SETTLEMENT AND RELEASE AGREEMENT 

This Settlement and Release Agreement ("Agreement") is made effective as of December 

16, 2013, by, between, and among the following undersigned parties ("Parties"): the Plaintiff 

Federal Deposit Insurance Corporation, as receiver for ISN Bank ("FDIC-R") and (1) Benjamin 

Friedman, (2) Jeffrey Gottlieb, (3) Brad Ingerman, (4) Jon Powell, and (5) David Lyster 

(collectively the "Settling Persons"). 

RECITALS 

WHEREAS: 

Prior to September 17, 2010, ISN Bank ("Bank") was a depository institution organized 

and existing under the laws of New Jersey; 

On September 17,2010, the Bank was closed by the New Jersey Department ofBanking 

and Insurance and pursuant to 12 U.S.C. § 1821(c), the FDIC was appointed receiver. In 

accordance with 12 U.S.C. § l 82 l(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 as receiver succeeded were any and all ofthe 

Bank's claims, demands, and causes of actions against its former directors, officers and 

employees arising from the performance, nonperformance and manner of performance oftheir 

respective functions, duties and acts as directors and/or officers of the Bank; 

The FDIC has asserted claims against the Settling Persons, who had each served at 

various times as directors and/or officers of the Bank. The Settling Persons have denied and 

continue to deny liability for the FDIC-R's claims. The FDIC has also asserted claims against 

John Coleman and Raymond Moyer and others. No lawsuit has been tiled by the FDIC-R 

against any fonner ofticer or director, including the Settling Persons, or Messer's John Coleman 

or Raymond Moyer. As provided for below, the settlement of the claims resolves all matters 

between the FDIC-R and the Settling Persons arising from the performance, nonperformance and 

manner of performance of their respective dulies and acts as directors, officers, or employees of 
the Bank, regardless of their function at the Bank. 

AIG issued directors' and officers' liability policy numbe~L.. ___ .. _ ....._ ... _ ...... ..Jkthe-''PoliGy''), .... (l.?.)(4.) 

which insured the directors and officers of the Bank according to the tenns, provisions and 

conditions of the Policy. The Settling Persons have made claims under the Policy. 

The undersigned parties deem it in their best interests to enter into this Agreement to 

avoid the uncertainty, trouble, and expense of litigation. The Settling Persons, who served the 

Bank as officers, directors, employees, or in other professional capacities such as attorneys or 

accountants, deny any and all liability, wrong doing, defalcation, negligence, gross negligence, 

breach of duty or contract, claims or assertions of any form that have been made or could have 

been made in this matter. The Parties acknowledge and agree that AIG is paying certain Policy 

proceeds to the FDIC-R to protect and defend its Insureds rather than expend those same sums in 

defense of the chums. 

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: 

SECTION 1: Payment to FDIC 

A. As an essential covenant and condition to this Agreement, (1) AIG shall pay the 

FDIC-R $5,100,000.00 (the "AIG Payment'') and (2) the Settling Persons shall pay the FDIC-R 

$50,000.00 (the "Settling Persons' Payment") (the A[G Payment and the Settling Persons' 

Payment are hereinafter collectively refened to as the "Settiement Funds"). 

B. Following the execution of an original, or originals in counterpart, of this 

Agreement by each of the undersigned Parties to this Agreement, no later than January LO, 2014, 

the Settlement Funds shall be delivered to FDIC in accordance with payment instructions 

provided by FDIC. 

C. In the event that the Settlement Funds are not delivered to the FDIC-R or its 

counsel on or before January 10,2014, interest shall accrue on all unpaid amounts at the rate of 

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5% per annum from January 10, 2014 until the date of payment. However, if said Settlement 

Funds are not delivered to the FDIC by January 10, 2014, as a result of the FDIC's failure to 

execute this Agreement, no interest shall accrue until ten days after the FDIC executes the 

Agreement. 

C. In the event that the full Settlement Funds are not received by the FDIC-R on or 

before January 10,2014, the FDIC-R, in its sole discretion, shall have (I) the right at any time 

prior to receipt of all Settlement Funds to declare this Agreement null and void or (2) the right to 

extend this Agreement for any period of time until it receives those Settlement Funds. Any 

decision by the FDIC-R to extend the terms of this Agreement shall not prejudice its rights to 

declare this Agreement null and void at any time prior to receipt of the Settlement Funds or to 

enforce the terms of the Agreement. In addition, and without waiving any other rights the 

FDIC~R may have, in the event that the Settlement Funds is not received by the FDIC~R on or 

before the Payment Date, then the FDIC-R shall have the right to enforce this Agreement. In 

such event, the Parties agree to jurisdiction in the Federal Court in the District ofNew Jersey. 

SECTION II: Releases 

Eflective upon receipt in full of the Settlement Funds described in Section I above and execution 

of this agreement by all Parties, and except as provided in Section ILL below: 

A. Release of Individual Settling Persons by FDIC. 

The FDIC-R, solely in its capacity as Receiver for the Bank and not in its corporate 

capacity, for itself and its successors and assigns, hereby releases and discharges each of the 

Settling Persons, and their respective heirs, executors, administrators, agents, representatives, 

successors and assigns, from any and all claims, demands, obligations, damages, actions, and 

canses of action, direct or indirect, in law or in equity, whether known or unknown, belonging to 

the FDIC-R, that arise from or relate to, the performance, nonperformance, or manner of 

· performance of the Settling Persons' respective functions, duties and actions as directors, officers 

employees, agents or in any other capacity at the Bank. 

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B. Rel~ase of FDIC by the Settling Persons. 

Effective simultaneously with the release granted in Section II.A. above, the Settling 

Persons, 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, whether known or unknown, that arise from or relate to, the Bank or to the 

performance, nonperformance, or manner of performance of the Settling Persons' respective 

functions, duties and actions as officers, directors, employees, agents or in any other capacity of 

the Bank or that arise from or relate to the policy. 

C. Release by Settling Persons of Each Other. 

Effective simultaneously with the releases granted in Sections II.A. and II.B. above, the 

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

administrators, agents, 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, whether known or unknown, 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. This release will not affect any separate 

obligations incurred with respect to funding the Settling Persons' Payment. 

D. Release of AIG by FDIC-R! 

Etlective simultaneously with the releases granted in Sections II.A. and II. B. above, the 

FDIC-R, for itself and its successors and assigns, hereby releases and discharges AlG, its 

parents, subsidiaries, affiliates and reinsurers, and their respective 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, whether known or 

unknown, that arise from or relate to the Policy. 

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E. Release of AIG by Settling Persons. 

Effective simultaneously with the releases granted in Sections II.A. and II.B. above and 

the payment by AIG of the sum set forth in Section I.A., the Settling Persons, on behalf of 

themselves individually, and their respective heirs, executors, administrators, agents, 

representatives, successors and assigns, hereby release and discharge AIG, its parents, 

subsidiaries, affiliates and reinsurers, and their respective 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, whether known or unknown, 

that arise from or relate to the released claims by the FDIC as set forth herein. 

F. Release of FDIC by AIG. 

Effective simultaneously with the release granted in Section II.D. above, AIG, 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, 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, whether known or unknown, that arise from or relate to the Policy. 

G. Release of Settling Persons and Covered Persons by AIG 

Effective simultaneously with the releases granted in Section !I.E. above, AIG, 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 each of the Settling Persons, and 

the Covered Persons described in Paragraph H below, and their respective heirs, executors, 

administrators, 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, whether known or unknown, that arise from or relate to funds expended by AIG in 

defense of or settlement negotiations related to the released Claims as set forth herein. 

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H. Release of Covereq Persons by the FDIC-R 

Effective simultaneously with the release granted in Section II.A. above, and except as 

provided in Section II. I. below, the FDIC-R, for itself and its successors and assigns, hereby 

releases and discharges all former directors, officers and employees of the Bank, including 

Messer's John Coleman and Raymond Moyer (collectively, the "Covered Persons") and their 

respective heirs, executors, administrators, 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, whether known or unknown, belonging to the FDIC-R, that arise 

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

respective functions, duties and actions as former officers, directors, employees agents or in any 

other capacity at the Bank regardless of their capacity at the Bank, including, without limitation, 

those based on negligence, gross negligence, and/or breach of fiduciary duty, belonging to the 

FDlC-R that arise from or relate to the claims. This release shall be null and void as to any 

Covered Person if such Covered Person asserts any claim against the FDIC-R. 

I. Express Reservations From Relca~~s By FDIC. 

l. Notwithstanding any other provision, by this Agreement, the FDIC 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 Persons 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 FDJC, the llank, other financial institutions, or any other person or entity, 

including without limitation any claims acquired by FDIC 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 arc not expressly released in Section II above. 

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

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

6 
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 oflaw, 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 New Jersey or 

any other federal judicial district. In addition, the FDIC 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, ct seq., if appropriate. 

SECTION Ill: WAIVER OF DIVIDENDS 

To the extent, if any, that Settling Persons are or were shareholders of the Bank and by 

virtue thereof are or may be entitled to a dividend, payment, or other distribution upon resolution 

of the receivership of the Bank, they hereby knowingly assign to the FDIC 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 ofliability by any of them 

regarding any claim. 

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B. Execution in_Counternarts. 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 arc 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, agents, 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 ofNew Jersey. 

E. Entire Agre~ment 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 pw1ies to be bound thereby, or by their respective authorized 

attorney(s) or other representative(s). 

F. Reasonable Cooperation. The undersigned parties agree to cooperate in good 

faith to effectuate all the tcnns and conditions of this Agreement. 

G. Advice of Counsel. Each party hereby acknowledges that it has consulted with 

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

has been explained to that party by his or her counsel. 

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H. Eilect on Tolling Agreement. Effective upon full perfonnance of this Agreement, 

including receipt in full of the Settlement Funds described in Section I, the Tolling Agreement 

entered into by the Parties effective June 4, 2013 and expiring on January 17, 2014, shall be 

terminated. 

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. 

Date: 

Date: 

FEDERAL DEPOSIT INSURANCE CORPORATION 

As Receiver for ISN Bank 

PRINTNAME: LfL.o~.::JA~O 5 1)e.?A6f?Ll4/ e__ 

Benjamin Friedman 

BY: 

TITLE: 

PRINT NAME: 

Jeffrey Gottlieb 

DY: 

TITLE: 

PRINT NAME: 

9 
(b)(6) 

H. Effect on Tolling Agreement. Effective upon full performance of this Agreement, 

including receipt in full of the Settlement Funds described in Section I, the Tolling Agreement 

entered into by the Parties effective June 4, 2013 and expiring on January 17, 2014, shall be 

terminated. 

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. 

Date: 

FEDERAL DEPOSIT INSURANCE CORPORATION 

As Receiver for ISN Bank 

BY: ________________________ __ 

TITLE: 

PRINT NAME: 

Date: f-1../~ 5Vr 5 Benjamin Friedman 8Y~;t.t.::.Y ............................: ....... -......... Iol.i.l ......... l.llaol ........................ -.. ---------..... 

TITLE: 

PRINTNAME:&-m ~M Ft'-fP~o.<-1. 

Date: Jeffrey Gottlieb 

BY: ·--------------------------------

TITLE: 

PRINT NAME: 

9 
_ I

,•' 

., 

H. Effect on "tolling Agreement .. Effective upon full pcrfonnancc of this Agreement 

including receipt in full ofth~ Settlement Funds described in Section I, the Tolling Agreement 

entered into by the Parties effective June 4, 2013 and expiring on Jnnuary 17. 2014, shall be 

terminated. 

IN WITNESS ~HEREOF~: the parties hereto have caused this Agreement to be executed by each 

of them or Jheir_dwy authorized representatives on the dates hereinafter subscribed. 

Date: 

Date: __ _ 

FEDERAL DEPOSIT INSURANCE CORPORATION 

As Receiver for ISN Bank 

BY: ________________________ _ 

TITLE: 

PRINT NAMF.: 

Benjamin Friedma,n 

BY: ________________________ _ 

TITLE: 

PRINT NAME: 

(b)(6) 

························ ·············································································· 

Jeffrey Gottlieb 

BY: __ 

TITLE: f) f. VtrcL qr 

PRINTNAMh: [J;ffr'f cllt~ 6 

9 
Date: 

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PRlNT NAME: lf1 ~ f ;M:O I iJ6 £ilf1 ~ 

Date: Jon Powell 

BY: 

TITI.E: 

PRINT NAME: 

Date: David Lyster 

BY: -------- -------------

TITLE: 

PRlNTNAME: 

10 
Date: Brad Ingerman 

I3Y: ___ _ _ 

TITLE: 

PRINT NAME: 

Date: _l~Yi l·~ Jon Powel ................................................................................ 

I3Y: __ _J~~------------~~~~

TITLE: 

PRINT 

Date: David Lyster 

BY:---- ---- --·. ···-- ___ _ 

TITLE: 

PRINT NAME: 

10 
Date: __ _ Brad lngennan 

BY: ------ - - - ·-··---

TITLE: 

PRfNT NAME: 

Date: Jon Powell 

BY: - - ---- - - -··· -··- -·-···-··· - - - -···. -··· -

TITLE: 

PRINT NAME: 

Date: l1h.ohot3 David Lyster .............................................................................. 

(b)(6) 

............................ 

BY: ---~~----~----~ 

TITLE: 

PRINT NAME: 

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