December 15,2014 

SETTLEMENT AND RELEASE AG.REEMENT 

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

the following undersigned parties: 

The Plaintiff Federal Deposit Insurance Corporation as Receiver for Community Bank of 

Arizona ("FDlC-R"); Edward M. Jamison, Stephen R. Curley, James E. Nelson, Lt;Roy R. Aman, 

Leanne B. Appeldorn-March, Rick L. Murphy, and Phillip B. Whitaker (collectively, the "Settling 

Defendants"); and Progressive Casualty Insurance Company ("Insurer")~ The FDIC-R, the 

Settling Defendants, and Insurer may be referred to herein as ''Party" and collcctivdy as the 

"Parties." 

R~ClTALS 

WHEREAS: 

Prior to August l4, 2009, Community Bank of Arizona ("Bank") was a depository 

institution organized and cxisling under the laws of Arizona; 

On August 14, 2009, the Arizona Department of Financial Jnstitut.ions closed the Bank 

and pursuant to 12 O.S.C. § l82l(c), the Federal Deposit Insurance Corporation was appointed 

Receiver. In accordance with 12 U.S.C. § 182l(d), the FOlC-K. succeeded to all rights, titles, 

powers and privileges of the Bank, including those with respect to its assets; 

On May 28, 2010, Community Rancorp, the holding company of the Bank, filed a 

Chapter 7 bankruptcy petition in the District of Nevada (the "Bankruptcy Court''), styled ln re 

Community Bancorp, Case No. BK-S-1 0-20038-LED ("the Bankruptcy"). The duly appointed 

Trustee for Community Bancorp in the Bankruptcy is Yvette E. Weinstein ("Trustee"): 

Among the assets to which the FDJC-R succeeded were all of the Bank's clajms, 
demands, and cau.ses of actions against its former directors, officers, and employees arising frum 

the perfonnancc, nonperformance, and manm.:r of performance of their respect[ vc fi.mctions, 

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

On July 13, 2012, the FDIC-R iiled a Complaiitt lor money damages againsl the Settling 

Dciendants, each of whom served <~ ! various l imes as direciors and/or off1ccrs of the Bank. 

Those claims fur damages are now pending in the United States District Court fo r the District of 

Arizona in FDIC as Receiver f or Community Bank of Arizona v. Jamison, e1 a!., Case No. [2-cv0 1508-PHX-SMM (D. Arizona) ("D&O Actio;1"). Tbe Scllling Defenda11ts have denied liability 

in the D&O Action; 

Insurer issued a director and officer li11bi lity policy nurnbcrcd ._l ___ __,lrfl:iJ~:.::perioc mmm ••••••••••••• (.PJ(4.) 

July 31,2007 through July 31, 20l0 ("Policy"), which insun:d the directors and officers of the 

Rank according to the terms, provisions, and conditions of the Policy. The Settling Defendants 

have asserted claims for coverage under the Policy; 

On Fcbmary 4, 20 13, Insurer fikd a Complaint against the FDIC-R and the Settling 

Dcfendan!s seeking, among other things, a tlecla:-ation that the D&O Action is not covered under 

tbe Policy ("Coverage Action"). The FDIC-R and the Seitling Defendants have denied tbat the 

Insurer is entitled to the requested relief. This Coverage /\ction is pending in ihe United States 

District Court for the District of Arizona styled as Progressive v. FDIC. eta!., Case No. 13-cv0232-BRH; 

Settling Defendants Curley, Nelson, and Jamison ("the lndcmnified Defendants") filed 

(b)(4)...,!!1."'"'''"'"·"'·"''""''''''''"''''G.1airu,,,:}i.os:l ::::: ::,f::::::::: ......... .j.~:~ nci:-· EJ respectively, in the Bankruptcy ("the Claims"), seeking, among 

other things, indemnificati on for any judgments or expenses incurred in connection with the 

D&O and Coverage Actions in the Bankruptcy; 
The lnsl.lrer, the Settling Defendants, and the Trustee have agreed to a resoluti.on of any 

claims, demands, obligations, damages, actions, and causes of action, that arise from or relate to 

the Claims, the Policy, the D&O Ac!ion or the Coverage Action as documented in Exhibit A 

hereto {the ''Bankmptcy Agreemcni"):; and 

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

avoid the uncertainty and expense of further litigation; 

NOW, THEREFORE, in consideration of ihe promises, undertakings, payments, and 

releases stated herein, the suf1ic.iency of which consideration is hereby acknowledged, the 

undersigned Parties agree, each wi th the other, as f()IJows: 

sgcTION 1: Payments to FDIC-R 

A. As an essential covcnaJJt and condition to this Agreement, on or before February 

I 0, 2015, Insurer agrees to pay to the FDIC-R the sum of $6,000,000 (the "Settlement 

Payment''). The obligations to makt! tht; Settlement Payment are subject to the satisfaction of the 

f()llowing conditions (the "Conditions"): (i) nankruptcy Court approval for the Insurer to use 

$5,800,000 from the Policy towards payment of the Settlement Payment and (ii) the Trustee's 

payment of $200,000 on the Claims to the trust account of LoliS, Judge & Ward, LLP. 

13. The Settlement Payment to the FDIC-R shall be paid by direct wire transfer into 

tht,; following account: 

federal Ilomc Loan Bank ofNew York 

(b)(4) .................................... .... 

(b )(4) 

(b)(4).: ....... 

..... AB/\Routi.ng .. N·umber'! I 

for. C'redit to· I .......................................... ·· f.~~Z.~'.ullt tl~ :-... 'j-·····-·---..-----------~ FJN 1010 I; Communi tv Bank of Ari?.ona 

Contact: .J.S. Tonkins~n, 972-761-81 05; P rofessional Liability I 

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