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SETTLEJVIENT AND Rl~LgASE AGREEMENT 

This Settlement and Release Agreement ('1Agreemcnt'') is made as of this _I day of 

~ 2012, by, bet\veen, and among the following undetsigned parties: 

The Fedeial Deposit Insurance Cotpotation, as receiver of Community National Bank at 

Bru:tow, Bartow, Florida C'FDIC-R'

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)} and St Paul Mercury Insurance Company ('~ St Paul") 

(individually, th.e FDIC-R, and St. Paul may be referted to herein as ('Party" and collectively as 

the ~Pruties") , 

RECITALS 

'WHEREAS: 

Prior to August 20, 2010, Community National Bank at Bartow, Bartow, Florida 

("Bank") was a depository institution mganized and existing under the laws of the United States .. 

On August 20, 2010, the Bank was closed by the Office of the Comptro.ller of the 

Cun ency. and pursuant to 12 U .S C.§ 182l(c), the PTIJC was appointed receiver .. In accotdance 

with 12 U S C.§ 182l(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 all of the Bank's claims, 

demands, and causes of actions against companies that issued financial institution bonds to the 

Bank 

On November 15, 2010, the FDIC-R notified St Paul of a potential cla1m under Financial 

(b)(4) ......................... JnstitutionBondNo::, ............................... ·········· ~t e «Bond").. On January 28, 2011, the FDIC-R 

submitted to St. Paul the Proof of Loss for the claim, which was assigned claim numbex.-1--.-....... -.... -........., .. J ... {~.)(~). 

(b)(4) ................. ..................... land covered a check-kiting scheme petpetrated by Bank custome1 PMH Gtoup: 

lnc in 2009, p!ior to the closure of the Bank (the "Bond Claim''). 

The FDIC-R bas made a claim undet the Bond, and St Paul has reseived its rights to 

deny coverage under the Bond for the Bond Claim asserted by the FDIC-R. Among other issues, 
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St. Paul has alleged that the loss vvas not discovered 1.mtil after August 20, 2010 

The undersigned parties deem it in theh best interests to enter into this Agreement to 

avoid the uncettainty, trouble~ and expense of litigation . 

NOW, THEREFORE, in consideration ofthe promises~ undettak:ings;. payments; and 

1eleases stated herein, the sufficiency of which consideiation is hereby acknowledged, the 

tmdcasigned pruties agr:ee, each with the other, as follows: 

SECTlON 1: Payment to F.DIC~R 

A. As an essential covenant and condition to this Agreement, St.I>aui agrees to pay 

the FDIC-R the sum of Seventeen Thousand Five Hundred Sixty Five Dollrus ($17,565 00) ("the 

Settlement Funds"). 

B Upon the execution of an original, or originals in counterprut, of this Agreement 

by each ofthe undersigned Parties to this Agreement, but no latet than 21 days afterihe 

Agreement is fully executed (the ''Payment Date"), St. Paul shall delivei the Settlement Funds to 

the DIC~R by check or·wire tranfei In the event that the Settlement Funds are not delivered to 

the FDlC-R (ot its counsel) by the Payment Date, intetest shall acctue on aU llllpaid amounts at 

the rate of 5%) pet anm.m1 from the Payment Date until the date payment is received by the FDICR 

C. In addition> and without waiving any othet rights that the DIC~R may have) in 

the event that all Settlement Funds (including all acctued interest) are nat received by the IC~ 

R by the Payment Date, then the FDIC-R, in lts sole discretion, shall have the right at any time 

ptior to receipt of all Settlement Funds (including all accrued interest) to declare this Agteement 

null and void, shall have the right to extend this Agreement for any period oftime until it 

teceives all Settlement Funds (including all acc1ued intetest)} and/or shall have the tight to 

enfotce this Agreement against St. Paul If the FDIC-R chooses to enforce this Agreement, St 

Paul agrees to the jurisdiction ofihe United States District Comt for the Midd1e District of 

Florida If the FDIC-R chooses to extend the terms of this Agreement 01 to accept a portion of 

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the Settlement Funds, doing so shaH not piejudice iis tights to dec late this Agteemeut null and 

void at any time p1i01 to receipt of all Settlement Funds (including all accrued intetest: if any) or 

to enfmce the terms of this Settlement Agreement; provided however, that delivery to the FDICR of some of the Settlement Funds shall reduce St. Paul's obligation to the FDTC-R undei the 

Bond or under this Agreement solely in the amount of such received funds. 

SECTION II: Releases 

A Release of St. Paul bv FDIC-R. 

Upon execution of this Agreement by each of the undersigned Parties and effective upon 

receipt in full of the Settlement r~unds plus any accrued interest, as desc1ibed jn SECTION I 

above: and except as provided in PARAGR.<\PH ll.C. below, the FDIC. for itself and its 

successors and assigns, hereby releases and discharges St Paul and its successors and assigns, its 

parents, subsidiaries, affiliates and reinsurers, and their successors and assigns, f1om any and all 

claims, demands, obligations! damages, actions, an.d causes of action, direct or indirect, in law or 

in equity, belonging to the FDIC-H., that a.tise from or relate to the Bond Claim.. 

B Rele ~e ofFDIC-R bv St Paul. 

Eftective simultaneously \:Vith the release granted i.n Paragraph ILA .. above, St Paul , fm 

itself and its successors and assigns, and on behalf of its parents, subsidiariess and affiliates~ and 

their successors and assigns, he1eby Ieleases and discharges the FDIC-R, and its employees, 

o.tli.cets, directms, agents, tepresentatives, successors and assigns, from any and all claims~ 

demands, obligations, damages, actions, and causes of action~ direct or indirec..1, in law or in 

equity, that arise fiom or relate to the Bond Claim. 

C. Express Reservations From Releases l3Y FDIC-R. 

1.. Notwithstanding any othez provision ofthis Agreement, the FDIC-R 

does not 1elease, and expressly preserves fully and to the same extent as if the Agreement had 

not been execute~ any claims or causes of action against any pet son or entity that may be 

btought, ruise llllder, or in any \:vay relate to any othe1 policy issued by St. Paul 01 its successor~'.i 
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and assigns} its patents. subsidiaries, affiliates and 1einsure1s, and their successors which are not 

expressly released in Pru:agraph IIA above. 

SECTION lll: Representations and Acknowledgements 

A. No Admission of Liability. The undersigned Pru.ties 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 eviden.ce of liability by any of them 

regruding any claim 

B. ,\;;!(ecution in Counte1parts. This Agreement may be executed in counterpru:ts by 

one or more of the patties named hetein and aU such colmterpmts when so executed shall 

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

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

binding the party or patties subsctibed thereto upon the execution by all par ties to this 

Agreement 

C, Binding Effect Each of the undersigned persons represents and wauants that 

they are a party hereto ot rue authorized to sign this Agteement on behaJf of the 1espective party, 

and that they have the full power and auth01 ity to bind such party to each and eve1y provision of 

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

according to applicable federal law, o.r in its absence, the laws of the State of Florida .. 

E Entire Agreement and Amendments. This Agreement constitutes the entire 

agreement and undeistanding between and among the undersigned parties concerning the mattets 

set forth hetein Ibis Agreement may not be amended ot modified except by anothet 'W1itten 

instlUment signed by the party or parties to be bound thereby, 01 by theil respective authorized 

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attorney(s) m· other t'epresentative(s). 

}' Reasonable Co.ope.ration, 

1.. The unde1signed parties agree to cooperate in good faith to effectuate all the 

terms and conditions of this Agreement 

G- Advice of CounseL Each patty hereby acknowledges that it has consulted with 

and obtained the advice of counsel ptiot to executing this Agreement, and that this Agreement 

has been explained to that pmty by its counsel. 

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

by each ofthern or theh duly authorized 1 eptesenta1i ves on the dates hereinafter subscribed_ 

FEDERAL DEPOSIT INSU:Rr\NCE CORPORATION 

BY: 

S1, PAUL MERCURY INSURA.NCE COMPANY 

(b)(6) ____________ ----

Date: _____ _ 

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