Page 5

B, Release of FDIC by the Settling Defendants,
Effective simultancously with the télease pranted in PARAGRAPH ILA. above, the

Settling Defendants, on behalf of themselves individually, and their respective employees,

employers,.members, officers, direstors,. legal representatives, agents, successors, heirs, . .

executors, administrators, agents, representatives, snecessors and assigns, hereby release and.
discharge PDIC, and its employees, officers, directors, representalives, successors and assigns,
from any and all claims, demands, obligations, damages, actions, and causes of action, direct ar
indirect, in law or in equity, that arige from or relate to, the Lawsuit, the Property and/or the
Appraisals.
C. Express Reservations From Releases By FDIC,

1. 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:
a) against any other person or entity for liability, if any, incurred as the maker,

endorser or guarantor of any promissory note payable or owed by them fo Federal Deposit
Tnsmance Corporation, the Bank, other financial institutions, or any other person or entity,
including without limitation any claims incurred as the maker, endorser ot guarantor of any
promissory note acquired by FDIC as successor in interest to the Bank ot any person or entity
other than Bank; :

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

0} which are not expressly released in Paragraphs 1.B and HI_A above.

2. Notwithstanding any other provision, nothing in this Agreemeat shall be
construed or interpreted ag Hmiting, waiving, releasing or compromising the jurisdiction and
authority of the Federal Deposit Insurance Corporation in the exercise of its supervisory or
regulatory authority or to diminish its ability to institute administrative enforcement proceedings
seeking removal, prohibition or any other administrative enforcement action which may arise by

operation of law, rule or regulation.



Page 10

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.
«ow FBDERAL DEPOSIT INSURANCE CORPORATION

Date: 12 |r i BY:

TLE: FOI’ Counsel
PRINTNAME: App Ew GIL BEAT

Date: LYONS VALUATION GROUP, LLC
BY:
TITLE:
PRINT NAME:

Date: DAVID M. LYONS

LIBERTY INSURANCE UNDERWRITERS, INC,

Date: BY:
TITLE:
PRINT NAME:


as

Agreement.
cg Binding Effect. Each of the undersigned persons represents and warrants that
they are a party herefo or are authorized to sign this Agreement on behalf of the respective party,

_ aad shat. they have the full power and authority.te bind such party.to each.and.every provision of.

this Agreement. This Agreement shall be binding upon and inure to the benefit of the
undersigned patties 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 Jaw, or in its absence, the laws of the State of Utah,

EB Entire Agreement and Amendments, This Agreement constitutes the entire

agreement and understanding between and among the undersigned parties concerning the
matters set forth herein. This Agreement may not be amended or modified except by
another writfen instrument signed by the party or parties to be bound thereby, or by their
respective authorized attorney(s) or other representative(s). .

F Reasonable Cooperation.
{. The undersigned parties agree to cooperate in good faith to effectuate all the

terms and conditions of this Agreement, including doing or causing their agents and attorneys to
do, whatever is reasonably uecessary fo effectuate the signing, delivery, execution, filing,
recording, and entry, of any documents necessary fo dismiss the Action and to otherwise perform

the terms of this Agreement.
2 Farther, the Individual Defendants agree to cooperate folly with the FDIC in

connection with any action required under this Agreement.

G. 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 parly by his or her comsel.

2


a : Page 6

3, Notwithstanding any other provision, this Agreement does not purport to
waive, or intend to waive, any criminal claims or charges or petitions for relief which could be

brought by the United States through either the Department of Justice or the United States

_... .Attomey's Office or which could be ordered by.a federal sourt, of competent jurisdiction in a... -
criminal action or proceeding. .
D. Express Reservation of Rights of Bond Carrier.
1 Notwithstanding any other provision, nothing in this Agreement shall release
or prejudice the nights of Travelers St. Paul Mercury Insurance Company or any other
underwriter of any financial institution bond, fidelity bond, or banker's blanket bond on which

the Bank is an insured, to bring any claims by way of subrogation to the claims of the FDIC,
against any directors, officers, or employees of the Bank. The Parties acknowledge and agree
that the Settling Defendants are nat directors, officers, or employers of the Bank,

2, Nothing herein shall be construed to admit the existence of, or to establish, any
claim or cause of action on the part of Travelers St. Paul Mercury Insurance Company or any
other bond underwriter by way of subrogation to claims of the FDIC, that would not exist had

’ this Agreement not been executed.

SECTION IV: Representations and Acknowledgements

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 ability 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 decument had been signed by all parties hereto;
and each such counterpart, upoa execution and delivery, shail be deemed = complete original,
binding the party or parties subscribed thereto upon the execution by all parties to this


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.

Date: .

Date: tas/y

Date:

Page 9

Loven in PEDERAL DEPOSIT INSURANCE CORPORATION

BY:
TITLE:
PRINT NAME:

LYONS VALUATION GROUP, LLC

BY:

TITLE: antec Wenger

PRINTNAME: Dagied in, Cyoas

DAVID M. LYONS

LIBERTY INSURANCE UNDER

TERS, INC.

BY:
TITLE:
PRINT NAME:

(b)6)


Page 1

SETTLEMENT AND RELEASE AGREEMENT Pare 6} / Lut
This Settlement and Release Agreement ("Agreement”) is made as of this Zé day of
April, 2011, by, between, and among the following undersigned parties:
Leen vee ‘The. Plaintiff. Federal Deposit. nsurance.Corporation, as Receiver for. MagnetBank, Ine... 2
CPDIC', and Lyons Valvation Group and David M. Lyons (collectively the "Settling
Defendants"), and Liberty Insurance Underwriters, Inc. (“Liberty”), Gndividually, the FDIC, the
Setiling Defendants and Liberty may be referred to herein as “Party” and collectively as the

Parties”),

: RECITALS
! WHEREAS:

Prior to Janvary 30, 2009, MagnetBank, Inc. ("Bank"} was a depository institution
organized and existing under the laws of the state of Utah;

On January 30, 2009, the Bank was closed by the Uteh Department of Financial
Institutions and pursuant to 12 U.S.C. § 1821(c), the FDIC was appointed Receiver. In
accordance with 12 U.S.C. § 1821(d), the FDIC as Receiver succeeded to all rights, dtles,
powers and privileges of the Bank, including those with respect to its assets;

Among the assets to which the FDIC as Receiver succeeded were any and all of the
Bank's claims, demands, and causes of actions arising from or relating to the lawsuit filed by the
Bank on September 28, 2007, and now pending in the U.S. District Court for the Central District
of Utah, captioned as FDIC as receiver for MagnetBank, Inc, v. Michael Lichtie, et al., Civil No.
2:09-cv-00470 (the “Lawsuit”};

Liberty issued an errors and omissions policy to the Settling Defendants, Policy No.

(b)(4) (ithe “Policy"), which insured the Setiling Defendants according to the terms,

provisions and conditions of the Policy;


ors wee Page 8

a

IN WITNESS WHEREOF, the parties hereto have cauged this Agreement ta be execated
by each of them or their duly authorized representatives on the dates hereinafter subscribed.

‘oF

__. FEDERAL DEPOSIT INSURANCE CORPORATION.

Date: BY:
TIPLE:
PRINT NAME:

Date: th 3}y LYONS VALUATION GROUP, LLC
BY:

TEELE prairie

PRINT NAME: Dayrd mm. Cyto

Date: Sf DAVID M. LYONS

LIBERTY INSUKANCE UNDERWRITERS, INC.

Date: “t pau By, LIN OSA MaeMenaais
TILE: Nackeane | Colarens Corre

‘ “<t las, Hand da
PRINT NAME: 7


a Page 4

terms of this Agreement. Any decision by the FDIC to extend the terms of this Agreement or to
: aecept 4 portion of the Settlement Funds shall not prejudice its rights to declare this Agreement
null and void with respect io the non-delivering Party, or Parties, at any time prior to receipt of

_..... all Settlement Funds (includiug all accrued. interest), or to enforce the terms of this Settlement... .........

Agreement; provided however, that in the event the FDIC declares this Agreement anil and void,
the FDIC will return all amounts paid to it under this Agreement by the non-deliveriag Party, or
Parties. In no event shall the FDIC declare this Agreement null and void with respect to any
Party that has delivered its share of the Settlement Fund (including any accrued interest) on or
before the date due, 30 days following the execution of this Agreement and the W-9 form,

SECTION IO: Stipulation and Dismissal
Upon execution of this Agreement by each of the undersigned Parties, and receipt of the
Settlement Funds, plus any accrued interest, the FDIC shall dismiss the action as against the
Settling Defendants only. The undersigned parties agree to enter stipulation(s) providing that the
dismissal(s) set forth above shall be with prejudice, with each party to bear its own costs as these

were originally incurred.

SECTION I: Releases
A. — Release of Individual Settling Defendants by FDIC.
Effective upon receipt in full of the setilement fimds plus any accrued interest and

dismissal as described in SECTION(S) I and I above, and except as provided in PARAGRAPH
TLC. and HELD. below, the FDIC, for itself and its successors and assigns, hereby releases and
discharges each of the Settling Defendants and their respective employees, employers, menabers,
officers, directors, legal representatives, agents, successors, insurance carriers, heirs, executors,
administrators, representatives, successors and assigns, from any and all claims, demands,
obligations, damages, actions, and causes of action, direct or indirect, in Jaw or in equity, ihat

arise from or relate io, the Lawsuit, the Property and/or the Appraisals.



fo Page 3

B. Within thirty G0) days of the execution of this Agreement an original, or originals

in counterpart and the execution of a W-9 signed by the FDIC’s authorized representative,

certified check from the Settling Defendants in full and final setilement of all claims and/or
potential claims against the Settling Defendants that have been or may be held by or assigned to
the FDIC which zelate fo or arise out of the Lawsuif, the Appraisals and the Property! Upon
receipt and successful negotiation of the total $200,000.00 Settlement Funds the FDIC will take
all necessary steps to dismiss the Setiling Defendants with prejudice from the Lawsuit, The

Patties agree to assist cach other to insure the Settling Defendants obtain a dismissal, with

prejudice, from the Lawsuit.

in the event that the Settlement Funds are not delivered to the FDIC (or its counsel)
within. the required time period noted above, interest shall accrue on all unpaid amounts at the
rate of 3% per annum starting on the date due, 30 days after the execution of this Agreement and
the W-9 form, and shai] continue to accrue until paid.

c. In addition, and without waiving any other rights that the FDIC may have, in the
event that all Settlement Fumds Gncinding all acerued interest) are not received by the FDIC on
of before the date due, 30 days following the execution of this Agreement and the exeoution of
the W-9 foun, then, the FDIC, in its sole discretion, shall have the right at any time prior to
receipt of all Settlement Funds (including all acerned interest) to declare this Agreement null and
void, shall have the right to extend this Agreement for any period of time until it receives all
Setilement Funds (including all accrued interest), and/or shall have the tight to enforce this
Agreement against the Party or Parties failing to deliver the Settlement Punds, in which event the
non-delivering Party, or Parties, agree to jurisdiction in Federal District Court in the State of
Uteh and agree to pay all of the FDIC’s reasonable attorney's fees expended in enforcing the

payment of the Settlement Funds shall be made to the FDIC by check from Liberty and by 0


a

1 cence ee een ‘ Page 2

In the Lawsuit, the Bank asserted claims against the Settling Defendants related to or
arising out of appraisals of real property consisting of approximately 73 acres located in

Florence, Pinal County, Arizona (the “Property”). David M. Lyons in connection with his

.. .eouployment for Lyons Vaination Group, LLC, prepared.two. Sas. is*.and an “as developed” value —-—~--- ----

appraisal reports of the Property for the Bank dated March 27, 2006 and March 2, 2007(hereafter

the “Appraisals”). The claims asserted against the Settling Defendants arise out of or are related

to the Appraisals;

The Setiling Defendants strenuously contest and dispute any liability for any damages
and claims asserted in the Lawsuit; and,

Following mediation before the Honorable William B. Bohiling, the undersigned parties
deem it in their best interests to enter into this Agreement to avoid the uncertainty and expense of
fiuther litigation. As a result, the Parties wish to enter into an Agreement for the compromise
and settlement of the rights and Habilities as between them arising out of or related to the
Lawsuit, the Property and the Appraisals.

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 ta FDIC
A As an essential covenant and condition to this Agreement, the Settling Defendants
agree to pay the FDIC the sum of One Thousand Two Hundred and Fifty Dollars ($1,250.00) and
Liberty, as the insurer of the Settling Defendants, agrees ta pay the FDIC the sum of One
Hundred and Ninety Hight Thousand and Seven Hundred and Fifty Dollars ($198,750.00) for a
total of Two Hundred Thousand Dollars ($200,000.00) ("the Settlement Funds") upon full

execution of this Agreement.