\'. 

SETTLEMEI'iT ANn RELEASE AGREEMENT 

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

following undersigned parties: 

The Federal Deposit Insurance Corporation as Receiver for American Sterling Bank 

('TDIC-R") and Herbert \1. Kahn ("Kohn"). (The FDIC-R and Kohn may be referred to herein 

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

RECITALS 

WHEREAS: 

Prior to April 17, 2009, American Sterling Bank (the "Bank") was a federal savings 

association organized and existing under the law of the Lnitcd States. 

On April 17, 2009, the Office of Thrift Supervision (''OTS") closed tht:: Bank and 

pursuant to 12 l J. S.C. § I 821 (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 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 fi·mn 

the performance, nonperformance, and manner of perfi)rmancc of their respective functions, 

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

The fDIC-R has asserted claims against Kohn and others, each of whom served at 

various times as a director and/or officer of the Bank. Kohn denies liability for the claims. 

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

avoid the uncertainty and expense of litigation. 

NOW, THEREFORE, in consideration of the promises, undertakings, payments. and 

releases stated herein, the su11iciency of which consideration is hereby acknowledged, the 

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

SECTION 1: Payment to .FillC-R 

A As an essential covenant and condition to this Agreement, on or before 12:00 p.m. 

{K0413616.DOCX; I} 
Central Daylight Time ("COT") on April 14, 2014, Kahn agrees to pay the FDTC-R the sum of 

$1 05,000 ("the Settlement Payment"). 

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

jnto an a<.:count designated by FDIC-R by notice to the attorneys for Kohn or by ccrtit1cd or 

cashier's check drawn upon a depository institution acceptable to f DlC-R. 

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

on or before 12:00 p.m. CDT on April14, 2014, interest shall accrue on all unpaid am.ounts at 

the rate or 5% per annum from April 14, 2014 until the date of payment. Ilowcvcr, if said 

Settlement Payment is not delivered to the FDTC-R on or before 12:00 p.m. COT on April 14, 

2014, as a result of the FDIC-It's failure to execute this Agreement, no interest shall accrue until 

five days after the FDIC-R executes the Agreement. 

C. If the FDIC-R does not receive the Settlement Payment in lull 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 l<.)r the Settlement Payment, including interest 

accruing fi·mn the date determined hy subsection A above, through the date of payment at a rate 

of YYo per annum; or 

2. l·:nforce this Agreement, in which event Kohn agrees to .iurisdiction in 

Lnitcd States District Court for the Western District of Missouri and to pay all of the FDIC-R 's 

reasonable attorneys' fees and costs expended in enrorcing the terms of this Agreement; or 

3. Terminate the Agreement and institute an action on the FDIC-R's claims. 

Kohn further waives all objections, defenses, claims or counterclaims, and covenants and agrees 

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

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

4. Seck any other relief avail able to it in law or equity. 

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

{K041 3616.DOCX; 1}2 
acceptance of a portion of the Settlement Payment shall not pr~judice the FDIC-R 's rights to take 

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

Settlement Payment (including all accrued interest) in full. 

SF.CTION II: Releases 

/\.. The FDIC-R's Relcas~~. 

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

the fDIC-R, f(H itself and its successors and assigns, hereby releases and discharges: 

1. Kohn and his 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 fi·om or relate to, the performance, nonpcrf(>rmanec, or manner of performance of Kolm' s 

respective functions, duties and actions as oHicers and/or directors ofthc Bank. 

11. Kohn' s Release. 

Effective simultaneously with the release granted in Section Il.A. above, Kohn, on behalf 

of himself individually, and his respective heirs, executors, trustees, administrators, agents, 

representatives, attorneys, successors, and assigns, hereby release and discharge 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 th>m or relate to, the Bank or to the performance, nonperformance, or 

manner of performance of Kohn' s respective functions, duties and actions as a director of the 

Bank. 

C. 1-:~f.<;J?tiQD.~ from Releases bv FDIC-R. 

I. Notwithstanding any other provision of this Agreement, the FDlC-R docs 

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 Kohn or any other person or entity t<x liability, if any, 

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

{K0413616.l>OCX; 1}3 
owed by them to FDIC-R, the I3ank, 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 

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. \iot'withstanding 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 or the Federal Deposit Insurance Corporation in the exercise of its 

s upervisory 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 Lnited States as defined by 18 U.S.C. § 

6. In addition, the FDIC-R specifically reserves the right to seck c.ow1-ordercd restitution 

pursuant to the relevant provisions of the Mandatory Victims Restitution Act, 1 & lf.S.C. §§ 3322 

and 3663 et seq., if appropriate. 

SECTION HI: Waiver of Dividends and Proceeds from Litigation 

To the extent, if any, that Kohn is or was a shareholder of the Bank, and by virtue thereof 

is 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 closjng ofthe l3ank, or any alleged acts or omissions by 

the Federal Deposit lnsurance Corporation in any capacity, the United States government, or any 

agency or department of the United States government in connection with the l3ank, its 

conservatorship, or receivership, Kohn hereby knowingly assigns to the FDIC-H. any and all 

{K04 136 16.DOCX; 1}4 
rights, titles, and interest in and to any and all such dividends, payments, or other distributions, 

or proceeds. 

SECTIOI\' IV: Representations and Acknowledgements 

A. Authorized Signa,~(lrjes. All of the undersigned persons represent and warrant that 

they arc Parties hereto or arc authorized to sign this Agreement on behalf of the respective Party, 

and that they have the fi..11l 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, representati ves, 

successors and assigns. 

I3. Advice of Couns~ Each Party hereby acknowledges that he or it has consulted 

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

Agreement has been expla ined to that Party by his or its counsel 

C. Fin al'}~ia l Disclosure ReprescntatiQJ!. Kohn has submitted financial information to 

the FDIC-R, including his Personal Financial Statement dated February 20 14, and herein affirms 

that his financial information is true and accurate as of the date o f this agreement. Kohn 

expressly acknowledges that, in determining to settle the claims released herein, the FDTC-R has 

reasonably and justifiably relied upon the accuracy of the financial information submiHcd by 

Kohn. The fDIC-R has no obligation to indept:ndently verify the completeness or accuracy or 

that financial information. If the FD.lC-R establishes via a final adjudication in an appropriate 

judicial forum that Kohn fai led to disclose any material interest, legal, equitable, or benefi cial, in 

any asset, that Kohn agrees to cooperate fully with the FDIC-R to provide updated financial 

information and to pay to the FDIC-R the lesser of (1) the value of Kahn's undisclosed material 

interest in such asset(s); or (2) the amount or unpaid damages alleged against Kohn. 

SECTIO~ V: Reasonable Cooperation 

T he Parties agree to cooperate in good faith to effectuate all the tem1s and conditions of 

this Agreement, including doing, or causing their agents and auorneys to do, whatever is 

reasonably necessary to eiTectuate the signing, delivery, execution, filing, recording, and 

{K0413616.00CX; 1}5 
(b)(6) ............... . 

(b)(6) 

entry, of any documents necessary to perform the terms of this Agreement. 

SECTlO~ VI: Other Ylatters 

A. 1\o Admission of Liabil_i~y. 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 ofthcm regarding any claim or defense, and that the Agreement shall not he offered or 

rcceivt::d in evidence by or against any Party except to enforce its terms. 

B. Ext::cution 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 constitute 

tht: 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 cnt<.1rccd 

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

D. Notices. Any notices required hereunder shall he sent by registered mail, tirst 

class, return receipt requested, and by email, to the f()llowing: 

If to the FDIC-R: 

Charles A. (ietto 

McAnany, Van Cleave & Phillips, P.A. 

10 E. Cambridgt:: Circle Drive, Suite 300 

Kansas City, Kansas 66103 

(913) 371-3838 

Ifto Kohn: 

Craig S. O'Dcar 

Bryan Cave LLP 

1200 Main Street; Suite 3800 

Kansas City, Missouri 64105-2122 

(816) 374-3207 

.......................................... (_ ..... _. _____ ..... 

{K0413616.DOCX: I }6 
E. Entire ~w:9cment 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 modiiied, nor may any of its provisions be waived, except in writing signed 

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

represcntati ve( s). 

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

arc f~)r convenience only and shall not affect the interpretation of this Agreement. 

G. No Confid nt i~ ity. The undersigned Parties acknowledge that this Agreement 

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

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

lN WIT:\ESS WHEREOF, the Parties hereto have caused this Agreement to be executed 

by each of them or their duly authorized representatives on the dates hcrci natkr subscribed. 

{K04l 36l6.DOCX; I} 7 
THE FEDERAL DEPOSIT INSURANCE CORPORATION AS RECEIVER FOR 

AMERICAN STERLING BANK 

(b)(6) - -----

COMMONWEALTH OF VIRGiNIA ) 

) ss: 

COUNTY 01' A Rr JNGTON ) 

Subscribed and sworn to before me his·'-~- day of April 2014. 

(b )(6 ) __ 11------

1 

Notary Public 

l 

! ~. \ Susan Sc!"!'h·J .. Il~ar; ~ Notary Putic ...-.r;;;~ ·~:\.. Commonweallh ofVItglrl3 

: OIF • 1 My Appointment Expires: < 1 1 : Comll''ssic·n N:. 7029579 \~"'$.~/ My Commlsslon Expires 1113012014 "' ~..-'' 

....... ___ _ 

{K04136 16.00CX; l}R 

·I 
(~)(~) ----------------------------------------------------------------[~~~~~~~~~~~ 

Herbert M. Kohn 

STATE OF MISSOU{I ) 

) ss: 

COL\ITY OF JACKSON ) 

On this _9 _ _t'-_ day of April 2014, bd()re me, the undersigned, a Notary Public in and for 

said County and State, personally appeared llerbcrt M. Kohn, known to me to be the person 

described herein, who executed the foregoing instrument, and acknowledged that he executed the 

same as his 11·ee act and deed. 

\VIT~ESS my hand and \fotarial Seal subscribed and affixed in said County and State, 

the day and vcar in this certificate above written. (~)(~) -.~1=.&.:.....--~~~~~~----. 

My Appointment Expires: 

MOLtY·A:"f006E· 

Notary Public· Notary Seal 

STATE OF MISSOURI 

Jackson County 

My Commission Expires: Mar. 2 2015 

Commission# 11451757 

1\ota\·y Pui{jjc D 

{K0413616.DOCX; I }9