SETTLEMENT AGREEMENT This Settlement Agreement is made on the 5th day of July , 2017, between Ryan Ferguson (hereinafter referred to as “Ryan”); Jeffrey L. Nichols, William J. Westbrook, John R. Short, Lloyd Simmons III, Latisha M. Stroer, Bryan E. Liebhart (hereinafter referred to collectively as “Defendants” or “Officers”); the City of Columbia, Missouri (“Columbia”); and Clarendon American Insurance Company (“Clarendon”). WHEREAS, on or about March 10, 2014, Ryan filed a lawsuit styled: Ryan Ferguson v. John Short, et.al., Case No. 2:14-CV-04062-NKL, in the US District Court for the Western District of Missouri (hereinafter the “Lawsuit”), against the Officers and other parties seeking money damages for injury sustained by Ryan commencing on March 10, 2004, when he was arrested, charged, and prosecuted for the Heitholt homicide, for which he was convicted on December 5, 2005, and imprisoned through November 12, 2013; and WHEREAS, in the Lawsuit, Ryan contended that the Officers caused or contributed to cause personal injury, bodily injury, emotional distress, and damage to him through a number of wrongful acts by them which resulted in Ryan’s wrongful conviction for the homicide of Kent Heitholt, which 1 homicide occurred on the night of October 31/November 1, 2001, in Columbia, Missouri; and WHEREAS, at the time of the Officers’ alleged respective acts, errors, and omissions which caused or contributed to cause injuries to Ryan each was an employee of the City of Columbia, Missouri within its Police Department, and acting in a law enforcement capacity within the course and scope of their respective official duties; and WHEREAS, the Lawsuit has reached a critical juncture, in that the District Court denied the Officers’ motion for summary judgment on or about August 14, 2015, which resulted in the Officers taking an interlocutory appeal to challenge the District Court’s order denying their affirmative defense of qualified immunity, which interlocutory appeal resulted in a second order by the District Court, dated January 17, 2017, “explicitly” denying qualified immunity to the Officers, and a second appeal to the Eighth Circuit Court of Appeals, which interlocutory appeal is pending at the time the parties enter this agreement; and WHEREAS, the Officers deny having engaged in any wrongful acts in their respective roles in the investigation or prosecution of Ryan, including each and every allegation of fabrication of evidence or pressuring witnesses; and 2 WHEREAS, the Officers deny having participated in a reckless investigation of Ryan and state that they investigated the Heitholt murder in a thorough, diligent and professional manner; and WHEREAS, the Officers deny any and all other liability to Ryan; and WHEREAS, the Officers recognize that their chances of prevailing in the Court of Appeals on their affirmative defense of qualified immunity are uncertain, and that if they do not prevail, that Ryan will have a jury trial in the District Court on his claims against them, and the outcome of any jury trial is uncertain; and WHEREAS, Clarendon issued one or more policies of liability coverage (the “Clarendon Policy,” whether in the singular or plural), naming the City of Columbia as the named insured, with each of the Officers as additional insureds or otherwise insured under the Clarendon Policy, which Policy is applicable to the alleged injuries and damages Ryan sustained, Insurance Policy No. XLA00310078, for the policy period of October 31, 2003 through October 1, 2004, which included law enforcement liability coverage with a limit of coverage in the amount of $2,250,000.00 per occurrence, with the actual Declarations of Coverage and Policy or Policies to govern; and WHEREAS, Columbia timely notified Clarendon of Ryan’s claims and Lawsuit; and 3 WHEREAS, Columbia has self-insured retention under the Clarendon Policy of $500,000 for Law Enforcement Liability, whereby Columbia is responsible up to that amount for the costs of defending Ryan’s claims and suit, and for indemnifying the Officers for any judgment against them collectively, with the actual Declarations of Coverage and Policy or Policies to govern; and WHEREAS, Clarendon has accepted and acknowledged that it has a duty to defend and indemnify the Officers, subject to the limit of its coverage and Columbia’s self-insured retention duties under the Clarendon Policy and applicable declarations of coverage; and WHEREAS, St. Paul Fire and Marine Insurance Company, and or a company named St. Paul Travelers Companies, Inc., and/or companies called The Travelers Companies, together with any officers, directors, agents, and employees of any one or more of these companies will be collectively referred to herein as “Travelers,” because that is how they are identified in a letter dated April 4, 2014, wherein Travelers denied liability coverage for Ryan’s damages and refused to provide a defense to the Officers, as more fully described below; and WHEREAS, Travelers issued one or more policies of liability coverage which may be applicable to the injuries and damages Ryan sustained, 4 Insurance Policy No. GP06301913, for the initial policy period of October 1, 2006 through October 1, 2007, and renewed annually for a total of five separate one year policy periods, ending on October 1, 2011, which included law enforcement liability coverage issued on Travelers Form 47292, as revised October, 2002, with an annual limit Total Limit of $3,000,000.00, Each Wrongful Act Limit of $2,000,000.00; and WHEREAS, Columbia timely notified Travelers of Ryan’s claims and Lawsuit; and WHEREAS, on April 4, 2014, Travelers, by its authorized representative, notified Columbia that Travelers was refusing to defend or indemnify the Officers and Columbia, a fair copy of that Letter is attached to this agreement and incorporated within it for all purposes, as Exhibit A; and WHEREAS, there are other policies of insurance issued to Columbia which do or may provide a duty to defend and indemnify the Officers, and this agreement contemplates their existence as well; and WHEREAS, Columbia and the Officers assert that Travelers wrongfully denied them a defense and wrongfully denied coverage for Ryan’s claims and damages, which Travelers Policy or Policies would have provided $10,000,000.00 or more of additional liability protection for the Officers of additional liability protection over and above that provided by 5 Clarendon; and, as a result of this wrongful denial of a defense and coverage, the Officers have entered into this agreement in order to protect their personal assets. WHEREAS, the Officers have been informed by their defense counsel, and acknowledge being aware, that as a result of the District Court’s denial of summary judgment for the officers, there is an evidentiary basis for and material risk that, should the Lawsuit be tried to a jury it could find for Ryan in the Lawsuit, and if a jury so finds, that based on the history of cases brought by wrongfully convicted individuals in the District Court and elsewhere in the United States, that their liability will almost certainly exceed the amount of Clarendon’s Policy and the City’s self-insured retention, leaving them individually exposed to an excess judgment; and WHEREAS, Clarendon tendered the limit of Clarendon’s Policy to Ryan, and Columbia tendered the remaining balance on its self-insured retention to Ryan in exchange for a full and complete release of Ryan’s claims and causes of action of every sort against the Officers; and WHEREAS, Ryan has rejected that offer as inadequate to compensate him for his injuries and damages, 6 NOW, THEREFORE, the Officers, Ryan, Columbia, and Clarendon, for consideration of the mutual promises set out in this agreement, agree as follows: 1. In order to avoid a lengthy, difficult, and uncertain trial on the issue of liability, wherein the Officers and Ryan each have evidence in support of their respective positions, the Officers and Ryan agree to settle the liability portion of the Lawsuit. The Officers and Ryan further agree that District Court may enter judgment based on this settlement by consent without further evidentiary basis. 2. The parties waive their right to a jury trial, and agree that the District Court may hold an evidentiary hearing on the issue of damages and plaintiff’s litigation expenses, including reasonable attorney’s fees, with Ryan and the Officers each having the right to put on evidence, to make motions to the District Court, to object to testimony, and to propose alternative and conflicting requests as to the amount of the judgment, interest, litigation expenses, and attorney’s fees. 3. This agreement is not contingent upon the District Court awarding damages at all or in any set or minimum amount. The findings on damages and all other relief which Ryan may request that the District Court decide shall be committed by this agreement to the District Court’s discretion. The parties do agree and stipulate that any such judgment is a legal liability of 7 each of the Officers, fully enforceable against them except as set out in this agreement. 4. Upon entry of final judgment in the District Court, regardless of the damage judgment amount or if the District Court awards damages at all, Clarendon and the City of Columbia agree that they shall immediately pay to Ryan, as Ryan’s legal counsel requests, one or more checks in the amount of $2,250,000.00 representing the limit of coverage on the Clarendon Policy, together with the remaining balance of Columbia’s self-insured retention, which Columbia shall reasonably verify on request of Ryan’s counsel. 5. The parties waive in advance their respective rights to appeal the final judgment contemplated but not required by paragraph 3, or to submit any authorized post-trial motions except as necessary to clarify the judgment or to correct any perceived errors in computations or verbiage. 6. From the amounts set out above, Ryan agrees to authorize his legal counsel to escrow $100,000.00 in her trust account for up to three years from the date of the District Court’s Judgment, which shall be available to the Officers or Columbia in the event of any civil litigation seeking a money judgment against them by or on behalf of any individual or entity whatsoever arising out of any criminal proceedings, charges, or prosecutions for the homicide of Kent Heitholt. In the event there are no such civil proceedings commenced within three years, then the Officers’ claims to such 8 funds shall terminate by operation of law and the funds may be released to Ryan, his successors or assigns. 7. Provided Clarendon and Columbia timely comply with paragraph 4, Ryan agrees to timely file a full or partial satisfaction of judgment upon receiving the payment or payments set out in paragraph 4. Ryan agrees to file a full satisfaction of judgment after receiving the amounts in paragraph 4 if the District Court’s Judgment is equal to or lower than the amounts set forth in paragraph 4. 8. By execution of the agreement, Clarendon hereby consents to the Officers entering into this Agreement under the particular facts and circumstances of allegations of the Lawsuit, as an authorized, fair, and reasonable settlement of Ryan’s claims against them based on the risk of a judgment in excess of Clarendon’s coverage limit and the limit of Columbia’s self-insured retention. 9. Ryan agrees that neither he nor any person, firm or corporation claiming by or through him, shall levy execution by garnishment or otherwise provided by law on any property, asset or right of the Officers, Columbia, or Clarendon except as follows: a. The assets of any insurer (other than Clarendon) or entity which insures the Officers’ legal liability or otherwise has a duty to indemnify them, including but not limited to Travelers; 9 b. The assets of any insurer, re-insurer, syndicate, individual or entity which insures the legal liability of Travelers (other than Clarendon); c. The proceeds of any cause of action or claim that the Officers may have against Travelers, or any other insurer (other than Clarendon) or entity which insures or owes a duty to indemnify the Officers for Ryan’s claims or judgment, which the Officers or Columbia may possess against such insurers or indemnitors, including but not limited to, any extra-contractual claims for bad faith in connection with: 1) refusal to provide coverage, 2) refusal to defend, 3) refusal to settle, or 4) any other conduct, error, omission, or act in the process of evaluating or handling its obligations to Columbia or the Officers. 10. From the date the Judgment described above is entered, the Officers and Columbia will, within 15 days, assign to Ryan, all rights, claims, actions and causes of action Columbia and the Officers have or may have against Travelers or others arising from the actions of Travelers or any other insurer in failing defend and cover Ryan’s claims and Lawsuit, and to take no part in attempting to settle the same for the limits of Traveler’s Policy, or any other claims handling conduct. Columbia and the Officers agree in accordance with this paragraph to execute, within the aforesaid time, an Assignment in substantial compliance with that attached hereto as Exhibit B. If any of the Officers or Columbia contends that he, she, or it, has sustained damage as a 10 result of the conduct of Travelers or any other insurer in addition to the amount of any judgment entered, he or she, or Columbia, may elect to participate with Ryan in the cause of action against Travelers or any other insurer to claim such damages. 11. Upon final adjudication or settlement of the causes of action contemplated by this agreement against Travelers or any other insurer or party obligated to indemnify Columbia or the Officers, whether by action to garnish the Travelers Policy, or any claim assigned to Ryan by the Officers and Columbia, Ryan will file a Final Satisfaction of Judgment in the Lawsuit. Further, Ryan will execute a satisfaction of Judgment in favor of the Officers which shall be held by the Officers’ attorney. Ryan hereby explicitly authorizes the Officers’ attorney to file said satisfaction if more than two years passes with no pending litigation involving any claim which involves the issues contemplated by this agreement. 12. Partial Release: Ryan for the sole consideration of the amounts to be paid as described in paragraph 4, does hereby and for his heirs, executors, administrators, successors and assigns, and all persons, firms, corporations, partnerships, or other entities related to one or any of them in any way, releases, acquits and forever discharges Stephen Montecelli, Randy Boehm, the City of Columbia Missouri, and all other current or former employees of the City of Columbia (other than the Officers), Clarendon and each of their 11 agents, employees, officers, servants, successors, heirs, executors, administrators, assigns, directors, and all other persons or entities related to any of them in any way, and all other persons, firms, corporations, associations, partnerships, or other entities, of and from any and all claims, actions, causes of action, demands, rights, damages, costs, loss of service, expenses, and compensation whatsoever, whether known or unknown, which Ryan has now or which may hereafter accrue, including, but not limited to, any and all claims, actions, causes of action, demands, rights, damages, costs, loss of service, expenses, and compensation on account of or in any way growing out of any and all known and unknown, foreseen and unforeseen bodily and personal injuries and property damage and the consequences thereof resulting or to result from the accident, casualty or event which is more particularly described above. This Partial Release shall not in any fashion release or discharge any claim, cause of action or damage which Ryan has against the Officers, or the Judgment which the District Court may enter for Ryan against the Officers, except to the extent of Ryan’s obligation to execute and file documents according to the provisions of paragraphs 7, 9, and 11, as Ryan recovers from or concludes litigation against Travelers and possibly other insurers. Reservation of Claims: Ryan hereby reserves and preserves any and all claims against Clarendon and the City of Columbia for failure to pay the 12 amounts described in paragraph 4, including any and all breach of contract actions, motions to enforce settlement agreements, or other cause of actions pertaining to any alleged failure to pay the amounts set forth in paragraph 4. Mutual Release: Ryan and the Officers in consideration of $10.00 and other valuable consideration, the receipt of which is hereby acknowledged, release any all claims that they may have, both now or in the future, regarding their respective opinions about the Heitholt murder investigation and each other’s conduct. Except as set forth herein, Ryan hereby reserves and preserves any and all claims against the Officers set forth the in the Lawsuit and nothing in this paragraph alters those claims whatsoever. 13. Ryan, the Officers, Columbia, and Clarendon agree that this Agreement is contractual in nature and shall be construed pursuant to the laws of the State of Missouri, with venue in any enforcement proceeding between the parties to be in the Circuit Court of Cole County, Missouri. 14. This Agreement shall be binding on the parties’ respective officers, directors, employees, legal representatives and successors in the case of Clarendon; the elected and appointed officials, employees, legal representatives and successors of Columbia; and the heirs, assigns, and legal representatives in the case of Ryan and the Officers. In the event of the death or disability of Ryan or any of the Officers, any proceeding contemplated by this agreement shall proceed in and through a duly 13 appointed legal representative for that purpose. The parties hereby agree and authorize the Circuit Court of Cole County, Missouri to make any such appointment and the parties consent to venue in the Circuit Court of Cole County, Missouri. 15. The parties agree that this Agreement is specifically authorized by Missouri law, including Section 537.065, RSMo., as in effect at the time of the execution of this agreement. 16. The parties agree that in the event that this Agreement or any provision of this Agreement shall be invalidated by any court, the remaining terms of this Agreement shall remain in full force and effect. 17. Columbia, Clarendon, and the Officers are aware that Michael G. Berry, of the law firm Berry Wilson, LLC, who previously represented a different defendant in the Lawsuit, has assisted and may continue to assist Ryan’s counsel in connection with this agreement and proceedings under it, and that he may eventually serve as counsel for Ryan and others in proceedings that this agreement contemplates. They acknowledge that there is no conflict of interests in his doing so, or alternatively, they knowingly and with full information and advice of counsel waive the same to the extent a conflict exists. 18. The parties acknowledge that they enter into this Agreement voluntarily and without any collusion and/or coercion from any party to the 14 Lawsuit or any other person, firm or corporation including Travelers, and that each party has been fully and regularly advised as to every aspect of this agreement and its effect, present and future. 19. The effective date of this Agreement shall be the date of when the last signature is obtained or dated. The parties acknowledge that separate signature pages are appropriate for convenience and for efficient execution. The parties stipulate that facsimile signatures, so long as duly acknowledged in person, are fully valid and that a photocopy or facsimile copy of this agreement is fully valid for all purposes, including any legal proceedings under it. To foreclose any future issue over this agreement by Travelers or any other third party, the parties agree to prepare two duplicate originals of this agreement, each of which is valid. 20. This agreement may be recorded in the Office of the Recorder of Deeds in any county. 15 BY OUR HAND AND SIGNATURES AS SET FORTH BELOW: Ryan FergusoV STATE OF (/1wa COUNTY OF 353? BEFORE ME, a Notary Public in and for the county and state aforesaid, personally appeared Ryan Ferguson, knewn to me to hr: the individual named herein and that he is of lawful age and executed the forcgoing document as his free and voluntary act and deed? IN WITNESS WEREOF, I have hereu 0 56 my hand. and af?xed my off: ial seal, the date last above written. 3/!6/9090 My Comlnission'Expires- ()1th 16 STATE OF W5 Sal/W )ss. COUNTY OF ll) 0 6M BEFORE ME, a Notary Public in and for the county and state aforesaid, personally appeared, known to me to be the individual named herein and that is of lawful age and executed the foregoing document as free and voluntary act and deed. IN WITNESS WHEREOF, I have hereunto set my hand and af?xed my of?cial seal, the date last above written. WW ll) (kiln/L NOTARUJUBLIC (I ?6 Gal 06 2610 P0454017 My Commission Expires 55? Commission #18842813 6 so twit?s??w 8?00 xpiras 9? 5.9 2 17 \1111l1 111m liam Westbrook 1 STATE 01? ?5 Etta/?if 6/ )ss. COUNTY 01: ORE MB L1 Notaiy?l L1blie 111 2111Lll'oi' the moon and state aloresaid. personally appeared, known to me to be the i11Lli1iLl11al l1e1ei11 and that is age and executed the loiegoing document as lice and 1olumaiy aet anLl LleeLl. lN WEENESS Wl-ll alR Ol ll1ave hereunto set 1'1'1y hand and af?xed my ollieial seal, the date last above written. Mv?w? SUSAN M. GREENFIELD 1 3 NotaryPuinc-NotarySeal l\Ol l( filtate of Missouri, County of Boom Commission #12479801 Ly Commission Expires Oct 2. 2020 My Commission Expires 17 STATE OF H ,SSQUr' COUNTY OF i' &cn-e.... BEFORE ME, a Notary Public in and for the county and state aforesaid, personally appeared, known to me to be the individual named herein and that ~ is of lawful age and executed tbe foregoing document as free and voluntary act and deed. k fNWITNESS WHEREOF, I have hereunto set my hand and affixed my official seal, the date last above written. t O\)J