successor in interest to the Bank or any person or entity other than 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
judicial district, or any other department or agency of the United States as defined by 18 U.S.C. §
6. In addition, 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. seq., if appropriate.

SECTION III: Waiver of Dividends and Proceeds from Litigation

To the extent, if any, that D. Graves or Executor is or was a shareholder of the Bank or its
holding company and by virtue thereof are 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 could 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, 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.



Corporation’s applicable policies, procedures, and other legal requirements.

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 Community South Bank

By: |

Printed Name: Doucees B Law

Attorney for the FDIC

Date:

Jonathan D. Graves, Executor for the Estate
of Danny L. Graves

Date:

SHERRARD ROE VOIGHT &
HARBISON, PLC

By:

Printed Name:

Attorney for the Jonathan D. Graves,
Executor for the Estate of Danny L. Graves
{

Date: le, Ad Berle



SECTION II: Releases

A. The FDIC-R’s Releases.

Upon receipt of the Settlement Payment in full and except as provided in Section ILC.,
the FDIC-R, for itself and its successors and assigns, hereby releases and discharges the Setiling
Defendant, as Executor 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
arise from or relate to, the performance, nonperformance, or manner of performance of D.
Graves’ respective functions, duties and actions as an officer and/or director of the Bank
including without limitation the Claims alleged in the Demand Letter.

B. The Settling Defendant’s Release.

Effective simultaneously with the release granted in Section IIA. above, the Settling
Defendant, as Executor, and his respective heirs, executors, trustees, administrators, agents,
representatives, attorneys, successors, and assigns, hereby release and discharge 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 indirect, in
law or in equity, that arise from or relate to, the Bank or to the performance, nonperformance, or
manner of performance of D. Graves’ respective functions, duties and actions as officer and/or
director of the Bank, including without limitation the Claims alleged in the Demand Letter.

Cc. Exceptions from Releases by FDIC-R.

1, Notwithstanding any other provision of this Agreement, 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 Executor, J. Graves, D. Graves 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 such claims acquired by FDIC-R as



SECTION IV: Representations and Acknowledgements

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 or her counsel.

Cc. Financial Disclosure Representation. Settling Defendant has submitted affidavit

of financial information to the FDIC-R dated April 6, 2016, and herein affirms that the financial
information of the Estate of Danny L. Graves is true and accurate as of the date of this
agreement. 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
financial information submitted by the Settling Defendant. The FDIC-R has no obligation to
independently verify the completeness ot accuracy of that financial information.
SECTION V: Reasonable Cooperation

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, delivery, execution, filing, recording, and entry,
of any documents necessary to otherwise perform the terms of this Agreement.

SECTION VI: Other Matters

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 defenses, that this Agreement is not an admission or evidence of liability or infirmity

by any of them regarding any claim or defense, and that the Agreement shall not be offered or



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 Community South
Bank (“FDIC-R”), and Jonathan D. Graves, Executor of the Estate of Danny L. Graves (the
“Settling Defendant” or “Executor”) (individually, the FDIC-R, the Settling Defendant may be
referred to herein as “Party” and collectively as the “Parties”).

RECITALS
WHEREAS:

Prior to August 23, 2013, Community South Bank (“Bank”) was a depository institution
organized and existing under the laws of Tennessee;

On August 23, 2013, the Tennessee Department of Financial Institutions closed the Bank
and pursuant to 12 U.S.C. § 1821(c), the Federal Deposit Insurance Corporation was appointed
Receiver, In accordance with 12 U.S.C. § 1821(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 FDIC-R succeeded were 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 of their respective functions,
duties and acts as directors, officers, and employees of the Bank;

On March 9, 2016, the FDIC-R in a demand letter (“Demand Letter”) asserted claims
against Danny L. Graves ("D. Graves"), former Chairman of the Board of the Bank for gross
negligence in connection with the approving of a number of loans, and other wrongful acts has
caused substantial losses to the Bank ( the “Claims”). A copy of the Demand Letter is attached
as Exhibit A;

Graves died on October 7, 2012, and Jonathan D. Graves (“J. Graves”) was appointed

Executor for the Estate of Danny L. Graves on March 21, 2013;



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.

Cc. 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 Tennessee.

D. Notices. Any notices required hereunder shall be sent by registered mail, first
class, return receipt requested, and by email, to the following:

If to the FDEC-R: Douglas B. Lang, Counsel
Professional Liability Unit
Federal Deposit Insurance Corp. — Legal Division
3501 Fairfax Drive, Room VS-B-7064
Arlington, VA 22226-3500

If to the Settling Defendant: Carolyn W. Schott
Sherrard Roe Voigt & Harbison, PLC
150 3rd Avenue South, Suite 1100
Nashville, TN 37201
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 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 writing signed
by the Parties bound thereby, or by their respective authorized attorney(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



The undersigned Parties deem it in their best interests to enter into this Agreement to
avoid the uncertainty and expense of 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 I; Payment to FDIC-R

A As an essential covenant and condition to this Agreement, the Settling Defendant
agrees to pay the FDIC-R the sum of One Hundred Forty Six Thousand ($146,000.00) (“the
Settlement Payment”) as follows:

1, ‘The Settling Defendant shall deliver the to the FDIC-R by certified or
cashier’s check the sum of $50,000 upon full execution of this Agreement;
2. The balance of $96,000.00 of the Settlement Payment shail be paid in
installments by certified or cashicr's check as follows:
Sixteen,
a. On or before July 1, 2016, Fifteen Thousand Dollars ($16,000.00);
b, On or before October 1, 2016, yc Thousand Dollars ($16,000.00); |
¢, On or before January 1, 2017, ‘Fiieon Thousand Dotlars ($16,000.00); i
4, On or before March |, 2017, Figsen Thousend Dollars ($16,000.00); i
e, On or before July 1, 2017, Fikess Thousand Dollars ($16,000,00);

Sixteen i
f. On or before October 1, 2017, Fifteen Thousand Dollars ($16,000.00); |

The payments in subsection A.1 and A. 2 above are collectively referred io as the “Installment
Payments” and individuatly as an “Installment Payment.” The check for each Installment
Payment should be made payable to: Federal Home Loan Bank of New York; ROUTING #:
[=~ } FOR CREDIT TO: FDIC National Liquidation Account; ACCOUNT #:
E==_} opt: FIN 10486 — Community South Bank, Parsons, TN; Contact: Dong Lang
703-516-1243;Professional-Liability {——_] DIF Fund, The checks shoutd be sent to (__} (by(6)
E-= JFinanciat Manager, FDIC-Financial Processing Department, 1601 Bryan St., Rim:
ENG-17116, Dallas, Texas 75201-3430,



B. In the event that the Settlement Payment (including any Installment Payment) is not
delivered to the FDIC-R (or its counsel) by the dates set forth in subsection A above, interest
shail accrue on all unpaid amounts at the rate of 5% per annum from the due date until the date
of payment. -

Cc. If the FDIC-R does not receive each of Installment Payment in full on or before
the due dates determined by subsection A above, then the FDIC-R, in its sole discretion, shall
have the right at any time prior to receipt of the installment payments in full (including ail
accrued interest) to:

1. Extend the period of time for the Installment Payment, including interest
accruing from the date determined by subsection 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 United States District Court in Tennessee and to pay all of the FDIC-R’s
reasonable attorney’s fees and costs expended in enforcing the terms of this Agreement; or

3. Terminate the Agreement, and institute an action on the FDIC-R’s Claims,
The Settling Defendant further agrees to waive any defense based on any statute of limitations
that would bar any of the FDIC-R’s Claims and waive all objections, defenses, claims or
counterclaims, 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 of time under Section L.C.1 for delivery of the Installment Payments or
acceptance of a portion of an Installment Payment shall not prejudice the FDIC-R’s rights to take
any of the actions set forth in Section L.C.2 through I.C.4 at any time prior to receipt of

Settlement Payment (including all accrued interest) in full.