3:12-cv CMC Date Filed 03/03/15 Entry Number Page 1 of 27 SETTLEMENT AGREEMENT AND RELEASE

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1 3:12-cv CMC Date Filed 03/03/15 Entry Number Page 1 of 27 SETTLEMENT AGREEMENT AND RELEASE This Settlement Agreement and Release ( Wray Settlement or Wray Agreement ) is entered into between plaintiff Raymond Wray ( Plaintiff Wray or Plaintiff ), on behalf of himself and the Settlement Class (as defined in Section III(A.26) below), and defendant CitiMortgage, Inc. ( CitiMortgage or Defendant ). The Wray Settlement is subject to preliminary and final approval by the Court, as required by Rule 23 of the Federal Rules of Civil Procedure. The Wray Agreement is intended by the Settling Parties (as defined in Section III(A.29) below) to fully, finally and forever resolve, discharge and settle the Released Claims (as defined in Section III(A.20) below), upon and subject to the terms and conditions hereof. I. DEFINED TERMS Capitalized terms used in this document are Defined Terms that are defined in Section III(A) of this document and at various points below. The Defined Terms apply throughout the Wray Agreement and the attached exhibits. II. RECITALS The following recitals are material terms of the Wray Agreement. The Wray Agreement is made with reference to and in contemplation of the following facts and circumstances: WHEREAS, on or about December 21, 2012, Plaintiff Wray filed a class action Complaint, entitled Wray v. CitiMortgage, Inc., No. 3:12-cv-03628, in the United States District Court for the District of South Carolina, and, on February 4, 2014, Plaintiff Wray filed an Amended Complaint (collectively, the Wray Lawsuit ). WHEREAS, the Wray Lawsuit alleges that CitiMortgage violated the Servicemembers Civil Relief Act, 50 U.S.C. App. 501, et seq. ( SCRA ), in its application of the interest rate relief protections afforded to Servicemembers by the SCRA in connection with the servicing of a mortgage, trust deed, or other security in the nature of a mortgage, including Section 527(a) of the SCRA. WHEREAS, Plaintiff filed a Second Amended Complaint, for the purpose of amending the class definition to conform with the Settlement Class definition as set forth below in Section III(A.26), on March 3, WHEREAS, as set forth in the Second Amended Complaint, Plaintiff filed the Wray Lawsuit on behalf of current or former Servicemembers who: (1) had periods of active military duty ending no more than 180 days before January 1, 2008 and no later than April 5, 2012 (the Review Period ); (2) submitted written notice of Active Duty orders to CitiMortgage within 180 days of the end of their period of active military duty; and (3) had home mortgage loans for which CitiMortgage used the Subsidy Method (as defined in Section III(A.31) below) to reduce the interest rate to 6%. WHEREAS, Defendant entered into a settlement agreement with the United States of America (the DOJ Consent Judgment, as defined in Section III(A.9) below) that fairly affords certain compensation and other relief to certain Servicemembers, as defined by the SCRA, 1

2 3:12-cv CMC Date Filed 03/03/15 Entry Number Page 2 of 27 including Settlement Class Members (as defined in Section III(A.27) below), who submitted a request for interest rate relief under Section 527 of the SCRA for Active Duty periods eligible for SCRA related relief between and including January 1, 2008 and April 5, WHEREAS, Defendant denies all claims asserted against it in the Wray Lawsuit, denies any and all allegations of wrongdoing and liability and denies all material allegations of the Wray Complaint, the Amended Wray Complaint, and the Second Amended Wray Complaint and has asserted numerous defenses as to both liability and damages. Defendant nevertheless desires to settle the Wray Lawsuit on the terms set forth herein solely for purposes of avoiding the burden and expense of continued litigation. WHEREAS, the Settling Parties and their respective counsel have conducted an extensive investigation into the facts and law and engaged in extensive, good faith, and arm s-length settlement negotiations and meetings relating to the Wray Lawsuit. The Wray Agreement resulted from and is the product of arm s-length negotiations, discovery and analysis by counsel knowledgeable and experienced in class action litigation. WHEREAS, the Wray Settlement, including any proceedings relating to the Wray Settlement, whether or not consummated, shall in no event be construed as, or deemed to be evidence of, an admission or concession on the part of CitiMortgage with respect to any claim of any liability or damage whatsoever, or any infirmity in any defense that CitiMortgage has or may have asserted. CitiMortgage is entering into the Wray Settlement to eliminate the burden, expense, uncertainty and distraction of further litigation with its attendant risks of monetary damages and reputational harm. WHEREAS, Plaintiff believes that the claims asserted in the Wray Lawsuit have merit and that the evidence developed to date supports the claims asserted. However, Plaintiff and his counsel also have taken into account, among other things, the inherent risks associated with prosecuting complex actions, such as the Wray Lawsuit, through trial and appeals, and have likewise taken into consideration the substantial relief already afforded to Settlement Class Members under the DOJ Consent Judgment. Based on their evaluation, Plaintiff and his counsel believe that the Wray Settlement confers substantial benefits upon the Settlement Class and is in the best interests of Plaintiff and the Settlement Class Members. NOW THEREFORE, in consideration of the covenants and agreements set forth herein, Plaintiff Wray and CitiMortgage, on behalf of themselves and the purported class and through their undersigned counsel, agree to the settlement of the Wray Lawsuit, subject to Court approval, under the following terms and conditions: III. TERMS OF SETTLEMENT A. Definitions In addition to the terms defined at various points within the Wray Agreement, the following Defined Terms apply throughout the Wray Agreement and the attached exhibits and shall have the following meanings: 2

3 3:12-cv CMC Date Filed 03/03/15 Entry Number Page 3 of Class Counsel means the law firm of Richard A. Harpootlian, P.A., including attorneys Richard A. Harpootlian and Christopher P. Kenney. 2. Class Notice or Notice means the form of notice of the Wray Settlement (as described in Section III(E) of the Wray Agreement) that the Settling Parties will ask the Court to approve in connection with the motion for preliminary approval and as approved by the Court consistent with the terms of the Wray Agreement. 3. Class Review Period or Review Period means the period consistent with the review period contemplated by the DOJ Consent Judgment i.e. periods of Active Duty Military Service eligible for SCRA interest rate relief between and including January 1, 2008 and April 5, 2012 and including periods of Active Duty ending no more than 180 days before January 1, The Review Period shall not include periods of Active Duty beginning prior to the loan s origination date or beginning after April 5, Class List means the document signed by Class Counsel and counsel for Defendant, which list is intended by the Settling Parties to identify the Persons (and their respective mortgage loan) covered by the Wray Agreement and to whom the Class Notice shall be sent. The Class List shall be kept and maintained as strictly confidential and may not be disclosed to any person except Defendant and its counsel and/or any third-party retained to administer the Wray Settlement, Class Counsel, Defendant s regulators, the DOJ and/or the DOJ s Independent Consultant under the DOJ Consent Judgment, and the Court. Upon request, the Court shall be provided with a copy of the Class List (and any amended Class List) for its in camera review and, if the Court deems it appropriate, a copy of the Class List will be filed under seal. The Class List shall be kept and maintained by Defendant and its counsel, and, upon reasonable notice and advance written request, the Class List shall be made available, at Defendant s counsel s office, for review and inspection by Class Counsel. Within ten (10) business days of the expiration of the Second Opt-Out Period, the Class List shall be amended to reflect those Persons who validly opted-out of the Wray Settlement, as identified in exhibits to the Final Approval Order. 5. Complaint means and includes any Complaint filed in the Wray Lawsuit, including but not limited to the Wray Complaint filed on or about December 21, 2012, and as amended by the Amended Wray Complaint filed on February 4, 2014 and the Second Amended Wray Complaint filed on March 3, Court means the United States District Court for the District of South Carolina. 7. Defendant or CitiMortgage means CitiMortgage, Inc., Citibank, NA. and Citi Residential Lending, Inc. and each and all of their respective present, former and future direct and indirect parent companies, affiliates, subsidiaries, agents, successors, and predecessors-ininterest. 8. DOJ means the United States Department of Justice. 9. DOJ Consent Judgment means the settlement provisions titled as the USDOJ Servicemembers Civil Relief Act Settlement Provisions, a copy of which is attached as Exhibit A to the Wray Agreement and is incorporated herein by reference. The DOJ Consent Judgment 3

4 3:12-cv CMC Date Filed 03/03/15 Entry Number Page 4 of 27 provisions are part of and constitute Exhibit H to a broader settlement reached in April 2012 between among others, Citigroup Inc. and certain affiliated entities, including CitiMortgage, the United States of America, the District of Columbia and 49 States and entered as a Consent Judgment in the United States District Court for the District of Columbia, often referred to as the National Mortgage Settlement. 10. Effective Date means the second business day after each and all of the following conditions have occurred: (i) the Wray Agreement has been signed by Plaintiff, Class Counsel, Defendant, and Defendant s counsel; (ii) orders have been entered by the Court conditionally certifying the Settlement Class, granting preliminary approval of the Wray Settlement, and approving the Class Notice; (iii) the Court-approved Class Notice has been duly provided as ordered by the Court; (iv) Defendant has not elected to withdraw from or terminate the Wray Settlement in accordance with the terms of the Wray Agreement; (v) the Court has entered a Final Approval Order (as defined in Section III(A.11) below) approving the Wray Settlement; (vi) the Court has entered a final order with respect to any attorneys fees and expenses to be awarded to Class Counsel and that order is final and non-appealable; and (vii) the Court has entered a Final Judgment (as defined in Section III(A.12) below) dismissing the Action as to the Settlement Class and Plaintiff Wray with prejudice and that Final Judgment has become Final (as defined in Section III(A.12) below). 11. Final Approval Order means the order to be entered by the Court in connection with the hearing as to the final approval of the Wray Settlement (the Hearing ). The Settling Parties proposed form of the Final Approval Order is attached hereto as Exhibit B. 12. Final Judgment or Judgment of Dismissal refers to the Judgment of Dismissal to be entered in the Wray Lawsuit, after it is entered by the Court and becomes Final. Such Judgment of Dismissal shall be deemed Final: (a) thirty-five (35) days after the Final Approval Order and Judgment of Dismissal are entered if no document is filed within that time seeking appeal, review, rehearing, reconsideration, or any other action regarding that order and/or judgment; or (b) if any such document is filed, then fourteen (14) days after the date upon which all appellate and/or other proceedings resulting from the document have been finally terminated in such a manner as to permit no further judicial action. 13. Initial Opt-Out Period refers to the period between the date Class Notice is initially mailed and a date not later than thirty-five (35) days thereafter, which date will be specified in the Class Notice, in which period Persons comprising the Settlement Class may submit a request to opt out of the Settlement Class, as described in Section III(G) below. 14. Notice and Administration Expenses means all fees and expenses incurred in connection with providing notice to the Settlement Class and the administration of the Wray Settlement, including but not limited to, printing and mailing the Class Notice in the manner set forth in the Wray Agreement. 15. Notice of Non-Eligibility means the form of notice to be provided to those Persons comprising the Settlement Class who have not previously Opted-Out and whose mortgage loan is not determined to be eligible for monetary relief under the DOJ Consent Judgment, the Settling Parties proposed form of which is attached hereto as Exhibit E, to be 4

5 3:12-cv CMC Date Filed 03/03/15 Entry Number Page 5 of 27 approved by the Court. The Notice of Non-Eligibility will be sent within sixty (60) days after the DOJ makes a final determination as to eligibility for financial relief under the SCRA interestrelated provisions of the DOJ Consent Judgment and the amount of financial relief, if any, and notifies Defendant of such final determinations. The Notice of Non-Eligibility will provide notice of non-eligibility for monetary relief under the DOJ Consent Judgment and notice of the Second Opt-Out Period. 16. Notice of Eligibility means the form of notice to be provided to those Persons comprising the Settlement Class who have not previously Opted-Out and whose mortgage loan is determined to be eligible for monetary relief under the DOJ Consent Judgment, the Settling Parties proposed form of which is attached hereto as Exhibit F, to be approved by the Court. The Notice of Eligibility will be sent within sixty (60) days after the DOJ makes a final determination as to eligibility for financial relief under the SCRA interest-related provisions of the DOJ Consent Judgment and the amount of financial relief, if any, and notifies Defendant of such final determinations. The Notice of Eligibility will provide notice of the amount of monetary relief available under the DOJ Consent Judgment and will provide notice of the Second Opt-Out Period. 17. Person means an individual, corporation, partnership, limited partnership, association, joint stock company, estate, legal representative, trust, unincorporated association, government or any political subdivision or agency thereof, and any other business or legal entity, and their spouses, heirs, predecessors, successors, agents, representatives, or assignees. 18. Plaintiff or Named Plaintiff means Plaintiff Raymond Wray and any of his heirs, successors and assigns. 19. Preliminary Approval Order means the order to be entered by the Court, the Settling Parties proposed form of which is attached hereto as Exhibit C. 20. Released Claims means the claims released by the Wray Agreement, as set forth in Section III(J) below. 21. Released Parties means Defendant and all Persons and/or entities released by the Wray Agreement, as set forth in Section III(J) below. 22. SCRA means the Servicemembers Civil Relief Act, 50 U.SC. App. 501, et seq., including any prior names by which the SCRA or its predecessor provisions were known. 23. Second Opt-Out Period refers to the period between the date the Notice of Non- Eligibility or Notice of Eligibility is initially mailed and a date not later than thirty-five (35) days thereafter, which date will be specified in the Notice of Non-Eligibility or Notice of Eligibility, in which period Persons comprising the Settlement Class who have not previously opted-out may submit a request to opt out of the Settlement Class, as described in Section III(G) below. 24. Servicemember has the same meaning as set forth in section 511(1) of the SCRA. Active Duty has the same meaning as set forth in section 101(d) (1) of Title 10, United States Code. Military Service shall have the same meaning as set forth in section 511(2) of the SCRA. 5

6 3:12-cv CMC Date Filed 03/03/15 Entry Number Page 6 of Settlement Benefit means the benefits a Settlement Class Member may receive pursuant to the Wray Agreement and as defined herein. 26. Settlement Class means all current or former Servicemembers who: (1) had periods of active military duty ending no more than 180 days before January 1, 2008 and no later than April 5, 2012 (the Review Period ); (2) submitted written notice of Active Duty orders to CitiMortgage within 180 days of the end of their period of active military duty; and (3) had home mortgage loans for which CitiMortgage used the Subsidy Method to reduce the interest rate to 6%. The Persons comprising the Settlement Class are those borrowers identified on the Class List. The Settlement Class shall not include any judge(s) presiding over this case or members of their chambers staff, or the immediate family members of any such person(s); any person(s) who, independent of the DOJ Consent Judgment, at any time prior to the date of execution of the Wray Agreement, have previously released Defendant or the Released Parties (as defined in Section III(J) below) for the same claims arising under Section 527 of the SCRA; and any person not qualifying for relief under the SCRA or comparable state laws. 27. Settlement Class Member means a Person who falls within the definition of the Settlement Class, excluding those Persons who timely and properly opt out of the Settlement Class in strict accordance with the terms of the Wray Agreement. 28. Settlement Website means and refers to the Internet Publication notice described in Section III(E.5) below, which will host key documents regarding the Settlement including the operative Complaint, the Wray Agreement, the Order Granting Preliminary Approval, Class Notice, templates of the Notice of Eligibility and Notice of Non-Eligibility, the fee petition and supplement thereto, the motion to approve the Incentive Payment and supplement thereto, and any other documents as directed by the Court or agreed to by the Settling Parties. The Settlement Website also will contain information regarding the case status and contact information for Class Counsel. 29. Settling Parties or Parties means, collectively, Defendant and Plaintiff, on behalf of himself and the Settlement Class Members. 30. Stated Rate Method means a loan-servicing methodology in which, at the time a Servicemember borrower becomes eligible for interest rate relief under the SCRA, the borrower s existing loan balance is re-amortized at a fixed rate compliant with the SCRA. 31. Subsidy Method or Subsidy-Based Interest Rate Relief Method means a loanservicing methodology in which, at the time a Servicemember borrower becomes eligible for interest rate relief under the SCRA, the servicer applies a subsidy amount to each payment by the borrower. Subsidy Method includes: (i) methods in which a subsidy is calculated by taking the difference between the borrower s current monthly payment and the fixed monthly payments that would be made by the borrower under a 6% Stated Rate loan; and (ii) methods in which a subsidy is calculated by calculating the difference between the borrower s current interest rate and the interest rate reduced to 6%. 6

7 3:12-cv CMC Date Filed 03/03/15 Entry Number Page 7 of Wray Lawsuit means and refers to the action filed in the United States District Court for the District of South Carolina entitled Wray v. CitiMortgage, Inc., No. 3:12-cv Wray Settlement or Wray Agreement means the settlement into which the Settling Parties have entered to resolve the Wray Lawsuit. The terms of the Wray Settlement are set forth in this document and the attached Exhibits. B. Certification Of Settlement Class 1. Solely for the purposes of the Wray Settlement (as defined in Section III(A.33) above), providing Class Notice (as defined in Section III(A.2) above), and implementing the Wray Settlement, the Settling Parties (as defined in Section III(A.29) above) agree to certification of the following Settlement Class (as defined in Section III(A.26) above), which shall be certified for settlement purposes only: All current or former Servicemembers who: (1) had periods of active military duty ending no more than 180 days before January 1, 2008 and no later than April 5, 2012 (the Review Period ); (2) submitted written notice of Active Duty orders to CitiMortgage within 180 days of the end of their period of active military duty; and (3) had home mortgage loans for which CitiMortgage used the Subsidy Method to reduce the interest rate to 6%. The Persons comprising the Settlement Class are those borrowers identified on the Class List (as defined in Section III(A.4) above). 2. For purposes of the Wray Agreement, and the proceedings and certification contemplated herein, the Settling Parties stipulate and agree that Plaintiff shall be appointed the Class Representative for the Settlement Class and that his counsel, the law firm of Richard A. Harpootlian, P.A., and attorneys Richard A. Harpootlian and Christopher P. Kenney, shall be appointed as Class Counsel (as defined in Section III(A.1) above) for the Settlement Class. The process for seeking certification of the Settlement Class and appointment of the Class Representative and Class Counsel shall be as set forth below in Sections III(D) (Preliminary Approval) and III(K) (Final Approval). 3. If the Court does not approve the Wray Settlement, certification of the Settlement Class and appointment of a Class Representative and Class Counsel will be void, no doctrine of waiver, estoppel, or preclusion will be asserted in any litigated certification proceedings in the Wray Lawsuit (as defined in Section III(A.32) above) and the Settling Parties will be returned to their positions status quo ante with respect to the Wray Lawsuit as if the Wray Settlement had not been entered into. C. Settlement Consideration In exchange for the mutual promises and covenants in the Wray Agreement, including without limitation, the Releases set forth in Section III(J) below and dismissal of the Wray Lawsuit upon the entry of Final Judgment (as defined in Section III(A.12) above), Defendant agrees as follows: 7

8 3:12-cv CMC Date Filed 03/03/15 Entry Number Page 8 of Monetary Benefits. Provided the Effective Date (as defined in Section III(A.10) above) has occurred, all Settlement Class Members (as defined in Section III(A.27) above) who do not opt out of the Settlement Class during either of the two opt-out periods, which are discussed in Section III(G) below, will be eligible for monetary benefits in the amount of $ per Settlement Class Member loan ( Monetary Benefits ). CitiMortgage is providing the Monetary Benefits to Settlement Class Members in connection with their actual or potential claims for alleged damages and in full and final settlement of the claims asserted in the Wray Lawsuit. The Monetary Benefits are separate and apart from any monetary relief to which Settlement Class Members may be found to be entitled under the DOJ Consent Judgment. Participation in either the Wray Settlement or the DOJ Consent Judgment shall not preclude participation in the other, if eligible, and in accordance with applicable terms and conditions. 2. Changes in Policies. Defendant currently implements SCRA interest rate relief through the Stated Rate Method (as defined in Section III(A.30) above). As part of the Wray Settlement and prospective relief hereunder, Defendant will commit for a period of twenty-four (24) months from the execution date of the Wray Settlement to not change its current Stated Rate SCRA interest rate relief method in any material manner that would be less beneficial to its borrowers, except that Defendant will at all times maintain the full ability and discretion to modify its policies and practices based on amendments, changes or clarifications of applicable law as enacted or interpreted by the courts, Congress, or federal regulators, and/or based on changes, amendments or clarification of applicable investor requirements. The Settling Parties agree that the fact that Defendant has agreed not to change its current Stated Rate Method of interest rate relief does not mean that the Stated Rate Method is the required methodology for complying with the SCRA, nor does it mean or imply that the Subsidy Method (as defined in Section III(A.31) above) does not comply with or violates the SCRA. 3. Notice and Administration Expenses and Other Costs. Defendant shall be responsible for all costs and expenses in the Wray Lawsuit for: (i) administering the Wray Settlement, including costs incurred in connection with preparing and mailing Class Notice in the manner set forth in Section III(E) below, and preparing and mailing the second notice of eligibility or non-eligibility as set forth in Section III(L)below; (ii) any attorneys fees and costs the Court awards to Class Counsel pursuant to and in accordance with the limits set forth in Section III(I) below; and (iii) any incentive payment awarded to the Plaintiff pursuant to Section III(I) below. Defendant may self-administer the Wray Settlement, or at its discretion, utilize a third-party to administer the Wray Settlement. All costs of administering the Wray Settlement, including the costs of any third-party administrator, shall be borne by Defendant. D. Preliminary Approval Upon execution of the Wray Agreement by all Settling Parties, the Settling Parties shall promptly request that the Court enter a Preliminary Approval Order, in the form attached as Exhibit C hereto, specifically including provisions that: (i) preliminarily approve the Wray Settlement reflected herein; (ii) preliminarily certify the Settlement Class (for settlement purposes only) and appoint Plaintiff as Class Representative and appoint Class Counsel as counsel for the Settlement Class; (iii) approve the form of Class Notice to be provided to the 8

9 3:12-cv CMC Date Filed 03/03/15 Entry Number Page 9 of 27 Settlement Class in the form attached hereto as Exhibit D, and find that the form, manner and timing of notice constitutes the best notice practicable under the circumstances, and is due and sufficient notice to the Settlement Class and fully satisfies the requirements of due process and of Rule 23 of the Federal Rules of Civil Procedure; (iv) direct that notice be provided to the Settlement Class, in accordance with the Wray Settlement; (v) establish a procedure for Persons comprising the Settlement Class to object to the Wray Settlement or exclude themselves from the Settlement Class and set a date, not later than thirty-five (35) days following the date Class Notice is initially mailed as per Section III(E) of the Wray Agreement, after which no one shall be allowed to object to the Wray Settlement or seek to intervene in the Wray Action; (vi) pending final determination of whether the Wray Settlement should be approved, bar those Persons comprising the Settlement Class, directly, on a representative basis, or in any other capacity, from commencing or prosecuting against any of the Released Parties any action, arbitration, or proceeding in any court, arbitration forum, or tribunal asserting any of the Released Claims; (vii) pending final determination of whether the Wray Settlement should be approved, stay all proceedings in the Wray Lawsuit except those related to the effectuation of the Wray Settlement; (viii) approve the form of Notice of Non-Eligibility and Notice of Eligibility to be provided to the Settlement Class as applicable in the form attached hereto as Exhibits E and F, respectively, and (ix) schedule a Hearing on final approval of the Wray Settlement (which Hearing date and time, as referenced herein and in Section III(K) below, shall be specifically inserted in the Class Notice and which shall take place after the Initial Opt-Out Period and the deadline to object and no earlier than one-hundred-twenty (120) days after entry of a Preliminary Approval Order). E. Class Notice 1. Timing of Class Notice. Class Notice shall initially be mailed as soon as reasonably practicable and no later than forty-five (45) days following the date of entry of the Preliminary Approval Order, in the form attached hereto as Exhibit D (and with the insertion of the applicable date and time of the Hearing on final approval of the Wray Settlement, as well as the objection and opt-out deadline) unless modified by the Court, provided that such modifications are agreed to by the Parties. 2. Method of Notice. Defendant will provide the Class Notice via mail to those Persons comprising the Settlement Class as identified on the Class List. The Class Notice referenced in this section will be mailed to the address of record on Defendant s mortgage loan records for the Persons comprising the Settlement Class, updated by a national change of address service. Class Notice shall be sent via first class mail. No other form of notice shall be required. In the event Class Notice is returned undeliverable with a forwarding address, Defendant shall r the Class Notice to the indicated forwarding address within no later than seven (7) days of receipt of the forwarding address. In the event Class Notice is returned undeliverable with no forwarding address, Defendant shall inform Class Counsel of such returned notices with seven (7) days of receipt of the returned notices, but shall have no further obligation to attempt to obtain a forwarding address for any such returned mail or to further r any such Class Notice or returned mail. 3. Notice of DOJ Consent Judgment. The Class Notice shall include a notification provision advising the Settlement Class of the DOJ Consent Judgment and that it: (i) provides 9

10 3:12-cv CMC Date Filed 03/03/15 Entry Number Page 10 of 27 for a review of certain servicemember mortgage loans to assess CitiMortgage s compliance with the SCRA s 6% interest relief provisions; and (ii) provides for monetary relief to servicemembers determined eligible under the DOJ Consent Judgment, in exchange for a signed release in favor of CitiMortgage. The contents of the notification provision shall be substantially the same as set forth in Section VII of the Class Notice attached hereto as Exhibit D, except as modified by the Court, provided such modifications are agreed to by the Settling Parties. The Class Notice, in the form attached hereto as Exhibit D, shall further advise that participation in either the Wray Settlement or the DOJ Consent Judgment shall not preclude participation in the other, if eligible, and in accordance with applicable terms and conditions. 4. Request for Forwarding Addresses. The Class Notice shall request that Persons comprising the Settlement Class provide notice of any subsequent change in their address, which notice shall be sent by a time certain to a P.O. Box to be provided by Defendant as part of administration of the Wray Settlement. In order to verify identity, Persons providing updated address information must also provide a copy of their valid driver s license, state identification card, or military identification card. 5. Internet Publication. Within fourteen (14) days of entry of the order granting Preliminary Approval of the Wray Agreement, Defendant, or an administrator appointed by Defendant, shall establish and maintain a Settlement Website (as defined in Section III(A.28) above) with links on the home page to key documents regarding the Settlement including the operative Complaint, the Wray Agreement, the Preliminary Approval Order, Class Notice, templates of the Notice of Eligibility and Notice of Non-Eligibility, the fee petition and supplement thereto, the motion to approve the Incentive Payment and supplement thereto, and any other documents as directed by the Court or agreed to by the Settling Parties. The Settlement Website also will contain information regarding the case status and contact information for Class Counsel. The Settlement Website shall be located at or such other URL as Class Counsel and counsel for Defendant may subsequently agree upon in writing, provided the URL shall not include the name CitiMortgage. On the day when the Class Notice is sent by mail, a link to the Class Notice shall be added to the Settlement Website substantially in the form attached as Exhibit D unless modified by the Court, provided that such modifications are agreed to by the Parties. The Settlement Website shall not include any advertising and shall not bear or include the names, logos, legends, trademarks or any other information of or attributable to CitiMortgage. The Settlement Website shall remain in place until after the latter of: (i) one hundred twenty (120) days after the Effective Date or (ii) one hundred twenty (120) days after the end of the Second Opt-Out Period. 6. Class Notice Costs. All costs of providing the Class Notice, as set forth in the Wray Agreement, or any other notice to the Settlement Class as set forth in the Wray Agreement, shall be paid exclusively by Defendant. F. Provision of Monetary Benefits to Class Members 1. Monetary Benefits to be Paid to Settlement Class Members. Settlement Class Members who do not opt out of the Settlement Class during either the Initial Opt-Out Period (as 10

11 3:12-cv CMC Date Filed 03/03/15 Entry Number Page 11 of 27 defined in Section III(A.13) above) or the Second Opt-Out Period (as defined in Section III(A.23) above) will be eligible for Monetary Benefits in the amount of $ per Settlement Class Member loan subject to the Wray Agreement. The Monetary Benefits shall be distributed to Settlement Class Members via a check payment. Monetary Benefits shall be distributed no later than sixty (60) days after the latter of: (i) the date that the Second Opt-Out Period has closed or (ii) the Effective Date. If there are two or more borrowers on a single SCRA loan, only one Monetary Benefit check in the amount of $ will be provided to or on behalf of the borrowers on that particular loan and the check will be made payable jointly to both borrowers. As described in Section III(G) below, if a borrower on a particular loan covered by the Wray Agreement opts-out of the Settlement Class, then no payment will be made to any co-borrower or co-signer on the SCRA Loan of the borrower who opted-out. 2. Distribution of Settlement Benefits. Monetary Benefits distributed by check shall be mailed to the Settlement Class Member at the address of record indicated on the loan records of Defendant, as such address is reflected on the Class List, updated by a national change of address database and/or any forwarding address received as a result of mailing the Class Notice. Check payments shall be issued in the name(s) of the borrowers for the SCRA loan at issue, as reflected on the loan records of Defendant, as such name(s) and loan(s) is/are reflected on the Class List. Each check mailed shall bear a conspicuous legend indicating that it will be void if not cashed within one-hundred twenty (120) days after issuance. Any Settlement Class Members who fail to cash their check within this time period shall forfeit their right to payment, but shall nevertheless be bound by the Wray Agreement, including its release provisions. Returned checks and the amounts attributable to checks that remain uncashed as of the 121 st day after issuance shall permanently revert to Defendant. 3. Settlement Not Contingent Upon Eligibility Under DOJ Consent Judgment. Settlement Class Members who do not opt out of the Settlement Class (as described in Section III(G) below) shall be bound by the Wray Settlement and all of their claims shall be dismissed with prejudice and released (as described in Section III(J) below) without regard to whether those Settlement Class Members are actually eligible to receive any compensation or other relief under the DOJ Consent Judgment, and without regard to whether those Settlement Class Members sign releases of their rights in connection with the DOJ Consent Judgment. The Settling Parties acknowledge and agree, and the Class Notice shall advise the Settlement Class that, participation in either the Wray Settlement or the DOJ Consent Judgment shall not preclude participation in the other, if eligible, and in accordance with applicable terms and conditions. CitiMortgage makes no representations regarding ultimate eligibility for review or relief under the DOJ Consent Judgment, nor about how or when DOJ shall make any such determinations. 4. Notice of No Determination of Liability. The Settling Parties acknowledge and agree that there has been no determination of liability by the Court in the Wray Lawsuit and that the Class Notice shall advise accordingly. The Class Notice shall further advise that there has been no determination by the Court or the DOJ that the Subsidy Method does not comply with or otherwise violates the SCRA. 11

12 3:12-cv CMC Date Filed 03/03/15 Entry Number Page 12 of Verification by Affidavit. There shall be no oversight or enforcement monitor appointed in connection with the Wray Settlement or otherwise in connection with the DOJ Consent Judgment. Within fourteen (14) days after expiration of the period for Settlement Class Members to cash their settlement benefit checks as described in Section III(F) of the Wray Agreement, Defendant shall provide Class Counsel with an affidavit or report attesting that, to the best of Defendant s knowledge, the DOJ Consent Judgment relief and review process has been completed in accordance with its terms. The affidavit or report will also set forth the dates on which the Notices of Non-Eligibility and Notices of Eligibility were mailed, the total numbers of each mailed, and will also identify the total number of settlement benefit checks sent and checks cashed pursuant to the Wray Settlement. The Class List will also be amended to reflect the Settlement Class Members who were sent a settlement benefit check and, as applicable, cashed such checks. Defendant also shall provide the Court with a copy of the affidavit or report for its in camera review and, if the Court deems it appropriate, a copy of the affidavit or report will be filed under seal. 6. Tax Obligations. Plaintiff and Class Counsel expressly agree and acknowledge that each Settlement Class Member shall be solely responsible for any and all tax obligations related to any payments, if any, received by that individual Settlement Class Member as part of the Wray Settlement, DOJ Consent Judgment, or otherwise. Defendant makes no representations about the tax ramifications, if any, of any payments made pursuant to the DOJ Consent Judgment. G. Opt-Out Rights 1. Two Opt-Out Periods. Persons comprising the Settlement Class shall be given two opportunities to opt out of the Settlement Class the Initial Opt-Out Period and the Second Opt-Out Period. 2. The Initial Opt-Out Period. The Initial Opt-Out Period shall run from the date Class Notice is initially mailed until a date not later than thirty-five (35) days thereafter, which date will be specified in the Class Notice, in which period Persons comprising the Settlement Class may submit a request to opt out of the Settlement Class, as provided in this Section III(G). Following the deadline for the Initial Opt-Out Period and not more than fourteen (14) days before the scheduled date for the Hearing on final approval of the Wray Settlement, Defendant shall provide the Court and Class Counsel with an affidavit or report confirming that Class Notice was sent to those Persons identified on the Class List in the manner required by the Wray Agreement, and setting forth the total number of Class Notices mailed, the number of Class Notices that were returned undeliverable with a forwarding address, the number of Class Notices that were r ed to the forwarding address, the number of Class Notices that ultimately were returned as undeliverable, and the number of requests for exclusion received by Defendant CitiMortgage. Such affidavit or report will be submitted for the Court s in camera review and, if the Court deems it appropriate, a copy of the affidavit or report will be filed under seal. 3. The Second Opt-Out Period. The Second Opt-Out Period shall run from the date the Notice of Non-Eligibility or Notice of Eligibility is initially mailed until a date not later than thirty-five (35) days thereafter, which date will be specified in the Notice of Non-Eligibility or Notice of Eligibility. During this period, Persons comprising the Settlement Class who did not 12

13 3:12-cv CMC Date Filed 03/03/15 Entry Number Page 13 of 27 previously opt out may submit a request to opt out of the Settlement Class, as provided in this Section III(G). Either a Notice of Non-Eligibility or a Notice of Eligibility, as applicable, will be sent within sixty (60) days after the DOJ makes a final determination as to eligibility for financial relief under the DOJ Consent Judgment and the amount of financial relief, if any, and notifies Defendant of such determinations. The Notice of Non-Eligibility and Notice of Eligibility will provide notice of the Second Opt-Out Period. To the extent that the Second Opt-Out Period expires after the Final Approval Order has been entered by the Court and to the extent that any Person(s) opt out during the Second Opt-Out Period, Defendant will submit a Notice of Additional Opt Outs to the Court within ten (10) business days of the expiration of the Second Opt-Out Period. The Notice will list the names of each Person who opted-out during the Second Opt-Out Period. The Notice of Additional Opt Outs shall serve, nunc pro tunc, as a supplementation to the list of opt outs, if any, set forth in the Final Approval Order. In the event that no Person(s) exercise their right to opt out during the Second Opt-Out Period, the Settling Parties will provide notice to the Court of that fact within ten (10) business days of the expiration of the Second Opt-Out Period. The Notice of Additional Opt-Outs will be submitted for the Court s in camera review and, if the Court deems it appropriate, a copy will be filed under seal. 4. Requests Must Be Timely. A request for exclusion that is not timely postmarked during either the Initial Opt-Out Period or the Second Opt-Out Period or that is sent to an address other than that set forth in the Class Notice, the Notice of Non-Eligibility, or the Notice of Eligibility shall be invalid and the Person(s) serving such request shall be a Settlement Class Member and be bound by the Wray Agreement unless the Person is allowed additional time to opt out pursuant to Section III(G.5) below. 5. Inability to Opt Out. If a Settlement Class Member is deployed overseas outside of the United States on Active Duty military service in an active combat capacity during the Second Opt-Out Period and the ability of such Person to opt out within the Second Opt-Out Period is materially impaired on the basis of the nature of such Active Duty military service, then such Person shall have thirty-five (35) days from the end of such impairment in which to opt out in accordance with the opt-out requirements provided herein and in the Notice of Non-Eligibility or Notice of Eligibility, provided that: (i) the Person can demonstrate that the nature of the Person s Active Duty Military Service prevented the Person from opting-out within the Second Opt-Out Period; and (ii) that the Person has not cashed any checks for Monetary Benefits under the Wray Settlement and has returned any such checks to CitiMortgage. If either of these two conditions is not satisfied, no further opt-out opportunity shall apply. The Court will retain jurisdiction to resolve disputes regarding whether a Settlement Class Member was unable to timely opt out. 6. Requirements for Opting-Out. Exclusion requests must: (i) be made on the form attached to the Class Notice, the Notice of Non-Eligibility, or the Notice of Eligibility or, in a separate writing containing substantially all of the same information; (ii) be signed by the Person obligated on the loan and include the full name, address and either the loan number(s) or the address of the property securing the loan of the Person(s) requesting exclusion; (iii) be timely postmarked and mailed to the address provided in the Class Notice, the Notice of Non- Eligibility, or the Notice of Eligibility; and, (iv) indicate through a check mark on a line reading 13

14 3:12-cv CMC Date Filed 03/03/15 Entry Number Page 14 of 27 I am opting out or through a statement to the same effect that the Person is requesting to opt out of the Settlement Class. No request for exclusion will be valid unless it complies with all the foregoing requirements and includes all of the information described above. Defendant will retain a copy of all requests for exclusion and will provide a copy of any such requests (with any loan number(s), except for the last four digits, redacted) to Class Counsel within seven business days following expiration of the deadline for the Initial Opt-Out Period and will provide copies of any additional requests (with any loan number(s), except for the last four digits, redacted) to Class Counsel within seven business days following expiration of the deadline for the Second Opt-Out Period. Class Counsel will keep any such opt-out information confidential and use it only for purposes of determining whether a person has properly opted out. All Persons comprising the Settlement Class who do not opt out in accordance with the terms set forth herein or whose opt-out request is deemed invalid by the Court shall be bound by all determinations and judgment in the Action and will be Settlement Class Members hereunder. 7. Only Individual Opt-Out Rights. Except as provided in this Section III(G.7), no Person may purport to exercise any exclusion rights of any other person, or purport to exclude other Persons as a group, aggregate, or class involving more than one person, or as an agent or representative. Any such purported exclusion shall be invalid and any Person(s) that does not submit an opt-out request on his or her own behalf shall be a Settlement Class Member and treated and be bound as a Settlement Class Member for all purposes. If a borrower on a loan submits a valid opt-out request, the request will be effective for any co-borrower or co-signer on the same loan. 8. Opt Outs Not Entitled to Settlement Benefits. All Persons who properly exclude themselves from the Settlement Class, as identified in the Final Approval Order, or on the list of opt outs provided to the Court, will not be entitled to any benefits provided by the Wray Agreement, including the Monetary Benefits, will not be bound by any further orders or judgments entered for or against the Settlement Class, and will preserve their ability to independently pursue, at their own expense, any claims they may have against Defendant. Nothing in the Wray Agreement shall preclude any Person from independently participating in the DOJ Consent Judgment in accordance with its terms. H. Objections To The Settlement 1. Any Settlement Class Member who has not previously opted out in accordance with the terms of the Wray Settlement may object to the Wray Settlement and appear at the Hearing on final approval to argue that the proposed Wray Settlement should not be approved and/or to oppose the application of Class Counsel for an award of attorneys fees and the incentive award to the Plaintiff. 2. In order to object, and/or be heard on such objection at the Hearing on final approval, the Settlement Class Member must make any Objection in writing, stating the grounds and reasons therefore, and either: (1) file the Objection with the Court using the Court s Case Management/Electronic Case Files (CM/ECF) system, or (2) hand-deliver or mail the Objection to the Clerk of Court. 14

15 3:12-cv CMC Date Filed 03/03/15 Entry Number Page 15 of To be considered valid, each Objection must be timely filed, hand-delivered or postmarked for mailing by the filing deadline set forth in the Class Notice (which date shall be thirty-five (35) days after the initial mailing date of the Class Notice), and must (i) be signed by the Settlement Class Member and include the full name, current address, telephone number, and either the loan number(s) or the address of the property securing the loan of the Settlement Class Member(s) making the objection; (ii) state that the Settlement Class Member objects to the Wray Settlement, in whole or in part; (iii) set forth a statement of the legal and factual bases for the objection; and (iv) provide copies of any documents that the Settlement Class Member wishes to submit in support of his/her position. Any Settlement Class Member who fails to object in the manner prescribed herein and in the Preliminary Approval Order shall be deemed to have waived his or her objection and forever be barred from making any such objection in the Wray Lawsuit. 4. Any Settlement Class Member who wishes to appear at the Hearing on the final approval of the Wray Settlement in person and be heard must either indicate such on the Settlement Class Member s timely, valid Objection or must file, hand-deliver or mail a separate notice of intention to appear with the Clerk of the Court in the same manner and timeframe as a written Objection. Settlement Class Members may attend the Hearing without providing prior notice, but may not be heard at the Hearing unless such notice has been provided. I. Attorneys Fees Award and Incentive Award for Plaintiff 1. Attorneys Fees and Costs. Class Counsel will request approval of attorneys fees and costs in an amount not to exceed one million, six hundred thousand dollars ($1,600,000.00) and Defendant agrees that it will not oppose an application by Class Counsel for attorneys fees and costs in an amount not to exceed $1,600, Provided Plaintiff and Class Counsel have timely provided the completed W-9 forms as required herein, and subject to the terms of the Wray Agreement, Defendant will pay such attorneys fees and costs, or such lesser amount ordered by the Court, within fourteen (14) business days after the later of the Effective Date or after any order on attorneys fees is final and non-appealable. The Wray Settlement and the effectiveness of the Wray Agreement are not conditioned upon the Court s approval of the fees or costs sought by Class Counsel. Plaintiff and Class Counsel shall accept as final such lesser amounts as may be awarded and approved by the Court for fees and costs. In addition, no interest will accrue on such amounts at any time. Class Counsel must file a fee petition consistent with the terms of the Wray Agreement at the time the Settling Parties request that the Court enter a Preliminary Approval Order. Class Counsel must file a supplement to that fee petition no later than fourteen (14) days prior to the date set for the Hearing on the final approval of the Wray Settlement. The fee petition and supplement will each be posted on the Settlement Website. Class Counsel also agrees to provide a completed W-9 Form for all appointed class counsel and a W-9 Form for Plaintiff at least forty-five (45) days in advance of any payments that may be due from Defendant pursuant to any terms of the Wray Agreement. The Parties acknowledge and agree that the entire amount of the court-approved attorneys fees and costs (not to exceed the total amount of $1,600,000.00) shall be paid by Defendant to Class Counsel. Except for that payment, Class Counsel, by signing the Wray Agreement, hereby releases the Released Parties from any and all claims for attorneys fees, by lien or otherwise, for any legal or other services rendered in connection with the Wray Lawsuit. 15

16 3:12-cv CMC Date Filed 03/03/15 Entry Number Page 16 of Settlement Incentive Payment to Wray. Defendant agrees not to oppose an application by Plaintiff Wray for a settlement incentive payment, subject to the Court s approval, in the amount not to exceed fifty thousand dollars ($50,000.00), in settlement of Plaintiff s individual and class claims. The Settling Parties agree that the settlement incentive payment of up to but not more than $50,000.00, or such lesser amount as awarded by the Court (the Incentive Payment ) is in consideration and release of, among other things, any and all individual or purported class claims in any way related to the Plaintiff s mortgage loan and/or the claims alleged in the Wray Lawsuit and is agreed to in lieu of any other distribution, payment or benefits hereunder. Plaintiff acknowledges and agrees that Plaintiff shall not be entitled to any of the relief or payments available to Settlement Class Members under the Wray Settlement. In no event shall there be any form of double recovery to Plaintiff. In the event compensation is awarded to Plaintiff under the DOJ Consent Judgment, the amount of the compensation awarded under the DOJ Consent Judgment shall be credited against the amounts awarded hereunder as an Incentive Payment, so as to prevent any double recovery to Plaintiff for the same alleged SCRA violation. However, Defendant shall only be obligated by the Wray Settlement to pay the amount of an Incentive Payment actually awarded by the Court not exceeding the total amount of $50, and in no event shall the payment to Wray under the Wray Settlement exceed that amount. Provided Plaintiff and his counsel have timely provided Defendant with the completed W-9 forms as required above, Defendant will pay such Incentive Payment within fourteen (14) business days after the later of the Effective Date or after any order on such Incentive Payment is final and non-appealable. The Wray Settlement and the effectiveness of the Wray Agreement are not conditioned upon the Court s approval of an Incentive Payment to Wray, or the approval of an award in the full amount requested by Wray. Plaintiff and Class Counsel shall accept as final such lesser amount as may be awarded and approved by the Court. Class Counsel must submit any motion to approve the Incentive Payment at the time the Settling Parties request that the Court enter a Preliminary Approval Order. Class Counsel must file a supplement to that motion no later than fourteen (14) days prior to the date set for the Hearing on the final approval of the Wray Settlement. The motion to approve the Incentive Payment and the supplement will each be posted on the Settlement Website. 3. Tax Obligations. Plaintiff and Class Counsel expressly agree and acknowledge that they shall be solely responsible for any and all tax obligations related to any payments received pursuant to this portion of the Wray Agreement. Defendant makes no representations about the tax ramifications, if any, of any payments made pursuant to the Wray Agreement or otherwise. J. Release of Claims 1. Releasing Parties. As of the Effective Date, the Named Plaintiff, on his own behalf and on behalf of each Settlement Class Member, and on behalf of their respective heirs, executors, administrators, representatives, agents, attorneys, partners, successors, predecessorsin-interest, assigns, and any co-borrowers or co-signers on their loan(s) (collectively the Releasing Parties ) acknowledges full satisfaction of and fully, finally and forever settles with, releases and discharges the Released Parties (as defined below) of and from all Released Claims (as defined below). Subject to Court approval of the Wray Settlement, all Settlement Class Members shall be bound by the Wray Settlement and all of their claims shall be dismissed with prejudice and released even if, despite Defendant s compliance with the Notice requirements of 16

17 3:12-cv CMC Date Filed 03/03/15 Entry Number Page 17 of 27 the Wray Agreement, they never received personal notice of the Wray Lawsuit or Wray Settlement. The effectiveness of the Wray Settlement shall not be conditioned upon approval of the payment or the amount of payment either to the Named Plaintiff or to Class Counsel, either as an award of attorneys fees or costs, or as an Incentive Payment to Plaintiff. 2. Released Parties. For purposes of the Wray Settlement, Released Parties means and includes: CitiMortgage, Inc., and each and all of its: (i) present, former and future direct and indirect parent companies, affiliates, subsidiaries, agents, successors, predecessors-in-interest, and/or any financial institutions, corporations, trusts, or any other entities that serviced or may hold or have held any interest in any Settlement Class Member s loan(s) or any receivables relating to any Settlement Class Member s loan(s), or any receivables or group of receivables, or any interest in the operation or ownership of CitiMortgage or any of the foregoing entities; and (ii) all of the aforementioneds respective past, present, or future officers, directors, employees, attorneys, shareholders, agents, vendors (including processing facilities) and assigns, as well as the holder, owner, mortgagee or third party servicer, or prior or subsequent servicer of any mortgage loan which is the subject of the Wray Settlement (collectively the Released Parties ). Without in any way limiting the generality of the foregoing, the Released Parties shall include but is not limited to Citigroup, Inc., Citibank N.A., Citi Residential Lending, Inc. and CitiFinancial Mortgage Company, Inc. to the same and full extent as CitiMortgage, Inc. is named a Released Party. 3. Released Claims. For purposes of the Wray Settlement, Released Claims means and includes any and all rights, duties, obligations, claims, demands, actions, causes of action or liabilities, whether arising under local, state or federal law, whether by Constitution, statute, contract, common law or equity, whether known or unknown, suspected or unsuspected, asserted or unasserted, foreseen or unforeseen, actual or contingent, liquidated or unliquidated, and including, but not limited to, breach of contract, unjust enrichment, money had and received, specific performance, promissory estoppel, unfair trade practice, usury claims, fraud, violation of state or federal banking regulations, violation of state or federal consumer protection statutes or unfair trade practices or competition statutes, and/or violation of the Servicemembers Civil Relief Act, 50 U.S.C. App. 501, et seq., which Plaintiff, or any Settlement Class Member or any Releasing Party now has or has ever had, as of the date of the Wray Agreement, that relate to or arise out of in any way: (i) any and all acts, omissions, facts, transactions, occurrences, claims, demands, actions, causes of actions, rights, offsets, liens or liabilities alleged, asserted, or referred to in the Wray Lawsuit; (ii) Defendant s provision of, or method for providing, implementing or calculating, SCRA related interest rate relief, including but not limited to the use of the Subsidy Method, the Stated Rate Method, or any other methods in connection with the Settlement Class Member s mortgage loan set forth on the Class List; (iii) any violation of the SCRA s interest rate relief provisions in connection with the loans identified on the Class List, including without limitation Section 527 of the SCRA or any comparable state law provisions pertaining to SCRA/servicemember interest rate relief, related to or arising out of the method or means used to implement, calculate or provide such relief, including but not limited to use of the Subsidy Method; and (iv) the means or manner, if any, by which CitiMortgage, in providing, implementing, terminating or suspending SCRA interest-related relief, notified borrowers of their SCRA interest relief related payment amounts or any changes in such payment amounts, including but not limited to any and all claims arising out of or in any way related to the Truth in Lending Act ( TILA ) or the Real Estate Settlement Procedures Act ( RESPA ) or any 17

18 3:12-cv CMC Date Filed 03/03/15 Entry Number Page 18 of 27 comparable state or other consumer protection laws in connection with the Settlement Class Member s mortgage loan set forth on the Class List. The release shall also apply to any and all claims of the Releasing Parties that would be barred by the doctrines of res judicata or collateral estoppel had the issues in the Wray Lawsuit been litigated by each Settlement Class Member to a final judgment on the merits, and to any and all past, present, and future claims, administrative or otherwise, actions, causes of action, rights or liabilities, known or unknown, based on, or arising out of, or in any way relating or pertaining to the facts, events, or transactions at issue in the Wray Lawsuit. 4. For purposes of the Wray Settlement and with reference to Plaintiff Wray, Released Claims further specifically extends to and includes any and all claims, actions, causes of action or liabilities, whether arising under local, state, or federal law, whether by Constitution, statute, contract, common law or equity, whether known or unknown, suspected or unsuspected, asserted or unasserted, foreseen or unforeseen, actual or contingent, liquidated or unliquidated, that relate to or arise out of in any way, the mortgage loan at issue in the Wray Lawsuit. 5. Without limiting the foregoing releases, the Released Claims specifically extend to claims that Plaintiff Wray and each and any Settlement Class Members do not know or suspect to exist in their favor at the time that the Wray Settlement, and the releases contained therein, becomes effective. This section constitutes a waiver of, without limitation as to any other applicable law, Section 1542 of the California Civil Code, which provides: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. Likewise, this section constitutes a waiver of, without limitation as to any other applicable law, Section of the South Dakota Codified Laws, which provides: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR. Plaintiff Wray and each Settlement Class Member understand and acknowledge the significance of these waivers of California Civil Code Section 1542, Section of the South Dakota Codified Laws and/or of any other applicable law relating to limitations on releases. In connection with such waivers and relinquishment, Plaintiff Wray and each Settlement Class Member acknowledge that they are aware that they may hereafter discover facts in addition to, or different from, those facts which they now know or believe to be true with respect to the subject matter of the Wray Settlement, but that it is their intention to release fully, finally and forever all Released Claims, and in furtherance of such intention, the release of the 18

19 3:12-cv CMC Date Filed 03/03/15 Entry Number Page 19 of 27 Released Claims will be and remain in effect notwithstanding the discovery or existence of any such additional or different facts. 6. Except to the extent released by the Wray Settlement, nothing contained within the Release Provision shall otherwise amend or modify the rights or obligations of any party as set forth in the loan mortgage agreements existing between the parties. 7. The releases contained in this Section III(J) shall apply to and bind all Settlement Class Members who do not opt out, including but not limited to those Settlement Class Members whose Class Notices are returned undeliverable, and/or those for whom no current address can be found. 8. Notwithstanding any of the foregoing, nothing in the release provisions of the Wray Agreement shall bar any of the Settlement Class Members from receiving any benefits under the DOJ Consent Judgment in accordance with its terms, if applicable. In accordance with Section III(J.4) above, this provision does not include Plaintiff Wray. K. Final Approval Following entry of the Preliminary Approval Order, the provision of Class Notice as set forth herein and expiration of the time for the Initial Opt-Out Period and objections, the Settling Parties shall, at the Hearing on the final approval of the Wray Settlement, promptly request that the Court enter a Judgment of Dismissal and of a Final Approval Order in the form attached hereto as Exhibit B or as otherwise agreed to between the Settling Parties and specifically including provisions that: (i) find that Class Notice was the best notice practicable under the circumstances and was due and sufficient notice to the Settlement Class, and that such notice fully satisfied the requirements of due process, and the requirements of Federal Rule of Civil Procedure 23; (ii) approve the Wray Settlement and find that the Wray Agreement is fair, reasonable and adequate and in the best interests of the Settlement Class; (iii) confirm that Plaintiff and the Settlement Class Members have released all Released Claims, as set forth above, and permanently bar and enjoin Plaintiff, and all Settlement Class Members, from asserting, commencing, prosecuting, or continuing any of the Released Claims against Defendant or any of the Released Parties; and (iv) dismiss the Wray Lawsuit with prejudice as to the Settlement Class Members and Plaintiff and dismiss the Wray Lawsuit without prejudice as to the remainder of the putative class that has opted out, subject to the Court s retaining jurisdiction over the enforcement of the terms of the Wray Agreement. The Final Approval Order may also contain provisions for the award of attorneys fees and costs and the incentive award as set forth herein. L. Notice of Non-Eligibility and Notice of Eligibility 1. Notice of Non-Eligibility and Notice of Eligibility. As noted in Section III(D) above, in the proposed Preliminary Approval Order, the Settling Parties will request that the Court approve a Notice of Non-Eligibility and Notice of Eligibility, in the forms attached hereto as Exhibits E and F or as otherwise agreed to between the Settling Parties and approved by the Court, to be mailed to applicable Persons comprising the Settlement Class within sixty (60) days after the DOJ makes a final determination as to eligibility for financial relief under the SCRA 19

20 3:12-cv CMC Date Filed 03/03/15 Entry Number Page 20 of 27 interest-related provisions of the DOJ Consent Judgment and the amount of financial relief, if any, and notifies Defendant of such final determinations. The Notice of Non-Eligibility will provide notice that applicable Persons comprising the Settlement Class are not eligible for monetary relief under the DOJ Consent Judgment and will provide notice of the Second Opt-Out Period. The Notice of Eligibility will provide notice to applicable Persons comprising the Settlement Class of the amount of monetary relief to which such Person is entitled under the DOJ Consent Judgment and will provide notice of the Second Opt-Out Period. 2. Method of Notice. The Notice of Non-Eligibility or Notice of Eligibility shall be mailed to the same address as the Class Notice, as updated by national change of address service or any forwarding address received as a result of mailing the Class Notice. No other form of notice shall be required. In the event the Notice of Non-Eligibility or Notice of Eligibility is returned undeliverable with a forwarding address, Defendant shall r the Notice of Non- Eligibility or Notice of Eligibility to the indicated forwarding address within no later than seven (7) days of receipt of the forwarding address. In the event the Notice of Non-Eligibility or Notice of Eligibility is returned undeliverable with no forwarding address, Defendant shall inform Class Counsel of such notices within seven (7) days of receipt of the undelivered notice, but shall have no further obligation to attempt to obtain a forwarding address for any such returned mail or to further r any such notice or returned mail. Except as posted on the Settlement Website in template form, the Settling Parties further acknowledge that there shall be no internet or publication notice of the Notice of Non-Eligibility or Notice of Eligibility. All costs of providing the Notice of Non-Eligibility and Notice of Eligibility shall be paid exclusively by Defendant. Once the Notices of Non-Eligibility and Notices of Eligibility have been mailed, the Settlement Website will be updated to reflect that fact and direct Settlement Class Members to contact Class Counsel with any questions. M. General Matters 1. No Admission of Liability. Defendant disputes the claims alleged in the Wray Complaint and denies any liability as part of the Wray Settlement. Defendant is settling and has entered into the Wray Agreement solely to avoid the cost and inconvenience of litigation, and to completely be free of any further claims that were asserted or that could have been asserted in the Wray Lawsuit. 2. Effect of Settlement. Neither the Wray Agreement nor any act performed or document executed pursuant to or in furtherance of the Wray Settlement: (i) is or may be deemed to be or may be used as an admission of, or evidence of, the validity of any Released Claim, or of any wrongdoing or liability of the Released Parties; (ii) is or may be deemed to be or may be used as an admission of, or evidence of, any fault or omission of the Released Parties in any civil, criminal or administrative proceeding in any court, administrative agency or other tribunal; or (iii) is or may be deemed to be a waiver of Defendant s right to seek to enforce the terms of any borrowers loan mortgage agreement. The Released Parties may file the Wray Agreement and/or the Final Judgment in any action or proceeding that may be brought against them in order to support a defense or counterclaim based on principles of res judicata, collateral estoppel, release, good faith settlement, judgment bar or reduction, or any other theory of claim preclusion or issue preclusion or similar defense or counterclaim. 20