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SETTLEMENT AND RELF ..ASE AGREEMENT 

This Settlement and Release Agreemenr ("Agreement") is made as of lhis~ay of 

April, 2011, by, between, and among the folJowing undersigned parties: The Federal Deposit 

Insurance Coxporat1on as Receiver of Citizens Community Bank ("FDIC-R), Ja.-nes Bovino, Joel 

Belgard, Richard Lanz~ Patrick Sanzari, Anthony Sciuto, Jack Vaughan, Charles Kaufman, 

James Atieh, and Thomas Emery (collectively, "the Settling Defendants"). The FDIC·R and the 

Settling Defendants may be referred to herein individualJy as a "Party" and collectively as the 

"Parties". 

RECITALS 

This Agreement is entered into in reference to the following: 

L Prior to May 1, 2009, Citizens Community Bank (~~cCB" or "the Bank'') was a 

state-chartered commercial bank operating in the State of New Jersey. 

· 2. On May I, 2009, the New Jersey Department of Banking and Insurance closed 

CCB and the FDIC·R was appointed receiver pursuant to 12 U.S.C. § 182l(c). In accordance 

\\rlth 12 U.S.C. § 1821(d), the FDIC-R, as receiver, succeeded to all rights, titles, powers and 

privileges of the Bank, including those with respect to its assets. Among the assets to which the 

FDIC~R succeeded were any and all of claims, demands, and causes of actions against its former 

directors, officers and employees arising from rhe performance, nonperformance and/or manner 

of perfonnance of their respective functions, duties and acts as directors, officers and/or 

employees of the Bank. 

3. National Union Fire Insurance Company of Pittsburgh, Pa. ("National Union") 

issued Financial Institutions Risk Protector Policy Number .._I __ ····-········-·······-········ ..... ····¥the ... ''Policy~'),Ib.~(b.)(4) 

Settling Defendants have made claims under the Policy in response to claims asserted by the 
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FDIC-R. National Union has raised questions and reserved rights as to whether the Policy is 

applicable to all such claims for payment and/or reimbursement of Loss. 

4. The Parties deem it in their best interests to enter into this Agreement to avoid the 

uncertainty, trouble, and expense of litigation. Among other things, the Parties have agreed that 

the Agreement shall be a settlement and release of all claims held by the FDIC-R) including its 

agents, successors and assigns, for all c1aims now or hereafter held by the FDIC-R against an 

former officers, directors and employees ofCCB (collectively, the "Covered Persons'') that arise 

from or relate to the perfonnance, non-perfonnance or manner of performance of the Covered 

Persons' respective functions, duties and/or actions as employees, officers and/or directors of 

CCB. 

NOW, THEREFORE, in consideration of the promises, undertakings, payments, and 

releases stated herein, the sufficiency and receipt of which consideration is hereby 

acknowledged, the Parties agree as foJlows: 

Section I: Payment to FDIC-R 

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

National Union shall pay to the FDIC~R the sum of One Million Five Hundred Fifty Thousand Dollars 

($1 ,550,000) ( .. the Settlement Funds). 

B. The Settlement Funds shall be delivered to FDIC-R within ten (10) business days 

("the Due Date") from the date that the Settlement and Release Agreement is fnlly executed by all 

Parties. 

C. lf all Settlement Funds are not received by the due date, this Agreement shall be deemed 

null and void, having no legal validity or binding affect upon the Parties, other than the FDlC-R's right, 

in its sole discretion, to enforce ihis Agreement against the Party or Parties failing to deliver the 

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Settlement Funds, in which event the Parties agree to jurisdiction in Federal District Court in New 

Jersey. 

Section II: Releases 

A. Release of Settling Defendants and Covered Persons by FDIC-R 

Effective upon payment of the Settlement Funds pursuant to Section I above, the FDJCR. for itself and its agentst successors and assigns~ hereby releases and discharges each of the 

Seitling Defendants and all Covered Persons from any and all claims, demands~ obligations. 

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

belonging to the FDIC-R. that arise from or relate to, (1) the perfonnance, nonperformance, or 

manner of performance of the Settling Defendant.:;~ and/or Covered Persons' respective 

functions, duties and actions as employees, officers and/or directors of CCB and! or (2) the fact 

that any Settling Defendant or Covered person is or was an officer, director~ or employee of 

CCB. For purposes of clarification and certainty) this release is applicable to, and includes each 

of the Settling Defendants and each. and every Covered Person who is not a Settling Defendant, 

as well as each and every of their respective heirs, executors, administrators, representatives, 

successors and assigns. Tbe FDIC bas also been advised that former officers and directors 

of CCB, including several of the Settling Deferadaots, have simultaneously entered into an 

agreement to settle certain claims asserted in the action entitled Robert Lieb d. AL v. James 

J. Bovino et al. in the United States District Court for the District of New Jersey, Docket 

No. 2:10~CV..02685. Although the FDIC-R did not partkipate in the aforementioned 

settlement, it does not object to tbe settlement of the aforementioned action. 

B. Release of FDIC-R by the Settling Defendants 

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Effective simultaneously with the release granted in Paragraph A of this Section II, the 

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

administrators5 agents, representatives, successors and assigns, hereby release and discharge 

DIC-~ and its employees, officers, directors, attorneys, 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, or to the performance, 

nonperfonnance, or manner of perfonnance of the Settling Defendants• respective functions, 

duties and actions as officers and/or directors of CCB or that arise from or relate to the Policy. 

C. Release of Natio.naJ Union by FDIC-R 

Effective sjmultaneously with the releases granted in Paragraphs A and B of this Section 

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

Union, its parents, subsidiaries, affiliates and reinsurers, and their respective employees. officers, 

directors, agents, representatives, successors and assigns, from any Md 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 Policy. The FDIC-R agrees that any interest it may have under the 

Policy is extinguished. 

D. Release of National Union by Settling Defendants 

Effective simultaneously with the releases granted in Paragraphs A and B ofthls Section 

II, the Settling Defendants, on behalf of themse]ves individually, and their respective heirs, 

executors, administrators, agents, representatives, successors and assigns, hereby release and 

discharge National Union, its parents, subsidiaries~ affiliates and reinsurers, and their respective 

employees, officers, directors, agents, repre.sentatives, successors and assigns, from any and all 

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

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in equity, that are based upon claims by the FDIC-R against the Settling Defendants that have 

been released pursuant to this Agreement, including but not limited to any contractual or extracontractual claims based upon the handling. defense) or resolution of the claims released by the 

FDIC"R. The Parties agree that this release shall be construed so that the Settling Defendants are 

deemed to release claims against only to the extent that the FDIC-R is deemed to release claims 

against the Settling Defendants. Furthermore, thls release shall not affect obligations with respect 

to Defense Costs incurred by the Settling Defendants. 

E. Express Reservations From Releases By FDIC-R 

1. Not\vithstanding 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 the Settling Defendants or any other person or entity for liability, if 

any, incurred as the maker, endorser or guarantor of any promiswry note or other evidence of 

indebtedness payable or owed by them or any of them to FDIC-R, other financial institutions, or 

any other person or entity, including without limitation any claims acquired by Federal Deposit 

lnsurWlce Corporation in its corporate capacity (''FDIC~Cj or as successor in interest to the 

Bank or any person or entity other than Bank; and 

b. against any person or entity not express]y released in this Agreement. 

2. Notwithstanding any other provision, nothing in tlris Agreement shall be 

construed or interpreted as limiting. waiving, releasing or compromising the jurisdiction and 

authority of the FDIC~C in the exercise of its supervisory or regulatory authority or to diminish 

its ability to institute administrative enforcement proceedings seeking removal, prohibition or 

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any other administrative enforcement action which may arise by operation of law, rule or 

regulation. 

3. Notwithstanding any other provision hereof, 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 New Jersey or 

any other federal judicial district. In addition, the right of the FDIC-R io seek court ordered 

restitution pursuant to tbe relevant provisions of the Victim and Witnes..~ Protection Act, 18 

U.S.C. § 3663, et. seq., if appropriate, also is not waived or released. 

4. The FDIC-R represents and warrant') that, as of the date of this Agreement, it has 

not transferred any claim, cause of action or other right that would be released hereunder if such 

claim, cause or action or right had not been previously transferred by the FDIC-R prior to the 

date of this Agreement, and to that end the Parties agree that the release by the FDIC-R set forth 

in Paragraph A of Section n is a full and complete release of al1 such claims, causes of action 

and rights. 

Section ill: Waiver of Dividends 

To the extent, if any, that Settling Defendants are or were depositors, creditors and/or 

shareholders of and by virtue thereof are or may have been entitled to a dividend, payment. or 

other pro-rata distribution upon resolution of the receivership of they hereby knowingly assign to 

the FDIC-R any and all rights, titles and interest in and to any and all such dividends, payments 

or other pro rata distributions. 

Section IV: Representations and Acknowledgements 

A. No Admission of Liabilitv. Each of the Parties acknowledge and agree that the matters 

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

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Agreement is not an admission or evidence of Jiability or of coverage by any of them regarding any 

claim. 

B. Ex«ution 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 bad 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 for which they are 

signing, 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. Spedfic Representations and Warranties. The Settling Defendants severally but not 

jointly swear and affirm that all financial information in the affidavits and financial statements prepared 

by them and provided to the FDIC-R pursuant to the FDIC-R's request was true and accurate at the time 

of submission. 

E. Reas()aable Cooperation. 

1. The undersigned parties agree to cooperate in good faith to effectuate all the tenns 

and conditions of this Agreement. 

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

to applicable federal Jaw. or in its absence, the laws of the State of New Jersey. 

G. Entire Agreement and Amendments. This Agreement constitutes the entire agreement 

and understanding between and among the undersigned Parties concerning the matters set forth herein. 

7 
(b )(6.) .... 

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

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

attomey(s) or other representative(s). 

H. Advice of Counss:l. 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. Enforcem~nt of Agreement. In the event that any Party brings suit to enforce 

the terms of this Agreement> or based on the alleged breach of the terms hereof, the Parties agree 

to exclusive venue in the United States District Court for the District of New Jersey, or 1n the 

event that the said federal court does not have jurisdiction, the Superior Court in and for Essex 

County. In such event, the prevailing Party or Parties shall be entitled to recover a.il costs 

incurred from the non-prevailing party or parties, including reasonable attorneys' fees. 

J. Time is of the Essence. Time i.s of the essence in this Agreement, including 

specifically, payment of the Settlement Funds to FDIC~R on or before the due date. 

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 

Dated ~/; 

Ja 

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(b )(6_)__ ____ _ -----~-

Dated; .f (I ~ / ({ ------~ 

Dated:- ----

Dated: 

Patrick Sanzari 

Dated: 

Anthony Sciuto 

Dated: 

Jack Vaughan 

Dated: 

Charles Kaufman 

Dated: 

Thomas Emery 

Dated: 

James Atieh 

Nationat Union Fire Insurance Company ofPittsburgh1 PA 

By:------ --- ----

Title:. ________ ___ _ 

Dated:----- Print Name: - - - -· 

i# 1333477 
Page 10 

Dated:----- Joel Belgard 

(b )(G)......................... .... oaiea: Y-tb .. ·-.. ~f..... .... ,................................................................ L R~i~ch td Lm-- --~--~~--------~ 

Dated; ____ _ 

Patrick Sanzari 

Dated: ------ Anthony Sciuto 

Dated;----- Jack Vaughan 

Dated:----- Charles Kaufman 

Dated: ----- Thomas Emery 

Dated:--- -- James Atieh 

National Union Fire Insurance Company of Pittsburgh. PA 

By: ______________________ __ 

Title: ___________ _ 

Dated:--- - - Print Name: 

9 

# 1333477 
0411 512011 11 :07 Page 11 (FAX)201 491 ettn P.0111011 

Dated:-----

Joel Belgard 

Dated:------ Ll ·-· 

(b)(6) o;;~;t;~;zc,rr<•················································································································· 

Dated:-----

- \ 

Anthony Sciutn 

Dated:------

Jack_ Vaugha.'l 

Dated:------

Char)es Kauftnan 

Dated:-----

Thomas Emery 

Dated:-----...... JamesAtieh 

National Union Fire lnsurance Company of Pittsburgh, PA 

By: __________ ~------------

Title: _________________ _ 

Dated: __ .;__ __ Print Name: ________ ~-
Page 12 

Dated: 

Joel Belgard 

Dated:----·---~··-··· Richard Lanza 

Dated: ----- Patrick Sanz.ari 

(b)(6) 

Diil:(E ~# J 

u-~A~n~m~o~n~y~s~c~tu~ro~~~.~------------~<s~~ 

Dated: ·--- ··-·····-···---·-·---·------- Jack Vaughan 

Dated: ----- Charles Kaufman 

Dated:---· ··-- Thomas Emery 

Dated: ---- James Atieh 

National Union Fire Insw1mce Company ofPittsburgh, PA 

By: __________________ __ 

Title: --------------- Dated:----- Print Name:----------

# tJ33477 
Page 13 

Dated:-----

Joel Belgard 

Dated:-----

Richard Lanza 

Dated:------

Patrick Sanzari 

Dated: ____ __ 

(b )(6) 

Dated:-----

Dated: ____ _ 

Charles Kaufman 

Dated:-----

Thomas Emery 

Dated: ____ _ 

James Atieh 

National Union Fire Insurance Company of Pittsburgh, PA 

By: _______________ __ 

Title: ___________ _ 

Dated:~---- Print Name:----------

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Dated: ___ _ 

Joel Betgw<f······ 

Dated: ____ _ 

Richard Lanza 

Dated: ----- ---- - - --- ··-········- ·--- Patrick Sanzari 

Dated:--- - - Anthony Sciuto 

Dated: ____ _ 

(b)(S .. ), __ n __ ated_ :_ tF"rs .. liTf""---t- -~----

Dated; - ----------· Thomas Emery 

Dated: --- - James Atieh 

National Union Fire Insurance Company of Pittsburgh. PA 

By: - -------------- ----- Title: ___ _ 

Dated: ----- Print Name: _____ ___ _ 

9 

#1333411 
Page 15 

Dated;-- - -- Joe] Belgard 

Dated: ---~-

Richard Lanza 

Dated: _ _ _ _ _ 

Patrick Sanzari 

Dated: ____ _ 

Anthony Sciuto 

Dated: ----- Jack Vaughan 

Dated: ____ _ 

Charles Kaufinan ... 

Dated:----- JamesAtieh 

National Union Fire Insurance Company of Pittsburgh; PA 

By: ----------------- -------- Title:. ____________ _ 

Dated:----- Print Name:------- ---

9 

~ 1333417 
Page 16 

Dated:---~- Joel Belgard 

Dated: ____ _ 

Richard Lanza 

Dated:-----

Patrick Sanzari 

Dated:-----

Anthony Sciuto 

Dated:------~ Jack Vaughan 

Dated: ____ _ 

Charles Kaufinan 

Dated:-----

(b )(6) - f);;d; ¢/):; 

Natjpnaf Union Fire lnSUfJ!llCe ComPanY of Pitt.sburgh, PA 

By: ____________________ __ 

Title: ------------------ Dated:----- Print Name:---------

9 

111333471