Exhibit 10.2

SETTLEMENT AGREEMENT AND MUTUAL RELEASE

This Settlement Agreement (“Agreement’') between Signature Group Holdings, Inc. (“Signature”) and James A. McIntyre, The James A, McIntyre Living Trust, the James A. McIntyre Grandchildren’s Trust and The McIntyre Foundation (collectively “McIntyre”) in connection with a possible sale or sales of the Signature common shares currently owned by McIntyre. Signature and McIntyre are referred to collectively as the “Parties”

Recitals

WHEREAS, McIntyre currently owns approximately 11,203,394 shares of Signature common stock (the “McIntyre Shares”) as follows:

WHEREAS, McIntyre recently informed Signature that it may seek one or more purchaser(s) of McIntyre Shares.

WHEREAS, Signature takes the position that unless the Board of Directors grants a waiver, in its discretion, of the transfer restrictions set forth in Section 8.2 of the Bylaws that Section 8.2 of the Signature Bylaws, prohibits any attempted transfer of the Company’s common stock to the extent that, as a result of such transfer (or any series of transfers) (i) any person or group of persons shall become a “4.9-percent shareholder” of the Company or (ii) the ownership interests of any 4.9-percent shareholder shall be increased or (iii) any shareholder holding 5% or more of the total market value of the Company’s common stock, transfers or agrees to transfer the Company’s common stock. The Parties continue to disagree on this matter;

WHEREAS, Signature currently has outstanding 120,143,247 of its common shares and 4.9% of that is 5,887,019;

WHEREAS, Signature maintains a Rights Agreement, by and between Signature and Mellon Investor Services LLC, as rights agent, dated October 23, 2007, as amended (the “Rights Agreement”) to protect its net operating loss carry forward.

WHEREAS, McIntyre and others currently have an appeal pending before the United States Bankruptcy Appellate Panel of the Ninth Circuit of the United States Bankruptcy Court for the Central District Court of California relating to a Santa Ana Division Order granting Signature’s Motion to Clarify, Interpret and Enforce the Confirmation Order and the Plan Consistent with the Rights Agreement and Retained Equity Rights (the “Bankruptcy Appeal”);

WHEREAS McIntyre is the Plaintiff in a civil action seeking Declaratory and Injunctive Relief action relating to the Rights Agreement pending before the Second Judicial District Court of the State of Nevada (the “Nevada Action”).

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WHEREAS, the Signature Board of Directors (the “Board”) continues to evaluate whether McIntyre and Kingstown Capital Partners, LLC (“Kingstown") and other persons and entities affiliated therewith (as identified in the Schedule 13D filed by Kingstown with the Securities and Exchange Commission on July 15, 2011), should be determined to be an ‘‘Acquiring Person” (as defined in the Rights Agreement) and if such determination is made, whether a “Distribution Date" (as defined in the Rights Agreement) for the distribution of securities under and pursuant to the Rights Agreement will occur. McIntyre’s believes that such a determination would be contrary to the terms of the Rights Agreement and contrary to applicable law. The Parties continue to disagree on this issue.

NOW THEREFORE BE IT AGREED AS FOLLOWS:

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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 OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

The Parties understand and acknowledge the significance and consequence of such specific waiver of Section 1542 and hereby assume lull responsibility for any injuries, damages, losses, or liability that they may hereafter incur from the prior conduct by the other party.

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The Signature Page Follows

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of this 5th day of September, 2012.

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