(lyOfto par the sums s,ecuretl by lhe Sewrity Instrument. whethe, or noIlhen due The JO-day period Will begin when 'he ilolice .i$ giVen.

If Borrower obtBinseaflhquake insurance -. and other hazard insurance, or any -(»)he, insurance on the Properl)' and. such il\Swanceis noI.~1)' req~ by Nole H.oklet. then (i) Borrower must ensure lila)· su.:ililiSu~i)ceoornesNcile Ho!d¢iasfl)s3;p1iY1!i! a·nd (fr}such insurance shan be subjed 10 thrs paragraph with ,esped 10 use 01 insurance pio~S.

Note HOlde.r. r:nay dliJr.ge a rea¥,nable fee lor the co~!. 0' detennini~gwhelher the bUilding orrrobile t>o"'e .eturi"g a loa·n;, 100000ed ,"an area h;""ing spi!cia'l flOod l1a1:ar'dS, subjed.o applicioble law.

5 BORROWER'S RIGHT TO PREPAY; PREPAY';'ENl CHARGE.

Borr """er may repayth. principal due under the Note at anytime. A payrne .... 01 prinop"1 only prior 10 .IIle Malvriiy ~a,t~ (beyond !he pOnC:ipal included in Ihe regular monthly payme.~) i~ ~n as a P'eP'l)'rnent'MleoBorrower makes a Prepaymerrt. Borrower must teU Not.e He!der .111 W11trng .hat Boncme' i. doil1jl.so Bonower may not designate a paYment 86 ~. P'''p''ymenl if Bo<mw", has no! ma"" all rhe monthly prlnopal and ·interesl payments ·due un"e' ·the Not"

Bonpw"r may rna~~ alunPrep3)'mentorqu;llifyiI!!lpani;llp,eP"Yment(sl as long as aorrower pay>; a P,e,pavrnent chatiJ:e equal to s.i> (6) n'JOOths' "dv<l:nte in~~ieSi!>n any P,epayme"i(s) made. inany tW¢lve (12) m!lnlh pe(iQc:! in excess 0' l'wenlYp6-.:ehl FO%lof tN!pr\9i"al.p~Jlal.;lO')O'!nI 01 the Note, 31 Ihr 'nleresf ra!erndleaun.der the NOle as.ofther;l;Jleol "abh Prep,,!},rJiei1t . ~r8.w'II J:>8 no Pre""yment It'ar9t' lor PrepaYrnem(s)rriade mote than ItTee (3) years aft .. rlh~ dale olth", No.te. " the N{ileis an Adjus.l»,ble ~~l'oIot.e, thelully irKle~f>d ;,)i.eresl Glle ;n ellea untie' s~1!:h ~ote ( •. e .. the margin ptus ~ iOOe:rr a. d e ~r>¢d in such Note), "S 01 the dale of any ~uch prepay:merii."'~1 be used to calculate. !he Prepay",e"t cha rye. subjed to any ;"I",esl ra'" fomil snt forth in sudl Note and w~hOoJ1 !egem to temporary ~terf'!st rate reductions.

9042158667

BY SIGNING BELOW. Borrower accepts ano "grees 10 the terms and covenants contained in this Ride •.

~ IS-I)

.~

_______________________ ISU~

-Boor~

----~-----.----

.~--I~'} aoeec-e-

________________ I5ea't

-80~,

______________________ l:;e"')

·Bor~

-······.~-I~~

. Bono-e-

_________ ~ ~ !S~~

,~,

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....._~.' . ,- ..........

A.iT,ESl;

!.l,UG 1 :t 20m

"2"

NOTICE OF DEFAULT

RECORDING REQUES1ED BY:

-'lECORJ]JNG R£OUeSTED 81' 1.A;~~es ttns co

AND WHEN RECORDED MAIL 10:

Fe) lE NDER SERVICES, INC. 8180 EAST KAISER BOULEVARD ANAHEIM HillS, CA 91808

lUI IIII1IIIIJIIIIIIlIIIIIItUIIIII 11111111111111

Stanislaus. County Recorder

Lee Lundrigan Co Recorder Office OOC- 2007-0143679-00

Accl ~e2-Count~r Customers Thursday, NOV 29, 2007 08:38:27

HI Pd $12.00 Nbr"0002445418

BOT/R2/1-2

Space above this line tOi recorder's use only

Loan No 904 2158667

Trustee Sale No 46038

I'MPORTANT NOTICE

NOTICE OF DEFAULT AND ELECTION TO SELL UNDER DEED OF TRUST

IF YOUR PROPERTY IS IN FORECLOSURE BECAUSE YOU ARE BEHIND IN YOUR PAYMENTS, IT MAY BE SOLD WtTHOUT ANY COURT ACTION, and you may have the legal right to bring your account in good standing by paying aJl of your past due payments plus permitted co-sts and ex,penses within the time permitted by law lor reinstatement 01 your account. which is normally five business days prtor 10 the date set lor the sale of your property. Nos;iJe dale maybe set ulltil three months from the date this notice of de;ault may be recorded (whiCh date of tecordaUon appears on rhl:s notice).

hi!! amount is $-6,628.94 as 01 1112612007 and win increase until your account becomes current

While your property is in lore-closure, you stilJ must pay othe-r obllg.ations (suc'h as inBunnce and taxes] required by your note and deed of trust or mortgage. If you lail to m-alle tutu'te payrne'rlts On Ihe loan, pay taxes on Ihe pr.op-erty, provide insurance on Ihe property, or pay other ohlig ... thms as r~9.l,.Ij,,~Q.ln It!J~ Jl.Q.leand,deedof trust or mott.g,i!.g.e, th-e bene;fictary or mottgagee may insist that you do 50 in order to reinstate your account in gooo standing. In addition, Ihe beneficiary Dr mortgagee may require as a conditlon 10 reinsl.alemenfthal y{)U provide reli:able wriNen evidence Ihat you paid all senior liens, property taxes, a ndhaz ard His.urance premiums.

Up.on your WriNNl requesl, Ihe beneficiary or rnortgagee will give you a written il~mi2ation 01 Ihe entire amounl you rhusl pay. You may not have 10 pay the entire unpaid portiOn of your account. even though 'u'·1 payment was demand.lld, bul you must pay all amounts In dllbult at the ttme payment is made. However, you and your beneficiary or mortgagee may mutually agree in writing prioJ to the time the notice of sale is posted (which may not be earlier than the end of Ihe three-month period stiited above] 10, among o.lhe.r thJngs,fl)pto~id-e adtlitfona'i lime in which to cure Ihe tle'aul! by transfer of the property or otherwise; or (2) establish a schedule of payments in order 10 cure your default; or both (1) and (2).

Following the expiration otthe lime period referred to in this paragraph ot this notice, unless the obligation being loredosed upon or a separate written a.greemenl between you and your creditor permits a longer period, you have only the legal righl 10 stop Ih!' sale of property by paying Ihe entire amount demanded by your cre dttor .

ro find out the amount you must pay, in Ille form of Cash, in U.S. Dollars, Cashiers Check or Money Order and to "range lor payment to stop Ihe loreclosure, or if your prope'r1y is in loreclosllrelor any other re as.on, contact: )OWNEY SAVINGS AND LOAN ASSOCIATION, FA. clo Fel LENDER SEFN1CES. INC 8180 EAST KAISER lOUlEVARO ANJI.HEIM -uu s CA 92808-2277 (714\ 282-2424

.,1/ 1/ r{~ L' l

: ..: :.~ .. -

Continued from page 1

T rus tee Sale No. 46038

I' you have anyquestlens, you should contact a lawyer or contact any governmental agency which may have insured your loan. Notwithstanding the tact that your property is in foreclosure, you may oHer your property for sale, provided the sale Is concluded prior to the conclusion of the foreclosure.

REMEMBER, YOU MAY LOSE LEGAL RIGHTS IF YOU 00 NOT TAKE PROMPT ACTION.

NonCE IS HEREBY GIVEN THAT: DSL SERVICE COMPANY, is the duly appointed Trustee, or duly aulhori2ed agent lor the Trustee, or duly designated Agent for the Beneficiary lor its assignee) under a Deed of Trusl dated 02109/2006, executed by ANTIiONY J. MARTIN; AN UNMARRIED MAN, as trustor, to secure obligations in favor of DOWNEY SAVINGS AND LOAN ASSOCIAHON, FA,as Beneficiary

RECQRlZlEU ON 2I')1J,06 AS INS"TRIJMENT #2006·001U155-00 01 official records in the OffIce of the Recorder 01 SUnislau~ Covnty, Cafitornia, as mpre hilly de~:cribed on the iJe-ed of Trust, securing the no.elc$} for the sum. of SJ}O,4PO.OO. Tbeb~,il,efi~taJ ,,,,*.6'r''''$.f unde"the £leesef TtUstand the obligations secured thereby is presently held by Beneficiary (or Its a,sslgnee). A default in the 0 obJ.il}iltionsJor which the Oeed of TrUl;1 is securltyJlas occurred in that the p~)'meo:thas nct p'e~n miJ-de 0.1: THE I,.STALLM:ENT OF PRiNCJPAl AND INTEReST WHICH BECAMf: DUE 09101.12007 AND AU SUBSEQUENT INSTAllMENTS, TOGnHER WITH ALL LATE CHARG'ES, ADVANCES TO SENf~R UENS, INTEREST, INSlJRANCE, TAXES AND ASSESSMENTS ADVANCED BY THE BENEFICIARY (OR ITS ASSIGNEES)

Due 10 the ~,elaulot, Ben~ficjary (or Its asslgile.eJ has e)u!cuted .and delivered 10 said Trustee, a wTinen Oedamlion and Demand tor Sale, and has dltPQ.sit.ed With the TrUstee, the D1t.(oL~ 01 Tru$t andall documents evidendng the -.bl'gations seocured.fhereby, and has d-e'cla',ed aU 5UJl"IlISectired "hereby immediately due and payable and has

tec te d 10 o aus e the Irust property 10 be sold to satisfy the obl4Jalions sec ured thereby,

DATE: \ 1/26/07

For: DSL SERVICE COMPANY, as Trustee By: Fel LENDER SERVICES. INC as Agent

Fel LENDER SERVICES, INC., IS A DEBT CQLLECTOR ATTEMPTING TO COLLECT A DEBT. I\NY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE .

." - ; .~; ~: ; _'- ; .:; : ; .'" • - .--'"l.

"3"

NOTICE OF SALE

RECORDING REQUESTED BY:

LandAmerica Default Services

WHEN RECORDED MAIL TO:

FCllENDER SERVICES, INC. 8180 EAST KAISER BLVD. ANAHEI.M HIllS, CA 91808

"" 11111111111111111111111111111111 1111111111111

Slanjslaus) Counly Recorder

lee Lllldr i9an Co RecQrder Of f ice .

DOC- 2008-0113800-00

Acct 40J-M~jJ Oocu~ent~

Tue s dav , OCT 21. 2008 09:0.0;58

HI Pd $11.00 Nbr-0001623378

OCE/R3/1-2

SPACE ABOV( nus liNE rOR RECORDER'S USE ONl Y

Title Order No.: 30099722 APN: 082-214-009-000

Loan No.: 90421 58667

Trustee Sale No.: 46038

NOTICE OF TRUSTEE'S SALE

YOU ARE IN DEFAULT UNDER A DEED OF TRUST DATE D 02! 09 ! 2 0 0 6 _ UNLE SS YOU TAKE ACTJON TO PROTECT YOUR PROPERTY, IT MAY BE SOLO AT A PUBUC SALE. IF YOU NEED AN EXPLANATION OF THE NATURE OF THE PROCEEDINGS AGAINST YOU, YOU SHOULD CONTACT A LAWYER.

011 11/J312008 at 12:00PM, DSL SERVICE COMPANY

as I.he d.uly appoint.ed TrusJt1e under and pursuant to Deed of Trust RECORDED ON 2 i 2 3 ! 06 J'..S INSTRUMENT #2006~002815S-00 of official r ocords in the Otfice of Ihe Recorder of Stanislau~ County, Callfornia, executed by:

Jl .. 1'JTHOWt J. MARTIN, AN lINMAHRJ EC HAN

, as "Trustor

DO'vH..JE'f S;::··lJ:NGS J>.J-JD LOA".] I\SSOCJJl.T]ON. r .».

, as Beneficiary

WilL SEll AT PUBLIC AUCTION TO THE HIGHEST BIDDER FOR CASH [payable al time 01 sale in lawful money of .he United States, by cash, a ca5hier's chock drawn by a stat·e or national bank, a check drawn by a state or fedt1ral credit union, or a check drawn by a state or fed.eral savings and loan association, savings association, or savings bank spe.clfled In section 5102 of the Financial Code and authorized to do business in this state). AI: THE .. I" STREET S J DE OF THE COUNTY COURTHOU SE BUI LDING , 1100 .. J .. STREET, MODESTO, CA,

all right, title and interest conveyed 10 and now held by it under said Deed of lrusl in Ihe property situ at ed in said County, Califor nla describing Ihe land !herein: -'".S MORE FULLY DESCRll3ED IN SA} D DE!':D OF T;;.US'T.

. ; - .~. - i -:-.'~ {", :'- .-=,':.-

Title Order No.: r ruslee Sale No.:

Loan No.:

APN:

30099722

46038 9042158667 082-214-009-000

NOTICE OF 1 RUSTEE'S SALE· continued

The property heretofore described is being sold "as is". The street address and other common dO!lignalion, if any. of the real property described above is purported 10 be: 1 312 HARBOUR TOWN LANE, MODESTO CALIFORNIA 95357.

The undersigned Trustee disclaims any liability for any incorrectness of the street address and other common designation, jf any, shown herein. Said sale will be made, but without covenant or warranty, expr eas.sd or implied, regarding litle, possession, or encumbrances, 10 pay the remaining principal sum of the nole(s) secured by said Deed of Trust, with lnterest Ihereon, as provided in said nole(5), advances, if any, under the terms of the Deed of Trust, estimated fees, charges and expenses at the "Trustee arid of the trusts created by said Oa:ed of Trust. lo-wit:

$439,890.82IEiillmaled)

Accrued internl and addltlorral advances. il any, will increase this flgu,~ prior 10 ~ ale.

The beneficiary under said Deed ot Trusl heretofore el!e(;uted and delivered to Ihe undersigned a wrjttnn Declaration of Default and Demand tor Sal~, and a written Notice ot Default and Election 10 Sell. The undersigned caused said Notice of Default and EI.ection to Sen to be recorded in the county where the real property is tocated and more than three months have elapsed since such recordation.

The mOf"t9BQoo. beneficiary Of authortz:ed a~nl for the m9rt~ oroonefi€l.Bry declarylS. pursuant to CaUfornia Civil Code § 2923.5(b), that the m~.ge6, benEiflclary Oftne m~®'s or oonefx:;i8ry's euthori:tOO ~nt c:ontoc,ed the borrower or, pursuant to California CMI CoPe § 29235{c}, made effortS. 10 COOIBCI the borrower, to assess Ihe borrower's financial situation and to explore options for !he borrt.JW6r 10 avoid foroclosure.

DATE:

10117;08

SEV]~£ COI1PANY, as Trustee EH! ERVJCES, INC .. as Aoent

'" si: BLVD" MlViE1M H1Li,s, CA 92"OE

- 2 8../2 424 SALE INFORMATION: 714 - 282 - 2 4) 0

~or :

By: f:JSO

ANY

RVICES, INC. IS A DEBT COLLECTOR ATIEMPTING 10 COLLECT A DEBT.

AlION OBTAINED WILL BE USED FOR THAT PURPOSE.

." r -. ~ • -; ""

. r:- i - . ' . ~,

"4"

TRUSTEE'S DEED UPON SALE

IJ:.!J 3/;<.4

-- -r-· ~-

i

RECORDING REQUESTED BY !'In.IJ

When R .. c orde d Mall 10:

DOWNEY SAVINGS AND LOAN ASSOCIAnON, FA

3501 JAMBOREE ROAD NEWPORT BEACH. CA 91660

MOIl! TaA Slat~menb to:

Same 8" above

Qj 002/00:1

~- ~~.~-

-- llllnnnlmUllHl_nmmlllUllnr ~--

Stanis laus, County Recorder .

lee Lundr igMl Co Recorder or [ice 0

OOc- 2009-0051086-0

A~cl .03-Mdil DocUMents

nR'1' 22. 200!l 08:30:21

F r i day. $11.00 Nbr -'0001121524

Hl Pd BoT/RJ!1-2

Tille Order No. J009Sn22

Trus le e Sale No. 46028

loan No. 9042158667

TRUSTEE'S DEED UPON SALE

APN 082~214-009-0aO

The undersigned gr_<lnlor ded a res:

1) The Grantee herein was the foreclosing beneficiary.

1) The amount of the unpatd debllogelher with costs was _ .. _ .. _. __ __ .. __ _ __ .

J) The amount paid by the g-rantee OIt the trustee sale was __ _._ _. _ .. __ . ..

4} The documentary lransfel tall 19._ _ ,-,.-.- .. - - .. -- .. ------ .. ---- __ . __ ._._ _ ..

5) Said property is located In Ihe City oJ Modes to.

~327.12 $168,750.00

~

and DSL SERVI CE C0I-1PANY

[bere in called Trustee}, as the du!y appointed Trustee under Ihe Deed 01 Trust hereinafter deac rlhert, does heJeby granl and convey. bul without covenant or warranty, e xpres s or implied. 10 DOWNEY SAVINGS AND LOJl.N A:::SOCIATJOI·J, F_,r.._

jhe rein called G rantee}, all of its 'ig':!, title and lntercs I In and 10 that certain property silualed In the County 0' Sta_[2:i_slau~. 51,lIn of C<lliIornla, described as lollows:

'oct 6 in Blocy. l:-;Oli of "t_}-,e Ce r o Li n a r " as per ma p I i Le d February 29. ::':000 r n \_:uL,m~ ':;8 oI [·Japs. e t Pi3(]E ':'S, (,prtj[-icate of Co r r e c t Lon recorded J'Jly F~'1. 2000. as InstrlUmml Nc_ ::9888, Official l1ecmdE_

RECITALS:

This conveyance Is made pursuant tn the powers conferred upon Trustee by fhal certain Deed 01 Trust dated 02,1 09/2006 and e:vecuted by F.N'THONY J _ ~_J\F;TJN, AN ill\JMARRl ED MAN,

as Trustor, and RECORDED ON 2/23/06 AS INSTRUHENT #2006-=.002131:'5-0_Q of official records 01 Stan i s 1 au s County, California, and after fulfillment 01 the conditions spec ifie d in s aid Deed 01 Trust authorizIng this conveyance.

Default occurred as SE'I torth in a Notics 0' Delaull and Election 10 Sell which was recorded in the Office of Ihl:' Reeor de r 01 ~ aid County

II IIltl 1111, I Hil

11111 1111111111 ~i II

1111 UIIIII~IIIIII

•• , .... ,., _J J.J ..... ~) r- A_'

Q) 00.1/0(J.1

TRUSTEE'S DEED UPON SALE - continued Page 'I

Trustee Sale No. 'J 6038

A II re qulrements of law regarding the mailing at copies of notices 01 the puellcatlon of a copy of the Nolle e or Default or the personal delivery of the copy of Ihe Notice of Default and Ihe posting and publltallon of coptes of the NoUceol a Sale havD been complied wIth.

Sald property was sold by saId Trustee at publlc auction on 05/15/2 009 at the plac a named in the Nolie e of Sale, In the county of S t ani 51 au s , California, in whlth the p/Operty 15 situated. Grantee, being th e highest bidder at s aid sale, became the purchaser of said property and paid therefore 10 sald trustee the amount bid beIng S 16 8 , 7:'0 .00 in Jawful money of the United States, or by the satisfaction. pro tanto, of the 0 bHg<l'!iOIl5 tllen secured by said Deed 01 Trust.

DA T E Q S i 1 5! ::: C!0 9

DSL SERVICE COMPANY, as Trustee

CALIFORNIA NOTARY ACKNOWLEDGMENT

STATE OF CALIfORNIA

COUNTY OF Orange (3

0'1 ll'h}-Lf1rctt before me.OS2_cux{f(l I;. ~l.Je(~01 /. . a Notary

Public in anl for aid county, personally appeared JaM Amador who proved to me on the basis 01 satistactory evidence) 10 be the persorus) whose name{s) is/are subscribed 10 the Within in5!rvment and acknowledged 10 me Ihat he/she/they executed the same in his/her/their authorized capaciryues), and that by his/helllheir signalure(s) on the instrument the oersorus). or the entity upon behatf 01 which the pelson(s) acted. executed the instrument.

; certly under penaHy of oerjurv under the las ul If,e State or Califomi" ih8; Wit fOI egoing paragraj:'!! ;~ tpJe 2nd correct

'NITNE SS my hand and official sea!

"5"

CEASE AND DESIST NOTICE

UNITED STATES OF AMERICA Before The

OFF1CE OF THRIFT SUPERVISION

In the Matter of

) ) ) ) ) } ) ) )

E 1T eel i ve Da Ie: ~_--==S,-"e~p:c::1 e,,-,m-,-,b~e_.__-r ;.5,-" 2,-"O~0~8,,----_

Order No.: ~_~----,\I._.__; E~-O!.-"8'-..:-O~I,-,,2,,--~

DOWNEY SA VINGS AND LOAN ASSOCJA TION, F.A ..

Newport Beach, California.

ors Docket No.: 06189

ORDER TO CEASE AND DESIST

\VHEREAS, Downey Savings and Loan Association, F.A., Newport Beach,

California,OTS Docket No. 06 J 89 (Association), by and through its Board of Directors

(Board) has executed a Stipu lation andConsent to the Issuance of an Order to Cease and

Desist (Stipulation): and

WHEREAS. the Association. by executing the Stipulation, has consented and agreed

to the issuance of this Order to Cease and Desist (Order) by the Office ofThrift Supervision

(OTS). pursuant 12 USC § .181 8(b); ~nd

WHEREAS. pursuant to delegated authority. the Regional Director is authorized 10

issue Orders to Cease and Desist where a savings association has consented to [he issuance of

an order.

NOW, THEREFORE. IT IS ORDERED that:

I. Order to C ea se a nd Desist

The Association, its directors, officers, employees and agents shall cease and desist

from any unsafe and unsound practices regarding lending.

U. Capjfal·

A. At each quarter end starting September 30,2008. the Association shall meet

and maintain minimum capital levels of Tier J Core Capital of seven percent (70%) and Total Risk Based Capital of fourteen percent (14.0%).

R Within forty-five (45) days. the Association shall update its written Capital

Augmentation and Strategy Plan submitted to the OTS 011 June JO. 2008 (Capital Augmentation Plan) and submit it for Regional Director review and comment The updated Capital Augmentation Plan shall address how the Association will meet and maintain the capital ratios set forth in 1A, above. at each quarter-end through December 3 J. 2010. AI a minimum. the Capital Augmentation Plan shall lake into consideration the requirements and restrictions imposed by this Order and shall:

I. detail capital preservation and enhancement strategies with specific narrative goals, which shall result in the raising of new equity and a capital infusion by no later than December 31 , 2008:

2. detail the method by which the additional capital wilt be raised and identify the sources of such capital; and

3, establish an alternative strategy or strategies to ensure the safe and sound operation of the Association. which shall be implemented immediately if the Board's primary strategy to raise additional capital is unsuccessful, including but not limited 10 ensuring that capital is maintained at no less than the levels set forth in 'jjl LA.. above, through 20 I O.

The Association shall make any changes to the Capital Augmentation Plan required by the Regional Director. or his designee, within ten (10) days after receipt. Thereafter, the

2

Board shall adopt and the Association shall implement and comply with the revised Capital A ugmenration Plan.

C. The Board shall provide the OTS with written updates on the status of its

compliance with this Paragraph every fourteen (!4) days until the capital augmentation has been achieved under ~11.B.I., above. with the first report due fourteen ( 14) days after the Effective Date of this Order.

D. Afler the capital augmentation has been achieved (as referenced in ~1J.8.1 ..

above). Management shall prepare quarterly variance reports on the Association's

compliance with the Capital Augmentation Plan within thirty (30) days after the close of each calendar quarter starting with the first quarter-end after the date of capital augmentation.

Such variance reports shall detail actual operating results versus projected results and shall include detailed explanations of any material deviations with a description of the specific corrective actions or measures that have been implemented or are proposed to address the material deviation. The Board shall review each variance report. and shall discuss Management's and the Association's compliance with tile approved Capital Augmentation Plan. The Board's review of the variance reports and evaluation of Management and the Association's compliance with tile material elements of the Capita! Augmentation Plan shall be thoroughly documented in the Board meeting minutes.

111. Classified Asset Reduction Plan

A. Within forty-five (45) days, the Board shall adopt and submit for OTS review

and non-objection a written comprehensive Classified Asset Reduction Plan. At a minimum, the Classified Asset Reduction Plan shall include:

(I) Targets acceptable to the OTS;

3

(2) A descriptionofthe manner and methods for reducing the Association-s level

of classified assets 10 the targets set therein; and

(3) Supporting documeruation for all assumptions and projections.

B. Within fifteen ( f 5) days of receipt of [he OTS's notice of objection. if any. 10

any aspect of the Classi fred Asset Reduction Plan. the A ssociation shall subrn it a revised Classified Asset Reduction Plan to the OTS addressing any such objections of the OTS.

Once the 'Classified Asset Reduction Plan is submitted pursuant to this Order and all objections from the OTS, if any. have been satisfactorily resolved. the Association may not amend, suspend, or revoke the Classified Asset Reduction Plan without theprior written nonobjection of the OTS. Immediately upon receipt of the OTS's non-objection to the Classified Asset Reduction Plan, or in the event no objection is raised by the Regional Director during the forty-five (45) day notice period. the Association shall implement the Classified Asset Reduction Plan and ensure that all directors, officers, and employees adhere to it.

C Management shall prepare quarterly variance reports on the Association's

compliance with the Classified Asset Reduction Plan within thirty (30) days after the close of the December 31. 2008 calendar quarter. and each calendar quarter thereafter. Stich variance reports shall detail actual operating results versus projected results and shall include detailed explanations of any material deviat ions with a description of the specific corrective actions or measures that have been implemented or are proposed to address the material deviation. The Board shall review each variance report. and shall discuss Management's and the Association's compliance with the approved Classified Asset Reduction Plan. The Beard's review of the variance reports and evaluation of Management and the Association's

4

compliance \ v ith the material elements ofthe Classified Asset Reduction Plan shall be thoroughly documented in the Board meeting minutes.

D. The Board shall provide the OTS with a copy of Management's quarterly

variance report and the Board meeting minutes detailing the Board's review of the variance report, including the identification of any corrective actions adopted by the' Board, and the Board's evaluation and assessment of Management and the Association's compliance with the Classified Asset Reduction Plan within ten (10) days after the dale of the Board meeting at which the Board's review was conducted.

IV. Real Estate Owned Disposition Plan

A. Within forty-five (45) days, the Board shall adopt and submit for OTS review

and non-objection a written. comprehensive Real Estate Owned Disposition Plan (REO Plan) that will promote the effective management and prompt disposition of Real Estate Owned by the Association. At a minimum. the REO Plan shall include:

(I) Specific Board strategies with goals and objectives for effectively managing

and reducing the Association's REO;

(2) A risk analysis by vintage of 103n origination. aging. and real estate

concentration by geography; and

(J) A comprehensive analysis of the Association's internal operations, staffing

requirements; information systems. and policies and procedures. including those related to valuation. ill order to determine their adequacy.

B. Within fifi:een (15) days of receipt of the OTS's notice of objection, if any, to

any aspect of the REO Plan, the Association shall submit a revised REO Plan (0 the OTS addressing any such objections of the OTS. Once the REO Plan is submitted pursuant to this

5

.= c

~-.: .. :

Order and all objections from the OTS. ifany. have been satisfactorily resolved. the Association may not amend. suspend. or revoke the REO Plan without the prior written nonobjection of the OTS. Immediately upon receipt of the OTS'5 non-objection to the REO Plan. or in the event no written objection i~ raised fly the Regional Director during the fortyfive (45) day notice period. rile Association shall implement the REO Plan and ensure that all directors. officers, and employees adhere to it

C Management shall prepare quarterly variance reports on the Association's

compliance with the REO Plan within thirty (30) days after the close of the December 31. 2008 calendar quarter. and each calendar quarter thereafter. Such variance reports shall detail actual operating results versus projected results and shall include detailed explanations of any material deviations with a description of the specific corrective actions Or measures that have been implemented or are proposed to address the material deviation. The Board shall review each variance report, and shall discuss Management's and the Association' s compliance with the approved REO Plan. The Board's review of the variance reports and evaluation of Management and the Association -5 compliance with the material elements of the REO Plan shall be thoroughly documented in the Board meeting minutes.

D. The Board shall provide the OTS with a copy of Management's quarterly

variance report and the Board meeting minutes detailing the Board's review of the variance reports, including the identification of any corrective actions adopted by the Board. and the Board's evaluation and assessment of Management and the Association's compliance with

the REO Plan within ten (10) days after the date of the Board meeting at which the Board's

review was conducted.

6

,.

V, Manaaement Plan

I, Within forty- five (45) days. [he Board shall subm it to the Regional 0 irector

for review and non-objection a written Management Plan detailing [he Boards actionj, to strengthen executive management of the Association to ensure that the Association is operated in a safe and sound manner and in compliance with applicable laws and regulations.

2_ The Board shall ensure the Associations retention of any new executive

officer complies with the requirements of ~VIII_C_ of this Order. The Board shall provide the OTS with written updates on the slaws of irs compliance with this Paragraph every fourteen (14) days, with the first report due fourteen (! 4) days after [he Effective Date of this Order. The Management Plan shall be fully implemented no later than December 31, 1008_

3_ Withinfifieen (15) days of receipt of the OTS's notice of objection. if any, to

any aspect of the Management Plan" the A ssociation shall subm it a revised Management Plan to the QTS addressing any such objections of the OTS_ Once the Management Plan is

, submitted pursuant to this Order and all objections from the OTS, jf any. have been satisfactorily resolved, the Association may not amend. suspend, or revoke the Management Plan without the prior written non-objection of the OT$. Immediately upon receipt ofthe OTS's non-objection to the Management Plan. or in the event no written objection is raised by the Regional Director during the forty- fi ve (45) day notice period. the Association shall implement the Management Plan and ensure that all directors. officers. and employees adhere

to it.

7

Vl. Business Plan

A_ Within forty-five (45) days, [he Board shall review. approve and submit for

OTS review and non-objection 'a written comprehensive long-term Busines; Plan covering at least a three-year period (Business Plan) beginn ing with {he fourth quarter of 2008 (4Q 2008)_ The Business Plan shall. at a minimum.contain specific Board strategies for a reduction in concentration of Payment Option Adjustable Rate Mortgage and Stated Income loans. The Business Plan shall specify the manner and method for reducing [he Association-s level of Payment Option Adjustable Rate Mortgage and Slated Income loans, including the establishment of a timetable and target reduction amounts,

B_ Within fifteen (15) days of receipt of the 01S$ notice of objection, if any, to

any aspect of the Business Plan, the Association shall submit a revised Business Plan to the OTS addressing any such objections of the OTS_ Once the Business Plan is submitted pursuant to this Order and an objections from [he OTS. jf any. have been satisfactnrily resolved, the Association may not amend. suspend. or revoke the Business Plan without the prior written non-objection of the OTS_ Immediately upon receipt of the OTS's nonobjection to the Business Plan, or in the event no "' .. ritten objection is raised by the Regional Director during the forty-five (45) day notice period. the Association shall implement the Business Plan and ensure that all directors. officers. and employees adhere to it

C. Management shall prepare quarterly variance reports on the Association's

compliance with the Business Plan within thirty (30) days afier the close ofthe December J f. 2008 calendar quarter, and each calendar quarter thereafter. Such variance reports shall detail actual operating results versus projected resu Its and shall include derai led explanations of any material dey iarions with a description ofthe specific corrective actions or measures

8

"

that have been implemented or are proposed In addr~ss [h~ material deviation. The Board shall review each variance report, and shall discuss Managernents and the Association-s coinpliance with the approved Business Plan. The Board-s review of the variance reports and evaluation of Manage men I and the Association's compliance with the material elements of the Business Plan shall be thoroughly documented in the Board meeting minutes.

D. TIle Board shall provide the OTS with a copy of Management's quarterly

variance report and the Board meeting minutes detailing the Board's review ofrhe variance report, including the identification ofany corrective actions adopted by ihe Board, and the Board's evaluation and assessment of Management and the Association's compliance with the Business Plan within ten (10) days after (he date of the Board meeting at which the Board's review was conducted.

YI1. Compliance witb Report QfExamiuatioJ]

The Board shall ensure that.the Association and its Management adequately address all corrective actions set forth in [he Report of Examination. provided that to the extent that there is any conflict between the provisions of the Report of Examination and this Order, the provisions of th is Order shall control.

VIII. Operating Restrictions

A. Growth, Effective immediately, the Association shall comply with the

requirements ofOTS Regulatory Bulletin 3b (RB 30) and, except upon receipt of the prior

writren approval of the Regional Director. shall not increase its total assets during any quarter, beginning with the quarter ending June 30, 2008, in excess of an amount equal to the net interest credited on deposit liabilities during the quarter.

9

-' .. ~ ... ~ ... ...::._ ..

B. Management Chances. Effective immediately. the Association shall comply

with the prior notification requirements for changes indirectors and senior executive officers set forth in 12 C.F.R. Part 563. Subpart H.

C. Employment ContraCls and Compensation Arrangements. Effective

immediately. the Association shall not enter into. renew. extend or revise anycontractual arrangement related to compensation or benefits with any director or sen ior executive officer ofthe.Associarion, unless the Association first (i) provides a minimum of thirty (30) days advance notice of the proposed transaction to OTS; and (ii) receives a written notice of nonobjection tram the OTS. In the event no written objectionis raised by the Regional Director during the thirty (30) day notice period. the Association may proceed with transaction.

D. Severance and f ndemnification Payments. Effective immediately, the

Association shall not make any golden parachute payment. as that term is defined in 12 U.S.c. 12 C.F.R. § 359.1 (f), or proh ibited indemnification payment as that term is defined at 12 C.F.R. § 359.1 (I), unless. with respect to each such payment, the Association has complied with the requirements of 12 C.F .R. Part 359 and. as to indemnification payments. 12 C.f.R. §545.11L

E. Capital Distributions. Effective immediately, the Association shall pay no

div idends or make any other capital distributions. as that term is defined in 12 c.r.s. § 563.14 I, without receiving the prior written approval of the Regional Director. The

Association-s written request for such approval should he suhmiued to the Rcg ionalDirector

at leas! forty-five (45) days prior to the anticipated date ofthe proposed dividend payment or distribution of capital:

10

F. Transactions with A fII Iiares. Effective immediate ly. the Associai ion shal J

provide written notification to the Regional Director at least thirty (30) days prior to entering into any transaction which would constitute a "covered transaction" as thai term is defined at

12 CF.R. ~ 223.3(h) with an "affiliate" as that term is defined at 12 CF.R. § 223.2. The transactions subject to this restriction also include, but are nOI limited to. those described in

J 2 Cr.R. § 223.52. The written notice required herein shall ( I) identify all the parties 10 the proposed transaction. (2) contain a full factual description ofthe proposed transaction. and (3) shall set forth the reasoning for entering inio such transaction. In the event nowritten objection is raised by the Regional Director during the thirty (30) day notice period, the Association may proceed with the rransaction.

G. Payment Option Adjustable Rate Mortgage and Stated Income Lending. The

Association shall not resume Payment Option Adjustable Rate Mortgage (Option-ARM) or Stated Income lending.

IX. Effectiye Date, lo(;orpora tiOD of Stipulation

This Order is effective on the Effective Date as shown on the first page. The Stipulation is made a part hereof and is Incorporated herein by this reference.

X. Duration

Th is Order shall remain in effect unti I terminated. modified or suspended; by written notice of such action by the Regional Director, or an OTS authorized representative.

XL Time Calcul:'ltions

A. Calculation of time limitations for cornphance with the terms of this Order run

from the Effective Date of this Order and shall be calendar based. unless otherwise noted.

II

·'

B. The. Regional Director. or an OTS authorized representative, may extend any

of the deadlines set forth in the provisions of this Order upon written request bv the

. . -

Association that includes reasons in support for any such extension, Any OTS extension

shall be made in wriring.

XlI. Submissjons and Notices

A. A II submissions. including progress reports. to the OTS that are requ ired by or

contemplated by this Order shall be submitted within the specified tirneframes.

B. Except as otherwise provided herein. all submissions, requests.

communications. consents or other documents relating to th is Order shall be in writing and

sent by first class U.s mail (or by reputable overnight carrier. electronic facsimile

12

transmission or hand delivery by messenger) addressed as. follows:

Darrel Dochow. Regional Director \Vest Region

Office of Thrift Supervision 200 I Junipero Serra Blvd. Daly City. CA 94014-3897

Timothy J. Lane. Assistant Director West Region

Office of TnTi fl. Supervision 1551 N. Tustin Ave.. Suite 1050 Santa Ana. CJ\ 92705

XIII. No Violations AIIthQrizeti

Nothing in rhis Order or the Stipulation shall be construed as allowing the

Association, its Board, officers or employees to violate any law. rule, or regulation ..

IT IS SO ORDERED.

OFFICE OF THRIFT SUPERVISION

By: Is!

DARREL W. DOCHOW Regional Director, West Region

Date: See Effective Date on page J

JJ

"6"

STIPULATION AND CONSENT TO CEASE AND DESIST

• •• ~ ... ..::. .. ----- •• ~;'; •• - -·....;.;-'-....:.-~·-~~·c

UNITED STATES OF AMERICA Before The

OFFICE OFTHRIFT SVPERVISION

In the Matter of

) } ) ) ) ) ) ) )

Order No.: .. WEe08-012

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

DOWNEY SA VINGS AND LOAN ASSOCIATION, F.A.,

Newport Beach. California

E ffeci i ve Date: __ -,So:;ee.cp,-"Ie"_,ll.:..:l-"Obe",,f,-,),,-,- 'c,.!2:::,O~O~8 __

O1'S Docket No.: 06189

STIPULATION AND CONSENT

TO lSSUANCE OF ORDER TO CEASE AND DESIST

WHEREAS. the Office of Thrift Supervision (OTS). acting by and through its Regional

Director for the West Region (Regional Director). and based upon information derived from the

exercise of irs regulatory and supcrv isory responsibili lies. has informed Downey Savings and

Loan Association, F.A., Newport Beach. California, OTS Docket No. 06189 (Association), that

the OTS is ofthe opinion that grounds exist to initiate an administrative proceeding againstthe

Association pursuant ro 12 USc. § 1818(b):

WHEREAS, the Regional Director. pursuant to delegated authority, is authorized to

issue Orders to Cease and Desist where a savings association has consented to the issuance of an

order: and

\VHEREAS. the Association desires to cooperate with the OTS to avoid the time and

expense of such administrative cease and desist proceedings by entering into this Stipulation and

Consent to the Issuance of Order To Cease and Desist (Stipulation) and, without admitting or .

denying that such grounds ex ist. bur only adrnining the STatements and conclusions in 'iiI below

concerning Jurisdiction. hereby stipulates and agrees to the following terms:

1. Juris'diction.

a. The Association is a "savings association" within the meaning of 12 USc. §

! 81 3(b) and 12 USc. § 1462(4}. Accordingly. the Association is "an insured depository

institution" as that term is defined in 12 USc. § IS l3(c): and

b. Pursuant to 12 U.sc. 0 I 813(q)( 4). the Director of the OTS is the_'_-appropriate

Federal banking agency" with jurisdiction to maintain an administrative enforcement proceeding

against a savings association. Therefore. the Association is subject to the authority of the OTS to

initiate and maintain an administrative cease-and-desist proceeding against it pursuant to 12

usc. § 18J8(b){I) and (b)(9).

2" OTSFindiilgs of Fact.

Based on findings set forth in the Report of Examination of the Association issued on

July 30. 200~" the OTS finds that the Association has engaged in unsa re and unsound practices.

Specifically, the asset quality. earnings, liquidity planning, management. and projected capital

levels of the Association are not satisfactory and require strengthening.

3. Consent.

The A ssociation consents fO the issuance by the OTS of the accompanying Order to

Cease and Desist (Order). The Association further agrees 10 comply with the terms of the Order

upon the Effective Dare of the Order and stipulates (hat the Order complies with all requirements

of Jaw.

2

4. Finality.

The Order is issued by the OTS under 12 USc. ~ 18 i8(b) and upon the Effective Date it

shall be a final order, effective and fully enforceable by [he OTS underthe provisions of 1:2

u.s.c. § 1818(i).

5. Waivers.

The Association waives the following;

a. The fight to be served with a written noticeof the OTS's charges against it as

provided by 12 USc. § 1818(b)and 12 CF.R. Part 509;

b. The right to an administrative hearing of'theO'Tx's charges as provided by 12

usc. § 1818(b) and 12 C.F.R. Part 509:

c. The right to.seek judicial review of the Order. including, without limitation. any

such fight provided by 12 USc. ~ 1818(h). or otherwise to challenge the validity of the Order:

and

d. Any and all claims against the OTS. including irs employees and agents. and any

other governmental entity for the award of fees, costs. or expenses related to this OTS

enforcement matter and/or the Order, whether arising under common law, federal statures or

otherwise.

6. OTS Aulbo.r:itv Not Affected.

Nothing in this Stipulation or accompanying Order shall inhibit. estop, bar or otherwise

prevent the OTS from taking any other action affecting the Association ifat any time the OTS

deems it appropriate to do so to fulfill {he responsibilities placed upon the OTS by law.

3

7. Other Governmental Actions No! Affected.

The Association acknowledges and agrees that its consent to the issuance of rile Order is solely for the purpose of resolving the matters addressed herein. consistent with ~6 above, and does not otherwise release, discharge, compromise, settle, dismiss. resolve. or in any way affect any actions. charges against. or liabi lit)' of the Association that arise pursuant to this action or otherwise, and that may be or have been hroughtby any governmental entuy other than the O:rS_

8. Miscellaneous.

a. The laws of tile United States of America shall govern the construction and validity

of this Stipulation and of the Order:

b. If any provision of this Stipulation and/or the Order is ruled to be invalid, illegal, or

unenforceable by the decision of any Court of competent jurisdiction. the validity, legality, and enforceability of the remaining provisions hereof shall not in any way be affected or Impaired thereby, unless the Regional Director in his or her sole discretion determines otherwise;

c. All references 10 the OTS in this Stipulation and the Order shall also mean any of

the OTS's predecessors, successors, and assigns:

d_ The section and paragraph headings in this Stipulation and the Order are for

convenience only and shall not affect the interpretation of this Stipulation Or (he Order:

e. The terms of this Stipu lation and of the Order represent the final agreement of the

parties with respect to the subject matters thereof. and constitute the sole agreement of the parties with respect to such subject matters: and

4

;"" ".~

f. The Stipulation and Order.shall remain in effect until terminated. modified, or

suspended in writing by the OTS. acting through its Regional Director or other authorized.

representative.

9. Sigilature ofDirectors/Bo~rd Resolution.

Each Director signing this Stipulation attests Ihal he or she voted in favor of a Board

Resolution authorizing the consent of the Association 10 [he issuance of the Order and (he

execution of the Stipulation.

WHEREFORE, the Association. by its Directors, executes this Stipulation.

Accepted by:

DOWNEY SA VINGS

AND LOAN ASSOCIATION, F.A. Newport Beach, Californta

OFFICE OF THRIFT SUPERVISrON

By:

Michael D. Bozarth Chairman of the Board

isl

By:

lsi

Darrel W. Dochow

Regional Director, Wes! Region

Dale: See Effective Date on page r

Gary W. Brummell

lsi

Is!

Brent G. McQuarrie

lsi

lsI

Paul M. Homan

I A~SH:r C. Smull

Is!

Is!

Michael Abrahams

Jane Wolfe

Is/

lsi

James H. Hunter

Thomas E. Prince"

5

AFFIDAVIT OF FDIC

I HE;REBS"·GERIIFY. THis TO BE JI. TRUE ~ND'EXACT

Cop.vO(iF "E R{ ~.' 'i_ . .

OalOO:._· .,...-,I;J.,.,j-~-!"-I--:-:::-""'""" U.S.8ankNa

8y

Name :4~{!IJ~htY-~'-":?:::;"';T---

Steven A. Carr

Rec.eWer.i..l.Gharge for Fmc :,!S. . "' ":.,

Receiver for Downey Savings and Loan Association, F.A.

II

I

RECORDING REQUESTED BY

U.S. Bank National Association

WHEN RECORDED MAil TO:

UK Bank National Association Attn: Compliance

3121 Michelson Drive, 5th Floor Irvine, CA 92612

SPACE ABOVE THIS LINE FOR RECORDER'S USE

A:FFIDAVlT -OF-TilE

FEDERAL DEPOSIT INSURANCE CORPORATION

I, Steven A Carr, having been first duly sworn, hereby make this Affidavit and state that:

. . .

1. I am an authorized representative of the Federal Deposit .Insurance Corporation (,'FDJ C"), an

agency ofthe United States government. '.' . . . '.'

2. On November 21, 2008, Downey Savings and Loan Association, F.A. ("Downey Savings") was closed by the Office of Thrift Sllpe.rviskm and the FDIC was appointed as receiver.

3. As authorized by Section 11(d)(2)(G)(j)(lI) of the Federal Deposit Insurance Act, 12 U.S.C.

Section1821{d)(2)(G}(i)(II), the FDIC as receiver fer-Downey Savings may transfer any asset or liability ofDowney Savings without any approval, assignment or consent with respect to such transfer.

4. Pursuant to the terms and conditions of a Purchase and Assumption Agreement between the FDIC as receiver for Downey Savings and U:S. Balik National Association (,'U"S,· Bank"), dated November 21, 2008 ("Purchase and Assumption Agreement'), U.S. Bank acquired certain of the assets, including all loans and all loan commitments, of Downey Savings.

5. As a result, on November 21, 2008 U.S. Bank became the owner of the loans and loan commitments of Downey Savings by operation of.law.

Executed thisb?Jday of October 2009 at Dallas, Texas.

Signature:~~;Jt ~ ff\\U~

My comm~on expires: ~6f1ii£i I My Commission number:

-----------------

ri,··rUtJ

1~~~w.~:'.!.~.~~ ... DEf!ORAH KAY MILLER '( *r· . \ .. \ NOTARY PUBLIC

'. '.. . /~; Slale 01 ToUls

.">. ..... ~'

.... ~?!~ Cornm. Exp. 03-28·2011

STATE OF TEXAS )

) ss.

COUNTY OF DALLAS )

On 1)ctnbt.r .ii,J.QOOjbefore me, o.k. K H il personall~ appeared Steven A Carr, who proved to me orl the basis of satisfactory evidence 0 be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capac:lty(ies), and that by hislher/tbeir signaturefs) on the instrument, the person(s), OJ the entity upon behalf of which theperson(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the Slate of Texas thai the foregoing paragraph is true and COrrect.

wrr:r:\rnSSmy hand and official seat

(Seal or Stamp)

"8"

PURCHASE AND ASSUMPTION AGREEMENT

PURCHASE AND ASSUMPTION AGREEMENT

WHOLE BANK

ALL DEPOSITS

AMONG

FEDERAL DEPOSIT INSURANCE CORPORATION, RECEIVER OF DOWNEY SAVINGS AND LOAN ASSOCIATION, F.A., NEWPORT BEACH, CALIFORNIA

FEDERAL DEPOSIT INSURANCE CORPORATION

and

U. S. BANK NATIONAL ASSOCIA nON

DATED AS OF

NOVEMBER 2],2008

Whole P & A 991022 November 16.2008,12:54 PM

Downey Federal Savings and Loan Association, FA

Newport Beach, California

ARTICLE I

ARTICLE]]

2.1 2.2 2.3 2.4

ARTICLKJlJ

3.1 3.2 3.3

ARTICLE IV

4.1 4.2 4.3 4.4 4.5 4.6 4.7

4.8

4.9 4.10 4.11 4.12

4.13

Wnoie P &: A 99i022 November

TABLE OF CONTENTS

DEFINITIONS ......................•..................................................................... 2

ASSUMPT10N OF L1ABILITJES 8

Liabi lilies Assumed by Assuming Bank 8

Interest on Deposit Liabilities 9

Unclaimed Deposits 1 0

Employee Plans 1 0

£URCHASE_1lE_ASSETS ..................•................•....•.............................. 10

Assets Purchased by Assuming Bank 10

Asset Purchase Price .. , 10

Manner of Conveyance; Limited Warranty;

Nonrecourse; Etc 11

Puts of Assetsto the Receiver.. 11

Assets Not Purchased by Assuming Bank 13

Assets Essential to Receiver ] 4

ASSUMPTION OF CERTAIN DUTIES AND OBLIGATIONS JS

Continuation of Banking Business , 15

Agreement WJili Respect to Credit Card Business 15

Agreement with Respect to Safe Deposit Business 16

Agreement with Respect to Safekeeping Business 16

Agreement with Respect to Trust Business J 6

Agreement with Respect to Bank Premises 16

Agreement with Respect to Leased Data

Processing Equipment 19

Agreement with Respect to Certain

Existing Agreements .20

Informational Tax Reporting 20

Insurance 2 J

Office Space for Receiver and Corporation 21

Agreement with Respect to Continuation of Group

Health Plan Coverage for Fonner Employees .2]

Agreement with Respect to Interim Asset Servicing , 22

II

Downev Federal Savings and loan Association. FA

ARTICLE V

5.1 5.2 5.3

ARTICLE VI

6.1 6.2 6.3 6.4

ARTICLE VIJ

ARTICLE V))I

ARTICLE IX

9.1 9.2 9.3 9.4 9.5 9.6

9.7

ARTICLE X

ARTICLE Xl

ARTICLE X))

] 2. I ]2.2 ]23 ]2.4 12.5 ]2.6 12.7 ]2.8

ARTICLE XIII

whole P& A 99i022 November

DUTIES WITH RESPECT TO DEPOSITORS

OF TllE FAILED BANK 22

Payment of Checks, Drafts and Orders 22

Certain Agreements Related to Deposits ; 22

Notice to Depositors 22

RE'CORDS 23

T ransfer of Records 23

Delivery of Assigned Records 24

Preservation of Records 24

Access to Records; Copies ;24

BID AM.OUNT 24

PROFORMA 25

CONTINUING COOP ERA TION 25

General Matters; ; 25

Additional Title Documents 25

Claims and Suits ; 25

Payment of Deposits 26

Withheld Payments 26

Proceedings with Respect to Certain Assets

and Liabilities 26

Information 27

CONDITION PRE'CEDENT 27

REPRESENTATIONS AND W ARRANTlES OF THE

ASSU·MIN·G BANK 27

INDEM:NIF1CA TION 28

Indemnification of lndernnitees .28

Conditions Precedent to Indemnification 3]

No Additiona) Warranty 32

Indemnification of Corporation and Receiver .32

Obligations Supplemental .32

Criminal Claims 33

Limited Guaranty of the Corporation .33

Subrogation 33

MISCELLANEOUS 33

JJJ

Downey Federal Savings and Loan Association.F A

J 3 _ J Entire Agreement . .. - . 33

J 3 _2 Headings . . . .33

J 3 _3 Counterparts . ... , ._. .34

J 3 _4 Governing Law . . . . . , 34

J 3 _5 Successors -- -- . __ . . . . __ . . 34

13_6 Modification; Assignment . . 34

J 3 _7 Notice . 34

13 _8 Manner of Payment . .35

13_9 Costs, Fees and Expenses . 35

J 3 .l 0 Waiver 35

13.11 Severability .35

J 3_ J 2 Term of Agreement. -- - . . .36

13_ J 3 Survival of Covenants, Etc . . .36

SCHEDULES

2_ J

3_1 3_2 3_5(k)

Certain Liabilities Assumed -_. , .38

Certain Assets Purchased --- , __ .39

Purchase Price of Assets or Assets . . .. .41

Securities Not Purchased .. . .. _. . .. .43

EXHIBITS

3_2(c) 4.13

Valuation of Certain Qualified Financial Contracts , .44

Interim Asset Servicing Arrangement . .46

\Vho]e P & A 991022

IV

Downey Federal Savings and Loan Association, FA

November

PURCHASE AND ASSUMPTION AGREEMENT

WHOLE BANK

ALL DEPOSITS

THIS AGREEMENT, made and entered into as of the 21 st day of November, 2008, by and among the FEDERAL DEPOSIT INSURANCE CORPORATION, RECEIVER of DOWNEY SAVINGS AND LOAN ASSOCIATION, F.A., NEWPORT BEACH, CALIFORNIA (the "Receiver"), U. S. BANK NATIONAL ASSOCIATION, organized under the laws of the United States of America, and having-itsprincipal-p+ace of business in Minneapolis, Minnesota (the" Assuming Bank"), and the FEDERAL DEPOSIT INSURANCE CORPORA TION, organized under the laws of the United States of A merica and having its principal office in Washington, D.C., acting in its corporate capacity (the "Corporation").

WITNESSETH: .

WHEREAS, on Bank Closing, the Chartering Authority closed Powney Savings and Loan Association, FA (the "Failed Bank") pursuant to applicable law and the Corporation was appointed Receiver thereof; and

WHEREAS, the Assuming Bank desires to purchase certain assets and assume certain deposit and ether liabilities of the Failed Bank on the terms and conditions set forth in this Agreement; and

WHEREAS, pursuant to ]2 USc. Section 182J(c)(2)(A), the Corporation may provide assistance to the Assuming Bank to facilitate the transactions contemplated by this Agreement, which assistance may include indemnification pursuant to Article XlI; and

WHEREAS, the Board of Directors of the Corporation (the "Board") has determined to provide assistance to the Assuming Bank on the terms and subject to the conditions set forth in this Agreement; and

WHEREAS, the Board has determined pursuant to ] 2 U .S.C. Section 1823(c)( 4 )(A) that such assistance is necessary to meet the obligation of the Corporation to provide insurance coverage for the insured deposits in the Failed Bank and is the least costly to the deposit insurance fund of all possible methods for meeting such obligation.

NOW THEREFORE, in consideration of the mutual promises herein set forth and other valuable consideration, the parties hereto agree as follows:

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Downey Federal Savings and Loan Association, FA Newport Beach, California

ARTICLE] DEFINITIONS

Capitalized terms used in this Agreement shall have the meanings set forth in this Article I, or elsewhere in this Agreement As used herein, words imparting the singular include the plural and vice versa.

"Accounting Records" means the general ledger and subsidiary ledgers and supporting schedules which support the general ledger balances.

"Acquired Subsidiaries" means Subsidiaries of the Failed Bank acquired pursuant to Section 3.].

"Adversely Classified" means, with respect to any Loan or security, a Loan or security which, as of the dale of the Information Package, has been designated in the most recent report of examination as "SUbstandard," "Doubtful" or "Loss" by the Failed Bank's appropriate Federal or State Chartering Authority or regulator.

.. Affiliate" of any Person means any director, officer, or employee of that Person and any other Person (i) who is directly or indirectly controlling, or controlled by, or under direct or indirect common control with, such Person, or (ii) who is an affiliate of such Person as the term "affiliate" is defined in Section 2 of the Bank Holding Company Act of 1956, as amended, 12 U.S.C Section 184].

"Agreement" means this Purchase and Assumption Agreement by and among the Assuming Bank, the Corporation and the Receiver, as amended or otherwise modified from time to time.

"Assets" means all assets of the Failed Bank purchased pursuant to Section 3 .1.

Assets owned by Subsidiaries of the Failed Bank are not "Assets" within the meaning of this definition.

"Assumed Deposits" means Deposits.

ItBankClosingtl means the close of business of the Failed Bank on the date on which the Chartering Authority closed such institution.

"Balik Premises" means the banking houses, drive-in banking facilities, and teller facilities (staffed or automated) together with appurtenant parking, storage and service facilities and structures connecting remote facilities to banking houses, and land on which the foregoing are located, that are owned or leased by the Failed Bank and that are occupied by the Failed Bank as of Bank Closing.

"Bid Amount" has the meaning provided in Article V]].

"Book Value" means, with respect to any Asset and any Liability Assumed, the dollar amount thereofstated on the Accounting Records of the Failed Bank. The Book Value of

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Downev Federal Savings and loan Association, FA Newport Beach, California

any item shall be determined as of Bank Closing after adjustments made by the Receiver for differences in accounts, suspense items, unposted debits and credits, and other similar adjustments or corrections and for setoffs, whether voluntary or involuntary _ The Book Value of a Subsidiary of the Failed Bank acquired by the Assuming Bank shall be determined from the investment in subsidiary and related accounts on the "bank only" (unconsolidated) balance sheet of the Failed Bank based on the equity method of accounting. Without limiting the generality of the foregoing, (i) the Book Value of a Liability Assumed shall include all accrued and unpaid interest thereon as of Bank Closing, and (ii) the Book Value of a Loan shall reflect adjustments for earned interest, or unearned interest (as it relates to the "rule of 78s" or add-on-interest loans, as applicable), if any, as of Bank Closing, adjustments for the portion of earned or unearned loan-related credit life and/or disability insurance premiums, if any, attributable to the Failed Bank as of Bank Closing, and adjustments for Failed Bank Advances. if any, in each case as determined for financial reporting purposes. The Book Value of an Asset shall not include any adjustment for loan premiums, discounts or any related deferred income or fees, or general or specific reserves on the Accounting Records of the Failed Bank.

"Business Day" means a day other than a Saturday, Sunday, Federal legal holiday or legal holiday under the laws of the State where the Failed Bank is located, or a day on which the principal office of the Corporation is closed.

"Cbarlering Autbority" means (i) with respect to a national bank, the Office of the Comptroller ofthe Currency, (ii) with respect to a Federal savings association or savings bank, the Office of Thrift Supervision, (iii) with respect to a bank or savings institution chartered by a Stale, the agency of such Stale charged with primary responsibility for regulating and/or closing banks or savings institutions, as the case may be, (iv) the Corporation in accordance with 12 U _S_C_ Section 1821(c), with regard to self appointment, or (v) the appropriate Federal banking agency in accordance with 12 U.S.c. ] 82] (c)(9)_

"Commitmtltf" means the unfunded portion of a line of credit or other commitment reflected on the books and records of the Failed Bank to make an extension of credit (or additional advances with respect to a Loan) that was legally binding on the Failed Bank as of Bank Closing, other than extensions of credit pursuant to the credit card business and overdraft protection plans of the Failed Bank, ifany.

"Credit DQCUlile·nts" mean the agreements, instruments; certificates or other documents at any time evidencing or otherwise relating to, govemingor executed in connection with or as security for, a Loan, including without limitation notes, bonds, Joan agreements, letter of credit applications, lease financing contracts, banker's acceptances, drafts, interest protection agreements, currency exchange agreements, repurchase agreements, reverse repurchase agreements, guarantees, deeds of trust, mortgages, assignments, security agreements, pledges, subordination or priority agreements, lien priority agreements, undertakings, security instruments, certificates, documents, legal opinions, participation agreements and intercreditor agreements, and all amendments, modifications, renewals, extensions, rearrangements, and substitutions with respect to any of the foregoing.

"Credit File" means all Credit Documents and all other credit collateral, or insurance documents in the possession or custody of the Assuming Bank, or any of its

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Downey Federal Savings and Loan Association, fA Newport Beach, California

Subsidiaries or Affiliates, relating to an Asset or a Loan included in a Put Notice, or copies of any thereof.

"Data Processing Lease" means any lease or licensing agreement, binding on the Failed Bank as of Bank Closing, the subject of which is data processing equipment or computer hardware or software used in connection with data processing activities. A lease or licensing agreement for computer software used in connection with data processing activities shall constitute a Data Processing Lease regardless of whether such lease Of licensing agreement also covers data processing equipment.

"Deposit" means a deposit as defined in ] 2 USc. Section 1813(1), including without limitation, outstanding cashier's checks and other official checks and all uncollected items included in the depositors' balances and credited on the books and records of the Failed Bank; provided, tbat the term "Deposit" shall not include all or any portion of those deposit balances which, in the discretion of the Receiver or the Corporation, (i) may be required to satisfy it for any liquidated or contingent liability of any depositor arising from an unauthorized or unlawful transaction, or (ii) may be needed to provide payment of any liability of any depositor to the Failed Bank or the Receiver, including the liability of any depositor as a director or officer of the Failed Bank, whether or not the amount of the liability is or can be determined as of Bank Closing.

"Failed Bank Advances" means the total sums paid by the Failed Bank to (i) protect its lien position, (ii) pay ad valorem taxes and hazard insurance, and (iii) pay credit life insurance, accident and health insurance, and vendor's single interest insurance.

"Fair Market Value" means (i)(3) "Market Value" as defined in the regulation prescribing the standards for real estate appraisals used in federally related transactions, ] 2

C.F .R. § 3232(g),and accordingly shall mean the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

(1) Buyer and seller are typically motivated;

(2) Both parties are well informed or well advised, and acting in what they consider their own best interests;

(3) A reasonable time is allowed for exposure in the open market:

(4) Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and

(5) The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale;

as determined as of Bank Closing by an appraiser mutually acceptable to the Receiver and the Assuming Bank; any costs and fees associated with such determination shall be shared equally by the Receiver and the Assuming Bank, and (b) which, with respect to Bank Premises (to the extent, if any, that Bank Premises are purchased utilizing this valuation method), shall be determined not later than sixty (60) days after Bank Closing by an appraiser selected by the

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Downey Federal Savings and Loan Association, FA Newport Beach, California

Receiver and the A ssuming Bank within seven (7) days after Bank C losing: or (ii) with respect to property other than Bank Premises purchased utilizing this valuation method, the price therefore as established by the Receiver and agreed to by the Assuming Bank, or in the absence of such agreement, as determined in accordance with clause (i)(a) above.

"Fixtures" means those leasehold improvements, additions, alterations and installations constituting all or a part of Bank Premises and which were acquired, added, buill, installed or purchased at the expense of the Failed Bank, regardless of the holder of legal title thereto as of Bank Closing.

"Furnjture and Equipment" means the furniture and equipment (other than Safe Deposit Boxes, artwork, motor vehicles, and leased data processing equipment, including hardware and software), leased or owned by the Failed Bank and reflected on the books of the Failed Bank as of Bank Closing, including without limitation automated teller machines, carpeting, furniture, office machinery (includingpersonal computers), shelving, office supplies, telephone, surveillance and security systems, artwork, and motor vehicles (Which motor vehicles shall be deemed located at Bank Premises owned by the Failed Bank).

"Indemnitees" means, except as provided in paragraph (k) of Section 12. ) , (i) the Assuming Bank, (ii) the Subsidiaries and Affiliates of the Assuming Bank other than any Subsidiaries or Affiliates of the Failed Bank that are or become Subsidiaries or Affiliates of the Assuming Bank, and (iii) the directors, officers, employees and agents of the Assuming Bank and its Subsidiaries and Affiliates who are not also present or former directors, officers, employees or agents of the Failed Bank or of any Subsidiary or Affiliate of the Failed Bank.

"lufurm.alioll Packa;ge" means the compilation of financial and other data with respect to the Failed Bank entitled "Information Package," as of October 31,2008, and any amendments or supplements thereto provided to the Assuming Bank by the Corporation.

"Legal Balan.ce" means the amount of indebtedness legally owed by an Obligor with respect to a Loan, induding principal and accrued and unpaid interest late fees, attorneys' fees and expenses, taxes, insurance premiums, and similar charges, if any.

"Liabilities Assumed" has the meaning provided in Section 2.1.

"Lien" means any mortgage, lien, pledge, charge, assignment for security purposes, security interest or encumbrance of any kind with respect to an Asset, including any conditional sale agreement or capital lease or other title retention agreement relating to such Asset.

"Loans" means all of the following owed to or held by the Failed Bank as of Bank Closing:

(i) loans (including loans which have been charged offthe Accounting

Records of the Failed Bank in whole or in part prior to the date of the Information Package), participation agreements, interests in participations, overdrafts of customers (including but not limited to overdrafts made pursuant to an overdraft protection plan or similar extensions of credit in connection with a deposit account), revolving commercial lines of credit, home equity Ji nes of

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Downey Federal Savings and Loan Assoc iarion, FA Newport Beach, California

credit. Commitments, United States and/or State-guaranteed student loans, and lease financing contracts:

(ii) all Liens, rights (includingrights of set-off), remedies, powers, privileges,

demands, claims, priorities, equities and benefits owned or held by, or accruing or to accrue to or for the benefit of, the holder of the obligations Of instruments referred to in clause (i) above, including but not limited to those arising under or based upon Credit Documents, casualty insurance policies and binders, standby letters of credit, mortgagee title insurance policies and binders, payment bonds and performance bonds at any time and from time to time existing with respect to any of the obligations or instruments referred to in clause (i) above; and

(iii) all amendments, modifications, renewals, extensions, refinancings, and

refundings of or for any of the foregoing;

provided, thaI there shall be excluded from the definition of "Loans" loans recorded on the Accounting Records of the Failed Bank on "in substance foreclosure" status as of Bank Closing, and amounts owing under Qualified Financial Contracts.

"New Loans" means Loans made by the Failed Bank subsequent to the "as of' date of the Information Package that are not continuations, amendments, modifications,

renewals, extensions, refinancings, restructurings, or refundings of or for any then existing Loan.

"Obtig()r" means each Person liable for the full Or partial payment or performance of any Loan, whether such Person is obligated directly, indirectly, primarily, secondarily, jointly, or severally.

"Ofhe,r Real Estate" means all interests in real estate (other than Bank Premises and Fixtures) and 10:'))1s on "in substance foreclosure" statusas of Bank Closing as recorded on the Accounting Records of the Failed Bank, including but not limited to mineral rights, leasehold rights, condominium and cooperative interests, air fights and development rights that are owned by the Failed Bank.

"Person" means any individual, corporation, partnership, joint venture, association', joint-stock company, trust, unincorporated organization, or government or any agency or political subdivision thereof, excluding the Corporation.

"Primary Indemnitor" means any Person (other than the Assuming Bank or any of its Affiliates) who is obligated to indemnifY or insure, or otherwise make payments (including payments on account of claims made against) to or on behalf of any Person in connection with the claims covered under Ankle XJJ, including without limitation any insurer issuing any directors and officers liability policy or any Person issuing a financial institution bond or banker's blanket bond.

"Proforma" means producing a balance sheet that reflects a reasonably accurate financial statement of the Failed bank through the date of dosing. The Proforma financial statements serve as a basis for the opening entries of both th~ Assuming Bank and the Receiver.

"Put Date" has the meaning provided in Section 3.4.

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6

Downey Federal Savings ~nd Loan i1~S50ciatlon~ Fl\ Newport Beach, California

"Put Notice" has the meaning provided in Section 3.4.

"Qualified Financial Contract" means a qualified financial contract as defined in 12 U.S.c. Section 1821(e)(8)(D).

"Record" means any document, microfiche, microfilm and computer records (including but not limited to magnetic tape, disc storage, card forms and printed copy) ofthe Failed Bank generated or maintained by the Failed Bank that is owned by Or in the possession of the Receiver at Bank Closing.

"Related Liability" with respect to any Asset means any liability existing and reflected on the Accounting Records of the Failed Bank as of Bank Closing for (i) indebtedness secured by mortgages, deeds of trust, chattel mortgages, security interests or other liens on or affecting such Asset, (ii) ad valorem taxes applicable 10 such Asset and (iii) any other obligation determined by the Receiver to be directly related to such Asset.

"Related Liability Amount" with respect 10 any Related Liability on the books of the Assuming Bank, means the amount of such Related Liability as stated on the Accounting Records of the Assuming Bank (as maintained in accordance with generally accepted accounting principles) as of the dale as of which the Related Liability Amount is being determined. With respect to a liability that relates to more than one asset, the amount of such Related Liability shall be allocated among such assets for the purpose of determining the Related Liability Amount with respect to anyone of such assets. Such allocation shall be made by specific allocation, where determinable, and otherwise shall be pro rata based upon the dollar amount of such assets stated on the Accounting Records of the entity that owns such asset.

"llepu.I:cbaseRl'ice" means, with respect to any Loan the Book Value, adjusted to reflect changes to Book Value after Bank Closing, plus (ii) any advances and interest on such Loan after Bank Closing, minus (iii) the total of amounts received after the Buyer for such Loan, regardless of how applied, after Bank Closing, plus (iv) advances made by Buyer, plus (v) total disbursements of principal made by Seller that are not included in the Book Value.

"Risk Assets" means (i) all Loans purchased hereunder, excluding (a) New Loans and (b) Loans to the extent secured by Assumed Deposits (and not included in (i)(a), plus (ii) the Accrued Interest Receivable, Prepaid Expense, Other Assets as set forth in Schedu Ie 120 of the Information Package.

"Safe Deposit Boxes" means the safe deposit boxes of the Failed Bank, if any, including the removable safe deposit boxes and safe deposit stacks in the Failed Bank's vaultts), all rights and benefits {other than fees collected prior to Bank Closing) under rental agreements with respect to such safe deposit boxes, and all keys and combinations thereto.

"SeUlemeh·t Date" means the first Business Day immediately prior to the day which is one hundred eighty (180) days after Bank Closing, or such other date prior thereto as may be agreed upon by the Receiver and the Assuming Bank. The Receiver, in its discretion, may extend the Settlement Date.

Whole P & A 991022 November 21,2008, I ;;>:54 PM

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Downey Federal Savings and Loan Assoc.ialion, FA Newport Beach, California

"Settlement Interest Rate" means, for the first calendar quarter or portion thereof during which interest accrues, the rate determined by the Receiver to be equal to the equivalent coupon issue yield on twenty-six (26)-week United Stales Treasury Bills in effect as of Bank Closing as published in The Wall Street Journal; provided, that if no such equivalent coupon issue yield is available as of Bank Closing, the equivalent coupon issue yield for such Treasury Bills most recently published in The Wall Street Journal prior to Bank Closing shall be used, Thereafter, the rate shall be adjusted to the rate determined by the Receiver to be equal to the equivalent coupon issue yield on such Treasury Bills in effect as of the first day of each succeeding calendar quarter during which interest accrues as published in The Wall Street Journal.

"Subsidi.ary" has the meaning set forth in Section 3(w)(4) of the Federal Deposit Insurance Act 12 USC Section 1813(w)(4), as amended.

ARTICLE IJ ASSUMPTION OF LIABILlTlES

2.1 Liabilities Assumed by Assumin.g Bank. The Assuming Bank expressly

assumes at Book Value (subject to adjustment pursuant to Article VHJ) and agrees to pay, perform, and discharge all of the following liabilities of the Failed Bank as of Bank Closing, except as otherwise provided in this Agreement (such liabilities referred to as "Liabilities Assumed"):

(a) Assumed Deposits; provided, that as to any Deposits of public money which are Assumed Deposits, the Assuming Bank agrees to properly secure such Deposits with such of the Assets as appropriate which, prior to Bank Closing, were pledged as security therefor by the Failed Bank, or with assets of the Assuming Bank, if such securing Assets, if any, are insufficient to properly secure such Deposits;

(b) liabilities for indebtedness secured by mortgages, deeds of trust, chattel mortgages, security interests or other liens on or affecting any Assets, if any; provided, that the assumption of any liability pursuant to this paragraph shall be limited to the market value of the Assets securing such liability as determined by the Receiver;

(c) borrowings from Federal Reserve Banks and Federal Home Loan Banks, if any, provjded, that the assumption of any liability pursuant to this paragraph shall be limited to the market value of the assets securing such liability as determined by the Receiver; and overdrafts, debit balances, service charges, reclamations, and adjustments to accounts with the Federal Reserve Banks as reflected on the books and records of any such Federal Reserve Bank within ninety (90) days after Bank Closing, jf any;

(d) ad valorem taxes applicable to any Asset, if any; provided, that the assumption of any ad valorem taxes pursuant to this paragraph shall be limited to an amount equal to the market value of the Asset to which such taxes apply as determined by the Receiver;

Whole P & A 991022 Downey Federal Savings and Loan Association, FA

November 21. 2008.12:54 PM

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Newport Beach, Califomia

(e) liabilities, jf any, for federal funds purchased, repurchase agreements and overdrafts in accounts maintained with other depository institutions (including any accrued and unpaid interest thereon computed to and including Bank Closing); provided, that the assumption of any liability pursuant to this paragraph shall be limited to the market value of the Assets securing such liability as determined by the Receiver;

(1) United States Treasury tax and loan note option accounts, if any:

(g) liabilities for any acceptance or commercial Jetter of credit (other than "standby letters of credit" as defined in 12 C.F.R. Section 337.2(a»; provided, that the assumption of any liability pursuant to this paragraph shall be limited to the market value of the Assets securing such liability as determined by the Receiver;

(h) duties and obligations assumed pursuant to this Agreement.including.without limitation those relating to the Failed Bank's credit card business, overdraft protection plans, safe deposit business, safekeeping business or trust business, if any;

(i) liabilities, if any, for Commitments;

(j) liabilities, jf any, for amounts owed to any Subsidiary of the Failed Bank acquired under Section 3.];

(k) liabilities, if any, with respect to QuaJified Financial Contracts;

(I) duties and obligations under any contract pursuant to which the Failed Bank provides mortgage servicing for others, or mortgage servicing is provided to the Failed Bank by others; and

(m) unsecured liabilities, including (i) aJJ asset related offensive litigation liabilities

and (ii) all asset related defensive litigation liabilities, but only to the extent such liabilities are covered by any loss share agreement; but excluding all other defensive litigation liabilities which shall be retained by the Receiver.

Schedule 2. I attached hereto and incorporated herein sets forth certain categories of Liabilities Assumed and the aggregate Book Value of the Liabilities Assumed in such categories. Such schedule is based upon the best information available lathe Receiver and may be adjusted as provided in Article VIJ].

2.2 In te res t on D.eposit Liabilities. The Assuming Bank agrees that, from and after

Bank Closing, it will accrue and pay interest on Deposit liabilities assumed pursuant to Section 2.] at a ratefs) it shall delermjne;prOYided~ that for nOhtrahsaction Depositn~biljties such rate( s) shall not be less thanthe lowest rate offei:ed by the Assuming Bank to its depositors for nontransaction deposit accounts. The Assuming Bank shall permit each depositor to withdraw, without penalty for early withdrawal, all or any portion of such depositor's Deposit, whether or not the Assuming Bank elects to pay interest in accordance with any deposit agreement formerly existing between the Failed Bank and such depositor; and further provided, that if such Deposit

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Downey Federal Savings and Loan Association. FA Newport Beach, California

has been pledged to secure an obligation of the depositor or other party, any withdrawal thereof shall be subject to the terms of the agreement governing such pledge. The Assuming Bank shall give notice to such depositors as provided in Section 5.3 of the rate(s) of interest which it has determined to pay and of such withdrawal rights.

2.3 Unclaimed Deposits. If, within eighteen (18) months after Bank Closing, any

depositor of the Failed Bank does not claim or arrange to continue such depositor's Deposit assumed pursuant to Section 2.] at the Assuming Bank, the Assuming Bank shall, within fifteen (15) Business Days after the end of such eighteen ( J g)-month period, (i) refund to the Corporation the full amount of each such Deposit (without reduction for service charges), (ii) provide to the Corporation a schedule of all such refunded Deposits in such form as may be prescribed by the Corporation, and (iii) assign, transfer, convey and deliver to the Receiver all right, title and interest of the Assuming Bank in and to Records previously transferred to the Assuming Bank and other records generated or maintained by the Assuming Bank pertaining to such Deposits. During such eighteen (18}month period, at the request of tile Corporation, the Assuming Bank promptly shan provide to the Corporation schedules of unclaimed deposits in such form as may be prescribed by the Corporation.

2.4 Employee Plans. Except as provided in Section 4.]2, the Assuming Bank shall

have no liabilities, obligations or responsibilities under the Failed Bank's employment agreements, health care, bonus, vacation, pension, profit sharing or stock purchase plans or similar plans, if any, unless the Receiver and the Assuming Bank agree otherwise subsequent to the date of this Agreement.

ARTICLE 111 PURCHASE OF ASSETS

3.1 AssetsPuJ:cbased .... byAssumiJj.g.Ba-nk. Subject to Sections 3.5 and 3.6, the

Assuming Bank hereby purchases from the Receiver, and the Receiver hereby sells, assigns, transfers, conveys, and delivers 10 the Assuming Bank, all right, title, and interest of the Receiver in and to all of the assets (personal and mixed, wherever located and however acquired) of the Failed Bank whether or not reflected on the books of the Failed Bank as of Bank Closing, as set forth in Schedule J. J attached hereto and incorporated herein. Schedule 3.1 sets forth certain categories of Assets. Such schedule is based upon the best information available to the Receiver and may be adjusted as provided in Article VUJ. Assets are purchased hereunder by the Assuming BaTik SUbject to all liabilities for indebtedness collateralized by Liens affecting such Assets to the extent provided in Section 2.1.

3.2 Asset Purchase Price.

(a) All Assets and assets of the Failed Bank subject loan option to purchase by the

Assuming Bank shall be purchased for the amount, or the amount resulting from the method specified for cletermining the atJ)ouJjt~ as specifiecJ on Sqhedple 3.2, except as otherwise may be providedherein. Any Asset, asset of the Failed Bank subject to an option to purchase or other asset purchased for which no purchase price is specified on Schedule 3.2 or otherwise herein shall be purchased at its Book Value. Loans or other assets charged off the Accounting Records of the Failed Bank prior to the date of the lnformation Package shall be purchased at a price of zero.

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Downey Federal Savings and Loan Assoc iation, FA Newport Beach, Cahlornia

b) The purchase price for securities (other than the capital stock of any Acquired

Subsidiary) purchased under Section 3. J by the Assuming Bank shall be the market value thereof as of Bank Closing, which market value shall be (i) the "Mid/Last", or "Trade" (as applicable), market price for each such security quoted at the close of the trading day effective on Bank Closing as published electronically by Bloomberg. LP.; (ii) provided, that if such market price is not available for any such security, the Assuming Bank will submit a bid for each such security within three days of notification/bid request by the Receiver (unless a different time period is agreed to by the Assuming Bank and the Receiver) and the Receiver, in its sale discretion will accept or reject each such bid; and (iii) further provided iii the absence of an acceptable bid from the Assuming Bank, each such security shall not pass to the Assuming Bank and shall be deemed to be an excluded asset hereunder.

(c) Qualified Financial Contracts shall be purchased at market value determined in

accordance with the terms of Exhibit 3.2(c), Any costs associated with such valuation shall be shared equally by the Receiver and the Assuming Bank.

3.3 Manner of Conveyancc;Limited Wan3'uty; Nourecourse; Etc. THE

CONVEYANCE OF ALL ASSETS, INCLUDING REAL AND PERSONAL PROPERTY INTERESTS, PURCHASED BY THE ASSUMING BANK UNDER THJS AGREEMENT SHALL BE MADE, AS NECESSARY, BY RECE1VER'S DEED OR RECE]VER'S BILL OF SALE, "AS ]S", "WHERE IS", WITHOUT RECOURSE AND, EXCEPT AS OTHERWJSE SPECIFlCALL Y PROVIDE]) IN THIS AGREEMENT, W1THOUT ANY WARRANT]ES WHATSOEVER WITH RESPECT TO SUCB ASSETS, EXPRESS OR ]MPLlED, WITH RESPECT TO TITLE, ENFORCEABILITY, COLLE CTlBIU TY , DOCUMENT A nON OR FREEDOM FROM LIENS OR ENCUMBRANCES ON WHOLE OR IN PART), OR ANY OTHER MA TfERS.

3.4 Puts of Ass~ts to tbe Receiver.

(a) Puts Witbiu 14 and At 30 DaysAfter Bank Closing. During the fourteen (14)-

day period following BankC]osing and only during such period, in accordance with this Section 3.4, the Assuming Batik shall be entitled 10 require the Receiver to purchase any New Loan that was transferred to the Assuming Bank pursuant to Section 3.], and at the end of the thirty (30)day period following Bank Closing and at that time only, in accordance with this Section 3.4; the Assuming Bank shall be entitled to require the Receiver to purchase any remaining overdraft transferred to the Assuming Bank pursuant to 3. J which both was made after the "as of" date of the lnformationPackage and was not made pursuant to an overdraft protection plan or similar extension of credit. Notwithstanding the foregoing, the Assuming Bank shall not have the right to require the Receiver to purchase any Loan if (i) the Obligor with respect to such Loan is an Acquired Subsidiary, or (ii) the Assuming Bank has:

CA) made any advance in accordance with the terms of a Commitment or otherwise with respect to such Loan;

(B) taken any action that increased the amount of a Related Liability with respect to such Loan over the amount of such liability immediately prior to the time of such action:

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Downey Federal Savings and Loan Association, FA Newport Beach, California

(C) created or permitted to be created any Lien on such Loan which secures indebtedness for money borrowed or which constitutes a conditional sales agreement, capital lease or other title retention agreement;

(D) entered into, agreed to make, grant or permit, or made, granted or permitted any modification or amendment to, any waiver or extension with respect to, or any renewal, refinancing or refunding of, such Loan or related Credit Documents or collateral, including, without limitation, any act or omission which diminished such collateral; or

(E) sold, assigned or transferred all or a portion of such Loan to a third party (whether with or without recourse).

The Assuming Bank shall transfer all such Loans to the Receiver without recourse, and shall indemnify the Receiver against any and all claims of any Person claiming by, through or under the Assuming Bank with respect to any such Loan, as provided in Section 12.4.

(b) Puts Prior to the Settlement Date. During the period from Bank Closing to and

including the Business Day immediately preceding the Settlement Date, the Assuming Bank shall be entitled to require the Receiver to purchase any Asset which the Assuming Bank can establish is evidenced by forged or stolen instruments as of Bank Closing; provided, that; the Assuming Bank shall not have the right to require the Receiver to purchase any such Asset with respect to which the Assuming Bank has taken any action referred to in Section 3A(a)(jj) with respect to such Asset The Assuming Bank shall transfer aU such Assets to the Receiver without recourse, and shall indemnify the Receiver against any and all claims of any Person claiming by, through or under the Assuming Bank with respect to any such Asset, as provided in Section 12.4.

(c) Notices to the Receiver. In the event that the Assuming Bank elects to require

the Receiver to purchase one or more Assets, the Assuming Bank shall deliver to the Receiver a notice (a "Put Notice") which shall include:

(i) a list of all Assets that the Assuming Bank requires the Receiver to purchase;

(ii) a list of all Related Liabilities with respect to the Assets identified pursuant to (i) above; and

(iii) a statement of the estimated Repurchase Price of each Asset identified pursuant to (i) above as of the applicable Put Date.

Such notice shall be in the form prescribed by the Receiver or such other form to which the Receiver shall consent. As provided in Section 9,6, the Assuming Bank shall deliver to the Receiver such documents, Credit Files and such additional information relating to the subject matter of the Put Notice as the Receiver may request and shall provide to the Receiver ful1 access to all other relevant books and records.

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Downey Federal Savings and Loan Associetion, FA Newport Beach, California

(d) Purchase by Receiver. The Receiver shall purchase Loans that are specified in

the Put Notice and shall assume Related Liabilities with respect to such Loans, and the transfer of such Loans and Related Liabilities shall be effective as of a date determined by the Receiver which date shall not be later than thirty (30) days after receipt by the Receiver of the Credit Files with respect to such Loans (the "Put Date").

(e) PUTchasePrj~eandPayment Date. Each Loan purchased by the Receiver

pursuant to this Section 3.4 shall be purchased at a price equal to the Repurchase Price of such Loan less the Related Liability J\.il1ount applicable to such Loan, in each case determined as of the applicable Put Date. If the difference between such Repurchase Price and such Related Liability Amount is positive, then the Receiver shall pay to the Assuming Bank the amount of such difference; if the difference between such amounts is negative, then the Assuming Bank shall pay to the Receiver the amount of such difference, The Assuming Bank or the Receiver, as the case may be, shall pay the purchase price determined pursuant to this Section 3.4(e) not later than the twentieth (20th) Business Day following the applicable Put Date, together with interest on such amount at the Settlement Interest Rate for the periodfrom and""inCfuding such Put Date 10 and including the day preceding the date upon which payment is made.

(f) Servicing. The Assuming Bank shall administer and manage any Asset subject to

purchase by the Receiver in accordance with usual and prudent banking standards and business practices until such time as such Asset is purchased by the Receiver.

(g) Reversats. In the event that the Receiver purchases an Asset (and assumes the

Related Liability) that it is not required to purchase pursuant to this Section 3.4, the Assuming Bank shall repurchase such Asset (and assume such Related Liability) from the Receiver at a price computed so as to achieve the same economic result as would apply if the Receiver had never purchased such Asset pursuant 10 this Section 3.4.

3.5 Assets NotPJ.I'rchasedby AsStimJng Bank. The Assuming Bank does not

purchase, acquire or assume, or (except as otherwise expressly provided in this Agreement) obtain an option to purchase, acquire or assume under this Agreement:

(a) any financial institution bonds, banker's blanket bonds, or public liability, fire, or

extended coverage insurance policy or any other insurance policy of the Failed Bank, or premium refund, unearned premium derived from cancellation, or any proceeds payable with respect to any of the foregoing;

(b) any interest, right, action, claim, or judgment against 0) any officer, director,

employee, accountant, attorney, or any other Person employed or retained by the Failed Bank or any Subsidiary of the Failed Bank onor prior to Bank Closing arising out of any act or omission of such Person in such capacity, (ii) any underwriter of financial institution bonds, banker's blanket bonds or any other insurance policy of the Failed Bank, (iii) any shareholder or holding company of the Failed Bank, or (iv) any other Person whose action or inaction may be related to any loss (exclusive of any loss resulting from such Person'S fajluie, tbpay on a Loan made by the Failed Bank) incurred by the Failed Bank; provided, that for the purposes hereof, the acts, omissions or other events giving rise to any such claim shall have occurred on or before Bank Closing, regardless of when any such claim is discovered and regardless of whether any such

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Downey Federal Savings and Loan Association, FA Newport Beach. Califomia

Whole P & A 991022

claim is made with respect to a financial institution bond, banker's blanket bond, or any other insurance policy of the Failed Bank in force as of Bank Closing;

(c) prepaid regulatory assessments of the Failed Bank, if any;

(d) legal or equitable interests in tax receivables of the F ai led Bank, if any, including

any claims arising as a result of the Failed Bank having entered into any agreement or otherwise being joined with another Person with respect to the filing of tax returns or the payment of taxes;

(e) omitted

(1) amounts reflected on the Accounting Records of the Failed Bank as of Bank

Closing as a general or specific loss reserve or contingency account, if any;

(g) leased or owned Bank Premises and leased Or owned Furniture and Equipment

and Fixtures and data processing equipment (including hardware and software) located on leased or owned Bank Premises, if any; provided, that the Assuming Bank does obtain an option under Section 4.6, Section 4.7 or Section 4.8, as the case may be, with respect thereto;

(h) owned Bank Premises which the Receiver, in its discretion, determines may

contain environmentally hazardous substances;

(i) any "goodwill," as such term is defined in the instructions to the report of

condition prepared by banks examined by the Corporation in accordance with 12 C.F.R. Section 304.4, and other intangibles;

(j) any criminal/restitution orders issued in favor of the Failed Bank;

(k) any security if, in the discretion of the Receiver, the value of such security either

cannot be determined or is determined to be zero pursuant to Section 3.2(b), and any security listed on Schedule 3.S(k), if any;

(It. Other Real Estate; and

(m) single family residence loans.

3.6 Assets Essential to R'ec.eiver.

(a) The Receiver may refuse to sell to the Assuming Bank, or the Assuming Bank

agrees, at the request of the Receiver set forth in a written notice to the Assuming Bank, to assign, transfer, convey, and deliver to the Receiverall of the Assuming Bank's right, title and interest in and to, any Asset or asset essential to the Receiver as determined by the Receiver in its discretion (together with all Credit Documents evidencing or pertaining thereto), which may include any Asset or asset that the Receiver determines to be:

(i) made to an officer, director, or other Person engaging in the affairs of the Failed Bank, its Subsidiaries or Affiliates or any related entities of any of the foregoing;

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Downey Federal Savings and Loan Association, FA Newport Beach, California

(ii) the subject of any investigation relating to any claim with respect to any item described in Section 3.5(a) or (b), or the subject of, or potentially the subject of, any legal proceedings;

(iii) made to a Person who is an Obligor on a loan owned by the Receiver or the Corporation in its corporate capacity or its capacity as receiver of any institution:

(iv) secured by collateral which also secures any asset owned by the Receiver: or

(v) related to any asset of the Failed Bank not purchased by the Assuming Bank under this Article m or any liability of the Failed Bank not assumed by the Assuming Bank under Article ll.

(b) Each such Asset or asset purchased by the Receiver shall be purchased at a price

equal to the Repurchase Price thereof Jess the Related Liability Amount with respect to any Related Liabilities related to such Asset or asset, in each case determined as of the date of the notice provided by the Receiver pursuant 10 Section 3.6(a). The Receiver shall pay the Assuming Bank not later than the twentieth (20th) Business Day following receipt of related Credit Documents and Credit Files together with interest on such amount at the Settlement Interest Rate for the period from and including the date of receipt of such documents to and including the day preceding the day on which payment is made. The Assuming Bank agrees to administer and manage each such Asset or asset in accordance with usual and prudent banking standards and business practices until each such Asset or asset is purchased by the Receiver. All transfers with respect to Asset or assets under this Section 3.6 shall be made as provided in Section 9.6. The Assuming Bank shall transfer all such Asset or assets and Related Liabilities to the Receiver without recourse, and shall indemnify the Receiver against any and all claims of any Person claiming by, through or under the Assuming Bank with respect to any such Asset or asset, as prov ided in Section I 2.4.

ARTICLE IV

ASSUMPTION OF CERTAIN DUTIES AND OBLIGATIONS

The Assuming Bank agrees with the Receiver and the Corporation as follows:

4.] Contin.uation oJ Banking Business. The Assuming Bank agrees to provide full

service banking in the trade area of the Failed BaTik commencing on the first banking business day (including a Saturday) after Bank Closing. At the option of the Assuming Bank, such banking services may be provided at any or all of the Bank Premises, or at other premises within such trade area.

4.2 Agree-me-Ill WifibR'esb:ecl toCredil Card Business. The Assuming Bank agrees

to honor and perform, from and after Bank Closing, all duties and obligations with respect to the F ailed Bank's credit card business, andlor processing related to credit cards, if any, and assumes all outstanding extensions of credit with respect thereto.

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Downey Federal Savings and Loan Association, FA Newport Beach. California

4.3 Agreement with Respect to Safe Deposit Business. The Assuming Bank

assumes and agrees to discharge, from and after Bank Closing, in the usual course of conducting a banking business, the duties and obligations of the Failed Bank with respect to all Safe Deposit Boxes: if any, of the Failed Bank and to maintain all of the necessary facilities for the use of such boxes by the renters thereof during the period for which such boxes have been rented and the

rent therefor paid to the Failed Bank, subject to the provisions of the rental agreements between the Failed Bank and the respective renters of such boxes; provided, that the Assuming Bank may relocate the Safe Deposit Boxes of the Failed Bank to any office of the Assuming Bank located

in the trade area of the Failed Bank.

4.4 Agreement with Respect to Safekeeping Business. The Receiver transfers,

conveys and delivers to the Assuming Bank and the Assuming Bank accepts all securities and other items, if any, held by the Failed Bank in safekeeping for its customers as of Bank Closing. The Assuming Bank assumes and agrees to honor and discharge, from and after Bank Closing, the duties and obligations of the Failed Bankwith respect to such securities and items held in safekeeping. The Assuming Bank shall be entitled to all rights and benefits heretofore accrued or hereafter accruing with respect thereto. The Assuming Bank shall provide to the Receiver written verification of all assets held by the Failed Bank for safekeeping within sixty (60) days after Bank Closing.

4.5 Agreement with Respect to Trust Business.

(a) The Assuming Bank shall, without further transfer, substitution, act or deed, to

the full extent permitted by law, succeed to the rights, obligations, properties, assets, investments, deposits, agreements, and trusts ofthe Failed Bank under trusts, executorships, administrations, guardianships, and agencies, and other fiduciary or representative capacities, all to the same extent as though the Assuming Bank had assumed the same from the Failed Bank prior to Bank Closing; provided, that any liability based on the misfeasance, malfeasance or nonfeasance of the Failed Bank, its directors, officers, employees or agents with respect to the trust business is not assumed hereunder.

(b) The Assuming Bank shall, to the full extent permitted by law, succeed to, and be

entitled to take and execute, the appointment to all executorships, trusteeships, guardianships and other fiduciary or representative capacities to which the Failed Bank is or may be named in wills, whenever probated, or to which the Failed Bank is or may be named or appointed by any other instrument.

(c) In the event additional proceedings of any kind are necessary to accomplish the

transfer of such trust business, the Assuming Bank agrees that, at its own expense, it will take whatever action is necessary to accomplish such transfer. The Receiver agrees to use reasonable efforts to assist the Assuming Bank in accomplishing such transfer.

(d) The Assuming Bank shall provide to the Receiver written verification of the

assets held in connection with the Failed Bank's trust business within sixty (60) days after Bank Closing.

4.6 Agreement with Respect to Bank Premises.

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DO\\T!ey Federal Savings and Loan Associatjon, F .A.

Newport Beach. Caljfornia

(a) Option to Purchase. Subject to Section 3.5, the Receiver hereby grants to the

Assuming Bank an exclusive option for the period of ninety (90) days commencing the day after Bank Closing to purchase any or all owned Bank Premises. The Assuming Bank shall give written notice to the Receiver within the option period of itselection 10 purchase or not to purchase any of the owned Bank Prem ises. Any purchase of such premises shall be effective as of the date of Bank Closing and such purchase shall be consummated as soon as practicable thereafter, and in no event later than the Settlement Date.

(b) Option to Lease. The Receiver hereby grants to the Assuming Bank an exclusive

option for the period of ninety (90) days commencing the day after Bank Closing to cause the Receiver to assign to the Assuming Bank any or all leases for leased Bank Premises, if an Yo which have been continuously occupied by the Assuming Bank from Bank Closing to the date it elects to accept an assignment of the leases with respect thereto to the extent such leases can be assigned; provided, that the exercise of this option with respect to any lease must be as 10 all premises or other property subject to the lease. If an assignment cannot be made of any such leases, the Receiver may, in its discretion, enter into subleases with the Assuming Bank containing the same terms and conditions provided under such existing leases for such leased Bank Premises or other property. The Assuming Bank shaH give notice to the Receiver within the option period of its election to accept or not to accept an assignment of any or all leases (or enter into subleases or new leases in lieu thereof). The Assuming Bank agrees to assume a ll leases assigned (or enter into subleases or new leases in lieu thereof) pursuant to this Section 4.6.

(c) Faci1itatiQll. The Receiver agrees to facilitate the assumption, assignment or

sublease of leases or tnenegotiation of new leases by the AsSuming Bank; provided, tbat neither the Receiver nor the Corporation shall be obJigated to engage in litigation, make payments to the Assuming Bank or to any third party in connection with facilitating any such assumption, assignment, sublease or negotiation or commit to any other obligations to third parties.

(d) Occupancy. The Assuming Bank shall give the Receiver fifteen (15) days' prior

written notice of its intention to vacate prior to vacating any leased Bank Premises with respect to which the Assuming Bank has not exercised the option provided in Section 4.6(b). Any such notice shall be deemed to terminate the Assuming Bank's option with respect to such leased Bank Premises.

(e) Occ1l.p.ancy Costs.

(i) The Assuming Bank agrees to pay to the Receiver, or to appropriate third

parties at the direction of the Receiver, during and for the period of any occupancy by it of (x) owned Bank Premises the market rental value and all operating costs, and (y) leased Bank Premises, all operating costs with respect thereto and to comply with all relevant terms of applicable leases entered i)1to by the Failed Bank, illcJuding without limitation the timely payment of all rent. Operating costs include, without limitation all taxes, fees, charges, uti Iities, insurance and assessments, to the ex:lent nolincJtldedin the rental value or rent. If the Assuming Bank elects to purchase any owned Ilank'Premises in accordance with $edion 4.6(a), the amount of any rent paid (and taxes paid to the Receiver which have not been paid to the taxing authority and for which the Assuming Bank assumes liability) by the Assuming Bank with respect thereto shall be applied as an offset against the purchase price thereof.

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Downey Federal Savings and Loa" Association. fA Newport Beach, California

(ii) The Assuming Bank agrees during the period of occupancy by it of owned

or leased Bank Premises, to pay to the Receiver rent for the use of all owned or leased Furniture and Equipment and all owned or leased Fixtures located on such Bank Premises for the period of such occupancy. Rent for such property owned by the Failed Bank shall be the market rental value thereof, as determined by the Receiver within sixty (60) days after Bank Closing. Rent for such leased property shall be an amount equal to any and all rent and other amounts which the Receiver incurs or accrues as an obligation or is obligated to pay for such period of occupancy pursuant to all leases and contracts with respect to such property. If the Assuming Bank purchases any owned Furniture and Equipment or owned Fixtures in accordance with Section 4.6(f) or 4.6(h), the amount of any rents paid by the Assuming Bank with respect thereto shall be applied as an offset against the purchase price thereof.

(f) Certa.in Reg.uiremenls as to Fur·niJ.u.re,EguipuumLandEixhu:£s. If the

Assuming Bank purchases owned Bank Premjses~r ~ccepts an .assignment of the lease (or enters into a sublease or a new lease in lieu thereof) for leased Bank Premises as provided in Section 4.6(a) or 4.6(b), or if the Assuming Bank does not exercise such option but within twelve (12) months following Bank Closing obtains the right to occupy such premises (whether by assignment, lease, sublease, purchase or otherwise), other than in accordance with Section 4.6(a) or (b), the Assuming Bank shall (i) effective as of the date of Bank Closing, purchase from the Receiver all Furniture and Equipment and Fixtures owned by the Failed Bank and located thereon as of Bank Closing, (ii) accept an assignment or a sublease of the leases or negotiate new leases for all Furniture and Equipment and Fixtures leased by the Failed Bank and located thereon, and (iii) if applicable, accept an assignment or a sublease of any ground lease or negotiate a new ground lease with respect to any land on which such Bank Premises are located; provided, that the Receiver shall not have disposed of such Furniture and Equipment and Fixtures or repudiated the leases specified in clause (ii) or (iii).

(g) Vacating Premises.

(i) If the Assuming Bank elects not to purchase any owned Bank Premises,

the notice of such ejection in accordance with Section 4.6(a) shall specify the date upon which the Assuming Bank's occupancy of such premises shall terminate, which date shall not be later than ninety (90) days after the date of the Assuming Bank's notice not to exercise such option. The Assuming Bank promptly shall relinquish and release to the Receiver such premises and the Furniture and Equipment and Fixtures 10catedtheteoJl in the same condition as at Bank Closing, normal wear and tear excepted. By occupying any such premises after the expiration of such ninety (90}·day period, the AssuJJ1ing Bank Shall, at the Receiver's option, (x) be deemed to have agreed to purchase such Bank Premises, and to assume all leases, obligations and liabilities with respect to leased Furniture and Equipment and leased Fixtures located thereon and any ground lease with respect to the land on which such premises are located, and (y) be required to purchase all Furniture and Equipment and Fixtures owned by the Failed Bank and located on such premises as of Bank Closing.

(ii) If the Assuming Bank eJects not to accept an assignment of the lease or

sublease any leased Bank Premises, the notice of such election in accordance with Section 4.6(b) shall specify the date upon which the Assuming Bank's occupancy of such leased Bank Premises sh~n terminate, which date shall not be later than the date which is one hundred eighty (180)

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Downev Federal Savings and Loan AS50clation~ F.AL Newport Beach, California

days after Bank Closing. Upon vacating such premises, the Assuming Bank shall relinquish and release to the Receiver such premises and the Fixtures and the Furniture and Equipment located thereon in the same condition as at Bank Closing, normal wear and tear excepted. By failing to prov ide notice of its intention to vacate such premises prior to the expiration of the option period specified in Section 4.6(b), or by occupying such premises after the one hundred eighty (l 80)day period specified above in this paragraph (i i), the Assuming Bank shall, at the Receiver's option, (x) be deemed to have assumed all leases, obligations and liabilities with respect to such premises (including any ground lease with respect ro the land on which premises are located), and leased Furniture and Equipment and leased Fixtures located thereon in accordance with this Section 4.6 (unless the Receiver previously repudiated any such lease), and (y) be required to purchase all Furniture and Equipment and Fixtures owned by the Failed Bank and located On such premises as of Bank Closing.

(h) Furniture and Equipment and Certain Other Equipment. The Receiver

hereby grants to the Assuming Bank an option to purchase all Furniture and Equipment or any telecommunications, data processing equipment (including hardware and software) and check processing and similar operating equipment owned by the Failed Bank and located at any owned or leased Bank Premises that the Assuming Bank elects to vacate or which it could have, but did not occupy, pursuant to this Section 4.6; provided, that, the Assuming Bank shall give the Receiver notice of its election to purchase such property at the time it gives notice of its intention to vacate such Bank Premises or within ten (10) days after Bank Closing for Bank Premises it could have, but did not, occupy.

4.7 Agreement with Respect to Leased Data Processing Equipment

(a) The Receiver hereby grants to the Assuming Bank an exclusive option for the

period of ninety (90) days commencing the day after Bank Closing to accept an assignment from the Receiver of any or all Data Processing Leases to the extent that such Data Processing Leases can be assigned.

(b) The Assuming Bank shall (i) give written notice to the Receiver within the option

period specified in Section 4.7{a) of its intent to accept an assignment or sublease of any or all Data Processing Leases and promptly accept an assignment or sublease of such Data Processing Leases, and (ii) give written notice to the appropriate lessor(s) that it has accepted an assignment or sublease of any such Data Processing Leases.

(c) The Receiver agrees to fad lit ate the assignment or sublease of Data Processing

Leases or the negotiation of new leases or license agreements by the Assuming Bank; provided, that neither the Receiver nor the Corporation shall be obligatedto engage in litigation or make payments to the Assuming Bank or to any third party in connection with facilitating any such assumption, assignment, sublease or negotiation.

(d) The Assuming Bank agrees, during its period of use of any property subject to a

Data Processing Lease, to pay to the Receiver or to appropriate third parties at the direction of the Receiver an operating costs with respect thereto and 10 comply withall relevant terms of the applicable Data Processing Leases entered into by the Failed Bank, including without limitation the timely payment of all rent, taxes, fees, charges, utilities, insurance and assessments.

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Downey Federal Savings and Loan Assoc iaiion, FA Newport Beach, California

(e) The Assuming Bank shall, not later than fifty (50) days after giving the notice

provided in Section 4.7(b), (i) relinquish and release to the Receiver all property subject to the relevant Data Processing Lease, in the same condition as at Bank Closing, normal wear and tear excepted. or (ii) accept an assignment or a sublease thereof or negotiate a new lease or license agreement under this Section 4.7.

4.8 Agreement with Respect to Certain Existing Agreements.

(a) Subject to the provisions of Section 4.8(b), with respect to agreements existing as

of Bank Closing which provide for the rendering of services by or to the Failed Bank, within ninety (90) days after Bank Closing, the Assuming Bank shall give the Receiver written notice specifying whether it elects to assume or not to assume each such agreement. Except as may be otherwise provided in this Article IV, the Assuming Bank agrees to comply with the terms of each such agreement for a period commencing on thecj~y aft·er Bank Closing and endiEgOfl: (i) in the case of an agreement that provides for the rendering of services by the Failed Bank, the date which is ninety (90) days after Bank Closing, and (ii) in the case of an agreement that provides for the rendering of services to the Failed Bank, the date which is thirty (30) days after the Assuming Bank has given notice to the Receiver of its election not to assume such

agreement; provided, that the Receiver can reasonably make such service agreements available

to the Assuming Bank, The Assuming Bank shall be deemed by the Receiver to have assumed agreements for which no notification is timely given. The Receiver agrees to assign, transfer, convey, and deliver to the Assuming Bank an right, title and interest of the Receiver, if any; in and to agreements the Assuming Bank assumes hereunder. In the event the Assuming Bank elects not to accept an assignment of any lease (or sublease) or negotiate a new lease for leased Bank Premises under Section 4.6 and does not otherwise occupy such premises, the provisions of this Section 4.8(a) shall not apply to service agreements related to such premises. The Assuming Bank agrees, during the period it has the use or benefit of any such agreement, promptly to pay

to the Receiver or to appropriate third parties at the direction of the Receiver all operating costs with respect thereto and to comply with a II relevant terms of such agreement.

(b) The provisions of Section 4.8(a) shall not apply to (i) agreements pursuant to

which the Failed Bank provides mortgage servicing for others or mortgage servicing is provided to the Failed Bank by others, (ii) agreements that are subject to Sections 4. J through 4.7 and any insurance policy or bond referred to in Section 3.5(a) or other agreement specified in Section 3.5, and (iii) consulting, management or employment agreements, if any, between the Failed Bank and its employees or other Persons. Except as otherwise expressly set forth elsewhere in this Agreement, the Assuming Bank does not assume any liabilities or acquire any rights under any of the agreements described in this Section 4.8(b).

4.9 Informational Tax Reporting. The Assuming Bank agrees to perform all

obligations of the Failed Bank with respect to Federal and State income tax ·informatioilal reporting related to (i) the Assets and the Liabilities Assumed, (ii) deposit accounts that were closed and loans that were paip off or collateral obtained with respect thereto pril)r to Barik Closing, (iii) miscellaneous payments made to vendors ofthe Failed Bank, and (iv) any other asset or liability of the Failed Bank, including, without limitation, loans not purchased and Deposits not assumed by the Assuming Bank, as may be required by the Receiver,

Whoie P & A 99i022

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Downey Federal Savings and Loan Association, FA Newpon Beach, California

4.10 Insurance. The Assuming Bank agrees to obtain insurance coverage effective from and after Bank Closing, including public liability, fire and extended coverage insurance acceptable to the Receiver with respect to owned or leased Bank Premises that it occupies, and all owned or leased Furniture and Equipment and Fixtures and leased data processing equipment (including hardware and software) located thereon, in the event such insurance coverage is not already in force and effect with respect to the Assuming Bank as the insured as of Bank Closing. All such insurance shall, where appropriate (as determined by the Receiver), name the Receiver as an aCJditional insured.

4.11 Office Space f'Or Receiver and C'OrporatioD. For the period commencing on the

day following Bank Closing and ending on the One hundred eightieth (I 80th) day thereafter, the Assuming Bank agrees to provide to the Receiver and the Corporation, without charge, adequate and suitable office space (including parking facilities and vault space), furniture, equipment (including photocopying and telecopying machines) and utilities (including local telephone service) at the Bank Premises occupied by the Assuming Bank for their use in the discharge of their respective functions with respect to the Failed Bank. In the event the Receiver and the Corporation determine that the space provided is inadequate or unsuitable, the Receiver and the Corporation may relocate to other quarters having adequate and suitable space and the costs of relocation and any rental and utility costs for the balance of the period of occupancy by the Receiver and the Corporation shall be borne by the Assuming Bank.

4.12 Agreement with RespecUo Continuation of Group Healtb P·.an Coveraee for Former Employees of the Fa:iledBaJlk.

(a) The Assuming Bank agrees to assist the Receiver, as provided in this Section

4. J 2, in offering individuals who were employees Or forrneremployees ofthe Failed Bank, or any of its Subsidiaries, and who, immediately prior to Bank Closing, were receiving, or were eligible to receive, health insurance coverage or health insurance continuation coverage from the Failed Bank ("Eligible Jnd~v]duals"), the oBPortunityto obtain heCiIth ihslJT;lQce coverage in the Corporation'S FlA Continuation Coverage Plan which provides for health insurance continuation coverage to such Eligible Individuals who are qualified beneficiaries of the failed Bank as defined in Section 607 of the Employee Retirement Income Security Act of 1974, as amended (respectively, "qualified beneficiaries" and "ERISA"). The Assuming Bank shall consult with the Receiver and not later than five (5) Business Days after Bank Closing shaH provide written notice to the Receiver ofthe number (if available), identity (if available) and addresses (if available) of the Eligible Individuals who are qualified beneficiaries of the Failed Bank and for whom a "qualifying event" (as d:e:nflediri Section 6tH 6fERlSA:) has occurred and with respect to whom the Failed Bank's obligations under Part 6 of Sub lit Ie B of Til Ie 1 of ERISA have not been satisfied in full, and such other information as the Receiver may reasonably require. The Receiver shall cooperate with the Assuming Bank in order to permit it to prepare such noti ce and shall provide to the Assuming Bank such data in its possession as may be reasonably required for purposes of preparing such notice.

(b) The Assuming Bank' shall take such further action to assist the Receiver in

offering the Eligible liidividutih; who are qu-aJified beneficiaries ofthe FaHed Bank the opportunity to obtain health insurance coverage in the Corporation's F]A Continuation Coverage Plan as the Receiver may direct. All expenses incurred and paid by the Assuming Bank (i) In connection with the obligations of the Assuming Bank under this Section 4.1 2, and (ii) in

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Downey federal Savings and Loan Assoc rarion, FA Newport Beach, California

providing health insurance continuation coverage to any Eligible Individuals who are hired by the Assuming Bank and such employees' qualified beneficiaries shall be borne by the Assuming Bank.

(c) This Section 4.12 is for the sole and exclusive benefit of the parties to this

Agreement, and for the benefit of no other Person (including any former employee of the Failed Bank or any Subsidiary thereof or qualified beneficiary of such former employee). Nothing in this Section 4.] 2 is intended by the parties, or shall be construed, to give any Person (including any former employee of the Failed Bank or any Subsidiary thereof or qualified beneficiary of such former employee) other than the Corporation, the Receiver and the Assuming Bank any lega I or equitable right, remedy or claim under or with respect to the provisions of this Section.

4.13 Agreeinent with Respect to Interim Asset Servicing. At any time after Bank Closing, the Receiver may establish on its books an asset poolls) and may transfer to such asset poolts) (by means of accounting entries on the books of the Receiver) all or any assets and liabilHies ofthe Failed Bank which are not acquired by the Assuming Bank, including, without limitation, wholly unfunded Commitments and assets and liabilities which may be acquired, funded or originated by the Receiver subsequent to Bank Closing. The Receiver may remove assets (and liabilities) from or add assets (and liabilities) to such pool(s) at any time in its discretion. At the option of the Receiver, the Assuming Bank agrees to service, administer, and collect such pool assets in accordance with and for the term set forth in Exhibit 4.13 "Interim Asset Servicing Arrangement".

ARTICLE V

DUTIES WITH RESPECT TO DEPOSITORS OF THE FAILED BANK

5.1 Paymen1ofChecks,Draftsafid .orders. Subject to Section 9.5, the Assuming

Bank agrees to pay all properly drawn checks, drafts and withdrawal orders of depositors of the Failed Bank presented for payment, whether drawn on the check or draft forms provided by the Failed Bank or by the Assuming Bank, to the extent that the Deposit balances to the credit of the respective makers or drawers assumed by the Assuming Bank under this Agreement are sufficient to permit the payment thereof, and in all other respects to discharge, in the usual course of conducting a banking business, the duties and obligations of the Failed Bank with respect to the Deposit balances due and owing to the depositors of the Failed Bank assumed by the Assuming Bank under this Agreement.

5.2 Certain Agr(:emel1ts Related tolleposits. Subject to Section 2.2, the Assuming

Bank agrees to honor the terms and conditions of any written escrow or mortgage servicing agreement or other similar agreement relating to a Deposit liability assumed by the Assum ing Bank pursuant to this Agreement.

5.3 Notice to Depositors.

(a) Within seven (7) days after Bank Closing, the Assuming Bank shall give (i)

notice to depositors of the Failed Bank of its assumption of the Deposit liabilities of the Fa iled Bank, and (ii) any notice required under Section 2.2, by mailing to each such depositor a notice with respect to such assumption and by advertising in a newspaper of general circulation in the

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county or counties in which the Failed Bank was located. The Assuming Bank agrees that it will obtain prior approval of all such notices and advertisements from counsel for the Receiver and that such notices and advertisements shall not be mailed or published until such approval is received.

(b) The Assuming Bank shall give notice by mail to depositors of the Failed Bank

concerning the procedures to claim their deposits, which notice shall be provided to the Assuming Bank by the Receiver or the Corporation. Such notice shall be included with the notice to depositors to be mailed by the Assuming Bank pursuant 10 Section 5.3(a).

(c) lf the Assuming Bank proposes to charge fees different from those charged by the

Failed Bank before it establishes new deposit account relationships with the depositors of the Failed Bank, the Assuming Bank shall give notice by mail of such changed fees to such depositors.

ARTICLE V] RECORDS

6.1 Transfer of Records.

(a) In accordance with Section 3.1, the Receiver assigns, transfers, conveys and

delivers to the Assuming Bank the following Records pertaining to the Deposit liabilities of the Failed Bank assumed by the Assuming Bank under this Agreement, except as provided in Section 6.4:

(i) signature cards, orders, contracts between the Failed Bank and its depositors and Records of similar character:

(ii) passbooks of depositors held by the Failed Bank, deposit slips, cancelled checks and withdrawal orders representing charges to accounts of depositors;

and the following Records pertaining to the Assets:

(iii) records of deposit balances carried with other banks, bankers or trust companies;

(iv) Loan and collateral records and Credit Files and other documents:

(v) deeds, mortgages, abstracts, surveys, and other instruments or records of title pertaining to real estate or real estate mortgages:

(vi) signature cards, agreements and records pertaining to Safe Deposit Boxes, if any; and

(vii) records pertaining to the credit card business. trust business or safekeeping business of the Failed Bank, if any.

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DO""CV Federal Savings and loan Association, FA Newport Beach. California

(b) The Receiver. at its option, may assign and transfer to the Assuming Bank by a

single blanket assignment or otherwise, as soon as practicable after Bank Closing, any other Records not assigned and transferred to the Assuming Bank as provided in this Agreement, including but not limited to loan disbursement checks, general ledger tickets, official bank checks. proof transactions (including proof tapes) and paid out loan files.

6.2 Delivery of Assigned Records. The Receiver shall deliver to the Assuming Bank

all Records described in (i) Section 6.1(a) as soon as practicable on or after the date of this Agreement. and (ii) Section 6.1 (b) as soon as practicable after making any assignment described therein.

6.3 Preservation of Records. The Assuming Bank agrees that it will preserve and

maintain for the joint benefit of the Receiver, the Corporation and the Assuming Bank, all Records of wh ich it has custody for such period as either the Receiver or the Corporation in its discretion may require, until directed otherwise, in writing, by the Receiver or Corporation. The Assuming Bank shall have the primary responsibility to respond to subpoenas, discovery requests, and other similar official inquiries with respect to the Records of which it has custody.

6.4 Access to Records; Copies. The Assuming Bank agrees to permit the Receiver

and the Corporation access to all Records of which the Assuming Bank has custody, and to use, inspect, make extracts from or request copies of any such Records in the manner and to the extent requested, and to duplicate, in the discretion of the Receiver or the Corporation, any Record in the form of microfilm or microfiche pertaining to Deposit account relationships; provided, that in the event that the Failed Bank maintained one Or more duplicate copies of such microfilm or microfiche Records, the Assuming Bank hereby assigns, transfers, and conveys to the Corporation one such duplicate copy of each such Record without cost to the Corporation, and agrees to deliver to the Corporation all Records assigned and transferred to the Corporation under this Article V] as soon as practicable On or after the date of this Agreement. The party requesting a copy of any Record shall bear the cost (based on standard accepted industry charges to the extent applicable, as determined by the Receiver) for providing such duplicate Records. A copy of each Record requested shall be provided as soon as practicable by the party having custody thereof.

ARTICLE V]] BID AMOUNT

The Assuming Bank has submitted to the Receiver a First Loss Amount bid, as that term is defined in the Loan Sale Agreements, of $1,522,410,000.00 for the Assets purchased and Liabilities Assumed hereunder (the "Bid Amount").

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Downey Federal Savings and Loan Association, FA Newport Beach, California

ARTICLE VI]) PROFORMA

The Assuming Bank, as soon as practical after Bank Closing, in accordance with the best information available, shall provide to the Receiver a Proforma Statement of Condition indicating all assets and liabilities of the Failed Bank as shown on the Failed Bank's books and records as of Bank Closing and reflecting which assets and liabilities are passing to the Assuming Bank and which assets and liabilities are to be retained by the Receiver. In addition, the Assuming Bank is to provide to the Receiver, in a standard data request as defined by the Receiver, an electronic database of all loans, deposits, and subsidiaries and other business combinations owned by the Failed Bank as of Bank Closing. See Schedule 3.la.

ARTtCLEIX CONTINuINC··GOOPERAHeN

9.1 General Matters. The parties hereto agree that they will, in good faith and with

their best efforts, cooperate with each other to carry out the transactions contemplated by this Agreement and to effect the purposes hereof.

9.2 Additional Title Documents. The Receiver, the Corporation and the Assuming

Bank each agree, at any time, and from time to time, upon the request of any party hereto, to execute and deliver such additional instruments and documents of conveyance as shall be reasonably necessary to vest in the appropriate party its full legal or equitable title in and to the property transferred pursuant to this Agreement or to be transferred in accordance herewith. The Assuming Bank shall prepare such instruments and documents of conveyance (in form and substance satisfactory to the Receiver) as shall be necessary to vest title to the Assets in the Assuming Bank. The Assuming Bank 'shaH be responsible for recording such instruments and documents of conveyance at its own expense,

9.3 Claims~nd Suits.

(a) The Receiver shall have the right, in its discretion, to (I) defend or sertle any

claim or suit against the Assuming Bank with respect to which the Receiver has indemnified the Assuming Bank in the same manner and to the same extentas provided in Article Xll, and OJ) defend or settle any claim or suit against the Assuming Bank with respect to any Liability Assumed, which claim or suit may result in a loss to the Receiver arising out of or related to this Agreement, or which existed against the Failed-Bank on or before Bank Closing. The exercise by the Receiver of any rights under this Section 9.3(a) shall not release the Assuming Bank with respect to any of its obligations under this Agreement.

(b) In the event any action at law or in equity shall be instituted by any Person against

the Receiver and the. CorporatiOn as COdefendants with respect to any asset of the Failed Bank retained or acquired pursuant to this Agreement by the Receiver, the Receiver agrees, at the request of the Corporation, to join with the Corporation in a petition to remove the action to the United States District Court for the proper district. The Receiver agrees to institute, with or without joinder of the Corporation as coplaintiff, any action with respect to any such retained or

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acquired asset or any matter connected therewith whenever notice requ iring such act ion shall be given by the Corporation to the Receiver.

9.4 Payment of Deposits, In the event any depositor does not accept the obligation of

the Assuming Bank to pay any Deposit liability of the Failed Bank assumed by the Assuming Bank pursuant to this Agreement and asserts a claim against the Receiver for all or any portion

of any such Deposit liability, the Assuming Bank agrees on demand to provide to the Receiver funds sufficient to pay such claim in an amount not in excess of the Deposit liability reflected on the books of the Assuming Bank at the time such claim is made. Upon payment by the Assuming Bank to the Receiver of such amount, the Assuming Bank shall be discharged from any further obligation under this Agreement to pay to any such depositor the amount of such Deposit

liability paid to the Receiver.

9.S \Vithh~Jd Payments. At any time, the Receiver or the Corporation may, in its

discretion, determine that an or any portion of any deposit balance assumed by the Assum ing Bank pursuant to this Agreement does not constitute a "Deposit" (or otherwise, in its discretion, determine that it is the best interest of the Receiver or Corporation to withhold all or any portion of any deposit), and may direct the Assuming Bank to withhold payment of all or any portion of any such deposit balance. Upon such direction, the Assuming Bank agrees to hold such deposit and not to make any payment of such deposit balance to or on behalf of the depositor, or to itself whether by way of transfer, set-off, or otherwise. The Assuming Bank agrees to maintain the "withheld payment" status of any such deposit balance until directed in writing by the Receiver or the Corporation as to its disposition. At the direction of the Receiver or the Corporation, the Assuming Bank shall return all or any portion of such deposit balance to the Receiver or the Corporation, as appropriate, and thereupon the Assuming Balik shaH be discharged from any further liability to such depositor with respect to such returned deposit balance. If such deposit balance has been paid to the depositor prior to a demand for return by the Corporation or the Receiver, and payment of such deposi; balance had not been previously withheld pursuant to this Section, the Assuming Bank shall not be obligated to return such deposit balance to the Receiver or the Corporation. The Assuming Bank shall be obligated to reimburse the Corporation or the Receiver, as the case may be, for the amount of any deposit balance or portion thereof paid by the Assuming Bank in contravention of any previous direction to withhold payment of such deposit balance or return such deposit balance the payment of which was withheld pursuant to this Section.

9.6 Proceed'ihes with R'(fSpect toCetiaib Assets and LiahiJities.

(a) In connection with any investigationproceeding or other matter with respect to

any asset or liability of the Failed Bank retained by the Receiver, or any asset of the Failed Bank acquired by the Receiver pursuant to this Agreement, the Assuming Bank shall cooperate to the extent reasonably required by the Receiver.

(b) lnaddition to its obligations under Section 6.4, the Assuming Bank shall provide

representatives of the Receiver access at reasonable times and locations without other limitation or qualification to (i) its directors, officers, employees and agents and those of the Subsidiaries acquired by the Assuming Bank, and (ii) its books and records, the books and records of such Subsidiaries and all Credit Files, and copies thereof Copies of books, records and Credit Files

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shall be provided by the Assuming Bank as requested by the Receiver and the costs of duplication thereof shall be borne by the Receiver.

(c) Not later than ten (10) days after the Put Notice pursuant to Section 3.4 or the

date of the notice of transfer of any Loan by the Assuming Bank to the Receiver pursuant to Section 3.6, the Assuming Bank shall deliver to the Receiver such documents with respect to such Loan as the Receiver may request, including without limitation the following: (i) all related Credit Documents (other than certificates, notices and other ancillary documents), (ii) a certificate setting forth the principal amount on the date of the transfer and the amount of interest, fees and other charges then accrued and unpaid thereon, and any restrictions on transfer to which any such Loan is subject, and (iii) all Credit Files, and all documents, microfiche, microfilm and computer records (including but not limited to magnetic tape, disc storage, card forms and printed copy) maintained by, owned by, or in the possession of the Assuming Bank or any Affiliate of the Assuming Bank relating to the transferred Loan.

9.7 InioJ;lJ)ation. The Assuming Bank promptly shall provide to the Corporation such

other information, including financial statements and computations, relating to the performance of the provisions of this Agreement as the Corporation or the Receiver may request from time to time, and, at the request of the Receiver, make available employees of the Failed Bank employed or retained by the Assuming Bank to assist in preparation of the pro forma statement pursuant to Section 8.].

ARTICLE X CONDITION PRECEDENT

The obligations of the parties to this Agreement are subject to the Receiver and the Corporation having received at or before Bank Closing evidence reasonably satisfactory to each of any necessary approval, waiver, or other action by any governmental authority, the board of directors of the Assuming Bank, or other third party, with respect to this Agreement and the transactions contemplated hereby, the closing of the Failed Bank and the appointment of the Receiver, the chartering of the Assuming Bank, and any agreements, documents, matters or proceedings contemplated hereby or thereby,

ARTICLE Xl

REPRESENTAT10NS AND WARRANTIES OF THE ASSUMING BANK

The Assuming Bank represents and warrants to the Corporation and the Receiver as follows:

(a) Corporate Existence and Authority. The Assuming Bank (i) is duly organized,

validly existing and in good standing under the laws of its Chartering Authority and has full power and authority to own and operate its properties and to conduct its business as now conducted by it, and (ii) has filII power and authority to execute and deliver this Agreement and to perform its obligations hereunder. The Assuming Bank has taken ali necessary corporate action to authorize the execution, delivery and performance of this Agreement and the performance of the transactions contemplated hereby.

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(b) Third Party Consents. No governmental authority or other third party consents

(including bUI not limited to approvals, licenses, registrations or declarations) are required in connection with the execution, delivery or performance by the Assuming Bank of this Agreement. other than such consents as have been duly obtained and are in full force and effect.

(c) Execution and Enforceability. This Agreement has been duly executed and

delivered by the Assuming Bank and when this Agreement has been duly authorized, executed and delivered by the Corporation and the Receiver, this Agreement will constitute the legal, valid and binding obligation of the Assuming Bank, enforceable in accordance with its terms.

(d) Compliance with Law.

(i) Neither the Assuming Bank nor any of its Subsidiaries is in violation of

any statute, regulation, order, decision, judgment or decree of or any restriction imposed by, the United Stales of America, any State, municipality or other political subdivision or atl~-agency ot" any of the foregoing, or any court or other tribunal having jurisdiction over the Assuming Bank or any of its Subsidiaries or any assets of any such Person, or any foreign government or agency

. thereof having such jurisdiction, with respect to the conduct of the business of the Assuming

Bank or of any of its Subsidiaries, or the ownership of the properties of the Assuming Bank or any of its Subsidiaries, which, either individually or in the aggregate with all other such violations, would materially and adversely affect the business, operations or condition (financial or otherwise) of the Assuming Bank or the ability of the Assuming Bank to perform, satisfy or observe any obligation or condition under this Agreement.

(ii) Neither the execution and delivery nor the performance by the Assuming

Bank of this Agreement will result in any violation by the Assuming Bank of, or be in conflict with, any provision of any applicable law or regulation, or any order, writ or decree of any court or governmental authority.

e) Representations Remain True. The Assuming Bank represents and warrants

that it has executed and delivered to the Corporation a Purchaser Eligibility Certification and Confidentiality Agreement and that all information provided and representations made by or on behalf of the Assuming Bank in connection with this Agreement and the transactions contemplated hereby, including. but not limited to, the Purchaser Eligibility Certification and Confidentiality Agreement (which are affirmed and ratified hereby) are and remain true and correct in all material respects and do not fail to state any fact required to make the information contained therein not misleading.

ARTICLE XU INDEMNIFICATION

12.1 Indemnific.ation of Indemnitees, From and after Bank Closing and subject to

the limitations set forth in this Section and Section] 2.6 and compliance by the lndernnitees with Section 12.2, the Receiver agrees to indemnify and hold harmless the Indemnitees against any and all costs, losses, liabilities, expenses (including attorneys' fees) incurred prior to the assumption of defense by the Receiver pursuant to paragraph (d) of Section 12.2, judgments,

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Downey Federal Savings and Loan Association, FA Newport Beach, California

fines and amounts paid in settlement actually and reasonably incurred in connection with claims against any Indemnitee based on liabilities of the Failed Bank that are not assumed by the Assuming Bank pursuant to this Agreement or subsequent to the execution hereof by the Assuming Bank or any Subsidiary or Affiliate of the Assuming Bank for which indemnification is provided hereunder in (a) of this Section 12.1, subject to certain exclusions as provided in (b) of this Section 12.]:

(a)

(L) claims based on the rights of any shareholder or former shareholder as such of (x) the Failed Bank, or (y) any Subsidiary or Affiliate of the Failed Bank;

(2) claims based on the rights of any creditor as such of the Failed Bank, or any creditor as such of any director, officer, employee or agent of the Failed Bank, with respect to any indebtedness or other obligation of the Failed Bank arising prior to Bank Closing;

(3) claims based on the rights of any present or former director, officer, employee or agent as such of the Failed Bank or of any Subsidiary or Affiliate of the Failed Bank;

(4) claims based on any action or inaction prior to Bank Closing of the Failed Bank, its directors, officers, employees or agents as such, or any SUbsidiary or Affiliate of the F ailed Bank, or the directors, officers, employees or agents as such of such Subsidiary or Affiliate;

(5) claims based on any malfeasance, misfeasance or nonfeasance of the Failed Bank, its directors, officers, employees or agents with respect to the trust business of the Failed Bank, if any;

(6) claims based on any failure or alleged failure (not in violation of law) by the Assuming Bank to continue to perform any service or activity previously performed by the

F ailed Bank which the Assuming Hank is not required to perform pursuant to this Agreement or which arise under any contract to Which the Failed Bank was a party which the Assuming Bank elected not to assume in accordance with this Agreement and which neither the Assuming Bank nor any Subsidiary or Affiliate of the Assuming Bank has assumed subsequent to the execution hereof;

(7) claims arising from any action or inaction of any Indemnitee, including for purposes of this Section 12.1(a)(7) the former officers or employees of the F ailed Bank or of any Subsidiary or Affiliate of the Failed Bank that is taken upon the specific written direction ofthe Corporation or the Receiver, other than any action or inaction taken in a manner constituting bad faith, gross negligence or willful misconduct; and

(8)cl1:lims based on the rights of any depositor ofthe Failed Bank whose deposit has been accorded "withheld payment" status and/or returned to the Receiver or Corporation in accordance with Section 9.5 and/or has become an "unclaimed deposit" or has been returned to the Corporation or the Receiver in accordance with Section 2.3;

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Downey Federal Savings and Loan Association, FA Newport Beach, California

(b) provided, that, with respect to this Agreement, except for paragraphs (7) and (8)

of Section 12.1 (a). no indemnification will be provided under this Agreement for any:

(J) judgment or fine against, or any amount paid in settlement (without the

written approval of the Receiver) by, any Indemnitee in connection with any action that seeks damages against any lndemnitee (a "counterclaim") arising with respect to any Asset and based on any action or inaction of eitherthe Failed Bank, its directors, officers, employees or agents as such prior to Bank Closing, unless any such judgment, fine or amount paid in settlement exceeds the greater of (I) the Repurchase Price of such Asset, or (ii) the monetary recovery sought on such Asset by the Assuming Bank in the cause of action from which the counterclaim arises: and in such event the Receiver will provide indemnification only in the amount of such excess; and no indemnification will be provided for any costs or expenses other than any costs or expenses (including attorneys' fees) which, in the determination of the Receiver, have been actually and reasonably incurred by such Indemnitee in connection with the defense of any such counterclaim; and it is expressly agreed that the Receiver reserves the right to intervene, in its discretion, on its behalf and/or on behalf ofthe Receiver, in the defense of any such counterclaim:

(2) claims with respect to any liability or obligation of the Failed Bank that is expressly assumed by the Assuming Bank pursuant to this Agreement or subsequent to the execution hereof by the Assuming Bank or any Subsidiary or Affiliate of the Assuming Bank;

(3) claims with respect to any liability of the Failed Bank to any present or former employee as such of the Failed Bank or of any Subsidiary or Affiliate of the Fai led Bank, which liability is expressly assumed by the Assuming Bank pursuant to this Agreement or subsequent to the execution hereof by the Assuming Bank or any Subsidiary or Affiliate of the Assuming Bank;

(4) claims based on the failure of any Indemnitee to seek recovery of damages from the Receiver for any claims based upon any action or inaction of the Failed Bank, its directors, officers, employees or agents as fiduciary, agent or custodian prior to Bank Closing;

(5) claims based on any violation or alleged violation by any Indemnitee of the antitrust, branching, banking or bank holding company or securities laws of the United States of America or any State thereof;

(6) claims based on the rights of any present or former creditor, customer, or supplier as such of the Assuming Bank or any Subsidiary or Affiliate of the Assuming Bank;

(7) claims based on the rights of any present or former shareholder as such of the Assuming Bank or any Subsidiary or Affiliate of the Assuming Bank regardless of whether any such present or former shareholder is also a present Or former shareholder of the F ailed Bank;

(8) claims, if the Receiver determines that the effect of providing such indemnification would be to (i) expand or alter the provisions of any warranty or disclaimer thereof provided in Section 3.3 or any other provision of this Agreement, or (ii) create any warranty not expressly provided under this Agreement;

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Downey Federal Savings and Loan Association, fA Newport Beach, California

(9) claims which could have been enforced against any Indemnitee had the Assuming Bank not entered into this Agreement;

(J 0) claims based on any liability for taxes or fees assessed with respect to the consummation of the transactions contemplated by this Agreement including without limitation any subsequent transfer of any Assets or Liabilities Assumed to any Subsidiary or Affiliate of the Assuming Bank;

(I]) except as expressly provided in this Article X I I, claims based on any action or inaction of any Indemnitee, and nothing in this Agreement shall be construed to provide indemnification for 0) the Failed Bank, (ii) any Subsidiary or Affiliate of the Failed Bank, or (iii) any present or former director, officer, employee or agent of the Failed Bank or its Subsidiaries or Affiliates; provided, that the Receiver, in its discretion, may provide indemnification hereunder for any present or former director, officer, employee or agent of the Failed Bank or its Subsidiaries or Affi1iates who is also or becomes a director. officer, employee or agent of the Assuming Bank or its Subsidiaries or Affiliates;

(12) claims or actions which constitute a breach by the Assuming Bank of the representations and warranties contained in Article Xl:

(13) claims arising out of or relating to the condit ion of or generated by an Asset arising from or relating to the presence, storage or release of any hazardous or toxic substance, or any pollutant or contaminant, or condition of such Asset which violate any applicable Federal, State or local law or regulation concerning environmental protection: and

(] 4) claims based on, related to or arising from any asset, including a loan, acquired or liability assumed by the Assuming Bank, other than pursuant to this Agreement.

12.2 ConlliiiuilS Precedent to Indemnification. 11 shall be a condition precedent to

the obligation of the Receiver to indemnify any Person pursuant to this Article Xll that such Person shall, with respect to any claim made or threatened against such Person for which such Person is or may be entitled to indemnification hereunder:

(a) give written notice to the Regional Counsel (Litigation Branch) of the

Corporation in the manner and at the address provided in Section 13.7 of such claim as soon as practicable after such claim is made or threatened; provided, that notice must be given on or before the date which is six (6) years from the date of this Agreement:

(b) provide to the Receiver such information and cooperation with respect to such

claim as the Receiver may reasonably require;

(c) cooperate and take all steps, as the Receiver may reasonably require, to preserve

and protect any defense to such claim;

(d) in the event suit is brought with respect to such claim, upon reasonable prior

notice, afford to the Receiver the right, which the Receiver may exercise in its sale discretion, to conduct the investigation, control the defense and effect settlement of such claim, including without limitation the right to designate counsel and to control all negotiations, litigation,

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Downey Fede ra l Savings and Loan Association, FA Newport Beach, California

arbitration, settlements, compromises and appeals of any such claim, all of which shall be at the expense of the Receiver: provided, that the Receiver shall have notified the Person claim in g indemnification in writing that such claim is a claim with respect to which the Person claiming indemnification is entitled to indemnification under this Article Xll:

(e) not incur any costs or expenses in connection with any response or suit with

respect to such claim, unless such costs or expenses were incurred upon the written direction of the Receiver; provided, that the Receiver shall not be obligated to reimburse the amount of any such costs or expenses unless such costs or expenses were incurred upon the written direction of the Receiver;

(f) not release or settle such claim or make any payment or admission with respect

thereto, unless the Receiver consents in writing thereto, which consent shall not be unreasonably withheld; provided, that the Receiver shall not be obligated to reimburse the amount of any such settlement or payment unless such settlement or payment was effected upon the written direction of the Receiver; and

(g) take reasonable action as the Receiver may request in writing as necessary to

preserve, protect or enforce the rights of the indemnified Person against any Primary Indemnitor.

12.3 No Additional Warranty. Nothing in this Article xn shall be construed or deemed to (i) expand or otherwise alter any warranty or disclaimer thereof provided under Section 3.3 or any other provision of this Agreement with respect to, among other matters, the title, value, collectibility, genuineness, enforceability or condition of any (x) Asset, or (y) asset of the Failed Bank purchased by the Assuming Bank subsequent to the execution ofthis Agreement by the Assuming Bank or any Subsidiary or Affiliate of the Assuming Bank, or (ii) create any warranty not expressly provided under this Agreement with respect thereto.

12.4 Indemnification of Receiver and Corporation. From and after Bank Closing, the Assuming Bank agrees 10 indemnify and hold harmless the Corporation and the Receiver and their respective directors, officers, employees and agents from and against any and all costs, losses, liabilities, expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with any of the following:

(a) claims based on any and all liabilities or obligations of the Failed Bank assumed

by the Assuming Bank pursuant to this Agreement or subsequent to the execution hereofby the Assuming Bank or any Subsidiary or Affiliate of the Assuming Bank, whether or not any such liabilities subsequently are sold and/or transferred; other than any claim based upon ,any action or inaction of any] ndemnitee as provided in paragraph (7) or (8) of Section 12.1 (a); and

(b) claims based on any act or omission of any Indemnitee (inclJJding but not limited

to claims of any Person claiming any right or title by or through II;1e Assuming Bank with respect to Assets transferred to the Receiver pursuant to.Section 3.4 or 3.6), other than any action or inaction of any Indemnitee as provided in paragraph (7) or (8) of Sed ion 12.1 (a).

12.5 Obligatjons Supplemental The obligations of the Receiver, and the Corporation as guarantor in accordance with Section] 2.7, to provide indemnification under this Article X]] are to supplement any amount payable by any Primary Indemnitor to the Person indemnified

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