SKTTLgMgNT AND RELEASE AGRI.i:I~: MI.: NT 

This Settlement and Release Agreement ("Agreement") is made as of this 27th day of 

June 2013, by, between, and among the following undersigned patties: 

The Federal Deposit Insurance Corporation as Receiver for United Security Bank 

("FDIC-R") and Pierce Neese (the "Settling Defendant") and Cincinnati Insurance Company 

("CIC"). (individually, the FDIC-R, the Settling Defendant, and CIC may be refen·cd to herein 

as a "Party" and collectively as the "Parties"). 

RECITALS 

WI IEREAS: 

Prior to November 6, 2009, United Security flank (the "Bank") was a .depository 

institution organized and existing under the laws of Georgia. 

On November 6, 2009, the Bank was closed by the Georgia Department of nanking and 

finance and, pursuant to 12 lJ .S.C. § 1821 (c), the FDIC-R was appointed receiver. In 

accordance with 12 U.S.C. § 182l(d), the FDIC-R 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-R as receiver succeeded were any and all of the 

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

employees arising from the performance, nonperformance, and manner of performance ofthcir 

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

On January 6, 2010, the FDIC-R sent a demand letter to the Settling Defendant setting 

forth allegatjons against the Settling Defendant (the "Demand"). The Settling Defendant has 

denied liability for the allegations set f011h in the Demand. 
On October 23, 2013, the FDIC-R filed a complaint for money damages against the 

Settling Defendant. Those claims for damages are now pending in the United States District 

Court for the Northern District of Georgia in FD!C-R v. Neese, Case No. 1: 12-CV -3694 (N.D. 

Ga.) (the "D&O Action") against the Settling Defendant, who served as an officer and/or director 

of the Bank. The Settling Defendant denied liability in the D&O Action. 

CIC issued Financial Institutions Blue Chip .Policy No.j ................................. j(thc''.P.oHcy'.'.)to ............. (!?.1(4.) 

the Bank and the Settling Defendant sought coverage under the Policy in response to the 

allegations set fm1h in the D&O Action. CJC reserved its rights under the Policy for the claims 

asserted by the FDJC-R against the Settling Defendant in the D&O Action. 

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

avoid the unce1tainty, trouble, and expense of litigation. 

NOW, THEREFORE, in consideration of the above Recitals, which are expressly 

incorporated herein by reference, as well as 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 FI}IC-R 

A. As an essential covenant and condition to this Agreement, the Settling Defendant 

and CIC, collectively, agree to pay the FDTC-R the sum of six hundred twenty-five thousand 

dollars and no cents ($625,000.00) (the "Settlement Funds") to be paid as set fm1h below. 

I3. Upon the execution of an original, or originals in counterpm1s, of this Agreement 

by each ofthe undersit,rned Parties to this Agreement, but no later than July 15, 20 13 (the 

"Payment Due Date") provided that this Agreement has been executed by the FDIC-R and 

distributed to the other Parties no later than June 28, 2013, the Settlement Funds shall be 
delivered to the FDIC-R by check drawn upon a depository institution acceptable to FDIC-R 

which shall he sent by certilied mail or overnight delivery to the following addressee: FDIC 

Legal Division, A ttcntion: Karen Munce-Gatcs, 1601 Bryan Street, Dallas, TX 7 5201. The check 

or transmittal letter enclosing the check shall include the 1o1Jowing information: BANK: Federal 

(b)( 4 --l:I~,wR--Ilank-ef-.Nc-w-¥6-rk-;--ROO'Fl-NB-# --- l FOR CREDlT TO: FDIC 

(b) ( 4 ) ........................ NationaLLiquidation--Acceunt;-Af;GeHNT#;--1·················· ll;und code(s)· L....::J r:::J(··un·l··t<>-d ..... <:-'ccur"Jty (b),(4 ) 't:1' ~ a 

Bank); Account onicer to be notified and phone number: Michael Sova, 904.256.3802. In the 

event that the Settlement Funds are not delivered to the FDIC-R by the Payment Due Date, 

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

Date until the date of payment, provided that no interest shall accrue prior to the Payment Due 

Date. 

C. In addition, and without waiving any other rights that the FDIC-R may have, in 

the event that all Settlement Funds arc not received by the FDIC-R on or before the Payment 

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

of all Settlement Funds (jncluding all accrued interest) to declare this Agreement null and void, 

shall have the right to extend this Agreement for any period of time until it receives all 

Settlement Funds (including all accrued interest), and/or shall have the right to enforce this 

Agreement against the Party or Parties failing to deliver their share of the Settlement Funds, in 

which event the non-delivering Party, or Pat1ies, agree to jurisdiction in r cderal District Court in 

Georgia and agree to pay all ofthe FDIC-R's reasonable attorney's fees expended in entorcing 

the terms ofthis Agreement. Any decision by the FDIC-R to extend the terms of this Agreement 

ur to accept a portion of the ScHJement Funds shall not prejudice its rights to declare this 

Agreement null and void with respect to the non-delivering Party, or Parties, at any time prior to 
receipt of all Settlement Funds (including all accrued interest) or to enforce the terms of this 

Settlement Agreement; provided, however, that in the event the FDIC-R declares this Agreement 

null and void, the FDIC-R will return all amounts paid to it under this Agreement by the nondeljvering Party, or Patiies. In no event shaiJ the FDIC-R declare this Agreement nu11 and void 

with respect to any Party that has delivered its share ofthe Settlement Funds on or before the 

Payment Due Date. The failure of one Party to deliver its share of the Settlement Funds shall not 

affect the validity of this Agreement with respect to a Party that has delivered its share of the 

Settlement Funds. 

SECTION JJ: Stipulation and Dismissal 

Upon execution ofthis Agreement by each of the undersigned Parties, and receipt of the 

Settlement Funds plus accrued interest, if any, the FDIC-R shall dismiss the D&O Action. The 

FDIC-R and Settling Defendant agree to enter stipulation(s) providing that the djsmissal of the 

D&O Action shall be with prejudice, with each pa1iy to bear its own costs as these were 

originally incutTcd. 

SECTJON Ill: Releases 

A. Release of Settling J1<;{cndant by the FDIC-R. 

Effective upon receipt in full of the Settlcmcnt Funds plus accrued interest, if any, and 

the dismissal of the D&O Action described in SECTION I and SECTION II above, and except as 

provided in Section Ill. H. below, the FDIC-R, for itself and its successors and assigns, hereby 

releases and discharges the Settling Defendant and his respective heirs, executors, administrators, 

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

actions, and causes of action, direct or indirect, in Jaw or in equity, belonging to the FDIC-R, that 

arise from or relate to, the performance, nonperformance, or manner of performance of the 
Settling Defendant's functions, duties, and actions as an officer and/or director of the Bank 

including, without limitation, the allegations in the Demand or D&O Action. 

B. Release of Covered Persons by the t"'DTC-R. 

Effective simultaneously with the release granted in Section TTL/\. above, and except as 

provided in Section lll.ll. below, the FDlC-R, for itself and its successors and assigns, hereby 

releases and discharges all former directors, officers, and employees of the Bank (collectively, 

the "Covered Persons") and their respective 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 equity, based on negligence, gross negligence, 

and/or breach of fiduciary duty, belonging to the FDJC-R that arise from or relate to the 

allegations in the Demand and/or 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. 

C. Release of the FDIC-R by the Settling Q~fendant. 

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

Defendant, on behalf of himself and his heirs, executors, administrators, agents, representatives, 

successors, and assigns, hereby releases and discharges the .FDIC-R and its employees, officers, 

directors, representatives, successors, and assigns, from any and all claims, demands, obligations, 

dam;:tgcs, actions, and causes of action, direct or indirect, in law or in equity, that arise from or 

relate to the performance, nonperformance, or manner of performance ofthc Settling 

Defendant's functions, duties, and actions a~ an officer and/or director of the Bank or that arise 

from or relate to the Policy including, without limitation, tbc allegations in the Demand or D&O 

Action. 
D. Release of CIChy the FDIC-R. 

Eflective simultaneously with the releases granted in Sections liLA, lli.B., and JIJ.C. 

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

its parents, subsidiaries, affiliates, and reinsurers and their rcspccti vc 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 Policy. The FDIC-R agrees that any interest, if any, it may have had 

under the Policy is extinguished. 

E. Release pf CJC by Settling Defendant. 

Effective simultaneously with the releases granted in Sections liLA. and III.C. above, the 

Settling Defendant, on behalf of himself, and his heirs, executors, administrators, agents, 

representatives, successors, assigns, and all other "Insureds" under the Policy, hereby releases 

and discharges CIC, its parents, subsidiaries, af1iliates, and reinsurers and their respective 

employees, officers, directors, agents, representatives, 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 aJlegations that were asserted or could have been asserted 

in the Demand or the D&O Action, except with respect to "Defense Costs," as that term is used 

in the Policy, that have been incuncd or may be incutTcd in the future by the Settling Defendant 

in connection with the D&O Action. 

F. Release of the FDJC-R hy CIC. 

Eflective simultaneously with the release granted in Section III.D. above, CIC, for itself 

and its successors and assigns and on hchalf of its parents, subsidiaries, affiliates, and reinsurers 

and their successors and assigns, hereby releases and discharges the FDIC-R and its employees, 
officers, directors, agents, representatives, successors, and ac;signs 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. 

G. Release of Settling Defendant by CIC. 

Effective simultaneously with the releases granted in Section Ili.E. above, CIC, on behalf 

of itself and on behalf of its parents, subsidiaries, ai1iliates, reinsurers and their respective 

employees, oHlcers, directors, agents, representatives, and assigns hereby releases and 

discharges the Settling Defendant and his 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 Jaw or in equity, that arise from or relate to the 

allegations that were asserted or could have been asserted in the Demand or the D&O Action, 

except with respect to "Defense Costs," as that term is used in the Policy, that have been incun-cd 

or may be incurred in the future by the Settling Defendant in connection with the D&O Action. 

II. Express Reservations fron). Releases hy the FDIC R 

I. Notwithstanding any other provision by 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 the Settling Defendant, the Covered Persons, 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 the FDlC-R, the Bank, other 

financial institutions, or to any other person or entity including, without limitation, any claims 

acquired hy the FDIC-R as successor in interest to the f3ank or any person or entity other than the 

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

c. which are not released in Sections liLA., IJJ.B., and lll.D. 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 ofits supervisory or 

regulatory authority or to diminish its ability to institute administrative enforcement proceedings 

seeking removal, prohibition, or any other administrative enforcement action which may arise by 

operation oflaw, rule, or regulation. 

3. Notwithstanding any other provision, this Agreement docs not purport to 

waive, or intend to waive, any claims that could be brought by the United States through either 

the Dcpatimcnt of Justice, the United States Attorney's Office for the Northern District of 

Georgia or any other federal judicial district. In addition, the FDIC-R specifically reserves the 

right to seck court ordered restitution pursuant to the relevant provisions of the Victim and 

Witness Protection Act, 18 U .S.C. § 3663, ct. seq., if appropriate. 

SKCTION IV: WAIVER OF HIVIDENDS ANI> I'ROCEEDS FROM LITIGATION 

To the extent, if any, that Settling Defendant is or was a shareholder of the Bank or its 

holding company and by virtue thereof is or may be entitled to (I) a dividend, payment, or other 

distribution upon resolution of the receivership of the Bank or (II) proceeds from any litigation 

that has been or could he brought against the United States based on or arising out oC in whole or 

in part, the dosing of the Bank, or any a11cgcd acts or omissions by the FllLBH, OTS, RTC, 

FDIC, the FSLIC Resolution Fund or the United States government in connection with the Bank, 

its conservatorship or receivership, he hereby assigns to the FDIC-R any and all rights, titles and 

interest in and to any and all such dividends, payments, distributions, or proceeds. 
SECTJON V: Representations and Acknowledgements 

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

regarding any claim or of coverage under the Policy. The Settling Defendant expressly denies 

any liability regarding the Demand or D&O Action. 

H. Execution in Counterparts. This Agreement may be executed in counterparts by 

one or more of the Pat1ies named herein and all such counterparts when so executed and 

delivered shall together constitute the Jinal Agreement, as if one document had been signed by 

all Parties hereto; and each such counterpart, upon execution and delivery, shall be deemed a 

complete original, binding the Party or Pa11ics subscribed thereto upon the execution by all 

Patties to this Agreement. 

C. Binding Effect. Each ofthe undersigned persons represents and warrants that 

they arc a Party hereto or arc authori:t.cd to sign this Agreement on behalf of the respective Party, 

ami that they have the full power and authority to bind such Patty to each and every provision of 

this Agreement. This Agreement shall be binding upon and inure to the benefit of lhc 

undersigned Pat1ies and their respective heirs, executors, administrators, representatives, 

successors, and assigns. 

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

according to applicable f~derallaw or, in its absence, the laws of the State of Georgia. 

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

agreement and understanding bet ween and among the undersigned Parties concerning the matters 

set forth herein. This Agreement may not be amended or modified except by another written 
instrument signed by the Pat1y or Parties to be bound thereby or by their respective authorized 

atlorncy(s) or other rcprcscntative(s). 

F. ,Sp~cific _R9PI~~cntations, Warranties, and Disclaimers. The Settling Defendant 

expressly acknowledges that in determining to st:ttle the claims released here, the FDJC-R has 

reasonably and justifiably relied upon the accuracy of financial infonnation in the financial 

statement submitted by the Settling Defendant to the FDIC-R. 'Jbe Settling Defendant swears 

and affirms that all financial information in the financial statement prepared by him and provided 

to the FDJC-R was true and accurate at the time of submission. The FDlC-R has no independent 

obligation to verify the complt:tent:ss and accuracy of that financial infmmation. If, in his 

financial statement, the Settling Defendant has failed to disclose any material interest, legal, 

equitable, or beticficial, in any asset, the Settling Defendant agrees to cooperate fully with the 

FDIC-R to transfer his interest in the asset to the FDIC-R and to sign any and all documents 

necessary to effectuate the transfer. 

G. Re~~Q.J;abj~_CQ~?.P~ration and Notice. 

l. The Parties agree to cooperate in good faith to effectuate a11 the terms and 

conditions of this Agreement and any action required under this Agreement including doing or 

causing their agents and attorneys to do whatever is reasonably necessary to effectuate the 

delivery, execution, Jiling, recording, and entry of any documents necessary to conclude the 

D&O Action and to otherwise perform the tenns of this Agreement. 

2. further, the Settling Defendant agrees to reasonably cooperate with the 

FDIC-R in connection with any action required under this Agreement. Any such coopt:ration 

that involves any out-of-pocket costs is subject to reasonable reimbursement by the FDIC-R 
pursuant to its intemal guidelines and policy fur such reimbursement. Such cooperation shall 

consist of: 

a. producing all documents requested by the FDIC-R without the 

necessity of subpoena, as determined by the FDIC-R, in its sole discretion, to be relevant to the 

Hank; 

b. making himself available upon request by the FDIC-R at 

reasonable times and places for interviews regarding facts, as detem1incd by the FDIC-R, in its 

sole discretion, to be relevant to the Bank; 

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

determined by the FDIC-R, in its so]c discretion, to be related to the Hank, without the necessity 

of subpoena; 

d. signing truthful affidavits upon request by the FDIC-R regarding 

any matter as detcnnined hy the FDIC-R, in its sole discretion, to he relevant to the Hank. 

3. Notwithstanding the cooperation obligations set forth in Section V.G.2., 

the Settling Defendant docs not waive any privi]cgcs he may possess under the Fitlh Amendment 

to the Constitution of the United States of America. 

4. The Parties further agree that in the event any issue arises related to 

effectuating the terms and conditions of this Agreement other than terms and conditions 

regarding receipt of the full Settlement Funds, a Party will first give written notice to the other 

Party or Pat1ies, whose performance or cooperation is required. In the event the respective 

Parties acting in good faith cannot resolve the issue or obtain the requested performance or 

cooperation within a reasonable period, not to exceed thirty (30) days after notice is given, then 

the Parly or Parties may proceed with all available remedies at law or in equity. 
H. Advige of Counsel. Each Party hereby acknowlcdgc..c;; that he or it has consulted 

with and obtained the advice of his or its counsel prior to executing this Agreement and that this 

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

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. 

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

FEDERAL DEI)OSIT INSURANCE CORPORA TJON 

AS Rf!:Cl£IVER FOR UNITED SECURITY BANK 

Date: \, '":£; 1 

BY: 1- : 

TITLE: ( ( ' "' ;-,.-........ __,_1 _ _ ___ _ 

~ . (\ ~ PRlNT NAME: vv, 2. ... k.. tt . !(..\ c . .._ \c 

Date: - --- - ------------

BY: 

PRINT NAME: 
H. Advice of CounseL Each Patty hereby acknowledges that he or it bas consulted 

with and obtained the advice of his or its counsel prior to executing this Agreement and that this 

Agreement has been explained to that Party by his or its counseL 

lN WITNESS WHEREOFf the Parties hereto have caused this Agreement to be executed 

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

FEDERAL DEPOSIT INSUR.-\NCE CORPORATION 

AS RECEIVER FOR UNITED SECURITY BANK 

Date:----------------

BY: 

TITLE: -------------

I 

A.ker~ 
(b)(6) ··············································································································································································· 

ClNCINNATIINSTJRANCE COMPANY 

BY: 

TITLE; _ .As>« t,li::t.:g_ M~~- a.,rc:.,_ 

PRlNTNA\1E: /)tf/t.tyM/ C ~v~~