SETTLEME!"T AI\;() RRLEASJ4: AGREEMfi~NT 

This Settlement and Release Agreement ("Agreement") is made as of this 4

1

h day of 

March, 2014, by, between, and among the following undersigned parties: 

1. The Federal Deposit Insurance Corporation, as receiver of Bank First ("FDIC"); 

2. The Cincinnati Insurance Company ("Cincinnati"); and 

3. Various BankFirst directors and officers, including Richard Burnton, Mcghan 

llarris, James Clifford, David King, Tim Kosick and Scott Anderson (the "BankFirst Parties"). 

(Individually, the FDIC, the BankFirst Parties, or Cincinnati may be referred to herein as "Party" 

and collectively as the "Parties") 

RECITAI.S 

WHEREAS: 

Prior to July 17, 2009, BankFirst ("Bank'') was a depository institution organized and 

existing under the laws of South Dakota; 

On July 17, 2009, the Dank was closed by the South Dakota Division of Banking and 

pursuant to 12 U.S.C. § 1821(c), the FDIC was appointed receiver; 

In accordance with 12 U.S.C. § 1821(d), the FDIC as receiver 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 as receiver succeeded were any and all of the 

Bank's claims, demands, and causes of actions against various former directors, officers and 

employees arising from the performance, nonperformance and manner of performance of their 

respective functions, duties and acts as directors and/or oflicers of the Bank; 
Cincinnati issued Financial Institutions Blue Chip Policy Numberl 

"Policy"), which insured the directors and officers of the Bank according to the terms, provisions 

and conditions of the Policy; 

The FDIC has asserted, among other things, that certain loans issued by the Bank were 

not in e.{)mpliance with the then applicable lending policy. None of these loans involved any 

insider preferential treatment of Bank officers and there are no claims by the FDIC of sci f .. 

dealing by any of the officers. 

The rDIC gave notice of claim in March 2010 and urged each recipient to send the notice 

to Cincillilati before insurance coverage lapsed. 

The BankFirst Parties disputed that they are liable for any claim, alleged wrongdoing or 

alleged misconduct arising out of their performance, nonpcrfonnance and manner of 

performance of their respective functions, duties and acts as directors and/or officers of the Bank. 

The BankFirst Parties tendered the defense of the FDIC's claim to Cincinnati. Cincinnati 

has determined to enter into a settlement herein with the FDIC, to which the BankFirst Panics 

have consented. 

The BankFirst Parties assert that their consent to this Agreement is not an admission or 

evidence of liability by any of them regarding any claim, wrongdoing or misconduct alleged by 

the FDIC. 

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

avoid the uncertainty, trouble, distraction, and expense of litigation. 

NOW, THEREFORE, in consideration of the promises, undertaki ngs, payments, and 

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

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

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.......... (1:.>.).(4.). 
SECTION 1: Payment to FDIC 

A. As an essential covenant and condition to this Agreement, on behalf of the 

BankFirst Parties, Cincinnati, agrees to pay the FDIC the sum of five Million Dollars 

SS,OOO,OOO ("the Settlement Funds"), not later than thirty (30) calendar days following the 

execution of an original, or originals in counterpart, of this Agreement by the undersigned 

Parties. The Settlement Funds shall be delivered to the FDlC by check payable to the Leonard 

O'Brien client trust account. 

B. In the event that the Settlement Funds are not delivered as provided in 

PARAGRAPH LA. above, interest shall accrue on all unpaid amounts at the rate of one-year 

U.S. Treasury bills as reported in the WALL STREET ]OI,;RNAL at the end of the last quarter 

inunediately preceding the date of this Agreement. 

C. In audition, and without waiving any other rights that the FDIC may have, in the 

event that all Settlement Funds (including all accrued interest) are not received hy the FDIC as 

provided in PARAGRAPH I.A. above, the FDIC, in its sole discretion, shall have the right at any 

time prior to receipt of all Settlement Funds (including all accrued interest) (i) to declare thi!'l 

Agreement null and void, in which event the Bankfirst Parties and Cincinnati shall consent and 

shall agree that any and all statute of limitations applicable to any claims the FDIC may have 

against the BankFirst Parties shall be tolled to and including thirty (30) calendar days 

following the FDIC's declaration that this Agreement is null and void; (ii) to extend this 

Agreement for any period of time until it receives all Settlement Funds (including all accrued 

interest); and/or (iii) to enforce this Agreement, in which event the Ban.kFirst Parties and 

Cincinnati agree to jurisdiction in the United States District Court for the District of Minnesota 

and agree to pay all of the fDIC's reasonable attorney's fees expended in enforcing the terms of 

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this Agreement. Any decision hy the FDIC to extend the terms of this Agreement or to accept a 

portion of the Settlement Funds shall not prejudice its rights to declare this Agreement null and 

void at any time prior to receipt of all Settlement Funds (including all accrued interest) or to 

enforce the terms of this Settlement Agreement; provided however, that in the event the FDIC 

declares this Agreement null and void, the FDIC shall return all amounts paid to it under this 

Agreement. 

SECTION II: Releases 

A. Release of Bankfirst Parties by FDIC. 

Effective upon receipt in full of the Settlement Funds plus any accrued interest described 

in SECTIOK I above, and except as provided in PARAGRAPll(S) II. I. and ll.J. below, the 

FDIC, for itself and its successors and assigns, hereby releases and discharges each of the 

Bank First Parties and each of their respective heirs, executors, 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, that uris~ from or 

relate to the performance, nonperformance, or manner ofperfonnance of the BankFirst Parties' 

respective functions, duties and action~ as officers, directors and/or employees of the Bailie 

B. Release of FDIC by the llari_k.Ejrst Parties. 

Effective simultaneously with the relea~e granted in PARAGRAPH II.A. above, the 

BankFirst Parties, on behalf of themselves individually, and their respective heirs, executors, 

administrators, representatives, successors and assigns, hereby release and discharge FDIC, and 

its employees, officers, directors, 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 Bank or to the pcrfom1ancc, nonperformance, or 

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manner of performance of the Bank First Parti es' respective functions, duties and actions as 

oflicers, directors and/or employees of the Bank or that arise from or relate to the Policy. 

C. Release by Bank.First Parties of Each Other. 

Effective simultaneously with the releases granted in PARAGRAPH II.B. above, the 

BankFirst Parties, and their respective heirs, executors, administrators, representatives, 

successors and assigns, hereby release and discharge 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 performance, nonperformance, or manner of pertonnancc 

of their respective functions, duties and actions as officers, directors and/or employees of the 

Bank. 

D. Relcas .f.C irw.innati by FDIC. 

Effective simultaneously with the releases granted in PARAGRAPHS ll.A. and ll.B. 

above, the FDIC, for itself and its successors and assigns, hereby releases Cincinnati, its parents, 

subsidiaries, affiliates and reinsurers, 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 rdate to 

coverage provided under the Policy. The FDIC agrees that, when this release becomes effective, 

any interest it may have under the Policy is extinguished. Excluded from the scope of this 

release arc any rights and interests the FDIC may have against Cincinnati that arise or relate to 

coverage provided under that certain Depository Institutions Blanket Bond 1'-io.l H·kthe .... H .....(Q)..(4.J 

"Fidelity Bond"). 

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E. Release of Cincinnati bv Bankfirst Parties. 

Effective simultaneously with the releases granted in PARAGRAPHS II.A. and ILB. 

above, the BankFirst Parties, on behalf of themselves individually, and their r~spcctivc heirs, 

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

discharge Cincinnati, its parents, subsidiaries, affiliates and reinsurers, from any and all claims, 

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

equity, that arc based upon or relate to claims that have been released by the FDIC pursuant to 

this Agreement, including but not limited to contractual or extracontractual claims based upon 

the handling, defense, or resol ution of claims released by the FDIC. This release, however, shall 

not affect Cincinnati's obligations with respect to reasonable and necessary Defense Costs 

incurred by the BankFirst Parties through counsel retained to defend against the FDIC released 

claims, which retention was previously consented to by Cincinnati. 

F. Releasc _ _qf FOlC by Cincinnati. 

Effective simultaneously w1th the release granted in PARAGRAPH 11.0. above, 

Cincinnati, 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 FDIC, 

and its 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 coverage provided under the Policy. 

G. Release of BankFirst Parties by Cincinnati. 

Effective simultaneously with the releases granted in PARAGRAPH II.E. above, 

Cincinnati, 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 each of 

the BankFirst Parties, and their respective heirs, executors, administrators, agents, 

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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 are based upon m rdat~ 

to claims that have been released by the FDIC pursuant to this Agreement. 

I I. Release of Other Insureds by the FDIC. 

Effective simultaneously with the release granted in Paragraph ll.A. above, and except as 

provided in Paragraph II. I. below, the FDIC, tor itself and its successors and assigns, hereby 

releases and discharges all other former directors, officers and employees of the Bank insured 

under the Policy (the "Other Insureds") and each of their respective heirs, executors, 

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, that arise at any time from or relate to, the performance, nonperfonnance, 

or manner of perfonnance of the Other Insured's respective functions, duties and actions as 

directors, officers, and/or employees of the Bank. This release shall be null and void as to any 

Oth~r Insured that asserts any claim against the FDIC arising out of matters pettaining to the 

Bank. 

I. Express Reservations From Releases By FDIC. 

1. ~otwithstanding any other provision, by this Agreement, the FDIC docs not 

release, and expressly preserves fully and to the same extent as if the Agreement had not been 

executed, any claims or causes of action: 

a. against the Bank.First Partit:s or any other person or entity tor liability, if 

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

payable or owed by them to FDIC, the Bank, other financial institutions, or any other person or 

entity, including without limitation any claims acquired by FDIC as successor in inter~st to the 

Bank or any person or entity other than Bank; 

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b. against any person or entity not expressly released in this Agreement; and 

c. which arc not expressly released in PARAGRAPHS li.A. or ll.D. above. 

2. ~otwithstanding any other provision, nothing in this Agreement shall be 

construed or interpreted as limiting, waiving, releasing or compromising the jurisdiction and 

authority of the FDIC in th~ exercise of its supervisory or regulatory authority or to diminish its 

ability to institute administrative enforcement proceedings seeking removal, prohibition or any 

other administrative enforcement action which may arise by operation of law, rule or regulation. 

3. Notwithstanding any other provision, this Agreement docs not purport to 

waive, or intend to waive, any claims which could he brought by the United States through either 

the Department of Justice, the United States Attorney's Office for the Districts of Minnesota, 

South Dakota, or any oth~.:r federal judicial district. In addition, the FDIC specifically reserves 

the right to seek court ordered restitution associated with any criminal conduct, if uny, pursuant 

to the relevant provi~ions ofth~ Victim and Witness Protection Act, l8lJ.~.C. § 3663, et seq., if 

appropriate. 

J. Express Reservation of Rights Under Bond. 

1. l\otwithstanding any other provision, nothing in this Agreement shall release or 

prejudice the rights or claims of the FDIC under the terms of the Fidelity Bond issued by 

Cincinnati under which the Bank is an insured. 

2. Notwithstanding any other provision, nothing in this Agreement shall release or 

prejudice the rights or claims of Cincirmati, under the terms of the fidelity Bond issued by 

Cincinnati under which the Bank is insured. 

3. Nothing herein shall be construed to admit the existence of, or to ~stablish, any 

claim or cause of action on the part of Cincinnati, under the terms of the Fidelity Bond issu~u by 

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Cincilli1ati under which the Bank is insured, or any other bond underwriter by way of 

subrogation to claims of the FDIC, that would not exist had this Agreement not been executed. 

SECTION III: Waiver of Dividends 

To the extent, if any, that BankFirst Parties arc or were shareholders of the Bank and by 

virtue thereof are or may have been entitled to a dividend, payment, or other pro rata distribution 

upon resolution of the ec~.e ivcrship of the Bank, they hereby knowingly assign to the FDIC any 

and all rights, titles and interest in and to any and all such dividends, payments or other pro rata 

distributions. 

SECTfOI' I IV: Waiver of Dividends and Proceeds from Litigation 

To the extent, if any. that Bank.First Parties arc or were shareholders of the Bank and by 

virtue thereof arc 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 United States based on or arising out of, in whole or in part, the closing of the Bank, 

or any aBcgcd acts or omissions by the Federal Home Loan Bank Board, Office of Thrift 

Supervision, Office ofthe Comptroller of Currency, Resolution Trust Corporation, Federal 

Dt:posit Insurance Corporation, Federal Reserve Roard, the Federal Savings and Loan Insurance 

Corporation Resolution Fund or the United States government in connection with the Bank, its 

conservatorship or receivership; they hereby knowingly assign to the FDIC any and all rights, 

titles and interest in and to any and all such dividends, payments or other distributions, or such 

proceeds. 

SECTION V: Representations and Acknowledgements 

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 

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claims, and that this Agreement is not an admission or evidence of liability by any of them 

regarding any claim, alleged wrongdoing or alleged misconduct. 

B. Execution in Counterparts. This Agreement may be executed in counterparts by 

one or more of the parties named herein and all such counterparts when so executed shall 

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

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

binding the party or parties subscribed thereto upon the execution by all parties to this 

Agreement. 

C. Binding Effect. Each of the undersigned persons represents and warrants that 

they arc a party 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, administrators, representatives, 

successors and assigns. 

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

according to applicablt! federal law, or in its absence, the laws of the State of Minnesota. 

E. Entire Agreement and Amendments. This Agreement constitutes the entire 

agreement and understanding between and among the undersigned Parties l:Oncerning the matrcrs 

set forth herein. This Agreement may not be amended or modified except by another written 

instrument signed by the Party or Parties to be bound thereby, or by their respective authorized 

attumey(s) or other representative(s). 

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F. Reasonable Cooperation. 

t. The undersigned Parties agree to cooperate in good faith to effectuate all the 

terms and conditions of this Agr~ement perform the terms of this Agreement. 

2. Further, the BankFirst Parties agree to cooperate fully with the FDIC in 

connection with any action required under this Agreement. Any such cooperation that involves 

any out-of-pocket costs is subject to reasonable reimbursement by the FDIC pursuant to its 

internal guidelines and policy for such reimbursement. Such cooperation shall consist of: 

a. producing all documents requested by the FDIC, without the necessity 

of subpoena, as determined by the FDIC, in its sole discretion, to be relevant to the Bank; 

b. making themselves available upon request by the FDIC at reasonable 

times and places for intervir.:ws regarding facts, as determined by the FDIC in its sole discretion, 

to be relevant to the Bank; 

c. appearing to testify, upon request by the FDIC, in any matter 

determined by the FDIC in its sole discretion, to be related to the Han k, without the necessity of 

subpoena; 

d. signing truthful affidavits upon request by the FDIC, regarding any 

matter, as determined by the FDIC in its sole discretion, to be relevant to the Bank. 

G. Advice of Counsel. Each party hereby acknowledges that 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. 

H. Tcm1ination of Tolling Agreement. Effective upon receipt in full of the 

Settlement Funds plus any accrued interest described in Section I above, this Agreement shall 

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constitute a Notice of Termination of that certain Tolling Agreement dated .Ju ly I 0, 20 12 

between the FDIC and BankFirst Parties, which Tolling Agreement shall be hereby terminated. 

IN WITNESS WH.EREOF, the parties hereto ~ caused this Agreement to be executed 

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

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

Date: 3/"if /~·····., ..... ~l~:~: ~ 

::ll ~Osrr !; !RANCE QRl'ORA ~ 

TITT ,E: L~O U N:5 ~l- ._. (-=,p J:.: ... ~~: .... 

PRINT NAME: TI.J-o IV( A ~ .:::;-: 0 '1'5..1:.-' t-_N. __ _ 

Date: RICHARD HlJRN'l'ON ----

Date: ______ ·-. JAMES CT JPPORD 

Date:____ . ___ _ MEOHAN ITARR ~ 

Date: DAVID KING 

Date: --- TIMOTIIY KOSlEK - --

Date: SCOTT ANDERSON 

12 
constitute a Notice ofTcrminution of thai certain Tolling Agreement dated July 10, 2012 

between the FDJC and BankFirst Parties, which Tolling Agre~mcnt shall be hereby terminated. 

IN W[TNESS WHEREOF, the parties hereto have caused this Agreement to be executed 

' 

by each of them or their duly nuthorized rcprcsent~tives on the dates hereinafter subscribed. 

FEDERAL DEPOSIT INSURANCE CORPORATION 

Oatc: BY: - ---- - - ---- - ------···· --·- - ·- ----

TITLE: 

PRINT NAME: 

Dnte:~: ~ J · 1 t..{ ru6iARi?auR!)(i()N) 

(b)(~) ........ ······················ ... ······························ lr ............. ~ ............. u.L..I .............. .t::l...t.: .............. ~ .............. = ............. ........ ~ ...... ~............. .:...~.. .............. - --------,1. 

Date: ____ _ JAMES CLIFFORD 

--- --- - ···. · ·· ··· ·-··· 

Date: _ _ _ MEGHAN HARIOS 

Date: DAVID KING 

Date: ___ ___ ··- TIMOTHY KOSIEK 

- - ------···--- --

Date: SCOTf ANDERSON 

12 
(b)(6) 

constitute a Notice of Termination of that certain Tolling Agreement dated July 10, 2012 

between the FDIC and BankFirst Parties, which Tolling Agreement shall be hereby terminated. 

IN Wl1NESS 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. 

FEDERAL DEPOSIT INSURANCE CORPORATION 

Date: BY:. ______________________________ _ 

TITLE:. ___________________ _ 

PRINT NAME:. ___________ _ 

Date: RlCHARD BURNTON 

Date:~ Z( ZPJ'/ JAMES CLIFFORD 

................................ ,.LI_···· .,......----.,...,.---------~-------

Date: __________ _ 

Date: -------

Date: -------

Date:. ______ _ 

/I ; ' 

.·MEGHAN HARRIS 

i.,-" 

DAVID KING 

TIMOTIIY KOSIEK 

SCOTf ANDERSON 

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constitute a ~oticc ofTcrmination of that cct1ain lolling Agreement dated July 10,2012 

between the FDIC and BankFirst Parties, which Tolling Agreement shall be hereby terminated. 

1::\ WITXESS WHEREOF, the parties hereto have caused :his Agreement to be executed 

by each of t~cm nr their July authorized n:prcsentatives on the dates hereinafter subscribed. 

FEDERAL DEPOS1T I~SURANCE CORPORATION 

Date: lJ Y: 

TITI.F: --···· ...... - ·--------

PRINT. NA:VtE: ---

RICI lARD BURNT0:'\1 

Date: JA\!tES CLiffORD ·---·· -··-···--·---

(b)(6) 

Date: 

rE(i~.~~·~ ':~~({(~ 

DA~i;.) 2tNG 

Date: TIMOTHY KOSIEK 

Date: SCOTT ANDERSO\" 

···-.. ···· ...... --------

12 
constitute a Notice ofTermination of that certain Tolling Agreement dated July 10,2012 

between the FDIC and BankFirst Parties, which Tolling Agreement shall be hereby terminated. 

IN WITNESS WHEREOF, the pal'ties hereto have ca\lsed this Agreement to be executed 

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

FEDERAL DEPOSIT INSURANCE CORPORATION 

Date: BY: ------- -···········- ...... ··-------------

TITLE: -···--····-·······--····--· ------------

PRINT NAME: ______ ··-·····-··-···------·-

Date: ______ _ RICHARD BURNTON 

Date: JAMES CLIFFORD -------

-----------------··--··----

Date: MEGHAN HARRIS 

D'}!lPKlNG 

Date: 

························f...__ _ ___,..........,____.____ __ _ 

TIMOTHY KlsiEe --·--------

Date: SC01T ANDERSON 

----- --·-- ·------ ·-----·-- ... -----

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constitute a Notice ofTennination of that certain Tolling Agreement dated July 10, 2012 

between the FDIC and BankFirst Parties, which Tolling Agreement shall be hereby terminated. 

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. 

FEDERAL DEPOSIT INSURANCE CORPORATION 

Date:. ______ _ BY: ___ _ 

TITLE:. __________________ .. _ 

PRINT NAME:. ___________ _ 

Date: ______ _ RICHARD BURNTON 

Date: JAMES CLIFFORD ----

Date: ______ _ MEGHAN HARRIS 

Date: _____ _ DAVID KING 

I 

Date: .(.- .~ 1- ~ TIMOTHY KOSIEK 

12 
constitute a Notice ofTcrmination of that certain Tolling Agrl!emcnt dated July 10,2012 

between the FDIC and Bank first Parties, which Tolling Agreement shall be hereby terminated. 

IN WITNESS WHEREOF, the parties hereto have caus~:u this Agreement to be executed 

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

fEDERAL DEPOSIT C\SlJRANCE CORPORA TI01\ 

Date: ------- BY: _____ _ 

TITLE: -------··-···-···-····--· 

PRINT NAME: _____ _ 

Dale: ---- RICHARD BCR~TON 

Date: ----- JAMES CLII-TORD 

-----···························· --------

Date: MEGHA~ HARRIS 

Date: D/\VID KING -------

Date: TIMOTHY KOSTEK 

Date: ;_- l- 6 - I t..J ..... . ·-· --··--- I - SCOTT ANDFRSO:--.! 

12 
03/U~i~Ul4 1U:18 FAX 51~ R70 2087 CI):TI 1:-lSl'R.-\):CE CLAIMS W 4]llll1 

(b)(6) 

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