SEITLEMENT AND RELEASE AGREEMENT 

., 

This Settlement and Release Agreement ("Agreement") is made as of this [_ day of 

September 2011 by and between the following undersigned parties: 

The Federal Deposit Insurance Corporation, as recciver of The Columbian Bank and 

Trust Company ("FDIC"), and G. Reid Teaney ("Teanei'). (Individually, the FDIC and Teaney 

may be referred to herein as '"Party" and collectively as the ''Parties ... ) 

RECITALS 

WHEREAS: 

Prior to August 22, 2008, The Columbian Bank and Tl\lst Company ("Columbian" or the 

'~ank") was a depository institution organized and existing under the laws of the State of 

Kansas. 

On August 22. 2008, the Bank was closed by the State of Kansas and pursuant to 12 

U.S.C. § 182l(c), the FDIC was appointed receiver: In accordance with 12 U.S.C. § 1821(d), the 

FDIC as receiver 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 as receiver succeeded were any and all of the 

Bank's claims, demands, and causes of actions against its former directors, officers and 

employees ari6ing from the performance, nonperformance and manner of perform~ce of their 

respective functions, duties and acts as directors and/or officers of the Bank. 

. The FDIC has asse.rted claims against certain persons; including Teaney, who had ·each 

served at various times as directors of the Bank. Teaney has denied liability for the FDIC's 

claims. 

Banclnswe issued directors' and officers.' liability policy numberLI ___ ···_·······-·······-······-·······...~·lthe· ................ (~)(~) 

"Policy .. ). which inirured the directors and officers of the Bank according to the terms) provisions 

and conditions of the Policy. Teaney has made claims under the Policy. 

{KD348506.DOC; l} 
The undersigned parties deem it in their best interests to enter into this Agreement to 

avoid the uncertainty, trouble, and expense of litigation. 

NOW, TIIEREFORE, in consideration of the promises, Wldertakings, payments, and 

releases stated herein, the sufficiency of which consideration is hereby acknowledged, the 

undersigned parties agree~ each with the other, as follows: 

SECTION I: Payment to FDlC 

A. As an essential (}Ovenant and condition to this Agreement, Teaney. agrees to pay 

the FDIC the sum of $75,000 ("the Settlement Funds'}. 

B. Upon the execution of an original1 or originals in counterpart, of this .Agreement 

by each of the undersigned Parties to this Agreement, the Settlement Funds shall be delivered to 

FDIC by direct wire transfer into an account desjgnated by FDIC or by certified or cashier's 

check drawn upon a deposirory institution acceptable to FDIC. 

C. Without waiving any other rights that the FDIC may have, in the event that all 

Settlement Funds are not re<:e~ved by the FDIC, the FDIC, in its sole discretion, shall have the 

right at any time prior to receipt of aU Settlement Funds to declare this Agreement null and void, 

shall have the right to extend t~is Agreement for any period of time until it receives aU 

Settlement Funds, and/or shall have the right to enforce this Agreement. in which event Teaney, 

'agrees to jurisdiction in Federal District Court in Kansas and agrees to pay all of the FDJC's 

reasonable attorneys, fees expended in enforcing the tenns of this Agreement. Any decision by 

the FDIC to &ecept a portion of the Settlement Funds shall not prejudice its rights to declare this 

Agreement null and void at any time prior to receipt of all Settlement Funds or to enforre the 

terms of this Settlement Agreement; provided however, that in the event the FDIC declares this 

Agreement null and void, ·the FDIC will return all amounts paid to it under this Agreement. 

SECfiON II: Releases 

A. Release ofTr.aney by the FDIC. 

{K0348SOG.OOC; I }210431l .doe 

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Effective upon receipt in full of the settlement funds described in SECTION I above, and 

except as provided in PARAGRAPH II.D., the FDIC, fur itself and its suooesso:m and assigns, 

hereby releases and discharges Teaney and his heirs, executors, 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 equitys belonging to the FDIC. that arise from or 

relate to, the performance, nonperformance, or manner of performance of Teaney's functions. 

duties and actions as a director of the Bank. 

B. Release of FDIC J>y Teaney. 

Effective simultaneously with the release granted in PARAGRAPH II.A. above, Teaney, 

on behalf of himself individually, and his heirs, executors, admini~trators, agents, 

representatives, successors and assigns, hereby releases and discharges the FDIC, and its 

employees, officers, directors, representatives, successors and assigns) from any and all claims, 

demands~ obligations~ damages, actions, and causes of action, direct <Jt indire<;t, in law or in 

equity. that arise from or relate to, the Bank or to the perfonnance, nonperfomtance., or manner 

of performance of Teaney's func~ons, duties an.d actions as a director of the Bank. 

C. &lease of Banclnsure by Tean~y 

Effective simultaneously with the releases granted in Paragraphs II.A. and U.B. above, 

Teaney, on behalf of himself individually, and his heirs, executors, administrators, agents, 

representatives, succe8sors and assigns, hereby releases and discharges Banclnsure., its parents, 

subsidiaries, affiliates and reinsurers, and their respective employees, officers, diredurs. agents, 

representatives, successors and assigns~ from any and aU claims, demands, obligations, damages, 

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

Policy. Teaney agrees that any interest be may ·have under the Policy is extinguished. The 

FDIC does not release, but instead expressly and fully preserves, any claims against Banclnsure. 

notwithstanding the release ofBanclnsure by Teaney. 

fK.03"*5Q6,00C; 1 }21041112.~ 

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D. Express Reservations From Releases By FDIC. 

1. Notwithstanding any other provision, by this Ag.reemen~ the FDIC 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 Teaney or any other penron 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. the Bank, other financi~ institutions, or any other person or entity, 

including without limitation any claims acquired by FDIC as successor in intetest to the Bank or 

any person or entity other than Bank; 

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

Agreement; and 

c. which are not expressly released in Paragraph ILA., 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 FDIC in the exercise of its supervisory or regulatory e.trthority or to diminish its 

ability to institute administrative enforcement proceedings seeking removal, prohibition or any 

other administrative enforcement action which may arlSe by operation of law, tule or regulation. 

J. Notwithstanding any other provision, this Agreement does not purport to 

waive~ or intend to waive, any claims which could be brought b y the United States through either 

the Depart.r.nent of Justice, the United Stares Attorney's Office for the Djstrict of Kansas or any 

other federal judicial district. In addition, the FDIC speeifically reserves the right to seek court 

ordered restitution p~uant to the relevant provisions of the Victim and Witness Protoc-tion Act, 

l8 U.S.C. § 3663, et seq., if appropriate. 

SECTION III: WAIVER OF DIVIDHNDS AND PROCEEDS FROM LITIGATION 

To the extent, if any, that Teaney is or was a shareholder of the Bank and its holding 

company, and by virtue thereof is or may be entitled to a dividendj payment, or other distribution 

(K034$506.00C; 1)2104672.doo 

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

could be brought against the United States based on or arising out of, in whole or in part, the 

closing of t:IJ.e Bank, or any alleged acts or omissions by the United States government in 

connection with Columbian or its receivership; he hereby knowingly assigns to the FDIC any 

and aU rights, titles and interest in and to any and all such dividends~ payments or other 

distributions, or such proceeds, 

SECTION IV: Representations and Acknowledgements 

A No Admission of Liability, The un~ersigned parties each acknowledge and agree 

that the matters set forth in this AgTet1ment constitute the settlement and compromise of disputed 

claimss and that this Agreement is not an admission or evidence of liability by any of them 

· regarding any c.laim. 

B. Execution in Counnm;w. This Agreement may be executed in counterparts by 

one or more of the parties named herein and all such counterparts when so executed shaU 

together constitute the final Agreement, as if one d.ocument had been signed by all parti~ hereto; 

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. 

C. Binding Effect. Each of the undersigned persons represents and wanants that 

they are a party hereto '?r are authorized to sign this Agreement on behalf of the respective party, 

and that they have the full power and authodty 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 

uudersigned parties and their respective heirs, executors, administrators, representatives, 

successors and assigns. 

D. Choice of Law. This Agreement shalJ be interpret~d, construed and enforced 

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

(}(()3"'S06.DOC; J )2104372..doc 

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

agreement and understanding between the undersigned parties concerning the matters set forth 

herein. This Agreement may not be amended or mooi.fied except by another written i~trnment 

signed by the party or parties to be bound thereby) or by their respective authorized attorney(s) or 

other representative(s). 

F. Specific IU.mesentations Warranties and DlscJaimer. Teaney expressly 

acknowledges that in detennining to ·settle the claims released here, the FDIC has reasonably and 

justifiably relied upon the accuracy of financial information in the personal financial statement 

he has submitted. If, in his persop.al financial statement, Teaney bas intentionally failed to 

disclose any interest, legal, equitable, or beneficialJ jn any material asset such that disclosure of 

said asset would have effected a material change in Teaney's personal financial statement, 

Teaney agrees to cooperate fully with the FDIG to transfer his interest in the asset to the FDIC 

and to sign any and aU documents necessary to transfer his interest in the asset to the FDIC. 

Moreover, if, in his personal financial statement Teaney has intenti<mally f!liled to dlsclose any 

interest, legal, equitable, or beneficial, in any material asset such that disclosure of said asset 

would have effected a material change in his persooal financial staiement, the FDIC in its sole 

discretion, may exercise one or more or all of the foll5>wing remedies: (a) the FDIC may d~lare 

the releases granted to Teaney as null and void; (b) the FDIC may retain the Settlement Funds; 

(c) the FDIC may sue Teaney for damages, an injunction, and specific performance for the 

breach of this agreement; and (d) the FDIC may seek to vacate any dismiss.aJ order and reinstate 

the FDIC's daims against Teaney. Teaney agrees that if, in his personal financial sta.temerrt, he 

has intentionally faiJed to disclose any interest, legal, equitable, or beneficial, ln any material 

asset such that disclosure of said asset would have effected a material change in his personal 

financial statement, Teaney consents to the reinstatement of the FDIC's claims and waives any 

statute ofJimitations that would bar any of the FDIC's claims against him 

G. Reasonable Cooperation; 

!K034JS06.00C; 1}21~2 dot 

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1. Teaney agrees to cooperate in good faith to effectuate all the tenns and 

conditions of this Agreement, including doing or causing his 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. 

2. Further} Teaney agrees to cooperate fully with the FDIC in connection 

with any action required under this Agreement, and in any litigation filed by the FDIC against 

any furmer directors or officers of Columbian. Any sU¢h cooperation that involves any out-ofpocket costs is subject tE> reasonable reimbursement by the FDJC pun1uant to its internal 

guidelines and policy for such reimbursement. Such cooperation shall consist of: 

a. producing all docwnents requested by the FDlC, without the 

necessity of subpoena. as determined by the FDIC, in its so1e discretion. to be relevant to the 

Bank; 

b. making himself available upon request by the FDIC at reasonable 

times and places for interviews regarding facts, a:s detennined by the FDIC in its sole discretion, 

· to be relevant to the Bank; 

c. appearing to testify, upon request by the FDIC, in any matter 

detennined by the FDIC in its sole discretion, to be related to the Bank, without the necessity of 

subpoena; 

d. signing truthful aftldavits upon request by the FDIC, regarding any 

matter, as determined by the FDIC in its sole discretion. to be relevant to the Bank. 

H. Advice of Counsel. Teaney acknowledges that he has consulted with and 

obtained the advice of counsel. prior to executing this Agreement, and that this Agreement has 

been explained tn him by his c.otmsel. 

lN WITNESS WHEREOF, the parties hereto have c~sed this Agreement to be exeeuted 

by each ofthem or their duly authorized representatives on the daie.s hereinafter subscribed. 

(KOJ485'06.00C; t)2104872.doe 

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(b)(6) 

(b)(6) 

IN WITh'"ESS 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. 

TilE FEDERAL DEPOSIT INSURANCE CORPORATION, its capacity as the recciver of The 

Columbian Bank & Trost Company 

B : Herbert G. Smith II 

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

TG. SMITH II 

COMMONWEALTH OF VIRGINIA ) 

) ss: 

COUNTY OF ARLINGTON ) 

Subscribed and sworn to before me this ~day of September 2011. 

l I 

(b)( 6) H NotaryPubt~...······· ___ _, Millicent Kaplan Commonwealth or VIrginia 

Not1ry Public 

Commission No. 7389422 

My C<l~Otl Er;:!rvs 613012015 

My Appointment Expires: 

C/Jo hotf> 

l 1 

!K0348SOO.OOC; J}:ZI04872.doc 

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(b)(6) 

(b)(6) 

...................................... ............................................................. ..................................... ... ...... ......... . .1 

......................................... 

I 

STATEOF ) .. ~~ )ss: COUNTYO~) 

. On this~ day of ~2011 ~before me> the undersigned, a Notruy_Public in and 

for said County and States personally appeared, 0. Reid Teaney, known to me to be the person 

described herein, who executed th~ foregoing instrument, and acknowledged that he executed the 

same as his free aot and deed. 

WITNESS my hand and Notarial Seal subscribed and affixed n said County and State. 

the day arul year in this certificate above wr ~:; Publoc . . . ~ -·· ._._l!>Jl§2. 

My Appointment Expires: 

~,ktb-o;t{-

(K0043S06.00C; l}2!04872.doc 

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