UNITET? STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK

In re REFCO, INC. SECURITIESLITIGATION

MASTER FIILE NO.05 Civ,. 8626 (GEL)

,STrPIIY.ATION AND AGREEMENT OF SETTLEMENT

This stipulation and agreement of settlement is made and entered into by and

between Lead Plaintiffs RH Capital Associates LLC and Pacific Investment Management

Company LLC on behalf of themselves and the class of persons defined below (the

"Class") and Defendant BAWAG P.S.K. Bank. Mr Arbeit and Wirtschaft and

OsterreicldschePostsparkasse Aktiengesellschaft ("I33AWAGx").

W1WBA$t

A. All capitalized words or terms not otherwise defined herein shall have the

meaning for those words or terms as set forth itsi the section below entitled "Definitions"

at ¶1 hereof

B. Commencing in October 2005 , multiple securities class action complaints

were filed against Refco, certain of Refco's former officers and directors, Refco's

auditors , Refeo's underwriters, and others .

C. By Order dated February 8, 2006, the Court consolidated the class actions

and appointed RH Capital A ssociates LLC and Pacific Investment Management

Company LLC as Lead Plaintiffs, and appointed the law firms of Bern stein Litowitz and be

Grant & Eisenhofer to serve as Co-Lead Counsel;

D. On or about March 30, 2006, Co-Lead Counsel commenced settlement

discussions with BAWAG' s Counsel ;

E. On April 3, 2006, based in part on those settlement diacussion , when

Lead Plaintiffs filed in the Action the Complaint, they did not name 1AWAG as a

detendmt ;

F. On May 5, 2006, Lead Plaintiffs filed in the Action the Amended

Complaint, which, inter ahzu, named BAWAG as a defendant, and asserted claims against

BAWAG pursuant to Section 15 of the Securities Act of 1933 and Sections 10(b) an d

20(a) of the Securities Exchange Act of 1934 ;

G. Co-Lead Counsel have conducted an investigation and analyzed the claims

and researched the applicable law with respect to the claims against BAWAG and it s

potential defenses thereto;

H. Co-Lead Counsel and BAWAG's Counsel have continued to engage in

arms ' length negotiations to resolve the claims by Lead Plaintiffs and the Class against

BAW AG, and have now agreed to settle those claims on terms that include financial and

nonfinancial benefits to the Class, including the payment of at least $108 million in cas h

to the Class ;

L In order to facilitate BAWAG's ability to achieve a global resolution of its

potential liability relative to Refco in the Action and o ther cases and potential cases, Lead

Plaintiffs have agreed that to the extent they may obtain funds from the Global

Resolution Fund, which the UJSAO may establish to compensate, among others ,

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victimized Refee investors , those fads will be credited as partial payment of BAWAG's

obligations under this agreement ;

J . In the course of these settlement discussions , BAWAG has made available

for review by Co-Lead Counsel certain documents pertinent to the Class's claims an d

BAWAG's defenses to those claims , including all documents that 13AWAG had provided

to the TJSAG and the Creditors Committee, and Co-Lead Counsel reviewed those

documents before Lead Plaintiffs agreed to this Settlement;

K. As pan of these settlement discussions, BAWAG has briefed counsel for

Lead Plaintiffs and their consultants concerning the limited ability of BAWAG to pay

any judgment or settlement;

L. BAWAG acknowledges that the efforts of Lead Plaintiffs, including the

.ling of the Amended Complaint and the presentation of certain facts and arguments

during the settlement discussions, contributed materially to BAWAG's agreement to fimd

the Global Resolution Fund and to pay the Settlement Amount set forth below in order to

resolve the Action ;

M_ Based upon their independent investigation and the BAWAG documents

they have reviewed, Co-Lead Counsel and Lead Plaintiffs have concluded that the terms

and conditions of this Stipulation are fir, reasonable and adequate to Lead Plain tiffs and

the Class, and in the Class 's best interests, and have agreed to se tt le the claims raised in

the Action with BAWAG pursuant to the terms and provisions of this Stipulation, after

considering (a) the substantial benefits that the Class will receive from the Settlement,

(b) the attendant risks of litigation, and (e) the desirability of permitting the Settlement to

be consummated as provided by the te rms of this Stipulation ; and

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N. BAWAG continues to deny that it committed any acts or omissions giving

use to any liability and/or violation of law, and is entering into this Settlement to avoi d

the burden and expense of further litigation.

NOW THEREFORE , without any concession by Lead. Plaintifs that the Action

lacked remit, and without any concession by BAWAG of any liability or wrongdoing or

lack of merit in its defenses, it is hereby STIPULATED AND AGREED, by and among

the parties to this Stipulation, through their respective allomeys, subject to approval by

the Court pursuant to We 23(e) of the Federal Rules of Civil procedure, in consideration

of the benefits flowing to the parties hereto, that all Settled Claims as against BAWAG

shall be compromised, settled, released and dismissed with prejudice, and without costs,

upon and subject to the following terms and conditions :

DEFE II` IONS

1. As used hereinafter in this Stipulation, the following terms shall have th e

following meanings ;

a. "Action" means In re Refco. Inc. Securities Litigation, No. 05 Cis'.

8626 (GEL) (S .D.N.Y.), pending in the United States District Court for the Southern

District of New York .

b. "Amended Complaint" stall mean the amended complaint filed by

Lead Plaintiffs in this Action on May 5, 2 046.

c. "Approval (hder" means any order of the United States

Batdniptcy Court for the Southern District of New York approving the separat e

settlement reached between BAWAG and the Creditors Committee;

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d. "Authorized Claimant" means a Class Member who submits a

timely and valid Proof of Claim to the Claims Administrator and does not opt out.

e. "BAWAG" means BAWAG P.S_K. Bank Air Albeit und

Wirtschaft and Osterrciobischo Postspaxkasse Aktiengesellschaft .

f. "BAWAG's Counsel" means the law firm of Dechert LLP,

g. `~BAWAG Global Restitution Fund" means a fund to be created by

the USAO using the proceeds of a separate settlement between the USAO and BAWAG,

b„ 1IAWAG Settlement" or "Settlement" means the resolution of the

Action as against BAWAG in accordance with the terms and provisions of thi s

Stipulation .

i . "Bernstein Litowitz" means the law fmn of Bernstein Litowitz

Berger & Gmssmann LLP, Co-Lead Counsel for Lead Plaintiffs and the Class.

j "Claims Administrator" means the firm to be retained by Lead

Counsel, subject to Court app cwal, which shall process Proofs of Claim and administer

the Settlement Amount to Authorized Claimants .

k . "Class" means all persons and entities who purchased or otherwise

acquired Refco Group Ltd ., LLC/Refco Finance Inc. 9% Senior Subordinated Notes due

2012 (CUSIP Nos. 758 (56HAA5 and/or 75866f1.C1) and/or common stack of Refco

(CUSIP No. 758666109) during the Class Period and who were damaged thereby .

Excluded from the Settlement Class are. (i.) Refco ; (ii) the Defendants; (iii) any person or

entity who was a partner, executive officer, director, controlling person, subsidiary, or

affiliate of Refco or any Defendant during the Class Period ; (iv) members of the

Defendants' immediate families; (v) entities in which Refco or any Defendant has a

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controlling interest ; and (vi) the legal representatives, heirs, predecessors, successors or

assigns of any of the foregoing excluded persons or entities_ Also excluded from the

Class is any person or entity who or which properly excludes himself, herself or itself by

filing a valid and timely request for exclusion in accordance with the requirements set

forth in the Notice,

1 . "Class Distribution Order" means an order of the Court approving

the Claims Administrator 's administrative determinations concerning the acceptance an d

rejection of the claims submitted herein, and approving any fees and expenses not

previously applied for, including the fees and expenses of the Claims Administrator and,

if the Effective Date has occurred, directing payment of the Net Settlement Fund t o

Authorized Claimants .

in. "Class Member" means any person or entity who or which is a

member of the Class and not excluded therefirom _

ri, "Class Period" means the period from August 5, 2004 through and

including October 17, 2005 .

o. "Co-Lead Counsel" means the law firms of Bernstein Litowitz and

Giant & l3isenhofer ,

p "Complaint" shall mean the consolidated class action complaint

filed. by Lead Plaintiffs in this Action on April 3, 2006.

q "Confidentiality Agreement" mew the confidentiality agreement

entered into between BAWAG and Co-Lead Counsel for the Lead Plaintiffs, dated July 7 ,

2006 .

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r "Contingent Payment" shall have the meaning set forth in ¶ 8

below.

s. "Court" means the United States District Court for the Southern

District ofNew York.

t, "Creditors Committee" means Refco's Official Committee of

Unsecured Creditors in the Refco Bankruptcy Proceeding .

u, "Defendants" means all defendants named in the Amended

Complaint and any future named defendants .

v. "Effective Date" means the date upon which the Judgment has

become Final .

W. "Escrow Account" means the interest beathig account maintaine d

by the Escrow Agent into which the Settlement Amount shall be deposited . Until the

Effective Date, the Escrow Account shall be controlled and maintained -jointly by

Bernstein Litowitz and Grant & Eisenhofer , on behalf of Lead Plaintiffs and the Class.

X . "Escrow Agent" means the financial institution selected by Co-

Load Counsel to receive, hold, invest and disburse the Settlement Amount pursuant to the

terms of this Stipulation and the Escrow Agreement ,

Y- "Escrow Agreement" means the escrow agreement between

Bernstein Litowitz, Grant & Eisenhofer and the Escrow Agent with respect to the Escro w

Account.

Z. "Final," with respect to the Judgment, means the later of (i) if

there is an appeal from the Judgment (other than an appeal pertaining solely to the

Court's approval of a Plan of Allocation and/or the Court's award of attorneys' fees ,

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costs or expenses), the date of final affixmance on appeal and the expiration of the time

for any further•judicial review whether by appeal, reconsideration or a petition for a writ

of certiorari and, if certiorari is granted, the date of final aflainnanco of the Judgment

following review pursuant to the grant; or (ii) the expiration of the time for the filing or

noticing of any appeal from the Judgment, which shall be thirty (30) days der the

Judgment is entered in the Court's docket. Any appeal or proceeding seeking judicial

review pertaining solely to (i) Court approval of the Plan of Allocation of the Net

Settlement Fund ; and/or (ii) the Court's award of attoanneys' fees, costs or expenses, shall

not affect the time set forth above for the Judgment to become Final .

sa. "Grant & Eisenhofe?" means Grant & Eisertho fe r P.A., Co-Lead

Counsel for Lead Plaintiffs and the Class .

bb. ";udgment" means the proposed judgment to be entered approvin g

the BAWAG Settlement substantially in the f©tm attached hereto as Exhibit B .

cc. "Lead Plaintiffs" means RTC Capital Associates LLC and Pacifi c

Investment Management Company LLC .

dd. "Net Settlement Fund" means the Settlement Fund less (i) Court

awarded attorneys' fees and expenses; (u) Notice and Administration Expenses ; (iii) any

required Taxes ; and (iv) any other fees or expenses approved by the Court.

ee. `Norm-Contingent Payment" has the meaning set forth in 18 below .

if. "Notice" means the Notice of Pendency of Class Action, Hearing

on Proposed Settlement and Attorneys' Fee Petition and Right to Share in Net Settlement

Fund which is to be sent to members ofthe Class substantially in the form attached hereto

as Exhibit 1 to Exhibit A hereto .

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gg. "Notice and Administration Expenses" means all expense s

incurred in connection with the preparation and printing of the Notice ; providing notice

to the Class by mail, publication and other means; receiving and reviewing claims ;

applying the Plan of Allocation; corresponding with Class Members ; and the costs of the

Claims Administrator.

hh. 'Notice and Preliminary Approval Order" means the proposed

order preliminarily approving the BAWAG Settlement, and directing notice to the Clas s

of the pcndeney of the Action and of the BAWAG Settlement, which shall b e

substantially in the form attached hereto as Exhibit A.

ii . "Plan of Allocation" means the plan that Lead Plaintiffs wil l

submit to the Court at a later date and upon further notice to the Class that shall b e

atilized for distribution of the Net Settlement Fund to Authorized Clain tts in a manne r

consistent with the terms of this Stipulation, and as approved by the Court.

jj . "Proof of Claim" means the form substantially in the form to b e

approved by the Court and disseminated to Class Members at a future date, which Clas s

Members shall be required to complete and return to the Claims Administrator in order to

substantiate their entitlement to a share of the Net Settlement Fund.

kk. "Publication Notice" means the Summary Notice of Pendency o f

Class Action, Hearing on Proposed Settlement and Attorneys' Fee Petition and Right to

Shape in Net Settlement Fund for publication substantially in the form attached a s

Exhibit 2 to Exhibit A hereto.

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11. "R.efco" means Refco, Inc. and its predecessors and subsidiaries,

including, but not limited to, ltefco Group Ltd ., LLC, New Refco Group Ltd., LLC,

- Refco Finance Holdings LLC, Refco Finance Inc ., and Refco Capital Markets Ltd .

mm. "Refco Ba iptcy 'roceeding" means the consolidated

bankruptcy pxaeeedings relating to Refco, currently pending in the Bankruptcy Court for

the Souther District of Now York .

nn. "Released Parties" means the Settling Defendants and the Released

Plaintiff Parties collectively .

00. "Released Plaintiff Parties" means the Lead Plaintiffs and their

attorneys, trustees, accountants, affiliates, subsidiaries, parents, predecessors, successors,

or related companies and any of their respective present or former officers, directors and

o nployees.

pp. "Sale Puce" means the Transaction Value as defined in a separate

Stipulation and Order of Settlement reached between BAWAG and the Creditors

Committee and approved by the Approval Order.

qq. "Salo Transaction" means the Sale Transaction as defined in a

separate Stipration and Order of Settlement reached between BAWAG and the Creditor s

Committee and approved by the Approval Order.

rr. "Settled Claims" means any and all claims, rights, demands,

obligations, controversies, debts, damages, losses, causes of action or liabilities of any

kind or nature whatsoever in law or in equity, including both known and Unknown

Claims, held by any Class Member at any point from the beginning of time to the date of

the execution of this Stipulation, including but not limited to those which (1) were

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asserted in the Action by Class Members against any of the Settling Defendants ; or (ii)

could have been asserted in any forum by any of the Class Members against any of the

Settling Defendants , that arise out of or relate to the allegations of the Complaint and the

acquisition or disposition of Refce Group Ltd„ LLC/Refco Finance Inc . 9% Senior

Subordinated Notes due 2012 and/or common stock of Refeo during the Class Period,

as . "Settling Defendants" means :SAWAG, its direct and indirect

subsidiaries, parents, affiliate , predecessors, and successors, set forth in the attached

Schedule A, and their respective agents and attorneys , set forth in the attached Schedule

B, and all past, present, and future officers, directors and employees, except for the

individuals set forth in the attached Schedule C or any individuals who at any time

worked as an officer, director or employee of Refco, in their capacity as officer, director

or employee of Refco , excluding any individual who served as an officer, director, or

employee OfBAWAG Overseas, Inc, or DP Capital , Inc . prior to the merger with or sale

of these entities to Refco and who was not otherwise employed by Refco .

tt . "Settling Defendants' Claims" means any and all claims, rights ,

demands, obligations, controversies, debts, damages, losses, causes of action and

liabilities of any kind or nature whatsoever in law or in equity, including both known and

Unknown Claims, held at any point from the beginning of time to the date of the

execution of this Stipulation, which claims have been or could have been asserted by the

Settling Defendants against any of the Released Plaintiff Parties and which arise out of or

relate in anyway to the institution or maintenance of the Action .

I I

au. "Settlement Amount" means the Non-Contingent Payment o f

$108;000,000 and the Contingent Payment of up to $32,000,000, as described more fully

in ¶ 8 -10 below.

vv. "Settlement Fund" means (i) the Non-Contingent Payment of

$108,000,000 in cash to be paid by or on behalf of BAWAG ; (ii) any amounts paid

pursuant to the Contingent Payment; and (iii) any interest earned on any monies held in

the Escrow Account.

ww. "Settlement Hearing" means the hearing to be held by the Court to

determine whether the proposed BAWAG Settlement is fair , reasonable and adequate and

should be approved.

xx. "Stipulation" means this Stipulation and Agreement of Settlement,

yy. "Taxes" means all taxes on the income of the Settlement Fund and

expenses costs incurred in connection with the taxation of the Settlement Fund

(including, without limitation, expenses of tax attorneys and accountants) .

zz. "Termination Notice" shall have the meaning set forth in 13 7

below.

aaa. "USAO" means the United States Attorney for the Southern

District of New York.

bbb. 'Vnknown Claims ' means any and all Settled Claims which Lead

Plaintiffs in the Action or any Class Member does not know to exist in his, her or it s

favor at the time of the release of the Settling Defendants, and any Settling Defendants'

Claims which the Settling Defendants do not know to exist in its favor at the time of the

release of the Released Plaintiff Parties, Which if known by them might have affecte d

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their decisions with respect to the Settlement . With respect to any and all Settled Claims

and Settling Defendants' Claims, the parties stipulate and agree that upon the Effective

Date, Lead Plaintiffs and the Settling Defendants shall expressly, and each Class Member

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, any law applicable in Austria or principle of common law, which is

similar, comparable, or equivalent to Cal . Civ. Code § 1542, which provides-

A general release does not extend to claims which thecreditor does not know or suspect to exist in his or herfavor at the time of executing the release, which if knowuby him or her must have materially affected his or hersettlement with the debtor.

Lead Plaintiffs and BAWAG acknowledge, and other Class Members by operation of law

shall be deemed to have acknowledged, that the inclusion of -Unknown Claims" in the

definition of Settled Claims and Settling Defendants' Claims was separately bargained

for and was a key element of this Settlement .

RELEASES

2. The obligations incurred pursuant to this Stipulation are in full and final

disposition of the Action with respect to the Settling Defendants and any and all Settled

Claims .

3. As of the Effective Date, Lead Plaintiffs and each Class Member on behalf

of themselves, and each of their respective predecessors, successors, parents, subsidiaries,

affiliates, heirs, executors, trustees, and administrators, by operation of the Judgment,

will release and forever discharge each and every Settled Claim, as against each and

every one of the Settling Defendants and shall forever be barred and enjoined from

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commencing, instituthg or maintaining any of the Settled Claims against any of the

Settling Defendants .

4, As of the Effective Date, the Settling Defendants, on behalf of themselve s

and each and every of the Settling Defendants, by operation of the Judgment, will release

and forever discharge each and every Settling Defendants' Claim, and shall forever be

barred and enjoined from commencing, instituting or maintaining any of the Settling

Defendants' Claims against any of the Released Plaintiff Parties .

5. Notwithstanding any release or other language that may be contained i n

the Stipulation and Order of Settlement that may be entered by the Bankruptcy Court or

in any other documcnt (including, but not limited to, any order issued by the Bankruptcy

Court for the Southern District of New York in connection with the separate settlement

reached between BAWAG and the Creditors Committee) which purports to release or

otherwise extinguish or limit any claims that Lead Plaintiffs and/or members of the Class

have asserted or could assert against BAWAG (collectively, the "Bankruptcy Releases"),

the Parties agree that as long as the Settlement between Lead Plaintiffs and BAWAG is

approved by the Cowl, the Bankruptcy Releases shall be fully effective on their terms,

provided, however, the Bankruptcy Releases shall not release the claims of Lead

Plaintiffs and/or members of the Class in this Action, which claims will be released only

through this Settlement between Lead Plaintiffs and BAWAG . Further, notwithstanding

any language that may be contained in the Bankruptcy Releases or other documents

referenced above, if this Settlement or any future settlement between the Parties is

approved by the Court, nothing shall preclude members of the Class from receiving

distributions from such Settlement or future settlement in this Action receivin g

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distributions from settlements reached between BAWAG and others in the Bankruptcy

Court, to the extent that those Class members have allowed claims as creditors or interest

holders in the Refco Bankruptcy Proceeding. The Parties fu Zer agree that, in the event

that this Settlement is not approved by the Court, and the Parties subsequently enter into a

future settlement, any future settlement will include the terms of this paragraph .

CLASS CERTIFICATION

6. Solely for proses of this Settlement, BAWAG stipulates to (i )

certification of the Action as a class action, pursuant to Rules 23(a) and 23(b)(3) of the

Federal Rules of Civil procedure; (ii) the appointment of Load Plaintiffs as

representatives of the Class; and (iii) the appointment of Co-Lead Counsel as Class

Counsel pursuant to Rule 23(g) of the Federal Rules of Civil Procedure. Lead Plaintiffs

will move for, and BAWAG shall not oppose, entry of the Notice and Preliminary

Approval Order, which will certify the Action to proceed as a class action solely for

purposes of the Settlement .

THE SETTLEMENT CONSIDERATIO N

7. In fall settlement of the claim s asserted in the Action against the Settlin g

Defendant and in consideration of the rcleascs specified in 'J 3-5, above, BAWAG shall

provide Lead Plaintiffs with the monetary and non-monetaz y consideration described

below.

Ma et Consideration

8, BAWAG shall pay or cause to be paid to the members of the Class the

sum of$108,00 0,000 in cash (the "Non-Contingent Payment"), and in the event BAWAG

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is sold for a Sale Price exceeding €L8 billion (curos) within two years after the Approva l

Order is entered, BAWAG will pay to the members of the Class an additional cash sum ,

calculated as follows: 5% of the Sale Price of BAWAG above £1 .8 billion (euros), up to

a maximum additional payment to the Class not to exceed $32,000,000 (dollars) (the

"Contingent Payment"). For currency conversion puposes, all amounts paid shall be

converted into U.S. dollars on the date such Contingent Payment is made .

9. The Settlement Amount shall be paid in accordance with the followin g

schedule:

a. BAWAG shall pay $25,000,000 of the Non-Contingcut Payment

into the Escrow Account within thirty days after the Approval Order becomes a final

order that has not been stayed, vacated, reversed, or materially modified or amended, and

as to which: (i) the time to seek review, reargument, or rehearing has expired, and as to

which no appeal or motion or petition for certiorari, review, or rehearing is pending, or

(ii) if a stay, appeal, review, reargur ent, rehearing, or certiorari has been sought, the

order or judgment has been afl rmed, or the request for stay, review, reargument,

rehearing, or certiorari has been denied and the time to seek fur her stay, appeal, review,

reargument, rehearing, or certiorari has expired, as a result of which such order or

judgment has become final and non-appealable in accordance with applicable law;

provided, however, that the possibility that a motion under Rule 60 of the Federal Rules

of Civil ocedure, or Rule 9024 of the Federal Rules of Bankruptcy Procedure, may be

but has not then been Mod with respect to such order, shall not cause such order not to be

a final order.

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b. Within thirty days of the earlier of (a) the closing of the Sal e

Transaction of BAWAG or (b) one year after the date the Approval Order is entered,

BAWAG shall pay $75,000,000 of the Non-Contingent Payment into the Escrow

Account ;

o. Should BAWAG be sold for a Sale Price exceeding £L8 billion

(euros) within two years after the Approval Order is entered, BAWAG shall, within thirt y

days after the closing of the Sale Transaction of BAWAG, pay the Contingent Payment

into the Escrow Account ;

d. Within ten days after entry of the, Notice and i liminary Approval

Order by the Court, $AWAG shall pay $8,000,000 of the Non-Contingent Payment into

the Escrow Account.

10. Lead Plaints agree that, in connection with each of the payments due

from BAWAG in accordance with. ¶¶ 9(a)-(c) above, before demanding payment from

BAWAG they will use their reasonable best efforts both to (a) apply to the USAO, on

bebaif ofthe Class, to receive that payment from the BAWAG Global Resolution Fund,

and (b) pursue receipt of such payment, and further, that they will credit the receipt of

any monies received from the BAWAG Global Resolution Fund to reduce, dollar for

dollar, the payment obligations of BAWAG pursuant to ¶¶ 9(a)-(c) in that order (Le,

¶3(a) first, then ¶9(b), then ¶9(c)) . BAWAG agrees that it remains unconditionally

obligated to pay directly to the Class whatever amount is necessary to ensure that each of

the payments set forth in ¶¶ 9(a)-(c) above is fully paid should the USAO, for any reason

whatsoever, fail to pay, in whole or in part, the amounts required to be paid pursuant to

IM 9(a)-(c). BAWAG's obligation to pay the amounts set forth in ¶¶ 9(a)-(c) shall b e

17

suspended while the USAO processes the aforementioned request(s), pravk ed however,

that if the USAO fails to make full payment within 180 days of a scheduled payment

date, interest shall accrue on such amounts that remain unpaid at the then-applicable 3-

month LIBOR rate without compounding . If the USAO fails to make frill payment of any

amount of the Non -Contingent Payment within 365 days of the scheduled payment dat e

in 19(b) or full payment of the Contingent Payment within 365 days of the scheduled

payment date in 19(c), BAWAG shall, on or before the 366th day after the respective

scheduled payment dates, make such payments to the Escrow Account as are necessary

such that the Class receives fall payment of the scheduled payment, plus interest as set

forth herein . Nonetheless, if the USAO inalces a payment to the Class out of th e

BAWAG Global Resolution fund after BAWAG has made a direct payruent to the Class

pursuant In 9(a), (b) or (c) above, the Class will transfer an amount equivalent to the

pay xeent received fCoxn the USAO pr ant to that same subparagraph ie . ' 1 9(a), (b) or

(c)) to BAWAG within twenty days of receipt of such payment from the USAQ . In-no

event shall the funds received through the BAWAG Global Resolution Fund reduce the

payment obligation ofBAWAG set forth in 19(d) above, even if that payment results in

total payments to the Class exceeding $108 million .

Non-Monetary Consideration

11. Subject to Austrian bank secrecy laws and pursuant to the Co dentialit y

Agrcement, BAWAG shall provide Co-Lead Counsel with access to such documents and

financial information that Lead Plaintiffs believe arereasonably necessary to confir the

information provided during the course of settlement negotiations. Subject to the

provisions of the Austrian bank secrecy laws and pursuant to the Confidentiality

is

Agreement, BAWAG agrees, that it shall, upon reasonable request, be under a continuing

obligation to provide Lead Plaintiffs with copies of all Refco-related documents provided

in the future to the USAO and/or the Creditors Committee.

12. BAWAG shall in good faith and subject to Austrian bank secrecy laws

provide reasonable cooperation to assist Lead Plaintiffs in their prosecution of claims

against other defendants and/or prospective defendants in the Action. BAWAG's

cooperation shall include making reasonably available to Lead Plaintiffs for interviews

and depositions (without the need for subpoenas) in Austria then current BAWAG

employees familiar with the aforementioned documents and the matters alleged in the

Amended Complaint, provided, however, that Lead Plaintiffs agree that the timing of

such interviews and/or depositions will be subject to coordination with the USAO and

Securities and Exchange Commission.

USE AM A ) % NISTlt4UON OF SETTLEMENT FUND

13. The Settlement Fund may be used. (i) to pay any Taxes; (ii) to pay Notic e

and Administration Expenses ; (iii) to pay any attorneys' fees and expenses awarded by

the Court ; (iv) to pay any other fees and expenses approved by the court ; and (v) to pay

Claims of Authorized Claimants determined valid for payment; provided, however, that

Co-Lead Counsel agree that finds used to pay any attorney's fee award shall not be

drawn from funds that are paid to the Settlement Fund through the BAWAG Global

Resolution Fund .

14, The Net Settlement Fund shall remain in the Escrow Account until th e

Effective Date, whereafter the Net Settlement Fund shall be distributed to Authorize d

Claimants as provided in ¶j 22-25 hereof. All funds held by the Escrow Agent shall b e

19

deemed to be in the custody of the Court, and shall remain subject to the jurisdiction of

the Court -until such tine as the funds shall be distributed or returned Pursuant to this

Stipulation and/or further order of the Court . The Escrow Agent shall invest arty funds in

the Escrow Account in United States Treasury Bills or, if approved by each of the Co-

Lead Counsel and Lead Plaintiffs, in money market funds with one or more of the fifty

(50) largest banking institutions in the United States, and shall collect and reinvest all

interest accrued thereon. The Lead Plaintiffs have structured the Escrow Account so that

will qualify as a "qualified settlement hind," as that term is defined in Treas . Reg.

§1 .46881, which has been promulgated under Section 468E of the Internal Revenue

Code of 1986, as amended) and the parties hereto accordingly agree to treat the

Settlement Fund as a Qualified Settlement Fund within the meaning of Treasury

Regulation §1,468B-l., and that Bernstein Litowitz and Grant & Eiseuhofer, as

administrators of the Settlement Fund within the meaning of Treasury Regulation

§1 .468B-2(k)(3), shall be responsible for timely filing tax returns and any relevant tax

filings and documentation relating thereto for the Settlement Fund and timely paying

from the Settlement Fund any Taxes owed with respect to the Settlement Fund,

BAWAGs Counsel as transferor agrees to provide promptly to Bernstein Litowitz the

required statement described in Trceaury Regulation §1 .468B-3(o); ovide thA since

the Settling Defendants are not US persons and are not US taxpayers, the Settling

Defendants do not file US federal income tax returns and thus, the Settling Defendants

cannot file the required statement with their US tax retort-, as this regulation appears t o

require-

20

15. All Taxes shall be paid out of the Settlement Fund, and shall be timely

paid by the Escrow Agent without prior Order of the Court . Any Tax returns prepared

for the Settlement Fund (as well as the election set forth therein) shall be consistent with

the previous paragraph, and in all events shall reflect that all Taxes (including any

interest or penalties) on the income earned by the Settlement Fund shall be paid out of the

Settle ,ent Fund as provided herein. The Settlement Fund shall indemnify and hold the

Settling Defendants harmless for Taxes and related expenses (including without

limitation, taxes payable by reason of any such inde nihcation), if any, payable by the

Settling Defendants by reason of the income earned on the Settlement Fund . The Set g

Defendants shall notify the Escrow Agent promptly if they receive any notice of any

claim for Taxes relating to the Settlement Fund .

16. Co-Lead Counsel may pay from the Settlement Amount al l reasonable

costs and expenses associated with the administration of the settlement, including,

without limitation, the actual costs of identifying and notifying Class Members and

printing and mailing the Notice and Proof of Claim, publication of the Publication

Notice, reimbursement to nominee owners for forwarding the Notice and Proof of Claim

to their beneficial owners, the administrative expenses incurred and fees charged by the

Claims Administrator in connection with mailing notices and processing the submitted

claims, and any other Notice and Administration Expenses. In the event that the

Settlement is terminated, as provided for hereon, Notice and Administration Expenses

paid or accrued in connection with this paragraph shall not be returned to the persons

who paid the Settlement A oubt up to a maximum amount of $300,000.04.

21

17. Co-Lead Counsel will apply to the Court for a Class Distribution Order ,

on notice to BAWAG's Counsel, approving the, Claims Administrator 's administrative

determinations concerning the acceptance and rejection of the claims submitted herein

and approving any fees and expenses not previously applied for, including the fees and

expenses of the Claims Administrator, and, if the Effective Date has occurred, directing

the payment of the Net Settlement Fund to Authorized Claimants.

18. This is not a claims-made settlement . As of the Effective Date, with the

exception of the Class's obligation to return payments to BAWAG if payments arc later

obtained from the BAWAG Global Resolution Fund (as set forth in paragraph 10 above),

and the terms of paragraph 40 below, neither the Settling Defendants nor any person

paying the Settlement Amount or any portion of the Settlement Amount on behalf of the

Settling Defendants shall have any right to the return of the Settlement Fund or any

portion thereof irrespective of the number of Proofs of Claim filed, the collective amount

of losses of Authorized Claimants, the percentage of recovery of losses, or the amounts to

be paid to Authorized Claimants from the Not Settlement Fad . In the event that the

Settlement is ter ated or fails to become effective for any reason prior to the Effective

Date, the Class shall return to BAWAG the $8 million Non-Contingent Payment paid in

accordance with paragraph 9(d) above, subject to the provisions of paragraph 40.

19. The Claims Administrator will administer the Settlement under Co-Lead

Counsel's supervision and subject to the jurisdiction of the Court. The Settling

Defendants will have no responsibility for the administration of the Settlement, and shall

have no liability to the Class in connection with such adrninistratiom Co-Lead Counsel

will cause the Claims Administrator to mail the Notice (and, at a later date, the Proof of

22

Claim) to those members of the Class whose addresses may be identi fied through

reasonable effort. Co-Lead Counsel will publish the Publication Notice of the proposed

Settlement in the national edition of The Wall Street Journal within ten (10) days of the

mailing of the Notice, or in such other form or manner as may be ordered by the Court .

ATTORNEYS' FEI AND EXPENSE S

20. At any time prior to distribution to the Class, upon reasonable notice to

Class Members, Co-Lead Counsel, on behalf of all plaintiffs' counsel in the Action, may

apply to the Court for an award from the Settlement Fund of attorneys' fees not to exceed

7% of the Non-Contingent Payment; provided, however, that funds used to pay any

attorneys' fee award shall not be drawn from funds that BAWAG may pay to the

Settlement Fund through the BAWAG Global Resolution Fund . BAWAG will take no

position on any request for attorney's fees by Co-Lead Counsel other than to

affirmatively acknowledge that the efforts of Lead Plaintiffs and Co-Lead Counsel,

including the filing of the Amended Complaint and the presentation of certain facts and

arguments during the, settlement discussions, contributed materially to BAWAG's

agreement to fond the BAWAG Global Resolution Fund and to pay the Settlement

Amount to the Class. Any attorneys' fees as axe awarded by the Court shall be paid from

the Settlement Fund to Co-Lead Counsel within five (5) business days of the entry of the

Order awarding such attorneys' fees, notwithstanding the existence of any timely filed

objections thereto, or potential for appeal therefrom, or collateral attack on the Settlemeiit

or any part thereof, subject to the obligation of Co--Lead Counsel and each such plaintiffs'

counsel to refund to the Settlement Fund, within ten (10) days, the amount received by

each plus accrued interest at the rate paid on the Escrow Account by the financial

23

institution holding it, if and when, as a result of any appeal and/or further proceeding on

remand, or successful collateral attack, the fee or cost award is reduced or reversed, if the

award order does not become final, if the Settlement itself is voided by any party as

provided herein, or if the Settlement is later reversed or modified by any court. Co-Lead

Counsel shall allocate tbo attorneys' fees among plaintiffs' counsel in a manner in which

they in good faith believe reflects the contributions of such counsel to the prosecution and

settlement of the Action with the Settling Defendants . Co-Lead Counsel will indemnify

and hold the Settling Defendants harmless for any claims by any Class member regarding

attorneys' fees.

21 . Lead Plaintiffs and Co-Lead Counsel may not cancel or terminate th e

Stipulation or the Settlement in accordance with' 37 or otherwise based on this Court's

or any appellate court's ruling solely with respect to any application for attorneys' fees

and expenses or other fee and expense award in the Action . The Settling Defendants

have no responsibility or liability for the allocation of attorneys" fees .

nix sUTION TO AUThORJZ1p CLA1MANrT S

22. The Claims Administrator shall determine each Authorized Claimant's pr o

rata share of the Net Settlement Fund based upon each Authorized Claimant' s

Recognized Loss as set forth in 123 below.

23. The distribution of the Net Settlement Fund to Class Members shall be

subject to the Plan of Allocation, which Lead Plaintiffs shall propose in their discretion,

at a later point and subject to farther notice to Class Members . The Settling Dcf ndants

will take no position with respect to such Plan of Allocation; such Plan of Allocation is a

matter separate and apart from the proposed Settlement between Lead plaintiffs and th e

24

Settling Defendants, and any decision by the Court concerning the Plan of Allocation

shall not affect the validity or finality of the proposed Settlemcnt .

24. The Plan of Allocation is not a necessary term of this Stipulation and it is

not a condition of this Stipulation that any particular plan of allocation be approved by

the Court . Lead Plaintiffs and Co-Lead Counsel may not cancel or terminate the

Stipulation or the Settlement in accordance with ¶ 37 or otherwise based on this Coma's

or any appellate court's ruling solely with respect to the flan of Allocation or any plan of

allocation in the Action . The Settling Defendants have no responsibility or liability for

allocation of the Net Settlement Fund .

25. Each Authorized Claimant shall be allocated a pro rata share of the Net

Settlement Fund based on the Flan of Allocation. The Settling Defendants will have no

involvement or responsibility in reviewing or challenging claims.

ADMJ 1ST.' 4TION Or~ SETTLEMENT

26. Any member of the Class who fails to timely submit a valid Proof o f

Claim will not be entitled to receive any of the proceeds from the Net Settlement Fund

but will otherwise be bound by all of the terms of this Stipulation and the Settlement,

including the terns of the Judgment to be entered in the Action and the, releases provided

for herein, and will be barred from bringing any action against the Settling Defendants

concerning the Settled Claims .

27. Co-Lead Counsel shall be responsible for supervising the admini stration

of the Settlement and disbursement of the Net Settlement Fund. The Settling Defendants

shall have no liability, obligation or responsibility for the administration of the

25

Settlement, the allocation of the Settlement proceeds or the reviewing or challenging o f

claims of members of the Class .

28. For purposes of determining the extent, if any, to which a Class Membe r

shall be entitled to be treated as an "Authorized Claimant," the following conditions shal l

apply :

a. Each Class Member shall be required to submit a Proof of Claim

signed under penalty of perjury, and supported by such documents as are designated

therein, including proof of the claimant's loss, or such other documents or proof as Lead

Counsel, in its discretion, may deem acceptable and subject to the approval of the Court;

b. All Proofs of Claim must be submitted by the date specifie d

thereon unless such period is extended by Order of the Court. Any Class Member who

fails to submit a Proof of Claim by such date shall be forever ban cd from receiving anY

payment pursuant to this Stipulation (unless, by Order of the Court, a later submitted

Proof of Claim by such Class Member is approved), but shall in all other respects be

bound by all of the terms of this Stipulation and the Settlement, including the terms of the

Judgment to be entered in the Action and the releases provided for herein, and will be

barred from bringing any action against the Settling Aofcndants concerning the Settled

Claims . A Proof of Claim shall be deemed to have been submitted when posted, if

received with a postmark indicated on the envelope and if mailed first-class postage

prepaid and addressed in accordance with the instructions thereon, provided that it is

received before the motion for the Class Distribution Order is filed. In all other cases, the

Proof of Claim shall be deemed to have been submitted when actually received by the

Claims Administrator ;

26

e. Each Proof of Claim shall be submitted to and reviewed by the

Claims Administrator, who shall determine in accordance with this Stipulation and unde r

the supervision of Co-Lead Counsel, the extent, if any, to which each claim shall b e

allowed, subject to review by the Court pursuant to subparagraph (e) below;

d. Proofs of Claim that do not meet the submission requirements may

be rejected. Prior to rejection of a Proof of Claim, the Claims Administrator shall

communicate with the claimant in order to afford the claimant the opportunity to remedy

curable deficiencies in the Proof of Claim submitted . The Claims Administrator, under

supervision of Co-Lead Counsel, shall -notify, in a timely fashion and in writing, all

claimants whose Proofs of Claim they propose to reject in whole or in part, setting forth

the reasons therefore, and shall indicate in such notice that the claimant whose claim is to

be rejected in whole or in part bas the right to a review by the Court if such claimant so

desires and if such claimant complies with the requirements of subparagraph (e) below;

e. If any claimant who is notified by the Claims Administrator tha t

the Claims Administrator intends to reject his, her or its claim in whole or in part desires

to contest such rejection, such claimant must, within twenty (20) days after the date of

mailing of the notice required in subparagraph (d) above, serve upon the Claims

Administrator a notice and statement of reasons indicating the claimant's grounds for

contesting the rejection along with any supporting documentation, and specifically

requesting a review thereof by the Court. If the dispute concerning the claim cannot be

otherwise, resolved, Co-Lead Counsel shall thereafter present the request for review to the

Court; and

27

f The administrative determinations of the Claims Administrato r

accepting and rejecting claims shall be presented to the Court, on notice to f3AWAG's

Counsel, for approval by the Court in the Class Distribution Order.

29. Each claimant shall be deemed to have submitted to the jurisdiction of the

Court with respect to the claimant's claim, and the claim will be subject to investigation

and discovery under the Federal Rules of Civil Procedure, provided that such

investigation and discovery shall be limited to that claimant's status as a Class Membe r

and the validity and amount of the claimant 's claim. Iu connection with the processing of

the Proofs of Claim, no discovery shall be allowed on the merits of the Action or of the

settlement,

30. Payment pursuant to this Stipulation shall be deemed final and conclusive

against all Class Members . All Class Members whose claims are not approved by the

Court shall be barred from participating in distributions from the Net Settlement Fund,

but otherwise shall be bound by all of the terms of this Stipulation and the Settlement,

including the terms of the Judgment to be entered in the Action and the releases provided

for herein, and will be barred from bringing any action against the Settling Defendant s

concerning the Settled Claims.

31. All proceedings with respect to the administration, processing and

determination of claims described in this Stipulation and the determination of al l

controversies relating thereto, including disputed questions of law and fact with respect to

the validity of claims, shall be subject to the jurisdiction of the Court .

32. The Net Settlement Fund shall be distributed to Authorized Claimants b y

the Claims Administrator only after the Effective Date and after all claims have bee n

28

processed and all claimants whose claims have been rejected or disallowed, iti whole or

in part, have been notified and provided the opportunity to communicate with the Claims

Administrator concerning such rejection or disallowance; provided, however, that a

distribution may occur pending any appellate court's ruling solely with respect to the

scope of the bar order provision of the Judgment, as set forth in 135 herein .

TERMS OF THE PRELIMINARY APPROVAL ORDER

33 . Concurrently with their application for preliminary Court approval of the,

Settlement contemplated by this Stipulation, and promptly after execution of this

Stipulation, Co-Lead Counsel shall apply to the Court for entry of an Order Preliminarily

Approving Settlement of the Action, substantially in the forth of the Preliminary

Approval Order annexed hereto as Exhibit A.

34. The Settlement is conditioned upon the Approval Order by the Bankruptcy

Court becoming a final order that has not been stayed, vacated, reversed, or materially

modified or amended, and as to which: (i) the time to seek review, reargument, or

rehearing has expired, and as to which no appeal or motion or petition for certiorari,

review, or rehearing is pending, or (ii .) if a stay, appeal, review, reargument, rehearing, or

certiorari has been sought, the order or judgment has been affirmed, or the request for

stay, review, rear ,rtent, rehearing, or certiorari has been denied and the time to seek

further stay, appeal, review, rear ent, rehearing, or certiorari has expired, as a result of

which such order or judgment has become final and non-appealable in accordance with

applicable law; provided, however, that the possibility that a motion under Rule 60 of the

Federal Rules of Civil Procedure, or Rule 9024 of the Federal Rules of l ankruptey

Procedure, may be but has not then been filed with respect to such order, shall not cause

29

such order not to be a final order. Should this condition not be met, the Settlement shal l

be null and void.

TERMS QF THE U 3GW+ NT

35. If the Settlement contemplated by this Stipulation is approved by the

Court, Co-Lead Counsel and BAWAG's Counsel shall jointly request that the Court enter

a Judgment substantially in the form annexed hereto as Exhibit B . The Judgment shall

contain a provision barring claims for contribution, as provided for in 15 U.S.C. §78u-

4(1)(7), by or against the Settling Defendants . Nothing herein is intended to broaden the

language of the Private Securities Litigation Reform Act of 1995 .

36, The Settlement is conditioned upon final court approval, dismissal of the

Action as to BAWAG with -prejudice, and the Judgment becoming Final . Should those

conditions not be met, the Settlement shall be null and void .

TERMINATIO N

37. BAWAG and Lead plaintiffs shall have the right to terminate th e

Settlement and this Stipulation by providing written notice of their election to do so

(`Termination Notice") to all other parties hereto within thirty (30) days of (a) the

Court's declining to enter the Preliminary Approval Ow" in any material respect ; (b) the

Court's refusal to approve this Stipulation or any material part of it, (c) the Court's

declining to enter the Judgment in any material -respect ; (d) the date upon which the

Judgment is modified or reversed in any material respect by the United States Court of

Appeals or the Supreme Court of the United States; or (e) in the event that the Court

enters a judgment in a form other than the Judgment {`Alternative Judgment') and none

of the parties hereto elects to terminate this Settlement, the date upon which suc h

30

Alternative Judgment is modified or reversed in any material respect by the United States

Court of Appeals or the Supreme Court of the United States . The award of attorneys'

fees, if any, to Co-Lead Counsel is not a basis for termination of this Settlement

Agreement.

38. BAWAG, at its discretion, has the option to withdraw from the Settlement

if (i) holders of 5% (five percent) of the shares eligible to participate in the Settlement opt

out, and/or (ii) holders of 5% (five percent) of the notes eligible to participate in the

Settlement opt out. Co-Lead Counsel shall have the right to communicate with the

holders of such shares and/or notes and, if a sufficient number of them withdraw their

requests for exclusion such that the total number of shares and/or notes eligible to

participate in the Settlement represented by the remaining "opt outs" represents less than

5% of the total number of shares and/or notes eligible to participate in the Settlement,

BAWAG's notice of termination shall be deemed withdrawn . 13AWAG must exercise its

option to terminate in writing to Co-Lead Counsel within ten business days after

receiving notice that the last opt out is filed that would exceed the 5% threshold for eithe r

stock or notes, or the option is waived .

39. Except as otherwise provided herein, in the event the Settlement is

terminated or fails to become effective for any reason, then the Settlement shall b e

without prejudice and none of its terms shall be effective or enforceable except as

specifically provided herein, the parties to this Stipulation shall be deemed to have

reverted to their respective status in the Action as of May 31, 2006 and, except as

otherwise expressly provided, the parties in the Action shall proceed in all respects as i f

31

this Stipulation and any related orders had not been entered . In such event, the fact and

terms of this Stipulation shall not be adm issible in any trial of this Action.

40_ If the Settlement Amount, or any portion thereof, is to be returne d

pursuant to the provisions of this Stipulation, any portion of the Settlement Amount

previously paid by or on behalf of the Settling Defendants, plus interest earned less any

Taxes paid or due (in which case the deducted funds will be used to pay such Taxes) with

respect to such interest income , and less any Notice and Administration Costs actually

paid or incurred up to $300,000, shall be returned to the source of such payments i.e.

BAWAQ or the BAWAG Global Resolution Fund) .

NO" MISSION OF WRONGDOIN G

41 . This Stipulation, whether or not consummated, and any negotiations ,

proceedings or agreements relating to the Stipulation, the Settlement, and any matter s

arising in connection with settlement negotiations, proceedings, or agreements :

a. shall not be admissible in any action or proceeding for any reason,

other than an action to enforce the terms hereof;

b. shall not be described as, co=trued as, offered or received agains t

the Settling Defendants as evidence of and/or deemed to be evidence of any presumption,

concession, or admission by the Settling Defendants of: the truth of any fact alleged by

Lead Plaintiffs ; the validity of any claim that has been or could have been asserted in the

Action or in any litigation; the deficiency of any defense that has been or could have been

asserted in the Action or in any litigation ; or any liability, negligence, fault, or

wrongdoing of the Settling Defendants ;

32

C . shall not be described as, construed as, offered or received agains t

Lead Plaintiffs or any Class Members as evidence of any infirmity in the claims of said

Lead plaintiffs and the Class or that damages recoverable under the Amended Complaint

would not have exceeded the Settlement Amount ;

d. shall, not be described as, construed as, offered or received against

any of the parties to this Stipulation, in any other civil, criminal or administrative action

or proceeding, provided, however, that (i} if it is necessary to refer to this Stipulation to

effectuate the provisions of this Stipulation, it may be refer'ed to in such proceedings,

and (ii) if this Stipulation is approved by the Court, the Settling Defendants may refer to

it to effectuate the liability protection granted them hereunder ; and

e. shall not be described as or construed against the Settlin g

Defendants or the Toad Plaintiffs and any Class Members as an admission or concession

that the consideration to be given hereunder represents the amount which could be or

would have been awarded to said Lead Plaintiffs or Class Members after trial .

MISCELLANEOUS PROVISIONS

42. All of the exhibits attached hereto are hereby incorporated by reference as

though fully set forth herein,

43 . BAWAG warrants as to itself that, as to the payments made by or on

behalf of it, at the time of such payment that BAWAG made or caused to be made

pursuant to 118.10 above, it was not insolvent nor did nor will the payment required to

be made by or on behalf of it render BAWAG insolvent within the meaning of and/or f'or

the purposes of the United States Bankruptcy Code, including §§ 101 and 547 thereof

This warranty is made by BAWAG and not by BAWAGr's Counsel .

33

44, If a case is commenced in respect of BAWAG (or any insurer contributin g

funds to the Settlement Amount on behalf of )3AWAG) under Title 11 of the United

States Code (Bankruptcy), or a trustee, receiver or conservator is appointed under any

similar law, and in the event of the entry of a final order of a court of competent

jurisdiction determining the transfer of money to the Settlement Fund or any portion

thereof by or on behalf of BAWAG to be a preference, voidable transfer, fraudulent

transfer or similar transaction, and any portion thereof is required to be returned, and such

amount is not promptly deposited to the Settlement Fund by others, then, at the election

of Lead Plaintiffs, the parties shall jointly move the Court to vacate and set aside the

releases given and the Judgment entered in favor of the Settling Defendants pursuant to

this Stipulation, which releases and Judgment shall be null and void, and the parties shall

be restored to their respective positions in the litigation as of May 31, 2006, and any cash

amounts in the Settlement Fund shall be returned as provided above .

45 . The parties to this Stipulation and Agreement of Settlement intend th e

Settlement of the Action to be a final and complete resolution of all disputes asserted or

which could be asserted by Lead Plaintiffs and Class Members against the Settling

Defendants with respect to the Settled Claims . Accordingly, Lead Plaintiffs and the

Settling Defendants agree not to assert in any form that the Action was brought or

defended in bad faith or without a reasonable basis. The parties hereto shall assert no

claims of any violation of Rule 11 of the Federal Rules of Civil Procedure relating to the

maintenance, defense or settlement of the, Action. The parties agree that the amount paid

and the other tennis of the Settlement were negotiated at arm's length in good faith by th e

34

parties, and reflect a settlement that was reached voluntarily after consultation with

experienced legal counsel .

46. This Stipulation may not be modified or amended, Por may any of its

provisions be waived, except by a writing signed by all parties hereto or their successors-

in interest .

47. The headings herein are used for the purpose of convenience only and are

not meant to have legal effect.

48. The administration and consummation of the Settlement as embodied in

this Stipulation shall be under the authority of the Court, and the Court shall retain

jurisdiction for the purpose of entering orders providing for awards of attorneys' fees and

expenses to Co-Lead Counsel and enforcing the terms of this Stipulation .

49. The waiver by one patty of any breach of this Stipulation by any other

party shalt not be deemed a waiver of any other prior or subsequent breach of this

Stipulation.

50. This Stipulation and its exhibits constitute the entire agreement among the

parties hereto concerning the Settlement of the Action as against the, Settling Defendants ,

and no representations, warranties, or inducements have been made by any party hereto

concerning this Stipulation and its exhibits other than those contained and memorialize d

in such documents.

51. This 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 provided that counsel for the parties to this Stipulation shall exchange among

themselves original signed counterparts .

35

52. This Stipulation slain be binding when signed, but the Settlement shall be

effective only on the condition that the Effective Date occurs.

53 . This Stipulation shall be binding upon, and inure to the benefit of, the

successors and assigns of the parties hereto .

54. The construction, interpretation, operation, effect and validity of thi s

Stipulation, and all documents necessary to effectuate it, shall be governed by the internal

laws of the State of New York without regard to conflicts of laws, except to the exten t

that tzder'al law requires that federral law govern .

55. This Stipulation shall not be construed more strictly against one party than

another merely by virtue of the fact that it, or any part of it, may have been prepared by

counsel for one of the parties, it being recognized that it is the result of arm's length

negotiations among the parties, and all parties have contributed substantially and

materially to the preparation of this Stipulation.

$S. All counsel and any other person executing this Stipulation and any of the

exhibits hereto, or any related settlement documents , warrant and represent that they have

the fall authority to do so , and that they have the authority to take appropriate action

required or permitted to be taken pursuant to the Stipulation to effectuate its terms .

57. Co-Lead Counsel and BAWAG's Counsel agree to cooperate fully with

one another in seeking Court approval of the Preliminary Approval Order, the Stipulatio n

and the Settlement, and to promptly agree upon and execute all such other documentation

as reasonably may be required to obtain final approval by the Court of-the Settlement .

36

IN WITNESS WHEREOF, Lead Plain tiffs and BAWAG have caused this

Stipulation to be executed,by their duly authorized attorneys, as of September ,2 2006.

GRANT & ETSENHOPER P.A. DECHBRT LLP

By BY ~. . ..

-and- Cournseifor BAWAG P.S.K Bankfir.rhea and Wirischaft andOsterreichi the Pos twpurkusseAktiengaellkhaft

BERNSTE!N LUOWI.TZ IMRGPR& GROSSMANN LL 1 1

f

'By

Ca-Lead Counsel for Load Plaintiffs and the Class

37

$cbe trade A

AVB Affiliates„Ingebe" Ind strie - u . GewerbeBeteiligangsgesellsehaft m b.H.Austinvest AnstaltAl-ALTERNATIVE INVESTMENTS LTD .Alinea Pri tstifhmgAlinea Holding GmbHALPHARENT sx.o .Athena Wien Beteiligungen AGAUST-INGEBE Beteiligangsverwaltung GmbH.AUSTFINANZVERWALTUNO S .A.AUSTOST ANSTALTAUSTOST HANDELS UN]) TREUHAND LIMITEDAUSTOST HANDELS- UN) TREUHANDGESELLSCHAI T M.B.H .B.I.S. BAWAG Internet Services CrmhHB.L.H. BAWAG Leasing Holding GmbHBAWAG Allianz Mitarbeitervorsorgekasse AGBAWAG Bank CZ as.BAWAG banka d4 .BAWAG Bet eiligungsmanagement CrrnbHBAWAG CAPITAL FINAN CE (JERSEY) II LIMITEDBAWAG CAPITAL FINANCE (JERSEY) III LIMITEDBAWAG CAPITAL FINANCE (JERSEY) LIMITEDBAWAG FINANCE HOLDING LIMITEDI3AWAG Finance Malta Ltd .BAWAG Fin analyse GZnbHBAWAG INTERNATIONAL FINANCE LIMITEDBAWAG Invest Consult GnxbHBAWAG Leasing & Fleet KftBAWAG Leasing & fleet s-T.o .BAWAG Leasing & Fleet Sp. z o .o .BAWAG Leasing Rt .BAWAG Malta Banc Limited.BAWAG F.S.K. Datendienst Gesellsoha-ft m.bH.BAWAG P.S.K. Fubrparkleasing GmbHBAWAG P .S.K. IMMOBILIEN AGBAWAG P .S.K. IMMOBILIENLEASING GmbHBAWAG P.S.K. Kommerzieasing GmbHBAWAG P .S.K. LEASING GmbHBAWAG P .S.K. LEASING (bnbH & Co. Hacl holzerhof Endchtungs- and Vermietungs-KO.BAWAG I .S .K . LEASING GmbH & Co. MOBILIENLEASING KG.BAWAG P.S.K. MOBI'LIENLEAEING QnbTlBAWAG P.S.K. Vennietungs unid Leasing GmbHBAWAG Wohnbaubank AktiengesellschaftBAWAG Wahnbauholding GmbB

BETARENT s.r .o_bezahlen .at Internet Service GinbHBodensee LimitedBFI Holding GmbH13FI Holding GmbH & Co KEG .BPI Holding GrmbH & Co . Bstriebsanlagenverwaltangs KG.BPI Holding GmbH & Co . Immobilien and Anlagen KG.BSH BAWAG Strategic Holding Gmb HCeIestcTrust reg .C. & P. Leasing Gescllsehaft m.b.H .Cafe Bawag Betriebagesellschaft xn .b .H.CARNI Industrie-I mobiliengesellschat zn .b .H.Cromer Capital Management Ltd .CROMER FINANCE LTD .Cromer International LimitedE-C-B Beteiligungsgeselischaft m.b.H .easybank AGEinlagensicherang der Banken and Bankiers Gesellschaft m .b .H .EURO RAIL INVEST LIMITEDFC Leasing GmbHFCH alpha Fiinanzierongsvermittlung CmbHFCH beta Finanzierungsvern itthmg Gmb HF FE Finai1zierungsvermittlungsgesellschaft m .b .H. in Liqu .FinHaus s.r .o.Gara Fcucrwehrzentralen Leasing Gesellschaft m.b.H.Gara Holding GmbHGara RPK Grandstizcksverwaltungsgesellschaft m .b.H.Genossanschaftskiiche der bei der Osterreichischen Postsparltasse tatigen Bediensteten,rogistrierte Genosse ehaft mit beschrankter Haftung in Liqu.Haffner See-Liegenschaftsverwaltungsgesellschaft m .b.H.HBV Holding d Eeteiligurngsvetwaltung GmbHHFE alpha Handels'GmbH[DG Immobilien Development Gesellscbaft rn .b .H.[DO Imrnobilien Development Geseilsehaft tn .b .H. & Co KGIngcbe beta Immobilienholding GmbHIngebe CGR Finar .erungsberatung GmbH in Liqu .Ingebe Im nobilienhandels- mid Vermittlungs-GmbH.Ingebe Modica Holding GmbHISTRO - RECOVERY, s.r.o ,IS'1RO ASSET MANAGEMENT, sprav, spol ., a.s .Istrobanka a.s .ISTROFINANCE, s,r.o .ISTROLEASING, s,r.o.ISTRORENT, sx.o.Kinomax spolka z. ograniczona odpawiedzialnosciaKLB B aulandentwicklung GmbH

Kommun easing GmbNKongrel3hotel Linz Betriebsgesellschaft m b .FLKongref3hotel Linz richhingsgesellscb ift m .b.H.L. B6sendorfer Klavierfabrik GmbHM. Sittikus Sir. 10 Errichtonl s GmbH.

M.AP Xandels GmbHMARVE lmmobiliencntwicklungsgesellschaft m .b.H.MffT + RA, s .r.o.Monte Brook Corporate Assets Ltd .Obesnosterer - Beteiligungsgesellschaft rn.b.H.OMNIJ C Infonnationstecbnolagie-Systemservice GrnbHP.S.K. Beteiligungsverwalf g G ibHP.S.K. Handel and Vermietang GmbH.P.S.K. IMMOBILIENLEASING GmbHP. S .K. Liegenschai n VermieWngs- and Verwalttmgsgeselllschaft m .b .11,P.S.K. Versivherongs` and Pinamasexviee Gmb HP.S.K. Zahlungsve&ehxsabwick1ungs G nbHP. S .K.VicherangAGPLATO Gmndstiicksverwertung GSnbHPluto Beteiligungsverwaltung GmbHPOLESTAR LIMITEDPT limnobilieffleasing GmbHPULAWSKA Planungs . und Errichtungsges.m b.H.R & B Leasinggesellschaf imb .H.RAIL TRANS INVEST LIMITEDReslplan Beta Liegenschaflsverwaltung Gesellschaft m .b.H.RP 17 BAWAG hnmobilienleasing GntbHRF 2 BPI Holding GmbH & Co . KG .RF 4 BAWAG P .S .K LEASING GmbH & Co. OHO.RF BAWAG Leasing Gesellschaft m.b.H.RP elf Realitatenverwertungsgesellscliatl m.b.H,RP fiinfztie1m BAWAG Mobilien-Leasing Geaeflschait ra .b.H,RF near BAWAG P.S.K. LEASING GmbH & Co. KG.RF sechs BAWAG P .S.I . LEASING GmbH & Co. KG.RF zehn BPI Holding GmbH & Co KG.RF zwolf BAWAG Leasing Gesellachaf t m .b .H.Rhein LimitedRVG Immobilienholding GmbHRVG, Renalitatenverwcrtungsgesellschaft mi .b .H,SPARI)A Bank AktiengesellschaftSTART Immobilienloasing GmbHStiefelkonig d .o .o .Stiefelkonig Schuhhandels Gesellschaft m.b .H .Stiefelkonig spol. s.r.o .Stiefclkonig trgovinas ceviji d .o.o.STK Be ligang GmnbH

TADEMA Leasing and Boteiligwng Gcsellsoha±t in .b.H .UHW Finanzierungsdienstl eistungenbeta Gmb Hiini venture Beteffigangs AG6KK Holding Gesellsohafl m.t .H.Osteneichische VoTkehrskrcdifbmk AGBond Classic Ltd.CAP Holding AGCDC City Investments Ltd.Conservative Properties Ltd .First Investors Assets Ltd.Moore Classic Ltd . 'ts'ar Portfolio Ltd.

KGB entitiesO ceichiseher GewcTkschaftsburdQGB Vermoge verwaltungsgeseltschaft m.h.H.0GB Beteiligungsgeseilschaft m.b.HAnteilsverwaitung BAWAG P .S .T .. AGasterreichische Gewerkscha #ilithe SolidarAat Pfivatstit g

Current Supervisory Boardfamily name first nameMulnu Wcmcr

Selhtseh SiegfriedStein Dwors1-Ioehieituer AlbertKothbauer MaxK.ovarik GeorgSehe Richard

Zraimig Gabriela

Rai Mon a

Mstel MaetuelaJa ubovits BrigitteLeeb Rudol fPrali BeatrixStreibel-Zarf Tngtid

Schedule B

SchedWe 13 includes the following, their predecessors, successors, and all a .rioyees, partners,members, shareholders, agents, and representatives thereof:

KPMG Wirtschafrufangs- d St erberatungs bHDeloitte WirtsehaRspriiihngs GrmbHExinger GmbHDeloitte F8I Consulting GrmbH

Schedule B also includes the following, their predecessors, successors, affiliates, parents, andsubsidiaries, and all employees, partners, members, shareholders, agents, and representativesthereof

Feltner Wratzfeld. & Partner Recbtsanwalte GmbH.Dr. Harry Neubauer and Dr. Christa Springer, RechtsanwaltcMcDermott will & EmeryDechert LLPJaksch, Schoeller & RielSchoenherr Rechtsanwl lte GmbHMien & Overt' LLP

Schedule C

Helmut ElsnerJohann ZwettlexHubert KreuchJosef Schwa eskerChristian Buttnerpater Nakowitz

CERTIFICATE OF SERVIC E

I hereby certify that on September 8, 2006, the attached document was fi led with theClerk of Court using CM/ECF which will send noti fication of such fi lings to the fo llowingparties :

Bradley E . Lerman, EsquireBruce Roger Braun , EsquireLinda T. Coberly, EsquireWINSTON & STRAWN3 5 West Wacker DriveChicago, IL 6060 1Emails : blerman@winston.com,bbraun@winston.com, lcoberly@winston .comCounsel to Defendant Grant Thornton LLP

David Emilio Mollon , EsquireJames David Reich, Jr., EsquireBeth A. Tchlinguirian , EsquireWINSTON & STRAWN LLP200 Park AvenueNew York, NY 10166

Isl Megan D. McIntyreMegan D. McIntyre

Stuart 1. Friedman , EsquireIvan O . Kline , EsquireElizabeth D . Meacham, EsquireFRIEDMAN & WITTENSTEIN P .C .600 Lexington AvenueNew York, NY 10022Emails : sfriedman@friedmanwittenstein .com,emeacham c@friedmanwittenstein .com,ikline@friedmanwittenstein .comCounsel to William Sexton

Richard E . Nathan, EsquireNATHAN LAW FIRM123 South June Stree tLos Angeles , CA 90004Email : renathan@att .netCounsel to Dennis Klejna

Emails : jreich@winston.com,dmollon@winston.comCounsel to Defendant Grant Thornton LLP

Helen B . Kim, EsquireBAKER HOSTETLER333 South Grand Avenue, Suite 1800Los Angeles , CA 9007 1Email : hkim i bakerlaw.comLead Counsel to Dennis Klejna

Mark D. Powers, EsquireBAKER HOSTETLER666 Fifth AvenueNew York, NY 10103Email : mpowers@bakerlaw .comCounsel to Dennis Klejna

Holly K. Kulka, Esq .HELLER EHRMAN WHITE &MCAULIFFE, LLPTimes Square Tower7 Times SquareNew York, NY 10036Email : hkulka@hewm .comCounsel to Phillip Silverman

Melissa Sarafa, EsquireNorman L . Eisen, EsquireZUCKERMAN SPAEDER LLP1540 Broadway , Suite 1604New York, NY 1003 6Email : msarafa zuckerman .comCounsel to Tone Grant

John V.H. Pierce, EsquireRobert Bruce McCaw, EsquireDawn M. Wilson, EsquireLori A. Martin, EsquireMichael L. Feinberg, EsquireMichael H . Park, EsquireWILMER, CUTLER & PICKERING399 Park AvenueNew York, NY 10022Emails : robert.mccaw@wilmerhale .com,j ohn.pierce(awilmerhale. com,lori .martin@wilmerhale .com,dawn.wilson@wilmerhale .com,michael . feinberg_@wilmerhale . eomMichael. park@wilmerhale . comCounsel to Defendants Credit Suisse First Boston LLC,Goldman Sachs & Co., Bank ofAmerica Securities LL C,Merrill Lynch Pierce Fenner & Smith Inc., DeutscheBank Securities Inc ., JP Morgan Securities Inc., SandlerO'Neil Partners LP, HSBC Securities (USA) Inc.,William Blair & Company LLC, Harris Nesbitt Corp.,Samuel A . Ramirez & Company, Muriel Siebert & Co .,Inc ., The Williams Capital Group, Utendahl CapitalPartners and CMG Institutional Trading LLC

Greg A. Danilow, EsquireRobert Francis Carangelo, EsquireWEIL, GOTSHAL & MANGES LLP767 Fifth AvenueNew York, NY 10153Counsel to Defendants Thomas H. Lee, David V.Harkins, Scott L. Jaeckel, Scott A. Schoen, NathanGanicher, Leo R. Breitman, Ronald L. O'Kelley, ThomasH. Lee Partners, L .P., Thomas HLee Equity Fund V.,L.P ., Thomas H. Lee Parallel Fund V., L.P., Thomas H.

Lee Equity (Cayman) Fund V., L.P., THL EquityAdvisors V., LLC, Thomas H. Lee Investors LimitedPartnership, The 1997 Thomas H. Lee Nominee Trust

Email : greg.danilowgweil .com

robert .cqKgngelo@weil .com

Barbara Moses, EsquireRachel Marissa Korenblat, EsquireMORVILLO, ABRAMOWITZ, GRAND,IASON ANELLO &BOHRER, P .C .565 Fi fth Ave.New York, NY 1001 7Counsel to Robert TrostenEmails : bmoses . maglaw.comrkorenblat(,maglaw . corn

I hereby certify that on September 8, 2006, the attached document was sent via OvernightMail to the following parties :

Matthew Sava , EsquireYoram Jacob Miller , EsquireSHAPIRO FORMAN ALLEN SAVA &MCPHERSON LLP380 Madison AvenueNew York, New York 1001 7Counsel to Defendant Gerald Sherer andJoseph J. Murphy

Michael T . Hannafan, EsquireBlake T. Hannafan, EsquireNicholas A. Pavich, EsquireMICHAEL T . HANNAFAN & ASSOCIATESOne East Wacker Drive, Suite 1208Chicago, IL 60601Counsel to Defendant Tone N. Grant

Jeffrey T. Golenbock, EsquireAdam C. Silverstein, EsquireGOLENBOCK EISEMAN ASSOR BELL &PESKOE LLP437 Madison AvenueNew York, NY 10022-7302Counsel to Defendants Refco Group Holdings, Inc .,Phillip Bennett and The Phillip R. Bennett Three YearAnnuity Trust

Richard Soto, EsquireHunton & Williams LLP200 Park Avenue, 53rd FloorNew York, New York 10166Counsel to Santo Maggio

Westminster-Refco Management LLC Andrew Levander, EsquireOne World Financial Center DECHERT LLP200 Liberty Street, Tower A 30 Rockefeller PlazaNew York, New York 10281 New York, NY 10112-2200

Email : andrew.levander@dechert .comCounsel to BAWAG P.,S K Bank fur Arbeit andWirtschaft and Osterreichische PostsparkasseAktiengesellschaft.

Refco Managed Futures LLCOne World Financial Center200 Liberty Street, Tower ANew York, New York 10281

Exhibit A

to Stipulation and Agreement of Settlement

IN THE UNITED STATES DISTRICT COURTFOR THE SOUTHERN DISTRICT OF NEW YORK----------------------------------------------------------- . x

05 Civ. 8626 (GEL)In re REFCO, INC. SECURITIES LITIGATION

--- ---------------------------------------- --------------- x

ORDER PRELIMINARILY APPROVINGPROPOSED SETTLEMENT WITH DEFENDANT BAWAG

WHEREAS, by Order dated February 8, 2006, Pacific Investment Management

Company LLC and RH Capital Associates LLC were appointed by this Court to serve as Lea d

Plaintiffs on behalf of the Class in In re Refco, Inc. Securities Litigation , No. 05 Civ. 8626

(GEL) (S.D.N.Y.) (the "Action") ;

WHEREAS, the parties have made an application, pursuant to Rule 23 of the Federa l

Rules of Civil Procedure, for an order preliminarily approving the partial settlement

("Settlement") of the Action in accordance with the Stipulation and Agreement of Settlement

dated September 7, 2006 ("Stipulation") as between Lead Plaintiffs and defendant BAWAG

P.S.K. Bank R k Arbeit and Wirtschaft and Osterreichische Postsparkasse Aktiengesellschaft

(BAWAG"), which sets forth the terms and conditions for a proposed Settlement and for the

release of certain claims and the dismissal of the Action against BAWAG with prejudice upon

the terms and conditions set forth therein ;

WHEREAS, the Court has not ce rtified the Action as a class action, but is being asked to

preliminarily certify a Settlement Class , for purposes of this Settlement only, consisting of al l

persons and entities that purchased or otherwise . acquired Refco Group Ltd ., LLC/ Refco Finance

Inc . 9% Senior Subordinated Notes, due 2012 (CUSIP Nos, 75866HAA5 and/or 75866HAC1)

and/or common stock of Refao (CUSIP No. 75866GI09) during the period August 5, 200 4

through and including October 17, 2005 (ft "Class Period") and who were damaged thereby;

i1REAS, Lead Plaintiffs' proposed definition of the Settlement Class excludes (i)

Refca; (ii) the Defendants; (iii) any person or entity who was a partner, executive officer,

director, controlling person, subsidiary, or affiliate of Refeo or any Defendant during the Class

Period; (iv) members of the Defendants' immediate families ; (v) entities in which Refers or any

Defendant has a controlling interest ; and (vi) the legal representatives, heirs, predecessors,

successors or assigns of any of the foregoing excluded persons or entities . Also excluded from

the Class is any person or entity who or which properly excludes himself, herself or itself by

Ming a valid and timely request for exclusion in accordance with the requirements set forth in

the Notice.

Wh EREAS, the Court having (1) read and considered the First Amended Consolidated

Class Action Complaint filed in this Action on May 5, 2006 ; (2) read and considered Lead.

Plaintiffs' Notice of Motion for (1) Preliminary Approval of Partial Settlement With Defendant

BAWAO, (I1) Preliminary Certification of Class for Purposes of Settlement (III) Preliminary

Approval of Form and Manner of Notice, and (.lV) Scheduling of a Final Approval Hearing,

together with the aceonmpanying Memorandum of Law; (3) read and considered the Stipulation ;

and (4) heard and considered arguments by counsel for Lead. Plaintiffs and 13AWAG in favor of

preliminary approval of the Settlement and preliminary certification of the Settlement Class for

purposes of the Settlement;

WHEREAS, the Court finds, upon a prelimina ry evaluation, that the proposed Settlement

fails within the range of possible approval criteria, as it provides a beneficial result for the

2

A6

Settlement Class and appears to be the product of good faith, informed and non-collusiv e

negotiations between experienced and able counsel for the settling parties;

WI ERAS, the Court also finds, upon a preliminary evaluation, that the Settlement

Class should be apprised of the Settlement, allowed to file objections thereto and to appear at th e

Settlement Hearing, or alternatively, be afforded a reasonable opportunity to opt out of the

Action ;

WHEREAS, the Court finds, upon a preliminary evaluation , that the Notice and the

Publication Notice attached hereto as Exhibits I and 2, respectively, and the mt4hodoiogy

described in Paragcapb 6 of this Order for the publication and dissemination of such Notice and

Publication Notice : (i) are the best practicable -notice ; (ii) are reasonably calculated, under the

c umstances, to apprise Class Members of the pendency of the Action and of their right to

object or exclude themselves from the proposed Settlement and to object to Co-Lead Counsel's

application for attorneys' fees; (iii) are reasonable and constitute due, adequate and sufficient

notice to all persons and entities entitled to receive notice; and (iv) meet all applicable

requirements of the Federal Rules of Civil Procedures, the United States Constitution (including

the Due Process Clause), the Private Securities Litigation Reform Act of 1995 (15 U.S.C. 78u-4,

et seq_), the Rules of the Court and any other applicable law; and

WHEREAS, unless otherwise. stated herein, all defined terms contained herein shall have

the same meanings set forth the Stipulation.

NOW THEREFORE, IT 1S HEREBY ORDERED :

1 . Class Findings - For purposes of the Settlement of this Action as against BAWAG (and

only for such purposes, and without an adjudication of the merits), the Court preliminarily finds that the

requirements of the Federal Rules of Civil Proaedm, the United States Constitution, the Rules of the

3

Court and any other applicable law have been met as to the Settlement Class described in the paragraphs

above in that :

a. The identities of the Settlement Class members are likely to beascertainable from records kept by Refeo and/or its agents, and from otherobjective criteria, and the Settlement Class members are so numerous thatthou' joindeer before the Court would be impracticable .

b . Lead Plaintiffs have alleged numerous questions of fact and law commonto the Settlement Class.

c. Based on allegations in the Action that BAWAG engaged in misconductuniformly affecting members of the proposed Settlement Class, the Courtpreliminarily finds that the claims of the Lead Plaintiffs in the Action aretypical of the claims of the proposed Settlement Class .

d. The Court finds that Lead Plaintiffs will fairly and adequately protect theinterest of the proposed Class in that (1) the interests of Lead Plaintiffs andthe nature of their alleged claims are consistent with those of the membersof the Settlement Class, (ii) there appear to be no conflicts between oranoag the Lead Plaintiffs and the Settlement Class, (in) Lead Plaintiffshave been and appear to be capable of coutin .zing to be active participantsin both the prosecution and the settlement of the Action, and (iv) LeadPla ffs and the Settlement Class mmernbers are represented by qualified,reputable counsel who are experienced in preparing and prosecuting largo,complex securities fraud class actions .

e. The Court preliminarily finds that, for settlement purposes in the Action asagainst BAWAG, questions of law or fact common to members of theSettlement Class predominate over any questions affecting only individualmembers of the Settlement Class and that a class-action resolution in themanner proposed by the Stipulation would be superior to other availablemethods for a fair and efficient adjudication of the Action. In makingthese preliminary findings, the Court has considered, among other factors,(i') the interest of the Settlement Class members in individually controllingthe prosecution or defense of separate actions, (ii) the impracticability orinefficiency of prosecuting or defending separate actions, (iii) the extentand nature of any litigation concerning these claims already couuuenced,and (iv) the desirability of concentrating the litigation of the claims in aparticular forum.

2. Prel mhi Class Ce eation for Settl+s ent Pn o es With BAWAG --- Based on

the findings set out in paragraph I above, the Court preliminarily certifies the following Settlement

Class for settlement purposes only under Fed . R. Civ. P, 23(a) and (b)(3) in the Action: all persons and

entities that purchased or otherwise acquired Refco Group Ltd ., LLC! Refco Finance Inc. 9% Senior

Subordinated Notes due 2012 (CUSIP Nos. 758661AA5 and/or 75S6 6HACX) and/or common stock of

Refco (CUSIP No. 75866(109) during the Class Period and were datuaged thereby. The Settlement

Class excludes (i) Refco; (ii) the Defendants ; (iii) any person or entity who was a partner, executive

officer, director, controlling person, subsidiary, or affiliate of Refco or any Defendant during the Class

Period; (iv) members of the Defendants' immediate families ; (v') entities in which Refco or any

Defendant has a controlling interest; and (vi) the legal representatives, heirs, predecessors, successors or

assigns of any of the foregoing excluded persons or entities . Also excluded from the Class is any person

or entity who or which properly excludes himself, herself or itself by filing a valid and timely request for

exclusion in accordance with the requirements set forth in the Notice .

3. Preliminary Approval of Settlement - The Court hereby preliminarily approve s

the Settlement, as embodied in the Stipulation, as being fair, reasonable and adequate as to th e

Settlement Class members, subject to further consideration at the Settlement Hearing described

below.

4. Settlement Hearing - A hearing (the "Settlement Hearing") shall be hold on

2006 at before the Honorable Gerard E. Lynch in the United

States District Court for the Southern District of New York, United States Courthouse, 500 Pearl

Street, New York, NY, 10007, The purpose of the Settlement Hearing will be to determine

whether the proposed Settlement on the terms and conditions provided for in the Stipulation is

fair, reasonable and adequate to the Class and should be approved by the Court; whether the

Judgment as provided in the Stipulation should be entered herein and whether Co-Lead

Counsel's application for attorneys' fees should be granted.

5

5 . Approval of Form► and Content of Notice -- The Court approves, as to form and

content, the Notice and the Publication Notice, attached hereto as l ibits I and 2, respectively,

and finds that the mailing and distribution of the Notice and the publication of the Publication

Notice in the manner and form set forth in Paragraph 6 of this Order meet the requirements of

Rule 23 of the Federal Rules of Civil Procedure, the Securities Exchange Act of 1934, a s

amended by Section 21D(a)(7) of the Private Securities Litigation Reform Act of 1995, 15

U.S,C. § 78u-4(a)(7), and due process, and is the best notice practicable under the circumstances

and shall constitute due and sufficient notice to all persons and entities entitled thereto .

6_ Rete 'an of Claims Administrator and Manger of No tice -- Lead Counsel are

hereby authorized to retain The Garden City Gaoup, Inc . ("Claims Administrator") to supervise

and administer the notice procedure as well as the processing of claims as more fully set forth

below:

(a) Not later than . 2006 (the "Notice Date"), Lead Counsel

shall cause a copy of the Notice substantially in the form attached to the Stipulation as Exhibit 1

to be mailed by first-class mail to all Class Members who can be identified with reasonabl e

effort ;

(b) Not later than 2006, Lead Counsel shall cause the

Publication Notice, substantially in form attached to the Stipulation as Exhibit 2, to be publishe d

on one occasion in the national edition ofThe -Wall Street Journal ; and

(e) Not later than 2006, Lead Counsel shall serve on

BAWAG's Counsel and file with the Court proof, by affidavit or declaration, of such mailing

and publication .

6

7 . Nominee Procedures -- Nominees who purchased or acquired Refco Group Ltd . ,

LLC/R.efco Finance Inc, 9% Senior Subordinated Notes Due 2012 or Refco, Inc . common stock

for the benefit of another person or entity during the Class Period shall he requested to send the

Notice to all such beneficial owners within ten (10) days after receipt thereof, or send a list of the

names and addresses of such beneficial owners to the Claims Administrator within ten (10) days

of receipt thereof in which event the Claims Administrator shall promptly mail the Notice to

such beneficial owners.

8. Exelusioa From the Class -- All Settlement Class members who do not timely

and validly request exclusion from the Settlement Class shall be bound by all proceedings,

determinations, orders and judgments in the Action relating to the Settlement, including, but not

limited to, the releases provided for therein, whether favorable or unfavorable to the Settlement

Class . Settlement Class members who wish to exclude themselves from the Settlement Class

shall request exclusion within the time and in the manner set forth in the Notice, including

mailing or delivering a written request for exclusion such that it is postmarked no later than

, 2006, to: In re Refco, Inc. Securities Litigation, c/o The Garden City Group,

Inc ., Claims Administrator, P .O. Box 9087, Merrick, NY 11566, as provided in the Notice.

9 . Appearance and Objections at Fairness Searing -- Any Settlement Clas s

member may enter an appearance in the Action, at their own expense, individually or through

counsel of their own choice, in which case such counsel must file with the Clerk of Court and

deliver to Co-Lead Counsel and BAWAG's Counsel a notice of appearance such that it is

received by , 2006, or as the Court may otherwise direct. Any Settlement

Class member who does not enter an appearance will be represented by Co-Lead Counsel . Any

Settlement Class member may appear and show cause, if he, she or it has any such cause, wh y

7

the proposed Settlement of the Action should or should not be approved as fair, reasonable and

adequate, or why a Judgment should or should not be entered thereon; or why Co-Lead

Counsel ' s application for attorneys ' fees should not be granted; provided, however, that no

Settle it Class member or any other person or entity shall be heard or entitled to contest the

approval of the terms and conditions of the proposed Settlement , or, -if approved, the Final

Judgment to be entered thereon approving the same or the award of attorneys' fees to Co-Lead

Counsel , unless that person or entity has filed written objections and copies of any such papers

and briefs with the Clerk of the Court for the United States District Court for the Southern

District of New York, on or before 2006, and unless copies of such

written objection papers and briefs are received by each of the following :

Attorney for DAWAG:

Andrew Levander, EsquireDECHERT LLP30 Rockefeller PlazaNew York, NY 10112-2200

Co-Lead Counsel :

Megan. D, McIntyre, EsquireGRANT ci EISENHOEER., P .A.Chase Manhattan Centre1201 N. Market Street, Suite 2100Wil mingto:n, DE 1980 1

John P . Coffey, EsquireBERNSTEIN LITOWITZ BERG & GROSSMANN, LLB'1285 Avenue of the AmericasNew York, NY 1001 9

The Claims Administrator :

In. to Refco Inc . Securities Litigationclo Ibe; Garden City Group, Inc .Claims Administrator

8

P.O. Box 9087Merrick, NY 11566

The objections and/or briefs filed by the objecting Settlement Class member must contain a

statement of his, her or its objection, as well as the specific reasons, if any, for each objection,

including the legal support the Settlement Class member wishes to bring to the Court's attentioii

and any evidence the Settlement Class member wishes to introduce in support of his, her or its

objection. Any Settlement Class member who does not make his, her or its objection in the

manner provided herein shall be deemed to have waived such objection and shall be forever

barred and foreclosed from making any objection to the farness, reasonableness or adequacy of

the proposed Settlement, or to the approval of Co Lead Counsel's fee application .

10. Fees and Expenses - All reasonable costs incurred in identifying and notifyin g

Settlement Class members, as well as in administering the Settlement, shall be paid as set fad in

the Stipulation. At or after the Settlement Hearing, the Court shall determine whether any

application for attorneys' fees shall be approved . Neither BAWAG nor BAWA(3's Counsel

shall have any responsibility for any application for attorneys' fees submitted by Co-Lead

Counsel, and such matters will be considered separately from the fairness, reasonableness and

adequacy of the Settlement .

It . Continuance of H paring - The Court reserves the right to adjourn the date of th e

Settlement Hearing without further notice to Settlement Class members and retains jurisdiction

to consider all further applications arising out of or connected with the proposed Settlement . The

Court may approve the Settlement, with such moc ifications as may be agreed to by the parties to

the Stipulation, if appropriate, without f rther notice to the Settlement Class .

U. Termination of Settlement - This Order shall become null and void, and be

without prejudice to the rights of Lead Plaintiffs , the Settlement Class members , and BAWAG,

9

all of whom shall be restored to their respective positions existing immediately before this Court

entered this Order, it (i) the proposed Settlement is not finally approved by the Court, or does

not become final, pursuant to the terms of the Stipulation ; or (ii) the proposed Settlement is

terminated or does not become effective for any other reason . In such events, the Stipulation

shall become null and void and of no f rthor force and effect .

13. Use of Order - This Order shall not be construed or used as an admission,

concession or declaration by or against BAWAG of any fault, wrongdoing, breach, or liability .

Nor shall the Order be construed or used as an admission, concession or declaration by or agains t

Lead Plaintiffs, or the Settlement Class members, that their claims lack merit, that their damage s

are in any way limited, or that the relief requested in the Action is inappropriate, improper, or

wmvailable, or as a waiver by any party of any defenses or claims he, she, or it may have.

IT IS SO ORDERED.

Dated: , 2006 BY THE COURT

H011. Gerard E. Lynch

UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YOR K

to

Exhibit I

to Order Preliminarily Approving ProposedSettlement With Defendant BAWAG

UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK

x

In re REFCO, INC . SECURITIES LITIGATION

-------- ..----------------------------------------------------- x

05 Civ. 8626 (GEL)

NOTICE OF (I) PENDENCY AND PROPOSED PARTIALSETTLEMENT OF CLASS ACTION WITH BAWAG, AN D

HEARING ON PROPOSED PARTIAL SETTLEMEN T

If you purchased or otherwise acquired Refco Group Ltd., LLC/ Refco Finance Inc . 9%Senior Subordinated Notes due 2012 (CUSIP Nos . 75866HAA5 and/or 75866HAC1) and/oar

Refco, Inc. common stock (CUSIP No. 75866G109) between August 5, 2004 and October17, 2005, inclusive, you might be a member of the class in this action entitling you to relief

in connection with a partial settlement of the action .

A federal court authorized this Notice. This is not a solicitation from a lawyer,

• The Court has preliminarily approved a partial settlement of a securities class actionbrought by investors who claim that the prices of Refco, Inc. common stock and RefcoGroup Ltd ., LLC/ Refco Finance Inc . bonds were artificially inflated as a result of falsestatements , non-disclosures , and fraudulent conduct in violation of the federal securitieslaws.

The partial settlement is between Lead Plaintiffs Pacific Investment ManagementCompany LLC and RH Capital Associates LLC, on behalf of themselves and theproposed Settlement Class (defined below), and defendant BAWAG P .S .K. Bank FOrArbeit and Wirtsebaft and Osterreichische Postsparkasse Aktiengesellschaft("BAWA(Y"). It is only a partial settlement because it does not resolve the plaintiffs'claims against forty-three (43) other defendants .

++ BAWAG will pay a minimum of $108 million in cash to settle the lawsuit, with thepossibility of an additional payment of up to $32 million if certain conditions are met .After payment of costs and expenses, the settlement proceeds will be distributed toinvestors who are members of the Settlement Class . No determination has been made yetof the amount to be distributed,

• The two sides disagree on the amount of money- that could have been recovered if theplaintiffs won at trial .

Although the fee agreement between Lead Plaintiffs and the plaintiffs' attorneys wouldhave entitled the attorneys to request a fee of up to 18% of the Class's recovery, theplaintiffs' attorneys have agreed to request a fee from this settlement of 7% of the Non-Contingent Payment (defined below), due to the timing and circumstances of thissettlement .

• The settlement was reached because it provides significant benefits to investors andavoids the costs and risks of continuing the lawsuit against BAWAG .

• If you are a member of the Settlement Class and the partial settlement is approved, yourlegal rights will be affected whether you act or not . Read this notice carefully to see whatyour options are in connection with the partial settlement .

+ These rights and options -- and the deadlines to exercise them -- are explained. in thisNotice .

The Court in charge of this case still has to decide whether to approve the settlement.Payments will be made only if the Court approves the settlement and that approval isupheld in any appeals. Please be patient.

BASIC I`ORMATION.. .. . . . . ... . .... . . . .... . .. . . . ... . .. . . . . . . . .. . . . .. . .... . . . . .. . ... . . . .... . .. . .. . . . . . . . . . . .. . . ... . . . . .. . Page 41 . Why did I get this Notice ?2. What is a class action?3 . What is this lawsuit about?

2

4. What should I do if my address changes, or if this notice was sentto the wrong address ?

WHO IS IN THE SETTLEMENT CLASS . . ... . ... . . . .. . . ... . .. .. . . .. .. . .. . . . . .. .. . ... . . . .. .. . . . . ... . . ... . . . ... . Page 65. How do I know whether I am a member of the Partial Settlement ?6. Are there exceptions to being included?7. I am still not sure whether I am included.

SUMMARY OF THE SETTLEMENT ... . . . .. . .. . . ... . . . .. . . ... . ... . .. . . . .. . . . . .. . . . . . ... . . . ... . . . ... . . . . ... . .. . . . . Page 7S. How and when was the Partial Se ttlement reached?9. What does the Partial Settlement provide?10. What are the reasons for the Partial Settlement?11 . What is the potential outcome of the lawsuit absent the Partial

Settlement?

TIDE SETTLEMENT BENEFITS - WHAT YOU GET . . . .. . . . . .. . . .. . . . . . . ... . . . . .. . . ... . . . .. . . . . . . . . .. Page 812. How much will be distributed to investors ?13. How much will my payment be?

HOW TO GET A PAYMENT . . . ... . . . .. . . .. .. . . . .uw . .... . . . .. . . . . . ... . ... . . . ... . . . .. . . .uwuo... . . ... . . . . .. . . .. . . . . . Page 914. What do I have to do to receive a share of the Partial Settlement?15. When will I receive my payment?16. What am I giving up to get a payment or stay in the Settlement

Class?17. Can I receive payments in both the Partial Settlement and the

Refco Bankruptcy?

EXCLUDING YOURSELF FROM THE SETTLEMENT . . . .. . . .... . . . ... . .. . . .. . . ... . . . . ... . . .. . . . Page 1018. What if I want to be excluded from the Partial Settlement ?19. If I don't exclude myself, can I sue BAWAG for the same thing

later?20. If I exclude myself, can I get money from the Partial Settlement?

THE LAWYERS REPRESENTING YOU . .. . . .. . .. . .. . . . . . .... . ... . . . .. . . .... . . . ... . . . .. . . . ... .. . . . . .. . ... . . . Page 1221 . Do I have a lawyer in the case ?22. How will the lawyers be paid?

OBJECTING TO THE SETTLEMENT OR THE ATTORNEYS' FEES . . ... . . . . ... . . .. . . . Page 1223. How do I tell the Court if I don't like the Partial Settlement ?24, What's the difference between objecting and requesting exclusion?25. When and where will the Court decide whether to approve the

Partial Settlement?26. Do I have to come to the hearing?27. May I speak at the hearing ?

IF YOU DO NOTIIING . . . . .... . . . ... . . . . . . . . . ... . ... . . ... . ... . . . . . .. . . . . . .. . ... . . . ... . . . .. . . . . ... . . . . .. . . .... . . . ... . . . .. . . Page 14

2$ . What happens if I do nothing at all?.

GETTING MORE INFORMATION ... . . . .. . . .. . ... . . . . .. . . .. . .. . . .. . . . . ... . ... . . . . . .. .. . . . ... . ... . . . . ... . . . . . . . . . Page 1529. Are there more details about the Partial Settlement?30. How do I get more information?

BASIC INFORMATION

You or someone in your family may have purchased or acquired Refco Inc . commonstock (CUSIP No . 758666109) and/or Refco Group Ltd., LLC/ Refco Finance Inc. 9% SeniorSubordinated Notes due 2012 (CUSIP Nos . 75866HAA5 and/or 7586614AC1) between August5, 2004 and October 17, 2005. The Court caused this Notice to be sent to you because, if youpurchased or acquired those securities during that period, you have a right to know about theproposed Partial Settlement of a class action lawsuit, and about all of your options, before theCourt decides whether to approve the Partial Settlement.

This Notice describes the lawsuit, the Partial Settlement, your legal rights, what benefitsare available, who is eligible for them, and how to get them ,

The Court in charge of this case is the United States District Court for the SouthernDistrict of New York . The case is known as In re Refco Inc. Securities Litigation, Case Number05 Civ. 8626 (GEL) .

In a class action, one or more plaintiffs called Lead Plaintiffs or class representatives sueon behalf of people who have similar claims . All of the individuals and entities on whose behalfthe class representatives are suing are known as class members . One court resolves the issues inthe case for all class members, except for those who choose to exclude themselves from the classif exclusion is permitted by applicable rules of procedure .

This lawsuit (the "Action") is a class action alleging violations of the federal securitieslaws by persons affiliated with Refco, Inc . and its predecessors and affiliates (including, but notlimited to, Refco Group Ltd ., LLC, Refco Finance Holdings LLC, and Refco Finance Inc.) .

Refco, Inc. and its predecessors and affiliates are referred to collectively as the "Company" or

"Refco" in this Notice. The Court has appointed Pacific Investment Management Company LLCand RH Capital Associates LLC ("Lead Plaintiffs") to serve as Lead Plaintiffs in the Action, and

has appointed the law firms of Grant & Eisenhofer P .A. and Bernstein Litowitz Berger &Grossmann LLP to serve as Co-Lead Counsel on behalf of the class . The Action is broughtagainst forty-four (44) individuals and entities, including certain current and former executive

4

officers of Refco, the members of Refco's audit committee, Refeo's outside auditing firm (GrantThornton LLP), fifteen Wall Street investment banks, the private equity firm of Thomas H . LeePartners, L .P. and its affiliates, and BAWAG (collectively, the "Defendants").

The First Amended Consolidated Class Action Complaint (the "Complaint"), which wasfiled in the Action on May 5, 2006, alleges that the Defendants violated the federal securitieslaws in numerous ways, including : engaging in negligent and fraudulent activities that concealedRefco's true financial condition from investors ; and using accounting practices that violatedgenerally accepted accounting principles and caused Refco's published financial statements forthe years ended February 29, 2002, February 28, 2003, February 28, 2004, February 28, 2005,and the quarter ended May 31, 2005, to be materially false and misleading .

As alleged in the Complaint, a little more than two months after completing an initialpublic offering ("TPO"), Refco admitted that its financial statements "should no longer be reliedupon" because the Company had concealed hundreds of millions of dollars of mcollcctiblereceivables . owed to the Company by an entity owned by its Chief Executive Officer, PhillipBennett ("Bennett") . The Complaint further alleges that while this admission only partiallyrevealed the true extent of the problems at the Company, it set into motion a chain of events andsubsequent disclosures that led to Refco's abrupt collapse into bankruptcy .

The Complaint alleges that the Defendants either actively participated in the Company'smanipulative accounting practices and misstatements during the Class Period, or knew or shouldhave known about them in the exercise of due diligence . The Complaint alleges that BAWAGparticipated in the scheme to defraud investors by, among other things, engaging in numeroussham loan transactions with Refco that had no purpose other than to allow Refco to temporarilyreplace related party receivables with third party loans on its books just before the end of itsfinancial accounting periods, thereby concealing from investors the existence of significantrelated party receivables .

The Complaint asserts two different sets of claims . The first is a series of strict liabilityand negligence-based claims pursuant to the Securities Act of 1933 ("Securities Act"), which areasserted against the Defendants who are statutorily responsible for the untrue statements in theprospectuses and registration statements pursuant to which Refco issued securities to the public .The second set of claims consists of fraud-based claims under the Securities Exchange Act of1934 ("Exchange Act") against those Defendants who directly participated in the fraudulentscheme and those who knew about or were reckless with respect to discovering the fraud . TheComplaint alleges seven (7) separate claims against BAWAG, including claims pursuant toSection 15 of the Securities Act and Sections 10(b) and 20(a) of the Exchange Act .

To the extent Defendants have responded to the Complaint, they have denied the claimsagainst them and specifically denied any wrongdoing or liability to any Class member .

The Court has made no determination on the merits of the claims against BAWAG oragainst any other Defendants.

If this Notice was sent to you at the wrong address, or if your address changes in thefuture, please send prompt written, notification of your correct address to the ClaimsAdministrator at the following address :

In re Refco Inc. Securities Litigationc% The Garden City Group, Inc .Claims AdministratorP.O. Box 9087Merrick, NY 11566

WHO IS TN 11W SETTLEMENT CLAS S

1 1 t

The Court has preliminarily certified for purposes of the Partial Settlement a SettlementClass that consists of, subject to certain exceptions identified below, the following individualsand entities :

All persons and entities that purchased or otherwise acquiredRefco Group Ltd., LLC/Refco Finance Inc. 9% SeniorSubordinated Notes due 2012 (CUSIP Nos. 75866HAA5 and/or75866HAC1) and/or common stock of Refco (CUSIP No.758666109) during the Class Period, and who were damagedthereby.

16 . f« ~3c„ . I x 1F\~ i l try

f#:;

Even if you fall within the Settlement Class definition, you are not a member of theSettlement Class if you are a Defendant in the Action ; if you were a partner, executive officer,director, controlling person, subsidiary, or affiliate of Refco or any Defendant between August 5,2004 and October 17, 2005 ; if you are an immediate family member of any Defendant ; if you arean entity in which Refco or any Defendant has a controlling interest ; or if you are a legalrepresentative, heir, predecessor, successor or assign of any of these excluded persons or entities ,

If you are still not sure whether you are, included, you can ask for help, which will beprovided to you at no cost. You can call the Claims Administrator toll free at (888) 212-5574, orwrite to the Claims Administrator at the address stated in the answer to Question #4 above .

SUMMARY OF SETTLEMENT

Lead Plaintiffs reached an agreement-in-principle with BAWAG regarding the PartialSettlement on May 31 , 2006. On September 7, 2006, Lead Plaintiffs and BAWAG signed aStipulation and Agreement of Settlement (the "Stipulation") to formalize their agreement.

The Partial Settlement was reached after arms-length negotiation between Co-LeadCounsel and counsel for BAWAG, and only after Co-Lead Counsel had (i) obtained access to,and reviewed, certain documents pertinent to the Class's claims and BAWAG's defenses to thoseclaims, including documents that BAWAG has provided to the United States Attorneys Office("USAO"), (ii) investigated and analyzed all available evidence, and (iii) researched theapplicable law with respect to the Class's claims against BAWAG and the potential defensesthereto .

In the Partial Settlement, BAWAG agrees to pay $108 million (the "Non ContingentPayment") to the Settlement Class. In addition, in the event that BAWAG is sold for a priceexceeding €1 .8 billion (euros) within two years after the United States Bankruptcy Court entersan order approving BAWAG's separate settlement with Refco's Official Committee ofUnsecured Creditors ("Creditors' Committee"), then BAWAG will pay the Settlement Class anadditional sum of 5% of the amount by which the sale price of BAWAG exceeds €1 .8 billion(curos), up to a maximum additional payment of $32 million (dollars) (the "ContingentPayment") . The Non-Contingent Payment and the Contingent Payment are collectively referredto as the "Settlement Amount."

The Settlement Amount will be paid in installments, with $8 million to be paid within tendays after preliminary approval of the Partial Settlement, another $25 million to be paid withinthirty days after the order approving BAWAG's settlement with the Creditors' Committeebecomes final, and $75 million to be paid within thirty days of the earlier of (a) the closing of thesale of BAWAG, or (b) one year after entry of the order approving BAWAG's settlement withthe Creditors' Committee . The Contingent Payment, if any, will be paid within thirty days afterthe closing of the sale of BAWAG . With the exception of the initial $8 million payment, LeadPlaintiffs have agreed to accept payment of the Settlement Amount from funds to be paid byBAWAG into a restitution fund managed by the USAO, subject to BAWAG's agreement to payany amounts that the USAO fails to pay, and to pay interest on any amounts not paid within 180days of the scheduled payment date .

Under the terms of the Partial Settlement, BAWAG also agrees to reasonably cooperatewith Lead Plaintiffs in providing copies of documents and in making employees available forinterviews and depositions, so as to reasonably assist Lead Plaintiffs in their prosecution ofclaims against other Defendants and/or prospective defendants in this Action .

If the Partial Settlement is approved by the Court, all members of the Settlement Classwill be deemed to have released all claims against BAWAG, its direct and indirect subsidiaries,parents , affiliates, predecessors, and successors , and their respective agents , attorneys, and past,present, and future officers, directors and employees , as agreed by the parties, (collectively, the"Releasees") that arise out of or relate to the allegations in the Complaint and the acquisition ordisposition of Refco Group Ltd., LLC/ Refco Finance Inc .'s 9% Senior Subordinated Notes due

2012 and/or Refco common stock between August 5, 2004 and October 17, 2005 . This meansthat, upon Court approval, all Settlement Class members will be permanently barred fromasserting any of the claims described above against BAWAG or any other Releasees, Inaddition, if the Court approves the Partial Settlement, BAWAG will be precluded from suing theLead Plaintiffs, members of the Settlement Class, or Co-Lead Counsel in connection with theAction.

Lead Plaintiffs agreed to the Partial Settlement because of the substantial monetarybenefit it will provide to the Class, compared to the risk that recovery might not be achieved aftera contested period of litigation which could extend years into the future . As with any litigatedcase, the plaintiffs would face an uncertain outcome if the case went to trial . Even if theplaintiffs were successful at trial, BAWAG might be bankrupt, sold, or unable to pay anyjudgment at that time. Alternatively, BAWAG might well appeal the verdict, result in furtheruncertainty and delay.

BAWAG agreed to the Partial Settlement to settle and terminate all existing or potentialclaims against it, to eliminate the risk of a substantial judgment against it, and to avoid theburden and expense of further litigation, without acknowledging any fault or liability.

Lead Plaintiffs and BAWAG do not agree on the average amount of damages per sharethat would have been recoverable from BAWAG if Lead Plaintiffs were to have prevailed oneach claim asserted. The issues on which the parties disagree include : (1) whether BAWAGengaged in conduct that would give rise to liability under the federal securities laws ; (2) whetherBAWAG acted with scienter with respect to the conduct alleged to constitute a violation ofSection 10(b) of the Exchange Act; (3) whether BAWAG has valid defenses to any of the claimsagainst it; and (4) the amount, if any, by which the prices of Refco's securities were artificiallyinflated as a result of BAWAG's alleged violations of the federal securities laws .

THE SETTLEMENT BENEFITS - WHAT YOU GET

The Partial Settlement will create a cash settlement fund in the aggregate principalamount of between $108 million and $140 million, depending upon whether and to what extentBAWAG's obligation to pay the maximum Contingent Payment is triggered . After deduction ofthe costs of notice and administration, certain taxes and tax-related expenses , and any attorneys'fees that are approved by the Court, the balance of the settlement fund, plus accrued interest, willbe available for distribution to members of the Settlement Class . Co-Lead Counsel will requestattorneys' fees of 7% of the Non Contingent Payment . Assuming no other recovery, Co-Lead

Counsel estimate that the net amount to be distributed to the Settlement Class will be between$98 million and $130 million .

The amounts to be distributed to individual Settlement Class members will depend on avariety of factors, including : the amount, if any, of the Contingent Payment ; the number of otherSettlement Class members who submit valid proof of claim forms ; the number of bonds or sharesof stock you purchased; the prices and dates of those purchases; and the prices and dates of anysales of your bonds or stock, The manner of dividing the settlement proceeds betweenpurchasers of bonds and purchasers of stock, and between the various claims in the Complaint,has not yet been determined. Depending upon which securities you purchased and the timing ofyour transactions, you may be entitled to recover for all, none, or only some of the claimsasserted in the Complaint.

The amount to be distributed to Settlement Class members on a per share basis willdepend on future Court proceedings and factual and legal analysis, and it is therefore not possibleto estimate the amount of any such distribution at the present time. After further notice to theSettlement Class and an opportunity to be heard, Lead Plaintiffs will seek Court approval of aplan of allocation that will govern calculation of Settlement Class members' individualdistributions .

HOW TO GET A PAYMENT

If you are a member of the Settlement Class, you will have to submit a proof of claimform and supporting documentation in order to establish your entitlement to share in the PartialSettlement. Those who act to exclude themselves from the Settlement Class, and those who failto submit timely and valid proof of claim forms with adequate supporting documentation, willnot be entitled to share in the Partial Settlement .

Proof of claim forms have not yet been prepared, and you need not submit a proof ofclaim or any other documentation of your claim at this time . You will be provided with aproof of claim form, and instructions on how to complete and submit it, in a future notice to bedisseminated in a similar manner as this notice . To ensure that you receive copies of futurenotices, you may write to the Claims Administrator at the following address to request that yoube added to the mailing list for notices in In re Refco, Inc. Securities Litigation :

In re Refco Inc. Securities Litigationc/o The Garden City Group, Inc.Claims AdministratorP.O. Box 9087Merrick, NY 11566

Please retain all records of your ownership of, or transactions in, Refco's stock andbonds, as they may be needed to document your claim .

Because BAWAG's payments under the Partial Settlement will be made in installmentsover a period of time, the Lead Plaintiffs do not anticipate being able to distribute the settlementproceeds to members of the Settlement Class for at least a year from now, and possibly longer .Distribution may also be delayed in the interest of the Settlement Class in order to minimize thenumber and cost of distributions during the course of the Action, and to allow for the BAWAGsettlement proceeds to be distributed in combination with future settlements or recoveries fromother Defendants.

Any settlement payments are also contingent upon the Court approving the PartialSettlement and on such approval becoming final and no longer subject to any appeals . Even ifthe Court approves the Partial Settlement, there still might be appeals, which can take more thana year to resolve .

The money paid by BAWAG in the Partial Settlement will be kept in an interest-bearingaccount until it is ready for distribution, and the accrued interest will be added to the principal

that will be distributed to the Settlement Class .

~ ` 3<'< { it • gi l1~ E,, .4 r l; 1 l i ' s ~ 1 4 ' ~ nIE~ut 0 1,If you remain a member of the Settlement Class and do not exclude yourself , you will be

bound by all orders, judgments and releases entered by the Court regarding the PartialSettlement. If the Partial Settlement is approved, you will not be able to sue, continue to sue, orbe part of any other lawsuit involving any claims released in the Partial Settlement ; provided,however, that the Partial Settlement does not affect your ability to recover as a creditor inRefco's bankruptcy proceedings, including your ability to receive a share of the monies paid toRefco's bankruptcy estate by BAWAG . You will be bound by the releases whether or not yousubmit a proof of claim and/or receive a payment under the Partial Settlement .

EXCLUDING YOURSELF FROM THE SETTLEMENT

r :u t{ ~ v e Paynien l th ;tl iaJ jet 'e t € d th 1 r 4ttlat

Yes. If you remain in the Settlement Class and receive a settlement payment from thePartial Settlement, you can still recover as a creditor or interest holder of Refco from funds paidby BAWAG to Refco's bankruptcy estate in connection with Refco's bankruptcy proceedings,provided that you establish your entitlement to such a recovery in accordance with theprocedures established by the bankruptcy court . Likewise, your recovery as a creditor in Refco'sbankruptcy proceedings will not prevent you from receiving' a payment from the PartialSettlement.

10

'N' I18. V l at if 15 a ; o h e CLUr el i ,~ L th Pa tipa l Settlement , . ..`. . ' ' < ; r .`.

To exclude yourself from the Partial Settlement, you must send a letter by mail to theClaims Administrator saying that you want to be excluded from In re Refco Inc. SecuritiesLitigation . Be sure to include your name, address, telephone number; your Social SecurityNumber or Taxpayer Identification Number ; a list stating the par amount of Refco bonds and thenumber of shares of Refco common stock purchased and sold between August 5, 2004 andOctober 17, 2005, and the dates of each purchase and sale ; as well as your signature . Mail yourexclusion request postmarked no later than , 2006, to :

In re Refco Inc. Securities Litigationc/o The Garden City Group, Inc.Claims AdministratorP.O. Box 9088Merrick, NY 11566

If you request exclusion on behalf of any person or entity other than yourself (such as, forexample, a trust, a minor, or a pension fund), you also must state the basis of your legal authorityto make a request for exclusion on behalf of that person or entity .

You cannot exclude yourself on the phone or by e-mail . If you do not follow the aboveprocedures -- including meeting the postmark deadline - you will not be excluded from theSettlement Class, and you will be bound by all of the orders and judgments entered by the Courtregarding the Partial Settlement . You must exclude yourself even if you already have a pendingcase against BAWAG or any other Releasees based on the claims being released .

If you ask to be excluded, you will not get any payment from the Partial Settlement, youcannot object to the Partial Settlement, and you will not be legally bound by anything thathappens in this lawsuit. You might be able to sue BAWAG or other Releasees in the future .

a ~: 1 i sir `t € ixt-) a h 3_ i s s s - 3 p r Ir k 1~ S : a. rI-y19. I I~do ~ ~ ~ l e ,u r f, caa~ 9 s E 1~ ~ , ' 1 tt~,,',;,` r I

No. Unless you exclude yourself, you give up any right to sue BAWAG for the claimsthat the Partial Settlement resolves . If you have a pending lawsuit, speak to your lawyer in thatcase immediately. You must exclude yourself from this Settlement Class to continue your ownlawsuit.

j .... 1St~y< Sr a ~I (~ ~j. iZfjif(t~~rry 3 'r i i:,t r . :ia AS a+~'~,' (E:

n ';(wr 99 - ?i ~r }bE ~ Tf l , X '~` niou ,: ~Pill',

J

No. Only Settlement Class members who do not exclude themselves will be eligible torecover money in the Partial Settlement,

11

THE LAWYERS REPRESENTING YOU

The Court has appointed the law firms of Bernstein Litowitz Berger & Grossman LLP

and Grant & Eisenhofer P .A. as Co-Lead Counsel to represent Lead Plaintiffs and all otherSettlement Class members in the Action. If you have any questions about the proposed Partial

Settlement, you may contact Co-Lead Counsel as follows : Megan D. McIntyre, Esq ., Grant &

Bisenhofer P.A., Chase Manhattan Centre, 1201 N. Market St., Wilmington, Delaware 19801,

(302) 622-7000; or John. P. Coffey, Esq., Bernstein Litowitz Berger & Grossmann, LLP, 1285Avenue of the Americas, New York, New York 10019, (212) 554-1400 .

If you want to be represented by your own lawyer, you may hire one at your ow nexpense .

You will be not charged directly for the fees or expenses of the Co-Lead Counselappointed by the Court . Instead, those lawyers may apply to the Court for payment of fees andexpenses out of the proceeds of any recoveries achieved in the Action .

When this case began, Lead Plaintiffs negotiated a fee agreement with Co-Lead Counselwhich permits Co-Lead Counsel to apply for fees of up to 18% of any recovery achieved by theClass plus out of pocket expenses . Given the timing and circumstances of the settlement withBAWAG, however, Co-Lead Counsel have agreed to apply for a fee from this settlement of 7%of the Non-Contingent Payment. The fees would pay the lawyers for investigating the facts,litigating the case, and negotiating the Partial Settlement. Co-Lead Counsel retain the right torequest the full 18% fee plus expenses from any future recoveries from other defendants .

OBJECTING TO THE SETTLEMENT OR THE ATTORNEYS' FEE S

If you are a Settlement Class member and you do not exclude yourself, you can object tothe Partial Settlement or any part of it, including Co-Lead Counsel's application for attorneys'fees, and give reasons why you think the Court should not approve it. To object, you must senda letter or other filing saying that you object to the proposed Partial Settlement and/or theattorneys' fee application in In re .Refco, Inc. Securities Litigation, Case No. 05 Civ. 8626(GEL) . Be sure to include your name, address, telephone number, signature, and the reasons foryour objection . Your written objection must be- sent to the following counsel and must bereceived by them no later than , 2006 :

Counsel for BAWAG:

12

Andrew Levander, EsquireDECHERT LLP30 Rockefeller Plaz aNew York, NY 10112-220 0

Co-Lead Counsel :

Megan D. McIntyre, EsquireGRANT & EISENHOFER P .A.Chase Manhattan Centre1201 N. Market StreetWilmington, DE 1980 1

and

John P. Coffey, Esquir eBERNSTEIN LITOWITZ BERGER & GROSSMANN, LLP1285 Avenue of the AmericasNew York, NY 1001 9

You must also file your objection with the clerk of the United States District Court forthe Southern. District of New York, so it is received no later than 2006 .The address is :

Clerk of the U.S. District Court for the Southern District of New York,Daniel Patrick Moynihan United States Courthous e500 Pearl Stree tNew York, NY 10007-131 2

Once an objection to the proposed Partial Settlement is made, it cannot be withdrawnwithout the Court's approval . Any member of the Settlement Class who does not object in themanner provided above will be deemed to have waived all objections to the Partial Settlementand to Co-Lead Counsel's application for attorneys' fees .

.,,{ . . ., . RIO, ~ . ,o . .s .. .~ ., . ., ~i . . i_ . ..r, .t . 3

Objecting is simply telling the Court that you do not like something about the PartialSettlement. You can object only if you are a Settlement Class member .

Excluding yourself is telling the Court that you do not want to be part of the SettlementClass. If you exclude yourself, you have no basis to object, because the case no longer affects

you. If you do not exclude yourself, you will be bound by the Partial Settlement and all ordersand judgments entered by the Court regarding the .Partial Settlement, regardless of whether theCourt accepts or denies your objection.

13

5 s n a nd i l ` r r fit' : th , ou 1 Kcle =ltetl r iii f + t Fri tial t c~ n`i'p, i ; `

The Court has scheduled a hearing on the proposed Partial Settlement for2006 at , before the Honorable Gerard E. Lynch in the U.S. District

Court for the Southern District of New York, United States Courthouse, 500 Pearl Street, NewYork, NY, 10007. At this bearing, the Court will consider whether the Partial Settlement is fair,reasonable, and adequate, and will consider Co-Lead Counsel's application for attorneys' fees .If there are objections, the Court will consider them . At or after the hearing, the Court willdecide whether to approve the Partial Settlement .

Please note that the date of the Court hearing is subject to change without further notice .If you plan to attend the hearing, you should check with the Court to be sure no change to thedate and time of the hearing has been made .

No. Co-Lead Counsel will answer any questions the Court might have. But you arewelcome to come at your own expense . If you send an objection, you do not have to come to theCourt to talk about it . As long as you mailed your written objection so it was received by thedeadline, it will be before the Court when the Court considers whether to approve the PartialSettlement. You may also pay your own lawyer to attend the hearing, but attendance is notnecessary.

If you are a Settlement Class member who has not asked to be excluded from theSettlement Class, you may ask the Court for permission to speak at the hearing . To do so, youmust send a letter or other paper called a "Notice of Intention to Appear at Fairness Hearing in Inre Iie, fco, Inc. Securities Litigation ." Be sure to include your name, address, telephone number,and your signature. Your Notice of Intention to Appear must be filed with the Clerk of the Courtand sent to the counsel listed above in the answer to Question #23 so it is received by the Courtand counsel no later than , 2006. You cannot speak at the hearing if you haveasked to be excluded from the Settlement Class .

IF YOU DO NOTHING

If you do nothing in response to this Notice, you will remain a member of the SettlementClass and will be bound by the Partial Settlement . You will not be able to start, continue, or bepart of any other lawsuit or arbitration against BAWAG or other Releasees based on the claimsin the Action. To receive a payment from the Partial Settlement, you will have to submit a proofof claim and supporting documentation at a future date, in accordance with instructions to beprovided in a future notice .

14

GETTING MORE INFORMATION

This Notice contains only a summary of the proposed Partial Settlement. The completePartial Settlement is set out in a Stipulation and Agreement of Settlement dated September 7,

2006. You may request a copy of the Stipulation in writing to Refco Inc. Securities Litigation,

c/o The Garden City Group, Inc ., Claims Administrator, P .O. Box 9087, Merrick, NY 11566 .

There may be a charge for copying and mailing the Stipulation . Copies of the Stipulation may beobtained for free at refcosecuritieslitigation.com.

You can also call the Claims Administrator toll free at (888) 212-5574, write to theClaims Administrator at the above address, or visit the website at where youwill find a copy of the Stipulation, the Complaint, and certain other documents relating to theAction and the Partial Settlement . Anyone interested in more detail regarding the Action isinvited to visit the Office of the Clerk of the United States District Court for the SouthernDistrict of New York at the United States Courthouse, 500 Pearl Street, New York, NY, 10007,during regular business hours, to inspect the Stipulation, the pleadings, and the other papersmaintained there in Case No . 05 Civ. 8626 (GEL) .

Dated: September_, 2006 BY ORDER OF THE COURT

Hon. Gerard E. LynchUNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK

15

Exhibit 2

to order Preliminarily Approving ProposedSettlement With Defendant BAWAG

UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK

05 Civ, 8626 (GEL)in re REFCO , INC. SECURITIES LITIGATION

X

SUMMARY NOTICE OF PENDENCY ANDPROPOSED PARTIAL SETTLEMENT OF CLASS ACTIO N

WITH BAWAG P.S.*L AND HEARING ON PROPOSED SETtLEMENT

TO: ALL PERSONS OR ENTITIES WHO PURCHASED OR ACQUIRED REFCOGROUP LTD ., LLCI REF CO FINANCE INC. 9% SENIOR SUBORDINATEDNOTES DUE 2012 (CUSIP NOS. 75866HAA5 ANDIOR 7586611AC1) ANDIOREEFCO INC. COMMON STOCK (CUSIP NO . 758666109) BETWEEN AUGUST5, 2004 AND OCTOBER 17, 2005, INCLUSIVE (THE "CLASS PERIOD"), ANDWHO WERE DAMAGED TUMBY (THE "CLASS-)

YOU ARE HEREBY NOTIFIED that the Lead Plaintiffs in the above- captioned class

action (the "Actions") have proposed a Partial Settlement with, defendant BAWAG P .S K. Bank

fir Arbeit and Wirtschaft und Osterreichisohe Postsparkasse Aktiengesellschaft ("BAWAG")

whereby BAWAG will pay a settlement amount to the Class of at least ONE HUNDRED AND

EIGHT MILLION DOLLARS ($108,000,000) and the Class Members will dismiss and release

their claims against BAWAG arising out of or related to the subject matter of the Action or any

transactions in the above-referenced securities of Refco Inc . and its predecessors during the Class

Period . In addition, if BAWAG is sold for a price exceeding E1 .8 billion (curos) within two

years after entry of an order approving BAWAG's separate settlement with Refco's Official

Committee of Unsecured Creditors, then BAWAG shall pay the Class an additional sum of 5%

of the amount by which the sale price of BAWAG exceeds £1 .8 billion (euros), up to a

maximum additional payment of $32,000,000 (dolly) .

This proposed Partial Settlement is the first proposed settlement in this multi-defendant

Action. The litigation is continuing against n ,nerous other named defendants.

A hearing will be held on , 2006 at - , before the Honorable

Gerard E . Lynch in the U .S. District Court for the Southern District of New York, United States

Courthouse, $00 Pearl Street, New York, NY, 10007, to determine (1) whether the Partial

Settlement should be approved as fair, just and reasonable ; (2) whether the Action should be

dismissed with prejudice against HAWAG and all claims against BAWAG released ; and (3)

whether the plaintiffs' attorneys' application for attorneys' fees should be granted .

IF YOU ARE A NEWER OF THE CLASS DESCRIBED ABOVE, YOUR EIGHTS

WILL EE AFFECTED AND YOU MAY BE ENTITLED TO SHARE IN THE SETTLEMENT

FUNDS. If you have not yet received the full printed Notice of (i) Pendency and Proposed

Partial Settlement of Class Action With BAWAG, and (ii) Hearing on Proposed Partial

Settlement, you may obtain one by contacting the Claims Administrator at :

In re Refco Inc . Securities Litigationc/6 The, Garden City Group, Inc .Claims AdministratorP .O. Box 9087Merrick, NY 11566

To participate in the Partial Settlement, you will be required to submit a proof of Claim ,

using it form to be disseminated to members of the Class at a future, date. To ensure that you

receive a Proof of Claim form and any future notices in this Action, please contact the Claims

Administrator at the address above to request that you be added to their mailing list for the Refco

Securities Litigation.

Inquiries, other than requests for copies of the Notice or for inclusion on the mailing lis t

for future notices, maybe directed to Plaintiffs' Co-Lead Counsel :

Sol m P . Coffey, Esquire13EPNSTEIN LITOWrTZ BEE.GER & GROSSMANN, LLP1285 Avenue of the AmericasNew York, NY 10019

2

Megan D. McIntyre, EsquireGRANT & EISENHOFER P .A.Chase Manhattan Centre1201 N. Market StreetWiImingtox , DE 19801

Dated: September. , 2006 BY ORDER OF THE COURT

3

Exhibit B

to Stipulation and Agreement of Settlement

IN THE UNITED STATES DISTRICT COURTFOR THE SOUTHERN DISTRICT OF NEW YORK---- -------------------------------------- ------------------- x

05 Civ. 8626 (GEL)In re REFCO , INC. SECURITIES LITIGATION :

x

JUDGMENT APPROVING CLASS ACTION SETTLEMENT WITH BAWAG

WHEREAS, Lead Plaintiffs and Defendant BAWAG P.S.K. Bank flr Arbeit and

Wirtschaft and Osterreichische Postsparkasse Aktiengesellschaft («BAWAG") entered into a

Stipulation and Agreement of Settlement dated September 7, 2006 (the "Stipulation") whic h

provides for a settlement of this action as against BAWAG only (the "Partial Settlement") ; and

WHEREAS, unless otherwise defined in this Judgment, the capitalized terms in thi s

Judgment shall have the same meaning as they have in the Stipulation ; and

WHEREAS, the Court entered an Order dated , 2006 (the "Preliminar y

Approval Order") preliminarily certifying, for settlement purposes only, an opt-out Settlemen t

Class pursuant to Fed. R. Civ . P. 23(a) and (b)(3) ; an d

WHEREAS, the Preliminary Approval Order also (i) ordered that notice be provided to

potential members of the Settlement Class ; (ii) scheduled a Settlement Hearing ; and (iii)

provided those persons and entities identified as members of the putative Settlement Class with

an opportunity either to exclude themselves from the proposed Partial Settlement or to object to

the proposed Partial Settlement ; and

WHEREAS, the Court held a Settlement Hearing on 2006 to determine ,

among other things, (i) whether the terms and conditions of the Partial Settlement are fair,

reasonable and adequate and should therefore be approved ; (ii) whether judgment should be

entered dismissing the Complaint on the merits and with prejudice as against BAWAG ; and (iii)

whether and in what amount to award attorneys' fees to Co-Lead Counsel ; and

NOW, THEREFORE, based on the submissions of the parties, and on the arguments o f

counsel at the Settlement Hearing, it is hereby ORDERED, ADJUDGED AND DECREED as .

follows :

1 . Incorporation of Settlement Documents . This Judgment Approving Class

Action Settlement With BAWAG incorporates and makes a part hereof:

(a) the September 7, 2006 Stipulation and Agreement of Settlement filed withthis Court ; and

(b) the Notice and the Publication Notice, both of which were filed with theCourt on 2006 (as attachments to the Declaration of

2. Jurisdiction . The Court has personal jurisdiction over all Settlement Class

members and has subject matter jurisdiction over the Action, including, without limitation,

jurisdiction to approve the proposed Partial Settlement, grant final certification of the Settlement

Class, and dismiss the Action as against BAWAG on the merits and with prejudice . The Court

has personal jurisdiction over BAWAG for purposes of enforcing the Partial Settlement .

3 . Final Settlement Class Certification . 'The Court finds that the Settlement Clas s

preliminarily certified in the Preliminary Approval Order meets all of the requirements of

Federal Rule of Civil Procedure 23(a) and (b)(3) for the reasons set out in the Preliminary

Approval Order . The Court therefore finally certifies the Settlement Class for settlement

purposes consisting of all persons and entities that purchased or otherwise acquired Refco Group

Ltd., LLC/Refco Finance Inc. 9% Senior Subordinated Notes due 2012 (CUSIP Nos.

75866HAA5 and/or 75866HAC1) and/or common stock of Refco (CUSIP No . 75866G109)

during the period August 5, 2004 through and including October 17, 2005, and who were

damaged thereby . Excluded from the Settlement Class are, (i) Refco ; (ii) the Defendants ; (iii)

any person or entity who was a partner, executive officer, director, controlling person,

subsidiary, or affiliate of Refco or any Defendant during the Class Period ; (iv) members of the

Defendants' immediate families ; (v) entities in which Refco or any Defendant has a controlling

interest; and (vi) the legal representatives, heirs, predecessors, successors or assigns of any of the

foregoing excluded persons or entities . Also excluded from the Class is any person or entity who,

or which properly excludes himself, herself or itself by filing a valid and timely request for

exclusion in accordance with the requirements set forth in the Notice .

4. Adequacy of Representation . The Co-Lead Counsel and Lead Plaintiffs

adequately represented the Settlement Class for purposes of entering into and implementing the

Partial Settlement and have fully and adequately represented the Settlement Class for purposes of

entering into and implementing the Partial Settlement and have satisfied the requirements of

Federal Rule of Civil Procedure 23(a)(4) .

5. Notice. The Court finds that the distribution of the Notice, the publication of the

Publication Notice, and the notice methodology : (i) were all implemented in accordance with

the Preliminary Approval Order; (ii) constituted the best practicable notice ; (iii) constituted

notice that was reasonably calculated, under the circumstances, to apprise Settlement Class

members of the pendency of the Action, of the effect of the Partial Settlement including the

releases, of their right to object to the proposed Partial Settlement, of their right to exclude

themselves from the Settlement Class, and of their right to appear at the Settlement Hearing, (iv)

were reasonable and constituted due, adequate, and sufficient notice to all persons or entities

entitled to receive notice; and (v) met all applicable requirements of the Federal Rules of Civil

Procedure, the United States Constitution, (including the Due Process Clause), the Private

Securities Litigation Reform Act of 1995 (15 U.S.C. 78u-4, et seq.) (the "PSLRA."), the Rules of

the Court, and any other applicable law .

6. Binding Effect . The terms of the Stipulation and of this Judgment shall be

forever binding on Lead Plaintiffs and all members of the Settlement Class, as well as all of thei r

heirs, executors and administrators , predecessors, successors, affiliates (as defined in 17 C .F.R .

Part 210 .1-02.b) and assigns .

7. Final Settlement Approval . The Partial Settlement is hereby fully and finally

approved as fair, reasonable and adequate, and Lead Plaintiffs and BAWAG are directed t o

implement and consummate the Partial Settlement in accordance with the terms and provision s

of the Stipulation . The Court approves the documents submitted to the Court in connection wit h

the implementation. of the Partial Settlement .

8. Releases . The releases as set forth in paragraphs 2 through 4 of the Stipulation

(the "Release"), together with the definitions of Settled Claims, Settling Defendants' Claims ,

Settling Defendants, and Released Plaintiff Parties are expressly incorporated herein in al l

respects . The Release is effective as of the Effective Date and forever discharges, among other

things, the Settling Defendants from any claims of liability arising from or related to the Settled

Claims, and the Released Plaintiff Parties from any claims of liability arising from or related to

the Settling Defendants' Claims . The Settled Claims are hereby compromised, settled, released,

discharged and dismissed as against the Settling Defendants on the merits and with prejudice by

virtue of the proceedings herein and this Judgment. The Settling Defendants' Claims are hereby

compromised, settled, released, discharged and dismissed as against the Lead Plaintiffs and the

members of the Settlement Class on the merits and with prejudice by virtue of the proceedings

herein and this Judgment .

9. No Other Releases. Notwithstanding any release or other language that may b e

contained in the Stipulation and Order of Settlement that may be entered by the Bankruptcy

Court or in any other document (including, but not limited to, any order issued by the

Bankruptcy Court for the Southern District of New York in connection with the separate

settlement reached between BAWAG and the Creditors' Committee) which purports to release or

otherwise extinguish or limit any claims that Lead Plaintiffs and/or members of the Settlement

Class have asserted or could assert against BAWAG (collectively, the "Bankruptcy Releases"),

the parties have agreed and this Court hereby orders that. (i) the Bankruptcy Releases shall be

fu lly effective on their terms, provided however, the Bankruptcy Releases shall not release the

claims of Lead Plaintiffs and/or members of the Class in this Action, which claims shall be

released only through this Judgment, and (ii) nothing shall preclude members of the Settlement

Class from receiving distributions from the Settlement or any future settlement in this Action and

receiving distributions from settlements reached between BAWAG and others in the Bankruptcy

Court, to the extent that those Settlement Class members have allowed claims as creditors or

interest holders of Refco.

10, Permanent Injunction. The Court permanently bars and enjoins (i) al l

Settlement Class Members (and their heirs, executors and administrators, predecessors,

successors, affiliates (as defined in 17 C.F.R. Part 210.1-02.b) and assigns) from filing,

commencing, prosecuting, intervening in, participating in (as class members or otherwise), or

receiving any benefits or other relief from, any other lawsuit, arbitration or other proceeding or

order in any jurisdiction that is based upon, arises out of or relates to any Settled Claims ; and (ii)

BAWAG and the Settling Defendants from filing, commencing, prosecuting, intervening in,

participating in (as class members or otherwise), or receiving any benefits or other relief from,

any other lawsuit, arbitration or other proceeding or order in any jurisdiction that is based upon,

arises out of or relates to any Settling Defendants' Claims.

11 . Contribution Bar Order. The Court hereby bars all claims (a) by any person

or entity against the Settling Defendants for contribution arising out of the Action, and (b) by the

Settling Defendants against any person or entity for contribution arising out of the Action, other

than a person whose liability has been extinguished by the Partial Settlement , each to the fullest

extent permitted by 15 U.S .C. § 78u-4(f)(7) and any other applicable law or regulation . Nothing

herein is intended to broaden the language of the Private Securities Litigation Reform Act of

1995 .

12 . 'No Admissions , Neither this Judgment, the Stipulation, nor any of their term s

and provisions, nor any of the negotiations or proceedings connected therewith, nor any of th e

documents or statement referred to therein shall be :

(a) admissible in any action or proceeding for any reason, other than an actio n

to enforce the terms of the Settlement or this Judgment ;

(b) described as, construed as, offered or received against the Settlin g

Defendants as evidence of and/or deemed to be evidence of any presumption, concession, or

admission by the Settling Defendants of the truth of any fact alleged by Lead Plaintiffs ; the

validity of any claim that has been or could have been asserted in the Action or in any litigation ;

the deficiency of any defense that has been or could have been asserted in the Action or in any

litigation; or any liability, negligence, fault, or wrongdoing of the Settling Defendants ;

(c) described as, construed as, offered or received against Lead Plaintiffs or

any Settlement Class members as evidence of any infirmity in the claims of said Lead Plaintiffs

and the Settlement Class or that damages recoverable under the Amended Complaint would not

have exceeded the Settlement Amount;

(d) described as, construed as, offered or received against any of the parties to

this Stipulation, in any other civil, criminal or administrative, action or proceeding, provided,

however, that (i) if it is necessary to refer to this Stipulation to effectuate the provisions of this

Stipulation, it may be referred to in such proceedings, and (ii) if this Stipulation is approved by

the Court, the Settling Defendants may refer to it to effectuate the liability protection granted

them hereunder; or

(e) described as or construed against the Settling Defendants or the Lea d

Plaintiffs or any Settlement Class members as an admission or concession that the consideration

to be given hereunder represents the amount which could be or would have been awarded to sai d

Lead Plaintiffs or Settlement Class members after trial .

13 . Enforcement of Settlement . Nothing in this Judgment shall preclude any action

to enforce the terms of the Stipulation .

14. Claims Administrator's Fees and Expenses . The Court retains jurisdiction to

consider an application by or on behalf of the Claims Administrator for an award of fees an d

reimbursement of expenses relating to its implementation of the terms of the Stipulation and/or

any orders of this Court.

15. Attorneys' Fees. Co-Lead Counsel are hereby awarded attorneys' fees equal to

$ , which the Court finds to be fair and reasonable . Co-Lead Counsel are not

seeking reimbursement of out-of-pocket expenses in connection with this Settlement.

16. Rule 11 Findings . The Court finds that all parties to the Stipulation and their

counsel have complied with each requirement of Rule 11 of the Federal Rules of Civil Procedur e

as to all proceedings herein .

1 7 . Modification of Settlement Agreement . Without further approval from the

Court, Lead Plaintiffs and BAWAG are hereby authorized to agree to and adopt suc h

amendments, modifications and expansions of the Stipulation or any exhibits attached to th e

Stipulation as : (i) are not materially inconsistent with this Judgment; and (ii) do not materially

limit the rights of Settlement Class members under the Stipulation.

18. Extensions of Time. Without further order of the Court, Lead Plaintiffs and

BAWAG may agree to reasonable extensions of time to carry out any provisions of the

Stipulation.

19. Retention of Jurisdiction . The Court has jurisdiction to enter this Judgment .

Without in any way affecting the finality of this Judgment, the Court expressly retains continuing

and exclusive jurisdiction over BAWAG and the Settlement Class members for purposes of the

administration, interpretation, and enforcement of the Stipulation and of this Judgment . The

Court further expressly retains continuing and exclusive jurisdiction over the Settlement Class

members for all matters relating to the Action .

20. Dismissal of Action . The Action, Which the Court finds was filed on a good faith

basis against BAWAG in accordance with the PSLRA and Rule 11 of the Federal Rules of Civil

Procedure based upon all publicly available information, is hereby dismissed as against BAWAG

only, on the merits and with prejudice as of the Effective Date, without fees or costs except as

otherwise provided in this Judgment .

21 : Entry of Final Judgment. Because the Partial Settlement resolves all claims as

to BAWAG in the Action, the Court finds that there is no just reason to delay the entry of this

Judgment as a final judgment as against BAWAG. Accordingly, the Court expressly directs the

immediate entry of final judgment by the Clerk of Court, as against BAWAG only, pursuant to

Federal Rule of Civil Procedure 54(b) .

SO ORDERED this day of 2006 .

I L1L EIVIN 'JI tVnLr %Jr-rr.l-~J; D. L 11VLri

United States District Judge