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SECTION HIE Representations and Acknowledgements

A. No Admission of Liability. The undersigned parties each acknowledge and agree
that the maiters set forth in this Agreement constitute the settlement and compromise of disputed
claims, and that this Agreement is not an admission or evidence of liability by any of them
regarding any claim. The undersigned parties further acknowledge that they may not base any
claim of waiver or estoppel in any other matter upon the execution of this Agreement or payment
of consideration described herein.

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 hereto;
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 are 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.

BD. Choice of Law. This Agreement shall be interpreted, construed and enforced
according to applicable federal law, or in its absence, the laws of the State of Texas.

E. Entire Agreoment and Amendments. This Agreement constitutes the entire
agreement and understanding between and among the undersigned parties conceming the matters
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
attorney(s) or other representative(s).

F Reasonable Cooperation. The undersigned parties agree to cooperate in good

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Underwriters, on behalf of themselves, and their respective heirs, executors, administrators,
agents, 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 Faithauer Claim.

C. Express Reservations From Releases By FDIC.

1, Notwithstanding any other provision, by this Agreement, the FDIC does 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 Underwriters or any other person or 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, the Bank, other financial institutions, or any other person or entity,
including without limitation any claims acquired by FDIC as successor in interest to the Bank or
any person or entity other than Bank;

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

c. which are not expressly released in Paragraphs IA.

2. Notwithstanding 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 the exercise of its supervisory or regulatory authority or to diminish its
ability to institute administrative enforcement proceedings secking removal, prohibition or any
other administrative enforcement action.

3. Notwithstanding any other provision, this Agreement does not purport to
waive, or intend to waive, any claims which could be brought by the United States through either
the Department of Justice, the United States Attorney's Office for the Western District of Texas
or any other federal judicial district. In addition, the FDIC specifically reserves the right to seek
court ordered restitution pursuant to the relevant provisions of the Victim and Witness Protection

Act, 18 U.S.C. § 3663, et. seq., if appropriate.

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Page 6

faith to effectuate all the terms and conditions of this Agreement, including doing or causing
their agents and attomeys 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.

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.

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: June 27, 2011 BY
x
TITLE: Counsel, Professional Liability Unit
PRINT NAME: Barry H. Gottfried
Date: June 27, 2011 CERTAIN UNDERWRITERS AT LLOYD’S LONDON

SUBSCRIBING TO MORTGAGE BANKER’S BOND
NO. MBB-06-00040

et
BY
TITLE: Counsel, Sedgwick, LLP

PRINT NAME: Todd D. McCormick

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(b)(4)

Page 1

SETTLEMENT AND RELEASE AGREEMENT

This Settlement and Release Agreement ("Agreernent") is made as of this 27th day of
June, 2011 (the “Effective Date”), by, between, and among the following undersigned parties:
The Plaintiff, Federal Deposit Insurance Corporation, as Receiver of Guaranty Bank, ‘Austin,
Texas ("FDIC"), and Defendant, Certain Underwriters at Lloyd’s London Subscribing to
Mortgage-Banker’s-Bond- No: FE cnderwriters”) (individually, the FDIC and
Underwriters may be referred to herein as “Party” and collectively as the “Parties”).

RECITALS

WHEREAS:

Prior to Augnst 21, 2009, Guaranty Bank, Austin, Texas ("Bank") was a depository
institution organized and existing under the laws of the United States.

On August 21, 2009, the Bank was closed by the Office of Thrift Supervision COTS”)
and pursuant to 12 U.S.C, § 1821(¢), 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 Underwriters relating to Mortgage

Banker's Bond] the “Bond”).

On January 17, 2011, the FDIC filed a complaint for money damages against
Underwriters, The claim for damages is now pending in the United States District Court for the
Western District of Texas, and is styled Federal Deposit Insurance Corporation, in its capacity
as Receiver for Guaranty Bank of Austin, Texas v. Certain Underwriters at Lloyd's London
Subscribing to Mortgage Banker’s Bond Number MBB-06-00040, Cause No. L11-CV-44 (the
“Bond Action”).

In the Bond Action, the FDIC has sued Underwriters in order to recover under the Bond

which insured the Bank for, among other things, the dishonest acts of its employees.

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Specifically, the FDIC alleges that two of the Bank’s former employees, Cheryi Carlini
(“Carlini”) and Anthony Faithauer (“Faithauver”), independent from one another, committed
dishonest acts that resulted in direct financial loss to the Bank. The FDIC alleges that the direct
financial loss caused by Carlini’s dishonest acts is $507,185.93, plus interest, costs and
attorneys’ fees (the “Carlini Claim”); the direct financial loss caused by Faithauer’s dishonest
acts, as alleged by the FDIC, is $1,362,957.55, plus interest, costs and attorneys’ Ives (the
“Faithaner Claim”). Underwriters have denied liability in the Bond Action for both the Carlini
Claim and the Faithauer Claim.

Underwriters and the FDIC settled the Carlini Claim on April 28, 2011. The undersigned
parties deem it in their best interests to enter into this Agreement to settle the Faithauer Claim in
order to avoid the uncertainty, trouble, 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

A. As an essential covenant and condition te this Agreement, Underwriters agrees to
pay the FDIC the sum of $865,000.00 (the “Settlement Funds").

BE. Upon the execution of an original, or originals in counterpart, of this Agreement
by each of the undersigned Parties to this Agreement (defined above as the “Effective Date”), but
no later than thirty (30) days after the Effective Date (the “Final Due Date”), the Settlement
Funds shall be delivered to FDIC by direct wire transfer into an account designated by FDIC or
by certified or cashier’s check drawn upon a depository institution acceptable to FDIC. In the
event that the Settlement Funds are not delivered to the FDIC (or its counsel) by the Final Due
Date, interest shall accrue on all unpaid amounts at the rate of $% per. annum from the Effective
Date until the date of payment. No later than ten (10) business days after the receipt of the
Settlement Funds by the FDIC in the manner described in this paragraph, the FDIC shall file e

dismissal of the Bond Action with prejudice, with each party to bear its own costs as those were

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originally incurred.

ion In addition, 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 by the FDIC on
or before the Final Due Date, then the FDIC, in its sole discretion, shall have the right at any
time prior to receipt of all Settlement Funds (including all accrued interest) to declare this
Agreement null and void, shall have the right to extend this Agreement for any period of time
until it receives all Settlement Funds (including all accrued interest), and/or shall have the right
to enforce this Agreement, in which event Underwriters agrees to jurisdiction in the United
States District Court for the Western District Court of Texas and agrees to pay all of the FDIC’s
reasonable attorney’s fees expended in enforcing the terms of this Agreement. Any decision by
the FDIC to extend the terms of this Agreement or to accept a portion of the Settlement Funds
shall not prejudice its tights to declare this Agreement null and void with respect to
Underwriters, 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 will retum all amounts paid to it under
this Agreement by Underwriters within ten (10) days of the FDIC’s act of declaring this
Agreement null and void.

SECTION It: Releases

A Release of Underwriter DIC.

Effective upon receipt in full of the Settlement Funds plus any accrued interest described
in SECTION I above, and except as provided in PARAGRAPH ILC,, the FDIC, for itself and its
successors and assigns, hereby release and discharge Underwriters and 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 from or relate to the Faithauer Claim.

B. Release of FDIC by Underwriters.
Effective simultaneously with the release granted in PARAGRAPH ILA. above,

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