(bya)

Page 5

to or concer the Bond and agrees that any interest it may have under the Bond is extinguished;

provided that, this release shall not extend to or affect any other St. Paul policy of insurance,

including but not limited to directors’ and officers’ liability Policy No] or-the

settlement agreement relating to Policy No,

B. Rel of FDIC. Paul.

Effective simultancously with the release granted in Paragraph ILA. above, St. Paul, for
itself and its predecessors, successors and assigns, aud on behalf of its parents, subsidiaries,
affiliates and reinsurers, and their successors and assigns, hereby releases and discharges the
FDIC-R and its employves, officers, directors, agents, representatives, predecessors, 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 Proofs of Loss, the
Claims, anxi/or the Bond including but not limited to any rights of subrogation, legal, equitable,
or otherwise,

C. Waiver of Subrogation by St. Paul.

St. Paul agrees to and hereby does irrevocably waive any rights of subrogation it may
have relating to the Claims, including without limitation those arising from St. Paul’s payment of
the Settlement Funds, or involving the underlying properties, assets or claims involved in the
Claims and all rights to recovery thereof (“Rights of Recovery”). St. Paul agrees that the FDIC-
R may retain, sell, transfer, or otherwise dispose of such Rights of Recovery as it sees fit, in its
sole discretion, and retain the proceeds (if any) thereof and any such present or future retention
or disposition of such Rights of Recovery shall not serve to modify, alter, increase, decrease, or
otherwise affect the consideration due under this Agreement or the monetary amount being paid
by St.Paul,

(by)


()(6)

()(6)

Page 10

901 Main Street, Suite 4400
Dallas, TX 75202
Feesimile: (214) 659-4186
Email:

Email

and

St. Paul Mercury Insurance Co.
111 Schilling Road

Attn: Stephen Kranz

Hunt Valley, MD 21031
Facsimile: (800) 357-8516
Email]

or to such other address as the recipient party has specified by prior written notice to the sending
party (or in the case of counsel, to such other readily ascertainable business address as such
counsel may hereafter maintain). If more than one method for sending notice as set forth above
ig used, the earliest notice date established as set forth above shall control.

i 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 Arkansas.

K. Entire Agreement and Amendments. This Agreement constitutes the entire
agreement and understanding between and among the undersigned parties concerning the matters
set forth herein; provided that, the obligations set forth in the previously executed Confidentiality
Agreement and Protective Order shall remain in effect. This Agreement may not be amended or
modified except by another written instrument signed by the party or parties to be bound thereby,
or by their respective authorized attorney(s) or other representative(s).

L. Reasonable Cooperation. The undersigned Parties agree to cooperate in goed faith

to effectuate all the terms and conditions of this Agreement, including doing or causing their

10


Page 7

& under or relating to any policy of insurance issued by St. Paul (or
any other insurer) other than the Bond, and
a which are not expressly released in Section [1.B. above.

3. Notwithstanding any other provision, this Agreement does not waive any
claims or actions that could be brought by any agency or instrumentality of the United States
government other than the FDIC-R.

SECTION IIL. Representations and Acknowledgments

A. Qvumership of the Claims. The FDIC-R represents and warrants that, pursuant to
12 U.S.C. §1821(d), the FDIC-R is the current lawful owner of, and that it has not assigned, sold,
or transferred ary interest in the Claims.

B. No Additional Actions. St. Paul hereby agrees that it will not bring, file, or
otherwise pursue any claims against any party, in relation to the Bond, including any claims for
indemnity or subrogation.

C. Na Admission of Liability, The undersigned Parties each acknowledge and agree
that the matters set forth in this Agreement constitute the settlement and compromise of a
disputed claim, and that this Agreement is not an admission or evidence of liability by either of
them regarding any claim nor is it intended to be, nor shall it be construed as, an interpretation of
the Bond or any other insurance policy. This Agreement shall not be used as evidence, or in any
other manner, before any court or any proceeding to create, prove, or interpret the obligations or
alleged obligations of St. Paul under the Bond to any party or non-party to this Agreement.
Except as provided above, the Parties may use the Agreement in any other proceeding to the
extent deemed relevant and admissible by a court and may use this Agreement in any manner as

may be necessary to enforce the terms of the Agreement.


Page 6

D. Express Reservations From Releases.

L Notwithstanding amy other provision, by this Agreement, the FDIC-R does
not release, and expressly preserves fidly and to the same extent as if the Agreement had not
been executed, any claims or causes of action: ,

a. against any person or entity for liability, if any, incurred as the
maker, endorser or guarantor of any promissory note or indebtedness payable or owed by them to
the FDIC-R, the Bank, other financial institutions, or any other person or entity, including
without limitation any claims acquired by the FDIC-R as successor in interest to the Bank or any
person or entity other than the Bank;

b against any person or entity not expressly released in this
Agreement; and

& under or relating to any policy of insurance issued by St. Paul (or
any other insurer) other than the Bond, and

4 which are not expressly released in Section ILA. above.

2 Notwithstanding any other provision, by this Agreement, the St. Paul 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:

a. against any person or entity for liability, if any, incurred as the
maker, endorser or guarantor of any promtissory note or indebtedness payable or owed by them to
the St. Paul;

b. against any person or entity mot expressly released in this

Agreement; and


()(6)

()(6)

Page 9

L Notices. If any Party is required to give notice to another Party under this
Agreement, such notice shall be (i) delivered personally, (if) sent by Federal Express (or another
recognized ovemight or two-day courier) requesting next or second business day delivery, (iii)
sent by facsimile, (iv) sent by United States certified or registered mail, postage prepaid, return
receipt requested, or (v) sent by email with a confirmation to be sent the same day by one of the
methods enumerated above. Any such notice shall be deemed given when (i) so delivered
personally, (ii) if sent by express courier, one or two business days (as the case may be)
following delivery to the courier, (ili) on the date sent by facsimile or email, with confirmation of
transmission, if sent during norma! business hours of the recipient, or, if not, then on the next
business day, or (iv) if sent by certified or registered mail, five business days after the date of
deposit in the United States mail to the respective address of the Party as set forth below, with
copies sent to the persons indicated below:

To the FDIC:

Shane Mecham, Esq.

The Levy Craig Law Firm

1301 Oak Street, Suite 500

Kansas City, MO 64106

Facsimile: (816) 382-6618

Email]

and

Federal Deposit Insurance Corporation

7777 Baymeadows Way West, Room 551F

Jacksonville, Florida 32256

Attn: Barbara Slott Pegg, Esq.
Email:

To St. Paul Mercury Insurance Co.:
Michael Keeley

Justin Meikus

Strasburger & Price, LLP


Page 1

SETTLEMENT AND RE AGREEMENT ph

This Settlement and Release Agreement (“Agreement”) is made as of this * day of
November, 2012, by, between, and among the following undersigned parties:

Federal Deposit Insurance Corporation, as Receiver of ANB Financial, N.A. CFDIC-R");

St. Paul Mercury Insurance Company (“St. Paul”). Individually, the FDIC-R and St. Paul

may be referred to herein as “Party” and collectively as the “Parties.”
RECITALS
WHEREAS:

A Prior to May 9, 2008, ANB Financial, N.A., Bentonville, Arkansas (“Bank” or
*ANB") was a depository institution organized and existing under the laws of the State of
Arkansas.

B. On May 9, 2008, the Bank was closed by the Office of the Comptroller of the
Currency (COCC") and pursuant to 12 U.S.C. § 1821(c), the FDIC-R was appointed receiver. In
accordance with 12 U.S.C. § 1821d)}, the FDIC-R. as receiver succeeded to all rights, titles,
powers and privileges of the Bank, its shareholders, and creditors, including right and title with
respect to the Bank’s assets.

Cc. Among the assets to which the FDIC-R as receiver succeeded were any and all
claims, demands, and causes of actions against the Bank’s financial institution bond insurer(s),
inchiding against St. Paul as issuer of the Bond, as that term is defined below.

DR On June 26, 2009, the FDIC-R submitted four proofs of less (the “Proofs of
Loss”) to St, Paul in connection with four separate claims the Bank previously notified St, Paul

about and for which the FDIC-R sought recovery (the “Claims”) under that certain Financial


Page 12

circumstances) shall remain in full force and effect.

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

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

FEDERAL DEPOSIT INSURANCE
CORPORATION, as Receiver of ANB Financial,

NA
Titley iif OAM ahha
Print Name:

ST. PAUL MERCURY INSURANCE COMPANY

()(6)

Date: November be 2012

()(6)

Date; November Y 2012 By:

Title VF CVS (ny
Print Name: “TP ACE TIO”



Page 11

agents and attorneys to de whatever is reasonably necessary to effectuate the signing, delivery,
execution, filing, recording, and entry, of any documents necessary to perform the terms of this
Agreement.

M. = Advice of Counsel.

Each Party hereby acknowledges that it has consulted with and obtained the advice of
counsel prior to executing this Agreement, and that this Agreement has been explained to that
party by his, her, or its counsel.

KR. Authority to Settle.

The FDIC-R, for itself and expressly in its capacity of having succeeded to all of ANB’s
claims against St. Paul under the Bond, and St. Paul, respectively, each warrant and represent
that they are the persons or entities which have collectively all of the interest in any of the
matters set forth herein, that the Recitals set forth above are material, tre and accurate, and that
they have the full right, power, and specific authority to enter into, execute and consummate this
Agreement.

0. Severability.

If any provision of this Agreement or the application of any provision herein to any
person, or circumstance is held invalid or unenforceable, only that provision shall be affected, and

the remainder of this Agreement (and the application of such provision to other persons or

ii


Page &

dD. Cooperative Drafting. The Parties to this Agreement have participated jointly in
the negotiation and preparation of this Agreement. Accordingly, the Parties agree not to assert
that any other party is the sole or principal drafter of the Agreement. The Parties also agree not to
assert that any canon of construction applicable to sole or principal drafters should be applied
against any other party.

E. 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,

F. 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 te each and every provision of this
Agreement, This Agreement shall be binding upon and inure to the benefit of the undersigned
parties and their respective insurers, agents, heirs, executors, administrators, representatives,
attomeys, successors and assigns.

G. No Confidentiality. The Parties acknowledge and agree that this Agreement is a
public document that will need to be disclosed pursuant to 12 U.S.C. § 1821(s) and other
applicable laws and regulations.

1h Construction. The descriptive headings of this Agreement are for convenience

only and shali not affect the construction or interpretation of this Agreement.


Page 4

Parties agree that all statutes of limitation or timing defenses with respect to Clairns that the
FDIC-R had against St. Paul prior to the date of the Agreement, including those asserted in the
Pending Litigation, are tolled from the date of the Agreement until fifteen (15) days after the
Agreement is declared null and void.

F, Upon execution of this Agreement by all Parties, the FDIC-R and St. Paul shall
file a joint motion in the Pending Litigation requesting the Court to enter an Order staying the
action until completion of the Agreement. Upon receipt of all Settlement Funds and full
compliance with the terms of the Agreement by St. Paul, the FDIC-R and St. Paul will jointly file
@ stipulation of voluntary dismissal under Fed. R. Civ. P. 41 (a)(fXA)GD, that provides the
dismissal of the Pending Litigation is with prejudice, and that each party is to bear its own costs

and attorney’s fees.

SECTION IE Releases

A. Release of St, Paul by FDIC-R.

Effective upon payment by St. Paul of the Settlement Funds, together with any accrued
interest, the FDIC-R, for itself and its predecessors, successors and assigns, hereby releases and
discharges St. Paul, its parents, subsidiaries, affiliates and reinsurers, and their respective
employees, officers, directors, agents, representatives, predecessors, successors and assigns, from
the Claims, including but not limited to any and all claims, demands, obligations, damages,
actions and causes of action, direct or indirect, in law or in equity, statutory, rion-contractual, or
in tort, that the FDIC-R alleged or could have alleged against St. Paul in connection with the
Claims, or the Proofs of Loss, or the Pending Litigation, or the Bond, or which the FDIC-R did
allege or could have alleged against St. Paul that arise from or relate to any Claims asserted by

the FDIC-R under the Bond, St. Paul’s adjusting of such Claims, or otherwise arise from, relate


Page 3

Barbara Slott Pegg (904) 256-3855; Reference ANB Financial, N.A., Bentonville, Arkansas (FIN
10005) Professional Liability G7100) DIF Fund.
Dd, In the event that the Settlement Funds are not delivered in full to the FIIC-R by
‘the Payment Due Date, interest shail accrue on all unpaid amounts at the rate of 5% per annum.
from such date until the date of payment in full.

E. In addition, and without waiving any other rights that the FDIC-R may have, in
the event that all Settlement Funds are not received by the FDIC-R on or before 30 days
following the Payment Due Date, then the FDIC-R, in its sole discretion, shall have the sight at
any time prio to receipt of all Setilement Funds (including all accrued interest) to declare this
Agreement aull and void, shall have the right to extend this Agreement for any period of time
until it receives al! Setement Funds (including all accrued interest), and/or shall have the right
to enforce this Agreement against St. Paul, which agrees to jurisdiction in Federal District Court
in the Western District of Arkansas and further agrees to pay all the FDIC-R’s reasonable
attorneys’ fees expended in enforcing St. Paul’s obligation to pay the Settlement Funds or any
part of them. Any decision by the FDIC-R to extend the terms of this Agreement or to accept 2
portion of the Settlement Funds shall not prejudice the FDIC-R’s rights to declare this
Agresment null and void at any time prior to receipt of all Settlement Funds (including all
accrued interest) or to enforce the terms of this Settlement Agreement; provided however, that in
the event the FDIC-R declares this Agreement null and void, the FDIC-R will return all amounts
paid to it under this Agreement by St. Paul. The Parties further agree to the jurisdiction of the
Federal District Court in the Western District of Arkansas to resolve any other disputes related to
the enforcement of the terms of this Agreement (other than with respect to the matters addressed

in Section If C, below). In the event the FDIC-R declares the Agreement null and void, the


Page 2

Institution Bond, St. Paul Form With Extended Coverages, Bond No] issned-by St.

Pauil to the Bank (the “Bond”).

E. The FDIC-R has asserted Claims against St. Paul under the Bond, and on June 1,
2011, the FDIC filed suit against St. Paul on certain of the Claims, in the United States District
Court for the Western District of Arkansas: FDIC-R of ANB Financial, NA. v. St. Paul Mercury
Ing. Co., Case No. 5:11-cv-05133-PKH (W.D. Ark.) (the “Pending Litigation”). The Pending
Litigation is set for trial to commence the week of November 26, 2012.

FE The Parties deem it in their best interests to enter into this Agreement to avoid the
uncertainty, trouble, and expense of further litigation.

NOW, THEREFORE, in consideration of the promises, 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 I: Payment to FDIC-R
A. The Recitals above are incorporated herein by reference.

B. As an essential covenant and condition to this Agreement, St. Paul agrees to pay
to the FDIC-R the sum of Five Million One Hundred Fifty Thousand and 00/100 Dollars
($5,150,000.00) (the “Settlement Funds”).

c. No later than fifteen business days following the execution of a signed original, or
signed originals in counterpart, of this Agreement by the undersigned Parties to this Agreement
(the “Payment Due Date”), the Settlement Funds shall be delivered te the FDIC-R by direct wire

transfer to the Federal Home Loan Bank of New York, New York Main Office, 101 Park

Avenue, New York, NY 10178-0599, Routing No, Account-No: for-the:

credit to FDIC National Liquidation Account OBI ANB Financial, N.A., Bentonville, Arkansas

(FIN 10005) Professional Liability (37100) DIF Fund—contact Bill Smith (972) 761-2659 or

2

(bya)

yA)