SETTLEMENT AND RELEASE AGREEMENT 

This Settlement and Release Agreement ("Agreement") is made by, between, and among 

the Federal Deposit Insurance Corporation as Receiver for Sun Security Bartle ("FPIC-R") and 

Berkshire Hathaway Homestate Insurance Company ("BHHIC"), as successor to Kansas 

Bankers Surety Company ("KBS") (individ11ally, the FDIC-R and BHHIC may be referred to 

herein as "Party" and collectively as the "Parties"). 

RECITALS 

WHEREAS: 

Prior to October 7, 2011, Sun Security Bank ("Bank") was a depository institution 

organized and existing under the laws of Missouri; 

KBS issued-~ Financial Institution Crime Bond No. ._!__ ····-·······-········_,····!<''Bond''.),Jothe...Ba.n.k: .•......................... (b)(4) 

The Bond was effective for the bond period December 31, 2010, through December 31, 2011, 

.and provided a Single Loss Limit ofLiability of$3,500,000 for fidelity and a Single Loss Limit 

ofLiability of $600,000 for securities. 

On May 31, 2011, the Bank provided JIBS with a w1itten notice ofloss seeking coverage 

under the Bond for losses incurred by the Bank that were caused by the dishonest acts ofa 

___c_e_rt~~I?-~_a!)k e.~ploy~_and an alleged forgery. On October 6, 2011, the Bartle provided KBS 

with documentation that was intended to satisfy the Bond's proof of loss requirement for these 

claims (coJlectively, "Bond Claims"). 

On October 7, 2011, the Missouti Department of Finance closed the Banlc and pursuant to 

12 U.S.C. § 1821(c), the Federal Deposit Insurance Corporation was appointed Receiver. In 

accordance with 12 U.S.C. § 1821.(d), the FDIC-R succeeded to all rights, titles, powers and 

privileges ofthe Bank, including those with respect to its assets. Among the assets to which the . 

FDIC-R succeeded were any and a1l claims, demands, and causes ofaction under the Bond, and 

with respect to the Bond Clajms. 
On October 7, 2011, KBS purported to rescind the Bond due to an alleged 

misrepresentation on the application for the Bond. The FDIC-R disputes whether the Bond was 

properly rescinded. 

T11e undersigned Parties deem it in their best interests to enter into this Agreernent to 

avoid the uncertainty and expense of litigation. 

N(?W, THEREFORE, in consideration ofthe promises, undertakings, payments, and 

releases stated herein, the sufficiency of which consideration is hereby ackno~ledged, the 

undersigned Parties agree, each with the other, as follows: 

SECTION I: Payment to FDIC-R 

A. · ·As an essential covenant an~ condition to this Agreement, on or before thirty (30) 

. calendar days following the date on which the FDIC·R executes this Agreement, BHHIC agrees 

to pay the FDIC-R the sum ofFifty Thousand Dollars ($50,000) ("the Settlement Payment"). 

B. BHHIC shall deliver the Settlement Payment to the FDIC-R by direct wire 

transfer into an account designated by FDIC-R by notice to BHHIC as provided in Section VlD 

or by ce11ified or cashier's check drawn upon a depository institution acceptable to FDIC-R. 

In the event that the Settlement Payment is not delivered to the FDIC-R (or its counsel) 

by :the date determined in Section I.A, interest sha11 accrue on all unpaid amounts at the rate of 

5% per annum from the date that payment was required under Section I.A until the date of ---1

payiilent. 

C. If the FDIC·R does not receive the Settlement Payment in full on or before the 

date determined by Section I.A, then the FDIC-R, in its sole discretion, shall have the right at 

any time prior to receipt of the Settlement Payment in full (including all accrned interest) to: 

1. Extend the period· oftime for the Settlement Payment, including interest 

accruing from the date detennined by Secti~n I.A above, through the date ofpayment at a rate . 

. calculated in accordance with S~ction I.A above; or 

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2. Enforce this Agreement, in which event BHHIC agrees to jurisdiction in 

United States District Court for the Eastern District ofMissomi and to pay all of the FDIC-R's 

reasonable attorney's fees and costs expended in enforcing the te1ms ofthis Agreement; or 

3. Terminate the Agreement, move to vacate any dismissal order, to which 

BHHIC agrees to consent, and institute an action on the FDIC-R's claims. BHHIC further 

agrees to waive any defense based on any statute of limitations that would bar any ofthe FDICR's claims and waive ~I objections, defenses, claims or counterclaj~ns, and covenants and agrees 

not to assert any objections, defenses, claims or counterclaims that did not exist or were 

otherwise unavailable as of the date this Agreement was fully executed; and/or 

4. Seek any other relief available to it in law or equity. 

Any extension of time under Section I.C. l for delivery ofthe Settlement Payment or 

acceptance of a portion of the Settlement Payment shall not prejudice the FDIC~R's rights to take 

any of the actions set forth in Section I.C.2 through I.C.4 at any time prior to receipt of 

Settlement Payment (including all accrued interest) in full. 

SECTION II: Releases 

A. Release ofBHHIC by the FDIC-R. 

Effective upon its receipt of the Settlement Payment in full, as described in Section I, and 

except as provided in Section 11.C, the FDIC-R, for itself and its successors and assigns, hereby 

releases and discharges BHHIC and its representatives, successors, and assigns, from any and all 

claims, demands, obligatio1)s, damages, actions, and causes of action, direct or indirect, in law or 

in equity, that arise from the Bond Claims. 

B. Release of the FDIC-Rby BHHIC. 

Effective simultaneously with the release granted in Paragraph II.A above, BHHIC, for 

itself and its agents, representatives, successors and assigns, hereby releases and discharges the 

FDIC-R and its employees, officers, directors, representatives, 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 the Bond Claims. 

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C. Exceptions from Releases by FDIC·R. 

1. Notwithstanding any other provision of this Agreement, the FDIC-R does 

not release, and expressly preserves fully and to the same extent as if this Agreement had not 

been executed, any claims or causes ofaction: 

. . . 

a. Against BHHIC or any other person or entity for liability, if any, 

incurred as the maker, endorser or guarantor ?f any promissory note or indebtedness payable or 

owed by them to FDIC-R, the Bank, other financial institutions, or any other person or entity, 

including without limitation any such claims acquired by FDIC-R as successor in interest to the 

Banlc or any person or entity other than Bank; and 

b. Against any person or entity not expressly relea.sed by the FDIC-R 

in this Agreement. 

2. Notwithstanding any other provision ofthis Agreement, nothing in this 

Agreement shall be canst.med or interpreted as limiting, waiving, releasing, or compromising the 

jurisdiction and authority of the Federal Deposit Insurance Corporation in the exercise ofits 

supervisory or regulatory authority or to diminish its ability to institute administrative 

enforcement or other proceedings seeking removal, prohibition, or any other relief it is 

authorized to seek pursuant tQ its supervisory or regulatory authority against any person. 

3. Notwithstanding any other provision of this Agreement, this Agreement 

does not purport to waive, or intend to waive, a~y claims that could be brought by the United 

States through the Department ofJustice, the United States Attorney's Office for any federal 

judicial district, or any other depa1tment or agency of the United States as defined by 18 U.S.C. § 

6. In addition, the FDIC-R specifically reserves the right to seek. court~ordered restitution 

pursuant to the relevant provisions ofthe Mandatory Victims Restitution Act, 18 U.S.C. §§ 3322 

and 3663 et. seq., if appropriate. 

SECTION III: Subrogation 

In further consideration ofthe releases in Section II, BHHIC waives any and all 

subrogation rights with respect to the Bond Claims. 

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SECTION IV: Represe~tations and Acknowledgements 

A. Authorized Signatories. All of the undersigned persons represent and warrant that 

they are Parties hereto or are authorized to sign this Agreement on behalfofthe respective Party, 

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

this Agreement. This Agreement shall be binding upon and inure to the benefit ofthe 

undersigned Pruties and thei~ respective heirs, executors, trustees, administrators, representatives, 

successors and assigns. 

B. Advice of Counsel. Each Party hereby acknowledges that he, she, or it has 


consulted with and obtained the advice ofcounsel prior to executing this Agreement, and that 
 . ·. 

this Agreement has been explained to ~hat Party by his or her counsel. 

SECTION V: Reasonable Cooperation 

The Parties agr~e 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 necessary to effectuate the signing, delivery, execution, filing, recording, and entry, 

ofany documents necessary to perform the tenns ofthis _Agreement. 

SECTION VI: Other Matters 

A. No Admission ofLiability. The undersigned Parties each acknowledge and agree 

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

claims and defenses, that this Agreement is not an admission or evidence of liability or infinnity 

by any ofthem regarding any claim or defense, and that the Agreement shall not be offered or . 

received in evidence by or against any Party except to enforce its terms. 

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

one or more of the Parties and all such counterparts when so executed shall together constih1te. 

the final Agreement, as ifone document had been signed by all Parties; and each such 

count_erpart, upon execution and delivery, shall be deemed a complete original, binding the 

Parties subscribed thereto upon the execution by all Pruties to this Agreement. 

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C. Choice ofLaw. This Agreement shall be interpreted, construed and enforced 

according to applicable federal law, or in its absence, the laws ofthe State ofMissouri. 

D. Notices. Any notices i:equired heretJnder shall be sent by registered mail, first 

class, return receipt requested, and by email, to the following: 


Ifto the FDIC-R: 


David C. Giles 


Schiff Hardin LLP 


233 South Wacker Drive, Suite 6600 


Chicago, IL 60606 


(b)(6) 1 ..... 

Ifto BHHIC: 

Bradley Z. Haurnont 

Senior Legal Counsel 

Berkshire Hathaway Homestate Insurance Company 

1314 Douglas Street, Suite 1400 

Omaha, NE 68102-1944 

(b)(6) ,............ 


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

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

set forth herein and supersedes any.prior agreements onmderstandings. This Agreement may 

not be amended or modified, nor may any ofits provisions be waived, except in writing signed 

by the Parties bound thereby, or by their respective authorized attorney(s), or other 

representative( s ). 

F. Titles and Captions. All section titles and captions contained in this Agreement 

are for convenience only and shall not affect the interpretation ofthis Agreement. ·-· ... 

G. No Confidentiality. The undersigned Parties acknowledge that this Agreement 

shall not be confidential and will be disclosed pursuant to the Federal Deposit Insurance 

Corporation's applicable policies, procedures, and other legal requirements. 

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

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

FEDERAL DEPOSIT INSURANCE CORPORATION AS 

RECENER FOR SUN SECURITY BANK 

(b)(6) 

\ I ............. 
 ···············································································I 

Date: l \ l"S} l.O! ~ BY: _.____________...,....__._____ I L 

. I' t ! l \\· •. 

TITLE: ,_,u>C'.l<<A 1 '1--J:~ "v,s: <N\. 

PRINT NAME: ,?'.)W\':&,\ ~ L,t:z 

BERKSHIRE HATHAWAY HOMESTATE INSURANCE 

COMPANY, AS SUCCESSOR TO KANSAS BANKERS 

SURETY COMPANY 

6 (b)( ) Date:\·\;"'0'5-tp 	 BY:····=JL······_··________...J----­

TITLE: ';.~ -dbll:Hr>v/lJS.~l.­

PRINT NAME: -5~\)LE,r 1- ,\-fPh)MoN ,­

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