SETTLEJ.\tiENT AND RELEASE AGREEMENT 

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

the following undersigned parties: 

Jhe Plaintiff Federal Deposit Insurance Corporation as Receiver for Orion Bank ("FDICR"), and-James Aultman, Earl Holland, and Brian Sclunitt (collectively the "Settling 

Defendants"), and Progressive Casualty Insurance Company ("Insurer") (individually, the FDICR, the Settling Defendants and Insurer may be referred to herein as "Party" and collectively as 

the "Parties"). 

RECITALS 

WHEREAS: 

Prior to November 13,2009, Orion Bank ("Bank") was a depository institution organized 

and existing Lmder the laws of Florida; 

On November 13, 2009, the Florida Office of Financial Regulation closed the Bank 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 of the Bank, including those with respect to its assets. 

Among the assets to which the FDIC-R succeeded were all of the Bank's claims, 

demands, and causes of action against its former directors, officers, and employees arising from 

the performance, nonperformance, and manner of perfonnance of their respective functions, 

duties and acts as directors, officers, and employees of the Bank; 

On January 23,2013, the FDIC-R filed a complaint for money damages against the 

Settling Defendants, each of whom served at various times as a director of the Bank. Those 

claims for damages are now pending in the United States District Court for the Middle District of 

Florida in FDIC as Receiver for Orion Bank v. Aultman, No. 2: 13-cv-99-SPC-CM ("D&O 

Action''). The SclUing Defendants have denied liability in the D&O Action. 
Insurer issued a director and officer liability policy nwnberedl ·························k"Policy''), .................. (p)(4.) 

which insured the directors and officers of the Bank according to the terms, provisions, and · 

conditions of the Policy. The Settling Defendants asserted claims for coverage under the Policy. 

Insurer has reserved its rights to deny coverage under the Policy for claims asserted by FDIC-R 

against the Settling Defendants. Additionally, on October 17, 2013, Insurer filed a declaratory 

judgment action against the FDIC-R, James Aultman; Earl Holland; Alan Pratt; and Brian 

Schmitt in the United States District Court for the Middle District of Florida captioned 

Progressive Casualty Insurance Company v. FDIC as Receiver for Orion Bank, et al., case 

number 2:13-cv-00737-SPC-CM ("Coverage Action") seeking a declaration of its rights and 

obligations under the Policy with regard to the claims asserted by the FDTC-R in the D&O 

A~tion. On February 5, 2014, the Coverage Action was dismissed, without prejudice, by 

s~ipulation. 

The undersigned Parties deem it in their best interests to enter into this Agreement to 

avoid the uncertainty 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 

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

SECTION 1: Payment to FDIC~R 

A. As an essential covenant and condition to tbis Agreement,") on or before one 

hWldred and twenty (120) calendar days following the date the Agreement is executed by all 

Parties, the Settling Defendants shall pay the FDIC-R the sum of $1.225 million ("the 

Defendants' Payment") and Insurer shalJ pay the FDIC-R the sum of$2.485 million ("the 

Insurer's Payment") for a collective total of$3.710 million ("the Settlement Payment"), The 

Insurer's payment obligation under this Agreement is limited to the Insurer's Payment. The 

Settling Defendants shall be jointly and severally liable for the Defendants' Payment. 

2 
B. The Settiing Defendants and Insurer shall deliver the Defendants• Payment and 

the Insurer•s Payment, respectively, to the FDIC-R by direct wire transfer into an account 

designated by FDIC-R by notice to the attorneys for the Settling Defendants and Insurer. 

C. If the FDIC-R docs not receive the Settlement Payment in full on or before the 

date determined by subsection A above, 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 accrued interest) 

to: 

1. Extend the period of time for the Settlement Payment, including interest 

accruing from the date determined by subsection A above, through the date of payment at a rate 

calculated in accordance with 26 U.S.C. § 662l(a)(2); or 

2. Enforce this Agreement, in which event the Settling Defendants and 

·Insurer agree to jurisdiction in United States District Cowt in Middle District of Florida and any 

defaulting party agrees to pay all of the FDIC-R's reasonable attorney's fees and costs expended 

in enforcing the tenns of this Agreement, or 

3. Terminate the Agreement, return any portion of the Settlement Payment 

received to the paying party, move to vacate any dismisRal order, to which the Settling 

Defendants agree to consent, and resume the Lawsuit.. The Settling Defendants further agree ~o 

not assert ·any objections, defenses, claims or counterclaims, including any defense based on any 

statute oflimitations that bars any of the FDIC-R's claims, that did not exist or wen~ otherwise 

unavailable as of the date thi~ Agreement was fully executed; and/or 

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

Any extension oftime under Section I.C.l for delivery of the 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. 

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SECTION II: Stipulatimi and Dismissal 

Within ten business days after receipt of the Settlement Payment in full, plus any accrued 

interest, the FDIC·R shall file a stipulation of dismissal with prejudice, execute~ by the attorneys 

for all Parties hereto, in the fonn attached hereto as Exhibit A, in the D&O Action. 

SECTION III: Releases 

A. The FDIC·R's Releases. 

Upon receipt of the Settlement Payment in full and except as provided in Section III.D, 

the FDIC·R, for itself and its successors and assigns, hereby releases and discharges: 

1. lbe Settling Defendants and their respective heirs, executors, trustees, 

administrators, representatives, insurers, successors, and assigns, from any and all claims, 

demands, obligations, damages, actions, and causes .of action, direct or indirect, in law or in 

equity, belonging to the.FDIC-R, that arise from or relate to, the perfonnance, nonperformance, 

or manner of performance of the Settling Defendants' respective functions, duties and actions as 

officers and/or directors of the Bank including without limitation the causes of action alleged in 

the D&O Action. 

2. Insurer, its parents, subsidiaries, affiliates and reinsurers, and its and their 

respective employees, officers, directors, agents, 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 or relate to the Policy. As part of this release of the 

Insurer, the FDIC·R agrees that any interest it may have under the Policy is extinguished. 

3. All other fanner directors, officers, and employees of the Bank 

(collectively, the "Covered Persons'.') and their respective heirs, executors, trustees, 

administrators, 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, 

belonging to the FDIC·R, that arise from or relate to, the performance, nonperformance, or 

manner of performance of the Covered Persons' respective functions, duties and actions as 

directors, officers and/or employees of the Bank including without limitation the causes of action 

4 
alleged in the D&O Action, except this release does not apply to the restitution orders issued 

against Angel Guerzon, Thomas Hcbble, Francesco Mileto, and Jerry Williams by the United 

States District Court for the Middle District ofFlori~a in case nwnbcrs 2: 11-CR-35-FtM360NF, 2:11-CR-36-PtM-36DNF, 2:11-CR-37-FtM-36DNF and 2:11-CR-38-FtM-3.6DNF. This 

release shall be null and void as to any Covered Person if such Covered Person asserts any claim 

against the FDIC-R. 

B. The Settling Defendants' Release . 

. ~ffective simultaneously with the release granted in Section liLA. above, the Settling 

Defendants, on behalf of themselves individually, and their respective heirs, executms, trustees, 

administrators, agents, representatives, attorneys, successors, and assigns, hereby release and 

discharge: 

1. The FDIC-R, and its employees, officers, directors, representatives, 

attorneys, 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 Bank or to the performance, nonperfonnance, or manner of performance of the Settling 

Defendants, respective functions, duties and actions as officers and/or directors of the Bank 

· including without limitation the causes of action alleged in the D&O Action. 

2. Insurer, its parents, subsidiaries, affiliates and reinsurers, and its and their 

respective employees, officers, directors, agents, 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 or relate to the Policy. As part of this release of the · 

· Insurer, the Settling Defendants agree that any interest they have wtder the Policy is 

extinguished. 

3. Each other and each other's respective heirs, executors, trustees, 

administrators, 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 or relate to the D&O Action. 

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C. The Insurer's Release. 

. . 

Effective simultaneously with the releases granted in Section liLA. above, Insurer, for 

itself and its successors and assigns, and on behalf of its parents, subsidiaries, affiliates and 

reinsurers, and their successors and assigns, hereby releases and discharges: 

1. The FDIC~R, and its employees, officers, directors, agents, 

representatives, attorneys, 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 Policy. 

2. Each of the Settling Defendants and their respective heirs, 

executors, trustees, administrators, 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 or relate lo the D&O Action. Nothing in this release shall affect any 

defense to Coverage Insurer may have with respect to any claim that may be ass~rted against it in 

the future, if any, connection with the Policy or otherwise. 

D. Exceptions from Releases by FDIC~R. 

I. 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 of action: 

a. Against the Settling Defendants or any other person or entity for 

liability, if any, incurred as the maker, endorser or guarantor of any promissory note or 

indebtedness payabl~ or owed by them to FDIC-R, the Bank, other fmancial institutions, or any 

other person or entity, including without limitation any such claims acquired by FDIC~R as 

successor in interest to the Bank or any person or entity other than Bank; and 

b. Against any person or entity not expressly released by the FDIC~R 

in this Agreement. 

2. Notwithstanding any other provision of this Agreement, nothlng in this 

Agreement shall be construed or interpreted as limiting, waiving> releasing, or compromising the 

6 
j w·isdiction 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 or other proceedings seeking removal, prohibition, or any other relief it is 

authorized to seek pursuant to 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, any claims that could be brought by the United 

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

judicial district, or any other department or agency of the United States as defmed 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 of the Ylandatory Victims Restitution Act, 18 U.S.C. §§ 3322 

and 3663 et. ~~ if appropriate. 

SECTION IV: Waiver of Dividends and Proceeds from Litigation 

To the extent, if any, that Settling Defendants arc or were shareholders of the Bank or its 

holding company and by virtue thereof are or may be entitled to a dividend, payment, or other 

disuibution upon resolution of the receivership of the Bank or proceeds in any litigation that has 

been or could be brought against the Federal Deposit Insurance Corporation in any capacity or 

against the United States based on or arising out of, in whole or in part, the closing of the Bank, 

or any alleged acts or omissions by the Federal Deposit Insurance Corporation in any capacity, 

the United States government, or any agency or department of the United States government in 

connection with the Bank, its conservatorship, or receivership, Settling Defendants hereby 

knowingly assign to the FDIC.-R any and all rights, titles, and interest in and to any and all such 

dividends, payments, or other distributions, or proceeds. 

SECTION V: Representations 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 behalf of the respective Party, 

and that they have the fuJI power and authority to bind such Party to each ~:md every provision of· 

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

7 
undersigned PartLes and their respective heirs, executors, tmstees, administrators, representatives, 

successors and assigns. 

B. Advice of Counsel. Each Party hereby aclmowledges that he, she, or 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 or her counsel. 

C. Financial Disclosure Representation. Each Settling Defendant has submitted 

financial information to..the FDIC-R including swom personal financial statements and hcrejn 

affirms that his financial information is true and accurate as of the date of thls agreement. Each 

Settling Defendant expressly aclmowledges that, in determining to settle the claims released 

herein, the FDIC-R has reasonably and justifiably relied upon the accuracy of the finalicial 

information submitted by the Settling Defendants. The FDIC-R has no obligation to 

independently verify the completeness or accuracy of that financial information. If the FDIC-R 

establishes via a final adjudication in an appropriate judicial forwn that a Settling Defendant 

failed to disclose any material interest, legal, equitable, or beneficial, in any asset, that Settling 

Defendant agrees to cooperate fully with the FDIC-R to provide updated financial information 

and to pay to the FDiC-R the lesser of(l) the value ofthe Settling Defendant's undisclosed 

material interest in such assct(s); or (2) the amount of unpaid damages alleged against that 

Settling Defendant. 

SECTION VI: 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 docwnents necessary to perform the terms of this Agreement. 

SECTION VII: Other Matters 

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 defenses, that this Agreement is not an admission or evidence of liability or. infirmity 

8 
(b)(6) ............ 

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

received in evidence ~Y or against any Party excep~ to enforce its terms. 

B. Execution in CoWlteroarts. This Agreement may be executed in COWlterpartc; hy 

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

the final Agreement, as if one docwncnt had been signed by all Parties; and each such 

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

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

C. Choice of Law. This Agreement shall be interpreted, constnied and enforced 

according to applicable federal law, or in its absence, the laws of the State ofFlorida. 

D. Notices. Any notices required hereunder shall be sent by registered mail, first 

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

Ifto the FDIC-R: 

Dennis Klein 

Hughes, Hubbard & Reed, LLP 

201 South Biscayne Boulevard 

Miami, Florida 33131 

305,379.5564 

··························I ················································ 

If to the Settling Defendants: 

Lawrence A. Kellogg 

LEVINE KELLOGG LEHMAN SCHNEIDER + GROSSMA.J.~ LLP 

20 l South Biscayne Boulevard, 22nd Floor 

Miami, FL 33131 

Telephone: (305) 403-8788 

(b)(6) m 00000000000000000000000000o<l o<o0•00000°

00000000000000000000000000 0000 I 

If to Insurer: 

Lewis K. Loss 

LOSS, JUDGE & WARD, LLP 

Two Lafayette Centre, 1133 21st Street, N.W., Suite 450 

Washington, D.C. 20036 

Telephone: (202) 7784060 

(b )(6)_ ______ .J;;----- I· 
(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 or understandings. This Agreement may 

. . not be amended OI' modified, nor may any of its provisions be waived, except in writing signed 

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

representa~ive( s ). 

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

arc for convenience only and shall not affect the interpretation of this 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 requirement 

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. 

IT INSURANCE CORPORATION AS 

RIONBANK 

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Date: I 0 { I "/ 2.o£ ~ BY: 

TITLE: Co v r-..~.(// \ · 

PRINTNAME: S{,ev~ ~~ct\... 

JAMES AULTMAN 

Date: ____ _ 

EARL HOLLAND 

Date: _____ _ 

10 
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 or understandings. This Agreement may 

not be amended or modified, nor may any of its provisions be waived, except in VvTiting signed 

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

representative( s). 

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

arc for convenience only and shall not affect the interpretation of this 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 requirement 

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be cx~uted 

by each of them or d1eir duly authorized representatives on the dates hereinafter subscribed. 

Date=---~-

Date:~~----

FEDERAL DEPOSIT INSURANCE CORPORATION AS 

RECEIVER FOR ORION BANK 

BY: 

TITLE: 

PRINT NAME: 

EARL HOLLAND 

------··-----···---·--

10 
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 or understandings. This Agreement may 

not be amended or modified, nor may any of its 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 thi's Agreement 

are for convenience only and shall not affect the interpretation of this Agreement. 

0. 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 reql!ircment 

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

by each of them or their duly authorized representatives on the date..<; hereinafter subscribed. 

Date: _ ___ _ 

Date: _ _ _ _ _ 

FEDERAL DEPOSIT INSURANCE CORPORATION AS 

RECEIVER FOR ORION BANK 

BY: 

TITLE: 

PRlNTNAME: 

JAMES AULTMAN 

EARL HOLLAND 

(b )(6). ...................................................................................................................................................................... ......... I 

~ ...................... . 

Date: ? () /1 f U{ .. I f = 

10 
BRIAN SCHMITT 

(b)(6)_ - - z:-t· .. ..... , ........... . ·········································· ............................ ................................................ . 

Date: /0 /Z- / , 

~ 

PROGRESSIVE CASUALTY COMPANY 

Date: .. ___ _ 

BY: 

TITLE: 

PRINT NAME: 

11 
BRIAN SCHMI'IT 

Date: ____ _ 

PROGRESSIVE CASUALTY COMPANY 

(b)(6t .......................................................... 

Date: /0/9[/ 

11 
EXHIBIT A 
UNITED STATES DISTRICT COURT 

MIDDLE DISTRICT OF FLORIDA 

FORT MYERS DIVISION 

FEDERAL DEPOSIT INSURANCE 

CORPORATION, AS RECEIVER FOR 

ORION BANK OF NAPLES, FLORIDA 

Plaintiff, 

v. 

JAMES AULTMAN, EARL HOLLAND, 

ALAN PRA IT, AND BRIAN SCHMITT, 

Defendants. 

Case No. 2: 13-cv-58-FtM-39CM 

PLAINTIFF'S AND DEFENDANTS' STIPULATION OF 

DISMISSAL WITHPREJUDICE 

Plaintiff, the Federal Deposit [nsurance Corporation as Receiver for Orion Bank of 

Naples, Florida ("FDTC-R"), and defendants James Aultman, Earl Holland, and Brian Sclunitt 

(coJlectively, the "Defendants," and together with the FDIC-R, the "Parties") hereby file this 

Stipulation of Dismissal With Prejudice ("Stipulation") under Federal Rule of Civil Procedure 

41 (a)(l )(A)(ii). The Parties agree as follows: 

1. The Parties have agreed that the FDIC-R's claims against all Defendants shall be 

dismissed with prejudice. 

2. All Defendants have answered in this action, and all Defendants agree to these 

dismissals. 

3. These cases are not governed by any federal statute that requires an order of the 

court for dismissal of these Defendants. 

4. All Parties shall bear their own attorneys' fees and costs. 

64912693_1 
Dated: October_, 201 4 

HUGHES HUBBARD & REED LLP 

By: Is De1mis S. Klein 

Dermis S. Klein 

Fla. Bar# 0091767 

(b )(6 ) ____ b:;;;;::.::::=:;:::::;:::~~~_j 

201 South Biscayne Boulevard 

Suite 2500 

Miami, Florida 33131-4332 

Telephone: (305) 358-1666 

Facsimile: (305) 371-8759 

Counsel for the Federal Deposit Insurance 

Corporation as Receiver for Orion Bank 

64912693_1 

Respectfully submitted, 

LEVINE KELLOGG LEHMAN 

SCHNEIDER+ GROSSMAN LLP 

By: /s Jason Kellogg 

Jason Kellogg 

Fla. Bar# 0578401 

I ~ 20 I South Biscayne Boulevard 

Miami Center, 22nd Floor 

Miami, FL 33 131 

Telephone: (305) 403-8788 

Facsimile: (305) 403-8789 

2 

Counsel for James Aultman, Earl Holland, and 

Brian Schmitt 
3 

CERTIFICATE OF SERVICE 

I hereby cettify that on October _, 2014, I electronically filed the foregoing document 

with the Clerk of the Court using CMIECF. I also certify that the foregoing document is being 

served this day on all counsel of record or pro se parties identified on the attached Service List in 

the manner specified, either via transmission ofNotices of Electronic Filing generated by 

CM!ECF or in some other authorized manner for those counsel or parties who are not authorized 

to receive electronically Notices of Filing. 

SERVICE I,TST 

Counsel for James Aultman, Earl Holland, and Brian Schmitt 

Lawrence A Kellogg, P.A. 

Levine Kellogg Sclmeider + Grossman LLP 

201 S. Biscayne Blvd. 

22nd Floor, Miami Center 

Miami, FL 33131 

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

64912693_1 

Is/ Dennis S. Klein 

Dennis S. Klein