Document:

<PAGE>
                                                                   EXHIBIT 10.44

                             SECOND AMENDMENT TO THE
                 AMENDED AND RESTATED STIPULATION OF SETTLEMENT

         This Second Amendment to the Amended and Restated Stipulation of
Settlement (this "Amendment") is made as of March 15, 2002, by and between the
Taylor Defendants (as defined in the Stipulation of Settlement described below)
and the Estate Representative (as defined in the Stipulation of Settlement
described below).

                                    RECITALS

         WHEREAS, the parties hereto have entered into that certain Stipulation
of Settlement, as amended and restated as of October 10, 2001 (the "Stipulation
of Settlement"); all capitalized terms used but not defined herein shall have
the meaning set forth for such terms in the Stipulation of Settlement;

         WHEREAS, pursuant to the Stipulation of Settlement, the Estate
Representative or the Taylor Defendants have the right to terminate the
Stipulation of Settlement if certain conditions have not been satisfied or
waived within a period of time ending on the one hundred eightieth (180th) day
following the Stipulation Execution Date (the "Termination Date"); and

         WHEREAS, the Stipulation of Settlement contemplates, among other
things, that Taylor Capital Group will be issuing: (1) the Trust Preferred
Securities and (ii) a number of shares of TCG Common Stock representing 15% of
the issued and outstanding TCG Common Stock (excluding treasury stock) as of
their date of issuance and immediately after giving effect to their issuance
(the "TCG Common Shares" and, together with the Trust Preferred Securities, the
"Settlement Stock") to the Estate Representative;

         WHEREAS, the parties determined that it is in both of their interests
to explore the possibility of the Taylor Defendants causing Taylor Capital Group
to pursue an initial public offering of the Settlement Stock, as a possible
alternative to said issuance; and

         WHEREAS, the parties have determined that it is therefore in both of
their interests to extend the Termination Date.

         NOW, THEREFORE, in consideration of the above premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree that the Termination Date shall be May 10, 2002.
<PAGE>
                                    COUNSEL FOR THE ESTATE REPRESENTATIVE

                                    ROBERT F. COLEMAN & ASSOCIATES

                           By: /s/ Steven R. Jakubowski
                               -------------------------------------------------
                               Steven R. Jakubowski

                               Robert F. Coleman
                               Steven R. Jakubowski
                               Sean B. Crotty
                               Cassandra A. Crotty
                               77 West Wacker Drive, Suite 4800
                               Chicago, Illinois 60601
                               Telephone:  (312)444-1000
                               Facsimile:  (312)444-1028

                               Estate Representative's Lead Counsel and Chairman
                               of Estate Representative's Executive Committee

                           COUNSEL FOR THE TAYLOR DEFENDANTS

                           MCDERMOTT, WILL & EMERY

                           By: /s/ Steven P. Handler
                               -------------------------------------------------
                               Steven P. Handler

                               Steven P. Handler
                               Steven H. Hoeft
                               David S. Rosenbloom
                               MCDERMOTT, WILL & EMERY
                               227 West Monroe Street
                               Chicago, Illinois 60606
                               Telephone:  (312)372-2000
                               Facsimile:  (312)984-7700

                               Counsel for the Taylor Defendants

                                      -2-<PAGE>
                                                                   EXHIBIT 10.45

                             THIRD AMENDMENT TO THE
                 AMENDED AND RESTATED STIPULATION OF SETTLEMENT

         This Third Amendment to the Amended and Restated Stipulation of
Settlement (this "Amendment") is made as of May 10, 2002, by and between the
Taylor Defendants (as defined in the Stipulation of Settlement described below)
and the Estate Representative (as defined in the Stipulation of Settlement
described below).

                                    RECITALS

         WHEREAS, the parties hereto have entered into that certain Stipulation
of Settlement, as amended and restated as of October 10, 2001 (the "Stipulation
of Settlement"); all capitalized terms used but not defined herein shall have
the meaning set forth for such terms in the Stipulation of Settlement;

         WHEREAS, pursuant to the Stipulation of Settlement, the Estate
Representative or the Taylor Defendants have the right to terminate the
Stipulation of Settlement if certain conditions have not been satisfied or
waived within a period of time ending on the one hundred eightieth (180th) day
following the Stipulation Execution Date (the "Termination Date"); and

         WHEREAS, the Stipulation of Settlement contemplates, among other
things, that Taylor Capital Group will be issuing: (1) the Trust Preferred
Securities and (ii) a number of shares of TCG Common Stock representing 15% of
the issued and outstanding TCG Common Stock (excluding treasury stock) as of
their date of issuance and immediately after giving effect to their issuance
(the "TCG Common Shares" and, together with the Trust Preferred Securities, the
"Settlement Stock") to the Estate Representative;

         WHEREAS, as of March 15, 2002, the parties extended the Termination
Date to May 10, 2002 so that the parties could explore the possibility of the
Taylor Defendants causing Taylor Capital Group to pursue an initial public
offering of the Settlement Stock, as a possible alternative to said issuance
(the "Public Offering"); and

         WHEREAS, the parties have determined that it is in both of their
interests to again extend the Termination Date so that they can continue to
explore the Public Offering.

         NOW, THEREFORE, in consideration of the above premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree that the Termination Date shall be May 31, 2002.
<PAGE>
                                    COUNSEL FOR THE ESTATE REPRESENTATIVE

                                    ROBERT F. COLEMAN & ASSOCIATES

                                    By:    /s/ Steven R. Jakubowski
                                           -------------------------------------
                                           Steven R. Jakubowski

                                           Robert F. Coleman
                                           Steven R. Jakubowski
                                           Sean B. Crotty
                                           Cassandra A. Crotty
                                           77 West Wacker Drive, Suite 4800
                                           Chicago, Illinois 60601
                                           Telephone:  (312) 444-1000
                                           Facsimile:  (312) 444-1028

                                           Counsel for the Estate Representative

                                    COUNSEL FOR THE TAYLOR DEFENDANTS

                                    MCDERMOTT, WILL & EMERY

                                    By:    /s/ Steven P. Handler
                                           -------------------------------------
                                           Steven P. Handler

                                           Steven P. Handler
                                           Steven H. Hoeft
                                           David S. Rosenbloom
                                           MCDERMOTT, WILL & EMERY
                                           227 West Monroe Street
                                           Chicago, Illinois 60606
                                           Telephone:  (312) 372-2000
                                           Facsimile:  (312) 984-7700

                                           Counsel for the Taylor Defendants

                                      -2-<PAGE>
                                                                   Exhibit 10.47

                       IN THE UNITED STATES DISTRICT COURT
                          FOR THE DISTRICT OF DELAWARE

IN RE RELIANCE SECURITIES LITIGATION         MDL Docket No. 1304
                                             Civil Action No. 99-858-RRM

IN RE:
                                             Chapter 11
RELIANCE ACCEPTANCE GROUP, INC.,
et al.,                                      Case No. 98-288 (PJW)
                                             (Jointly Administered)
                  Debtors.

                            STIPULATION OF SETTLEMENT

                                  BY AND AMONG

                                   THE CLASS,

                               THE ESTATE PARTIES,

                             THE GRAHAM DEFENDANTS,

                              THE COLE FAMILY, AND

                              THE TAYLOR DEFENDANTS
<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                             Page
                                                                             ----
<S>                                                                          <C>
I.    BACKGROUND TO THE SETTLEMENT .......................................    1

      A.    The Class Litigation .........................................    1

      B.    The RAG Bankruptcy Filing and Plan Confirmation ..............    3

II.   DEFENDANTS' STATEMENTS AND DENIALS OF WRONGDOING AND LIABILITY .....    4

III.  CLAIMS OF THE CLASS PLAINTIFFS AND BENEFITS OF SETTLEMENT ..........    4

IV.   TERMS OF STIPULATION AND AGREEMENT OF SETTLEMENT ...................    6

      1.    Definitions and Interpretations ..............................    6

      2.    Releases and Agreements Among the Settling Parties ...........   24

      3.    Preliminary Order and Settlement Hearing .....................   44

      4.    Conditions to Settlement; Effect of Disapproval or Termination   45

      5.    The Class Settlement Fund ....................................   51

      6.    Administration and Calculation of Claims, Final Awards, and
            Supervision and Distribution of Class Settlement Fund ........   56

      7.    Class Attorneys' Fees and Reimbursement of Expenses ..........   58

      8.    Miscellaneous Provisions .....................................   60
</TABLE>

                                        i
<PAGE>

EXHIBITS

      EXHIBIT A         [Proposed] Order Preliminarily Approving Settlement and
                        Providing for Notice

      EXHIBIT A-1       Notice of Proposed Settlement of Class Action

      EXHIBIT A-2       Summary Notice for Publication

      EXHIBIT A-3       Proof of Claim and Release Form

      EXHIBIT B         [Proposed] Final Judgment and Order of Dismissal with
                        Prejudice

      EXHIBIT C         Taylor Settlement Agreement

      EXHIBIT D         Summary of Certain Defense Costs of Certain D&O
                        Indemnity Claimants

      EXHIBIT E         Agreed Allocation of Remaining St. Paul Insurance
                        Proceeds Among the Graham D&O Defendants

      EXHIBIT F         Agreement By and Among the Lead Plaintiffs and the Class
                        5 Participants Regarding Proposed Plan of Allocation for
                        Class 5 Distributions

                                       ii

<PAGE>
         This Stipulation of Settlement (the "Settlement Stipulation") is dated
and executed as of October 10, 2001 (the "Settlement Execution Date"). All
capitalized terms used herein and not otherwise defined shall have the meanings
set forth in Section IV.1 hereof. This Settlement Stipulation is made and
entered into by and among the Settling Parties, by and through their undersigned
attorneys of record. This Settlement Stipulation is intended by the Settling
Parties, upon and subject to the terms and conditions hereof, to (among other
things) fully, finally, and forever resolve, discharge, and settle the Released
Class Claims and the Released Graham Defendant Claims.

I.       BACKGROUND TO THE SETTLEMENT

         A.       THE CLASS LITIGATION

         In early 1998, the following class action lawsuits were filed in the
United States District Court for the Western District of Texas alleging
violations of the federal securities laws and breaches of fiduciary duties under
Delaware law:

                  1.       Michael Sabbia, et al. v. Reliance Acceptance Group,
                           Inc., et al., C.A. No. 98-0044;

                  2.       Brian J. O'Connor v. Reliance Acceptance Group, Inc.,
                           et al., C.A. No. 98-0099;

                  3.       Walter M. Goldberg IRA Rollover v. Reliance
                           Acceptance Group, Inc., et al., C.A. No. 98-0111;

                  4.       Keith Jacobs, et al. v. Jeffrey W. Taylor, et al.,
                           C.A. No. 98-0119;

                  5.       Seymour Irwin Levin, et al. v. Reliance Acceptance
                           Group, Inc., et al., C.A. No. 98-0120;

                  6.       Darius Antia, et al. v. KPMG Peat Marwick, LLP, et
                           al., C.A. No. 98-0146;

                  7.       Bank West Financial Corp., et al. v. Jeffrey W.
                           Taylor, et al., C.A. No. 98-0184;

                  8.       Harold M. Nofzinger v. KPMG Peat Marwick, LLP, et
                           al., C.A. No. 98-0188; and

                  9.       Allen Aron, et al. v. Jeffrey W. Taylor, et al., C.A.
                           No. 98-0222.

         The Texas Actions were consolidated under the case captioned Michael
Sabbia, et al. v. Reliance Acceptance Group, Inc., et al., C.A. No. 98-0044. By
order dated June 29, 1998, the Lead

                                        1
<PAGE>
Plaintiffs and Class Co-Lead Counsel were appointed in the Texas Actions
pursuant to the requirements of the PSLRA.

         On February 2, 1998, a class action was filed in the United States
District Court for the Northern District of Illinois entitled Graham v. Taylor
Capital Group, Inc., et al., Civil No. 98 C 0779, alleging violations of the
federal securities laws and breaches of fiduciary duties under Delaware law and
ERISA. By order dated July 15, 1998, the Lead Plaintiffs and Class Co-Lead
Counsel were appointed in the Illinois Action pursuant to the requirements of
the PSLRA. On August 18, 1999, the Lead Plaintiffs filed the Consolidated
Amended Complaint.

         On December 9, 1999, the Judicial Panel on Multidistrict Litigation
transferred the Texas Actions and the Illinois Action to the United States
District Court for the District of Delaware for coordinated pretrial proceedings
with the Consolidated Adversary Proceeding being pursued by the Estate. The
caption of the consolidated proceedings before the Court is In re Reliance
Securities Litigation, MDL Docket No. 1304, Civil Action No. 99-858-RRM.

         On October 31, 2000, the United States District Court for the District
of Delaware entered an order certifying the Class and approving Class Co-Lead
Counsel as counsel for the Class.

         B. THE RAG BANKRUPTCY FILING AND PLAN CONFIRMATION

         On February 9, 1998 (the "Petition Date"), the Debtors filed with the
Bankruptcy Court their petitions for relief under chapter 11 of the Bankruptcy
Code. RAG's petition was filed as Case No. 98-288 (PJW). The petitions for RAG's
subsidiaries are consecutively numbered through Case No. 98-310 (PJW).

         On July 2, 1998, the Bankruptcy Court confirmed the Debtors'
Reorganization Plan. Under the Reorganization Plan, and through the Confirmation
Order, the Debtors and their respective chapter 11 estates were substantively
consolidated pursuant to Section 1123(a)(5)(C) of the Bankruptcy Code for
purposes of classification, distributions, and all other purposes under the
Reorganization Plan. The Reorganization Plan became effective on July 31, 1998.

                                        2
<PAGE>
         The Reorganization Plan divided the holders of Claims and Equity
Interests in the Debtors into various classes. Class 4 of the Reorganization
Plan consisted of the holders of certain Allowed unsecured claims against the
Debtors. Class 5 of the Reorganization Plan included the holders of Allowed
Equity Interests and the holders of Allowed Class 5 Litigation Claims. The
Reorganization Plan specified how the recoveries from Causes of Action brought
by the Estate Representative were to be divided among the Claims and Equity
Interests classified in Class 4 and Class 5 of the Reorganization Plan. The
Reorganization Plan, however, did not specify how distributions under the
Reorganization Plan to Class 5 are to be divided within Class 5.

         Approximately 40 proofs of claim were filed in RAG's Bankruptcy Case on
behalf of various holders of securities and related litigation claims. A number
of these proofs of claim were filed by the Lead Plaintiffs and by the Class
Co-Lead Counsel. On December 15, 2000, the Lead Plaintiffs filed an amended
proof of claim (the "Class Proof of Claim") in RAG's Bankruptcy Case based on
the actions described in the Consolidated Amended Complaint. The Class Proof of
Claim stated that RAG was liable to the Class for substantial damages, primarily
based upon alleged violations of Sections 10(b) and 14(a) of the Securities
Exchange Act of 1934, and Rules 10b-5 and 14a-9 promulgated thereunder.

II. DEFENDANTS' STATEMENTS AND DENIALS OF WRONGDOING AND LIABILITY

         The Graham Defendants have denied and continue to deny each and every
one of the claims and contentions asserted against them by the plaintiffs in the
Graham Litigation and the Delaware Class Litigation. The Graham Defendants
further have expressly denied and continue to deny all charges of wrongdoing or
liability arising out of any of the conduct, statements, acts or omissions
asserted against them in the Graham Litigation or the Delaware Class Litigation.

         Nonetheless, the Graham Defendants have concluded that their further
involvement in the Graham Litigation and the Delaware Class Litigation would be
protracted and expensive, and that it is desirable that all Claims and Causes of
Action against them be fully and finally settled in the manner and upon the
terms and conditions set forth in this Settlement Stipulation in order to limit

                                        3
<PAGE>
further expense, inconvenience, and distraction, and to dispose of burdensome
and protracted litigation.

III. CLAIMS OF THE CLASS PLAINTIFFS AND BENEFITS OF SETTLEMENT

         The plaintiffs in the Delaware Class Litigation and the Graham
Litigation believe that the Claims asserted in the Graham Litigation and the
Delaware Class Litigation have merit, and that the evidence developed to date
supports the Claims asserted. However, Class Co-Lead Counsel recognize and
acknowledge the expense and length of continued proceedings necessary to
prosecute the Graham Litigation and the Delaware Class Litigation against the
Graham Defendants through trial and through appeals. Class Co-Lead Counsel also
have taken into account the uncertain outcome and the risk of any litigation,
especially in complex actions (such as the Graham Litigation and the Delaware
Class Litigation), as well as the difficulties and delays inherent in such
litigation. Class Co-Lead Counsel are also mindful of the inherent problems of
proof under and defenses to the claims they have asserted in the Graham
Litigation and the Delaware Class Litigation against the Graham Defendants.

         The Lead Plaintiffs further believe that their Class Proof of Claim
filed in RAG's Bankruptcy Case has merit, and that the evidence developed in the
Graham Litigation, the Delaware Class Litigation, and the Consolidated Adversary
Proceeding supports the Claims asserted therein. However, Class Co-Lead Counsel
recognize and acknowledge the expense and length of continued proceedings
necessary to prosecute their Claims against the Estate through trial and through
appeals. Class Co-Lead Counsel also have taken into account the uncertain
outcome and the risk of any litigation, especially in such complex actions, as
well as the difficulties and delays inherent in such litigation. Class Co-Lead
Counsel are also mindful of the inherent problems of proof under and defenses to
the Class Proof of Claim.

         In light of the foregoing, Class Co-Lead Counsel believe that the
settlement set forth in this Settlement Stipulation confers substantial benefits
upon the Class. Based on their evaluation, Class

                                        4
<PAGE>
Co-Lead Counsel have determined that the settlement set forth in this Settlement
Stipulation is in the best interests of the Class.

IV. TERMS OF STIPULATION AND AGREEMENT OF SETTLEMENT

         NOW, THEREFORE, for good and valuable consideration, including the
payments, promises, and covenants contained herein, it is hereby stipulated and
agreed by and among the Settling Parties, by and through their respective
counsel or attorneys of record, as follows:

1.       DEFINITIONS AND INTERPRETATIONS

         The following terms shall have the following meanings when used in
capitalized form in this Settlement Stipulation. Such meanings shall be equally
applicable to both the singular and plural forms of such terms. The words
"herein," "hereof," and "hereunder" and other words of similar import refer to
this Settlement Stipulation as a whole and (unless otherwise specified) not any
particular section, subsection, or clause contained herein.

         1.1 "Allowed," when used with respect to any Claim or Equity Interest,
means the Claim or Equity Interest or applicable portion thereof that has been,
or will be, allowed pursuant to section 502 of the Bankruptcy Code or pursuant
to the Reorganization Plan (or if the Claim or Equity Interest was objected to,
that a final, nonappealable order has been, or will be, entered allowing the
Claim or Equity Interest).

         1.2 "Allowed Class Claim" means the Claim of the Class in the
Bankruptcy Cases that, pursuant to Section IV.2.1 of this Settlement
Stipulation, will be Allowed on the Settlement Effective Date in the amount of
$58,000,000 and treated under the Reorganization Plan as an Allowed Class 5
Litigation Claim.

         1.3 "Authorized Claimant" means any Class Member who files a proof of
claim in the Graham Litigation in such form and manner, and within such time, as
the Court shall prescribe.

         1.4 "Bankruptcy Cases" means the jointly administered chapter 11
bankruptcy cases of the Debtors in the Bankruptcy Court, Case No. 98-288 (PJW)
(Jointly Administered).

                                        5
<PAGE>
         1.5 "Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as
amended, 11 U.S.C. Sections 101, et seq.

         1.6 "Bankruptcy Court" means the United States Bankruptcy Court for the
District of Delaware.

         1.7 "Barlow" means Thomas L. Barlow, an individual.

         1.8 "Causes of Action" means all Claims, choses in action, third-party
Claims, counterclaims, and crossclaims.

         1.9 "Claim" means (a) a right to payment, whether or not such right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured, or unsecured, or (b)
a right to an equitable remedy for breach of performance if such breach gives
rise to a right of payment, whether or not such right to an equitable remedy is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured, or unsecured.

         1.10 "Class" means the class certified in the Graham Litigation by
order of the Court dated October 31, 2000, or as modified by any subsequent
Court order entered with the consent of all of the Settling Parties.

         1.11 "Class 4" means the impaired class designated as "Class 4" in the
Reorganization Plan.

         1.12 "Class 5" means the impaired class designated as "Class 5" in the
Reorganization Plan, which consists of (i) all Class 5 Equity Interests and (ii)
all Class 5 Litigation Claims.

         1.13 "Class 5 Equity Interest" means any Equity Interest.

         1.14 "Class 5 Litigation Claims" means the Claims defined in the
Reorganization Plan as "Class 5 Litigation Claims."

         1.15 "Class 5 Plan of Allocation" means that certain plan of allocation
to be approved by order of the Court or the Bankruptcy Court for distribution of
proceeds payable under the Reorganization Plan to holders of Class 5 Equity
Interests and Class 5 Litigation Claims.

                                        6
<PAGE>
         1.16 "Class Co-Lead Counsel" means the following firms: Milberg Weiss
Bershad Hynes & Lerach LLP (the "Milberg Firm"); and David B. Kahn & Associates
(the "Kahn Firm"), which were appointed as counsel for the Class in the Graham
Litigation and for the Persons designated as lead plaintiffs in the Delaware
Class Litigation.

         1.17 "Class Member" means a Person who falls within the definition of
the Class, as set forth herein.

         1.18 "Class Period" means the period from (and including) March 14,
1995, through (and including) November 14, 1997.

         1.19 "Class Settlement Fund" means the escrow fund established by Class
Co-Lead Counsel to accept distributions and recoveries on behalf of the Class,
including (i) distributions of cash and securities from the Estate on account of
the Allowed Class Claim, (ii) recoveries obtained pursuant to the terms hereof,
and (iii) all other Class recoveries.

         1.20 "Cole Family" means any or all of the following Persons: Irwin H.
Cole; the Estate of Irwin H. Cole; Shirley B. Cole, individually, as trustee or
investment advisor of any Cole Family Trust, and as executrix of the Estate of
Irwin H. Cole; Lori Cole, individually, as trustee or investment advisor of any
Cole Family Trust, and as successor executrix of the Estate of Irwin H. Cole;
Cathy Cole Williams, individually, as trustee or investment advisor of any Cole
Family Trust, and as successor executrix of the Estate of Irwin H. Cole; Ian
Hunt, individually and as trustee or investment advisor to certain Cole Family
Trusts; Justin Williams, individually and as trustee or investment advisor to
certain Cole Family Trusts; and each of the Cole Family Trusts.

         1.21 "Cole Family Chancery Action" means that certain litigation
commenced on August 19, 1998, by certain members of the Cole Family in the
Delaware Court of Chancery, Civil Action No. 16594NC, against certain of the
Graham Defendants and others for breach of fiduciary duty, fraud, and related
Causes of Action.

         1.22 "Cole Family Trusts" means any or all of the following Persons:
the 1993 Exempt Trust for Lori Cole; the 1993 Non-Exempt Trust for Lori Cole;
the 1985 Trust for Todd Justin

                                        7
<PAGE>
Williams; the Cathy Cole Williams Custodial Account for Bradley F. Williams; the
1992 Trust for Bradley F. Williams; the 1992 Trust for Todd Justin Williams; the
Cathy Cole Tayco Trust; the Lori Cole Tayco Trust; the Randy Cole Tayco Trust;
the 1993 Non-Exempt Trust for Cathy Cole; the 1993 Exempt Trust for Cathy Cole;
the 1985 Trust for Jamie Lee Matthews, and any of the foregoing Persons' past or
present trustees, investment advisors, or beneficiaries.

         1.23 "Confirmation Order" means (i) the order of the Bankruptcy Court
dated as of July 2, 1998, confirming the Reorganization Plan, and (ii) the order
of the Bankruptcy Court dated September 3, 1998, approving certain
post-confirmation technical amendments to the Reorganization Plan and confirming
the Reorganization Plan as amended.

         1.24 "Consolidated Adversary Proceeding" means the consolidated
proceeding ordered by the Court on July 15, 1999, resulting in the consolidation
of the 398 Adversary and the 399 Adversary into a single case before the Court,
captioned David T. Allen v. Sidney J. Taylor, et al., Civil Action No.
99-146-RRM.

         1.25 "Consolidated Amended Complaint" means that certain complaint
filed on August 18, 1999, in the Graham Litigation, as it may be amended from
time to time.

         1.26 "Court" means the United States District Court for the District of
Delaware.

         1.27 "D&O Indemnity Claimants" means Lori Cole, Irwin H. Cole, Cathy
Cole Williams, the Estate of Irwin H. Cole (including through its executrix),
Solway F. Firestone, William S. Race, Dean L. Griffith, Ross J. Mangano, Howard
B. Silverman ("Silverman"), and James D. Dolph.

         1.28 "D&O Indemnity Claims" means all the Class 5 Litigation Claims of
all the D&O Indemnity Claimants against the Debtors and the Estate for
indemnification or contribution (whether contractual or otherwise) based upon,
arising out of, or in any way related to, the defense of the Graham Litigation,
the Delaware Class Litigation, the Split-Off Transaction, or the Debtors.

         1.29 "Debtors" means any of the following entities at any time before
the Reorganization Plan Effective Date (including any of their predecessors or
successors in interest): (i) RAG; (ii) Reliance Acceptance Corporation, formerly
known as Cole Taylor Finance Company ("RAC"), a

                                        8
<PAGE>
wholly-owned subsidiary of RAG; and (iii) the following 21 wholly-owned
subsidiaries of RAC: Reliance Acceptance Corp. of Arizona, Reliance Acceptance
Corp. of Colorado, Reliance Acceptance Corp. of Florida, Reliance Acceptance
Corp. of Georgia, Reliance Acceptance Corp. of Illinois, Reliance Acceptance
Corp. of Indiana, Reliance Acceptance Corp. of Iowa, Reliance Acceptance Corp.
of Kentucky, Reliance Acceptance Corp. of Minnesota, Reliance Acceptance Corp.
of Missouri, Reliance Acceptance Corp. of Michigan, Reliance Acceptance Corp. of
New Mexico, Reliance Acceptance Corp. of Nevada, Reliance Acceptance Corp. of
North Carolina, Reliance Acceptance Corp. of Ohio, Reliance Acceptance Corp. of
Oregon, Reliance Acceptance Corp. of South Carolina, Reliance Acceptance Corp.
of Tennessee, Reliance Acceptance Corp. of Texas, Reliance Acceptance Corp. of
Utah, and Reliance Acceptance Corp. of Washington.

         1.30 "Delaware Chancery Court" means the Court of Chancery of the State
of Delaware in and for New Castle County.

         1.31 "Delaware Class Litigation" means the case captioned In re
Consolidated Reliance Acceptance Group Shareholder Litigation, C.A. No. 15989NC,
presently pending before the Delaware Chancery Court and represented by the
following consolidated actions: (i) Levin v. Reliance Acceptance Group, et al.,
C.A. No. 15989NC; (ii) Curnyn v. Taylor, et al., C.A. No. 16150NC; (iii) Hansen
v. Taylor Capital Group, Inc., et al., C.A. No. 16198NC; (iv) Pama Partnership
v. Taylor Capital Group, Inc. et al., C.A. No. 16212NC; and (v) Block, et al. v.
Taylor, et al., C.A. No. 16328NC.

         1.32 "Equity Interest" means any equity interest in the Debtors
represented by common stock or options issued by RAG.

         1.33 "Escrow Agent" means Class Co-Lead Counsel or their successors.

         1.34 "Estate" means the estates of the Debtors created by Section 541
of the Bankruptcy Code upon the commencement of the Bankruptcy Cases and
substantively consolidated pursuant to the terms of the Reorganization Plan.

                                        9
<PAGE>
         1.35 "Estate Parties" means the Debtors, the Estate, the
Post-Confirmation Estate, the Estate Representative, and the "Class 4 Designee"
(as defined in the Reorganization Plan).

         1.36 "Estate Representative" means David T. Allen, not individually,
but solely as the representative of the consolidated Post-Confirmation Estate
appointed pursuant to Section 1123 of the Bankruptcy Code.

         1.37 "Extraordinary Costs" means the costs incurred in the Insurance
Litigation by the Insurance Litigation Plaintiffs to retain experts, jury
consultants, and trial technology consultants (and related equipment charges).

         1.38 "Final" means, with respect to an order of any court, a final
order as to which the appeal or time to appeal has concluded and no further
appeal process is or will be available.

         1.39 "Graham Defendants" means Taylor Capital Group, Jeffrey W. Taylor,
Bruce W. Taylor, Sidney J. Taylor, Cole Taylor Bank, Irwin H. Cole, the Estate
of Irwin H. Cole, Shirley Cole (individually and in her representative
capacity), Lori Cole (individually and in her representative capacity), Cathy
Cole Williams (individually and in her representative capacity), Howard B.
Silverman, James D. Dolph, J. Christopher Alstrin, William S. Race, Ross J.
Mangano, Solway F. Firestone, Melvin E. Pearl, Dean L. Griffith, and the
Voluntarily Dismissed Defendants.

         1.40 "Graham D&O Defendants" means Jeffrey W. Taylor, Bruce W. Taylor,
Sidney J. Taylor, Irwin H. Cole, the Estate of Irwin H. Cole, Shirley Cole
(individually and in her representative capacity), Lori Cole (individually and
in her representative capacity), Cathy Cole Williams (individually and in her
representative capacity), Howard B. Silverman, James D. Dolph, J. Christopher
Alstrin, William S. Race, Ross J. Mangano, Solway F. Firestone, Melvin E. Pearl,
Dean L. Griffith, and the Voluntarily Dismissed Defendants.

         1.41 "Graham Litigation" means the Texas Actions, the Illinois Action,
the MDL Proceeding, and all Claims asserted therein.

         1.42 "Illinois Action" means that certain class action complaint filed
on February 2, 1998, in the United States District Court for the Northern
District of Illinois entitled Graham v. Taylor

                                       10
<PAGE>
Capital Group, Inc., et al., Civil No. 98 C 0779, as it may be amended from time
to time, alleging violations of the federal securities laws and breaches of
fiduciary duties under Delaware law and ERISA.

         1.43 "Insurance Arbitration" means the arbitration proceeding captioned
David T. Allen, as Estate Representative for Substantially Consolidated
Post-Confirmation Estate of Reliance Acceptance Group, Inc. (f/k/a The Cole
Taylor Financial Group, Inc.) and its Subsidiaries, Jeffrey W. Taylor, Bruce W.
Taylor, Sidney J. Taylor, J. Christopher Alstrin, and Melvin E. Pearl v.
National Union Fire Ins. Co. of Pittsburgh, PA, No. 51 Y 195 00162 01, pending
before the American Arbitration Association.

         1.44 "Insurance Litigation" means (i) that certain action pending
before the Court, captioned Alstrin v. St. Paul Mercury Ins. Co., et al., Civil
Action No. 98-683-RRM (the "Alstrin Litigation"), (ii) any Causes of Action the
Graham D&O Defendants and/or any of the Estate Parties may have against Dann
Insurance, Tri-City Brokerage, Freeborn & Peters, and/or David H. Kistenbroker,
(iii) any other action related to the Insurance Policies brought by the
Insurance Litigation Plaintiffs against any Person (including, without
limitation, the Insurance Arbitration and actions based upon denials of coverage
under the Insurance Policies).

         1.45 "Insurance Litigation Plaintiffs" means the parties of record in
the Insurance Litigation (whether as plaintiffs or defendants) who are insureds
under the Insurance Policies, including, without limitation, the Estate
Representative (in its capacity as cross-claimant), the Graham D&O Defendants,
and any other party of record who is, or asserts a claim as, a plaintiff in the
Insurance Litigation.

         1.46 "Insurance Policies" means, collectively, the following policies
of insurance: (i) a ten million dollar ($10,000,000) "Excess Insurance Policy,"
Number DOX 132022519, issued by Continental Casualty Company ("CNA"), incepting
July 31, 1996; (ii) a ten million dollar ($10,000,000) "Excess Financial
Products Insurance Policy," Number NDA 0117927-96, issued by Reliance Insurance
Company ("Reliance Insurance"), incepting July 31, 1996; and (iii) a thirty

                                       11
<PAGE>
million dollar ($30,000,000) "Directors, Officers and Corporate Liability
Insurance Policy," Number 484-93-25, issued by the National Union Fire Insurance
Company of Pittsburgh, PA ("National Union"), incepting February 12, 1997 (the
"National Union Policy").

         1.47 "Insurance Recoveries" means recoveries of proceeds obtained from
or in connection with the Insurance Policies or the Insurance Litigation
(whether such recoveries arise in contract or tort); provided, however, that
Insurance Recoveries shall not include amounts payable pursuant to the St. Paul
Insurance Policy, which shall be distributed in accordance with the provisions
of Section IV.2.4 hereof.

         1.48 "Judgment" means the "Final Judgment and Order of Dismissal with
Prejudice" to be entered by the Court, substantially in the form attached hereto
as EXHIBIT B, approving this Settlement Stipulation, and granting further relief
as provided therein.

         1.49 "Lead Plaintiffs" means the Persons who were appointed as lead
plaintiffs in the Graham Litigation.

         1.50 "MDL Proceeding" means the multidistrict litigation proceeding
captioned In Re Reliance Securities Litigation, MDL Docket No. 1304, C.A. No.
99-858-RRM, pending in the United States District Court for the District of
Delaware.

         1.51 "Non-Released Party" means any Person that is not a Released
Party.

         1.52 "Person" means a natural person, individual, corporation,
partnership, limited partnership, limited liability partnership, limited
liability company, association, joint venture, joint stock company, estate,
legal representative, trust, unincorporated association, government or any
political subdivision or agency thereof, any business or legal entity, and any
spouse, heir, executor, administrator, predecessor, successor, representative,
or assign of any of the foregoing.

         1.53 "Post-Confirmation Estate" means the substantively consolidated
Estate upon and after the Reorganization Plan Effective Date.

         1.54 "Preliminary Order" means the "Order Preliminarily Approving
Settlement and Providing for Notice" to be entered by the Court, substantially
in the form attached hereto as EXHIBIT

                                       12
<PAGE>
A, preliminarily approving this Settlement Stipulation, authorizing the form and
manner of notice of the Settlement Hearing (as defined in Section IV.3.2
hereof), and granting further relief as provided therein.

         1.55 "PSLRA" means the Private Securities Litigation Reform Act of
1995, as amended, 15 U.S.C. Sections 78u-4.

         1.56 "RAG" means Reliance Acceptance Group, Inc., a Delaware
corporation (formerly known as Cole Taylor Financial Group, Inc.), on or before
the Reorganization Plan Effective Date.

         1.57 "Related Persons" means any of the following with respect to a
Person: (i) present or former directors, officers, partners, principals,
members, stockholders, owners, employees, agents, servants, attorneys, personal
or legal representatives, parent companies, subsidiaries, divisions, related or
affiliated entities, predecessors, successors, joint ventures, heirs, executors,
spouses, associates, administrators, transferees, assigns; (ii) any entity in
which that Person has a controlling interest; (iii) any members of that Person's
immediate family; or (iv) any trusts in which that Person has a nominal or
beneficial interest or acts in an advisory, controlling, or fiduciary capacity.
However, the foregoing definition shall not include the following Persons: KPMG,
LLP; The Chicago Corporation (d/b/a ABN-Amro); Sandler O'Neill & Partners, L.P.;
Barlow; Scott Barlow; James Barlow; or any of the following parties in
connection with the Insurance Litigation: Dann Insurance, Tri-City Brokerage,
Freeborn & Peters, David H. Kistenbroker, CNA, Reliance Insurance, National
Union, or St. Paul Insurance.

         1.58 "Released Barlow Claims" means, collectively, all Claims
(including Unknown Claims), demands, rights, liabilities, and Causes of Action
of every nature and description whatsoever, known or unknown, direct or
indirect, whether or not concealed or hidden (including, without limitation,
claims for negligence, gross negligence, professional negligence, breach of duty
of care and/or breach of duty of loyalty and/or breach of duty of candor, fraud,
breach of fiduciary duty, mismanagement, corporate waste, breach of contract,
negligent misrepresentation, violations of any state or federal statutes, rules
or regulations), that were asserted or might have been asserted

                                       13
<PAGE>
by Barlow against (A) any other Graham Defendant and any of their Related
Persons, (B) any of the Lead Plaintiffs and any of their Related Persons, (C)
any Class Member and any of their Related Persons, (D) any member of the Cole
Family and any of their Related Persons, or (E) any of the Taylor Defendants and
any of their Related Persons from the beginning of time up to and including the
Settlement Effective Date, arising, based upon, or related to (I) the facts,
transactions, events, occurrences, acts, disclosures, statements, omissions, or
failures to act which were or could have been alleged in the Graham Litigation,
the Delaware Class Litigation, the Insurance Litigation, or the Cole Family
Chancery Action or (II) the assertion, prosecution, resolution, other pursuit,
or receipt of payments in respect of the Class Proof of Claim, the Allowed Class
Claim, the Graham Litigation, the Consolidated Adversary Proceeding, the Cole
Family Chancery Action, the Insurance Litigation, or the Delaware Class
Litigation. For purposes of this Section IV.1.58, notwithstanding anything
herein to the contrary, the "Released Barlow Claims" shall not include any
Claims Barlow may have asserted against the Estate Parties in the Bankruptcy
Cases.

         1.59 "Released Claims" means, collectively, the Released Class Claims,
the Released Estate Claims, and the Released Graham Defendant Claims.

         1.60 "Released Class Claims" means, collectively, all Claims (including
Unknown Claims), demands, rights, liabilities and Causes of Action of every
nature and description whatsoever, known or unknown, direct or indirect, whether
concealed or hidden, asserted or that might have been asserted (including,
without limitation, Claims for negligence, gross negligence, breach of duty of
care and/or breach of duty of loyalty and/or breach of duty of candor, fraud,
breach of fiduciary duty, mismanagement, corporate waste, breach of contract,
negligent misrepresentation, or violations of any state or federal statutes,
rules or regulations) by the Class or any Lead Plaintiff, Class Member, or
Delaware Class Litigation plaintiff against the Graham Defendants, any member of
the Cole Family, any of the Taylor Defendants, any of the Estate Parties
(including their counsel of record in the Consolidated Adversary Proceeding),
Barlow, or any Related Person to any of the foregoing, from the beginning of
time up to and including the Settlement Effective Date, arising out

                                       14
<PAGE>
of, based upon, or related to (A) both (i) the purchase of RAG common stock by
any Class Member during the Class Period or the holding of RAG common stock on
September 23, 1996 (the record date for the vote on the Split-Off Transaction),
and (ii) the facts, transactions, events, occurrences, acts, disclosures,
statements, omissions, or failures to act that were or could have been alleged
in the Graham Litigation or the Delaware Class Litigation, or (B) the assertion,
prosecution, resolution, other pursuit, or receipt of payments in respect of the
Class Proof of Claim, the Allowed Class Claim, the Consolidated Adversary
Proceeding, the Graham Litigation, the Cole Family Chancery Action, the
Insurance Litigation, or the Delaware Class Litigation; provided, however, that
(I) nothing herein shall in any way be deemed or construed as constituting a
release of (a) the Estate or the Post-Confirmation Estate from the liabilities
associated with the Allowed Class Claim or (b) the liabilities or obligations of
the Settling Parties arising pursuant to this Settlement Stipulation and (II)
the release provided herein to Barlow shall become null and void and of no force
and effect unless (a) Barlow shall have executed, as of the Settlement Effective
Date, a form of release that, consistent with the terms and conditions of this
Settlement Stipulation, and in form and substance reasonably acceptable to the
parties thereto, fully, finally, and forever releases, relinquishes, and
discharges the Released Barlow Claims, and (b) either (1) Barlow shall have
executed all releases requested pursuant to Section IV.2.15 hereof (or shall
have agreed in writing to be bound by the terms of Section IV.2.15 hereof as
though he were a Settling Party) or (2) the order contemplated by Section
IV.4.1(h) hereof shall become Final.

         1.61 "Released Estate Claims" means, collectively, all Claims
(including Unknown Claims), demands, rights, liabilities and Causes of Action of
every nature and description whatsoever, known or unknown, direct or indirect,
whether concealed or hidden, asserted or that might have been asserted
(including, without limitation, Claims for negligence, gross negligence, breach
of duty of care and/or breach of duty of loyalty and/or breach of duty of
candor, fraud, breach of contract, breach of fiduciary duty, mismanagement,
corporate waste, negligent misrepresentation, or violations of any state,
bankruptcy or other federal statutes, rules or regulations) by the Estate

                                                        15
<PAGE>
         Parties against the Class, the Graham Defendants, the Cole Family, the
Taylor Defendants, any Lead Plaintiff, any Class Member, or Class Co-Lead
Counsel, or any Related Person to any of the foregoing from the beginning of
time up to and including the Settlement Effective Date, arising out of, based
upon, or related to (A) both (i) the purchase of RAG common stock by any Class
Member during the Class Period or the holding of RAG common stock on September
23, 1996 (the record date for the vote on the Split-Off Transaction), and (ii)
the facts, transactions, events, occurrences, acts, disclosures, statements,
omissions, or failures to act that were or could have been alleged in the Graham
Litigation or the Delaware Class Litigation, or (B) the assertion, prosecution,
resolution, other pursuit, or receipt of payments in respect of the Class Proof
of Claim, the Allowed Class Claim, the Graham Litigation, the Cole Family
Chancery Action, the Insurance Litigation, or the Delaware Class Litigation;
provided, however, that nothing herein shall in any way be deemed or construed
as constituting a release of the liabilities or obligations of the other
Settling Parties arising pursuant to this Settlement Stipulation.

         1.62 "Released Graham Defendant Claims" means, collectively, all Claims
(including Unknown Claims), demands, rights, liabilities, and Causes of Action
of every nature and description whatsoever, known or unknown, direct or
indirect, whether or not concealed or hidden (including, without limitation,
claims for negligence, gross negligence, professional negligence, breach of duty
of care and/or breach of duty of loyalty and/or breach of duty of candor, fraud,
breach of fiduciary duty, mismanagement, corporate waste, breach of contract,
negligent misrepresentation, violations of any state or federal statutes, rules
or regulations), that were asserted or might have been asserted by any Graham
Defendant, by any Cole Family member, or by any Taylor Defendant against (A) any
other Graham Defendant and any of their Related Persons, (B) any of the Lead
Plaintiffs and any of their Related Persons, (C) any Class Member and any of
their Related Persons, (D) any member of the Cole Family and any of their
Related Persons, (E) any of the Taylor Defendants and any of their Related
Persons, (F) any of the Estate Parties and any of their Related Persons, or (G)
Barlow and any of his Related Persons from the beginning of time up to and
including the Settlement

                                       16
<PAGE>
         Effective Date, arising, based upon, or related to (A) the facts,
transactions, events, occurrences, acts, disclosures, statements, omissions, or
failures to act which were or could have been alleged in the Graham Litigation,
the Delaware Class Litigation, the Insurance Litigation, or the Cole Family
Chancery Action, or (B) the assertion, prosecution, resolution, other pursuit,
or receipt of payments in respect of the Class Proof of Claim, the Allowed Class
Claim, the Consolidated Adversary Proceeding, the Graham Litigation, the Cole
Family Chancery Action, the Insurance Litigation, or the Delaware Class
Litigation; provided, however, that (I) nothing herein shall in any way be
deemed or construed as constituting a release of (a) Claims or Causes of Action
against KPMG related to the Cole Family Chancery Action or (b) the liabilities
or obligations of the other Settling Parties arising pursuant to this Settlement
Stipulation and (II) the release provided herein to Barlow shall become null and
void and of no force and effect unless (a) Barlow shall have executed, as of the
Settlement Effective Date, a form of release that, consistent with the terms and
conditions of this Settlement Stipulation, and in form and substance reasonably
acceptable to the parties thereto, fully, finally, and forever releases,
relinquishes, and discharges the Released Barlow Claims, and (b) either (1)
Barlow shall have executed a release requested pursuant to Section IV.2.15
hereof (or shall have agreed in writing to be bound by the terms of Section
IV.2.15 hereof as though he were a Settling Party) or (2) the order contemplated
by Section IV.4.1(h) hereof shall become Final.

         1.63 "Released Parties" means, collectively, the Persons that are
released from the Released Class Claims, the Released Estate Claims, and the
Released Graham Defendant Claims.

         1.64 "Releasing Party" means any Person providing a release pursuant to
this Settlement Stipulation.

         1.65 "Reorganization Plan" means the "Fourth Amended Joint Plan of
Reorganization Dated April 30, 1998 of Reliance Acceptance Group, Inc., Reliance
Acceptance Corporation and Its Subsidiaries with Technical Amendments," which
was confirmed by the Bankruptcy Court pursuant to the Confirmation Order.

                                       17
<PAGE>
         1.66 "Reorganization Plan Effective Date" means July 31, 1998, the
effective date of the Reorganization Plan.

         1.67 "Settlement Effective Date" means the first date by which all of
the events and conditions specified in Section IV.4.1 of this Settlement
Stipulation have been met and have occurred (or have been waived in the manner
contemplated in Section IV.4.7 hereof).

         1.68 "Settlement Execution Date" means October 10, 2001.

         1.69 "Settling Parties" means, collectively, the Estate Parties, the
Class, the Graham Defendants, the Cole Family, and the Taylor Defendants.

         1.70 "Split-Off Transaction" means the transactions effective February
12, 1997, whereby, inter alia, RAG transferred all of the shares of common stock
of Taylor Capital Group to the Taylor Defendants, among others, in exchange for
the 4.5 million shares of common stock of RAG owned by the Taylor Defendants,
among others, which shares were transferred to RAG.

         1.71 "St. Paul" means St. Paul Mercury Insurance Company.

         1.72 "St. Paul Insurance Policy" means the $10 million ($10,000,000),
Financial Institution Corporate Indemnification and Directors and Officers
Policy, Number 0400JW4206, issued by St. Paul, incepting July 31, 1996.

         1.73 "Taylor Capital Group" means Taylor Capital Group, Inc., a
Delaware corporation and a Graham Defendant.

         1.74 "Taylor Defendants" means Taylor Capital Group, Jeffrey W. Taylor,
Bruce W. Taylor, Sidney J. Taylor, J. Christopher Alstrin, Iris Taylor, Cindy
Taylor Bleil, Taylor Family Partnership, Melvin E. Pearl, and such other of
their Related Persons that are named defendants in either the Graham Litigation
or the Consolidated Adversary Proceeding.

         1.75 "Taylor Settlement Agreement" means that certain executed
agreement, attached hereto as EXHIBIT C, between the Estate Representative and
certain of the Taylor Defendants settling all Claims and Causes of Action
asserted in the Estate's Consolidated Adversary Proceeding against the Taylor
Defendants.

                                       18
<PAGE>
         1.76 "Taylor Settlement Consideration" means the cash and securities
that are to be delivered by Taylor Capital Group as provided in Section IV.5 of
the Taylor Settlement Agreement.

         1.77 "Texas Actions" means, collectively, the nine class action
lawsuits identified in Section I.A hereof filed in the United States District
Court for the Western District of Texas alleging violations of the federal
securities laws and breaches of fiduciary duties under Delaware law.

         1.78 "Unknown Claims" means any Claims which any Person does not know
or suspect to exist in his, her, or its favor at the time of the release of the
Released Party which, if known by him, her, or it, might have affected his, her,
or its settlement with and release of the Released Party, or might have affected
his, her, or its decision not to object to this Settlement Stipulation.

         1.79 "Voluntarily Dismissed Defendants" means Richard W. Tinberg,
Adelyn Dougherty, and James Kaplan, who were named as defendants in certain of
the Graham Litigation lawsuits and/or the Delaware Class Litigation, but who
were voluntarily dismissed without prejudice or otherwise dropped from the
lawsuits.

         1.80 "398 Adversary" means the adversary proceeding captioned David T.
Allen v. Sidney J. Taylor, et al., Adversary Proceeding Number A-98-398, filed
with the Bankruptcy Court and subsequently withdrawn to the Court, consolidated
with the 399 Adversary, and assigned Civil Action No. 99-146-RRM in the
Consolidated Adversary Proceeding.

         1.81 "399 Adversary" means the adversary proceeding captioned David T.
Allen v. Sidney J. Taylor, et al., Adversary Proceeding Number A-98-399, filed
with the Bankruptcy Court and subsequently withdrawn to the Court, consolidated
with the 398 Adversary, and assigned Civil Action No. 99-146-RRM in the
Consolidated Adversary Proceeding.

         2. RELEASES AND AGREEMENTS AMONG THE SETTLING PARTIES

         In exchange for good and valuable consideration, including the promises
and covenants contained herein, the Settling Parties agree that:

         2.1 On the Settlement Effective Date, and subject to satisfaction of
the condition subsequent in Section IV.4.8 hereof, the Class Proof of Claim
filed in the Bankruptcy Cases shall

                                       19
<PAGE>
be Allowed in an amount equal to $58,000,000, and such Allowed Class Claim shall
be treated under the Reorganization Plan as a $58,000,000 Allowed Class 5
Litigation Claim; provided, however, that all distributions of consideration to
be made to the Class on account of its Allowed Class Claim shall be made only
after entry of a Final order of the Court or the Bankruptcy Court approving the
Class 5 Plan of Allocation and the entry of the Final Judgment.

         2.2 On the Settlement Effective Date, and subject to satisfaction of
the condition subsequent in Section IV.4.8 hereof, the Settling Parties agree
that the Claims and Causes of Action that were or could have been asserted by
the Class, the Lead Plaintiffs, or any Class Member in the Graham Litigation and
the Delaware Class Litigation as against the Graham Defendants, Barlow, and
their Related Persons shall be settled and released in exchange for the receipt
by the Class of the following: (i) all recoveries (if any) on all coverage under
the Insurance Policies (subject to the allocations and distributions described
in Sections IV.2.3 and IV.2.4 hereof), including, without limitation, all
coverages available to the Graham D&O Defendants and the Estate Parties; (ii)
all other extra-contractual recoveries (if any) that have been or will be
obtained from any source under the Insurance Policies or in connection with the
Insurance Litigation (including, without limitation, any recoveries pursuant to
Claims covered by any tolling agreements entered into by any Person with any of
the Estate Parties or the Graham Defendants); and (iii) all distributions to the
Class Settlement Fund pursuant to the Class 5 Plan of Allocation; provided,
however, that the release provided herein to Barlow shall become null and void
and of no force and effect unless (A) Barlow shall have executed, as of the
Settlement Effective Date, a form of release that, consistent with the terms and
conditions of this Settlement Stipulation, and in form and substance reasonably
acceptable to the parties thereto, fully, finally, and forever releases,
relinquishes, and discharges the Released Barlow Claims, and (B) either (1)
Barlow shall have executed a release requested pursuant to Section IV.2.15
hereof (or shall have agreed in writing to be bound by the terms of Section
IV.2.15 hereof as though he were a Settling Party) or (2) the order contemplated
by Section IV.4.1(h) hereof shall become Final.

                                       20
<PAGE>
         2.3 All Insurance Recoveries received by any of the Graham D&O
Defendants or the Estate Parties shall be held in trust for the sole and
exclusive benefit of the Class, shall be paid over to the Class Settlement Fund
as soon as practicable after receipt, and shall not in any manner become
property of the Graham D&O Defendants (except as otherwise provided in Section
IV.2.21 hereof) or the Estate Parties; provided, however, that on and after the
Settlement Effective Date, and subject to the satisfaction of the condition
subsequent in Section IV.4.8 hereof, the Class and Class Co-Lead Counsel shall
cause the Insurance Recoveries obtained from or related to the National Union
Policy (including both contractual and extracontractual recoveries obtained in
the Insurance Litigation related to the National Union Policy) to be allocated
and distributed in the following order of priority and sequence:

         (a)      $5,000,000 in proceeds shall be paid directly to the Estate
                  Representative for the sole and exclusive benefit of the
                  Post-Confirmation Estate (subject to the distribution
                  priorities required by Section IV.2.4 hereof);

         (b)      proceeds in an amount equal to the product of the following
                  shall be paid directly to the Estate Representative for the
                  sole and exclusive benefit of the Post-Confirmation Estate:
                  (i) a fraction whose numerator shall equal the total amount
                  that would be paid to the Class Settlement Fund from
                  recoveries obtained under the National Union Policy pursuant
                  to Section IV.2.3(e) hereof absent the distributions required
                  by this Section IV.2.3(b) on account of Extraordinary Costs
                  and whose denominator shall equal the sum of the numerator
                  plus the total amount paid the Estate Representative pursuant
                  to Section IV.2.3(a), multiplied by (ii) the total
                  Extraordinary Costs;

         (c)      $2,000,000 in proceeds shall be paid directly to Taylor
                  Capital Group as compensation for advances made to counsel of
                  record in the Insurance Litigation on account of legal fees
                  charged (or to be charged) and expenses

                                       21
<PAGE>
                  incurred (or to be incurred) in the Insurance Litigation,
                  regardless of the amount actually incurred;

         (d)      proceeds in an amount equal to 10% of the positive difference
                  (if any) between the total amount of Insurance Recoveries
                  obtained from or related to the National Union Policy and $15
                  million shall be paid directly to Taylor Capital Group as
                  further compensation for advances made to counsel of record in
                  the Insurance Litigation on account of legal fees charged (or
                  to be charged) and expenses incurred (or to be incurred) in
                  the Insurance Litigation, regardless of the amount actually
                  incurred; and

         (e)      all remaining proceeds from the total amount of Insurance
                  Recoveries obtained from or related to the National Union
                  Policy shall be paid directly to the Class Settlement Fund for
                  the exclusive benefit of the Class.

         2.4      SETTLEMENT OF D&O INDEMNITY CLAIMS

                  (a) Upon the Estate Representative's receipt of proceeds
         pursuant to Section IV.2.3(a) hereof, all D&O Indemnity Claims shall be
         settled for and Allowed in the aggregate amount of exactly $2,000,000
         (the "Aggregate D&O Indemnity Settlement"), and shall be paid in the
         manner provided hereinafter.

                  (b) Notwithstanding anything in the Reorganization Plan or the
         Class 5 Plan of Allocation to the contrary, of the net recoveries
         obtained by the Estate Representative pursuant to Section IV.2.3(a)
         hereof, the first $2,597,403 of such recoveries shall be allocated in
         the following manner: $597,403 of such recoveries shall be allocated to
         holders of Class 4 Claims under the Reorganization Plan on account of
         their right under the Reorganization Plan to receive 23% of all net
         recoveries after such holders have been paid the "100% Threshold
         Amount" (as defined in the Reorganization Plan); the remaining
         $2,000,000.00 of such recoveries shall be allocated to Class 5 under
         the Reorganization Plan and shall be paid to

                                       22
<PAGE>
         principal counsel for each of the D&O Indemnity Claimants in the
         amounts specified in EXHIBIT D hereto in full and final satisfaction of
         the Estate Parties' obligations in respect of the Aggregate D&O
         Indemnity Settlement and all D&O Indemnity Claims. Such payments shall
         be made in cash within thirty (30) days after receipt of said
         recoveries by the Estate Representative.

                  (c) No other recoveries may be obtained by any D&O Indemnity
         Claimant from any of the Estate Parties or from any other Released
         Parties on account of any unpaid D&O Indemnity Claims, except that
         recoveries made or relating to the St. Paul Insurance Policy shall be
         preserved exclusively for the Graham D&O Defendants and Barlow as
         reimbursement for defense costs incurred and shall be distributed by
         agreement of the Settling Parties pursuant to the allocations set forth
         in EXHIBIT E as soon as practicable following the Settlement Execution
         Date (subject to St. Paul obtaining (i) releases from all the Graham
         D&O Defendants, Barlow, and the Estate Parties, which the Graham D&O
         Defendants and the Estate Parties agree to provide promptly in
         substantially the form previously tendered by St. Paul or (ii) the
         order contemplated by Section IV.2.14 hereof in favor of St. Paul). The
         Settling Parties agree that the proceeds of the St. Paul Insurance
         Policy shall be distributed in full prior to the Settlement Effective
         Date (subject to said releases being provided to St. Paul) and that
         said distribution shall be final notwithstanding any cancellation,
         termination, or other event rendering this Settlement Stipulation
         ineffective.

         2.5 The Graham D&O Defendants and the Estate Parties make no warranties
or representations regarding either the assignability, value, collectibility, or
recoverability of (i) the Insurance Recoveries, (ii) the distributions to be
made to the Class on account of its Allowed Class Claim, (iii) the Taylor
Settlement Consideration, (iv) the coverage available under the Insurance
Policies, or (v) the consideration provided in Section IV.2.2 hereof. The
Settling Parties further

                                       23
<PAGE>
acknowledge, understand, and agree that the Graham D&O Defendants are
specifically relying on the Class's and Class Co-Lead Counsel's covenants that
regardless of the Insurance Recoveries obtained by the Class, the Settling
Parties shall have no right of recovery from the personal assets of the Graham
D&O Defendants, the Cole Family, the Taylor Defendants, or any Related Person to
any of the foregoing. Without limiting the generality of the foregoing, each of
the Lead Plaintiffs, the Class, the Class Members, and Class Co-Lead Counsel (on
behalf of themselves and their Related Persons) jointly and severally covenant,
agree, and acknowledge to each of the Graham D&O Defendants, the Cole Family,
and the Taylor Defendants as follows:

                  (a) He, she, or it will not seek to collect or obtain any sums
         from any of the personal assets of the Graham D&O Defendants, the Cole
         Family, the Taylor Defendants, or any Related Person to any of the
         foregoing, by any means, formal or informal.

                  (b) He, she, or it (or Class Co-Lead Counsel on his, her, or
         its behalf) has carefully read each of the Insurance Policies and the
         pleadings and discovery in the Insurance Litigation and understands and
         acknowledges that the issuers of the Insurance Policies have asserted
         (or may assert) several arguments in the Insurance Litigation or under
         the Insurance Policies as to why there should be no Insurance
         Recoveries by or on behalf of the Graham D&O Defendants.

                  (c) He, she, or it (or Class Co-Lead Counsel on his, her, or
         its behalf) understands that this Settlement Stipulation does not
         guarantee that he, she, or it will receive any Insurance Recoveries and
         that the settlement and releases set forth in this Settlement
         Stipulation may become effective, and the Judgment may become Final,
         without he, she, or it receiving any Insurance Recoveries.

         2.6 Only the Insurance Litigation Plaintiffs shall have the right and
authority to prosecute the Claims asserted in the Insurance Litigation on behalf
of themselves and all other Settling Parties; provided, however, that (i) the
Class or its designated representatives shall at all times have exclusive

                                       24
<PAGE>
decision-making authority regarding all amounts to be accepted by way of
settlement under the Insurance Policies or the Insurance Litigation, (ii) the
Insurance Litigation Plaintiffs shall not settle or compromise any Claims
arising under the Insurance Policies or the Insurance Litigation without the
prior express written consent of the Class or its designated representatives,
(iii) the Estate Parties shall advance Extraordinary Costs incurred in the
Alstrin Litigation as and when billed (subject to reimbursement as provided in
Section IV.2.3(b) hereof), (iv) after the Settlement Execution Date, the
Insurance Litigation Plaintiffs will continue in the prosecution of the Alstrin
Litigation, provide Class Co-Lead Counsel with reasonable access to the
documents, records, and other materials consistent with past practice, and bring
in courts determined by the Class or its designated representatives (with the
Class or its designated representatives bearing all fees, costs, and expenses in
respect thereof) any portion of the Insurance Litigation that is not then
pending in any court and appeal any result obtained in the Insurance Litigation
at the direction of the Class and its designated representatives (except that
Melvin E. Pearl shall not be obligated to bring such actions against Freeborn &
Peters or David H. Kistenbroker), and (v) after the Settlement Effective Date,
the Settling Parties shall otherwise continue and cooperate in the prosecution
of all aspects of the Insurance Litigation pursuant to the terms hereof under
the direction and control of the Class and its designated representatives. The
Insurance Litigation Plaintiffs have agreed to the foregoing rights, authority,
restrictions, and limitations and have offered the foregoing to the Class as
partial compensation for the releases and other consideration granted them
herein. To the extent that the Insurance Litigation Plaintiffs or their counsel
are held liable for any actions taken or not taken at the direction of the Class
and its designated representatives, the Class and its designated representatives
shall hold them harmless from any damages resulting therefrom (including losses
arising under Section IV.4.3 hereof). Notwithstanding anything in this
Settlement Stipulation to the contrary, nothing herein shall require any
Insurance Litigation Plaintiff to initiate or proceed with any aspect of the
Insurance Litigation that is not reasonably grounded in law or fact. The
Judgment or a Final order entered by the Court in the Alstrin Litigation shall
provide that the foregoing

                                       25
<PAGE>
arrangement is valid, effective, and enforceable, is not a valid defense to the
assertion of the underlying Claims or rights, and is entitled to full faith and
credit in any court of competent jurisdiction.

         2.7 The Settling Parties agree that counsel for the Taylor Defendants
shall have the right to withdraw as counsel from the Alstrin Litigation in their
sole discretion, subject only to the approval of the Court to the withdrawal.
The Settling Parties agree not to object to a request by counsel for the Taylor
Defendants to withdraw. In the event that counsel for the Taylor Defendants
choose to withdraw and the Taylor Defendants do not arrange for substitute
counsel reasonably satisfactory to the Class or its designated representatives,
the Class or its designated representatives shall have the right in their sole
discretion (and at their sole cost and expense) to choose new counsel to assume
prosecution of the Alstrin Litigation in place of said withdrawing counsel. If
said counsel does withdraw, and the Taylor Defendants do not arrange for
substitute counsel reasonably satisfactory to the Class or its designated
representatives, then the payments otherwise due Taylor Capital Group pursuant
to Sections IV.2.3(c) and IV.2.3(d) shall be forfeited to the Class Settlement
Fund. Notwithstanding anything contained herein, current counsel for any of the
Insurance Litigation Plaintiffs shall have no obligation to act as counsel of
record (i) in filing or pursuing appeals of any judgments in the Insurance
Litigation, or (ii) in any Insurance Litigation that is not pending as of the
Settlement Execution Date, including, but not limited to, prosecuting Claims
against Dann Insurance, Tri-City Brokerage, Freeborn & Peters, or David
Kistenbroker, and the failure of said counsel to so act shall have no effect on
the right of Taylor Capital Group to receive the payments set forth in Sections
IV.2.3(c) and IV.2.3(d) hereof. In the event that the current counsel for the
Insurance Litigation Plaintiffs shall, for any reason, cease to act as counsel
in the Alstrin litigation, not act as counsel in any appeals of any part of the
Insurance Litigation, or not act as counsel in any other Insurance Litigation
matter, such counsel shall provide the Class or its designated representatives
with reasonable access to its documents, records, and work product with respect
to the Insurance Litigation and thereafter cooperate reasonably with any
substituting counsel

                                       26
<PAGE>
for an orderly transition of the legal representation in the matter transferred.
All Insurance Litigation Plaintiffs hereby authorize their current counsel to
take all actions necessary or proper to comply with the requirements of the
foregoing sentence. Any Insurance Litigation Plaintiff may, at its own expense,
retain its own counsel in the Insurance Litigation, who also would be subject to
the requirements imposed upon the Insurance Litigation Plaintiffs by this
Section IV.2.7.

         2.8 Pursuant to that certain allocation agreement attached hereto as
EXHIBIT F (the "Allocation Agreement"), the Lead Plaintiffs (for themselves and
on behalf of the Class), the Cole Family, and certain other Persons
(collectively, the "Allocation Movants") intend to jointly propose a Class 5
Plan of Allocation for approval by the Court or the Bankruptcy Court, as the
case may be (hereinafter, the "Proposed Plan of Allocation"). As set forth
herein and in EXHIBIT F hereto, the Allocation Movants intend to propose in the
Proposed Plan of Allocation that the Class 5 recovery be divided among the
various Class 5 interests and that all sums payable thereunder to the Class
shall be paid into the Class Settlement Fund for further distribution pursuant
to order of the Court. In addition, the Allocation Movants intend in connection
with the Proposed Plan of Allocation to seek an order requiring that, with
respect to each and every distribution (except for distributions provided in
Section IV.2.4 hereof) of proceeds payable by the Estate to holders of Class 4
Claims, holders of Class 5 Equity Interests, holders of Class 5 Litigation
Claims, and the attorneys for the Estate Parties (the "Distributees"), the
respective amounts of cash, common stock, trust preferred securities, and any
other types of instruments or securities available for distribution to each
Distributee shall equal the percentage proportion that each Distributee's
distribution bears to the total amount of distributions to all Distributees.
Thus, if the stipulated value of a particular Distributee's distribution is
equal to one percent (1%) of the total stipulated value of all of the
distributions to all Distributees, that Distributee would receive one percent
(1%) of the total cash available for distribution, one percent (1%) of the total
common stock available for distribution, and so on with respect to every other
item of value being distributed to all Distributees. The Class and the Cole
Family hereby acknowledge and agree that their agreement to the provisions of
this Section IV.2.8, and their

                                       27
<PAGE>
separate agreement regarding the Proposed Plan of Allocation and other matters,
are material inducements to their entering into this Settlement Stipulation and
agreeing to be bound by its terms.

         2.9 The Settling Parties agree that they shall not (at any time, in any
venue, or in any manner); (i) oppose any aspect of the Proposed Plan of
Allocation, (ii) propose an alternative Class 5 Plan of Allocation, (iii)
support or endorse any aspect of any other proposed Class 5 Plan of Allocation,
(iv) assert or support another's assertion that the Class' recovery under any
Class 5 Plan of Allocation should be reduced or diminished in any fashion as a
result of actual or projected recoveries by the Class from other sources, or (v)
recognize, allow, pay, or otherwise approve or support any other Person's Claim
in the Bankruptcy Cases that seeks a recovery based upon the Claims and Causes
of Action asserted by the Class in the Allowed Class Claim or any such Person's
asserted right to represent the interests of the Class in any manner in the
Bankruptcy Cases; provided, however, that if this Settlement Stipulation fails
to become effective (or becomes effective and fails to remain effective pursuant
to Section IV.4.8 hereof), then (subject to their duties and obligations, if
any, pursuant to the Allocation Agreement) the Settling Parties shall have the
right to take any of the actions set forth in subsections (i) through (v) of
this Section IV.2.9. The Settling Parties acknowledge, accept, and agree that,
in addition to not opposing any aspect of the Proposed Plan of Allocation, the
Estate Parties are not endorsing any aspect of the Proposed Plan of Allocation.

         2.10 The Allocation Movants shall initiate the proceedings in the Court
or the Bankruptcy Court (as the case may be) in respect of the Proposed Plan of
Allocation as soon as practicable after the Settlement Execution Date. All
Settling Parties shall reasonably cooperate with the Allocation Movants in
initiating these proceedings and bringing them to prompt conclusion.

         2.11 On the Settlement Effective Date, subject to satisfaction of the
condition subsequent in Section IV.4.8 hereof, the Lead Plaintiffs, the Class,
and the Class Members shall be deemed to have, and by operation of the Judgment
shall have, fully, finally, and forever released, relinquished, and discharged
all Released Class Claims. On and after the Settlement Effective Date, the Lead

                                       28
<PAGE>
Plaintiffs, the Class, the Class Members, and their Related Persons shall be
forever permanently enjoined from asserting or pursuing any and all Released
Class Claims.

         2.12 On the Settlement Effective Date, subject to satisfaction of the
condition subsequent in Section IV.4.8 hereof, the Graham Defendants, the Cole
Family, and the Taylor Defendants shall be deemed to have, and by operation of
the Judgment shall have, fully, finally, and forever released, relinquished, and
discharged each and all of the Released Graham Defendant Claims. On and after
the Settlement Effective Date, the Graham Defendants, the Cole Family, the
Taylor Defendants, and any Related Person to any of the foregoing shall be
forever permanently enjoined from asserting or pursuing any and all Released
Graham Defendant Claims.

         2.13 On the Settlement Effective Date, subject to satisfaction of the
condition subsequent in Section IV.4.8 hereof, the Estate Parties shall be
deemed to have, and by operation of the Judgment shall have, fully, finally, and
forever released, relinquished, and discharged each and all of the Released
Estate Claims. On and after the Settlement Effective Date, the Estate Parties
and their Related Persons shall be forever permanently enjoined from asserting
or pursuing any and all Released Estate Claims.

         2.14 The Settling Parties agree that, based on the releases provided
herein by the Class to Barlow on the Settlement Effective Date (subject to
satisfaction of the condition subsequent in Section IV.4.8 hereof) and the other
terms contained herein, they shall use their commercially reasonable efforts to
cause the Court to provide in the Judgment to be entered that, on and after the
Settlement Effective Date, subject to satisfaction of the condition subsequent
in Section IV.4.8 hereof, (i) Barlow shall be deemed to have released any and
all Persons that are actual, potential, or prospective defendants in the
Insurance Litigation (including, without limitation, St. Paul, National Union,
CNA, Reliance Insurance, Tri-City Brokerage, Dann Insurance, Freeborn & Peters,
and David H. Kistenbroker) from any and all Claims or Causes of Action that were
or could have been asserted by Barlow in any matter comprising the Insurance
Litigation and (ii) Barlow shall be forever permanently enjoined from asserting
or pursuing any and all Claims or Causes of Action against any

                                       29
<PAGE>
and all Persons that are actual, potential, or prospective defendants in the
Insurance Litigation (including, without limitation, National Union, St. Paul,
CNA, Reliance Insurance, Dann Insurance, Tri-City Brokerage, Freeborn & Peters,
and David H. Kistenbroker) that were or could have been asserted by Barlow in
any matter comprising the Insurance Litigation.

         2.15 On or after the Settlement Effective Date, subject to satisfaction
of the condition subsequent in Section IV.4.8 hereof, the Settling Parties shall
execute all releases reasonably necessary or proper to cause any defendant in
any aspect of the Insurance Litigation with whom a settlement has been reached
or against whom a judgment has been entered to make payments in accordance with
the terms and conditions of this Settlement Stipulation; provided, however, that
such releases shall be (i) mutually provided by said defendant in favor of the
Settling Parties, (ii) consistent with the terms and conditions of this
Settlement Stipulation, and (iii) in form and substance reasonably acceptable to
the parties thereto. Said releases shall fully, finally, and forever release,
relinquish, and discharge the liabilities of the parties thereto to one another
with respect to RAG or the issues or Claims that were or could have been
asserted in the Insurance Litigation. On and after the date upon which said
releases have become effective, the parties to the releases and each of their
Related Persons shall be forever permanently enjoined from asserting or pursuing
any of the matters released therein.

         2.16 Within five (5) business days following the Judgment becoming
Final, the Estate Parties shall file a motion with the Third Circuit Court of
Appeals dismissing the appeal from the June 2, 1999 opinion of the Court
regarding the preliminary injunction entered by the Bankruptcy Court enjoining
the Graham Litigation with prejudice and without costs. The Settling Parties
shall cooperate with the Estate Parties in respect of this motion and provide
such documentation as is reasonably required to implement the foregoing.

         2.17 Within five (5) business days following the Judgment becoming
Final, the Class (by and through Class Co-Lead Counsel), for itself and on
behalf of the Persons designated as lead plaintiffs in the Delaware Class
Litigation, shall file a motion with the Delaware Chancery Court

                                       30
<PAGE>
dismissing the Delaware Class Litigation with prejudice and without costs. The
Settling Parties shall cooperate with the Class in respect of this motion and
provide such documentation as is reasonably required to implement the foregoing.

         2.18 Within five (5) business days following the Judgment becoming
Final, the Cole Family shall cause a motion to be filed with the Delaware
Chancery Court dismissing the Taylor Defendants, Barlow, and Silverman from the
Cole Family Chancery Action with prejudice and without costs. The Settling
Parties shall cooperate with the Cole Family in respect of this motion and
provide such documentation as is reasonably required to implement the foregoing.

         2.19 With respect to any and all Released Claims, each Releasing Party
stipulates and agrees that, upon the Settlement Effective Date (subject to
satisfaction of the condition subsequent in Section IV.4.8 hereof), said
Releasing Party shall be deemed to have, and by operation of the Judgment shall
have, expressly waived the provisions, rights, and benefits of California Civil
Code Section 1542, which provides:

                  A general release does not extend to claims which the creditor
                  does not know or suspect to exist in his favor at the time of
                  executing the release, which if known by him must have
                  materially affected his settlement with the debtor.

The Releasing Parties expressly have, shall be deemed to have, and by operation
of the Judgment shall have, expressly waived any and all provisions, rights and
benefits conferred by any law of any state or territory of the United States, or
principle of common law, which is similar, comparable or equivalent to
California Civil Code Section 1542. A Releasing Party may hereafter discover
facts in addition to or different from those which he, she or it now knows or
believes to be true with respect to the subject matter of the Released Claims,
but each Releasing Party shall expressly have, shall be deemed to have, and by
operation of the Judgment shall have, as of the Settlement Effective Date,
fully, finally, and forever settled and released any and all Released Claims,
known or unknown, direct or indirect, suspected or unsuspected, contingent or
non-contingent, whether or not concealed or hidden, which now exist, or
heretofore have existed, upon any theory of law or equity now existing or coming
into existence in the future, including, but not limited to, conduct which is

                                       31
<PAGE>
negligent, intentional, with or without malice, or a breach of any duty, law or
rule, without regard to the subsequent discovery or existence of such different
or additional facts. Each Releasing Party acknowledges, and shall be deemed by
operation of the Judgment to have acknowledged, that the foregoing waiver was
separately bargained for and a key element of this Settlement Stipulation of
which the Released Claims are a part.

         2.20 Prior to the Settlement Hearing, the Settling Parties shall
jointly file with the Court a motion in the Graham Litigation pursuant to 15
U.S.C. Section 78u-4(f)(7) seeking a bar order in favor of the Graham
Defendants, the Cole Family, the Taylor Defendants, and any Related Person to
any of the foregoing with respect to all Claims and Causes of Action which were
brought or could have been brought against any of the Graham Defendants, the
Cole Family, the Taylor Defendants, or any Related Person to any of the
foregoing. The bar order shall, as of the Settlement Effective Date (subject to
satisfaction of the condition subsequent in Section IV.4.8 hereof), constitute a
final discharge of the Graham Defendants, the Cole Family, the Taylor
Defendants, and any Related Person to any of the foregoing from all claims of
contribution which have been or may be brought by any Non-Released Party and
from any obligations to the Class arising out of the Graham Litigation. The bar
order shall also provide that a judgment in favor of the Class (if any) against
any of the Non-Released Parties shall be reduced in accordance with 15 U.S.C.
Section 78u-4(f)(7)(B) by the greater of (i) an amount equal to the aggregate
percentage of responsibility of the Settling Parties, or (ii) the amount paid to
the Class. For purposes of this Section IV.2.20, "the amount paid to the Class"
shall not exceed the cash and the value (measured as of the date of distribution
to the Class Settlement Fund) of the securities actually received by the Class
through this Settlement Stipulation (including under the Reorganization Plan
through the Class 5 Plan of Allocation). The foregoing is intended to comply
with 15 U.S.C. Section 78u-4(f)(7) so as to preclude any liability of the Graham
Defendants, the Cole Family, the Taylor Defendants, and any Related Person to
any of the foregoing to other alleged joint tortfeasors, if any, for
contribution and to define and limit any reduction of the Class's Claims against
any Non-Released Party. The Lead Plaintiffs (on behalf of themselves, the

                                       32
<PAGE>
Class, and all Class Members) further agree that they shall not initiate or
pursue (and shall on the Settlement Effective Date dismiss with prejudice) any
Claim or Cause of Action of any nature whatsoever arising under state law that
would not be covered by the bar order in favor of the Graham Defendants, the
Cole Family, the Taylor Defendants, and any Related Person to any of the
foregoing contemplated by this Section IV.2.20. The bar order provided by this
Section IV.2.20 shall also apply to Barlow in the event that (A) he shall have
executed, as of the Settlement Effective Date, a form of release that,
consistent with the terms and conditions of this Settlement Stipulation, and in
form and substance reasonably acceptable to the parties thereto, fully, finally,
and forever releases, relinquishes, and discharges the Released Barlow Claims,
and (B) either (1) Barlow shall have executed a release pursuant to Section
IV.2.15 hereof (or shall have agreed in writing to be bound by the terms of
Section IV.2.15 hereof as though he were a Settling Party) or (2) the order
contemplated by Section IV.4.1(h) hereof shall become Final.

         2.21 Promptly after the Settlement Execution Date, Class Co-Lead
Counsel shall use commercially reasonable efforts to enter into final executed
agreements with CNA and Reliance Insurance consistent with this Settlement
Stipulation. The Settling Parties shall, at Class Co-Lead Counsel's request,
promptly execute all reasonable mutual releases and settlement agreements
(consistent with the terms of this Settlement Stipulation) as may be necessary
or proper to cause either CNA or Reliance Insurance (collectively, the "Settling
Insurers") to pay the settlement amounts which Class Co-Lead Counsel has
previously negotiated with the Settling Insurers and has agreed to accept on
behalf of the Class (i.e., $5,500,000 (plus accrued interest from date of
agreement) from CNA and $1,750,000 from Reliance Insurance). On and after the
date upon which said releases have become effective, the parties to the releases
and each of their Related Persons shall be forever permanently enjoined from
asserting or pursuing any of the matters released therein. Any amounts paid in
settlement by the Settling Insurers before the Settlement Effective Date shall
be held in the Class Settlement Fund for the mutual benefit of all Settling
Parties. Such amounts so paid in settlement shall be held in the Class
Settlement Fund until the earlier of the following shall have

                                       33
<PAGE>
occurred: (i) the condition subsequent set forth in Section IV.4.8 hereof and
the conditions precedent set forth in Section IV.4.1 hereof shall have been
satisfied or waived; or (ii) sixty (60) days after this Settlement Stipulation
shall have been terminated. If the condition subsequent set forth in Section
IV.4.8 hereof and the conditions precedent set forth in Section IV.4.1 hereof
shall not have been satisfied or waived, or this Settlement Stipulation shall
have been terminated, then the amounts paid by the Settling Insurers, less the
amounts paid or owing pursuant to Sections IV.5.5 and IV.5.7 hereof shall be
held solely for the benefit of the Graham D&O Defendants until the earlier of
such time as (A) the Graham D&O Defendants agree among themselves on the amounts
to be distributed to each Graham D&O Defendant or (B) the Court enters an order
allocating the amounts paid by the Settling Insurers among the Graham D&O
Defendants. In the event that the Taylor Settlement Agreement becomes effective
and this Settlement Stipulation does not, the Taylor Defendants waive all rights
to the amounts paid by the Settling Insurers. The Settling Parties understand in
connection herewith that an Order of Liquidation in respect of Reliance
Insurance has been entered in the Commonwealth Court of Pennsylvania on October
3, 2001.

         2.22 The Cole Family members agree that any damages recovered by them
against any other tortfeasor, as a result of any injury or damages found to have
been also caused by any of the Graham Defendants or the Taylor Defendants (or
Barlow if he shall have executed by the Settlement Effective Date a release in
respect of the Released Barlow Claims and (i) Barlow shall have executed a
release requested pursuant to Section IV.2.15, or (ii) Barlow shall have agreed
in writing to be bound by the terms of Section IV.2.15 hereof as though he were
a Settling Party, or (iii) the order contemplated by Section IV.4.1(h) hereof
shall be Final), or any Related Person to any of the foregoing shall (upon entry
of an order of court) be reduced in accordance with the provisions of 10 Del. C.
Chapter 63 to the extent of the pro rata share of the Cole Family's damages
attributable to the Graham Defendants or the Taylor Defendants (or Barlow if he
shall have executed by the Settlement Effective Date a release in respect of the
Released Barlow Claims), or any Related Person to any of the foregoing;
provided, however, that any reduction pursuant to 10 Del. C. Section 6304(a)

                                       34
<PAGE>
of the Cole Family's Claims against Persons that are not Released Parties shall
be limited to the value of the consideration actually received by the Cole
Family members through this Settlement Stipulation. The foregoing is intended to
comply with 10 Del. C. Section 6304 so as to preclude any liability of the
Graham Defendants or the Taylor Defendants (or any of their Related Persons) to
other joint tortfeasors, if any, for contribution and to define and limit any
reduction of the Cole Family's Claims against any Non-Released Party.

         3. PRELIMINARY ORDER AND SETTLEMENT HEARING

         3.1 Within five (5) business days after the Settlement Execution Date,
the Settling Parties shall submit this Settlement Stipulation together with its
Exhibits to the Court and shall apply for entry of an order (the "Preliminary
Order"), substantially in the form of EXHIBIT A hereto, requesting, inter alia,
the preliminary approval of the settlement set forth in this Settlement
Stipulation, and approval for the mailing and publication of a settlement notice
(substantially in the form of EXHIBIT A-1 and EXHIBIT A-2 (the "Notices")) and a
Proof of Claim and Release Form substantially in the form of EXHIBIT A-3,
attached hereto, which shall include the general terms of the settlement set
forth in this Settlement Stipulation and the date of the Settlement Hearing (as
defined in Section IV.3.2 hereof).

         3.2 Class Co-Lead Counsel shall request that, after notice is given,
the Court hold a final hearing (the "Settlement Hearing") and approve this
Settlement Stipulation. At or after the Settlement Hearing, Class Co-Lead
Counsel will request that the Court approve a proposed plan of allocation (to be
determined by Class Co-Lead Counsel in their sole discretion) regarding
distribution of the Class Settlement Fund. If the request for Court approval of
said plan of allocation is to be made at the Settlement Hearing, Class Co-Lead
Counsel shall distribute appropriate notice to the Settling Parties of said
request at least fourteen (14) days in advance of the Settlement Hearing. For
purposes of the foregoing, EXHIBIT A-1 and EXHIBIT A-2 shall constitute
satisfactory notice.

                                       35
<PAGE>
         4.       CONDITIONS TO SETTLEMENT; EFFECT OF DISAPPROVAL OR TERMINATION

         4.1 The Settlement Effective Date shall be conditioned on the
occurrence of all of the following events, any of which may be waived only as
provided in Section 4.7 hereof:

                  (a) counsel for the Settling Parties shall have exchanged
         fully executed copies of this Settlement Stipulation;

                  (b) the Court shall have entered the Preliminary Order;

                  (c) the Court shall have entered the Judgment substantially in
         the form of EXHIBIT B hereto, which shall have become Final;

                  (d) the Cole Family Chancery Action against the Taylor
         Defendants and Silverman shall have been dismissed with prejudice and
         without costs;

                  (e) either (1) National Union shall have entered into an
         agreement acceptable to Class Co-Lead Counsel (in their sole
         discretion) regarding the effect of this Settlement Stipulation upon
         the right of the Insurance Litigation Plaintiffs to Insurance
         Recoveries under the National Union Policy, or (2) the Court shall have
         entered a Final order (the "Specified Coverage Order") providing that:
         (A) the settlement creates a "loss" to one or more of the "Insured
         Persons" (as defined hereinafter) sufficient to trigger coverage under
         the National Union Policy to the full extent of its $30,000,000 in
         policy limits, subject only to any coverage defenses asserted by
         National Union; (B) that National Union shall be obligated to pay the
         full amount of the policy limit if National Union loses all of its
         coverage defenses in the Alstrin Litigation with respect to any or all
         of the following Persons (hereinafter, the "Insured Persons"): any of
         the Estate Parties, Jeffrey Taylor, Bruce Taylor, Sidney Taylor, J.
         Christopher Alstrin, William S. Race, Ross J. Mangano, Solway F.
         Firestone, Dean L. Griffith, Lori Cole, Irwin H. Cole, the Estate of
         Irwin H. Cole, Howard B. Silverman, Melvin E. Pearl, and Thomas L.
         Barlow; and (C) any transfers of Insurance Recoveries by the Insurance
         Litigation Plaintiffs to the Class pursuant

                                       36
<PAGE>
         to this Settlement Stipulation are valid and enforceable transfers
         which do not void coverage or create a valid coverage defense under the
         National Union policy; provided, however, that if circumstances arise
         that render the finality of the Specified Coverage Order moot (e.g., if
         National Union prevails through entry of a Final order on any other
         coverage defenses asserted in the Insurance Litigation against all the
         Insured Persons, a settlement approved by the Class is reached with
         National Union, or a Final order is entered in which National Union is
         found liable under the National Union Policy), then the condition
         precedent represented by this Section IV.4.1(e) shall not apply and
         this Settlement Stipulation may become effective without the need for
         satisfaction of this condition precedent;

                  (f) the order described at Section IV.2.20 barring
         contribution claims and setting forth the judgment reductions with
         respect to certain Non-Settling Parties shall have been entered in
         substantially the form described therein;

                  (g) the Delaware Class Litigation shall have been dismissed
         with prejudice and without costs;

                  (h) the Court shall have entered an order, which need not
         become Final in order for this condition precedent to be satisfied, to
         the effect that on and after the Settlement Effective Date, subject to
         satisfaction of the condition subsequent in Section IV.4.8 hereof, (i)
         Barlow shall be deemed to have released any and all Persons that are
         actual, potential, or prospective defendants in the Insurance
         Litigation (including, without limitation, St. Paul, National Union,
         CNA, Reliance Insurance, Tri-City Brokerage, Dann Insurance, Freeborn &
         Peters, and David H. Kistenbroker) from any and all Claims or Causes of
         Action that were or could have been asserted by Barlow in any matter
         comprising the Insurance Litigation and (ii) Barlow shall be forever
         permanently enjoined from asserting or pursuing any and all Claims or
         Causes of Action against any and all Persons that are actual,
         potential, or

                                                        37
<PAGE>
         prospective defendants in the Insurance Litigation (including, without
         limitation, National Union, St. Paul, CNA, Reliance Insurance, Dann
         Insurance, Tri-City Brokerage, Freeborn & Peters, and David H.
         Kistenbroker) that were or could have been asserted by Barlow in any
         matter comprising the Insurance Litigation; and

                  (i) the Judgment or a Final order entered by the Court in the
         Alstrin Litigation shall provide that the arrangement described in
         Section IV.2.6 hereof shall be valid, effective, and enforceable, is
         not a valid defense to the assertion of the underlying Claims or
         rights, and is entitled to full faith and credit in any court of
         competent jurisdiction.

         4.2 If all of the conditions specified in Section IV.4.1 hereof are not
met within 180 days following the Settlement Execution Date (the "180 Day
Period"), then this Settlement Stipulation shall be canceled and terminated and
the Settling Parties returned to their respective positions as of the Settlement
Execution Date (subject to Section IV.4.3 hereof) unless the Settling Parties
consent (which shall not be unreasonably withheld) in writing to extend the 180
Day Period within which the conditions precedent in Section IV.4.1 hereof must
be satisfied; provided however, that if the Judgment set forth in Section
IV.4.1(c) and the Specified Coverage Order set forth in Section IV.4.1(e) shall
have been entered, the obligations of the Settling Parties under this Settlement
Stipulation shall remain in full force and effect (subject to the Judgment and
the Specified Coverage Order becoming Final) for so long as is necessary to make
that Judgment and Specified Coverage Order Final.

         4.3 Unless otherwise ordered by the Court, in the event the Settlement
Stipulation shall terminate or be cancelled, then (subject to Section IV.2.21
hereof) within five (5) business days after written notification of such event
is sent by counsel for the Estate Parties or any of the Graham D&O Defendants or
by Class Co-Lead Counsel to the Escrow Agent, the Class Settlement Fund
(including accrued interest), plus any amount then remaining in the Class Notice
and Administration Fund (including accrued interest), less expenses and any
costs which have either been disbursed pursuant

                                       38
<PAGE>
to Section IV.5 hereof, or are determined to be chargeable to the Class Notice
and Administration Fund shall be disbursed to such Persons as ordered by the
Court. At the request of counsel for any of the Graham D&O Defendants, the
Escrow Agent or its designee shall apply for any tax refund owed to the Class
Settlement Fund and pay the proceeds, after deduction of any fees or expenses
incurred in connection with such application(s) for refund, to such Persons as
ordered by the Court).

         4.4 Notwithstanding anything herein to the contrary, in the event that
this Settlement Stipulation is not approved by the Court, is terminated, or is
cancelled, then (i) the Settling Parties shall be restored to their respective
positions in the Graham Litigation, the Delaware Class Litigation, the Cole
Family Chancery Action, the Insurance Litigation (except with respect to the
Settling Insurers to the extent provided in Section IV.2.21 hereof and the
distribution of St. Paul proceeds pursuant to Section IV.2.4(c) hereof), and
otherwise as of the Settlement Execution Date, and none of the Settling Parties
shall argue or assert a defense in the Graham Litigation, the Delaware Class
Litigation, the Cole Family Chancery Action, or the Insurance Litigation that is
based upon or relies in any way on the entry of the Judgment or the passage of
time thereafter, (ii) any orders contrary to, or inconsistent with, such
positions shall be treated as vacated, nunc pro tunc, and (iii) the Settling
Parties shall take any steps and execute any documents necessary to accomplish
the foregoing results (including the execution of stipulations in the Cole
Family Chancery Action and the Delaware Class Litigation that would have the
effect of vacating any orders entered by the Delaware Chancery Court nunc pro
tunc). In such event, notwithstanding anything herein to the contrary, (A) the
terms and provisions of this Settlement Stipulation (except Sections IV.5.5 and
IV.5.7 hereof and the distribution of the proceeds of the St. Paul Insurance
Policy under Section IV.2.4(c) hereof) and, unless the releases specify
otherwise, all of the releases given pursuant to this Settlement Stipulation
shall have no force and effect with respect to anyone or anything (including the
Settling Parties) and shall not be used, and shall be inadmissible, in the
Graham Litigation, the Delaware Class Litigation, the Cole Family Chancery
Action, the Bankruptcy Case, the Insurance Litigation or in any other proceeding
for any purpose, and (B) any Judgment or order entered by any

                                       39
<PAGE>
court in accordance with or in furtherance of the terms of this Settlement
Stipulation shall be treated as vacated, nunc pro tunc.

         4.5 If the Settlement Effective Date does not occur, or if the
Settlement Stipulation is terminated pursuant to its terms, neither the Lead
Plaintiffs nor any of their counsel shall have any obligation to repay any
amounts actually and properly disbursed from the Class Notice and Administration
Fund. In addition, any unpaid expenses already incurred and properly chargeable
to the Class Notice and Administration Fund pursuant to Section IV.5.5 hereof at
the time of such termination or cancellation, shall be paid by the Escrow Agent
in accordance with the terms of the Settlement Stipulation prior to the balance
being distributed in accordance with Section IV.4.3 hereof.

         4.6 Any termination right exercised pursuant to this Settlement
Stipulation shall become effective twenty (20) days following the receipt by the
other Settling Parties of written notice of a Settling Party's intention to
exercise such termination right (the "Termination Date"); provided, however,
that termination of this Settlement Stipulation for the reasons specified in the
notice shall not become effective if cured prior to the expiration of said
twenty (20) day period.

         4.7 The conditions set forth in Sections IV.4.1(a) through IV.4.1(c),
and Sections IV.4.1(f) through IV.4.1(g) hereof may be waived with the express
written consent of all the Settling Parties. The conditions precedent set forth
in Section IV.4.1(d) hereof may be waived with the express written consent of
the Taylor Defendants and Silverman. The conditions precedent set forth in
Section IV.4.1(e), Section IV.4.1(h), and Section IV.4.1(i) hereof may be waived
with the express written consent of Class Co-Lead Counsel. The condition
subsequent set forth in Section IV.4.8 hereof may be waived with the express
written consent of Class Co-Lead Counsel and the Cole Family.

         4.8 Notwithstanding anything contained herein to the contrary, if,
within thirty (30) days following the latest to occur of the conditions
precedent to effectiveness set forth in Section IV.6.1 of the Taylor Settlement
Agreement, the delivery obligations under Section 5 of the Taylor

                                       40
<PAGE>
Settlement Agreement shall not have been fully performed, then Class Co-Lead
Counsel or the Cole Family shall have the right (in their sole discretion) to
terminate this Settlement Stipulation. In the event said termination right
becomes effective pursuant to Section IV.4.6 hereof, the provisions of Sections
IV.4.3 through IV.4.5 hereof shall become applicable.

         5. THE CLASS SETTLEMENT FUND

         5.1 The Escrow Agent shall invest funds deposited within the Class
Settlement Fund in instruments backed by the full faith and credit of the United
States Government or fully insured by the United States Government or an agency
thereof and shall reinvest the proceeds of these instruments as they mature in
similar instruments at their then-current market rates. The Escrow Agent shall
bear all risks related to investment of the Class Settlement Fund.

         5.2 The Escrow Agent shall not disburse the Class Settlement Fund
except as provided in this Settlement Stipulation, by Final order of the Court,
or with the written agreement of counsel for all Settling Parties.

         5.3 Subject to further orders and/or directions of the Court, the
Escrow Agent is authorized to execute such transactions on behalf of the Class
Members as are consistent with the terms of the Settlement Stipulation.

         5.4 All funds held by the Escrow Agent shall be deemed and considered
to be in custodia legis of the Court, and shall remain subject to the
jurisdiction of the Court, until such time as such funds shall be distributed
pursuant to the Settlement Stipulation and/or further order(s) of the Court.

         5.5 Within ten (10) days following deposit of funds into the Class
Settlement Fund, the Escrow Agent may establish a separate "Class Notice and
Administration Fund," and may deposit up to $100,000 from the Class Settlement
Fund into it. The Class Notice and Administration Fund may be used by Class
Co-Lead Counsel to pay costs and expenses reasonably and actually incurred in
connection with providing notice to the Class, locating Class Members,
soliciting Class claims, assisting with the filing of claims, administering and
distributing the Class Settlement Fund to Authorized Claimants, processing Proof
of Claim and Release forms and paying escrow fees and

                                       41
<PAGE>
costs, if any. The Class Notice and Administration Fund may also be invested and
earn interest as provided for in Section IV.5.1 of this Settlement Stipulation.

         5.6 No portion of the Class Settlement Fund shall revert to the Estate
Parties, any Graham Defendant, or any other Person for any reason whatsoever
unless this Settlement Stipulation is not approved by Final order of the Court
or is otherwise terminated, cancelled, or fails to become effective for any
reason set forth herein; provided, however, that any sums remaining in the Class
Settlement Fund after payment of all amounts to be paid to Authorized Claimants
under Section IV.6.2(d) hereof shall be distributed only pursuant to a separate
order of the Court obtained following notice to all the Settling Parties and
Barlow's counsel of record in the Graham Litigation.

         5.7 TAXES

                  (a) The Settling Parties and the Escrow Agent agree to treat
         the Class Settlement Fund as being at all times a "qualified settlement
         fund" within the meaning of Treas. Reg. Section 1.468B-1. In addition,
         the Escrow Agent shall timely make such elections as necessary or
         advisable to carry out the provisions of this Section IV.5.7, including
         the "relation-back election" (as defined in Treas. Reg. Section
         1.468B-1) back to the earliest permitted date. Such elections shall be
         made in compliance with the procedures and requirements contained in
         such regulations. It shall be the responsibility of the Escrow Agent to
         timely and properly prepare and deliver the necessary documentation for
         signature by all necessary parties, and thereafter to cause the
         appropriate filing to occur.

                  (b) For the purpose of Section 468B of the Internal Revenue
         Code of 1986, as amended, and the regulations promulgated thereunder,
         the "administrator" shall be the Escrow Agent. The Escrow Agent shall
         timely and properly file all informational and other tax returns
         necessary or advisable with respect to the Class Settlement Fund
         (including without limitation the returns described in Treas. Reg.
         Section 1.468B- 2(k)). Such returns (as well as the election described
         in Section IV.5.7(a) hereof)

                                       42
<PAGE>
         shall be consistent with Section IV.5.7 hereof, and in all events shall
         reflect that all taxes (including any estimated taxes, interest or
         penalties) on the income earned by the Class Settlement Fund shall be
         paid out of the Class Settlement Fund as provided in Section IV.5.7(c)
         hereof and Treas. Reg. Section 1.468B-2(a).

                  (c) All (i) taxes (including any estimated taxes, interest or
         penalties) arising with respect to the income earned by the Class
         Settlement Fund, including any taxes or tax detriments that may be
         imposed upon the Graham Defendants with respect to any income earned by
         the Class Settlement Fund for any period during which the Class
         Settlement Fund does not qualify as a "qualified settlement fund" for
         federal or state income tax purposes ("taxes"), and (ii) expenses and
         costs incurred in connection with the operation and implementation of
         Section IV.5.7 hereof (including, without limitation, expenses of tax
         attorneys and/or accountants and mailing and distribution costs and
         expenses relating to filing (or failing to file) the returns described
         in Section IV.5.7) ("Tax Expenses"), shall be paid out of the Class
         Settlement Fund; provided, however, that in all events the Estate
         Parties and the Graham Defendants shall have no liability or
         responsibility for the taxes or the Tax Expenses. The Escrow Agent
         shall indemnify and hold the Estate Parties and each of the Graham
         Defendants harmless for taxes and Tax Expenses (including, without
         limitation, taxes payable by reason of any such indemnification);
         provided, however, that the Escrow Agent's indemnification obligation
         in this Section IV.5.7(c) shall be limited to funds available or
         remaining in the Class Settlement Fund at the time such indemnification
         obligation comes due and shall not be paid out of any of the personal
         assets of the Escrow Agent. Further, taxes and Tax Expenses shall be
         treated as, and considered to be, a cost of administration of the Class
         Settlement Fund and shall be timely paid by the Escrow Agent out of the
         Class Settlement Fund without prior order from the Court and the Escrow
         Agent shall be obligated (notwithstanding

                                       43
<PAGE>
         anything herein to the contrary) to withhold from distribution to
         Authorized Claimants any funds necessary to pay such amounts including
         the establishment of adequate reserves for any taxes and Tax Expenses
         (as well as any amounts that may be required to be withheld under
         Treas. Reg. Section 1.468B-2(l)(2)); neither the Graham Defendants, nor
         their counsel are responsible nor shall they have any liability
         therefor. The Settling Parties agree to cooperate with the Escrow
         Agent, each other, and their tax attorneys and accountants to the
         extent reasonably necessary to carry out the provisions of Section
         IV.5.7 hereof.

                  (d) For the purpose of Section IV.5.7 hereof, references to
         the Class Settlement Fund shall include both the Class Settlement Fund
         and the Class Notice and Administration Fund and shall also include any
         earnings thereon.

         5.8 The Escrow Agent shall not be personally liable to any Settling
Party for any reason other than for damages proximately resulting from its own
intentional misconduct or gross recklessness.

         5.9 In the event the Settlement Stipulation is not approved, or is
terminated, cancelled, or fails to become effective for any reason, the Class
Settlement Fund (including accrued interest) less expenses actually incurred or
due and owing in connection with the settlement provided for herein, shall be
refunded as described in Sections IV.4.3 and IV.4.5 hereof.

         6. ADMINISTRATION AND CALCULATION OF CLAIMS, FINAL AWARDS, AND
            SUPERVISION AND DISTRIBUTION OF CLASS SETTLEMENT FUND

         6.1 Class Co-Lead Counsel, or their authorized agents, acting on behalf
of the Class, and subject to such supervision and direction of the Court as may
be necessary or as circumstances may require, shall administer and calculate the
claims submitted by Class Members and shall oversee distribution of the Class
Settlement Fund to Authorized Claimants.

         6.2 The Class Settlement Fund shall be applied as follows:

                  (a) to pay the taxes and Tax Expenses described in Section
         IV.5.7 hereof;

                                                        44
<PAGE>
                  (b) to pay Class Counsel attorneys' fees and expenses with
         interest thereon, if and to the extent allowed by the Court, as
         provided in Section IV.7.1 hereof;

                  (c) to pay all the costs and expenses reasonably and actually
         incurred in connection with providing notice, locating Class Members,
         soliciting claims of Class Members, assisting with the filing of
         claims, administering and distributing the Class Settlement Fund to
         Authorized Claimants, processing proofs of claim and release forms and
         paying escrow fees and costs, if any; and

                  (d) to distribute the balance of the Class Settlement Fund
         (the "Net Settlement Fund") to Authorized Claimants as allowed by the
         Settlement Stipulation, a Court-approved plan of allocation, or
         otherwise by the Court.

         6.3 Upon the Settlement Effective Date and thereafter, and in
accordance with the terms of this Settlement Stipulation, the Plan of
Allocation, or such further approval and further order(s) of the Court as may be
necessary or as circumstances may require, the Net Settlement Fund shall be
distributed to Authorized Claimants, subject to and in accordance with the
provisions of this Settlement Stipulation.

         6.4 Within ninety (90) days after the mailing of the Notices or such
other time as may be set by the Court, each Person claiming to be an Authorized
Claimant shall be required to submit to the claims administrator a completed
form entitled "Proof of Claim and Release," substantially in the form of EXHIBIT
A-3 hereto (the "Proof of Claim and Release Form"), signed under penalty of
perjury and supported by such documents as are specified in the Proof of Claim
and Release Form and as are reasonably available to the Authorized Claimant.

         6.5 Except as otherwise ordered by the Court, all Class Members who
fail to timely submit a Proof of Claim and Release Form within such period, or
such other period as may be ordered by the Court, or otherwise allowed, shall be
forever barred from receiving any payments pursuant to the Settlement
Stipulation and the terms set forth therein, but will in all other respects

                                       45
<PAGE>
be subject to and bound by the provisions of the Settlement Stipulation, the
releases contained therein, and the Judgment.

         6.6 The Net Settlement Fund shall be distributed to the Authorized
Claimants substantially in accordance with a plan of allocation to be described
in the Notices and approved by the Court. However, if there is any balance
remaining in the Net Settlement Fund after six (6) months from the date of
distribution of the Net Settlement Fund (whether by reason of tax refunds,
uncashed checks or otherwise), Class Co-Lead Counsel shall reallocate such
balance among Authorized Claimants in an equitable and economic fashion.
Thereafter, any balance which still remains in the Net Settlement Fund shall be
donated to an appropriate non-profit organization or distributed as may be
ordered by the Court consistent with the terms of this Settlement Stipulation.

         6.7 The Estate and the Graham Defendants shall have no responsibility
for, interest in, or liability whatsoever with respect to, (i) the investment,
distribution, or administration of the Net Settlement Fund, (ii) the
determination or administration of a plan of allocation in respect of the Net
Settlement Fund, (iii) the solicitation or calculation of Proofs of Claim and
Release Forms from Authorized Claimants, and (iv) the payment or withholding of
taxes, or any losses incurred in connection therewith from the Class Settlement
Fund.

         6.8 No Person shall have any Claim against Class Co-Lead Counsel or any
claims administrator, or other agent designated by Class Co-Lead Counsel, the
Estate Parties, or the Graham Defendants (or any counsel of any of the
foregoing) or any of their Related Persons, based on the distributions made
under this Settlement Stipulation and terms contained therein, the plan of
allocation to Authorized Claimants from the Net Settlement Fund, or further
orders of the Court.

         7. CLASS ATTORNEYS' FEES AND REIMBURSEMENT OF EXPENSES

         7.1 The Lead Plaintiffs or their counsel may submit an application or
applications (the "Fee and Expense Application") for distributions to them for:
(a) an award of attorneys' fees; plus (b) reimbursement of expenses incurred in
connection with prosecuting the Litigation, plus any interest on such attorneys'
fees and expenses at the same rate and for the same periods as earned by

                                       46
<PAGE>
the Class Settlement Fund (until paid) as may be awarded by the Court (the "Fee
and Expense Award"). Class Co-Lead Counsel reserve the right to make additional
applications for fees and expenses incurred.

         7.2 The Fee and Expense Award shall be paid to Class Co-Lead Counsel,
solely out of the Class Settlement Fund, in such manner as ordered by the Court,
proportionate to the cash, securities, and other consideration paid into the
Class Settlement Fund. Class Co-Lead Counsel intends to request the Court to
order payment within three days of that award. Class Co-Lead Counsel shall
thereafter allocate the attorneys' fees amongst Class counsel in a manner in
which they in good faith believe reflects the contributions of such counsel to
the prosecution and settlement of the Litigation. In the event the Settlement
Effective Date does not occur, or the Judgment or order approving the Fee and
Expense Award is reversed or modified, or this Settlement Stipulation is
cancelled or terminated for any other reason, and in the event that the Fee and
Expense Award has been paid to any extent, then Class Co-Lead Counsel shall
refund the fees and expenses previously paid to them to the Class Settlement
Fund (for distribution to the Graham D&O Defendants in accordance with Section
IV.2.21 hereof) within five (5) business days after receiving notice from any
Settling Party or a court of appropriate jurisdiction that (i) the Settlement
Effective Date has not occurred in accordance with the terms hereof, (ii) the
Settlement Stipulation has been cancelled or terminated, or (iii) the Fee and
Expense Award has been reversed or modified. Each such Class counsel's law firm,
as a condition of receiving such fees and expenses, on behalf of itself and each
partner, shareholder or member of it, agrees that the law firm and its partners
and/or shareholders are subject to the jurisdiction of the Court for the purpose
of enforcing the provisions of this section and that the Milberg Firm shall be
jointly and severally liable for the obligation to refund fees and expenses as
provided in this Section IV.7.2.

         7.3 The Graham Defendants, the Estate, the Debtors, the Estate
Representative, the Cole Family, the Taylor Defendants, and any Related Person
to any of the foregoing shall have no responsibility for, and no liability
whatsoever with respect to any payment to, Class Co-Lead

                                       47
<PAGE>
Counsel or the allocation among Class Co-Lead Counsel and/or any other Person
who may assert some claim thereto, of any Fee and Expense Award that the Court
may make in the Graham Litigation.

         7.4 It is understood and agreed by the Settling Parties that any
proposed plan of allocation of the Class Settlement Fund including, without
limitation, any adjustments to an Authorized Claimant's claim set forth therein,
any ruling on the Fee and Expense Application, or any Fee and Expense Award is
not a part of this Settlement Stipulation and is to be considered by the Court
separately from the Court's consideration of the fairness, reasonableness and
adequacy of the settlement set forth in this Settlement Stipulation. Any order,
proceeding, or appeal relating to said plan of allocation, Fee and Expense
Application, or Fee and Expense Award shall not operate to terminate or cancel
this Settlement Stipulation or affect the finality of the Court's Judgment
approving this Settlement Stipulation, the settlements and agreements set forth
therein, or any other orders entered or documents executed pursuant hereto.

         8. MISCELLANEOUS PROVISIONS

         8.1 The Settling Parties (a) acknowledge that it is their intent to
consummate this Settlement Stipulation and (b) agree to cooperate to the extent
necessary to effectuate and implement all terms and conditions of this
Settlement Stipulation and to exercise commercially reasonable efforts to
accomplish the terms and conditions of this Settlement Stipulation and obtain
entry of the orders of Court contemplated herein.

         8.2 By executing this Settlement Stipulation, and subject to entry of
an order in form and substance acceptable to the Settling Parties (whose
acceptance shall not be unreasonably withheld), the Settling Parties provide
their consent and withdraw any objections to the pending motion before the Court
captioned "Motion Of The Lead Plaintiffs In The Class Action For An Order
Certifying The Class Of Securities Class Action Claimants Pursuant to Fed. R.
Bankr. P. 7023 And Other Relief."

                                       48

<PAGE>
      8.3 The Estate Parties shall have no responsibility for, interest in, or
liability whatsoever with respect to (i) the securities issued under the Taylor
Settlement Agreement and distributed under the terms of the Reorganization Plan
to the Released Parties on account of their Allowed Claims or Allowed Equity
Interests in the Bankruptcy Case, (ii) the determination, administration, or
calculation of the Claims against the Class Settlement Fund asserted by
individual Class Members, (iii) the payment or withholding of taxes, or (iv) any
losses incurred in connection therewith.

      8.4 The Settling Parties further acknowledge that this Settlement
Stipulation is entered into after extensive discovery has been completed and
that they have had a full opportunity to evaluate with their legal counsel the
merits of all Claims that are being asserted, or that could have been asserted,
in the Graham Litigation.

      8.5 The Settling Parties agree that the terms of this Settlement
Stipulation reflect a good faith settlement of the Released Claims and of the
other terms and conditions contained herein, reached voluntarily after
consultation with experienced legal counsel. Neither this Settlement Stipulation
nor the settlements contained herein, nor any act performed, document executed,
or statement made pursuant to or in support of or in furtherance of this
Settlement Stipulation or the settlements contained herein: (i) is or may be
deemed to be or may be used as an admission of, or evidence of, the validity or
amount of any Released Claim or any other Claim, or of any wrongdoing or
liability of the Released Party; or (ii) is or may be deemed to be or may be
used as an admission of, or evidence of, any fault or omission of any Released
Party in any civil, criminal or administrative proceeding in any court,
administrative agency, or other tribunal. Any Released Party may file this
Settlement Stipulation and/or Judgment in any other action that may be brought
against them in order to support a defense or counterclaim based on principles
of res judicata, collateral estoppel, release, good faith settlement, accord and
satisfaction, judgment bar or reduction, or any theory of claim preclusion or
issue preclusion or similar defense or counterclaim. The Settling Parties may
file this Settlement Stipulation in any proceeding brought to enforce any of its
terms.

                                       49
<PAGE>
      8.6 The Lead Plaintiffs (on their own behalf and on behalf of each of the
Class Members) and the Released Parties intend this settlement to be a final and
complete resolution of all disputes between them with respect to the Graham
Litigation and the Delaware Class Litigation. This settlement compromises Claims
which are contested, and it shall not be deemed an admission by any Settling
Party as to the merits of any Claim or defense. The Judgment will contain a
finding that during the course of the Graham Litigation and the Delaware Class
Litigation, the Class and the Released Parties at all times complied with the
requirements of Federal Rule of Civil Procedure 11 and comparable state
procedural rules. The Settling Parties reserve their right to rebut, in a manner
that such party determines to be appropriate, any contention made in any public
forum that the Released Claims were brought or defended in bad faith or without
reasonable basis.

      8.7 All agreements made and orders entered during the course of the Graham
Litigation relating to the confidentiality of information shall survive this
Settlement Stipulation.

      8.8 The Settling Parties agree that any communications they make to any
taxing authorities shall be consistent with this Settlement Stipulation. Without
limitation of the foregoing, the Lead Plaintiffs, the Class, the Class Members,
and Class Co-Lead Counsel agree that no tax information reporting and no other
tax returns are required to or will be made by them to any tax authorities with
respect to the Graham D&O Defendants.

      8.9 This Settlement Stipulation may be amended or modified only by a
written instrument signed by or on behalf of all the Settling Parties; provided,
however, that if a Settling Party unreasonably refuses to execute an amendment
or modification deemed by another Settling Party to be (i) necessary to
implement the terms and conditions of this Settlement Stipulation consistent
with the intent of the Settling Parties as reflected herein or (ii) of
immaterial effect to the Settling Party refusing to execute such amendment or
modification, then Section IV.8.17 shall apply.

      8.10 This Settlement Stipulation and the Exhibits attached hereto
constitute the entire agreement between the Settling Parties, except for the
agreements (hereinafter, the "Other Agreements") represented by the (i) Taylor
Settlement Agreement (and agreements among any of

                                       50
<PAGE>
the Settling Parties with respect to certain waiver rights of the Estate Parties
thereunder), (ii) the agreements between and among the Allocation Movants, (iii)
agreements (if any) between the Class (or its designated representatives) and
the Taylor Defendants regarding the Insurance Litigation, and (iv) any
agreements--not expressly addressed in this Settlement Stipulation--between the
Estate Representative and any Settling Party regarding the allowance of that
Settling Party's Claims or Equity Interests in the Bankruptcy Cases. Except as
otherwise contained in any of the Other Agreements, no representations,
warranties, or inducements have been made to any party concerning this
Settlement Stipulation other than the representations, warranties, and covenants
contained and memorialized herein. The Settling Parties shall bear their own
costs, except as otherwise provided herein.

      8.11 All of the Exhibits to this Settlement Stipulation are material and
integral parts thereof and are fully incorporated therein by this reference.

      8.12 This Settlement Stipulation may be executed in one or more
counterparts. All executed counterparts and each of them shall be deemed to be
one and the same instrument. Counsel for the Settling Parties shall exchange
among themselves signed counterparts of this Settlement Stipulation.

      8.13 This Settlement Stipulation shall be binding upon and shall inure to
the benefit of the Settling Parties and their Related Persons.

      8.14 The Settling Parties hereby represent and warrant that they have not
assigned any rights, Claims, or Causes of Action that were asserted or could
have been asserted in connection with, under, or arising out of any of the
claims being settled or released herein, except as provided herein.

      8.15 Any Claim or dispute arising out of or relating in any way to the
Settlement Stipulation must be brought before the Court, which shall retain
jurisdiction of this matter and the Settling Parties for the purposes of
enforcing and implementing the terms and conditions of this

                                       51
<PAGE>
Settlement Stipulation and resolving disputes as to the rights and obligations
of the Settling Parties hereunder. The Settling Parties submit to the
jurisdiction of the Court for these purposes.

      8.16 This Settlement Stipulation shall be considered to have been
negotiated, executed and delivered, and to be wholly performed, in the State of
Illinois and the rights and obligations of the Settling Parties to this
Settlement Stipulation shall be construed and enforced in accordance with the
laws of the State of Illinois without giving effect to the choice of law
principles of the State of Illinois or any other State or jurisdiction.

      8.17 The Settling Parties consent, pursuant to 28 U.S.C.Section 636(c) and
Rule 73 of the Federal Rules of Civil Procedure, to the conduct by United States
Magistrate Judge Mary Pat Thynge (the "Magistrate Judge") of all proceedings and
to the entry by the Magistrate Judge of such orders and judgments, including,
without limitation, the Judgment, as are necessary or required to (i) implement
or act upon the Settlement Stipulation, (ii) approve, implement, or act upon the
Fee and Expense Applications or the plan of allocation regarding distribution of
the Class Settlement Fund, (iii) implement or act upon any petition or motion
related to the foregoing, or (iv) resolve disputes regarding amendment or
modification of this Settlement Stipulation arising pursuant to Section IV.8.9
hereof. To the extent any proceedings are conducted before the Magistrate Judge
pursuant to this Section IV.8.17, references in this Settlement Stipulation to
the "Court" shall be construed to mean the Magistrate Judge.

      8.18 This Settlement Stipulation shall not be construed more strictly
against one party than another merely because it, or any part of it, may have
been prepared by counsel for one of the parties. The Settling Parties
acknowledge and agree that the Settlement Stipulation is the result of arm's-
length negotiations between the parties and all parties have contributed
substantially and materially to the preparation of this Settlement Stipulation.

      8.19 All counsel and any other Person executing this Settlement
Stipulation or any related settlement documents represent and warrant that they
have the full authority to take appropriate

                                       52
<PAGE>
action required or permitted to be taken pursuant to the Settlement Stipulation
to effectuate its terms (including, without limitation, execution of this
Settlement Stipulation).

      8.20 All notices required or permitted hereunder or process relating
hereto shall be in writing and signed by the party giving notice, shall be
effective only upon delivery, and shall be delivered by personal delivery,
facsimile (with a confirming copy sent by personal delivery or overnight
courier), or by overnight delivery and a delivery receipt obtained, to the
signatories to this Settlement Stipulation at the addresses indicated below.

      8.21 The Settling Parties agree that they shall execute such additional
documents, statements, releases, instruments or assurances as may be reasonably
necessary to effectuate the terms of this Settlement Stipulation provided that
such additional documents, statements, releases, instruments or assurances are
generally consistent with the material terms and conditions set forth herein.

                           *       *       *       *

                  (REMAINDER OF PAGE LEFT INTENTIONALLY BLANK)

                                       53
<PAGE>
      IN WITNESS WHEREOF, the Settling Parties have caused this Settlement
Stipulation to be executed by their duly authorized attorneys.

                             COUNSEL FOR LEAD PLAINTIFFS AND THE CLASS

                                      MILBERG WEISS BERSHAD HYNES & LERACH LLP

                                      By: /s/ Helen J. Hodges
                                          __________________________________
                                               Helen J. Hodges

                                               William S. Lerach
                                               Helen J. Hodges
                                               Katherine L. Blanck
                                               600 West Broadway, Suite 1800
                                               San Diego, California 92101
                                               Telephone: (619) 231-1058
                                               Facsimile: (619) 231-4723

                                               Class Co-Lead Counsel

                                      DAVID B. KAHN & ASSOCIATES, LTD.

                                      By: /s/ Mark E. King
                                          __________________________________
                                               Mark E. King

                                               David B. Kahn
                                               Mark E. King
                                               Elissa C. Chase
                                               One Northfield Plaza
                                               Suite 100
                                               Northfield, Illinois 60093
                                               Telephone: (847) 501-5083
                                               Facsimile: (847) 501-5086

                                               Class Co-Lead Counsel

                                       54
<PAGE>
                             COUNSEL FOR THE ESTATE REPRESENTATIVE

                                      ROBERT F. COLEMAN & ASSOCIATES

                                      By: /s/ Robert F. Coleman
                                         __________________________________
                                               Robert F. Coleman

                                               Robert F. Coleman
                                               Steven R. Jakubowski
                                               Sean B. Crotty
                                               Cassandra A. Crotty
                                               77 West Wacker Drive, Suite 4800
                                               Chicago, Illinois 60601
                                               Telephone: (312) 444-1000
                                               Facsimile: (312) 444-1028

                                               Counsel for the Estate Parties

                             COUNSEL FOR THE GRAHAM DEFENDANTS

                                      MCDERMOTT WILL & EMERY

                                      By: /s/ Steven P. Handler
                                         __________________________________
                                               Steven P. Handler

                                               Steven P. Handler
                                               Steven H. Hoeft
                                               David S. Rosenbloom
                                               MCDERMOTT, WILL & EMERY
                                               227 West Monroe Street
                                               Chicago, Illinois 60606
                                               Tel: (312) 372-2000
                                               Fax: (312) 984-7700

                                               Counsel for the Taylor Defendants

                                       55
<PAGE>
                                 JENNER & BLOCK

                                      By: /s/ David J. Bradford
                                         __________________________________
                                               David J. Bradford

                                               David J. Bradford
                                               JENNER & BLOCK
                                               One IBM Plaza, 47th Floor
                                               Chicago, Illinois 60611
                                               Tel: (312) 222-9350
                                               Fax: (312) 527-0484

                                               Counsel for Melvin E. Pearl and
                                               the Voluntarily Dismissed
                                               Defendants

                                      LAW OFFICE OF JONAH ORLOFSKY

                                      By: /s/ Jonah Orlofsky
                                         __________________________________
                                               Jonah Orlofsky

                                               LAW OFFICE OF JONAH ORLOFSKY
                                               122 South Michigan Avenue
                                               Suite 1850
                                               Chicago, Illinois 60603
                                               Tel: (312) 566-0455
                                               Fax: (312) 427-1850

                                               Counsel for Certain of the Taylor
                                               Defendants in the Alstrin
                                               Litigation

                                       56
<PAGE>
                                      WILDMAN HARROLD ALLEN & DIXON

                                      By: /s/ Thomas I. Matyas
                                         __________________________________
                                              Thomas I. Matyas

                                              Thomas I. Matyas
                                              Richard M. Hoffman
                                              WILDMAN HARROLD ALLEN & DIXON
                                              225 West Wacker Drive
                                              Suite 3000
                                              Chicago, Illinois 60606
                                              Tel: (312) 201-2000
                                              Fax: (312) 201-2555

                                              Counsel for the Cole Family in the
                                              Graham Litigation and the
                                              Bankruptcy Cases

                                      MUNSCH, HARDT, KOPF & HARR, P.C.

                                      By: /s/ Dean W. Ferguson
                                         __________________________________
                                              Dean W. Ferguson

                                              Dean W. Ferguson
                                              David Matka
                                              MUNSCH, HARDT, KOPF & HARR, P.C.
                                              4000 Fountain Place
                                              1445 Ross Avenue
                                              Dallas, Texas 75202
                                              Tel: (214) 855-7500
                                              Fax: (214) 855-7584

                                              Counsel for the Cole Family in the
                                              Delaware Chancery Action and the
                                              Alstrin Litigation

                                       57
<PAGE>
                                      BELL, BOYD & LLOYD

                                      By: /s/ Stephen J. O'Neil
                                          --------------------------------------
                                              Stephen J. O'Neil

                                              Stephen J. O'Neil
                                              John W. Rotunno
                                              BELL, BOYD & LLOYD
                                              70 West Madison Street
                                              Suite 3300
                                              Chicago, Illinois 60602
                                              Tel: (312) 372-1121
                                              Fax: (312) 372-2098

                                              Counsel for Solway F. Firestone,
                                              Dean L. Griffith, Ross J. Mangano,
                                              and William S. Race

                                      ROSS & HARDIES

                                      By: /s/ Steven R. Smith
                                          --------------------------------------
                                              Steven R. Smith

                                              Steven R. Smith
                                              ROSS & HARDIES
                                              150 North Michigan Avenue,
                                              Suite 2500
                                              Chicago, Illinois 60601
                                              Tel: (312) 558-1000
                                              Fax: (312) 750-8600

                                              Counsel for Howard B. Silverman

                                       58
<PAGE>
                                     D'ANCONA & PFLAUM LLC

                                      By: /s/ George W. Spellmire, Jr.
                                          --------------------------------------
                                              George W. Spellmire, Jr.

                                              George W. Spellmire, Jr.
                                              John Everhardus
                                              D'ANCONA & PFLAUM LLC
                                              111 East Wacker Drive, Suite 2800
                                              Chicago, Illinois 60601
                                              Tel: (312) 602-2000
                                              Fax: (312) 602-3041

                                              Counsel for James D. Dolph

                                       59

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