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 Bank of the 

Commonwealth ("FDIC-R"), and Emory Carlton Bowyer ("Settling Defendant'') (individually, 

the FDIC-R and the Settling Defendant may be referred to herein as "Party" and collectively as 

the "Parties"). 

RECITALS 

WHEREAS: 

Prior to September 23, 2011, Bank of the Commonwealth ("Bank») was a depository 

institution organized and existing under the laws of Virginia; 

On September 23,2011, the Virginia State Corporation Commission 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. § 182l(d), the FDIC-R succeeded to all1ights, 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 of the Bank's claims, 

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

the perl'onnance, nonperfonnance, and manner of perl'ormance of their respective functions, 

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

On September 19,2014, the FDIC-R ftled a complaint for money damages againstt 

among others, the Settling Defendant, who served as a director of the Bani<:. Those claims for 

damages are now pending in the United States District Court for the Eastern District of Virginia 

in an action captioned 17te Federal Deposit Insurance Corporation as Receiver for Bank of the 

Commonwealth v. Edward J Woodard, Jr., et al., No. 2:14~cv-00471-RGD-DEM ("D&O 

Action'} The Settling Defendant has denied liability in the D&O Action; 

The unde.rsigncd Parties deem it in their best interests to enter into thi::~ Agreement to 

4828·0392-6307 

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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 the FDIC-R 

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

calendar days following the date the FDIC-R executes this Agreement, the Settling Defendant 

agrees to pay the FDIC-R the swn of Sixty Thousand Dollars ($60,000.00) ("the Settlement 

Payment'} 

B. The Settling Defendant shall deliver the Settlement Payment to the FDIC-R by 

direct wire transfer into an account designated by the FDIC-R by notice to the attorneys for the 

Settling Defendant or by certified or cashier's check drawn upon a depository institution 

acceptable to the FDIC-R. 

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

date detennined by Section I.A. above, 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: 

l. Extend the period of time for the Settlement Payment, including interest 

accruing from the date detennined by Section I.A. above, through the date of payment at a rate 

calculated in accordance with 26 U.S.C. § 6621(a)(3); or 

2. Enforce this Agreement, .in which event the Settling Defendant agrees to 

jurisdiction in the United States District Court for the Eastern District ofVh·ginia and to pay all 

of the FDIC-R's reasonab]e attorney's fees and costs expended in enforcing the terms of this 

Agreement; or 

3. Tenninate the Agreemcn~ move to vacate any dismissal order, to which 

the Settling Defendant agrees to consent, and re-institute an action on the FDIC-R's claims. The 

Settling Defendant further agrce5 to waive any defense based on any statute of limitations that 

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would bar any of the FDIC·R's claims and waive all objections, defenses, claims, or 

cowrtercJaims, 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. Seek any other relief available to it in law or equity. 

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

acceptance of a portion ofthc 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 the 

Settlement Payment (including all accrued interest) in :fuU. 

SECTION ll: Stipulation and Dismissal 

Within ten business days a.t-'ler the latter of (1) 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 as against the Settling Defendant, executed by 

the attorneys for all Parties hereto, in the form attached hereto as Exhibit A, in the D&O Action. 

SECTION III: Releases 

A. The FDIC-R's Releases. 

Upon receipt of the Settlement Payment in full and except as provided in Section III.C., 

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

Defendant and his 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 FDIC-R, that mise from 

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

Defendant's respective functions, duties, and actions as a director of the Bank, including without 

limitation the causes of action alleged in the D&O Action. 

B. The Settling Defendanf s Release. 

Effective simultaneously with the release granted in Section III.A. above, the Settling 

Defendant, on behalf of himself individually, and his respective heirs, executo1·s, trustees, 

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administrators, agents, representatives, attorneys, successors, and assigns, hereby releases and 

discharges the FDIC·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 indirec4 in law or in equity, that arise :from or relate to, the Bank or to 

the performance, nonperformance, or manner of performance ofthe S':ttling Defendant's 

respective functions, duties, and actions as a director of the Bank, including without limitation 

the causes of action aJleged in the D&O Action. 

C. Exceptions from Releases by the FDIC·R 

1. Notwithstanding any other provision of this Agreemen4 the FDIC-R does 

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 Defendant 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 FDIC-R, the B~ other financial institutions, or 

any other person or entity. including without limitation any such claims acquired by the FDIC-R 

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

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

§ 6. In additio~ the FDIC-R specifically reserves the right to seek court-ordered restitution 

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

and 3663 et. .§~ if appropriate. 

D. Express Reservation ofRights of Bond Carrier. 

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

Agreement shall release or prejudice the rights of Fidelity and Deposit Company of Maryland or 

any other underwriter of any financial institution bond, fidelity bond) or banker's blanket bond 

on which the Bank is an insw·ed, to bring any claims by way of subrogation to the claims of the 

FDIChR, against (a) any directors, officers, or employees of the Bank, including but not limited 

to the Settling Defendant, in their capacities as directors, officers, or employees of the Bank or in 

any other capacity, or (b) any other individual or entity. 

2. Nothing herein shall be construed to admit the existence of, or to establish, 

any claim or cause of action on the pmt of Fidelity and Deposit Company of Maryland or any 

other bond underwriter by way of subrogation to claims of the FDIC-R, that would not exist had 

this Agreement not been executed. 

SECTION IV: Waiver of Dividends and Proceeds f1·om Litigation 

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

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

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

been or cou1d 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, the Settling Defendant hereby 

knowingly assigns to the FDIC-R any and all rights, titles) and interest in and to any and all such 

dividends, payments, or other distributions, or proceeds. 

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SECTION V: Representations and Aclmowledgements 

A. Authorized Signatories. All of the 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 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, 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, her, or its counsel. 

C. Financial Disclosure Representation. The Settling Defendant has submitted 

financial information to the FDIC·R including a signed Financial Disclosw-e Form and herein 

affirms that his fmancial infonnation is true and accurate as of the date of this agreement. The 

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 rmancial 

information submitted by the Settling Defendant. The FDIC·R has no obligation to 

independently verifY the completeness or accuracy of that fmancial information. If the FDIC-R 

establishes via a fmal adjudication in an appropriate judicial forum that the Settling Defendant 

failed to disclose any material interest, legal, equitable, or beneficial, in any asset, the Settling 

Defendant agrees to cooperate fully with the .FDIC·R to provide updated fmancial information 

and to pay to the FDIC-R the lesser of(l) the value of the Settling Defendant's undisclosed 

material interest in such asset(s); or (2) the amount of unpaid damages alleged against the 

Settling Defendant. 

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, delivt:ry ~ execution, filing, recording, 

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and entry. of any documents necessary to conclude the D&O Action and to otherwise perform 

the te1ms of tltis Agreement. 

B. The Settling Defendant agrees to cooperate fully with the FDIC-R in connection 

with any action required under this Agreement. Such cooperation shall consist of: 

1. Producing all docwnents requested by the FDIC-R, without the necessity 

of subpoena, as detennined by the FDIC-R. in its sole discretion, to be relevant to the Bank; 

2. Appearing as requested by the FDIC-R at reasonable times and places for 

interviews regarding facts, as determined by the FDIC-R in its sole discretion, to be relevant to 

the Bank; 

3. TestifYing as requested by the FDIC-R, without the necessity of a 

subpoena, in any matter relevant to the Bank, as determined by the FDIC-R; 

.4. Signing truthful affidavits, regarding any matter, as determined by the 

FDIC-R in its sole discretion, to be relevant to the Bank. 

SECTION VII: Other Matters 

A N9 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 infmnity 

by any of them regarding 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 terms. 

B. 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. Tbjs Agreement shall be interpreted, construed, and enforced 

according to applicable federal law, or in its absence, the laws of the Commonwealth of Virginia. 

D. Notices. Any notices requirod hcrcwtdcr shaH be sent by registered mail, first 

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(b)(6) 

(b)(6) 

(b)(6) 

class, return receipt requested, and by email, to the following: 

Ifto the FDIC-R: 

If to the Settling Defendant: 

Christine P. Hsu 

Counsel 

FDIC-Legal Division 

3501 Fairfax Drive VS-B-7054 

Arlington, Virginia 22226-3500 

··········l·········· I 

With a copy to: 

Kathleen M. Balderston 

Nixon Peabody LLP 

437 Madison Avenue 

New York) New York 10022 

••••••••••••••••••••••••lm •••••••••••••••••••••••••••••••••••• 

Christopher Swecker 

1506 Hugh Forest Road 

Charlotte, North Carolina 28270 

lH I 

E. Entire Agre~ment and Amendments. This Agreement constitutes the entire 

agreement and understandiitg 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 Wliting signed 

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

representative( 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 Confidentiality. 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. 

II 

II 

II 

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(b)(6) 

(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. 

FEDERAL DEPOSIT INSURANCE CORPORATION AS 

RECEIVER FOR BANK OF TilE COMMONWEALTH 

....................................................................................... I. ...................................... .......................................................................... ~ L.. ..... ......... _ _ ........ _ ........ _ ....... ......... _ _ ........ _ .._________ ___, 

Date: ~err/ '2A c.~ . 

TITLE: ~ 

PRINTNAME: &..v._·sf7~ f~~ 

Date:-r:=- ~ -!' .,r- EMORY CARLTON BOWYER 

...... ........................ .......... I ...................................... 7 

TITLE: jO 4;} 

PRINT NAME: 

h V<PiP[ Ch'~~N &"-'7 e.A---.-. 

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