GUARANTY 

THIS GUARANTY dated as of February 5, 2009 (this “Guaranty”) is made by Stearns 

Bank, N.A., a national banking association organized under the laws of the United States of 

America (the “Guarantor”). Capitalized terms used but not defined herein have the meanings 

assigned to them in the Participation and Servicing Agreement dated as of February 5, 2009 (the 

“Participation Agreement”) between FNBN-RESCON I LLC, a Delaware limited liability 

company (the “Company”) and the Federal Deposit Insurance Corporation as Receiver for First 

National Bank of Nevada (“Participant”). 

WHEREAS, the Company and Participant are also parties to the Limited Liability 

Company Operating Agreement (the “LLC Agreement”), and the Loan Contribution and 

Assignment Agreement (the “Contribution Agreement”), in each case dated as of February 5, 

2009; and 

WHEREAS, the Guarantor owns (directly or indirectly) all of the outstanding equity 

interests of Stearns SPV I, LLC (“Member”); and 

WHEREAS, Participant and Member are concurrently herewith entering into the Limited 

Liability Company Interest Sale and Assignment Agreement (the “LLC Interest Sale 

Agreement”), pursuant to which, among other things, Participant, as the initial member of the 

Company, is selling, transferring and assigning to Member and Member is acquiring all of 

Participant’s interest in the Company; and 

WHEREAS, the Guarantor will directly or indirectly receive significant financial benefit 

from the consummation of the transactions contemplated by the LLC Interest Sale Agreement, 

the LLC Agreement, the Participation Agreement, the Contribution Agreement and the other 

Ancillary Documents; and 

WHEREAS, as a condition and inducement to the Participant’s willingness to enter into 

the LLC Interest Sale Agreement, the Guarantor has agreed to guarantee (the following are 

referred to as the “Guaranteed Obligations”): (a) the due and punctual payment when due of 

all amounts now or hereafter payable by the Company or by Member under the LLC Interest 

Sale Agreement, the LLC Agreement, the Participation Agreement and each of the other 

Ancillary Documents to which the Company or Member is or will be a party; and (b) the full and 

complete performance by the Company and Member of all of the terms, covenants and 

conditions contained in the LLC Interest Sale Agreement, the LLC Agreement, the Participation 

Agreement and each of the other Ancillary Documents to which the Company or Member is or 

will be a party when and as the same shall become due thereunder. 

NOW, THEREFORE, in consideration of the premises and for other good and valuable 

consideration, the receipt and sufficiency of which are hereby acknowledged, the Guarantor 

agrees as follows: 

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1. Guaranty. The Guarantor hereby unconditionally and irrevocably guarantees the 

Guaranteed Obligations. Any Beneficiary (as defined below) may at any time deliver notice to 

and proceed against the Guarantor in the event of any failure of payment or performance of any 

of the Guaranteed Obligations. 

2. Waiver, Etc. 

(a) The Guarantor waives: 

(i) all notices of the creation, renewal, extension or accrual of any of 

the Guaranteed Obligations and notice or proof of reliance by Participant (including its 

successors and assigns, the “Beneficiaries”) on this Guaranty or acceptance of this 

Guaranty; 

(ii) diligence, presentment, demand for payment, protest and notice of 

nonpayment or dishonor and all other notices and demands whatsoever relating to the 

Guaranteed Obligations or the requirement that a Beneficiary proceed first against the 

Company or Member or any other guarantor of the Guaranteed Obligations or otherwise 

exhaust any right, power or remedy under the LLC Interest Sale Agreement, the LLC 

Agreement, the Participation Agreement or any of the other Ancillary Documents to 

which the Company or Member is or will be a party giving rise to such Guaranteed 

Obligations before proceeding hereunder; and 

(iii) all suretyship defenses including, without limitation, all defenses 

based upon any statute or rule of law which provides that the obligation of a surety must 

be neither larger in amount nor in other respects more burdensome than that of the 

principal. 

(b) The Guaranteed Obligations shall conclusively be deemed to have been 

created, contracted or incurred in reliance on this Guaranty, and all dealings between the 

Beneficiaries and their Affiliates, on the one hand, and the Guarantor and/or the Guarantor’s 

Affiliates, on the other hand, in connection with the LLC Interest Sale Agreement, the 

Participation Agreement, the LLC Agreement, and the other Ancillary Documents to which the 

Company or Member is or will be a party and the transactions contemplated hereby and thereby 

shall likewise conclusively be presumed to have been had or consummated in reliance on this 

Guaranty. 

(c) The Guarantor covenants that this Guaranty shall not be discharged except 

by complete payment and performance of the Guaranteed Obligations. 

(d) The obligations of the Guarantor hereunder shall constitute a present and 

continuing guarantee of payment and not of collectibility only, shall be absolute and 

unconditional, shall not be subject to any counterclaim, setoff, deduction or defense the 

Guarantor may have against any Beneficiary or any other Person, and shall remain in full force 

and effect until all Guaranteed Obligations have been satisfied and performed in full, without 

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regard to any event whatsoever (whether or not the Guarantor shall have any knowledge or 

notice thereof or shall have consented thereto), including, without limitation: 

(i) any amendment or modification of, or supplement to, the LLC 

Interest Sale Agreement, the LLC Agreement, the Participation Agreement or any of the 

other Ancillary Documents to which the Company or Member is or will be a party, any 

assignment or transfer of any of the rights, obligations, duties or covenants of any party 

to the LLC Interest Sale Agreement, the LLC Agreement, the Participation Agreement or 

any of the other Ancillary Documents to which the Company or Member is or will be a 

party, any renewal or extension of time for the performance of any of the Guaranteed 

Obligations, or any furnishing or acceptance of security so furnished or accepted for any 

of the Guaranteed Obligations; 

(ii) any waiver, consent, extension, forbearance, release or substitution 

of security or other action or inaction under or in respect of the LLC Interest Sale 

Agreement, the LLC Agreement, the Participation Agreement or any of the other 

Ancillary Documents to which the Company or Member is or will be a party or this 

Guaranty, or any exercise of, or failure to exercise, any right, remedy or power in respect 

hereof or thereof; 

(iii) any bankruptcy, insolvency, marshaling of assets and liabilities, 

arrangements, readjustment, composition, receivership, assignment for the benefit of 

creditors, liquidation or similar proceedings with respect to the Company or Member or 

any of their Affiliates or the Guarantor; 

(iv) the dissolution, sale or other disposition of all or substantially all of 

the assets of any of the Company or Member or any of their Affiliates or the Guarantor; 

(v) any default by the Company or Member or any of their Affiliates 

or the Guarantor under, or any invalidity or any unenforceability of, or any 

misrepresentation by the Company or Member or any of their Affiliates or the Guarantor 

in, or any irregularity or other defect in, the LLC Interest Sale Agreement, the LLC 

Agreement, the Participation Agreement or any of the other Ancillary Documents to 

which the Company or Member is or will be a party or this Guaranty or any other 

instrument or agreement; or 

(vi) any other event, action or circumstance that would, in the absence 

of this Section 2(d)(vi), result in the release or discharge of the Guarantor from the 

performance or observance of any obligation, covenant or agreement contained in this 

Guaranty or otherwise constitute a defense to this Guaranty. 

Any term of this Guaranty to the contrary notwithstanding, if at any time any amount 

(constituting a Guaranteed Obligation) paid or payable by Member or the Company is rescinded 

or must otherwise be restored or returned, whether upon or as a result of the appointment of a 

custodian, receiver or trustee or similar officer for Member or the Company or any substantial 

part of any of their assets, or the insolvency, bankruptcy or reorganization of Member or the 

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Company or otherwise, the Guarantor’s obligations hereunder with respect to such payment shall 

be reinstated as though such payment had been due but not made at such time. 

3. Obligations Independent. The obligations of the Guarantor hereunder are 

independent of the obligations of any other guarantor, the Company or Member. Separate action 

or actions may be brought and prosecuted against the Guarantor, whether or not action is brought 

against the Company or the Member and whether or not the Company or Member be joined in 

any such action or actions. 

4. Representations and Warranties of the Guarantor. The Guarantor represents 

and warrants as follows: 

4.1 Capacity, Enforceability and Consents. 

(a) The Guarantor is duly organized, validly existing and in good standing 

under the laws of the jurisdiction of its incorporation or organization and has all requisite power 

and authority (corporate or other) to own, lease and operate its assets and properties and to carry 

on its business as presently conducted. 

(b) The Guarantor has all requisite power and authority (corporate or other) to 

execute, deliver and perform its obligations under this Guaranty and to consummate the 

transactions contemplated hereby. The execution and delivery by the Guarantor of, and the 

performance by the Guarantor of its obligations under, this Guaranty have been duly and validly 

authorized by all requisite action on the part of the Guarantor, and this Guaranty constitutes a 

valid and binding obligation of the Guarantor enforceable against it in accordance with its terms, 

except as enforceability may be limited by applicable bankruptcy, insolvency, fraudulent 

conveyance, reorganization, moratorium or other laws relating to or affecting the rights and 

remedies of creditors generally and to general principles of equity (regardless of whether in 

equity or at law). 

(c) The execution and delivery by the Guarantor of this Guaranty, the 

performance by the Guarantor of its obligations hereunder and the consummation by the 

Guarantor of the transactions contemplated hereby do not and will not: (i) violate any provision 

of the certificate of formation or limited liability company agreement (or comparable 

organizational documents with different names) of the Guarantor; (ii) require on the part of the 

Guarantor any notice or filing with, or any permits, licenses, authorizations, registrations, 

franchises, approvals, consents, certificates, variances and similar rights to be obtained from, or 

other authorization of, or any exemption by, any Governmental Authority; (iii) in any material 

respect, result in a violation or breach of, constitute a default under, result in the acceleration of, 

give rise to any right to accelerate, terminate, modify or cancel, or require any notice, consent, 

authorization, approval or waiver under, or result in any other adverse consequence under, any 

contract to which the Guarantor is a party or by which the Guarantor or any of its assets or 

properties is bound; (iv) violate or breach the terms of or cause any default under any Law 

applicable to the Guarantor or any of its properties or assets; or (v) with the passage of time, the 

giving of notice or both, have any of the effects described in clauses (i) through (iv) of this 

Section 4.1(c). 

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4.2 Legal Matters. There is no claim pending against, or, to the knowledge of the 

Guarantor, threatened against or affecting, the Guarantor or any of the Guarantor’s properties or 

rights, at law or in equity, before or by any court, arbitrator, panel or other Governmental 

Authority that could adversely affect the ability of the Guarantor to consummate the transactions 

contemplated by this Guaranty or any of the other Ancillary Documents to which the Guarantor 

is a party. 

5. Survival. All representations, warranties, covenants and agreements contained in 

this Guaranty shall survive (and not be affected in any respect by) the consummation of the 

transactions contemplated in the LLC Interest Sale Agreement, any investigation conducted by 

or on behalf of any party hereto and any information which any Beneficiary may receive or have. 

6. Miscellaneous. 

6.1 Notices. All notices, requests, demands, and other communications required or 

permitted to be given or delivered under or by reason of the provisions of this Guaranty shall be 

in writing and shall be given by certified or registered mail, postage prepaid, or, delivered by 

hand or by nationally recognized air courier service, directed to the address of such Person set 

forth below: 

If to the Participant, to: 

Manager, Capital Markets & Resolutions 

c/o Federal Deposit Insurance Corporation 

550 17th Street, NW (Room F-7014) 

Washington, D.C. 20429-0002 

Attention: Ralph Malami 

with a copy to: 

Senior Counsel 

FDIC Legal Division 

Litigation and Resolutions Branch, Receivership Section 

Special Issues Unit 

3501 Fairfax Drive (Room E-7056) 

Arlington, Virginia 22226 

Attention: David Gearin 

If to the Guarantor, to its address on a signature page hereto. 

Any such notice shall become effective when received (or receipt is refused) by the 

addressee, provided that any notice or communication that is received (or refused) other than 

during regular business hours of the recipient shall be deemed to have been given at the opening 

of business on the next Business Day of the recipient. From time to time, any Person may 

designate a new address for purposes of notice hereunder by notice to such effect to the other 

Persons identified above. 

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6.2 Assignment. This Guaranty and all of the provisions hereof shall be binding 

upon and inure to the benefit of the Guarantor, the Beneficiaries and their respective heirs (in the 

case of any individual), successors and permitted assigns; provided, however, that the Guarantor 

may not assign this Guaranty or any of its rights, interests or obligations hereunder. Any 

purported assignment or delegation in violation of this Guaranty shall be null and void ab initio. 

6.3 Entire Agreement. This Guaranty, the LLC Interest Sale Agreement, the LLC 

Agreement, the Participation Agreement and the other Ancillary Documents (including the 

Schedules and Exhibits hereto and thereto) embody the entire agreement and understanding of 

the parties and their respective Affiliates with respect to the transactions contemplated hereby 

and merge in, supersede and cancel all prior written or oral commitments, arrangements or 

understandings with respect thereto. 

6.4 Modifications, Amendments and Waivers. This Guaranty may not be modified 

or amended except by an instrument or instruments in writing signed by the Beneficiaries and the 

Guarantor. Any Beneficiary may, only by an instrument in writing, waive compliance by the 

Guarantor with any term or provision hereof. No failure or delay of any Beneficiary in 

exercising any right or remedy hereunder shall operate as a waiver thereof, nor will any single or 

partial exercise of any right or power, or any abandonment or discontinuance of steps to enforce 

such right or power, preclude any other or further exercise thereof or the exercise of any other 

right or power. The waiver by any Beneficiary of a breach of any term or provision hereof shall 

not be construed as a waiver of any subsequent breach. The rights and remedies of the 

Beneficiaries hereunder are cumulative and are not exclusive of any rights or remedies that they 

would otherwise have hereunder. 

6.5 Counterparts; Facsimile Signatures. This Guaranty will become effective 

when the signature page has been signed by the Guarantor and delivered to the Beneficiaries. A 

copy of the executed signature transmitted by telecopy, facsimile or other electronic transmission 

service shall be considered an original for purposes of this Section 6.5, provided that receipt of 

copies of such counterpart signature page is confirmed. 

6.6 Governing Law. THIS GUARANTY IS GOVERNED BY AND SHALL BE 

CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, 

EXCLUDING ANY CONFLICT-OF-LAWS RULE OR PRINCIPLE THAT MIGHT REFER 

THE GOVERNANCE OR THE CONSTRUCTION OF THIS GUARANTY TO THE LAW OF 

ANOTHER JURISDICTION. Nothing in this Guaranty shall require any unlawful action or 

inaction by any Person. 

6.7 Submission to Jurisdiction; Waiver of Jury Trial. The Guarantor, for itself 

and its Affiliates, hereby irrevocably and unconditionally: 

(a) (i) agrees that any suit, action or proceeding instituted against it by any 

Beneficiary with respect to this Guaranty may be instituted, and that any suit, action or 

proceeding by it against any other Person with respect to this Guaranty shall be instituted, only in 

the Supreme Court of the State of New York, County of New York, or the United States District 

Court for the Southern District of New York or the United States District Court for the District of 

Columbia (and appellate courts from any of the foregoing), (ii) consents and submits, for itself 

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and its property, to the jurisdiction of such courts for the purpose of any such suit, action or 

proceeding instituted against it by any other Person and (iii) agrees that a final judgment in any 

such suit, action or proceeding shall be conclusive and may be enforced in other jurisdictions by 

suit on the judgment or in any other manner provided by law; 

(b) agrees that service of all writs, process and summonses in any suit, action 

or proceeding pursuant to Section 6.7(a) may be effected by the mailing of copies thereof by 

registered or certified mail, postage prepaid, to the Guarantor at its address for notices pursuant 

to Section 6.1 (with copies to such other Persons as specified therein); provided, however, that 

nothing contained in this Section 6.7 shall affect the ability of the Guarantor to be served process 

in any other manner permitted by law; 

(c) (i) waives any objection that it may now or hereafter have to the laying of 

venue of any suit, action or proceeding arising out of or relating to this Guaranty brought in any 

court specified in Section 6.7(a), (ii) waives any claim that any such suit, action or proceeding 

brought in any such court has been brought in an inconvenient forum and (iii) agrees not to plead 

or claim either of the foregoing; 

(d) WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF 

ANY DISPUTE ARISING OUT OF OR RELATING TO THIS GUARANTY AND AGREES 

THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT 

A JURY; and 

(e) agrees that nothing contained in this Section 6.7 shall be construed to 

constitute a consent to jurisdiction by the Failed Bank or the FDIC, in any capacity, or a 

limitation on any removal rights the FDIC, in any capacity, may have. 

6.8 Severability. To the fullest extent that it may effectively do so under applicable 

law, the Guarantor hereby waives any provision of law that renders any provision of this 

Guaranty invalid, illegal or unenforceable in any respect. The Guarantor further agrees that any 

provision of this Guaranty which, notwithstanding the preceding sentence, is rendered or held 

invalid, illegal or unenforceable in any respect in any jurisdiction shall be ineffective, but such 

ineffectiveness shall be limited as follows: (a) if such provision is rendered or held invalid, 

illegal or unenforceable in such jurisdiction only as to a particular Person or Persons or under 

any particular circumstance or circumstances, such provision shall be ineffective, but only in 

such jurisdiction and only with respect to such particular Person or Persons or under such 

particular circumstance or circumstances, as the case may be; (b) without limitation of clause (a), 

such provision shall in any event be ineffective only as to such jurisdiction and only to the extent 

of such invalidity, illegality or unenforceability, and such invalidity, illegality or unenforceability 

in such jurisdiction shall not render invalid, illegal or unenforceable such provision in any other 

jurisdiction; and (c) without limitation of clause (a) or (b), such ineffectiveness shall not render 

invalid, illegal or unenforceable this Guaranty or any of the remaining provisions hereof. 

6.9 No Presumption. With regard to each and every term and condition of this 

Guaranty, the Guarantor understands and agrees that the same have or has been mutually 

negotiated, prepared and drafted (by the Guarantor, on the one hand, and on behalf of the 

Beneficiaries, on the other hand), and if at any time any such term or condition is desired or 

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required to be interpreted or construed, no consideration shall be given to the issue of who 

actually prepared, drafted or requested any term or condition of this Guaranty or any agreement 

or instrument subject hereto. 

6.10 Third Party Beneficiaries. This Guaranty is for the benefit of each of the 

Beneficiaries and their respective successors and assigns, all of whom shall be express third 

party beneficiaries under this Guaranty and shall be entitled to enforce their rights hereunder. 

6.11 Guaranty Limit. The aggregate amount for which the Guarantor shall be liable 

under this Guaranty (such amount, the “Guaranty Limit”) shall be the greater of (a) an amount 

equal to (i) the Unpaid Principal Balance as of the date of the calculation of the Guaranty Limit, 

multiplied by (ii) the Participant’s Share expressed as a fraction, multiplied by (iii) 0.50, 

multiplied by (iv) a percentage, expressed as a decimal, equal to (x) the Bid Amount (as defined 

in the Contribution Agreement), divided by the aggregate Adjusted Unpaid Principal Balance (as 

defined in the Contribution Agreement), divided by (y) the percentage obtained by subtracting 

the Participant’s Share from 100%, and (b) $5,000,000. The Guaranty Limit for any claim under 

this Guaranty shall be the Guaranty Limit on the date on which the earliest of any act or omission 

that is a basis of the claim occurred. 

[The next page is the signature page] 

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The Guarantor has caused this Guaranty to be duly executed and delivered as of the date 

first written above. 

STEARNS BANK, N.A., a national banking 

association organized under the laws of the 

United States of America 

By: 

Name: Norman C. Skalicky 

Title: Chairman and Chief Executive Officer 

Address: 

4191 2nd Street South 

St. Cloud, MN 56301 

Attention: Norman C. Skalicky 

with a copy to: 

Skalicky Law Offices 

57 West 58th Street 

#8C 

New York, NY 10019 

Attention: Kelly Skalicky 

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