Thi~ Settlement and Release ~grecment ("Agreement") is made by and between the 

Federal Deposit Insurance Corporation as Receiver for Wheatland Bank ("Fl)lC-R") and 

OncHeacon Midwest Insurance Company ("OncBcacon") (individually, the FDIC-R and 

OncBcacon may be referred to herein as "Party" and collectively as the "Pat1ics"). 

WHEREAS: 

Prior to April 23, 2010, Wheatland Bank ("Bank") was a depository institution organized 

and existing under the laws of the State of I1linois. 

On April 23, 2010, the Illinois Department of Financial and Professional Regulation 

closed the Bank and, pursuant to 12 U.S.C. § l82l(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 of the Bank, including those with respect to its assets. 

Among the assets to which the FDIC-R succeeded were all of the Bank's claims, 

demands, and causes of actions against insurance carriers, including OncBcacon, that issued any 

Financial Institution Bonds to the Bank. 

OneBcacon issued a Financial Institution Bond to the Bank, Bond number I -... H.IH.HH.(b){4.) 

~b)(4) ····EJ for the period December 14, 2007, to December 14, 2010 ("Bond"), which insured tht: 

Bank according to the terms, provisions and conditions of the Bond. 

On June 10, 2011, the FDIC-R filed suit against OncBcacon to recover on a claim (the 

"Claim") that had been submitted under the Bond. This lawsuit is now pending in the Onitcd 

Stutes District Comt for the Northern District of Illinois in FDIC as Receiver for Wheatland 

Bank v. OneBeacon Midwest Insurance Company, Case No. l:ll~cv-03972 (N.D. Ill.) (the 
"Bond Action"). OncBcacon has denied liability in the Bond Action. 

The undersigned Pm1ics 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 as follows: 

Sl ~CTION I: Payment to }1'J>IC-R 

A. As an essential covenant and condition of this Agreement, OneBeacon agrees to 

pay the FDIC~R the sum of ONE MILLION EIGI-IT HUNDIU-:D AND TWENTY FIVE 

THOUSAND DOLLARS AND ZERO CENTS ($1,825,000.00) (the "Settlement Payment"). 

The Settlement Payment shall be made to the FDIC-R within fourteen (14) calendar days afler 

both Pru.ties sign the Agreement and the FDIC-R delivers its signed Agreement to Onel3eacon. 

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

transfer into an account designated by the FDIC-R by notice to the attorneys for Onc13cacon1 

which has been provided. In th~ event that the Settlement Payment is not delivered to the FDICR (or its counsel) by the date set forth in Section I.A. above, interest shall accme on all unpaid 

amounts at the rate of 5 percent per annum from the date set fotih in Section I. A. above until the 

date of payment. However, if said Settlement Payment is not delivered to the FDIC-R by the 

date .set forth in St:ction I.A., as a result of the FDIC-R':-; failure to execute this Agreement, no 

interest shall accmc until five (5) days after the FDIC-R executes th~ Agreement. 

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

date determined by Section l.A. above, then the FDIC-R, in its sole di.scrction, shall have the 

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right 'lt any time prior to receipt ofthe Settlement Payment in full (including all accrued interest) 

to: 

1. Extend the period of time for the Settlement p,tymcnt, including interest accruing 

from the date determined by Section I. A. above, through the date of payment at a rate calculated 

in accordance with 26 U.S.C. § 662l(a)(3); or; 

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

United States District Comt for the Nm1hern District of Illinois und to pay all of the FDIC-R 's 

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

3. Terminate the Agreement, move to vacate any dismissal order, to which 

OneBeacon agrees to consent, and reinstitute any action on the FT>IC-R's claims. OncBeacon 

futther agrees to waive any defense based on any statute of limitations t11at would bar any of the 

FDIC-R's claims and waive all objections, defenses, claims or counterclaims, and covenant and 

agree not to assert any objections, defenses, claims or counterclaims that did not exist or were 

otherwise unavailable as of the date this Agreement was fully executed; and/or 

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

Any extension of tim·e under Section LC.l for delivery of the Settlement Payment or 

acceptance of a pottion 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 I.C.4 at any time prior to receipt of Settlement 

Payment (including all accrued interest) in fi.lll. 

SECTION 11: Stipulation of Dismissal 

Within three business days after receipt of the Settlement Payment in full, plus any 

accrued interest, the FDIC-R shall fllc in the Bond Action a Stipulation of Dismissal with 

Prejudice in the form attached hereto as Exhibit A. 

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. I l l 

,.j 

SI~CTION III: Uelcascs 

1. Upon re~cipt of the Settlement Payment in full as provided in Section (and except as 

provided in Sc.;<.:tion III.D., the FDIC-R, for itself and its successors and assigns, hereby releases and 

discharges OneBcacon, its parents, subsidiaries, affiliates and reinsurers, and their respective 

employees, officers, directors, agents, representatives, successors and assigns, fi·om any and all 

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

equity, that arise fi·om or relate to the Claim, OncBcacon's adjusting of the Claim, the l3ond, or the 

Bond Action. As part of this release of OneBeacon, the FDIC-R agn.:c~> that any interest it has or 

may have under the Bond is extinguished. 

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

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

reinsurers, ~md their successors and assigns, hereby releases and discharges the FDIC-R, and its 

employees, officers, directors, agents, representatives, attorneys, successors, and as::;igns, 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, the Bond or the Bond Action. 

C. Waiver of Subrogation by OncDcacon. 

OneBeacun agrees to and hereby does irrevocably waive any rights of subrogation it 

may have relating to the Bond, including, without limitation, those arising from OneBeacon's 

payment of the Settlement Payment, or involving the underlying properties, assets or claims 

involved in any claim under the Bond and all rights to recovery thereof ("Rights of 

Recovery"). OncBeacon agrees that the FDIC-R may retain, sell, transfer, or otherwise dispose 

of such Rights of Recovery as it sees fit, in its sole discretion, and retain the proceeds (if any) 

4 
:I 

: ' 

thereof and any such prc!{cnt or future retention or disposition of such Rights of Recovery 

shall not serve to modify, alter, increase, decrease, or otherwise affect the consideration due 

under this Agreement or the monetary amount being paid by OncBcacon. 

n. ,EXGCpJ.jQnS from Release HY...fPJC-R:. 

1. Notwithstanding any other provision of this Agreement, the FDIC-R docs not 

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

executed, any claims or causes of action: 

a. against OneBeacon 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 I3ank, other financial institutions, or any other person or entity, 

including without limitation any such claims acquired by FDJC-R as successor in interest to the 

Bank or any person or entity other than the Bank; and 

b. against any person or entity not expressly releast:d by the FDIC-R in this 

Agreement. 

2. Notwithstanding any other prov1s1on 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 ahility to institute administrative 

enforcement or other proceedings seeking removal, prohibition, or any other relief it is 

authorized to seck pursuant to its supervisory or regulatory authority against any person. 

3. Notwithstanding any other provision of this Agreement, this Agreement docs 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 

5 
district, or any other department or agency of the United States as defined by 18 U.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, 

ct seq., if appropriate. 

SJt:CTION IV: Representations and Acknowledgements 

A. AU~hqrized Signatgd_o;.~. Each of the undersigned persons represents and warrants 

that he or she is authorized to sign this Agreement on behalf of the respective Party on behalf of 

whom he or she is signing, and that he or she has the full power and authority to bind such Party 

to each and every provision ofthis Agreement. Thts Agreement shall be binding upon and inure 

to the benefit of the undersigned Parties and their respective heirs, executors, administrators, 

representatives, successors and assigns. 

B. Advice of..~Q\!11~<1.1_._ Each Party hereby acknowledges that it has con~ulted with 

and obtained the advice of counsel prior to executing this Agreement, and that this Agreement 

has been explained to that Party by its counsel. 

SECTION V: Reasonable Cooperation 

The 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 Bond Action and to otherwise pcrfoxm the terms of 

this Agrl;!ement. 

SECTION VI: Other M~ttcrs 

A. Q_'?{f1QJ.·ship_of Bond Claim. The I•DIC-R represents and wanants that, pursuant to 

12 U.S.C. § 1821 (d), the FDIC-R is the cunenllawful owner of, and that it has not assigned, sold, 

or transfencd any interest in, the Bond, and all matters being released herein. 

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B. No Additional Actig!l~. OneBeacon hereby agre~s that it will not bring, file, or 

otherwise pursue any claims against any party in relation to the l3ond, including any claims for 

indemnity or subrogation. 

C. No A-dmission of1,iability. 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 infi11nity 

by them regarding any claim or defense, and that this Agreement shall not be offered or received 

in evidence by or against any Party except to enforce its tcnns. 

D. 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. A copy of this 

Agreement shall be treated as an original. 

E. Choice of Law. This Agreement shall he interpreted, constmcd and enforced 

according to applicable federal law, or in its absence, the laws of the State of Illinois. 

F. Notices. Any notices required hereunder shall be sent by first class muil> return 

receipt requested> and by email, to the following: 

(b)(6), •••••••••mo•• 

If to the FDIC~R: 

Gregory K. Conway 

Counsel> Federal Deposit Insurance Corporation 

3501 Fairfax Drive,# B~7054 

Arlington, Virginia 22226 

•••••••••••m•m••momo••' ~momo••m•m••• I 

and 

7 
: I 

Antony S. Buti 

Lawrence H. Heftman 

SchiffHru:din T.LP 

233 South Wacker Drive 

Chicago, Illinois 60606 

(b )(6) -----------:t;;;;,;;;;;;;;;;;;;;;;;:::;::.... __ ~ll 

(b )(6) ~----l~t=::====-------_j· 

(b)(6) .. 

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

If to OncBeacon: 

Michael Keeley 

Toni S. Reed 

Strasburger & Price, I J ,p 

901 Main Street, Suite 4400 

Dallas, TX 75202-3794 

.: .. : ..:::::::.: .. :.:::::::::::.::::::: ...... \t---.- .. . - . ----.--------J 

and 

Michael P. Tone, Esq. 

Wilson, Elser, Moskowitz, Edelman & Dicker, LLP 

55 West Monroe Street, Suite 3800 

, Chicago, IL 60603 

b) 6)~~-----t=======----_j 

G. Entire Agreement an.ct. Amenqm~f.lt$.. This Agreement constitutes the entire 

agreement and understanding between and among the undctsigned 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 Pa1iies bound thereby, or by their respective authorized attorney(s) or other represcntativc(s). 

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

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

I. No Col!fi cn lily. All Parties acknowledge that this Agreement shall not be 

confidential and wW be disclosed pmsuant lo the Federal Deposit Insurance Corporation's 

applicable policies, procedures) and other legal requirements, and as OncBcacon deems 

appropriate. 
~, 

I 

.I 

In witness whereof, the Parties hereto have caused this Agreement to be executed by each 

of them by their duly authorized representative on the date hereinafter subscribed. 

FEDERAL J>Kt>OSIT INSURANCJi~ CORPOI~TION AS RECEIVER FOR 

WHEATLAND BANK 

Date: 01- 2g-20/ S BY: __ . ·I ·····················································J(b)(~) 

TITLE: ~c=-ou_n_s~el~----~,--------~ 

PRINT NAME: Gregory K. Conway 

) 

9 
ONEBEACON MIDWEST INSURANCE COMPANY 

(b )(6). 

Date: liz~{!? ___ ---syq---·---· I 

TITLE: A V. t~ ~ (.&:u,_-. ~._ 

. P~INTNAME: .lJA"nl_e_l S ."¥y~ 

40071- 000 0 

CJU \15 H 16'17. 4 

10 
IN THE UNITED STATES DISTRICT COURT 

FOR TIIE NORI'H.El~N DISTRICT OF ILLINOIS, J•:As·n:RN DIVISION 

rEDERAJ. DEPOSIT INSURANCE 

CORPORATION AS RECEIVER FOR 

WI-IEATLAND BANK, 

Plaintiff, 

v. 

ONEBEACON MIDWEST INSURANCE 

COMPANY 

Defendant. 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

Case No. l: 11-cv-03972 

lion. Thomas M. Durkin 

STIPULATION TO DISMISS WITH JlRI~.JUDICE PLAINTJFJ4''S CLAIMS 

AGAINST ONJ!:BEACON MU>WEST INSURANC.Ii~ COMPANY 

Plaintiff Federal Deposit Insurance Corporation as Receiver· tor Wheatland Bank ("FDICReceiver"), and Defendant OncBcacon Midwest Insurance Company ("One Beacon"), hereby 

file this stipulation to dismiss with prejudice all of the FDIC-Reccivcr's claims against 

OncBcacon in this action, each party to bear its own costs. 
Dated: h.:bruary . 2015 

lsi M ichacl Keeley 

Geoffrey Alexander Belzer 

Michael P. Tone 

Kimberly J-:1 izabclh I3lair 

WILSON, ELSER, MOSKOWITZ, EDELMAN & 

DICKER, LLP 

55 Wesl Monroe Street, Suite 3800 

Chicago, IL 60603 

(31 2) 704-0550 

Michae l Keeley 

Toni Scott Reed 

STRASBURGER & J>JOCE, LLP 

90 I Main Street, Suite 4400 

Dallas, TX 75202 

(214) 651-4672 

Allorneys for One Beacon Midwest 

Insurance Company 

Respectfully submitted, 

_,s/'-'Ac...o=nt~o~v~S"""' . B=ur'-!.t __ ·-·-· -·--·· ___ _ 

Antony S. Hurt 

I .awrcncc I I. Heftman 

Kelly M. Warner 

Adam Diederich 

SCHIFF HARDIN LLP 

233 S. Wacker Dr., Suite 6600 

Chicago, IL 60606 

(312) 258~5500 

(312) 258-5600 (fax) 

Attorneysfor Plaintiff Federal Deposit Insurance 

Cmporation, as Receiver_f(n· Wheatland Bank 

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CERTIFICATI•: OF SI-~RVICE 

The undersigned attorney hereby certifies that on February . , 2015, he caused the 

foregoing document to be electronically filed with the Clerk of the United States District Court 

for the Not1hcrn District of Illinois, Eastern Division, using the Court's CM/ECF system, which 

shall send notification of such filing to all counsel of record. 

/s/ Lawrence ll. Ueftman.,__ _____ _ 

Lawrence H. rleftman 

CJ!2'1159>51J7.1 

·I 

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