()(6)

Get. 18.2012 02:17 pM

DAVID GAZERWITZ, an individual

Dated:

DONALD GLASCOFF, an individual

Dated:

FREDERICK KELLER, an individual

Dated;

DAVID LICHTENSTEIN, an individual

Dated:

Dak 7 7p 5s v Bp

PATRICK MURPHY, an individual

Dated:

FABBLE 9490

BAGE.

is


()(6)

1, Title and Captions. All section titles and captions contained in this Agreement are
for convenience only and shell not affect the interpretation of this Agmement.

aa Authorship/Construction. This Agreement sets forth terms and agreements jointly
negotiated by the Parties, It is expressly agreed that this Agreement shall not be construed for or
against any Party by reason of which Party drafted it or against OneBeacon based on the fact that
it issued the Policy,

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 far The Park Avenue Bank

By:

Christine P. Hsu
Its; Counsel
Date:

CHARLES ANTONUCCI, an individual

Dated:

EDWARD BEYER, an individual

Dated: 7O- $72, )

BRUNO DeVINCK, an individual

Dated:


()(6)

CHARLES PRICE, an individual

Dated:

MENDEL ZILBERRERG, an individual

Dated:

ONEBEACON MIDWEST INSURANCE COMPANY

By:

Wayne A. Everson
Its: Claim Counsel
Date: October 2, 2012


2. OneHeacon and its employees, officers, directors, agents, representatives,
successors and assigns, from any and all claims that arise from or relate to the FDIC-R Claims
released herein with the exception of any claims for covered defense costs incurred up to the
time this Agreement is executed by that Settling Individual. To the extent that any claims
against the Settling Individuals are reserved in this Agreement (the “Reserved Claims”), the
Settling Individuals’ releases likewise exclude Settling Individuals’ potential claims against
OncBeacon arising from the Reserved Claims,

c QneBeacon’s Releases. Effective simultaneously with the releases granted in
Paragraphs [IL.A. and B. above, OneBeacon, for itself and its suceessors and assigns, and on
behalf of its parents, subsidiaries, affiliates, and reinsurers, and their successors and assigns,

hereby releases and discharges:

1, the FDIC-R and its employees, officers, directors, agents, representatives,
successors and assigns, from any and all claims that srise from or relate to the Policy; and

2. each of the Settling Individuals and their respective employees, officers,
directors, representatives, agents, heirs, executors, administrators, successors and assigns, from
any and all claims that arise from or relate to the FDIC-R Claims released herein. For
clarification, OneBeacon specifically releases the Settling Individuals from any liability for the

* Settlement Payment. However, to the extent the Settling Individuals’ releases exelnde any

elaims or potential claims against OneBcacon, all of QneReacon’s rights are preserved with
respect to those claims or potential claims by the Settling Individuals.

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:


()(6)

DAVID GAZERWITZ, an

Dated:

DONALD GLASCOFF, an individual

Dated:

FREDERICK KELLER, an individual

Dated:

DAVID LICHTENSTEN, an individus!

Dated:

ANGELA MIRIZZ1-OLSEN, an individual

Dated:

PATRICK MURPHY, an individual

Te FB pa


CHARLES PRICE, an individual

Dated:

MENDEL ZILBERBERG, an individual

(bX6)
" bye)
Dated: to/s/ i!
ONEBEACON MIDWEST INSURANCE COMPANY
(bX6)

By

Wafne A, Everson
is: Claims Counsel
Daie: October 2, 2012

14


DAVID UALEKWILZ, an maiviauda

Dated:

DONALD GLASCOFF, an individual

Dated:

FREDERICK KELLER, an individual

()(6)

Dated: fo /o2 7/2

DAVID LICHTENSTEIN, an individual



()(6)

()(6)

()(6)

()(6)

William P. Munday

MARC

210 Fark Avenue, Suite 301
Florham Park, New Jersey 07932

Anthony J. Rotondi
Rotondi, PLLC

708 3" Avenue, Sixth Floor
New York, NY_10017

a

Hf to GneBeacon:

Thomas J. Judge

Thompson, Loss & Judge, LLP
Two Lafayette Centre

1133 21" Street, NW, Suite 450
Washington, D.C, 20036

SECTION VIII: 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 or coverage by any of
them regarding any claim.

B. Execution in Counterparts. This Agreement may be executed in counterparis 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 cach 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 Parties represents and warrants that they

are a Party hereto or are authorized to sign this Agreement on behalf of the respective Party, and


directors, officers, or employees of the Rank or in any other capacity or b) any other individual
or entity, for dishonest or fraudulent conduct that directly caused the bond logs and only for the
amount of logs actually paid by the bond carrier.

2. Nothing herein shall be construed to admit the existence of, or to establish, any
claim or cause of action on the part of National Union Fire Insurance Company of Pittsburgh,
PA, OneBeacon America Insurance Company, or any other bond underwriter by way of
subrogation to claims of the FDIC-R, that would not exist had this Agreement not been executed,

SECTION IV: Waiver of Dividends and Proceeds from Litigation

To the extent, if any, that Settling Individuals are or were shareholders of the Bank or
Park Avenue Bancorp Inc. and by virtue thereof are or may be entitled to a dividend, payment, or
other distribution ugon 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 FHLBB, OTS, RTC,
FDIC, the FSLIC Resolution Fund or the United States government in connection with the Bank,
its conservatorship or receivership; they hefeby knowingly assign to the FDIC-R any and all
tights, titles and interest in and to any and all such dividends, payments or other distributions, or
such proceeds.

SECTION ¥: Financial Disclosures —
Specific Representations, Warranties and Disclaimer

A. Each Settling Individual has submitted to the FDIC-R a signed and notarized
Financial Disclosure Farm (FDIC-R form 7600/01), The Parties expressly acknowledge that, in
determining to settle the claims released herein, the FDIC-R has reasonably and justifiably relied
upon the acevracy of the financial information submitted by each Settling Individual to the
FDIC-R. The FDIC-R has no obligation to independently verify the completeness and accuracy

of each Financial Disclosure Form,


a against the Setilmg Individuals 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 FDIC-R, the Bank, other financial institutions, or any
other person or entity, including without limitation any claims acquired by FDIC-R as successor
in interest to the Bank er any person or entity other than Bank; and

b, against any person or entity not expressly released by the FDIC-R
in this Agreement.

2. Notwithstanding any other provision of this Agreement, nothing herein
limits, waives, releases, diminishes or compromises the jurisdiction and authority of the Federal
Deposit Insurance Corporation (in a capacity other than as FDIC-R) in the exercise of its
supervisory of regulatory authority under any statute or regulation, inclading but not limited to
12 U.S.C. § 1815, to institute administrative enforcement or other proceedings seeking removal,
prohibition, civil penalties, restitution or other relief it is authorized to seek pursuant of its
supervisory or regulatory authority against any person.

3. Notwithstanding any other provision of this Agreement, this Agreement
does not waive any claims which could be brought by the United States through the Department
of Justice, the United States Attomey’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 PDIC-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, et seq., if appropriate.

E. Express Reservation of Rights of Bond Carrier,

1. Notwithstanding any other provision, nothing in this Agreement shall
release or prejudice the rights of National Union Fire Insurance Company of Pittsburgh, PA,
OneBeacon America Insurance Company, or any other underwriter of any financial institution
bond, fidelity bond, or banker’s blanket bond on which the Bank is an insured, to bring any
claims by way of subrogation to the claims of the FDIC-R, against a) any directors, officers, or

employees of the Bank, including but not limited to the Settling Individuals, in their capacity as


DAVID GAZERWITZ, an individual

Dated:

DONALD GLASCOPF, an individual

Dated:

FREDERICK REULER, an individual

Dated:

DAVID LIGEEENSTEIN, an individuel

()(6)

Dated: EXCAKASE RTS, OU

ANGELA MIRIZZL-OLSEN, an individual

Dated:

PATRICK MURPHY, an individual

Dated:



SECTION VII: Notices
Any notices required hereunder shali be sent by registered mail, first class, return receipt

requested, and may also be sent by email, io the following:
Ifte the FDIC-R;

Christine P, Hsu

FDIC ~ Legal Division

3501 Fairfax Drive, VS-B-7054
Arlington, VA 22226-3500

()(6)

with a copy to:

Kathleen M. Balderston
Nixon Peabody LLP
437 Madison Avenue
New York, NY 10022

()(6)

If to the Settling Individuals:

Nathaniel Z. Marmur
Stillman & Friedman, P.C.
425 Park Avenue

New York, New York 10022

()(6)

Greg Markel

Cadwalader, Wickersham & Taft LLP
One World Financial Center

New York, NY 10281

Benjamin Akley

Pryor Cashman LLP

7 Times Square

New York, NY_16036-6569
(bX6)

Robert 8, Frenchunan
Bracewell & Guiliani LLP
1251 Avenue of the Americas
New York, NY 10020-1104


SETTLEMENT AND RELEASE AGREEMENT

This Settlement and Release Agreement (“Agreement”) is made as of this lgt day of
October, 2012, by, between, and among the following undersigned parties:

‘The Federal Deposit Insurance Corporation, in its capacity as receiver for The Park
Avenue Bank and not in any other capacity (@FDIC-R”)}, Charles Antonucci, Edward Beyer,
Bruno deVinck, David Gazerwitz, Donald Glascoff, Frederick Keller, David Lichtenstein,
Angela Mirizzi-()isen, Patrick R. Murphy, Charles Price, and Mendel Zilberberg (collectively,
the “Settling Individuals”), and OneBeacon Midwest Insurance Company (“OneBeacon”)
(individually, the FDIC-R, the Settling Individuals and OneBeacon may be referred to herein as

“Party” and collectively as the “Parties”.

RECITALS
WHEREAS:

1 Prior te March 12, 2010, The Park Avenue Bank (“Bank”) was a depository
institution organized and existing under the laws of the State of New York;

2 On March 12, 2010, the Bank was closed by the New York State Banking
Department and pursuant io [2 U.S.C. § 1821(c), 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;

3, Among the assets to which the FDIC-R suceceded were any and all of the Bank's
claims, demands, and causes of action against its former directors, officers and employees arising
from ihe alleged performance, nonperformance and manner of performance of their respective
functions, duties and acts as directors, officers and/or employees of the Bank;

4, The FDIC-R has asserted claims against certain persons, including the Settling

Individuals, who had each served at various times as directors, officers and/or employees of the

again


()(6)

i Authorship/Construction. This Agreement sets forth terms and agreements jointly
negotiated by the Parties. It is expressly agreed that this Agreement shall not be construed for or
against any Party by reason of which Party drafted it or against OneBeacon based on the fact that
it issued the Policy.

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 for The Park Avenue Bani:

ByO) Christine F. Hsu
Its: Counsel

Date: t lu fz.

CHARLES ANTONUCCE, an individual

Dated:

EDWARD BEYER, an individual

Dated:

BRUNO DeVINCK, an individual

Dated:


thal they have the full power and authority fo 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.

dD Choice of Law/Forum. This Agreement shall be interpreted, construed and
enforced according to applicable federal law, or in its absence, the laws of the State of New
York. Any legal action brought to enforce this Agreement shall be brought in the United States
District Court for the Southern District of New York, unless that Court lacks jurisdiction, in.
which event, or upon a final order determining a lack of jurisdiction, the Parties agree to
jurisdiction in the Supreme Court of New York, New York County.

E. Entire Agreement and Amendments. This Agreement constitutes the entire
agreament and understanding between and among the undersigned Parties conceming 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}.

¥, Reasonable Cooperation.
I, 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 effectuate the signing, delivery, execution, filing,
recording, and entry, of any documents necessary to conclude the Coverage Action, and to
otherwise perform the terms of this Agreement.

GS. Advice of Counsel. Each Party hereby acknowledges that he, she or it has
consulted with and obtained the advice of counsel pricr to executing this Agreement, and that
this Agreement has been explained to that Party by his, her or its counsel.

HL Severability. If any provision of this Agreement is held unenfarceable, then such
provision will, if possible, be modified to be enforceable but still reflect the Parties’ intentions.

In any event, the remaining provisions of this Agreement shall remain in full foree and offect.

i


B Subsequent to the execution of this Agreement, if the FDIC-R establishes via final
adjudication in an appropriate judicial or administrative forum that, in his or her Financial
Disclosure Form, a Settling Individual has intentionally 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 of all of the following remedies: (a) the FDIC-R may declare the releases granted to that
Seitling Individual as null and void (this will not render that Settling Individual’s Release of
OneBeacon null and void); (6) the FDIC-R may retain the full amount of the Settlement
Payment; and (¢} the FDIC-R may sue that Settling Individual for damages, an injunction or
specific performance for breach of this Agreement. The Settling Individual agrees that if, in his
or her Financial Disclosure Form, he or she has intentionally failed to disclose any material
interest, legal, equitable or beneficial, in any asset, the Settling Individual consents to the
reinstatement of the FDIC-R Claims and the calculation of any statute of limitations that would
bar any of the FDIC-R Claims against him or her would be calculated as modified by Section V1

of this Agreement.

SECTION VI: Termination
In the event the FDIC-R exercises its right to terminate this Agreement as provided
herein, then, for the purposes of any statute of limitations or other time-based defense to any of
the claims of the FDIC-R, the parties to this Agreement shall be deemed to have reverted to their
respective statuy as of 5:00 p.m. Eastern Time of the date this Agreement was signed by the

FDIC-R.


()(6)

CHARLES PRICK, an individual

Dated: 70/8 fF 2

MENDEL ZILBERBERG, an individual

Dated:

ONEBEACON MIDWEST INSURANCE COMPANY

By:

[insert representative}
Tis: [title]
Date:


Any exiension of time for delivery of the Settlement Payment shall not prejudice the FDIC-R’s
right to take other action or seek any relief afer such period of extension has expired, including
the right to bring an action to enforce the Agreement or terminate the Agreement.

SECTION I: Effect of Dismissal of the Coverage Action

A It is the understanding of all the Parties that this Settlement Agreement
resolves the FDIC-R Claims and OneBeacon agrees not to seek to reapen the Coverage Action to
address the FDIC-R Claims released herein. Otherwise, the dismissal of the Coverage Action

remains without prejudice.

SECTION Hh: Releases
A. The FDIC-R's Releases. Upon receipt of the Settlement Payment and except as

provided in PARAGRAPH HILD., the FDIC-R, for itself and its successors and assigns, hereby

releases and discharges:

1, the Settling Individuals and the Covered Persons (to the extent they agree
in writing to be bound by all the terms of this Agreement in the same manner as the Settling
Individuals, including the giving of Releases in Section III B); their respective heirs, executors,
administrators, agents, representatives, successors and assigns, from any and all claims,
demands, contracts, obligations, damages, actions, and canses of action, fees, or costs, direct or
indirect, in law or in equity belonging to the FDIC-R, based on their actions or failures to act in
their respective capacities as directors, officers, and/or employees of the Bank; and

2 OneBeacon and ity employees, officers, directors, agents, representatives,

successors and assigns, for any and all claims that arise from or relate to the Policy,

BR. The Settling Individuals’ Releases, Effective simultaneously with the release in
PARAGRAPH IILA. above, the Settling Individuals, on behalf of themselves individually, and
their respective heirs, executors, administrators, agents, representatives, successors and assigns,

hereby release and discharge:

i, the FDIC-R and its employees, officers, directors, agents, representatives,

successors and assigns, from any and all claims that arise from or relate to the Bank, and


()(6)

1 Tide and Captions, All section titles and captions contained in this Agreement are
for convenience only and shall not affect the interpretation of this Agreement.

I Authorship/Construction, This Agreement sets forth terms and agreements jointly
negotiated by the Parties. It is expressly agreed that this Agreement shall net be construed for or
aguinst any Party by reason of which Party drafted it or against OneBeacon based on the fact that
it issued the Policy,

IN WITNESS WHEREOF, the Partics 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 Reveiver for The Park Avenue Bank

By:

Christine P. Heu
its; Counsel
Date:

CHARLES ANTONUCCI, an individual

Dated:

RDWARD BEYER, an individual

Dated:

BRUNO DeVINCK, an individual

Dated: perl. 2, 221%


()(6)

DAVID GAZERWITZ, an individual

Dated:

DONALD GLASCOFF, an individual

Dated: Ots baw x, 24a,

FREDERICK KELLER, an individual

Dated:

DAVID LICHTENSTEIN, an individual

Dated:

ANGELA MIRIZZI-OLSEN, an individual

Dated: |

PATRICK MURPHY, an individual

Dated:


(33,000,000.00) (“the Settlement Payment”) on or before thirty (30) days following the date this
Agreement is fully executed.
B. OneBeacon shall deliver the Settlement Payment to the FDIC-R by direct wire

transfer into the following account:

Bank: Federal Home Loan Bank of New York
oye) ae

Routing No:

For Credit to: FDIC National Liquidation Account
(bya)

Account No:

FIN 10198: The Park Avenue Bank, New

OBL: York, NY; Contact: Christine Hou, 703-
516-3046; Professional Liability (37100);
DIF Fund; Asset No, LO19S001058

c If the FDIC-R does not receive the Settlement Payment in full on or before the
date determined by subparagraph A above, then the FDIC-R, in its sole discretion, shall have the
right to:

lL extend the period of time for payment, including interest acenuing from the
date the FDIC-R executes this Agreement through the date of payment at a rate calculated in
accordance with 26 U.S.C. § 6621 (a}(2); or

2. enforce this Agreement and, in such event, OneBeacon agrees to
Jurisdiction in the United States District Court for the Southern District of New York and to pay
all of the FDIC-R’s reasonable attomeys’ fees and costs expended in enforcing the terms of this
Agreement; or

3 terminate the Agreement, move to vacate any dismissal order, to which the
Settling Individuals agree to consent, and institute an action on the FDIC-R’s claims against the
Settling Individuals; and/or

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


(bya)

(bya)

Bank, aa stated jn demand letters from the FDIC-R to the Settling Individuals, dated on or about
September |, 2010, and September 3, 2010 (the “FDIC-R Claims”). The Settling Individuals
have denied liability for the FDIC-R Claims,

OneBeacon issued Menagement and Professional Liability insurance policy

number the “Policy"), which insured the directors and officers of the Bank

according to the terms, provisions and conditions of the Policy. The Settling Individuals have

tendered the FDIC-R Claims for coverage under the Policy. On March 21, 2011, OneBeacon
filed a declaratory judgment action against Park Avenue Bancorp, Inc., the FDIC-R, Charles
Antonucci, and Patrick Murphy, seeking rescission of the Policy, as well as Financial Institution
Bond. sumber————_—_—_—issued by OneBeacon America Insurance Company (the
“Bond”), in the United States District Court for the Southem District of New York, captioned
One?eacon Midwest Insurance Company, et al. v, Park Avenue Bancorp, inc., et al., Civil
Action No. | 1-C'V-1937 (HB) (“the Coverage Action”). The Coverage Action was dismissed
without prejudice as ordered by the Court on August 13, 2012; and

6 ‘The Parties deem it in their best interests to enter into this Agreement to avoid the
uncertainty, trouble, and expense of litigation, The Settling Individuals deny and continue to
deny any and all Hability and each and every allegation in the FDIC-R Claims. The Parties
further agree that, as a compromise and settlement of disputed claims, this Agreement is not an
admission or evidence of liability or of coverage with respect to the disputed claims.

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, cach with the other, as follows:

SECTION I: Payment to FOIC-R
A As an essential covenant and condition to this Agreement, OneBeavon, on behalf
of itself and the Settling Individuals, and all other former officers, directors and employees and
any other person who constitutes an “Insured Person” a3 that term is defined in the Policy

(collectively, the “Covered Persons”), shall pay to the FDIC-R the sum of Three Million Dollars


ides ind vaptions contained Int

1 Tidleand Captions AN ae Agreement
ars fur convenience only and shall sot affect the interpretation of this Agreement

f

muction. This Agreemsni sets forth ems and agreements j

it is expressly agrzed that ths Agreemont shal! not be construed for or

any Bary by reason af which Pariy dratled it or against OreBencon bused on the fact that

in issued the Policy

IN WITNESS WHEREOF, the Partizs bereto have caused this Agreement to be executed

ci dal eacntat ter subscribed

by cach of them or

authorized rep

FEDERAL DEPOSIT INSURANCE CORPORA
As Receiver for The Park Avenuc Bank

Chreting Hsu
ts Counsel

an individual

()(6)

Dated:

EOWARD BE san imndividual

Dated

BRUNO DeVINCK, ap iidividuat

Dated:


()(6)

DAVID GAZERWITZ, an individual

Dated: JO-S- 1. FENG)

DONALD GLASCOFF, an individual

Dated:

PREDERICK KELLER, an individual

Dated:

DAVID LICHTENSTEIN, an individual

Dated:

ANGELA MIRIZZI-OLSEN, an individual

Dated:

PATRICK MURPHY, an individual

Dated:

i