SETTLEMENT AND RELEASE AGREEMENT 

This Settlement and Release Agreement ("Agreement") is made as of this 10th day of 

August, 2011, by, between, and among the following undersigned parties: The Federal Deposit 

Insurance Corporation as receiver of Butler Bank, Lowell, Massachusetts ("FDIC-R"), and John 

H. Pearson, Jr. ("Settling Defendant"). The FDIC-R and the Settling Defendant may be referred 

to herein individually as a "Party" and collectively as the "Parties." 

RECITALS 

WHEREAS: 

1. Prior to April 16, 2010, Butler Bank ("Bank") was a depository institution 

organized and existing under the laws of the Commonwealth of Massachusetts; 

2. On April 16, 2010, the Bank was closed by the Massachusetts Division of Banks 

and, pursuant to 12 U.S.C. § 1821(c), the FDIC-R was appointed receiver of the Bank. 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; 

3. Among the assets to which the FDIC-R succeeded were any and all of the Bank’s 

claims, demands, and causes of actions 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 and/or officers of the Bank; 

4. The FDIC-R is investigating claims against the Settling Defendant, who served as 

a director and officer of the Bank. The Settling Defendant denies liability for the FDIC-R’s 

claims; 

5. The Settling Defendant and the Federal Deposit Insurance Corporation ("FDIC") 

have entered into a Stipulation and Consent to the Issuance of an Order to Pay ("Consent 

Agreement") dated August 10, 2011, whereby, among other things, the Settling Defendant has 

agreed to pay a civil money penalty in the amount of $225,000, and the FDIC has agreed to remit 

the civil money penalty on the condition that the Settling Defendant pays $225,000 to the 

FDIC-R; and 
6. The undersigned Parties deem it in their best interests to enter into this Agreement 

to avoid the uncertainty, trouble, and expense of 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: 

AGREEMENT 

SECTION I: Payment to the FDIC-R 

A. As an essential covenant and condition to this Agreement, the Settling Defendant 

has agreed to pay the FDIC-R the sum of $225,000 ("Settlement Funds"), as specified in the 

Consent Agreement. 

B. Within thirty (30) days of the date of the Consent Agreement, the Settlement 

Funds shall be delivered to the FDIC for forwarding to the FDIC-R, or to the FDIC-R with a 

copy to the FDIC, by cashier’s check drawn upon a depository institution acceptable to the 

FDIC-R. 

In the event that the Settlement Funds are not delivered to the FDIC or to the 

FDIC-R within thirty (30) days of the date of the Consent Agreement, interest shall accrue on all 

unpaid amounts at the rate of 5% per annum from the date that is thirty-one (3 1) days after the 

date of the Consent Agreement, until the date of payment. 

C. In addition, and without waiving any other rights that the FDIC-R may have, in 

the event that all Settlement Funds are not received by the FDIC or the FDIC-R within thirty (30) 

days of the date of the Consent Agreement, then the FDIC-R, in its sole discretion, shall have the 

right at any time prior to receipt of all Settlement Funds (including all accrued interest) to declare 

this Agreement null and void, shall have the right to extend this Agreement for any period of 

time until it receives all Settlement Funds (irn5luding all accrued interest), and/or shall have the 

right to enforce this Agreement against the Settling Defendant, in which event the Settling 

Defendant agrees to jurisdiction in Federal District Court in Massachusetts and agrees to pay all 

of the FDIC-R’s reasonable attorney’s fees expended in enforcing the terms of this Agreement. 
Any decision by the FDIC-R to extend the terms of this Agreement or to accept a portion of the 

Settlement Funds shall not prejudice its rights to declare this Agreement null and void with 

respect to the Settling Defendant at any time prior to receipt of all Settlement Funds (including 

all accrued interest) or to enforce the terms of this Settlement Agreement; provided, however, 

that in the event the FDIC-R declares this Agreement null and void, the FDIC-R will return all 

amounts paid to it under this Agreement by the Settling Defendant. 

SECTION II: Releases 

A. Release of the Settling Defendant by the FDIC-R. Effective upon receipt in full 

of the settlement funds plus any accrued interest described in SECTION I above, and except as 

provided in PARAGRAPH II.C. below, the FDIC-R, for itself and its successors and assigns, 

hereby releases and discharges the Settling Defendant and his heirs, executors, administrators, 

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, belonging to the FDIC-R that 

arise from or relate to the performance, nonperformance, or manner of performance of the 

Settling Defendant’s functions, duties and actions as an officer and director of the Bank. 

B. Release of the FDIC-R by the Settling Defendant. Effective simultaneously with 

the release granted in PARAGRAPH II.A. above, the Settling Defendant, on behalf of himself 

individually and his respective heirs, executors, administrators, agents, representatives, 

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

directors, 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 Bank or to the performance, nonperformance, or manner of performance of the 

Settling Defendant’s respective functions, duties and actions as an officer and/or director of the 

Bank. 

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C. Express Reservations from Releases by the FDIC-R. 

1. Notwithstanding any other provision, by 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 the Settling Defendant or any other person 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 the FDIC-R, the Bank, other 

financial institutions, or any other person or entity, including without limitation 

any such claims acquired by the FDIC-R as successor in interest to the Bank or 

any person or entity other than Bank; 

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

Agreement; and 

C. which are not expressly released in Paragraph II.A. above. 

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 FDIC in the exercise of its supervisory or regulatory authority or to 

diminish its ability to institute administrative enforcement proceedings seeking removal, 

prohibition or any other administrative enforcement action which may arise by operation 

of law, rule or regulation. 

3. Notwithstanding any other provision, this Agreement does not purport to 

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

through either the Department of Justice, the United States Attorney’s Office for the 

District of Massachusetts or any other federal judicial district. In addition, the FDIC-R 

specifically reserves the right to seek court-ordered restitution pursuant to the relevant 

provisions of the Victim and Witness Protection Act, 18 U.S.C. § 3663, el seq., if 

appropriate. 

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SECTION III: Waiver of Dividends and Proceeds from Litigation 

To the extent, if any, that the Settling Defendant is or was a shareholder of the Bank or its 

holding company and by virtue thereof is 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 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 Home Loan Bank Board 

(or its successors), the Office of Thrift Supervision, the Resolution Trust Corporation (or its 

successors), the FDIC, the Federal Savings and Loan Insurance Corporation Resolution Fund (Or 

its successors), or the United States government in connection with Butler Bank, its 

conservatorship or receivership, the Settling Defendant hereby knowingly assigns to the FDIC-R 

any and all rights, titles and interest in and to any and all such dividends, payments or other 

distributions, or such proceeds. 

SECTION IV: Representations and Acknowledgements 

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 that this Agreement is not an admission or evidence of liability by any of them 

regarding any claim. 

B. Execution in Counterparts. 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 hereto, 

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. 

C. Binding Effect. Each of the undersigned persons represents and warrants that 

they are a Party 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, administrators, representatives, 

successors, and assigns. 

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

according to applicable federal law or, in its absence, the laws of the Commonwealth of 

Massachusetts. 

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. This Agreement may not be amended or modified except by another written 

instrument signed by the Party or Parties to be bound thereby, or by their respective authorized 

attorney(s) or other representative(s). 

F. Specific Representations Warranties and Disclaimer. The Parties expressly 

acknowledge that, in determining to settle the claims released herein, the FDIC-R has reasonably 

and justifiably relied upon the accuracy of the financial information, including but not limited to 

personal financial statements and related materials, submitted by the Settling Defendant to the 

FDIC ("Financial Information"). If, in such Financial Information, the Settling Defendant has 

failed to disclose any material interest, legal, equitable, or beneficial, in any asset, the Settling 

Defendant agrees to cooperate fully with the FDIC-R to transfer his interest in the asset to the 

FDIC-R and to sign any and all documents necessary to transfer his interest in the asset to the 

FDIC-R. Moreover, if, in his Financial Information, the Settling Defendant has failed to disclose 

any material interest, legal, equitable, or beneficial, in any asset, the FDIC-R, in its sole 

discretion, may exercise one or more or all of the following remedies: (a) the FDIC-R may 

declare the releases granted to the Settling Defendant as null and void; (b) the FDIC-R may 

retain the Settlement Funds; and (c) the FDIC-R may sue the Settling Defendant for damages, an 

injunction, and specific performance for breach of this Agreement. The Settling Defendant 

agrees that if, in his Financial Information, he has failed to disclose any material interest, legal, 

equitable, or beneficial, in any asset, the Settling Defendant consents to the reinstatement of the 
FDIC-R’s claims and waives any statute of limitations that would bar any of the FDIC-R’s 

claims against him. 

G. Reasonable Cooperation. 

The undersigned Parties agree to cooperate in good faith to effectuate all 

the terms and conditions of this Agreement, including doing or causing their agents and 

attorneys to do whatever is reasonably necessary to perform the terms of this Agreement. 

2. Further, the Settling Defendant agrees to cooperate fully with the FDIC-R 

in connection with any action required under this Agreement. Any such cooperation that 

involves any out of pocket costs is subject to reasonable reimbursement by the FDIC-R 

pursuant to its internal guidelines and policy for such reimbursement. Such cooperation 

shall consist of: 

a. producing all documents requested by the FDIC-R, without the 

necessity of subpoena, as determined by the FDIC-R, in its sole discretion, to be 

relevant to the Bank; 

b. making the Settling Defendant available upon request by the 

FDIC-R at reasonable times and places for interviews regarding facts, as 

determined by the FDIC-R, in its sole discretion, to be relevant to the Bank; 

C. appearing to testify, upon request by the FDIC-R, in any matter 

determined by the FDIC-R, in its sole discretion, to be related to the Bank, 

without the necessity of a subpoena; and 

d. signing truthful affidavits upon request by the FDIC-R regarding 

any matter, as determined by the FDIC-R, in its sole discretion, to be relevant to 

the Bank. 

H. 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. 

’A 
1. Enforceability. In the event that any provision of this Agreement is held to be 

void or unenforceable by a court of competent jurisdiction, the remaining provisions of this 

Agreement shall have the same force and effect as though the void or unenforceable parts have 

been deleted. 

J. Authorship. In the event any dispute, disagreement or controversy arises 

regarding this Agreement, the Parties shall be considered joint authors and no provision shall be 

interpreted against any Party because of authorship. 

K. Titles and Captions. All section titles or captions contained in this Agreement are 

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

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. 

FEDERAL DEPOSIT INSURANCE CORPORATION 

As Receiver of Butler Bank 

Date: August Li 2011 

Dominic A. Ami, Esq. 

Counsel 

Date: August , 2011 

JOHN H. PEARSON, JR. 

By: 

- John H. Pearson, Jr. 

(b)(6) 

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1. Enforceability. In the event that any provision of this Agreement is held to be 

void or unenforceable by a court of competent jurisdiction, the remaining provisions of this 

Agreement shall have the same force and effect as though the void or unenforceable parts have 

been deleted. 

Authorship. In the event any dispute, disagreement or controversy arises 

regarding this Agreement, the Parties shall be considered joint authors and no provision shall be 

interpreted against any Party because of authorship. 

K. Titles and Captions. All section titles or captions contained in this Agreement are 

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

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. 

FEDERAL DEPOSIT INSURANCE CORPORATION 

As Receiver of Butler Bank 

Date: August , 2011 By: 

Dominic A. Arni, Esq. 

Counsel 

JOHN H. PEARSON, JR. 

(b)(6) 

Date: August2011 By: