SETTLEMENT AND RELEASE AGREEMENT 

This Settlement and Release Agreement ("Agreement") is effective as of April~2014, 

by, between, and among the following Wtdersigncd parties: (a) Plaintiff Federal Deposit 

Insurance Corporation as Receiver for Ravenswood ~ank ("FDIC-R"); (b) Eric Hubbard, Ronald 

Friedman, Raymond Prosser, Kalman Shiner, Charles Eck, Roger Luri, and Sam Segvich 

(collectively, the ''Settling Defendants"); and (c) Federal Insurance Company ("Insurer") 

(individually, the FDIC-R, the Settling Defendants and the Insurer may be referred to herein as 

"Party" and collectively as the «Parties"). 

RECITALS 

WHEREAS, prior to August 6, 2010, Ravenswood Bank, Chicago, Illinois ("Bank") was 

a depository institution organized and existing under the laws of the State of Illinois; 

WHEREAS, on August 6, 2010, the 111inois Department of Financial and Professional 

Regulation closed the Bank and pursuant to 12 U.S.C. § 1821(c), and the Federal Deposit 

Insurance Corporation was appointed Receiver. In accordance with 12 U.S.C. § 1821 (d), the 

FDIC-R succeeded to all rights, titles, powers and privileges of the Bank, including those with 

respect to its assets; 

WHEREAS, among the assets to which the FDIC-R succeeded were all of the Bank's 

claims, demands, and causes of action against its former directors, officers, and employees 

arising from the performance, nonperformance, and manner of performance of their respective 

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

WHEREAS, on August 2, 2013, the FDIC-R filed a complaint for money damages 

against the Settling Defendants, each of whom served at various times as a director and/or ofticer 

of the Bank. 'Jbose claims for damages arc now pending in the United States District Court for 
the Northern District of Illinois in FDIC v. Hubbard et al., Case 1 : 13-cv-05530 ("D&O Action"). 

The Settling Defendants have denied and continue to deny liability in the D&O Action. 

WHEREAS, Insurer issued a director and officer liability policy numberooJL... __ ·····-······· ...... ·kor ......... .(.b.J.(4..) 

the period July 25, 2009 to July 25, 2011 ("Policy"), which insured the directors and officers of 

the Bank according to the tenns, provisions, and conditions of the Policy. The Settling 

Defendants made claims for coverage under the Policy. Insurer has reserved its rights to deny 

coverage under the Policy for claims asserted by FDIC-R against the Settling Defendants. 

WHEREAS, the und~igned Parties deem it in their best interests to enter into this 

Agreement to avoid the uncertainty and expense of further litigation. 

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 1: Paymeot to FDIC-R 

A. As an essential covenant and condition to this Agreement, on or before thirty (30) 

calendar days following the date the FDIC-R executes this Agreement (the thirtieth calendar day 

shall be the "Payment Date"), the Insurer agrees to pay the FDIC-R the sum of Three Million 

Four Hundred Twenty-Five Thousand Dollars (U.S. $3,425,000) ("the Settlement Payment") on 

behalf of the Sett1ing Defendants. 

B. The Insurer shall deliver the Settlement Payment to the FDIC-R by direct wire 

transfer into the following account: 

Bank: Federal Home Loan Bank ofNew York 

(b)( 4 ) .................................... ···· ABARouting··Number:IL.. ·······_···· ___ _. 

For Credit to: FDIC National Liquidation Account 

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(b)( 4 t ............................. ..... :AccounrNum15er·d'-...... _ __ _, 

FIN 1 0276; Ravenswood Bank 

Contact: Barry H. Gottfried, 703-562-2519; Professional Liability[:::.:JDIFFund ............ .Ct.?.1(4.) 

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

Payment Date, then the FDIC-R. in its sole discretion, shall have the right at any time prior to 

receipt of the Settlement Payment in full (including all accrued interest) to: 

1. Extend the period oftime for the Settlement Payment, including interest 

accruing from the Payment Date, through the date of payment at a rate calculated in accordance 

with 26 U.S.C. § 662l(a)(3); and/or 

2. Terminate the Agreement and continue to litigate the 0&0 Action; or 

3. Enforce this Agreement, in which event the Settling Defendants and 

Insurer agree to jurisdiction in the United States District Court for the Northern District of 

Illinois and the Insurer agrees to pay all of the FDIC-R's reasonable attorney's fees and costs 

expended in enforcing the tenns of this Agreement; and/or 

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

Any extension of time under Section J.C. J for delivery of the Settlement Payment or 

acceptance of a portion of the Settlement Payment shall not prejudice the FDIC-R's rights to take 

any of the actions set forth in Section I.C.2 through l.C.4 at any time prior to receipt of 

Settlement Payment (including all accrued interest) in full. 

SECTION II: Stipulation and Dismissal 

Within ten business days after the latter of(l) full execution of this Agreement by all of 

the Parties, and (2) receipt of the Settlement Payment, plus any accrued interest, the FDIC-R 

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shall file a stipulation of dismissal with prejudice, executed by the attorneys for all Parties 

hereto, in the form attached hereto as Exhibit A, in the D&O Action. 

SECTION Ill: ReleasH 

A. The FDTC-R's Releases. 

Upon receipt of the Settlement Payment in full and except as provided in Section III.D., 

the FDIC-R, for itself and its successors and assigns, hereby releases and discharges: 

1. The Settling Defendants, and each ofthem, and each of their respective 

heirs, executors, trustees, legatees, beneficiaries, administrators, agents, attorneys, 

representatives, successors, and assigns, from any and all claims, demands, contracts, 

obligations, damages, actions, and causes of action, direct or indirect, in law or in equity, known 

or unknown, belonging to or that ever did belong to the FDIC-R, that arise from or relate to, the 

performance, nonperformance, or manner of performance of the Settling Defendants' respective 

functions, duties and actions as officers and/or directors of the Bank including, without 

limitation, the causes of action alleged in the D&O Action. 

2. Insurer, its parents, subsidiaries, affiliates and reinsurers, and their 

respective employees, officers, directors, agentst attorneys, representatives, successors, and 

assigns, from any and all claims, demands, contracts, obligations, damages, actions and causes of 

action, direct or indirect. in law or in equity, known or unknown, that arise from or relate to the: 

Policy. As part of this release of the Insurer, the FDIC-R agrees that any interest it may have 

under th~ PoJjcy is extinguished. 

3. All other former d1rcctors, officers, and employees of the Bank (each a 

"Covered Person'') and their respective heirs, executors, trustees, legatees, beneficiaries, 

administrators, agents, attorneys, representatives, successors, and assigns (each a "Covered-

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Person Related Party"), from any and all claims, demands, contracts, obligations, damages, 

actions, and causes of action, direct or indirect, in law or in equity, known or unknown, 

belonging to or that ever did belong to the FDIC-R, that arise from or relate to, the performance, 

nonperformance, or manner of performance of a Covered Person's functions, duties and actions 

as directors, officers and/or employees of the Bank including, without limitation, the causes of 

action alleged in the D&O Action. This release shall be null and void as to any Covered Person 

if such Covered Person asserts any claim against the FDlC-R that arises from or relates to, the 

performance, nonperformance, or miUlller of performance of such Covered Person's functions, 

duties and actions as a director, officer, and/or employee of the Bank, including. without 

limitation, the causes of action alleged in the D&O Action. This release likewise shall be null 

and void as to any Covered-Person Related Party if such Covered-Person Related Party asserts 

any claim against the FDIC-R that arises from or relates to, the performance, nonperformance, or 

manner ofperformance of a Covered Person's functions, duties and actions as a director, officer, 

and/or employee of the Bank, including, without limitation, the causes of action alleged in the 

D&OAction. 

B. The Settling Defendants' Releases. 

1. The Settling Defendants' Release of the FDlC-R. 

Effective simultaneously with the releases granted in Section ill.A. above, the Settling 

Defendants, on behalf of thcmseh es individually, and their respective heirs, executors, trustees, 

legatees, beneficiaries, administrators, agents, attorneys, representatives, successors, and 

assigns, hereby release and discharge the FDIC-R, and its employees, officers, directors, agents, 

attorneys, representatives, successors and assigns, from any and all claims, demands, contracts, 

obligations, damages, actions, and causes of action, direct or indirect, in law or in equity, known 
or unknown, that arise from or relate to, the Bank or to the performance, nonperformance, or 

manner of performance ofth.e Settling Defendants' respective functions, duties and actions as 

officers and/or directors of the Bank including, without limitation, the causes of action alleged in 

the D&O Action. 

2. The Settling Defendants' Release of Each Other. 

Effective simultaneously with the release granted in Section liLA. above, the Settling 

Defendants, on behalf of themselves individually, and their respective heirs, executors, trustees, 

legatees, beneficiaries, administrators, agents, attorneys, representatives, successors, and assigns, 

hereby release and discharge each other, and/or any person who may be considered an "insured" 

as defined by the Policy, from any and all claims, demands, contracts, obligations, actions and 

causes of action, direct or indirect, in law or in equity, known or unknown, that arise from or 

relate to the Policy. 

3. The Settling Defendants' Release oflnsurer. 

Effective simultaneously with the releases granted in Section III.A. above, the Settling 

Defendants, on behalf of themselves individuaJ1y, and their respective heirs. executors, trustees, 

legatees, beneficiaries. administrators, agents, attorneys, representatives, successors, and 

assigns, hereby release and discharge Insurer, its parents, subsidiari~. affiliates, representatives, 

successors and assigns, from any and all claims, demands, contracts, obligations, damages, 

actions and caus~ of action, direct or indirect, in law or in equity, known or unknown, that arise 

from or relate to the D&O Action. This release shall not extend to Insurer's obligations to pay 

the Settling Defendants' legal and consulting fees incurred prior to the date of this Agreement's 

execution. This release shall not operate as a release of any ofthe Settling Defendants' remaining 

rights under the Policy with respect to any other claims, and remaining coverage under the 

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aggregate liability limits of the Policy. 

C. The Insurer's Release. 

1. Insurer's Release ofFDIC-R. 

Effective simultaneously with the releases granted in Section filA. above, Insurer, for 

itself, for its employees. officers, directors, agents, attorneys, representatives, successors, and 

assigns, for its parents, subsidiaries, affiliates and reinsurers, and 

and for their respecti,·e employees, officers, directors, agents, attorneys, representatives, 

successors, and assigns, hereby releases and discharges the FDlC-R, and its employees, officers, 

directors, agents, representatives, attorneys, successors, and assigns, from any and all claims, 

demands, contracts, obligations, damages, actions, and causes of action, direct or indirect, in law 

or in equity, known or unknown, that arise from or relate to the Policy. 

2. Insurer's Release of Settling Defendants. 

Effective simultaneously with the releases granttxi in Section Ili.A. above, Insurer, for 

itself and its successors and assigns, and on behalf of its parents, subsidiaries, affiliates and 

reinsurers, and their successors and assigns, hereby releases and discharges the Settling 

Defendants, and each of them, and each of their employees, officers, directors, agents, 

representatives, attorneys, 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 re]ate to the claims asserted by the FDIC in the 0&0 Action. 

D. Exceptions from Releases by FDIC-R. 

1. Notwithstanding any other provision of this Agreement, the FDIC-R does 

not release, and expressly preserves fully and to the same extent as if this Agreement had not 

been executed, any claims or causes of action against the Settling Defendants or any other person 

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or entity for liability, if any, incurred as the maker, endorser or guarantor of any promissory note 

or indebtedness payable or owed by them to FDIC-R, the Bank. other financial institutions, or 

any other person or entity, including without limitation any such claims acquired by FDIC-R as 

successor in interest to the Bank or any person or entity other than Bank; and against any person 

or entity not expressly released by the FDIC-R in this Agreement. 

2. Notwithstanding any other provision of this Agreement, 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 purport to waive, or intend to waive, any claims that could be brought by the United 

States through the Department of Justice, the United States Attorney's Office for any federal 

judicial district, or any other department or agency of the United States as defined by 18 U.S.C. § 

6. In addition, the FDIC-R specifica11y 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. ~,if appropriate. 

E. Common Exceptions from the Parties' Respective Releases. 

With respect to the FDlC-R, the Settling Defendants and the Insurer, none of the 

foregoing parties release, and expressly preserve fully and to the same extent as if this 

Agreement had not been executed, any claims or causes of action against any person or entity not 

expressly released by a Party in this Agreanent. 

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SECTION IV: Waiver of Dividends and Proceeds from Litigation 

To the extent, if any, that Settling Defendants are or were shareholders of the Bank or its 

holding company and by virtue thereof are or may be entitled to a dividend, payment, or other 

distribution upon resolution of the receivership of the Bank or proceeds in any litigation that has 

been or could be brought against the Federal Deposit Insurance Corporation in any capacity or 

against the United States based on or arising out of, in whole or in part, the closing of the Bank, 

or any alleged acts or omissions by the Federal Deposit Insurance Corporation in any capacity, 

the United States government, or any agency or department of the United States government in 

connection with the Bank, its conservatorship, or receivership, Settling Defendants hereby 

knowingly assign to the FDIC-R any and all rights, titles, and interest in and to any and aJI such 

dividends, payments, or other distributions, or proceeds. 

SECTION V: Representations and Acknowledgements 

A. Authorized Signatories. All of the undersigned ~ons represent and warrant that 

they arc Parties hereto or are authorized to sign this Agreement on behalf of the respective Party, 

and that they have the full power and authority to bind such Party 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. Advice of Counsel. Each Party hereby acknowledges that he or 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 its counsel. 

SECTION VI: Reasonable Cooperation 

A. The Parties agree to cooperate in good faith to effectuate all the tenn:; and 

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conditions of this Agreement. 

SECTION \-n: Other Matters 

A. No Admission of Liability. The undersigned Parties each acknowledge and agree 

that the matters set forth in this Agreement constitute the settlement and compromise of disputed 

claims and defenses, that this Agreement is not an admission or evidence of liability or infinnity 

by any of them 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. The Settling Defendants 

deny any fault, liability or wrongdoing as to any facts or claims alleged or asserted by FDIC-R in 

the D&O Action and in any other action or proceeding. Payment by Insurer shall not be an 

admissjon of coverage. 

B. Execution in Counterparts. This Agreement may be executed in counterparts by 

one or more of the Parties 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 

Parties subscribed thereto upon the execution by all Parties to this Agreement. Signature pages 

may be delivered by facsimile or e·maiJ trdllsmission, which will constitute complete deJjvery 

without the necessity to deliver original signed signature pages. 

C. Choice of Law. This Agreement shall be interpreted, construed and enforced 

according to applicable federal law, or in its absence, the laws of the State of Illinois, without 

regard to conflict oflaw rules. 

D. Notices. Any notices required hereunder shall be sent by registered mail, first 

class, return receipt requested, and by email, to the following: 

Ifto the FDIC-R: Christopher J. Graham, Jones Lemon & Graham LLP, The 

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Fulton House, 328 South. Second, Geneva, Illinois 60134; 630-208-0805; Fax: 630-208-4651; 

(b)(6) ... JL..: ... _-······-·······-·······-·······-·······-··· ____ _.land Barry H. Gottfried, Counsel, Professional Liability Unit, Federal 

Deposit Insurance Corporation, 3501 Fairfax Drive, Room VS-B-7018, Arlington, Virginia 

22226-3500; (703) 562-2519; Fax (703) 516~5067J 

If to the Settling Defendants: Jeffery M. Heftman, Gozdccki, Del Giudice, 

Americus, Farkas & Brocato LLP, 1 East Wacker Drive, Suite 1700, Chicago, Illinois 60601; 

(b)(6) ......... .(31.2)782~50JO;Fax-:(3l-2)782-4324;l.._---·---______ ...... 

If to Insurer: BrownynA. De Witt, 233 S. Wacker Drive, Suite 4700, Chicago, IL 

(b )(6 )....... . .................... 60606;(3J2)454-4740~{Fax)(3l2)454-440l;._l·_·· ____ __. 

E. Entire Agreement and Amendments. This Agreement constitutes the entire 

agreement and understanding between and among the undersigned 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 bound thereby, or by their respective authorized attomcy(s ), or other 

representative( s ). 

F. Titles and Captions. All section titles and captions contained in this Agreement 

are for convenience only and shall not affect the interpretation of this Agreement. 

G. Agreement Not Confidential. Pursuant to 12 U.S.C. § 1821(s), this Agreement 

cannot be and shall not be deemed to be confidential, and will be disclosed pursuant to the 

Federal Deposit Insurance Corporation's applicable policies, procedures, and other legal 

requirements. 

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

by each of them or their duly authorized representatives on the dates hereinafter subscribed. 

ll 
(b)(6) 

FEDERAL DEPOSIT INSURANCE CORPORATION AS 

RECEIVER FOR RAVENSWOOD BANK 

--:~~~~-~~~~-~[~~~-.~~~~~~ TITLE: ~Ov'C\&~ -

PRlNT NAME:~a--s:~i \~ . ~-\--\--r\ ~ 

12 
PRINT NAME: -""-e~r:.L..;t C...~.:....,Lk~h:....:. A_rJ..;.. . __ 

RONALD FRIEDMAN 

P~NAME: __________________ _ 

Date: - ------- RAYMOND PROSSER 

P~NAME: ___________________ _ 

Date: ------- KALMAN SHINER 

P~NAME: _ _________ ________ _ 

13 
Date: ERIC HUBBARD 

PRINT NAME: 

Date: /Jtgt L Ql; / C/ ~ RONALD FRlliDMAN 

(b)(6) ___ ___ ___ __ J,...~~~~~~~~-.:~~~----------~L 

PRINT NAME~,{~A) tfL.(} /1 E/?1 £&11 /f/1,1 

Date: - - ·-·· .. . _ .•.......... RAYMOND PROSSER 

PRINT NAME: -------------------

Date: ------ --~ 

KALMAN SH1NER 

PruNT NAME: ____ ~--------------

13 
Date: -- ERIC HUBBARD - - - -

P~TNAME: _________________ __ 

Date: -------- RONALD FRIEDMAN 

P~NAME: ______ ~----~-----

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PRINT NAME: RfitfVl CJ iJIJ 

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Date: ___ _ _ _ __ KALMAN SHINER 

P~KAME: _________________ __ 

13 
Date: ------- ERIC HUBBARD 

TnLE: ____________________ __ 

P~NAME: ________________ __ 

Da~: ____________ __ RONALD FRIEDMAN 

TITLE: ______________________ __ 

P~NAM& ________________ __ 

Date: ---------- RAYMOND PROSSER 

TlTI.E: ------------

P~NAME: _____________ ___ 

(b)(6) I Date: -----fY-+/-"J..r ..... ,L.f~"-'-/"---- KA.!-.--l ..... MAN ............... SH .... INE_R _____ __, 

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Date: 

(b )(6) 

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Date: ------

CHARLESECK I -

ROOERLURJ 

PRINT NAME: 

SAMSEGVICH 

P~TNAME:~-------------------

FEDERAL INSURANCE COMPA.~Y 

BY: 

TOLE: _____ ~~-------------

P~TNAME: ___________________ _ 

14 
Date: 

Date: (b)(6) ....... 

Date: 

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PRINT NAME: 

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PRJNTNAME: 

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PRINT NAME: 

Date: ___ ...;.__ _ _ FEDERALINSURANCECO~ANY 

BY: 

TITLE: -------------------------- PRINTNAME: 

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Date:: -------- CHARLES ECK 

PRmTNAME: ____________________ __ 

Dare: ______________ _ ROGERLURI 

PR~NAME: ____________________ __ 

Date: -......;.~,_~...;;,..2;;...:y~~;...,:/._,y:~-- SAM SEGVICH 

(b)(6) ____________ ]-~-----

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Date: ------------- FEDERAL INSURANCE COMPANY 

BY: 

TITLE: --------------- -----

PRmTNAMffi: ___________________ __ 

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