(b)(2) 

SETTLEMENT AND RELEASE AGREEMENT 

This Settlement and Release Agreement ("Agreement") is made as of this day of 

November, 2010, by and between the following undersigned parties: 

Plaintiff Federal Deposit Insurance Corporation, As Receiver for the St. Stephen 

State Bank ("FDIC"), and the Defendant Lynette D. Jeppesen ("Jeppesen"). 

RECITALS 

WHEREAS: Prior to January IS, 2010, the St. Stephen State Bank ("Bank") was a federally 

insured depository institution organized and existing under the laws of Minnesota; 

WHEREAS: On January 15, 2010, the Bank was closed by the Minnesota Department of 

Commerce and pursuant to 12 U.S.C. § 1821(c), the FDIC was appointed receiver of the Bank; 

WHEREAS: In accordance with 12 U.S.C. § 1821(d), the FDIC as receiver succeeded to all 

rights, titles, powers and privileges of the Bank, its shareholder, and creditors, including right 

and title with respect to the Bank’s assets; 

WHEREAS: Among the assets to which the FDIC as receiver succeeded are certain of the Bank’s 

claims, demands, and causes of actions against Lynette D. Jeppesen, as follows: 

1. On June 1, 2010, the FDIC filed against Jeppesen a Complaint for "NonDischargeability of Debt" under section 523 of the United State Bankruptcy 

Code in the United Stales Bankruptcy Court, District of Minnesota, Third 

Division, No. 10-31309 ("Lawsuit"), alleging among other things defalcation 

while acting in a fiduciary capacity, seeking among other things entry of 

judgment in favor of the FDIC and against Jeppesen in the amount of 

$42,750.75, and a determination pursuant to 11 U.S.C. § 523 that such 

judgment is not subject to any discharge Jeppesen may otherwise receive 
under the bankruptcy code. 

2. On June 30, 2010, Defendant Jeppesen tiled an "Answer to Complaint 

Objecting to Discliargeability of Debt" which among other things generally 

denies the allegations by FDIC, states various affirmative defenses, and seeks 

dismissal of FDIC’s Complaint in its entirety; 

WHEREAS: The undersigned parties deem it in their best interests to enter Into this Agreement 

to avoid the uncertainty, trouble, and expense of further litigation, and desire to settle the 

Lawsuit without further legal action based upon the terms and conditions contained herein; 

SETTLEMENT 

NOW, THEREFORE, in consideration of the promises, covenants, undertakings, 

payments, and releases stated herein, the sufficiency of which consideration is hereby 

acknowledged, the undersigned parties agree, each with the other, as follows 

SECTION 1 

Piyment & Delivery to FDIC 

A. As an essential covenant and condition to this Agreement, Jeppesen agrees to pay 

the FDIC the sum of Ten Thousand Dollars ($10,000.00) in certified funds made payable to: 

FDIC as receiver for St. Stephen State Bank ("Settlement Funds") and execute this Agreement 

and deliver both to the FDIC as forth in Section 1(B) below on or before Monday, November15, 

2010. 

B. Jeppesen shall deliver the Agreement and Settlement funds to the FDIC by 

delivering both on or before November 15, 2010 to: Andrew J. Steil, Rinke Noonan, 1015W. 

St, Germain St., #300, St. Cloud, MN. 

C. In the event either the Settlement Funds or Agreement is not delivered as set forth 

above in Section 1(A) and Section 1(B), then this Agreement shall become null and void. 

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D. Upon performance of delivering the Settlement Funds and Agreement as set forth 

in Section 1(A) and Section 1(B) above, the parties through their attorneys shall execute a 

stipulated dismissal with prejudice and without costs or expenses to either party with each part to 

bear its own expense for the perpetration of such filing. 

SECTION It 

Release 

A Release of FDIC byJeppesen. 

Effective simultaneously with the release granted in Section 11(b) below, Jeppesen, on 

behalf of herself !individually, and her respective heirs, executors, administrators, agents, 

representatives, successors and assigns, hereby releases and discharges the FDIC, and its 

employees, officers, directors, representatives, attorneys, successors and assigns, from any and 

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

or in equity, that arise from or relate to the causes of action alleged in the Lawsuit. 

B. Release of Jeppesen by FDIC -

Effect ive upon delivery of the Settlement Funds and Agreement as set forth in SECTION 

I above, the FDIC in its capacity as receiver for the Bank, hereby releases and discharges 

Jeppesen, from any and all claims, demands, obligations, damages, actions, and causes of action, 

direct or indirect, in law or in equity, belonging to the FDIC in its capacity as receiver for the 

Bank that arise from or relate to the causes of.action alleged in the Lawsuit, 

C. Express Reservations From Releases By FDIC. 

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

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

claims or causes of action: 

(i) against Jeppesen or any other person or entity for liability, if any, incurred 

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as the maker, endorser or guarantor of any promissory note or 

indebtedness payable or owed by them to the FDIC, the Bank, other 

financial institutions, or any other person or entity, including without 

limitation any claims acquired by FDIC as successor in interest to the 

Bank or any person or entity other than the Bank; 

(ii) against any person or entity not expressly released in this Agreement; 

and 

(iii) which are not expressly released in Section 11(A) and Section 11(B) 

above. 

SECTION 111 

Representations and Acknowledgments 

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

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

claims, and that this Agreement is not an admission or evidence of liability by any of them 

regarding any claim. 

B. Execution in Counterparts. This Agreement may be executed in counterparts by 

one or more of the parties named herein and all such counterparts when so executed shall 

together constitute the final Agreement, as if one document had been signed by all parties hereto; 

and each such counterpart, upon execution and delivery, shall be deemed a complete original, 

binding the party or parties subscribed thereto upon the execution by all parties to this 

Agreement. 

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

they are a party hereto or are authorized to sign this Agreement on behalf of the respective party, 

and that they have the full power and authority to bind such party to each and every provision of 

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this Agreement. This Agreement shall be binding upon and inure to thebenefit of the 

undersigned parties and their respective heirs, executors, administrators, representatives, 

successors and assigns. 

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

according to applicable federal law, or in its absence, the laws of the State of Minnesota. 

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

agreement and understanding between and among the undersigned parties concerning the matters 

and the terms set forth herein. This Agreement may not be amended or modified except by an 

express written instrument signed by both parties to this Agreement, or by their respective 

authorized attorney(s) or other representative(s). 

F. Reasonable Cooperation. The undersigned parties agree to cooperate in good 

faith toeffectuate all the terms and conditions of this Agreement, including doing or causing 

their agents and attorneys to do, whatever is reasonably necessary to effectuate the signing, 

delivery, execution, filing, recording, and, entry, of any documents necessary to conclude the 

Lawsuit, and to otherwise perform the.terms of this Agreement. 

C. Adviceof Counsel. Neither party is relying upon any representatioti nor 

information from the other party in agreeing to this Agreement and each party has had an 

opportunity to review this agreement with an attorney and accountant of its choosing Each party 

hereby a’ cknowledges that it has consulted with and obtained The advice ofounsel prior to 

executing this Agreement, and that this Agreement has been explained to that party by his or her 

counsel. 

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

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

SO AGREED: 

FEDERAL DEPOSIT INSURANCE CORPORATION 

AS RECEIVER FOR THE ST. STEPHEN STATE BANK 

Date: 

TITLE: 

PRINTNAME: Ampkw 6( 

Date: ) I )5/O LYNETTE D. JEPPESEN 

(b)(6) 

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