SETTLEMENT AND RELEASE AGREEMENT 

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

the following Undersigned parties: the PlaintiffFederal Deposit Insurance Corporation as 

Receiver for Charter Bank ("FDIC-R"); John W. Brown, Ronald Brown, Andrew Feld, Paul 

Goblet, Joyce Godwin, Shirley Scott, Bruce Seligman, Stephen M. Walker, R. Glenn Wertheim, 

and the Estate of Robert Wertheim (collectively the "Settling Defendants"); and Progressive 

Casualty Insurance Company ("Insurer"). Individually, the FDIC-R, the Settling Defendants and 

the Insurer may be refened to herein as "Party," and collectively they may be refened to as 

"Parties." 

RECITALS 

Prior to January 22, 2010, Charter Bank of Santa Fe ("Bank") was a depository institution 

organized and existing under the laws of New Mexico. 

On January 22,2010, the Office ofThrift Supervision ("OTS") 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. § 182l(d), the FDIC-R succeeded to all rights, titles, 

powers and privileges of the Bank, including those with respect to the Bank's assets. 

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

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

from the performance, nonperfonnance, and/or manner of performance of their respective 

functions, duties and acts as directors, officers, and employees of the Bank. 

On January 13,2013, the FDIC-R filed a complaint for money damages against the 

Settling Defendants, each of whom served at various times as a director and/or officer of the 

Bank. The complaint was filed in an action now pending in the United States District Court for 

the District of New Mexico ("Court") entitled FDIC v. Wertheim, et al, number 1:13 cv-00050 

("D&O Action''). 

The Settling Defendants have ·denied liability for the claims asserted in the D&O Action. 

Insurer issued a director and officer liability policy numbered I HH lrortheperiod fl.:>.)(4.) 

6280052v.4 (732882.5) 
June 14, 2006 through June 14, 2009 ("Policy"), 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 the claims asserted by FDIC-R against 

the Settling Defendants. 

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

resolve the D&O Action and 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 

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

SECTION I: Payment to FDIC-R 

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

calendar days following the later of (i) the date this Agreement has been executed by all Parties 

and (ii),the date the notice described in Section I.B, below, have been provided, (the "Settlement 

Payment Date"), the Settling Defendants agree to pay the FDIC-R the sum of$100,000, and the 

Insurer agrees to pay the FDIC-R the sum of$2,900,000~ for a total payment to the FDIC-R of 

$3,000,000 ("the Settlement Payment''). 

B. The Settling Defendants and Insurer shall deliver the Settlement Payment 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 does not receive the Settlement Payment in full on or before the 

Settlement Payment Date, above, then the FDIC-R, in its sole discretion, shall have the right at 

any time prior to receipt of the Settlement Payment (including accrued interest) to: 

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

accruing on the unpaid amount against the nonpaying Party fro~ the date detennined by Section 

I.A. above, through the date of payment at a rate calculated in accordance with 26 U.S.C. § 

6621(a)(2); or 

2 

6280052v.4 (732882.5) 
2. Enforce this Agreement, in which event any Party whose portion of the 

Settlement Payment remains outstanding agrees to jurisdiction in United States District Court in 

New Mexico and to pay all of the FDIC-R's reasonable attorney's fees and costs expended in 

enforcing the tenns of this Agreement; or 

3. Tenninate this Agreement, return to the paying Party any portion of the 

Settlement Payment it has received, move to vacate any dismissal order, to which the Settling 

Defendants and Insurer agree to consent, and re-institute an action on the FDIC-R's claims, but 

such vacation or re-institution shall be limited to the assertion or reassertion only of the specific 

claims currently contained in the Amended Complaint filed in the D&O Action. In that event, 

the Settling Defendants and Insurer further agree to waive and not assert any objections, 

defenses, claims or counterclaims, including any defense based on any statute of limitations that 

would bar any of the FDIC-R's claims, that did not exist or were unavailable as of the date the 

D&O Action was filed ; and/or 

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

D. Any extension oftime under Section I.C.I 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. 

SECTION II: Stipulation and Dismissal 

The attorneys for the Parties agree to promptly execute a stipulation for dismissal with 

prejudice of the D&O Action. Within ten business days after the full execution of this 

Agreement by all of the Parties, and the FDIC-R,s receipt of the Settlement Payment (including 

any accrued interest), the FDIC-R shall file the stipulation for dismissal with the Court and 

FDIC-R shall file pleadings in the New Mexico District Court for the County of Bernalillo, 

Second Judicial District, In the Matter of the Estate of Robert Wertheim, Deceased (No. D-202-

PB-2013-00170), requesting the entry of a Stipulated Order vacating the previous Stipulated 

Order For Supervised Administration of the Estate and dismissing with prejudice (a) the FDIC-R 

3 

6280052v.4 (732882.5) 
petition for Supervised Administration, and (b) all claims asserted therein by FDIC-R. 

SECTION III: Releases 

A. The FDIC-R's Releases. 

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

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

1. The 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 performance, 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 or the D&O Action. 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 former 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 alleged in the D&O Action. This release shall be null and void as to any Covered Person 

if such Covered Person asserts any claim against the FDIC-R. 

4 

6280052v.4 (732882.5) 
B. The Settling Defendants' Releases~ 

Effective simultaneously with the releases granted in Section III.A. and C., the Settling 

Defendants, on behalf of themselves individually, and their respective heirs, executors, 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, 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 I 

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 or the D&O Action. Upon the 

complete perfonnance of this Agreement by all Parties, the Settling Defendants agree that any 

interest they have in the Policy is extinguished except with regard to unreimbursed defense fees 

and costs in the D&O Action. 

3. Each other 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 or the D&O Action. 

C. The Insurer's Releases. 

Effective simultaneously with the releases granted in S~ction IILA.and B.,, 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: 

5 

6280052v.4 (732882.5) 
I. 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 or the D&O Action. 

2. 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 to the Policy or the D&O Action. Nothing in this release· shall limit any 

defense to coverage in connection with any future request for coverage under the Policy, if any. 

D. 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 of action: 

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

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

indebtedness payable 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, nothing in this . 

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

jurisdiction and authority ofthe 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 autfioritY against any person. 

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

6 

6280052v.4 (732882.5) 
does not purport to waive, or intend to waive, any clai!fis that could be brought by the United 

· States through the Department of Justice, the United States Attomey~s Office for any federal 

judicial district, or any other department 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 of the Mandatory Victims Restitution Act, 18 U.S.C. §§ 3322 

and 3663 et. seq., if appropriate .. 

SECTION IV: Waiver of Dividends and Proceeds from Litigation 

To the extent, if any, that Settling Defendants are 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 

distribution 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 ofthe Bank, 

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

the United Stafes 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: Representatio.ns 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 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 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 advi~e of counsel prior to executing this Agreement, and that 

this Agreement has been explained ~ that Party by his or her counseL 

7 

6280052v.4 (732882.5) 
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 documents necessary to conclude the D&O Action, and to perform the tenns 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 

by any of them 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 Counter:parts. This Agreement may be executed in counterparts by 

one or more of the Parties and aJl such counterparts when so erecuted shall together constitute 

the final Agreement, as if one document 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, construed and enforced 

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

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

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

If to the FDIC·R: 

Stephen Lemmon 

Husch Blackwell, LLP 

111 Congress A venue, Suite 1400 

Austin, TX 78701·4093 ! ....... 

And 

8 

6280052v.4 (732882.5) 
(b)(6) . 

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

Kevin W. Wheelwright 

FDIC Legal Division 

3501 Fairfax Drive, Suite VS-B 7022 

Arlington, VA 22226 

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

If to the Settling Defendants: 

If to Insurer: 

William Frank Carron 

Dykema Cox Smith 

1201 Elm Street, Suite 3300 

Dallas, TX 75270 

••I•••••• •••••moo•••••••••••••••••••••••••• 

Lewis K. Loss 

Loss, Judge & Ward, LLP 

Two Lafayette Centre 

1133 21st Street, NW, Suite 450 

WashjnQton DC 20036 

(b)(6) I I 

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 this Agreement 

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

G. No Confidentiality. The undersigned Parties acknowledge that ~his Agreement 

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

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

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> 

intending same to be effective as of the date ofthe latest signature date below. 

9 

6280052v.4 (732882.5) 
(b)(6) ____ ~~,~ 

. Date: ~IJ~ti(j.-

Date: 

Date: 

Date: 

' . 

Date: 

Date: 

Date: 

Date: 

6280052v.4 (732882.5) 

FEDERAL DEPOSIT INSURANCE CORPORATION AS 

RECEIVER FOR CHARTER BANK 

. Wheelwright 

. )OHN W. BROWN 

RONALD BROWN 

ANDREWFELD 

PAUL GOBLET 

JOYCE GODWIN 

SHIRLEY SCOTT. 

BRUCE SELIGMAN 

10 
FEDERAL DEPOSIT INSURANCE CORPORATION AS 

RECEIVER FOR CHARTER BANK 

Date: BY:~---=-----'""""":'"""-=-==~---:--=--- PRINT NAME: Kevin W. Wheelwright 

TITLE: Counsel 

JOHN W. BROWN 

(b)(6) om:':t~~Jl!. 11~ ··············································4 .... ·_·········_·········_········_·········---------" 

RONAWBROWN 

Date: __ 

ANDREWFELD 

Date: 

PAUL GOBLET 

Date: 

JOYCE GODWIN 

Date: 

SHIRLEY SCOTT 

Date: 

BRUCE SELIGMAN 

bate: __ 

10 

6280052v.4 (732882.5) 
(b)(6) 

88/27/2015 09:48 5658838746 

Date: __ 

Date: __ 

BROWN ASSOCIATES 

FEDERAL DEPOSIT INSURANCE CORPORATION AS 

RECEIVER FOR CHARTER BANK 

BY: ~---=~--~--~------- PRINTNAME: Kevin W. Wheelwright 

TITLE: Counsel 

JOHN W. BROWN 

.................................................. lA'~~& ~~~ ......................................................................................................................................... Date~ '{ 

ANDREWFELD 

Date; 

PAUL GOBLET 

Date; 

JOYCE GODWIN 

Date: __ 

SHIRLEY SCOTI 

Date: 

BRUCE SELIGMAN 

Date: 

10 

62800S2v.4 (732882.5) 

PAGE 82/82 
Date: 

Date: 

Date: · 

FEDERAL DEPOSIT INSURANCE CORPORATION AS 

RECEIVER FOR CHARTER BANK 

BY: ____________________ _ 

PRINT NAME: Kevin W. Wheelwright 

TITLE: Counsel 

JOHNW. BROWN 

RONALD BROWN 

ANDREW~FE~L~D~----------~ 

(b)(6) na~:ot··ar:7;·-r ·····················································································_··········_··········_··········_··········_...l_····· _.,...

1 

....,, ____ _,___ 

PAUL GOBLET 

Date: 

JOYCE GODWIN 

Date: 

.SHIRLEY SCOIT 

Date: 

BRUCE SELIGMAN 

Date: 

6280052v.4 (132882.5) 
2~ AUa 2015 10:20 RP&C INTERNATIONAL NO. 427 P. 

Da~: 

Date; 

Date: 

Date: 

FEDERAL DEPOSIT INSURANCE CORPORATION AS 

RECEIVER FOR CHARTER BANK 

BY: 

pRJNT=-=-N::-:-A.ME"'7'"-:=:-: --:::K=-evm~·~w:-. Wh==-e ":""twri-~ih=-tTITLE: Counsel 

JOHN W. BROWN 

RONALD BROWN 

ANDRBWFELD 

)~r-------- . -----------pA\';ff:;-00 

Date:~ ~c/..r- JOYCE GODWIN 

Date: 

SHIRLEY SCOTT 

Date:~ 

BRUCE SELIGMAN 

Date: 

10 

62a0052v.4 (732882..S) 
Date: 

Date: 

Date: 

Date: 

Date: 

Date: 

Date: 

628QOS2v.4 (732llt2.5) 

FEDERAL DEPOSIT INSURANCE CORPORATION AS 

RECEIVER FOR CHARTER BANK 

BY: ~---=-=~~~~--~-- PRINT NAME: Kevin W. Wheelwright 

TITLE: Counsel 

JOHN W. BROWN 

RONALD BROWN 

ANDREWFELD 

PAUL GOBLET 

JOYCE GODWIN 

_J• m••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 

SHIRLEY SCOTT 

BRUCE SELIGMAN 

tO 

·.-
Date: 

Date: 

Date: 

Date: 

Date: 

Da:te: 

Date: 

I 

.. FEDERAL DEPOSIT INSURANCE CORPORATION AS 

RECEIVER FOR CHARTER BANK 

BY:=---------------------

PRINT NAME: Kevin W. Wheelwright 

TITLE: Counsel 

JOHN W. BROWN 

RONALD BROWN 

ANDREWFELD 

PAUL GOBLET 

JOYCE GODWIN 

BRUCE SELIGMAN 

10 
· 08/27/2015 07:41 FAX 5058892858 

Date; 

Date: 

Date: 

Date: 

Date: 

Date: 

Date: 

morganstanley lgJ 0002/0002 

FEDERAL DEPOSIT INSURANCE CORPORATION AS 

RECENER FOR CHARTER BANK 

BY:=---~~~-=-=~~~-- PRINT NAME: Kevin W. Wheelwright 

IDLE: Counsel 

JOHN W. BROWN 

RONALD BROWN 

ANDREWFELD 

PAUL GOBLET 

JOYCE GODWIN 

SHIRLEY SCOTT 

BRUCE SELIGMAN 

(b)(6) ~ fi'/1}-IL--------,-C>,.--------1 

10 

62800S2v.4 (732882.5) ·.~. 
(b )(6) ................ 08.=.25.= .. 15;13:11 I I ' # 21 2 

SrEPHBNM. WAl :HR 

~? -

R GLBNNWBRTH ~IM 

Date: 

E ~TATE OF l~.OBEI TWERmBJM 

Date: B ~; p ~lNTNAME: 

T rrr..E: 

p ~OGRESSIVE CA! UAL'I'Y INSURANCE COMPANY 

Date:_ B r: ' 

p ~NAME: 

,T TLE: 

11 

6280052.v.4 (1328 8l.S) 

-
STEPHEN M. WALKER 

Date: 

R. GLENN WERTHEIM 

(b)(6) ~~,A~~u.;.;.;~ jL..········ _________ ..... 

ESTATE OF ROBERT WERTHEIM 

Date: BY: 

PRrnrr~N-AME--~:----------------

TITLE: 

PROGRESSIVE CASUALTY INSURANCE COMPANY 

Date: __ BY: ~-------------------- PRINTNAME: 

TITLE: 

11 

6280052v.4 (732882.5) 
! . 

;. 

I 

i 

Da:te: __ 

Date: 

Date: 

I --

6280052v.4 (7.32882.5) 

STEPHEN M. WALKER 

R. GLENN WERTHEIM 

ESTATE OF ROBERT WERIBEIM: 

PROGRESSIVE CASUALTY INSURANCE COMPANY 

BY=----------------~----- PRJNTNAME: 

1ITLE: 

11 
STEPHEN M. WALKER 

Date; 

R. GLENN WERTIIEIM 

Date: 

ESTATE OF ROBERT WERTHEIM 

Date: BY: ____________________ ___ 

PRINT NAME: 

TITLE: 

PROGRESSIVE CASUALTY INSURANCE COMPANY 

(b)(6), __ --+-BYj I 

PRINTNAME:L-.a: ~' evVc~ 0 Le~Je/S TITLE: ~t \ 

C/o.,~s Sf' ecr~.fts fSr: 

11 

628.0052vA (732882.5).