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SETTLEMENT AND RELEASE AGREEMENT 

This Settlement and Release Agreement ("Agreement") is made and entered into by and 

between the FEDERAL DEPOSIT INSURANCE CORPORATION, AS RECEIVER FOR 

FIRST NATIONAL BANK OF NEVADA ("FDIC-R"), on the one hand, and SJO CATLIN 

SYNDICATE 2003 at LLOYD;S (''Catlin") on the other hand. FDIC-R and Catlin are 

sometimes hereinafter collectively referred to as the "Parties" and each of them in the singular as 

a "Party". This Agreement is effective as of February l, 2013 ("Effective Date,). 

WHEREAS, prior to July 25, 2008, First National Bank of Nevada ("FNB Nevada'~ or 

Bank ') was a depository institution organlzed and existing under the laws of the United States, 

and whose deposits were insured by the Federal Deposit Insurance Corporaiion; and 

WHEREAS, prior to June 30, 2008, First National Bank of Arizona C'FNB Arizona") 

was a depository institution organized and existing under the laws of the United States, and 

whose deposits were insured by the Federal Deposit lnsurance Corporation; and 

WHEREAS, prior to June 30; 2008, FNB Nevada, FNB Arizona, and First Heritage 

Bankf NA ("First Heritage") were whoUy owned subsidiaries of First National Bank Holding 

Company ("First Holding11); and 

WHEREAS. FNB Arizona merged into FNB Nevada on or about June 30, 2008, and 

thereafter }i'NB Nevada continued as a wholly owned subsidiary of First Holding; and 

WHEREAS, on or about July 25, 2008, the Office of the Comptroller of th.e Currency 

closed FNB Nevada, whereupon the Federal Deposit Jnsurance Corpora1ion was appointed as 

receiver for FNB Nevada; and 

WHEREAS, in accordance with 12 U.S.C. § 182l(d), FDTC-R succeeded to all rights, 

titles, powers and privileges of tl1e Bank, including those with respect to its asse1s; including but 

Selllcment and Release Agreemen ~· Page 11164\00\00602264 
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not limited to, any and all of the Bank's claims, demandst and causes of actions against its former 

directors, officers and employees arising from the perfonnance, nonperformance and manner of 

performance of their respective functions, duties and acts as directors and/or officers of FNB 

Arizona and FNB Nevada; and 

WHEREAS, FDIC4R asserted claims against certain individuals ("Former Ds&Os"') 

relating to their conduct as former directors and/or officers o.f FNB Arizona. and FNB Nevada up 

through and incJudJng July 25, 2008 ("Professional Claims')); and 

WHEREAS, on August 23,2011, FDIC-R filed suit against Philip A. Lamb and Gary A. 

Dorris ("D&O Defendants") on the Professional Claims styled Federal Deposit Insurance 

Corporation, as Receiver for First National Bank of Nevada v Gary A. Dorris and Philip A. 

Lamb, in the United States District Court for the District of Arizona in case number 2:11-cv0 1 652-GMS e(FNB Nevada Lawsuit"); and 

WHEREAS, on October 13, 2011 , the Court in the FNB Nevada Lawsuit entered 

judgmetrt in favor of FDIC-R and gain~'t the D&O Defendants severally, each in the amount of 

$20 milLion ("Settlement Judgmenf'); and 

WHEREAS, Federal Insurance Company CFederal") · issued Financial Institutions 

(b)( 4) _ __...:&>rtfoli£LP..olicy-number1--- Fith a Policy Period effective from April 9, 2007 to June 9, 

2008 (

11Federal Policy"), which provided coverage to, among others~ directors and officers of 

FNB Arizona and FNB Nevada according to the terms, provisions and exdusions of the Federal 

Policy; and 

WHEREAS, the Former Ds&Os provided notice of the Professional Claims to federal 

under the Federal Policyl and Federal acknowledged a potential for coverage subject to its 

reservation of rights; and 
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WHEREAS, Federal accepted the defense of the Former Ds&Os in connection with the 

Professional Claims) subject to its reservation of rights; and 

WHEREAS, Catlin issued Director and Officer and Corporate Securities Liability 

(b)( 4) ...... Insuraooe .. Policynumbe1 ............... I with a Policy Period effective from June 9) 2008 to 

June 91 2009 CCailin Policy"), which provided coverage to, among others, directors and officers 

of FNB Arizona and FNB Nevada according to the tenus, provisions and exclusions of th.e Catlin 

Policy; and 

WHEREAS, the Fonner Ds&Os provided notice of the Professional Claims to Catlin 

under the Catlin Policy, and Catlin denied coverage under the Catlin Policy for the Professional 

Claims asserted by FDIC~R against the 17ormer Ds&Os; and 

WHEREAS, effective August 26,2011, FDIC-R and the Former Ds&Os entered into an 

agreement settling (i) the Professional Claims asserted by FDIC-R against the Former Ds&Os, 

and (ii) the FNB Nevada Lawsuit against the D&O Defendants (such settlements collectively 

referred to as the .. D&O Settlement''); and 

WHEREAS, as part of the consideration in connection \v.ith the D&O Settlement, the 

Former Ds&Os and the D&O Defendants assigned to FDIC-R all of their respective rights, 

claims, and causes of action (including defense costs) against Catlin relating to or arising out of 

the Catlin Policy, the FNB Nevada Lawsuit, the Settlement Judgment or the D&O Settlement 

("Assigned Claims"); and 

WHEREAS, on October 25, 2011, FDIC~R flied snit against Catlin on the Assigned 

Claims styled Federal Deposit Insurance Corporation, as Receiver for First National Bank of 

Nevada v. Syndicate 2003 at Lloyd's, in the United States District Court for the District of 

Arizona in case number 2;11-cv-02083-PHX-SMM ("Catlin Lawsuit•1 or "Action,'); and 

Sell!<lment lind ReiCl~Se Agreement • :P~~ge 3 1164\00\00602264 
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WHEREAS, the Parties deem it in their best interests to enter into this Agreement to 

avoid the uncertaintys trouble, risk and expe1lSe of litigation. 

NOW, THEREFORE. in consideration of the promises, 1.mdertakings, payments and 

releases stated herein) the sufficiency of which consideration is hereby acknowledged; the Parties 

agree, each with the others, as follows: 

1. Settlement Payment. As an essential covenant and condition to this Agreement, 

CatHn agrees to pay FDIC-R the sum of SEVEN MILLION FIVE HUNDRED THOUSAND 

DOLLARS ($7,500,000) in lawful money of the United States of America ("Settlement 

Payment") within twenty (20) days of the Effective Date ("Due Date"). The Settlement Payment 

shall be delivered to FDIC-R by direct wire transfer pursuani to wiring instructions the FDIC-R 

has already provided to Catlin in writing. In the event that the Settlement Payment is not 

delivered to .FDIC·R on or before the Due Date, interest shall accrue on all unpaid amounts at the 

rate of 5% per annum from such date lmtil the dale of payment. 

2. Dismissal of tl1e Action. 

A. Upon payment of the Settlement Payment, the Catlin Lawsuit and aH "Claims" (as 

defined below) asserted or which could have been asserted in the Action by the Parties against 

each other are to be dismissed~ with prejudice~ each Party to bear its own costs and attorneys' 

fees, as a matter of settlement and not as an adjudication on the merits. The Order of Dismissal 

shall also order the Parties to timely comply with their settlement obligations under this 

Agreement. 

B. The term "Claims" js intended to be broadly and comprehensively defined as 

including any and all manner of civil or resulatory fault or liability whatsoever, whether or not 

presently asserted, and whether predating this instrument or arising or discovered in the future, 

Setilcmcnt nod Relcmse Agr<:tm1e.ot- Page 4 1164\00\00602264 
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based upon or arising out of (i) the Catlin Policy, (H) the Insurance Coverage, (iii) Catlin's denial 

of Insurance Coverage under the Ca1lin Policy, and (iv) the allegations and causes of action 

asserted or which could have been asserted by the FDIC and Catlin against each other in the 

Action, including~ but not limited to all conceivable civil, regulatory or statutory causes of action 

(including but not Jimited to Breach of Contract, Bad Faith, and Punitive Damages), suits~ debts, 

dues, sums of money, accounts, reckonings, bonds, biJls, specialties, covenants~ contracts~ 

express or implied warranties, negligence, controversies, agreements. promises, variances! 

trespasses, personal and economic injuries, damages, costs, expenses~ attorneys' fees, judgments, 

executions, and other obligations whatsoever. in law or in equity associated with the Catlin 

Policy and the Insurance Coverage1 whether or not presently asserted, including Claims that are 

not accrued or suspected to exist which~ if krtown~ would llave materially affected the decision to 

settle the Action. The Parties acknowledge that (i) settlement has been negotiated and this 

Agreement is being executed with conscious appreciation that unknow~ unanticipated and 

unsuspected Claims are being released, and (ii) the decision to settle may be based upon 

incomplete or inaccurate information, the risk of which is being expressly assumed. For clarity~ 

the releases herein do not extend to or release any claims or causes of action enjoyed by the 

FDIC with respect to other Catlin insurance policies or other financial institutions insured by 

Catlin. 

3. Release of Catlin by FDICwR. Upon full execution of this Agreement by the 

Parties and full receipt of the Settlement Payment by FDIC-R, and in consideration therefor, 

FDIC~R, for itseJf and its successors and assigns, hereby releases a'ld discharges Catlin,J HH .. HJH .. (1:>.){4.1 

(b)(4) ____ ....... lH .... - lsJOC Catlin Syndicate 2003 at Lloyd's~ I H H ~nd Jp)(4.1 

(b)( 4) ·····H····H H I·········· I and their affiliates, parents, subsidiaries, employeess officers, directors, 

Settlement and Release Agr~mcnl· Page S ll64\00'.oo602264 
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representatives, agents, attorneys, successors and assigns, from any and all claimsi causes of 

action, damages, personal or economic injuries, rights or liabilities whatsoever, including 

attorneys fees, costs and litigation expenses, whether grounded in contract> tort, equity or 

regulatory violation, which are based upon or arise out of the allegations and causes of action 

asserted or which could have been asserted by FDIC-R in the Catlin Lawsuit (including without 

limitation a]] "Clainu!" us defined in paragraph 2.B). The release in this paragraph 3 does not 

release or discharge Catlin fi'Om its obligations under this Agreement. 

4. Release of FDIC·R by Catlin. Effective simultaneously with the re1ease granted 

in Paragraph 3 above, Catlin, on behaJf of itself and its employees, officers, directors, 

representativ-es, agents, attorneys) successors and assigns, hereby releases and discharges FDICR, and its employees, officers, directors, representatives~ agentsj attorneys, successors and 

assigns, from any and all claims, causes of action, damages, personal or economic injuries, rights 

or liabilities whatsoever, including attorneys fees, costs and litigation expenses, whether 

grounded in contract1 tort, equity or regulatory violation. which are based upon or arise out of the 

allegations and causes of action asserted or which could have been asserled by FDIC-R, or which 

were asserted or could have been asserted by Catlini in the Catlin Lawsuit (including without 

limitation al1 ~•cJtums" as defined in paragraph 2.B). The release in this paragraph 4 does not 

release or discharge FDIC-R from its obligations under this Agreement. 

5. No Admission nf Liabili!!. The Patties each acknowledge and agree tbat the 

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

and that tbis Agreement is not an admission or evidence of liability by any of them regarding any 

claim. 

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6. Execution in Counterparts. This Agreement shall not be binding on either Party 

until signed and delivered by both Parties; provided, however, it may be executed 1n one or more 

counterparts and delivered by facsimile or email, and each such counterpart, upon execution and 

delivery, shaH be deemed a complete original, binding the Party subscribed thereto upon 

execution by both Parties to this Agreement. Such counterparts when so executed shall together 

constitute the final Agreement. Photocopies and/or facsimile and/or e~mail transmissions of 

original signatures shall be considered in all respects equivalent to original signatures. On the 

date of execution of this Agreement, both Pru1ies shall provide notice of their execution of the 

Agreement to the other Party by sending or arranging to be sent an e-mail attaching a copy of the 

signed Agreement to the e~mall address for the attorney for such Party as set forth in paragraph 

14 below. 

7. Bin dina Efi'cct. Both Parties represent and warrant that they are a party hereto or 

are authorized to sign this Agreement on behalf of such Party) and that they have the full power 

and authority to 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 Parties and their respective 

successors and assigns. 

8. Choice of Law. This Agreement shall be interpreted, construed and enforced 

ac-cording to the laws of the State of Arizona. 

9. Entire Agreement and Amendments. 1bis Agreement constitutes the e11tire 

agreement and understanding between the Parties concerning the matters set forth. herein. This 

Agreement may not be amended or modified except by another written instrument signed by the 

.Parties, or by their respective authorized attorney(s) or other reprcsentative(s). 

Setllement and Release Agreement ·Page 7 II (14\00\00602264 
(b)(6) 

(b )(6)Homo 

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10. No Prior Transfer of Claims. Each Party warrants and represents that such Party 

has not assigned, sold, or otherwise transferred or disposed of, and will not assign, sell~ otherwise 

tran.~fer or dispose of, any interest ln the claims settled and/or released pursuant to this 

Agreement. 

ll. Reasonable Cooperation. The 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 necessary to effectuate the signing, delivery, 

execution, filing, recording, and entry of any documents necessary to perform the terms of this 

Agreement 

12. Advice of CounseL Both Parties hereby acknowledge that such Party has 

consulted with and obtained the advice of counsel prior to executing this Agreement, and that 

this Agreement has bee.n explained to that Party by his, her or hs counseL Furthermore, the 

Parties agree, after consultation with their attorneys, that reasonable and prudent parties in their 

position would enter into this Agreement to avoid the rjsks and uncertainty of litigation. 

13. Notices. Any notices relating to or arising out of this Agreement shall be sent by 

e~mail, shall be considered delivered when received by the Party to whom it was sent, and shaH 

be addressed to the following recipients: 

To tltc FDIC-R: 

Bob Rogers~ Esq . 

....... m·············· .Em~i.l.;.'-1_·······-·······-·······-·······-······----' 

with a copy to; 

John M. Brown, Esq . 

.......... E.mail:l·················m·············· 

To Catlin: 

Mark Breitenbach 

Sett!eruent arul Release Agreement • P~ R 
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(b )(6) ............. ......... . m.EmaU: ... fL... .....___ .......... _ ......... ....... __ ..... ___ __,.J 

with a copy to: 

(b )(6) """ 

Timothy J. Thomason, Esq. 

E.mnil:l .. ......................... ·· ··· 

14. Preparation of Agreement. TI1is Agreement has been prepared by the combined 

efforts of both Parties and their respective attorneys. The Parties represent and warrant that both 

of them have had the unfettered opportunity to fully consult with an attorney of their own choice. 

This Agreement shall, therefore, be construed without reg-ard to the authorship of the language 

and witbout any presumption or interpretation or construction in favor of any person, entity or 

Party. 

15. Costs and Expenses. All costs and expenses incurred in closing and carrying out 

the transactions contemplated by this Agreement shall be born.e by the respective Party incurring 

such cost<J and expenses. 

16. Survival. AU representations and warranties made herein shaU continue and 

survive the execution of this Agreement, and remnin binding upon the person or persons making 

the representation or warranty, even after this Agreement is executed. 

17. Severability, In the event that any provision of this Agreement is declared OJ' 

deemed to be invalid or un nforceable~ such invalidity or unen.forceability shall not affect the 

validity m: enforceability of the remaining portions ofthis Agreement. 

18. Nondisclosure. Outside counsel for FDIC-R shall not publish on i:ts website or in 

marketing materials) or otherwise disclose to any third parties any infonnation about the terms 

and amount of this settlement. 

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19. Attorneys' Fees. If any lawsuit is brought to enforce any term or provision of 

this Agreement, or in connection with any dispute arising from or relating to this Agreement or 

to the alleged breach of this Agreement, the prevailing party shall be entitled to recover its 

reasonable and necessary attorneys• fees and costs incurred in connection with any such lawsuit 

or proceeding~ throughout trial and aU appeals. 

FEDERAL DEPOSIT INSURANCE 

CORPORATION~ AS RECEIVER FOR 

Date: ____ ~.-~- ~7 

:r~ ttaiJa~~~ :::~F~~~~~ (~)(6) 

Date~ 31 :L:...o. Z.t::s t3_ 

PHOENIX 55100·1 32906v1 

SeU!ement aod Rei~ Agree:nwt ·Page I 0 

Name: ..I{:d<... Ca..w"~~ n%... 

SJO CATLIN SYNDICATE 2003 at 

LLOYD'S 

Nam 

(b)(4