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.

E. Release of FDIC-R by Insurance Company.

Effective simultaneously with the release granted in Paragraph IID. above, Insurance
Company, 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 FDIC-
R, and its employees, officers, directors, 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 the Policy.

F. Express Reservations From Releases By FDIC-R.

L 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 Defendants 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 or any person or entity other than the Bank;

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

& asserted in the Bankruptcy of Anthony Montalbano (in re
Montalbano, Case No. 09-30477 (N.D. IL.));


(opts)

Date: tt woke 7 gots

PAUL MCALLISTER,

ed

(b)

By:]

Tithe;
Print Name: 72400 as? ounsg rem

ANTHONY MONTALBANO

By:
Tithe:
Print Name:

DANIEL REGAN

By;
Title:
Print Name:

FEDERAL INSURANCE COMPANY

By:

Title:
Print Name:



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 bebalf 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 State of Illinois.

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 here, FDIC-R has reasonably and justifiably


d. asserted in the Bankruptcy of Daniel Regan (Jn re Regan, Case No.
11-47684 (ND. IIL); and
e which are not expressly released in Paragraphs II.A. or ILD. 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.
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 Northern District of Ulinois or any other
federal judicial district. In addition, FDIC-R specifically reserves the right to seek court ordered
restitution pursuant to the relevant provisions of the Victim and Witness Protection Act, 18
US.C. § 3663, et seq,, if appropriate.
SECTION HE Waiver of Dividends
To the extent, if any, that Settling Defendants are or were shareholders of the Bank or its
holding company, Town BancShares, Inc., and by virtue thereof are or may have been entitled to
a dividend, payment, or other prorata distribution upon resolution of the receivership of the
Bank, they hereby knowingly assign to FDIC-R any and all rights, titles and interest in and to
any and ail such dividends, payments or other pro rata distributions.
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


(b)(6)

(b)(6)

a. producing all documents requested by FDIC-R, without the necessity of
subpoena, as determined by FDIC-R, in its sole discretion, to be relevant to the Bank;

b. making themsetves available upon request by FDIC-R at reasonable
times and places toe inberviews regending facts, as determined by FDIC-R in its sale discretion,
to be relevant to the Bank; ‘

& appearing to teatify, upon request by PDIC-R, in any matter determined
by the FDIC in its sole diseretion, 10 be related to the Bank, without the necessity of subpoena;

4. signing truthful affidavite upon tequest by FDIC-R, regarding any
matter, as deterruined by FDIC-R in its sole discretion, to be relevent to the Bank.

H. Advice of Counsel, Each party hereby acknowledges that it has conmlted with and

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

been expleived to that party by his or her counsel, : ;

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

pate:_ 6 fieé 2003

tane. Crieoiiod

(6)

200



SETTLEMENT AND RELEASE AGREEMENT

This Settlement and Release Agreement (“Agreement”) is made as of this iaa day of
March, 2013, by, between, and among the following undersigned parties:

The Plaintiff Federal Deposit Insurance Corporation (“FDIC”), as receiver of Town
Community Bank and Trust (FDIC-R”), and Frank Gironda, Paul McAllister, Anthony
Montalbano, and Daniel Regan (collectively the “Seitling Defendants”), and Federal Insurance
Company ( “Insurance Company”) (individually, the FDIC-R, the Individual Defendants and the
Insurance Company may be referred to herein as “Party” and collectively as the “Parties”).

RECITALS

WHEREAS:

Prior to January 15, 2010, Town Community Bank & Trust (“Bank”) was a depository
institution organized and existing under the laws of Illinois;

On January 15, 2010, the Bank was closed by the Illinois Department of Financial and
Professional Regulation and pursuant to 12 U.S.C. § 1821(c), the FDIC-R was appointed
receiver. In accordance with 12 U.S.C. § 1821(d), the FDIC 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 as receiver 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, nonperformanve and manner of performance of their
respective functions, duties and acts as directors and/or officers of the Bank:

The FDIC-R has asserted claims and has the jurisdiction to assert other claims against the

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


Date:

PAUL MCALLISTER

By;

Tite:
Print Name:

ANTHONY MONTALBANO

By:

MARCH 6 Dore

Title:
Print Name:

DANIEL

FEDERAL INSURANCE COMPANY

By:,

Title:
Print Name:

by(6)



PAUL MCALLISTER

Date:
Date: 3 ~ / 3 3
Date: By:
Title:
Print Name:
FEDERAL INSURANCE COMPANY
Date: By:

Tide:
Print Name:

by(6)



relied upon the accuracy of financial information in the affidavits submitted. If, in their
affidavits, the Settling Defendants have failed to disclose any material interest, legal, equitable,
or beneficial, in any asset, the Settling Defendants agree to cooperate fully with FDIC-R to
transfer their interest in the asset to FDIC-R and to sign any and all documents necessary to
transfer their interest in the asset to FDIC-R. Moreover, if, in their affidavits the Settling
Defendants have failed to disclose any interest, legal, equitable, or beneficial, in any asset,
FDIC-R in its sole discretion, may exercise one or more or all of the following remedies; (a)
FDIC-R may declare the releases granted to the Settling Defendants as null and void; (b) FDIC-
R may retain the Settlement Funds; (c} FDIC-R may sue the Settling Defendants for damages, an
injunction, and specific performance for the breach of this agreement; and (d) FDIC-R may seek
to vacate any dismissal order and reinstate FDIC-R’s claims against the Settling Defendants.
The Settling Defendants agree that if, in their affidavits, they have failed to disclose any interest,
legal, equitable, or beneficial, in any asset, the Settling Defendants consent to the reinstatement
of FDIC-R’s claims and waive any statute of limitations that would bar any of FDIC-R’s claims
against them.
G. Reasonabl

1. The undersigned parties agree to cooperate in good faith to effectuate all
the terms and conditions of this Agreement.

2. Further, the Settling Defendants agree to cooperate fully with 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 FDIC-R pursuant to its

internal guidelines and policy for such reimbursement. Such cooperation shall consist of:


Seitling Defendants’ respective functions, duties and actions as officers and/or directors of the

Effective simultaneously with the release granted in Paragraph I].A. above, the Settling
Defendants, on behalf of themselves individually, and their respective heirs, executors,
administrators, agents, representatives, successors and assigns, hereby release and discharge
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 Defendants’ respective functions, duties and actions as
officers and/or directors of the Bank or that arise from or relate to the policy.

c. Release by Settling Defendants of Each Other.

Effective simultaneously with the releases granted in Paragraph ILB. above, the Settling
Defendants, and their respective heirs, executors, administrators, representatives, successors and
assigns, hereby release and discharge each other 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 performance, nonperformance, or manner of performance of their respective
functions, duties and actions as officers and/or directors of the Bank.

D. Release of Insurance Company by FDIC-R.

Effective simultaneously with the releases granted in Paragraphs ILA. and ILB. above,
the FDIC-R, for itself and its successors and assigns, hereby releases and discharges Insurance
Company, its parents, subsidiaries, affiliates and reinsurers, and their respective employees,

officers, directors, agents, representatives, successors and assigns, fram any and all claims,


March 7, 2013, then the Due Date shall be such date that is four business days after the FDIC-R
provides writien evidence of its execution of this Agreement.

Cc. In addition, and without waiving any other rights that the FDIC-R may have, in
the event that it does not receive all Settlement Funds on or before March 15, 2013 (or such other
Due Date four business days after FDIC-R provides written evidence that it has executed this
Agreement, as set forth in Paragraph 1.B. above), then, with respect to the Party, or Parties, that
fail to deliver their share of the Settlement Funds only, the FDIC-R, in its sole discretion, shall
have the right at any time prior to receipt of all Settlement Funds 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, and/or shall have the right to enforce this Agreement against the Party or
Parties, failing to deliver their share of the Settlement Funds, in which event the non-delivering
Party, or Parties, agree to jurisdiction in Federal District Court for the Northern District of
Hlinois and agree to pay all of the FDIC-R’s reasonable attomey’s fees expended in enforcing
the terms of this Agreement.

SECTION Il: Releases
A. Release of Settling Defendants by FDIC-R.
Effective upon receipt in full ef the Settlement Funds and except as provided in

Paragraph ILF., the FDIC-R, for itself and its successors and assigns, hereby releases and
discharges each of the Settling Defendants and their respective 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, whether derived from a
statute or common law, known or unknown, asserted or unasserted, belonging to the FDIC-R,

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


(b)(4)

(b)(4)
(b)(4)

Bank. The Settling Defendants have denied liability for any asserted or unasserted claims of the

FDIC-R,;

Federal Insurance Company issued directors’ and officers’ liability 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 Defendants have made claims under the
Policy. The Insurance Company has reserved its rights to deny coverage under the Policy for
claims asserted by FDIC-R against the Settling Defendants;

The Parties deem it in their best interests to enter into this Agreement t0 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 Parties
agree, cach with the other, as follows:

SECTION 1: Payment te FDIC-R
A As an essential covenant and condition to this Agreement, the Insurance Company

agrees to pay the FDIC-R the sum of $1,300,000.00 (“the Settlement Funds”), by way of wire

transfer to:
BANK: Loan Bank of New York
ROUTING Now .
FOR CREDIT TO: FDIC National Liquidation Account
ACCOUNT Nos

FIN 10170; Town Community Bank & Trust, Antioch, Illinois;
Contact: David C. Joseph; 972-761-8648; Professional Liability
(37100); DIF Fund
B. Payment of the Settlement Funds is due March 15, 2013 (the “Due Date”)
provided that the FDIC-R provides writien evidence of its execution of this Agreement by March

7, 2013. If the FDIC-R does not provide written evidence of its execution of this Agreement by

(b)(4)


Date:

Date:

Date:

Date: 3/13/13

PAUL MCALLISTER

By:
Title:
Print Name:

ANTHONY MONTALBANO

By:
Title:

Print Name:

DANIEL REGAN

By:

Tide:
Print Name:

FEDERAL INSURANCE COMPANY

(b)(6)
By:

Title: Sr. Claims Officer
Print Name: Nora B, Neary