SETI'LEMENT AND RELEASE AGftEJSMENT 

This Settlement and Release Agreement ("Agreetrumt") is made on this )1+~y of 

~ 2016, by, bctwccn, and among the fullowing unc!cmignecl partico: . 

The Federal Deposit Insurance Corporation as Receiver for First Southern Bank ("FDICR") and BKD, LLP ("BKD") (individually, the FDIC-R and BKD may be referred to herein as 

RECITALS 

WHEREAS: 

Prior to December 17, 2010, First Southern Bank {"Bank'') was a depository institution 

organized and ex.brting under the laws of Arkansas; 

On ~ber 17, 2010, the Arkansas State Bank Department closed the Bank and 

pursuant to 12 U.S.C. § 1821(c), the Fede~ Deposit Insurance Corporation was appointed 

Receiver. In &QCOrdance with 12 U.S.C. § 1821(d), the FDIC-R succeeded to all rights, titles, 

powers and privileges of the B~ 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 accountants and auditors arising from the performance, 

nonperfonnance, and manner ofperfonnance of their respective functions, duties and acts as 

accotmtants and/or auditors of the Bank; 

On December 13, 2013, the FDIC-R filed a complaint for money damages against BK.D, 

which perfonned accounting and other professionalserviees at various times for the Bank. 

Those claims for damages are now pending in the United States District Court for the Eastern 

District of Arkansas in an action captioned Fefkral Deposit lnsuran&e Corporation as Receiver 

for First Southern Bank v. BKD, LLP, No. 4: 13-<Jv-720-JM (the ,.Action"). BKD has denied and 

continues to deny that it has any liability in the Action. 
Each party deetnB it in its own best interests to enter into this Agreement to avoid the 

uncertainty and burdens and expense of further litigation. 

N9W, 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 FDIC-R 

A. As an essential covenant and condition to this Agreement, on or before ten (10) 

calendar days following the date on which (i) aU Parties have fully executed this Aareement and 

(ii) the FDIC-R has provided to BKD all necessary payment instructions~ BKD agrees to pay the 

FDIC-R the sum of four million dollars ($4,000,000) ('"the Settlement Payment"). 

B. BKD shall deliver the Settlement Payment to the FDlC-R by either direct wire 

transfer into an account designated by FDIC-R or by check issued by its professional liability 

insW'Cr payable to FDIC as receiver for First Southern Bank and delivered to Christine Hsu, 

Federal Deposit Insurance Corporatio~ 3501 Fairfax Drive, Room VS-B-7054, Arlington, VA 

22226-3500. 

C. Subject to and without waving the requirements set forth in Section I.A. abovet if 

the Settlement Payment is not delivered to the FDIC-R on the date determined by Section I .A., 

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

Settlement Payment to~ 

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

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

of3.55%; or 

2. Enforce ,this Agreement, in which event BKD agrees to jurisdiction in the 

United States District Court for the Eastern District of Arkansas; or 

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3. Terminate the Agreement and institute an action on the FDIC-R'a claims. 

BKD 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 I.C.l for delivery of the Settlement Payment or 

acceptance of a portion of the Settlement Paymcmt shall not prejudice the FDIC~R's rights to take . 

any of the actions set forth in Section I.C.2 through LC.4 at any time prior to receipt of 

Settlement Payment (including all accrued interest) in full. 

SECTION U: Stipulation and Dismissal 

Within ten (1 0) business days after the latter of (I) full execution of this Agreement by all 

of the Parties, and (2) receipt of the Settlemellt Payment, plus any accrued interest, the FDIC-R 

shalt (Ile a stipulation of dismissal with prejudice as against BKD, executed by the attorneys for 

all Parties hereto, in the fom attached hereto as Exhibit A, in the Action. 

SECl'JON W; Releases 

A. The FDIC-R's Releases. 

Effective upon receipt of the Settlement Payment in full and except as provided in 

Seetion In.C., the FDIC-R, for itself and its successors and assigns, hereby releases and 

discharges BKD and its respective memb~ employees, officers, directors, agents, 

representatives, insurers, successors and assigns from any and all claims, demands, obJigations, 

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, nooperfonnance, or manner of 

perfonnance ofB.KD's functions, duties and actions at any time as an independent auditor and/or 

3 
accounting professional performing services for the Bank, including without limitation the 

causes of action alleged in the Action. 

B. BKD' s Release. 

Effective simultaneously with the release granted in Section UI.A. above, BKD, on behalf 

of itself and its members, employees, officers, directors, agents, representatives, insurers, 

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

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

obligations, damages, actioDS, and causes of action, direct or indirect, in law or in eqUity, that 

arise from or relate to, the Bank or to the performance, nonperfonnanee, or manner of 

perfonnance ofBKD's function&, duties and actions at any time as an independent auditor and/or 

accounting professional perfonning services for the Bank, including without limitation the 

causes of action alleged in the Action. 

C. Exce,ptions from Releases by FPIC-R. 

1. Nomithstanding 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 bad not 

been executed, any claims or causes of action: 

a. AgainstBKD or any person or other entity for liability, if any, 

incum:d as the maker, endorser or guarantor of any promissory note or indebtedness payable or 

owed by them to FDICAR, the Bank, other financial institutions, or any other person or entity, 

irwludJng without limitation any such claims acquired by FDICwR as 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. 

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2. Notwithstanding any other provision ofthls Agreement, nothing in this 

AgreemeDt 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 re&Ulatory 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 1flrougb tbe Department of Justice, the United S1ates Attomeyts 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, t 8 U.S.C. §§ 3322 

and 3663 sa, SQ., if appropriate. 

SECTION IV: Representations and Acfmowledgemeptt 

A. Authorized Signatories. All of the undersigned persons represent and warrant that 

they 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, suooessors and assigns. 

B. Advice of Counsel. Each Party hereby acknowledges that he, she, or it bas 

consulted with and obtained the advice of counsel prior to ex"uting this Agreement, and that 

this Agreement has been explained to that Party by its coupsel. 

C. Coopqation. The Parties agree to cooperate in good faith to eifc(;tuate all the 

terms and conditions of this Agreement, including doing, or caasing their agents and attorneys to 

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do, whatever is reasonably necessary to effectuate the signing, delivery, execution,-filing, 

recording, and entry, of any docwnents necessary to perfonn the terms of this Agreement. 

D. 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 1his 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 

received in evidence by or against any Party except to enforce its terms. 

B. Execution in Counter,parts. This Agreement may be executed in counterparts by 

one or more of the Pw.ties and all such counterparts when so executed shall together conatitute 

the final Agreement, as if one document had been signed by all Parties; and each ~ch 

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. 

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

acwrdi.ng to applicable federal law, or in its absence, the laws of Arkansas. 

0. Entire Asreement and Amendments. This Agreement constitutes the entire 

agreement and undersbmding between and among the undersigned Parties concerning the matters 

set forth herein and supersedes any prior agreements or understandings. This Aifeement may 

not be amended or modified, nor may any of its provisiOOB be waived, except in writing signed 

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

representative( s ). 

H. 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. 

I. No Confidentiality. The Parties acknowledge that this Agreement is not 

6 
(b)(6) 

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

applicable policies, procedures, and other legal requirements. 

IN WITNESS WHEREOF, the Parties hereto ba.ve 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 FIRST 

s"(u,{c.~ SOr-BANK ...................... P.11.~.:~_:,,._....._ __ ·······""' ········································································ ==········· 

BY: 

~----------------------~ 

TITI.E: ~J 

PR1NTNAME: &,r;·sb·, p.ik_ 

BKD,LLP 

Dare:. ____________ __ TITLE:. ______________________ _ 

PRJNTNAME: _________ _ 

7 
(b)(6) 

confidential and may be disclosed pursuant to the Federal Deposit lnsurance 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. 

Date: _______ _ 

FEDERAL DEPOSIT lNSURANCE 

CORPORATION AS RECEIVER FOR FIRST 

SOUTHERN BANK 

BY: ---------------------------- TITLE: ___________ _ 

PRINT NAME: ________ _ 

BKD, LLP 

........... Date: yf;··=r!&?r~ ·········································· ··············································ay:l ···················································· · I 

TITLE:--=-U~,~, L-{.u.&=,;c...k .:...:~=·-------­

PRINT NAME: IYJi'-bcu ( /,U lk 

7 
EXHIBIT A 
IN THE UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF ARKANSAS 

WESTERN DMSION 

FEDERAL DEPOSIT INSURANCE CORPORATIONt 

as Receiver for First Southern Bank 

PLAINTIFF 

Case No. 4:13·cv~7l0 JM 

v. 

BKD,LLP DEFENDANT 

STXPULATION OF DISMISSAL WITH PREJU])ICE 

IT IS HEREBY STIPULATED AND AGREED, by and between the parties, that this 

action is dismissed with prejudice pursuant to Rule 41 (a)(l XA)(ii) of the Federal Rules of Civil 

Procedure, each party to bear its own costs and fees. 

J\llle _, 2016 

FOR THE PLAINTIFF: 

FEDERAL DEPOSIT INSURANCE 

CORPORATION as Receiver for 

First Southern Bank 

FOR THE DEFENDANT: 

Bim,LLP 

By: ____________________ __ 

One of its Attorneys By: ------~----------­ One of its Attorneys 

John E. Tull ill 

E. B. Chiles IV 

Robert Ryan Younger 

QUATTLEBAUM, GROOMS & TULL, PLCC 

111 Center Street, Suite 1900 

Little Rock, AR 72201 

(501) 379-1700 Telephone 

(501) 379-1701 Facsimile 

(b)(6) _

1

_ I 

Philip E. Kaplan 

WILLIAMS & ANDERSON PLC 

111 Center Street, Suite 2200 

Little Rock, AR 72201 

(501) 396--8432 Telephone 

(501) 396-8532 Facsimile 

I ................................ J 

John R. Gerstein 

Richard Ambrow 

TROUTMAN SANDERS LLP 

. . ........ .(9).(.6) 
C. Philip Curley 

Cynthia H. Hyndman 

ROBINSON CURLEY & CLAYTON, P.C. 

300 South Wacker Drive, Suite 1700 

Chicago, lllinois 60606 

(312) 663-3100 Telephone 

{312) 663-0303 Facsimile 

(b)(6) •••••••••••••••••••••••l'-m-•• -------....J 

401 9t11 Street, N.W. 

Washington, D.C. 20004 

(202) 274-2950 Telephone 

{202) 274-2994 Facsimile 

I ···························································· 1---------- (p)(§) 

Timothy K. McNamara 

Chief Legal Officer, BKD, LLP 

1201 Walnut Street, Suite 1700 

Kansas City, MO 64106 

(816) 221-6300 Telephone I ...................................................J ........ . . ....................... (1?.)(§) 
Z:\F .D.LC\First Southern Bank\Pleadings\Stipulated Dismissal Order.docx