SETTLEMENT AND RELEASE AGREEMENT 

This Settlement and Release Agreement C' Agreement11) is made by, bel ween, and among 

the following undersigned parties: 

The Plaintiff Federal Deposit Insurance Corporation i:lS Rccciwr for Montgomery Bank 

& Trust, Ailey, Oeorgia (''"FDIC-R"); Melanie Dami~n, as sole Dircclor for Montgomery County 

Bankshares, Jnc. ("MCBl") and as Receiver for PFOBI, LLC ("PFGBl") (collectively "SEC-R"), 

and St. Paul Mercury Insurance Company ("St. Paul") (individually, the FDIC-R, the SEC-Rand 

St. Paul, may be referred to h.erein as "Party, and collectively as the "Parties"). 

RECITALS 

WH'ER'RAS: 

Prior to July 6, 20 12, Montgomery Bank & Trust, Ailey, Georgia ("Bank") was a 

depository institution organi7.ed and exi ng under the laws of the State of Georgia. 

The B<mk was wholly owned by Montgomery County Ban.kshares, Inc. which, in nun, 

was majority owned (72%) by P.FGBI. Aubrey Lee Price ("Price") was lhe managing member 

(b)( 4 )1(1:>1 .... .andf .............................................. . lofPFGBI. 

(6) ~t. Paul issued a }'inancial Institution Bond, Policy NoJ._ ___ ... _ ........ ...Jf (th~''Bond"),tothe ................... (1:>)(4,) 

Bank for the period of December 31, 2011 to December 31, 2012. The Bond provided a Single 

Loss Limit of Liability of $1 million for employee dishonesty. 

The Bank, MCBI, and PFGBl are all listed as Insureds \UlCkr the Bond, wilh MCBI being 

the First Named Insured. 

On July 6, 20 12, the Georgia Department of Ranking and Finance ("GDBF") closed the 

Dank and, pursuant to 12 U.S.C. § 182l(c). the Federal Depositlnsurancc Corporation was 

appointed Receiver. In accordance with 12 U.S.C. § l 82I(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 FDTC-R succeeded were all of the Bank's claims, 

demands, and causes of action against St. Paul relating to and arising under the Bond. 
On August 10, 2012, the District Court for the Northern District of Georgia (the "District 

Court") presiding over the ca:se styl~d Securities and Exchange Commission v. Aubrey l,el~ Price 

et al. ~ Case No. 1: 12~CV -2296 TCI3, appointed Ms. Damian as the Receiver for the Estate of 

Aubrey I ,ee .Price and for PFG, LLC, PFGBI, LLC, Montgomery Asset Management, LLC f/k/a 

P.FG Asset Management, LLC (Florida), and Montgomery Asset Management, LLC f/k/a PFG 

Asset Management, LLC (Georgia). [D.E. 20]. 

Pursuant to the District Court's Order Appointing the Receiver (the "Receivership 

Order"), the Receiver is obligated to, among other things, "sue for and collect, recover, receive, 

and take ~nto possession from third patties all Receivership Property and records relevant 

the•·cto[T' [D.F. 7.0 at §7(B)J. Furthermore, the Receivership Order authorizes the Receiver 

"[t]o take such action as necessary and appropriate for the preservation of Receivership Propetty 

or to prevent the dissipation or concealment of Receivership Property[.]" [D.n. 20 at §7(H)]. 

Among the assets to which the SEC-R succeeded were all of the Receivership Defendant's 

claims, demands, and causes of action against St. Paul relating to and arising under the Bond. 

On January 7, 201 ::!, the FDIC-R submitted a Proof of Loss to St. Paul alleging a loss 

during the policy period caused by the dishonest actsof Price ("FDIC~R Bond Claim"). 

The SEC-R, in her capacity as Receiver ofPJIGBI, subsequently filed a Pmof of Loss 

with St. Paul on behalf of PFG.Bl, alleging a loss during the policy period caused by the 

dishonest acts of Price. 

The SEC-R, in her capacity as sole Director ofMCBI, also filed a Proof of Loss with St. 

Paul on behalf of MCBI, alleging a loss during the policy per~od caused by the dishonest acts of 

Price (collectively the Proofs of Loss filed on behalf ofPFGBI and on behalf of MCBI are 

referred to as "SEC-R Bond C:laim"). 

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 ntlter, as fbllows: 

2 
(b )(5) ,m 

(b )(6) _ 

SECTION 1: Payment to FDIC~R and SEC-R 

A. As an essential covenant and condition to this Agreement, St. Paul agrees to pay 

the FDIC-R the sum of ONE HUNDRED TWENTY THOUSAND AND 00/100 DOLLARS 

($120,000.00) ("FDIC-R Settlement Payment'') and agrees to pay the SEC-R the sum of ONE 

HUNDRED EIGHTY THOUSAND 00/100 DOLLARS ($180,000.00) ("SEC-R Settlement 

Payment"), for a total payment of THREE HUNDRED THOUSAND AND 00/100 DOLLARS 

($300,000.00) (collectively, the "Settlement Payments"). The Settlement Payments witl be 

made within fifteen (15) husiness days after the District Court's order approving this 

Agreement. 

H. St. Paul shall deliver the FDIC-R Settlement Payment by direct wire transfer into 

the following account: Federal Home Loan Bank. of New York, New York Main Office, 101 

Park Avenue, New York, NY 10178-0599, Routing No.I H H l-AccounlNo.l H.HHH-1 ••••••••••••(p)(4) 

for credit to FDIC National Liquidation Account Montgomery Bank & Trust, Ailey: Georgia 

(F!Nl0448)ProfessionalLiabi1ityfH I DIF Fund. Asset Number i~ I ············ (p)( ) 

.. Contact=f···· IDRR Investigations, (972) 761-8112. 

C. St. Paul shall deliver the SEC-R Settlement Payment by direct wire transfer into 

the following account: Gibraltar Bank, FSB, 55 Alhambra Plaza, Miami, FL 33134, Beneficiary 

(b)(4) ,,,,. ___ Ac.J.:,mmtL:::: lRouting/ABA#-:l···· I Beneficiary: Receiver's Account Estate of 

Aubrey I ,ee Price PFG LLC, _Beneficiary Address: 1000 Drickell A vc., Ste. 1 020, ~iami, FL 

JJ 131. 

The Parties agree that time h; of lhe essence with respect to the obligation to make the 

Settlement Payments. 

D. If the FDIC-R and the SEC-R do not receive their respective Settlement 

Payments in full on or before the date determined by subsection A above, then the .FDIC-R 

and/or SEC-R, at its sole discretion, shall have the right at any lime prior to receipt of it~ 

~etllement Payment in full (including all accrued interest) to: 

1. Extend the period of time t(n the Settlement Payment; or 

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2. Enlbrcc this Agreement, in which event St. Puul agrees to jurisdiction in the 

District Court Case No. 1:12-CV-2296 TCB.and to pay all of the FDIC-R's and the SEC-R's 

reasonable attorneys' fees unci costs expended in enforcing the tcnns ofthls Agreement; or 

3. Terminate the Agreement and institute an action on the FDIC-R's and/or SEC-R's 

claims. St Paul further agrees to waive any defense based on any statute oflimitations that 

would bar any of the FDIC-R's or the SEC-R's claims relating to and arising under the Dond and 

waive all objections, dcHmses, claims or counterclaims, and covenant and agree not to asset1 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 of time under Section I.D.l for delivery of the Settlement Payment or 

acceptance of a portion of the Settlement Payment shall not prejudice the FDIC-R' s or the SECR's rights to take any of the actions set fotth in Section I.D.2 through LD.4 at any time prior to 

receipt of their respective Settlement Payment (including all accrued interest) in full. 

SECTION II: Releases 

A The f'DIC-R's Release. 

Upon receipt of the FDIC-R Settlement Payment in full by the FDIC-R, as provided in 

Section l, and except as provided in Section II.E, the FDIC-R, for itself and its successors <Uld 

assigns, herehy releases and discharges St. Paul and its parents, subsidiaries, affiliates and 

reinsurers, and their respective employees, officers, directors, agents, l'Cprcscntativcs, 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 a1·ise from or relate to the FDIC-R 

Bond Claim. 

B. St. PauPs Release 9fFPTC-R. 

Effective simultaneously with the release granted in Section II. A. above, St. Paul for 

itself, and its parents, subsidiaries, affiliates and reinsurers, and their respectiv~ ernployct:s, 

officers, directors, agent~ • .-epresentatives, attorneys, successors and assigns, hereby releases and 

4 
discharges the FDIC-R and its employees, officers, directors, agents, representatives, attorneys, 

successors, and assigns, from nny and all claims, demands, obligations, damages, actions, ~tnd 

causes of action, direct or indirect, in law or in equity, that arise from or relate to the FDIC-R 

Bond Claim. 

C. The SE~-_R's Relea_~~-

Upon receipt of the SEC-R Settlement Payment in fi.tll by the SEC-R, as provided in 

Section 1, and except as provided in Section ILE, the SEC-R, for it~clf and its parents, 

subsidiaries, affiliates and reinsurers, and their respective employees, officers, directors, agents, 

representatives, attorneys, successors and assigns, hereby releases aml discharges St. Paul and its 

parents, subsidiaries, affiliates and reinsurers, and their respective employees, attomeys, 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 ectuity, in 

contract or in tort, that arise from or in any way relate to the SEC-R Bond Claim including but 

not limited to any principal claims or statutory or common law bad f'hlth claims. 

f)_ :-:t. paurs Releas~~fSEC-R. 

Effective simultaneously with the release granted in Section II. C. above, St. Paul for 

itself, and it~ parents, subsidiaries, affiliates and reinsurers, and their respective receivers, 

employees, attorneys, officers, directors, agents, representatives, attorneys, successors and 

assigns, hereby releases and discharges the SEC-R and its respc?tive employees, officers, 

directors, representatives, attorneys, successors and assigns, from 'my and all claims, demands, 

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

contract or in tort, that arise from or in any way relate to the SEC-R Bond Claim, including but 

not limited to any plincipal claims or statutory or common law bad faith claims. 

E. Express Reservations from Releases by FDIC-R and SEC-R. 

l. Notwithstanding any other provision in thi~ 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: 

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a. Against St. Paul or any other person or entity for I iability, if any, incum~d 

as the maker, endorser or guarantor of any promissory note or indebtedness payable or owed by 

them to FDIC-R, the Dank, other financial institutions, the SEC-R, 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 cntjty other than Rank; and 

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

SEC-R in this Agreement. 

2. Notwithstanding any other provision in this Agreement, the SEC-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 actinn arising from St. Paul or SEC-R's breach of this 

Agreement, if any. 

3. Notwithstanding any other provision of this Agreement, nothing in th.is 

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

jurisdiction and authority of the Fedcr:al Deposit Thsurance Corporation in the exercise of jts 

supervisory or regulatory authority or to diminish its abil ity to institute administrative 

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

pursuant to its supervisory or regulatory authority against any person. 

4. Notwithstanding any other provisi<>.n of this Agl'eement, this Agreement does not 

purport to waive, or intend to waive, any claims which could he brought by the United States 

through either the Depatt ment of Justice, the United States Attorney's Oftice for any federal 

judicial district, or any other department or agency of the Unjted States as defin~d by 18 U.S . C. § 

6. [n addition, the FDlC-R specifically reserves the right to seek court ordered restitution 

pursuant to the 1elevant provisions ofthe Mandatory Victims Restitution Act, 18 U.S.C. §§ 3322 

and 3663, ct. seq., if appropdate. 

SECTION III:· Cooperation and Sub,·ogation 

The Parties affirm their understanding and agreement to be bound by the Bond provisions 

relating to cooperation and suhrogation and assignment rights as set forth in the Bond. The 

6 
Patties further agree that the FDIC·R's agreement with the SEC-R not to share in any 

distribution of the SEC-R' s proceeds from this settlement shall not be deemed an impairment of 

St. Paul's subrogation or other rights under the Bond. 

SECTION IV: Representations and Aclrnowlcdgements 

A. Authorized Signa,torie~. Each of the w1dcrsigned persons represent and wan:ant 

that they are Parties hereto or are authori.zed to sign this Agreement on behalf of the respective 

Party on behalf of whom he or she is signing, and that he or she has 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 w1dersigned Parties and their respective heirs, executors, 

trustees, administmtors, representatives, successors and assigns. 

B. No Admission of Li~1.bility. 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 by any of 

them regro·ding 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 tem1s. 

C. .Ex~cution htf-ounterparts. This Agreement may be executed in counterpatts by 

one or more of the Parties named herein and all such couuterpatts 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. 

D. 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. 

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

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

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

not be amended or modified, nor may any of its provisions be waived, except by another written 

instrument signed l;>y the Parties bound thereby, or by their respective authorized attomey(s), ot· 

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other reprcscntative(s). 

F. Rea~pable Coqperatton. The Parties agree to cooperate in good faith to 

effectuate all the terms and conditions of this Agreement, including doing or causing their agent~ 

and attorneys to do whatever is reasonably necessary to eflecluatc the signing, delivery, 

execution, filing, recording, and entry, of any documents necessary to perform the terms of this 

Agreement. 

G. Advice of Counsel. Each Party hereby acknowledges lhat it has consulted with 

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

has been explained lo that Pa1ty by his or her counsel. 

I-1. Notices. Any notices required hereunder shall be sent by first class mail, return 

receipt requested, and by email, to the following: 

If to the FDIC-R: 

Barbara Slott Pegg 

Counsel, Federal Deposit insurance Corporation 

3501 Fairfax Dr.,# B~7062 

Arlington, VA 22226 

(b)(6) _ _ -~-t===--_j 

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

and 

Alan Curley 

Robinson Curley & Clayt~n, P.C. 

300 South Wacker Drive, Suite 1700 

Chicago, Illinois 60606 

l ••••••••••••• •••••••••••••••••••••••o m•••••• 

Ifto SEC-R: 

Melanie E. Damian, Receiver 

c/o Kenneth Dante Murena, P.A. 

Damian & Valori, LLP 

1000 Brickell A venue, Suite 1020 

Miami, Florida 33131 

(b )(6) 

- - E I 

8 
(b )(6) ........... 

I. 

If to St. Paul: 

Michael. Caldwell 

Travelers Bond & Financial Products Claims 

1000 Windward Concourse, Suite 100 

Alpharetta, Georgia 30005 

l--· I 

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

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

J. No Confidentiality, All Parties acknowledge this Agl'eement shall not be 

confidential and will be disclosed pursuant to the Federal Deposit Insurance Corporation's 

applicable policies, procedures, and other legal requirements, and as required for the SEC-R to 

obtain the District Court's approval to enter into this Agreement. 

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

by each of them or their duly authori7.ed representatives on the dates hereinafter subscribed. 

Date: '7/ {~ J J.IJ f ~ r I 

FEDERAL ))EPOSIT INSURANCE 

CORPORATION S RECRIVJ!:R !~'OR 

MON~~~~~~~~~~ 

~ ................................... . 

By: 

Titl'-e-:: R=-e-c-e":""iv_e_r---r-----'""-::-""-'---

Print Name: Melanie E. Damian 

MELANIE E. DAMIAN AS 

))JRECTOR FOR MONTGOMERY 

COUNTY BANKSHARI!~S, INC. 

9 
Date: 

Date: 

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

By Titl''-c-=: S~o"T'le...,l~)i,...rc-c~to-t· _______ ....... 

Print Name: Melani~ E. Damian 

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... __ (_~)(~)