SETTLEMENT AND RELEASE AGREEMENT 

This Settlement and Release Agreement ("Agrct.:mcnt") is made by, between, and among 

the following undersigned parties: 

The Plaintiff, Federal Deposit Insurance Corporation as Receiver for Hank of the 

Commonwealth ("f'DIC-R"), and Morton Goldmeicr, Herbert L. Perlin, Richard J. ·ravss, Raju 

V. Uppalapati, and Kenneth J. Young (collectively the "Settling Defendants") (individually, the 

FDIC-R and the Settling Defendants may be referred to herein as "Party" and collectively as the 

"Parties"). 

RECITALS 

WHEREAS: 

Prior to September 23, 2011, Bank of the Commonwealth ("Bank") was a depository 

institution organized and existing under the laws of Virginia; 

On September 23, 2011, the Virginia State Corporation Commission closed the Bank and 

pursuant to 12 U.S.C. § 182l(c), the Federal Deposit Insurance Corporation was appointed 

Receiver.· ln accordance with 12 U.S.C. § l82l{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 action against its former directors, officers, and employees arising from 

the performance, nonperformance, and manner of performance of their respective functions, 

duties, and acts as directors, otliccrs, and employees of the 11ank; 

On September 19, 2014, the fDIC-R filed a complaint for money damages against, 

among others, the Settling Defendants, each of whom served at various times as a director of the 

11ank. Those claims for damages arc now pending in the United States District Court for the 

Eastern District of Virginia in an action captioned The Federal Deposit .Insurance Corporation 

as Receiver fin- /Jank t~f the Commonwealth v. J•;dward J. Woodard, Jr., et al., No. 2: 14-cv00471-RGD-DEM ("D&O 1\ction"). The Settling Defendants have denied and continue to deny 

4H37-934H-611~ 
liability in the D&O Action; 

Nevertheless, the undersigned Parties dl)Cm it in their best interests to enter into this 

Agreement to avoid the uncertainty and expense of further litigation. 

NOW, TIIEREFORE, in consideration of the promises, undertakings, payment~, 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 the FOIC-R 

A. As an essential covenant and condition to this Agreement, on or before thirty (30) 

calendar days fo llowing the date the Parties exchange, in counterpart, fully executed copies of 

this Agreement, the Settling Defendants, jointly and severally, agree to pay the FDlC-R their 

respective portions of the sum of $1 ,200,000 ("the Settlement Payment''). 

B. The Settling Defendants shall deliver the Settlement Payment to the FDlC-R by 

one or more direct wire transfers into an account designated by the rDIC-R by notice to the 

attorneys for the Settling Defendants or by one or more certified or cashier's checks drawn upon 

a depository institution acceptable to the FDIC-R. 

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

date determined by Section I.A. above, then the FDJC-R, in its sole discretion, shall have the 

right at any time prior to receipt of the Settlement Payment in full (including all accrued interest) 

to: 

I. Extl)nd the period of time tor the Settlement Payment, including interest 

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

calculated in accordance with 26 U.S.C. § 662 1 (a)(2); or 

2. .Enforce this Agreement, in which event the Settling Defendants agree to 

jurisdiction in the United States District Comt for the Eastern District of Virginia and to pay all 

of the fDIC-R's reasonable attorney's fees and cosl-; expended in enforcing the terms of this 

Agreement; or 

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

483'1-9:l4R-61 15 2 
the Settling Defendants agree to consent, and re-institute an action on the FDIC-R's claims. The 

Settling Defendants further agree to waive any defense based on any statute of limitations that 

would bar any of the f.DfC-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 

fuHy executed; and/or 

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

Any extension of time under Section I.C.l for delivery of the Settlement Payment or 

acceptance of a portion 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 l.C.4 at any time prior to receipt of the 

Settlement Payment (including all accrued interest) in full. 

Sl<:CTION II: Stipulation and Dismissal 

Within ten business days after the latter of (1) full execution of this Agreement by all of 

the Parties, and (2) receipt of the Settlement Payment, plus any accrued interest, the FDlC-R 

shall file a stipulation of dismissal with prejudice as against the Settling Defendants, executed by 

the attorneys for all Parties hereto, jn the form attached hereto as Exhibit A, in the D&O Action. 

SECTJ.ON Ill: Releases 

A. The FDIC-R 's Releases. 

Upon receipt of the Settlement .Payment in full and except as provided in Section III.C., 

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

Defendants and their respective heirs, executors, trustees, administrators, representatives, 

successors, and assigns, from any and all L:laims, demands, obligatjons, damages, actions, and 

causes of action, direct or indirect, in law or in equity, belonging to the FDIC-R, that arise from 

or relate to, the performance, nonperformance, or manner of performance of the Setlling 

Defendants' respective functions, duties, and actions as directors of the Bank, including without 

limitation the causes of action alleged in the D&O Action. 

4R37-'1348-611 5 3 
B. The Settling Defendants' .Release. 

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

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

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

discharge the FDIC-R, and il<> employees, officers, directors, representatives, attorneys, 

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 Hank or to 

the performance, nonpe1formance, or manner of performance of the SeUiing Defendants' 

respective functions, duties, and actions as directors of the Bank, including without limitation the 

causes of action alleged in the D&O Action. 

C. Exceptions from Releases bv the FDIC-R. 

1. Notwithstanding any other provision of this Agreement, the FDIC-R docs 

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: 

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 the .l<DIC-R, the Bank, other financial institutions, or 

any other person or entity, including without limitation any such claims acquired by the FDIC-R 

as successor in interest to the Bank or any person or entity other than the Hank; 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 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 ability to institute administrative 

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

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

4R 934~-6115 4 
3. Notwithstanding any other provision of this Agreement, this Agreement 

docs not purp011 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 Oflice 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 rDIC-R spccitically reserves the right to seck court-ordered restitution 

pursuant to the relevant provisions of the Mandatory Victims Restitution Act, 18 U.S.C. §§ 3322 

and 3663 et. seq., if appropriate. 

D. Express Reservation of Rights of Bond Carrier. 

I . Notwithstanding any other provision of this Agreement, nothing in this 

Agreement shall release or prejudice the rights, if any, of Fidelity and Deposit Company of 

Maryland or any other underwriter of any financ ial institution bond, fidelity bond, or banker's 

blanket bond on which the Bank is an insured, I.e) bring any claims by way of subrogation to the 

claims of the FDTC-R, against (a) any directors, o fticcrs, or employees of the Hank, including but 

not limited to the Settling ndant ~, in their capacities as directors, officers, or employees of 

the Bank or in any other capacity> or (b) any other individual or entity. 

2. Nothing herein shall be construed to admit the existence of, or to establish, 

any claim or cause of action on the part of fidel ity and Deposit Company of Maryland 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 the Settling Defendants are or were shareholders of the Bank or 

its holding company and by virtue thereof arc or may be entitled to a dividend, payment, or other 

distribution upon reso lution of the receivership of the Bank or proceeds in any litigation that has 

been or could be brought against the Federal Deposit Insurance Corporation in any capacity or 

against the United States based on or arising out of, in whole or in art~ the closing of the Bank, 

or any alleged acts or omissions by the Federal Deposit Insurance Corporation in any capacity, 

the United States government> or any agency or department of the United States government in 

5 
connection with the Bank, its conservatorship, or receivership, the Settling Defendants hereby 

knowingly assign to the rDlC-R any and all rights, titles, and interest in and to any and all such 

dividends, payments, or other distributions, or proceeds. 

SI(CTJON V: Representations and Acknowledgements 

A Aulhori:t.cd Signatories. All of the undersigned persons represent and warrant that 

they are Parties hereto or are 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, trustees, admi nistrators, representatives, 

successors, and assigns. 

B. Advice of Counsel. Each Party hereby acknowledges that he, she, or it has 

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

this Agreement has been explained to that Patty hy his, her, or its counsel. 

C. Financial Disclosure Representation. Each Settling Defendant has suhmitted 

financial infotmation to the FDlC-R including a signed Financial Disclosure Form and herein 

affirms that his financial information is materially true and accurate as of the date of this 

Agreement. Each Settling Defendant expressly acknowledges that, in determining to settle the 

claims released herein, the FDIC-R has n:asonably and justifiably rdicd upon the accuracy of the 

financial information submitted by the Settling Defendants. The FDIC-R has no obligation to 

independently verify the completeness or accuracy of that financial information. lf the FDlC-R 

establishes via a final adjudication in an appropriate judicial forum that a Settling Defendant 

fa iled to disclose any material interest, legal, equitable, or beneficial, in any asset, that Settling 

Defendant agrees to cooperate fully with the FDIC-R to provide updated financial information 

and to pay to the FDIC-R the Jesser of (J) the value of the Settling Defendant's undisclosed 

material interest in such asset(s); or (2) the amount of unpaid damages alleged against that 

Settling Defendant. 

•llt.17-9348-(,J I 5 6 
SECTION VI: Reasonable Cooperation 

A. The Parties agree to cooperate in good faith to effectuate all the terms and 

conditions· of this Agreement, including doing, or causing their genl~ and attorneys to do, 

whatever is reasonably necessary to effectuate the signing, delivery, execution, fi ling, recording, 

and entry, of any documents necessary to conclude the D&O Action and to othe1wisc perform 

the terms of this Agreement. 

B. The Settling Defendants agree to cooperate fully with the FDIC-R in connection 

with any action required under this Agreement. Such cooperation shall consist of: 

I. Producing all documents requested by the FDlC-R, without the necessity 

of subpoena, as determined by the PDIC-R, in its sole discretion, to be relevant to the Hank; 

2. Appearing as reque&ied by the FD.LC-R at reasonab1e times and places for 

interviews regarding facts, as detcnnined by the FDIC-R in its sole discretion, to be relevant to 

the Bank; 

3 . Testifying as requested by the i:''D IC-R, without the necessity of a 

subpoena, in any matter relevant to the Bank, as determined by the FD1C-R~ 

4. Signing truthful affidavilc;, regarding any matter, as determined by the 

F.D[C-R in its sole discretion, to be relevant to the Bank. 

SECTION VII: Other Matters 

A. No Admission of Liability. The undersigned Parties each acknowledge and agree 

that the matters set f01th in this Agreement constitute the settlement and compromise of disputed 

claims and defenses, thal this Agreement is not an admission or evidence of liability or infinnity 

by any of them regarding any claim or defense, and that the Agreement shall not be offered or 

received in evidence by or against any Party except to cntorce its terms. 

B. Execution in Counterparts. This Agreement may be executed in counterparts by 

one or more of the Parties and all such counterpm1s when so executed shall together constitute 

the final Agreement, as if one document had been signed by all Parties; and each such 

countcrpa11, upon execution and delivery, shall be deemed a complete original, binding the 

4837·9348-61 IS 7 
Parties subscribed thereto upon the execution by all Parties to this Agreement. 

C. Choice of Law. This Agreement shall be interpreted, construed, and enfbrced 

according to appli cable federal law, or in its absence, the laws o f the Commonwealth of Virginia. 

D. Notices. Any notices required hereunder shall he sent by registered mail, tirst 

class, return receipt rtXJuested, and by email, lo the following: 

[fto the FDIC-R: Christine P. Hsu 

Counsel 

FDIC- Legal Division 

3501 Fairfax Drive VS-B-7054 

Arlington, Virginja 22226-3500 

(b)(6) ........ ....... ·································· ........................... J...... I 

(b )(6) . 

(b)(6) 

If to Settling Defendants 

other than Richard J. Tavss: 

Ifto Richard J. Tavss: 

With a copy to: 

Kathleen M. Balderston 

Nixon Peabody LLP 

437 Madison Avenue 

New York, New York 1 0022 

.......................... j&... ---------.....J 

llunter W. Sims Jr. 

Kaufman & Canales, P.C. 

I SO W. Main Street, Suite 2100 

Norfolk, Virginia 235 10- 1665 

··---1- I 

Mary 'f. Morgan 

Cooper, Spong & Davis, P.C. 

200 High Street, Suite 500 

Portsmouth, Virginia 23704 

(b)(6) ___ _____ _ --- -b ------ I 

C. Entire Agreement and Amendments. This Agreement constitutes the entire 

agreement and understanding between and among the undersigned 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 he waived, except in writing signed 

hy the Parties bound thereby, or by their respective authorized attomcy(s), or other 

rcprcsentati vc( s). 

8 
F. Titles and Captions. All section titles and captions contained in this Agreement 

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

G. No Confidentiality. l he undersigned Parties acknowledge that this Agreement 

shall not be confidential. and will be disclosed purs uant to the Federal DeposH Insurance 

Corporation 's applicable polic ies, procedures, and other legal requirements. 

IN WITNESS WI IEREOF, 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 BANK OF THE COMMONWEALTII 

(b)(6) ............................. ······· o~~~;~is ....... 8~ ········· ······································· ......... . ... ~C>~----------------------------~ 

TITLE: ~~ 

PRINT NAME: f!h va's·ft~A.f. 'f. & 

Date: _____ _ MORTON GOLDMEIER 

TlTLE: 

PRINT NAME: 

Date: _____ _ . HERBERT L. PERLIN 

TITLE: 

PRINT NAME: 

483'/-9~4&-611 s 9 
F. Titles and Captions. All section titles and cnptions contained in this Agreement 

nrc for convenience only und shall not affect the interpretation of this Agreement. 

G. ~o Cgnfidentiality. The undersigned Parlics al~knowledge that this A~:,:rrcl.!mcnt 

shall not he contidt!ntial and will be disclosed pursuant to the Federal Deposit fnsurancc 

Corporation's applicable policies, procedures, nnd other legal rcq\lircments. 

IN WrTNESS WHEREOF, the Parties hereto have caused this Agreement to be executed 

by each of them or their duly authorized reprcscnlntivcs on th~ dates hercinatlcr subscribed. 

Date: ____ . ·-····-

FHDHRAL DEPOSIT INSURANCE CORPORATION AS 

RECEIVER FOR BANK OF THE COMMONWEALTI I 

BY: 

TITLE: 

PRINT NAME: 

(b)(6l. .. ___ Dat~ ~~~l-- 1~ 10l?·---- R~'ON GOLDMETE!} 

TITLE: 

PRINT NAME: Mv~n Go leA \~'Y 

Date: ___ _ HERBERT L. PERIJN 

TITI.E: 

PRINT NAME: 

•l8l1'J).It\-<.IIS 9 
F. Titles and Caption~. All section titles and captions contained in this Agrcc:mcnl 

arc for convenience only and shall not affect the interpr~lation of this Agrccmenl. 

Ci. No_~~Qnndcntiality. Th~ undc:rlligned Parties acknowledge that this Agn:crncnt 

shall not he confidential and will be disdoscd pul'suant to the Feder.al Deposit Insurance 

Corporation's applicable policies. procedures, and other legal requirements. 

IN WITNESS WHEREOF, the l)artics hereto have caused this Agreement to he executed 

by each of them or their duly authorized representatives on the dutcs hcrcinatlcr subscribed. 

D<itc: 

Date:------·----

·"" ------· 

FEDERAL DEPOSIT INSURANCE CORPORATION AS 

lli:CFIVER FOR BANK OF THE COMMONWEAL T11 

nv: 

TITLE: 

PRINT NAME: 

MORTON GOLIJMEIER 

TITLE: 

PR.INT NAME: 

.- /. . J .- Dutc: ___ ? ~~ _ _:_.!{_-::-_~-~- HERBERT 1.. PERLIN 

(b)(6) J 

~-~..-~'~r~rl~.,~.r~~:--~----~===-------------~ 

PRINT NAME: 
(b)(6) _________ ·--·--

/ 

Date: £-Itt- H 

Date: ____ _ 

Date: _ _ ___ _ 

4837-9348-6115 

E·- RJCHARD i?TA VSS 

TITLE: Former Director, Bank of the Commonwealth 

PRINT NAME: Richard J. Tavss 

RAJUV. UPPALAPATI 

TITLE: 

PRINT NAME: 

KENNETH J. YOUNG 

TITLE: 

PRINT NAME: 

10 
Date: ___ _ _ RICHARD J. TJ\ VSS 

TITLE: 

PRINT NAME: 

RAJU V. UPPALAPATI 

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

~~~~ ~~- -- ------.....l 

PRINT NAME: ~AJLA \j ' u PPA 1-A !)A\ I 

Date: KENNETH J. YOUNG 

TlTLE: 

PRINT NAME: 

10 
Date: ___ _ _ RICHARD J. T A VSS 

lTI'LE: 

PRINT NAME: 

Date: ------· ··--- RAJU V. UPI'ALAPATI 

TITLE: 

PRINT NAME: 

Date: · ~~ "I > ··. / ) KENNETII J. YOUNG 

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

TITLE: 

10