SETTLEMENT AND RELEASE AGREEMENT 

This Settlement and Release Agreement ("Agreement") is made as of this_ day of _ , 

201_, by, between, and among the following undersigned parties: 

The Federal Deposit Insurance Corporation, as receiver of Security Bank, N.A. ("FDICR"), and Timothy H. Kenney, P.A. ("Kermey P.A.") and Timothy H. Kenney ("Kermey") 

(collectively the "Kermey Parties"). Individually, the FDIC-R and the Kenney Parties may be 

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

RECITALS 

WHEREAS: 

Prior to May 4, 2012, Security Bank, N.A. ("Bank") was a depository institution 

organized and existing under the laws of the United States. 

On May 4, 2012, the Bank was closed by the Office of the Comptroller of the Currency 

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

12 U.S.C. § 182l(d), the FDIC-R-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 actions against its former directors, officers, attorneys and 

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

respective functions, duties and acts as directors and/or officers of the Bank (the "Bank's 

Claims"). 

Prior to FDIC-R's acquisition of the Bank's Claims, on April 1, 2011, Kenney P.A. 

corrunenced a civil action styled Timothy H. Kenney, P.A. vs. Security Bank, N.A., Case No. 50-

2011-CA-004926-XXXX-MB-AI in the Circuit Court for the Fifteenth Judicial Circuit in and for 

Palm Beach County, Florida (the "Action") seeking $67,562.31 in fees for legal services 

allegedly performed for the Bank and seeking to impose retaining and charging liens on the sum 

of $56,353.50 representing the proceeds of settlements of the Bank's claims against third parties 
that were held in trust by Kenney P .A (the "Trust Account Funds"). The Bank then asserted 

counterclaims for damages against Kenney P .A. and Kenney alleging breaches of their duties to 

the Bank as legal counsel and, with respect to Kenney, breaches of his duty as a director. 

Following FDIC-R's acquisition of the Assets, the Action was removed to the United States 

District Court for the Southern District of Florida in Timothy H. Kenney, P.A. v. Security Bank, 

N.A. Case No. 12-80852-CN-Middlebrooks (the "Removed Action''). FDIC-R has denied 

liability to Kenney P .A. for the entire amount of damages demanded and the Kenney Parties 

have denied liability to FDIC-R for breaches of any duty as legal counsel and/or director in the 

Removed Action. 

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

avoid the uncertainty, trouble, 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: Payments 

A. Payment to FDIC-R: As an essential covenant and condition to this Agreement, 

the Kenney Parties agree to pay the FDIC-R the sum of $65,000 ("the Settlement Funds") of 

which sum of $60,000 is to be paid by Continental Casualty Company ("CCC") and the sum of 

$5,000 is to be paid by the Kenney Parties. 

B. Delivery of Settlement Funds: Upon the exe'Cution of an original, or originals in 

counterpart, of this Agreement by each of the undersigned Parties to this Agreement, the 

Settlement Funds shall be delivered to FDIC-R by direct wire transfer into an account designated 

by FDIC-R or by certified or cashier's check drawn upon a depository institution acceptable to 

FDIC-R. In the event that the Settlement Funds are not delivered to the FDIC-R (or its counsel) 

by December 1, 2013, interest shall accrue on all unpaid amounts at the rate of 5% per annum 

from December 1, 2013 through the date of payment. However, if said Settlement Funds are not 

delivered to the FDIC-R by December 1, 2013, as a result of the FDIC-R's failure to execute this 

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Agreement, no interest shall accrue until the day after the FDIC-R executes the Agreement. 

C. Payment to Kenney P.A.: As an essential covenant and condition to this 

Agreement, and strictly conditioned upon FDIC-R's receipt of, and the clearance of any item 

representing the Settlement Funds, Kenney P. A. shall I) receive Receivership Certificates in the 

face amount of$12,000 on or before December 1, 2013; and 2) retain for their own accounts the 

Trust Account Funds in the amount of $56,353.50. Upon execution of this Agreement by each 

of the undersigned parties and payment of the $5,000 by Timothy H. Kenney, P.A. to the FDICR, Timothy H. Kenney, P.A. shall be expressly authorized to disburse the Trust Account Funds 

into Timothy H. Kenney, P.A.'s possession. 

D. Provided that the FDIC-R has fully executed the Agreement, in addition, and 

without waiving any other rights that the FDIC-R may have, in the event that all Settlement 

Funds (including all accrued interest) are not received by the FDIC-R on or before December 1, 

2013, then, the FDIC-R, in its sole discretion, shall have the right at any time prior to receipt of 

all Settlement Funds (including 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 Kenney Parties, in which event the Kenney Parties agree to jurisdiction in 

Federal District Court for the Southern District of Florida and agree that the prevailing party 

shall recover its reasonable attorney's fees. Any decision by the FDIC-R to extend the terms of 

this Agreement or to accept a portion of the Settlement Funds, after December 1, 2013, shall not 

prejudice its rights to declare this Agreement null and void, 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. 

SECTION II: Stipulation for Dismissal 

Upon execution of this Agreement by each of the undersigned Parties, the parties shall 

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execute a Joint Stipulation for Dismissal with Prejudice. The Stipulation shall provide that the 

Parties shall each bear their own costs and attorneys' fees. The Stipulation shall be held in 

escrow by counsel for FDIC-R pending receipt and clearance of the Settlement Funds, plus any 

accrued interest (the "Escrow Release Event"). 

SECTION III: Releases 

A. Release of Individual Kenney Parties by FDIC-R. 

Effective upon the Escrow Release Event, and except as provided in Paragraph III.C. 

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

of the Kenney Parties and their respective heirs, executors, employees, officers, directors, 

administrators, insurers, 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 

FDIC-R, or that arise from or relate to the causes of action asserted as counterclaims in the 

Removed Action. 

B. Release of FDIC-R by the Kenney Parties. 

Effective simultaneously with the release granted in Paragraph liLA. above and except as 

provided in Paragraph III. D., the Kenney Parties, on behalf of themselves individually, and their 

respective heirs, executors, administrators, agents, successors and assigns, hereby release and 

discharge FDIC-R, and its employees, officers, directors, 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 Bank or to the performance, nonperformance, or 

manner of performance of the Kenney Parties' respective fimctions, duties and actions as legal 

counsel and/or a director of the Bank including without limitation the causes of action alleged in 

the Removed Action. 

C. Express Reservations From Releases By FDIC-R. 

1. 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: 

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a. against the Kenney Parties 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 claims acquired by FDIC-R as successor in interest 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 arc not expressly released in Paragraphs liLA. 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-R in the exercise of its 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 of law, rule or 

regulation. 

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

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

the Department of Justice, the United States Attorney's Office for the Southern District of Florida 

or any other federal judicial district. 

D. Express Reservations From Releases By Kenney Parties. 

1. Notwithstanding any other provision, by this Agreement, the Kenney Parties 

do not release, and expressly preserve 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 not expressly released in this Agreement; and 

b. which arc not expressly released in Paragraph III.B above. 

SECTION IV: Waiver of Dividends 

Except as set forth in Paragraph I.C. above, to the extent, if any, that Kenney Parties are 

or were shareholders of the Bank and by virtue thereof arc or may have been entitled to a 

dividend, payment, or other pmrata distribution upon resolution of the receivership of the Bank, 

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they hereby knowingly assign to the FDIC-R any and all rights, titles and interest in and to any 

and all such dividends, payments or other pro rata distributions. 

SECTION V: Representations and Acknowledgements 

A. No Admission of Liability. The 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. 

B. 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 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. A facsimile, .pdf or electronic copy of this Agreement and any signature hereon 

shall be considered for all purposes as originals and delivery of an executed counterpart. 

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

they are a party hereto or 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, administrators, representatives, 

successors and assigns. 

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 Florida 

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. This Agreement may not be amended or modified except by another written 

instrument signed by the party or parties to be bound thereby, or by their respective authorized 

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(b)(6) 

attorney(s) or other representative(s). 

F. Reasonable Cooperation. The undersigned parties agree to cooperate in good 

faith to effectuate all the tenns 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 the Stipulation and any other documents 

necessary to conclude the Removed Action and to otherwise perform the terms of this 

Agreement. 

G. Advice of Counsel. Each party hereby acknowledges that it has consulted with 

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

has been explained to that party by his or her counsel. 

H. Authority to Enter Into Agreement. Each individual executing this document 

represents that he or she has the express authority to act on behalf of the Party for whom he or 

she is purporting to act. 

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. 

TITLE: Counsel - FDIC - Professional Liability 

PRINT NAME: Steven C. Morrison 

Dare:~ T!MOTIIYH.KEN~ ~----~------~fi~L-~-----------~---- TITLE: ~-~. . .... -

PRINTNAME:~-:!fP~T 

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