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SKl'TLEMENT AND RELEASE AGREEMENT 

This Settlement and Release Agreement ("Agreement") is entered into by and between 

the Federal Deposit Insurance Corporation as Receiver fc.Jr Platinum Community Bank ("FDICR") and Continental Casualty Company ("Continental") (individually, the FDIC-ll and 

Continental may be referred to herein as a "Party" and collectively as the "Parties"). 

RECITALS 

WHEREAS: 

Prior to September 4, 2009, Platinum Community Bank (the "Hank") was a depository 

institution organized and existing under the laws ofIllinois; 

On September 4, 2009, the Office ofThrift Supervision closed the Bank and pursuant to 

12 U.S.C. § 1821(c), the Federal Deposit Insurance Corporation was appointed receiver. In 

accordance with 12 U.S.C. § 182l(d), the FDIC-R succeeded to all rights, titles, powers and 

privileges ofthe Bank, including those with respect to its assets; 

Among the assets to which FDIC-R succeeded were any and all claims, demands, and 

causes of action against the Bank's financial institution bond insurer, including against 

Continental as issuer of the Bond, as that tenn is defined below; (b )( 4) 

On June 22, 2009, Continental issued a "Community Financial lnstitutions Bond," Policy 

Number ------ ("Bernd"). 

The FDIC-R submitted a proof ofloss, a supplemental proofofloss, and suppoi1ing 

documents to Continental seeking coverage under the Bond on the basis that Paul Allen acted 

dishonestly and induced the Bank to fund and/or purchase a series of loans using escrow funds 

deposited by Freddie Mac ("Claim"); 

Continental disputed that the Claim was covered hy the Bond; and 

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

avoid the uncertainty and expense oflitigation. 
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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 FDJC-R 

A. As an essential covenant and condition of this Agreement and in consideration for the 

releases set forth in Section II, Continental agrees to pay to the FDIC-R the sum of SIX 

lllJNDREil SIXTY-SEVEN THOUSAND fl VE HUNDRED DOLLARS and ZERO CENTS 

($667,500.00) (the "Settlement Payment"). The Settlement Payment shall be paid to the FDIC-R 

within thi1iy (30) calendar days after both Parties sign the Agreement. The Parties agree that 

time is of the essence with respect to the obligation to make the Settlement Payment. 

B. Continental shall deliver the Settlement Payment to the FDIC-R by direct check. The 

check shall be made payable to the Federal Deposit Insurance Corporation as Receiver for 

Platinum Community Bank. The check shall be delivered to: 

Christine P. Hsu 

Counsel, Professional Liability Unit 

Federal Deposit Insurance Corporation 

3501 Fairfax Drive, VS-B-7054 

Arlington, Virginia 22226 

C. If the FDIC-R does not receive the Settlement Payment in full on or before the date 

determined by Section I.A. above or any extension granted in accordance with Section l.C.1 

below, then the FDIC-R, in its sole discretion, shall have the right at any time prior to receipt of 

the Settlement Payment in full to: 

I. Extend the period of time for the Settlement Payment, including interest accruing 

from the date determined by subsection A above, tlu-ough the date of payment at a rate calculated 

in accordance with 26 U.S.C. §6621 (a)(2); 

2. Enforce this Agreement, in which event Continental agrees to jurisdiction in 

United States District Court for the District of Illinois and to pay all of the FDIC-R's reasonable 

attorney's fees and costs expended in enforcing the terms of this Agreement; 
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3. Terminate the Agreement; or 

4. Seek any relief available to it in law or equity. 

In the event the FDIC-R extends the period of time in accordance with Section I.C.l, the 

actions set forth in Sections I.C.2 through I.C.4 shall only be available if the FDIC-R does not 

receive the Settlement Payment (including all accrued interest) in full on or before the date set 

out in the extension. 

SECTION JI: Releases 

A. Release of Continental by FDIC-R 

Effective upon receipt in full of the Settlement Payment, plus any accrued interest due under 

Section I.C.1, and except as provided in Section II.D below, the FDIC-R, for itself and its 

successors and assigns, hereby releases and discharges Continental, its parents, subsidiaries, 

affiliates and rcinsurers, and their respective employees, officers, directors, agents, 

representatives, successors and assigns ( collectively the "Continental Released Parties"), from 

any and all claims, demands, obligations, damages, actions and causes of action, direct or 

indirect, in law or equity, that arise from or relate to the Claim, the Bond, any acts or omissions 

committed by Paul Allen, or Freddie Mac's escrow funds. As part of this release of Continental, 

the FDJC-R fu1iher agrees that any interest it has or may have under the Bond is extinguished 

and that it will not pursue any fmiher claims under the Blmd, whether or not related to the Claim. 

B..Rskasc of FDIC-R by Continental 

Effective simultaneously with the Release granted in Section II.A above, Continental, for 

itself and its successors and assigns, and on behalf of the Continental Released Pa1iies hereby 

releases and discharges the FDIC-Rand its employees, officers, directors, agents, 

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 

Claim or the Bond. 
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C. Waiver of Subrogation_ by_ Continental 

1. Effective simultaneously with the Release granted in Section II.A above, 

Continental agrees to and hereby docs irrevocably waive any rights under Section 4 of the Bond 

(titled "Assignment-Subrogation-Recovery-Cooperation") and any rights of subrogation or 

recovery it may have relating to or arising out of the Claim or the Bond including, without 

limitation, any rights arising from Contincntal's payment of the Settlement Payment or involving 

any action, error or omission of Paul Allen (collectively, "Rights of Recovery"). Continental 

does hereby assign, transfer, and convey to the FDIC-R any of its rights, claims, title, and 

interest as to ,my Rights of Recovery. Continental agrees that the FDIC-R may retain, sell, 

transfer, or otherwise dispose ofsueh Rights of Recovery as it sees fit, in its sole and unfettered 

discretion, and retain the proceeds (if any) thereof. Any future recovery pursuant to such Rights 

of Recovery shall not modify or otherwise affect the amount of Settlement Payment due under 

this Agreement and required to be paid by Continental. 

D. Express Res9_r_y_ations from Releases by FDIC-R 

1. Notwithstanding any other provision contained in this Agreement, the FDIC-R 

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 any person or cnti'.y for liability, if any, incurred as the maker, 

endorser or guarantor of any promissory note or indebtedness payable or owed by them to the 

FDIC-R, the Bank, other financial institutions, or any other person or entity, including without 

limitation any claims acquired by the FDIC-Ras successor in interest to the Bank or any person 

or entity other than the Bank; 

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

c. under or relating to any policy of insurance issued by Continental ( or any 

other insurer) other than the Bond; and 

d. which are not expressly released in Section II.A above. 
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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 federal Deposit Insurance Corporation in the exercise of its supervisory or 

regulatory authority or to diminish its ability to institute administrative enforcement or other 

proceedings seeking removal, prohibition or any other relief it is authorized to seek pursuant to 

its supervisory or regulatory authority against any person. 

3. Notwithstanding any other provision of this Agreement, this Agreement does not 

waive, or intend to waive, any claims which could be brought by the United States through the 

Department of Justice, the United States Attorney's Office for the N01ihcrn District of Illinois or 

any other federal judicial district, or by any other department, agency or instrumentality of the 

United States as defined by 18 lJ.S.C. § 6. In addition, the FDIC-R specifically reserves the right 

to seek court ordered restitution pursuant to the relevant provisions of the Mandatory Victims 

Restitution Act, 18 U.S.C. § 3322 and§ 3663, et. seq., if appropriate. 

SECTION III: Representations and Acknowledgements 

A. Authorized Signatories 

All of the undersigned persons represent and warrant that they are authorized to sign this 

Agreement on behalf of the respective Party, and that they have the full power and authority to 

bind such Pmiy 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, 

trustees, administrators, representatives, successors and assigns. 

B. Owners}Jip of the Claim. 

The Parties hereby represent and warrant that they have not transferred, assigned, released, or 

otherwise compromised any rights or claims released herein. The FDIC-R represents and 

warrants that it is the sole owner of the Claim. The FDIC-R understands and agrees that this 

representation is a material portion of the consideration provided to Continental in this 

Agreement. 
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C. No Admission of Liability 

The undersigned Parties each acknowledge and agree that the matters set fmth in this 

Agreement constitute the settlement and compromise of disputed claims and defenses, and that 

this Agreement is not an admission or evidence of liability or infirmity by either Party regarding 

any claim or defense, and that the Agreement shall not be offered or received in evidence by, or 

against, any Party except to enforce its terms. 

D. Execution in C_Q1U1Jerpart~ 

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; 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. 

E. Choice of Law 

This Agreement shall be interpreted, construed and enforced according to the applicable 

federal law, or in its absence, the laws of the state of Illinois. 

F. Entire Agreement @._nd Amendments 

This Agreement constitutes the entire Agreement and understanding between the Parties 

concerning the matters set forth herein and supersedes any prior agreements or understandings. 

This Agreement may not be amended or modified, nor may any of its provisions be waived, 

except in writing signed by the Parties to be bound thereby, or by their respective authorized 

attorncy(s), or other representative(s). 

G. Reasonable Cooperation 

The undersigned Parties agree to cooperate in good faith to effectuate all of the terms and 

conditions of this Agreement, including doing or causing their agents and attorneys 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. 
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H. Advice ofCounsel 

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. 

I. No Confidentiality 

The Parties acknowledge and agree that this Agreement is a public document that will 

need to be disclosed pursuant to 12 U.S.C. § 182l(s) and other applicable laws and regulations. 

J. Titles and Captions 

All section titles and captions contained in this Agreement are for convenience only and 

shall not affect the interpretation ofthis Agreement. 

IN WilNESS WHEREOF, the Parties have hereto caused this Agreement to be 

executed by each ofthem or their duly authorized representatives on the dates hereinafter 

subscribed. 

(b)(6) 

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