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3, Notwithstanding any other provision of this Agreement, this Agreement does not
waive, or intend to waive, any claims which could be brought by the United States through the
Department of Justice, the United States Attorney’s Office for the District of South Carolina or
any other federal judicial district, or by any other department, agency or instrumentality of the
United States as defined by 18 U.S.C. § 6. In addition, the FDIC-R specifically reserves the right
to seek court ordered restitution pursuant to the relevant provisions of the Mandatory Victims

Restitution Act, 18 U.S.C. § 3322 and § 3663, et. seq., if appropriate.
SECTION III: Representations and Acknowledgements

A. Authorized Signatories

All of the undersigned persons represent and warrant that they are authorized to sign this
Agreement on behalf of the respective Party, and that they have the full power and authority to
bind such Party to each and every provision of this Agreement. This Agreement shall be binding
upon and inure to the benefit of the undersigned Parties and their respective heirs, executors,
trustees, administrators, representatives, successors and assigns.

B. Ownership of the Claim.

The Parties hereby represent and warrant that they have not transferred, assigned,
released, or otherwise compromised any rights or claims released herein. The FDIC-R represents
and warrants that it is the sole owner of the Claim. The FDIC-R understands and agrees that this
representation is a material portion of the consideration provided to SECURITY in. this
Agreement.

C. No Admission of Liability

The undersigned Parties each acknowledge and agree that the matters set forth in this
Agreement constitute the-settlement and compromise of disputed claims and defenses, and that
this Agreement is not an admission or evidence of liability or infirmity by either Party regarding
any claim or defense, and that the Agreement shall not be offered or received in evidence by, or

against, any Party except to enforce its terms.


Page 4

SECURITY’s payment of the Settlement Payment or involving any action, error or omission of
John Harter Jr.. SECURITY does hereby assign, transfer, and convey to the FDIC-R any of its
rights, claims, title, and interest as to any Rights of Recovery. SECURITY agrees that the FDIC-
R may retain, sell, transfer, or otherwise dispose of such Rights of Recovery as it sees fit, in its
sole and unfettered discretion, and retain the proceeds (if any) thereof. Any future recovery
pursuant to such Rights of Recovery shall not modify or otherwise affect the amount of
Settlement Payment due under this Agreement and required to be paid by SECURITY.

D. Express Reservations from Releases by FDIC-R

1. Notwithstanding any other provision contained in this Agreement, the FDIC-R
does not release, and expressly preserves fully and to the same extent as if the
Agreement had not been executed, any claims or causes of action:

a. against any person or entity for liability, if any, incurred as the maker,
endorser or guarantor of any promissory note or indebtedness payable or
owed by them to the FDIC-R, the Bank, other financial institutions, or any
other person or entity, including without limitation any claims acquired by
the FDIC-R as successor in interest to the Bank or any person or entity
other than the Bank;

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

¢, under or relating to any policy of insurance issued by SECURITY (or any
other insurer) other than the Bond; and

d. which are not expressly released in Section II.A above.

2. Notwithstanding any other provision, nothing in this Agreement shall be
construed or interpreted as limiting, waiving, releasing or compromising the jurisdiction and
authority of the Federal Deposit Insurance Corporation in the exercise of its supervisory or
regulatory authority or to diminish its ability to institute administrative enforcement or other
proceedings seeking removal, prohibition or any other relief it is authorized to seek pursuant to

its supervisory or regulatory authority against any person.


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D. Execution in Counterparts

This Agreement may be executed in counterparts by one or more of the Parties named
herein and all such counterparts when so executed shall together constitute the final Agreement
as if one document had been signed by all Parties; and each such counterpart, upon execution
and delivery, shall be deemed a complete original, binding the Party or Parties subscribed thereto
upon the execution by all Parties to this Agreement.

E. Choice of Law

This Agreement shall be interpreted, construed and enforced according to the applicable

federal law, or in its absence, the laws of the state of South Carolina.

F. Entire Agreement and Amendments

This Agreement constitutes the entire Agreement and understanding between the Parties
concerning the matters set forth herein and supersedes any prior agreements or understandings.
This Agreement may not be amended or modified, nor may any of its provisions be waived,
except in writing signed by the Parties to be bound thereby, or by their respective authorized
attorney(s), or other representative(s).

G. Reasonable Cooperation

The undersigned Parties agree to cooperate in good faith to effectuate all of the terms and
conditions of this Agreement, including doing or causing their agents and attorneys to do,
whatever is reasonably necessary to effectuate the signing, delivery, execution, filing, recording
and entry, of any documents necessary to perform the terms of this Agreement.

H. Advice of Counsel

Each Party hereby acknowledges that it has consulted with and obtained the advice of
counsel prior to executing this Agreement, and that this Agreement has been explained to that
Party by his or her counsel.

I. No Confidentiality
The Parties acknowledge and agree that this Agreement is a public document that will

need to be disclosed pursuant to 12 U.S.C. § 1821(s) and other applicable laws and regulations.


Page 1

SETTLEMENT AND RELEASE AGREEMENT

This Settlement and Release Agreement (“Agreement”) is entered into by and between
the Federal Deposit Insurance Corporation as Receiver for Allendale County Bank (“FDIC-R”)
and Security National Insurance Company (“Security”) (individually, the FDIC-R and
SECURITY may be referred to herein as a “Party” and collectively as the “Parties”).

RECITALS
WHEREAS:

Prior to April 25, 2014, Allendale County Bank (the “Bank”) was a depository institution
organized and existing under the laws of South Carolina;

On April 25, 2014, the South Carolina State Board of Financial Institutions closed the
Bank and pursuant to 12 U.S.C. § 1821(c), the Federal Deposit Insurance Corporation was
appointed receiver. In accordance with 12 U.S.C. § 1821(d), the FDIC-R succeeded to all rights,
titles, powers and privileges of the Bank, including those with respect to its assets;

Among the assets to which FDIC-R succeeded were any and all claims, demands, and
causes of action against the Bank’s financial institution bond insurer, including against
SECURITY as issuer of the Bond, as that term is defined below;

SECURITY issued Financial Institution Bond No. (“Bond”) for the
period December 15, 2013 to December 15, 2014 to the Bank.

The Bank sent a notice of potential loss and the FDIC-R submitted a proof of loss and
supplemental supporting documents to SECURITY seeking coverage under the Bond (“Claim”);

SECURITY disputed that the Claim was covered by the Bond; and

The undersigned Parties deem it in their best interests to enter into this Agreement to
avoid the uncertainty and expense of litigation.

NOW, THEREFORE, in consideration of the promises, undertakings, payments, and
releases stated herein, the sufficiency of which consideration is hereby acknowledged, the

undersigned Parties agree, each with the other, as follows:

(®)(4)



Page 7

All section titles and captions contained in this Agreement are for convenience only and

shall not affect the interpretation of this Agreement.

IN WITNESS WHEREOF, the Parties have hereto caused this Agreement to be
executed by each of them or their duly authorized representatives on the dates hereinafter

subscribed.

FEDERAL DEPOSIT INSURANCE CORPORATI!
Date: 7h 014 BY:

TITLE? Counsel
PRINT NAME; 9 ottw V. Chueci

SECURITY NATIONAL INSURANCE COMP.

Date: Seale BY:
TITLE. DSeKy HEL CAKUA
PRINT NAME: UP Cleat MS



Page 2

SECTION I: Payment to FDIC-R

A. As an essential covenant and condition of this Agreement and in consideration for the
releases set forth in Section Il, SECURITY agrees to pay to the FDIC-R the sum of TWO
HUNDRED FIFTY THOUSAND DOLLARS and ZERO CENTS ($250,000.00) (the
“Settlement Payment”). The Settlement Payment shall be paid to the FDIC-R within thirty (30)
calendar days after both Parties sign the Agreement and receipt by SECURITY of a W-9 from
the payee. The Parties agree that time is of the essence with respect to the obligation to make the
Settlement Payment.

B. SECURITY shall deliver the Settlement Payment to the FDIC-R by direct check. The
check shall be made payable to the Federal Deposit Insurance Corporation as Receiver for

Allendale County Bank. The check shall be delivered to:

John Church

Counsel, Professional Liability Unit
Federal Deposit Insurance Corporation
3501 Fairfax Drive, VS-B-7056
Arlington, Virginia 22226

C. If the FDIC-R does not receive the Settlement Payment in full on or before the date
determined by Section LA. above or any extension granted in accordance with Section LC.1
below, then the FDIC-R, in its sole discretion, shall have the right at any time prior to receipt of
the Settlement Payment in full to:

1. Extend the period of time for the Settlement Payment, including interest accruing
from the date determined by subsection A above, through the date of payment at a rate calculated
in accordance with 26 U.S.C. §6621 (a)(2);

2. Enforce this Agreement, in which event SECURITY agrees to jurisdiction in
United States District Court for the District of South Carolina and to pay all of the FDIC-R’s
reasonable attorney’s fees and costs expended in enforcing the terms of this Agreement;

3. Terminate the Agreement; or

4, Seek any relief available to it in law or equity.


Page 3

In the event the FDIC-R extends the period of time in accordance with Section I.C.1, the
actions set forth in Sections L.C.2 through I.C.4 shall only be available if the FDIC-R does not
receive the Settlement Payment (including all accrued interest) in full on or before the date set
out in the extension.

SECTION I: Releases

A. Release of SECURITY by FDIC-R

Effective upon receipt in full of the Settlement Payment, plus any accrued interest due
under Section I.C.1, and except as provided in Section II.D below, the FDIC-R, for itself and its
successors and assigns, hereby releases and discharges SECURITY, its parents, subsidiaries,
affiliates and reinsurers, and their respective employees, officers, directors, agents,
representatives, successors and assigns (collectively the “SECURITY Released Parties”), from
any and all claims, demands, obligations, damages, actions and causes of action, direct or
indirect, in law or equity, that arise from or relate to the Claim or the Bond. As part of this
release of SECURITY, the FDIC-R further agrees that any interest it has or may have under the
Bond is extinguished.

B. Release of FDIC-R by SECURITY

Effective simultaneously with the Release granted in Section II.A above, SECURITY, for
itself and its successors and assigns, and on behalf of the SECURITY Released Parties hereby
releases and discharges the FDIC-R and its employees, officers, directors, agents,
representatives, successors and assigns, from any and all claims, demands, obligations, damages,
actions and causes of action, direct or indirect, in law or in equity, that arise from or relate to the
Claim or the Bond.

C. Waiver of Subrogation by SECURITY

L. Effective simultaneously with the Release granted in Section II.A above,
SECURITY agrees to and hereby does irrevocably waive any rights under Section 7 of the Bond
and any rights of subrogation or recovery it may have relating to or arising out of the Claim or

the Bond (“Rights of Recovery”) including, without limitation, any rights arising from