SETTLEMENT AND RELEASE AGREEMENT 

This Settlement and Release Agreement ("Agreement") is made by, between, and among 

the following undersigned parties: 

The Plaintiff Federal Deposit Insurance Corporation as Receiver for First National Bank 

of Georgia ("FDTC-R"), and II.B. "Rocky" Lipham, Grady W. Cole, Richard A. Duncan, W.T. Green, 

Jr., Lemuel G. Joyner, R. David Perry, Thomas T. Richards, J. Thomas Vance, Charles M. Willis, Sr., 

Randall f. Eaves, and Mary M. Covington (collectively the "Settling Defendants"), and The 

Cincinnati Insurance Company ("Insurer") (individually, the FDIC-R, the Settling Defendants 

and the Insurer may be referred to herein as "Party" and collectively as the "Parties'} 

RECITALS 

WHEREAS: 

Prior to January 29,2010, First National Bank of Georgia (''Bank") was a depository 

institution organized and existing under the Jaws of the United States; 

On January 29, 2010, the Office of Comptroller of the Currency closed the Bank and 

pursuant to 12 U.S.C. § l821(c), the .Federal Deposit Insurance Corporation was appointed 

Receiver. In accordance with 12 U .S.C. § 182 I (d), the FDIC-R succeeded to all rights, titles, 

powers and privileges of the Bank, including those with respect to its assets. 

Among the assets to which the FDIC-R succeeded were all ofthe Bank's claims, 

demands, and causes of action against its former directors, officers, and employees arising from 

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

duties and acts as directors, officers, and employees of the Bank; 

On January 25, 2013, the FDlC-R filed a complaint for money damages against the 

Settling Defendants, each of whom served at various times as a director and/or officer of the 

Bank. Those claims for damages are now pending in the United States District Court for the 

Northern District of Georgia in FDIC v. Lipham, et. al., Case No. 3:13-cv-00014-TCB (N.D. 

Ga.) ("D&O Action"). The Settling Defendants have denied liability in the 0&0 Action. 
lnsurer issued Financial Institutions Hlue Chip policy number I lforthe {p)(4.) 

period November I, 2006, through November I, 2009 ("Policy"), which insured the directors 

and officers of the Bank according to the terms, provisions, and conditions of the Policy. The 

Settling Defendants asserted claims for coverage under the Policy. Insurer reserved its rights to 

deny coverage under the Policy for claims asserted by FDIC-R against the Settling Defendants. 

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

avoid the uncertainty and expense of further 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: 

SECTION 1: Payment to FDIC-R 

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

calendar days following the date that the Agreement is executed by all parties ("Due Date''), the 

Insurer agrees to pay the FDIC-R the sum of three million eight hundred and fifty thousand 

dollars ($3.85 million) on behalf of the Settling Defendants (''the Settlement Payment"). 

B. The Insurer shall deliver the Settlement Payment to the FDIC-R by a check drawn 

on a depository institution acceptable to the FDIC-R that shall be sent by ov~::might delivery to 

the addressee provided to counsel for the Settling Defendants and Insurer, with advanced email 

notice to the parties. In the event that the Settlement Payment is not delivered to the FDIC-R by 

the Due Date, interest shall accrue on all unpaid amounts at the rate of 5% per annum from the 

Due Date until the date of payment. 

The FDIC shall provide Insurer with an executed Form W9 not less than I 0 days prior to 

the Due Date. 

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

Due Date, then the FDIC-R, in its sole discretion, shall have the right at any time prior to receipt 

of the Settlement Payment in full (including all accrued interest) to: 

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I. 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); or 

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

T nsurer agree to jurisdiction in United States District Court in the Northetn District of Georgia 

and to pay all ofthc FDIC-R's reasonable attorney's fees and costs expended in enforcing the 

terms of this Agreement; or 

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

the Settling Defendants and Insurer agree to consent, and continue the 0&0 Action or reinstitute an action on the FDlC-R's claims. The Settling Defendants and Insurer further agree to 

waive any defense based on any statute of limitations that would bar any of the FDIC-R's claims 

and waive all objections, defenses, claims or counterclaims, and covenant and agree not to assert 

any objections, defenses, claims or counterclaims that did not exist or were otherwise 

unavailable as of the date this Agreement was fully executed; and/or 

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

Any extension oftime under Section L.C.l for delivery of the Settlement Payment or 

acceptance of a portion ofthe Settlement Payment shall not prejudice the FDIC-R's rights to take 

any of the actions set forth in Section I.C.2 through I.C.4 at any time prior to receipt of 

Settlement Payment (including all accrued interest) in full. 

SECTION II: Stipulation and Dismissal 

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

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

shall file a stipulation of dismissal with prejudice, executed by the attorneys for all Parties 

hereto, in the fonn attached hereto as Exhibit A, in the D&O Action. 

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SECTION lll: Releases 

A. The FDIC-R's Releases. 

Upon receipt of the Settlement Payment in full and except as provided in Section lll.D., 

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

1. The Settling Defendants and their respective heirs, executors, trustees, 

adminislrators, representatives, insurers, successors, and assigns, from any and all claims, 

demands, obligations, damages, actions, and cau:ses of action, direct or indirect, in law or in 

equity, belonging to the FDIC-R, that arise from or relate to, the performance, nonperformance, 

or manner of performance ofthc Settling Defendants' respective functions, duties and actions as 

officers and/or directors of the Bank including without limitation the cause::; of action alleged in 

the D&O Action. 

2. Insurer, its parents, subsidiaries, affiliates and reinsurers, and their 

respective employees, ofticers, directors, agents, representatives, attorneys, successors and 

assigns, from any and all claims, demands, obligations, damages, actions and causes of action, 

direct or indirect, in law or in equity, that arise from or relate to the Policy. As part ofthis 

release of the Insurer, the FDIC-R agrees that any interest it may have under the Policy is 

extinguished. 

3. All other former directors, ofticers, and employees of the Bank 

(collectively, the "Covered Persons") and their respective heirs, executors, trustees, 

administrators, 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, 

belonging to the FDlC-R, that arise from or relate to, the performance, nonperformance, or 

manner of performance of the Covered Persons' respective functions, duties and actions as 

directors, officers and/or employees of the Bank including without I imitation the causes of action 

alleged in the D&O Action. This release shall be null and void as to any Covered Person if such 

Covered Person asserts any claim against the FDIC-R. 

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B. The Settling Defendants' Release. Effective simultaneously with the release 

granted in Section liLA. above, the Settling Defendants, on behalfofthemsclves individually, 

and their respective heirs, executors, trustees; administrators, agents, representatives, attorneys, 

insurers, successors, and assigns, hereby release and discharge: 

1. · The FD1C-R, and its employees, officers, directors, representatives, 

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

actions, and causes of action, direct or indirect, in law or in equity, that arise from or relate to, 

the Rank or to the performance, nonperformance, or manner of performance of the Settling 

Defendants' respective functions, duties and actions as officers and/or directors of the Hank 

including without limitation the causes of action alleged in the D&O Action. 

2. The Insurer, its parents, subsidiaries, affiliates, attorneys, and reinsurers, 

and their respective employees, officers, directors, agents, representatives, successors and 

assigns, from any and all claims, demands, obligations, damages, actions and causes of action, 

direct or indirect, in law or in equity, for the D&O Action. This release shall not apply to any 

claim for the payment of attorney's fees incurred in the defense of the D&O Action. 

C. The Insurer's Release. 

Effective simultaneously with the releases granted in Section liLA. above, Insurer, for 

itself and its successors and assigns, and on behalf of its parents, subsidiaries, affiliates and 

reinsurers, and their successors and assigns, hereby releases and discharges: 

1. The FDIC-R, and its employees, officers, directors, agents, 

representatives, attorneys, successors, and assigns, from any and all claims, demands, 

obligations, damages, actions. and causes of action, direct or indirect, in law or in equity, that 

arise from or relate to the Policy. 

2. Each of the Settling Defendants, and their respective heirs, executors, 

administrators, agents, representatives, successors and assigns, from any and all claims, 

demands, obligations, damages, actions, and causes of action, direct or indirect, in law or in 

equity, for the D&O Action. Nothing in this release shall affect any defense to coverage that the 

5 
Insurer may have with respect to any claim that may be assert~d against it in the future, if any, in 

connection with the Policy or otherwise. 

D. Exceptions from Releases by FDIC-R. 

I. ·Notwithstanding any other provision of this Agreement, the fDIC-R docs 

not release, and expressly preserves fully and to the same extent as if this Agreement had not 

been executed, any claims or causes of action: 

a. Against the Settling Defendants or any other person or entity for 

liability, if any, incurred as the maker, endorser or guarantor of any promissory note or 

indebtedness payable or owed by them to FDIC-R, the Bank, other financial institutions, or any 

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

successor in interest to the Bank or any person or entity other than Bank; and 

b. Against any person or entity not expressly released by the FDIC-R 

in this Agreement. 

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

Agreement shall be construed or interpreted as limiting, waiving, releasing, or compromising the 

jurisdiction and authority of the Federal Deposit Insurance Corporation in the exercise of its 

supervisory or regulatory authority or to diminish its ability to institute administrative 

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

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

3. Notwithstanding any other provision of this Agreement, this Agreement 

does not purport to waive, or intend to waive, any claims that could be brought by the United 

States through the Department of Justice, the United States Attorney's Office for any federal 

judicial district, or any other department or agency of the United States as defined by 18 U.S.C. § 

6. In addition, the FDJC-R specifically reserves the right to seck court-ordered restitution 

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

and 3663 et. seq., if appropriate. 

6 
SECTION IV: Waiver of Dividends and Proceeds from Litigation 

To the extent, if any, that Settling Defendants arc or were shareholders of the Bank or its 

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

distribution upon resolution oflhe receivership of the Bank or proceeds in any litigation that has 

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

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

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

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

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

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

dividends, paymcnL<;, or other distributions, or proceeds. 

SECTION V: Representa tions and Acknowledgement 

A. Authorized Signatories. All ofthe undersigned persons represent and warrant that 

they are Parties hereto or are authorized to sign this Agreement on behalf of the respective Party, 

and that they have th e full power and authority ttl 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. Advice of Counsel. Each Party hereby acknowledges that he, she, or it has 

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

this Agreement has been explained to that Party by his or her counsel. 

C. Financial Disclosure Representation. Each Settling Defendant has submitted 

financial information to the FDIC-R and herein affirms that his/her financial information is true 

and accurate as of the date of its submission. Each Settling Defendant expressly acknowledges 

that, in determining to settle the claims released herein, the FDIC-R has reasonably and 

justifiably relied upon the accuracy of the financial information submitted by the Settling 

Defendants. The FDIC-R has no obligation to independently verify the completeness or 

7 
accuracy of that financial information. 

SECTION VI: Reasonable Cooperation 

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

conditions of this Agreement, including doing, or causing their agents and attorneys to do, 

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

and entry, of any documents necessary to conclude the 0&0 Action, and to otherwise perform 

the terms of this Agreement. 

SECTION VII: Other Matters 

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

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

claims and defenses, that this Agreement is not an admission or evidence of liability or infirmity 

by any of them regarding any claim or defense, that the Settli ng Defendants maintain their 

express denial oflhe FDIC-R's allegations, and that the Agreement shall not be offered or 

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

1:3. Execution in Counterparts. This Agreement may be executed in counterparts by 

one or more of the Parties 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 

Parties subscribed thereto upon the execution by all Parties to this Agreement. 

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

according to applicable federal law, or in its absence, the laws of the State of Georgia. 

D. Notices. Any notices required hereunder shall be sent by registered mail, first 

class, return rcceip1 requested, and by email, to the f(.)l lowing: 

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Ifto the PDIC-R: 

David L. Tumer 

Schulten Ward & Turner, LLP 

260 Peachtree Street 

Suite 2700 

Atlanta, GA 30303 

(404) 688-6800 

(b)(6)_---+t ~ 

(b )(6) .... --····-···· ·-·--

If to the Settling Defendants: 

Mary C. Gill 

Alston & Bird LLP 

1201 W. Peachtree St., N.W. 

Atlanta, GA 30309 

404-881-7276 

.... -(. .... -·-·--·-·--·-·----

lf to Insurer: 

Victor C. Peters 

Peters & Nye 

14 Executive Court, Suite 2 

South Harrington, lL 60010 

847-423-0350 

(b)(6)_---tl =====---_j 

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

agreement and understanding between and among the undersigned Parties concerning the matters 

set forth herein and supersedes any prior agreements or understandings. This Agreement may 

not be amended or modified, nor may any of its provisions be waived, except in writing signed 

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

rcprcscntat ive( s). 

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

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

G. No Confidential ity. The undersigned Parties acknowledge that this Agreement 

shall not be confidential and will be disclosed pursuant to the Federal Deposit Insurance 

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

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(b)(6),m, 

IN WITNESS WHEREOF. the Parties hereto have caused this Agreement to be executed 

by each of them or their duly authorized representatives on the dates hereinafter subscribed. 

. ! : . 

Date: 1 I } .: i ;-.. :: ~ 

Date: 1 

Date: __ _ 

Date: __ _ 

Date: __ _ 

FEDERAL DEPOSIT INSURANCE CORPORATION, AS 

RECEIVER FOR FIRST NATIONAL BANK OF , ' 

TITLE: ____ r::....:: ·;;_'·-···....;'_· ---------

PRINT NAME: .· A .. · -' ·· , , 

H.B. "ROCKY" LIPHAM 

................................. ----·!'----_ .................................... ______,__ 

GRADY W. COLE 

RICHARD A. DUNCAN 

W.T. GREEN. JR. 

)() 
(b)(6) 

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

by each of them or their duly authorized representatives on the dates hereinafter subscribed. 

Date: __ _ 

Date: __ _ 

Date: __ _ 

Date: __ _ 

FEDERAL DEPOSIT INSURANCE CORPORATION, AS 

RECEIVER FOR FIRST NATIONAL BANK OF 

GEORGIA 

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

TITLE: ______________ _ 

PRlNTNAME: __________________ _ 

H.B. "ROCKY" LIPHAM 

GRADYW COLE 

W.T. GREEN, JR. 

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IN WITNESS WHEREOF. the Parties hereto have caused this Agreement to be executed 

by each of them or their duly authorized representatives on the dates hereinafter subscribed. 

Date: __ _ 

Date: __ _ 

Date: __ _ 

Date: /-.) g ··IS 

Date: __ _ 

FEDERAL DEPOSIT INSURANCE CORPORATION, AS 

RECEIVER FOR FIRST NATIONAL BANK OF 

GEORGIA 

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

TITLE: ------------------------------- PRINT NAME:----------------

H.B. "ROCKY" LIPHAM 

GRADY W. COLE 

------------

RICHARD A. DUNCAN 

----------------------------------------IL...--_--------------------------------------_---------------------------------_------------------_ _____. 

W .'f. GREEN, JR. 

10 
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed 

by each of them or their duly authorized representatives on the dates hereinafter subscribed. 

Date: _ _ _ 

Date: - - -

Date: _ _ _ 

Date: _ _ _ 

FEDERAL DEPOSIT INSURANCE CORPORATION, AS 

RECEIVER FOR FIRST NATIONAL BANK OF 

GEORGIA 

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

TITLE: ______________________________ _ 

PRlNT NAME: 

H.B. "ROCKY" LIPHAM 

GRADY W. COLE 

RICHARD A. DUNCAN 

W.T. GREEN, JR . 

.................................... ················ ........................ . . .................................. ....... ................................ . 

v 

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_,.. .. ,I . 

Date: .........-.....;...__- ·' · ; LEMUEL G. JOYNER 

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

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L.. .. _ ........ _ ........ _ ........ _ ........ _ ........ _ ........ _ ........ _ ........ _ ....... ________ __, 

L 

Date: __ _ R. DAVID PERRY 

Date: __ _ THOMAS T. RICHARDS 

Date: __ _ J. THOMAS VANCE 

Date: __ _ CHARLES M. WILLIS, SR. 

Date: __ _ RANDALL F. EAVES 

Date: __ _ MARY M. COVINGTON 

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(b)(6) 

(b)(6) 

Date: __ _ 

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ate: i • -· .r · l 

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

Date: __ _ 

Date: t/Jv/rr-·-

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

Date: __ _ 

Date: __ _ 

Date: __ _ 

LEMUEL G. JOYNER 

. ..... - R. DAVID PERRY~ 

'- ../ 

THOMAS T. RICHARDS 

.I. THOMAS VANCE 

·················-·····-········ 1---·----

CHARLES M. WILLIS, SR. 

RANDALL F. EAVES 

MARY M. COVINUTON 

I I 
Jan 23 2015 4:59 HP LASERJ~T 3330 770-832-0779 p. 1 

Date: __ _ LEMUEL G. JOYNER 

Date: __ _ R. DAVID PERRY 

(b)(6) 

Dare:F-/1'7-

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L-----------------------------~ 

THOMAS T. RICHARDS 

Date: __ _ J. THOMo\S VANCE 

Date; __ _ CHARLES M. WILUS, SR. 

Date: __ _ RANDALL F. EAVES 

Date: --- MARY M. COVINGTON 

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Date: __ _ LEMUEL G. JOYNER 

Date: __ _ R. DAVID PERRY 

Date: __ _ THOMAS T. RICHARDS 

Date: __ _ J. THOMAS VANCE 

Date: /-ZJ-1.:7 

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

CHARLES M. WILLIS. SR . 

...1.____ ......................................... I ................................. __ _ 

Date: __ _ RANDALL F. EAVES 

Date: __ _ MARY M. COVINGTON 

II 
Date: __ _ LEMUEL G. JOYNER 

Date: __ _ R. DAVID PERRY 

Date: __ _ THOMAS T. RICHARDS 

Date:~-- J. 'ffiOMAS VANCE 

Date: --- CHARLES M. WILLIS, SR. 

Date: l;rJO-.lvt~ RANDALL F. EAVES 

(b)(6)_ 

................................................................................ IL...___ -------J~ 

Date: __ _ MARY M. COVINGTON 

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Date: ·~·h· ........... . LEMUBL G. JOYNER 

Date: R. DA VlD PERRY 

Date:~ ..... THOMAS T. RICHARDS 

Date:.-·-·--· J. THOMAS VANCE 

l.Jate: CHARLES M. WILLIS. SR. 

Date: RANDALL F. EAVES 

MARY M. COVINGTON 

(b )(6)om,,, '''' 

............................................................................... IL___ _ _______. 

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THE CINNATJINSURANC COMPANY 

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

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