SETTLEMENT AGREEMENT THIS SETTLEMENT AGREEMENT (the “Agreement”) is made and entered into by and among (i) Ralph S. Janvey, solely in his capacity as court appointed Receiver for Stanford International Bank, Ltd., et al. (the “Receiver”); (ii) the Official Stanford Investors’ Committee (the “Committee”); and (iii) Certain Underwriters at Lloyd’s of London,1 Arch Specialty Insurance Co., and Lexington Insurance Company (collectively referred to as “Underwriters”) (the Receiver, the Committee, and Underwriters are each referred to in this Agreement individually as a “Party” and together as the “Parties”); WHEREAS, on February 16, 2009, the Securities and Exchange Commission (“SEC”) filed Civil Action No. 3:09-cv-00298-N, Securities and Exchange Commission v. Stanford International Bank, Ltd., et al., (N.D. Tex.) (the “SEC Action”), alleging that Robert Allen Stanford, James M. Davis, Laura Pendergest-Holt, Stanford International Bank, Ltd., Stanford Group Company, Stanford Capital Management, LLC, and Stanford Financial Group (the “Stanford Defendants”) had engaged in a fraudulent scheme affecting tens of thousands of customers from over one hundred countries; WHEREAS, in an order dated February 16, 2009, in the SEC Action (Doc. 10), the United States District Court for the Northern District of Texas assumed exclusive jurisdiction and took possession of the assets, monies, securities, properties, real and personal, tangible and intangible, of whatever kind and description, wherever located, and the legally recognized privileges (with respect to the entities) of the Stanford Defendants and all entities they owned or controlled (the “Receivership Assets”), and the books and records, client lists, account statements, financial and accounting documents, computers, computer hard drives, computer 1 Certain Underwriters at Lloyd’s of London refers to Lloyd’s of London Syndicates 2987, 2488, 1084, 1886, 4000, 1183, and 1274. 1 disks, internet exchange servers, telephones, personal digital devices and other informational resources of or in possession of the Stanford Defendants, or issued by the Stanford Defendants and in possession of any agent or employee of the Stanford Defendants (the “Receivership Records”); WHEREAS, in an order dated February 16, 2009, in the SEC Action (Doc. 10), Ralph S. Janvey was appointed Receiver for the Receivership Assets and the Receivership Records (collectively, the “Receivership Estate”) with the full power of an equity receiver under common law as well as such powers as are enumerated in that order, as amended by an order in that same matter, dated March 12, 2009 (Doc. 157), and as further amended by an order entered in that same matter, dated July 19, 2010 (Doc. 1130); WHEREAS, Ralph Janvey has served as Receiver continuously since his appointment and continues to serve in that capacity; WHEREAS, John J. Little, Esq., was appointed to serve as Examiner (the “Examiner”) by an order entered in the SEC Action, dated April 20, 2009 (Doc. 322), to assist the Court in considering the interests of the worldwide investors in any financial products, accounts, vehicles or ventures sponsored, promoted or sold by any defendants in the SEC Action; WHEREAS, John Little has served as Examiner continuously since his appointment and continues to serve in that capacity; WHEREAS, the Committee was created pursuant to an order entered in the SEC Action, dated August 10, 2010 (Doc. 1149) (the “Committee Order”), to represent the customers of Stanford International Bank, Ltd., who, as of February 16, 2009, had funds on deposit at Stanford International Bank, Ltd. and/or were holding certificates of deposit issued by Stanford International Bank, Ltd.; 2 WHEREAS, by the Committee Order, the Examiner was named as the initial Chairperson of the Committee; WHEREAS, the Examiner has served as Chairperson of the Committee continuously since his appointment and continues to so serve; WHEREAS, Lloyd’s Syndicates 2987, 2488, and 1886 and Arch Specialty Insurance Company subscribe to the Directors’ and Officers’ Liability and Company Indemnity Policy No. 576/MNK558900 (the “D&O Policy”); WHEREAS, Lloyd’s Syndicates 2987, 2488, 1084, 1886, 4000, and 1183 and Arch Specialty Insurance Company subscribe to the Financial Institutions and Professional Indemnity Policy No. 576/MNA851300 (the “PI Policy”); WHEREAS, Lloyd’s Syndicates 2987, 2488, 1886, 1084, 1274, and 4000, Lexington Insurance Company, and Arch Specialty Insurance Company subscribe to the Excess Blended “Wrap” Policy No. 576/MNA831400 (the “Excess Policy”), which sits above or is in excess to the D&O Policy and the PI Policy; WHEREAS, the Receiver has made multiple claims for coverage (the “Direct Claims”) under the D&O, PI, and Excess Policies (collectively, the “Policies” or “Insurance Policies”); WHEREAS, the Receiver and the Committee have filed numerous lawsuits against Underwriters’ Insureds (all such claims, including but not limited to the Receiver’s and the Committee’s claims against the individuals identified in Exhibit A and those claims identified in Exhibit B, are referred to collectively, as the “Indirect Claims”) who sought or may seek coverage under the Policies and which coverage was, or might have been, pursued directly by Underwriters’ Insureds or by the Receiver or the Committee, through assignment or otherwise; 3 WHEREAS, Underwriters and the Receiver are parties to a lawsuit, Underwriters v. Janvey, No. 3:09-cv-1736 (N.D. Tex.), concerning their respective rights and obligations relating to the Policies (the “Coverage Action”); WHEREAS, Underwriters dispute that coverage exists under the Policies for the Indirect Claims and have been and are party to numerous lawsuits relating to certain individuals’ claims for coverage under the Policies; WHEREAS, the Policies provide for certain policy limits, and the Parties dispute issues of coverage, the legal effect of the provisions governing the Policies’ limits, and the amount of the Policies’ remaining limits; WHEREAS, the Receiver has sought to intervene or has intervened in certain of the “Third-Party Coverage Actions” (as defined below); WHEREAS, Underwriters each expressly deny any and all allegations by the Receiver or anyone else of wrongdoing, fault, liability or damages whatsoever, pursuant to the Insurance Policies or otherwise, and are entering into this Agreement to avoid the burden, expense, and risks of litigation; WHEREAS, the Receiver has conducted an investigation into the facts and the law relating to the Indirect Claims and the Direct Claims (the “Indirect Claims” and the “Direct Claims” are referred to, collectively, as the “Claims for Coverage”), and after considering the results of that investigation and the benefits of this Agreement, as well as the burden, expense, and risks of litigation, has concluded that the Agreement is fair, reasonable, adequate, and in the overall best interests of the Receivership Estate; the Claimants; the individuals, entities, and/or customers who, as of February 16, 2009, had funds on deposit at Stanford International Bank, Ltd., or were holding certificates of deposit issued by Stanford International Bank, Ltd. (the 4 “Stanford Investors”), and/or who had an interest in any financial products, services, accounts, vehicles, or ventures that the Stanford Entities sponsored, issued, promoted or sold; any other interested party; and all Persons affected by the Stanford Entities; WHEREAS, the Committee has conducted an investigation into the facts and the law relating to the Indirect Claims it is prosecuting, and after considering the results of that investigation and the benefits of this Agreement, as well as the burden, expense, and risks of litigation, has concluded that the Agreement is fair, reasonable, adequate, and in the overall best interests of the Receivership Estate; the Claimants; the Stanford Investors and/or other Persons who had an interest in any financial products, services, accounts, vehicles, or ventures that the Stanford Entities sponsored, issued, promoted or sold; any other interested party; and all Persons affected by the Stanford Entities; WHEREAS, the Parties desire to fully, finally, and forever compromise and effect a global settlement and discharge of all claims, disputes, and issues between Underwriters and the Receiver and Committee pursuant to the terms outlined herein, including that Underwriters would have no further obligation to Underwriters’ Insureds or to Stanford Investors; WHEREAS, the Parties have engaged in extensive, good faith, arm’s-length negotiations, including participation by the Receiver and his counsel, representatives of Underwriters and Underwriters’ counsel, and the Examiner in three days of mediation with Jed Melnick, Esq. of JAMS, leading to this Agreement; WHEREAS, absent this Agreement, the Parties would have faced years of litigation in a variety of different civil actions, substantial litigation costs, and uncertainty as to the outcome of such litigation; 5 WHEREAS, the Examiner, both in his capacity as Chairperson of the Committee and in his capacity as the Court-Appointed Examiner, participated in the negotiation of the Agreement; WHEREAS, the Examiner, in his capacity as Examiner, has reviewed this Agreement and, as evidenced by his signature hereon, has approved this Agreement and will recommend that this Agreement be approved by the Court and implemented;2 and WHEREAS, the Receiver has reviewed and approved this Agreement, as evidenced by his signature hereon; WHEREAS, the Examiner and the Committee have reviewed and approved this Agreement, as evidenced by the Examiner’s signature hereon; NOW, THEREFORE, in consideration of the agreements, covenants and releases set forth herein and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the Parties agree as follows: I. Agreement Date 1. This Agreement shall take effect once all Parties have signed the Agreement, and as of the date of execution by the last Party to sign the Agreement (the “Agreement Date”). II. Terms Used in this Agreement The following terms, as used in this Agreement, the Bar Order, and the Judgment and Bar Orders, have the following meanings: 2. “Attorneys’ Fees” means those fees awarded to the Receiver’s and Committee’s counsel from the Settlement Amount pursuant to order of the Court on motion by the Receiver. 3. “Claim” means a Person’s potential or asserted right to receive funds from the Receivership Estate. 2 The Examiner has also executed this Agreement to confirm his obligation to post Notice on his website, as required herein, but is not otherwise individually a party to the Agreement. 6 4. “Claimant” means any Person who has submitted a Claim to the Receiver or to the Joint Liquidators. Where a Claim has been transferred to a third party and such transfer has been acknowledged by the Receiver, the transferee is a Claimant, and the transferor is not a Claimant unless the transferor has retained a Claim that has not been transferred. Where the Receiver has disallowed a Claim and the disallowance has become Final, then the submission of the disallowed Claim does not make the Person who submitted it a Claimant. 5. “Confidential Information” means the communications and discussions in connection with the negotiations that led to this Agreement. Confidential Information also includes the existence and terms of this Agreement, but only until the filing of this Agreement and related documents with the Court. 6. “Court” means the United States District Court for the Northern District of Texas, Judge David C. Godbey currently presiding. 7. “Distribution Plan” means the plan hereafter approved by the Court for the distribution of the Settlement Amount (net of any attorneys’ fees or costs that are awarded by the Court) to Stanford Investors who, as of the date of the approval of the Distribution Plan, have had their Claims allowed by the Receiver (“Allowed Claims”). 8. “Settlement Effective Date” means the date on which the last of all of the following have occurred: a. entry in the SEC Action of a bar order including findings under Federal Rule of Civil Procedure 54(b) and in substantially the form attached hereto as Exhibit C (the “Bar Order”); b. entry in the Coverage Action of a judgment and bar order in substantially the form attached hereto as Exhibit D (the “Coverage Action Judgment and Bar Order”); 7 c. entry in each of the Third-Party Coverage Actions of a judgment and bar order in substantially the form attached hereto as Exhibit E (the “Third-Party Coverage Action Judgment and Bar Order”); and d. the Bar Order, the Coverage Action Judgment and Bar Order, and each Third-Party Coverage Action Judgment and Bar Order have all become Final. 9. “Final” means unmodified after the final conclusion of, or expiration of any right of any Person to pursue, any and all possible forms and levels of appeal, reconsideration, or review. The Bar Order including findings under Federal Rule of Civil Procedure 54(b) will become final as set forth in this paragraph as though such order was entered as a judgment at the end of the case, and the continuing pendency of the SEC Action shall not be construed as preventing such an order from becoming final. 10. “Forum” means any court, adjudicative body, tribunal, or jurisdiction, whether its nature is federal, foreign, state, administrative, regulatory, arbitral, local, or otherwise. 11. “Hearing” means a formal proceeding in open court before the Court. 12. “Interested Parties” means the Receiver, the Receivership Estate, the Committee, the members of the Committee, the Claimants, the Examiner, the Stanford Investors, and Underwriters’ Insureds. 13. “Joint Liquidators” means the liquidators appointed by the Eastern Caribbean Supreme Court in Antigua and Barbuda to take control of and manage the affairs and assets of Stanford International Bank, Ltd. 14. “Notice” means a communication, in substantially the form attached hereto as Exhibit F, describing (a) the material terms of this Agreement; (b) the rights and obligations of the Interested Parties with regard to this Agreement; (c) the deadline for the filing of objections 8 to the Agreement, the Bar Order, the Coverage Action Judgment and Bar Order, and each Third-Party Coverage Action Judgment and Bar Order; (d) the date, time and location of the Hearing to consider final approval of this Agreement, the Bar Order, the Coverage Action Judgment and Bar Order, and each Third-Party Coverage Action and Bar Order. 15. “Person” means any individual, entity, governmental authority, agency or quasi- governmental person or entity, worldwide, of any type, including, without limitation, any individual, partnership, corporation, estate, trust, association, proprietorship, organization, or business, regardless of location, residence, or nationality. 16. “Receivership Released Parties” means the Receiver, the Examiner, the Committee, and each of their counsel. Receivership Released Parties also includes each of the foregoing persons’ respective past, present, and future directors, officers, legal and equitable owners, shareholders, members, managers, principals, employees, associates, representatives, distributees, agents, attorneys, trustees, general and limited partners, lenders, insurers and reinsurers, direct and indirect parents, subsidiaries, affiliates, related entities, divisions, partnerships, corporations, executors, administrators, heirs, beneficiaries, assigns, predecessors, predecessors in interest, successors, and successors in interest but only in the capacity in which they allegedly would incur liability or potential liability that is derivative of or related to their relationship with the Receiver, the Examiner, the Committee, or their counsel. 17. “Releasor” means any Person granting a release of any Settled Claim. 18. “Settled Claims” means any action, cause of action, suit, liability, claim, right of action or demand whatsoever, whether or not currently asserted, known, suspected, existing, or discoverable, and whether based on federal law, state law, foreign law, common law, or otherwise, and whether based on contract, tort, statute, law, equity or otherwise, that a Releasor 9 ever had, now has, or hereafter can, shall, or may have, directly, representatively, derivatively, or in any other capacity, for, upon, arising from, relating to, or by reason of any matter, cause, or thing whatsoever, that, in full or in part, concerns, relates to, arises out of, or is in any manner connected with (i) the Policies; (ii) the Stanford Entities; (iii) any actual or potential claim of coverage under the Policies in connection with the SEC Action, the Receivership, the Indirect Claims, the Direct Claims, the Stanford Investor Claims, or any claim asserted against any of Underwriters’ Insureds or any Stanford Defendant or any other Person who has ever had any affiliation with any Stanford Defendant; (iv) any certificate of deposit, CD, depository account, or investment of any type with any one or more of the Stanford Entities; (v) any one or more of the Underwriters’ relationship with any one or more of Underwriters’ Insureds; (vi) the Coverage Action; (vii) the Third-Party Coverage Actions; (viii) the Indirect Claims; and (ix) all matters that were asserted in, could have been asserted in, or relate to the SEC Action, the Coverage Action, the Indirect Claims, the Coverage Action, the Third-Party Coverage Actions, the Stanford Investor Claims, or any proceeding concerning the Stanford Entities pending or commenced in any Forum. “Settled Claims” specifically includes, without limitation, all claims each Releasor does not know or suspect to exist in his, her, or its favor at the time of release, which, if known by that Person, might have affected their decisions with respect to this Agreement (“Unknown Claims”). Each Releasor expressly waives, releases, and relinquishes any and all provisions, rights, and benefits conferred by any law or principle, in the United States or elsewhere, which governs or limits the release of unknown or unsuspected claims, including, without limitation, California Civil Code § 1542, which provides: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM 10