Document:

exv10w37

Exhibit 10.37

SETTLEMENT AGREEMENT

THIS SETTLEMENT AGREEMENT (the “Agreement”), made on this 19th day of November 2009, by and between
Armistead Mechanical, Inc. (“Armistead”), its predecessors, successors, assigns, parents,
subsidiaries, divisions, and/or affiliates (whether incorporated or unincorporated), and all of the
past and present directors, officers, shareholders, trustees, attorneys, employees, and agents or
each, and Converted Organics, Inc., its predecessors, successors, assigns, parents, subsidiaries,
divisions, and/or affiliates (whether incorporated or unincorporated), and all of the past and
present directors, officers, shareholders, trustees, attorneys, employees, and agents or each and
Converted Organics of Woodbridge, LLC its predecessors, successors, assigns, parents, subsidiaries,
divisions, and/or affiliates (whether incorporated or unincorporated), and all of the past and
present directors, officers, shareholders, trustees, attorneys, employees, and agents or each
(Converted Organics, Inc. and Converted Organics of Woodbridge, LLC are collectively referred to as
“COI”).

W I T N E S S E T H:

          WHEREAS, Armistead is a New Jersey corporation with its principal place of business at 168
Hopper Ave., Waldwick, New Jersey and

          WHEREAS, Converted Organics, Inc. is a corporation organized and existing under the laws of
the Commonwealth of Massachusetts having an address at 7A Commercial Wharf West, Boston,
Massachusetts; and

          WHEREAS, Converted Organics of Woodbridge, LLC is a limited liability company organized and
existing under the laws of the State of New Jersey maintaining an address at 99 Madison Ave.,
Fanwood, New Jersey, and having a principal place of business located at 75 Crows Mill Road,
Keasbey, New Jersey; and

          WHEREAS, Armistead and COI entered into an agreement captioned “Standard Form of Agreement
Between Owner and Contractor Dated November 30, 2006 AIA A101/CMa (1992 Edition) Between Armistead
Mechanical, Inc. and Converted Organics of Woodbridge, LLC” and the “Rider and Supplementary
Conditions” dated January 10, 2007 (collectively hereinafter referred to as the “Contract”), for
Armistead to perform certain work including the process equipment, piping and infrastructure work
at 75 Crows Mill Road, Keasbey, New Jersey (the “Property”); and

          WHEREAS, on or about February 26, 2009, Armistead filed a Construction Lien Claim (the “Lien
Claim”) against the leasehold interest of COI with references to the above obligations and the
subject Property in the amount of $2,295,463.60. The lien was duly recorded by the Middlesex County
Clerk in Book 36, page 651; and

          WHEREAS, Armistead and COI engaged in a litigation captioned Armistead Mechanical, Inc. v.
Converted Organics, Inc., et al, bearing the docket number MID-L-4504-09 (the “Litigation”)
regarding certain work, services, materials or equipment provided by Armistead for the benefit of
COI; and

          WHEREAS, Armistead filed a Demand for Arbitration with the American Arbitration

 

 

Association on or about May 26, 2009, and an Amended Demand for Arbitration on or about August 6,
2009 (collectively the “AAA Demand”) regarding the contract balance due and owing under the
Contract; and

          WHEREAS, it is agreed that Armistead and COI (the “Parties”) have acted in a good faith,
honest, fair and reasonable manner in resolving the Litigation; and

          WHEREAS, the Parties, without making any admissions of any kind, desire to settle, and
compromise all claims that were or could have been asserted by them with regard to the Litigation;
and

          WHEREAS, by doing so, the Parties seek to avoid further legal expense and the possibility of
protracted legal proceedings with respect to the Litigation; and

     NOW, THEREFORE, the Parties, for good and sufficient consideration, the sufficiency of which
is acknowledged, hereby agree as follows:

	 	1.	 	COI unconditionally accepts Armistead’s work under the Contract and acknowledges and
confirms herein its $2,029,000.00 obligation (the “Obligation”) owed to Armistead, and that
defenses to the payment of same are hereby waived. The Parties agree that payment of the
Obligation shall be as follows:

	 	a.	 	$1,000,000.00 (the “First Payment”) of the Obligation will be paid in cash
forthwith at closing. Payment of this sum is not subject to any other conditions.
Within ten (10) days of Armistead’s receipt of the First Payment it will cause to be
filed and recorded an amendment to the Lien Claim reducing the amount of the Lien Claim
to $1,029,000.00.
	 
	 	b.	 	The sum of $1,029,000.00 shall be payable to Armistead in eighteen (18) level
monthly payments of principal and interest calculated at 6% per annum in accordance
with the amortization table attached hereto as Exhibit “A” and made a part hereof. The
initial monthly payment shall be due on or before January 1, 2010, and the remaining
monthly payments shall be due on the first of every month thereafter until same is paid
in full.

	 	2.	 	COI shall make all of the payments to Armistead as set forth in this agreement by wire
transfer or check payable to “Armistead Mechanical, Inc.” and mailing or delivering same,
in sufficient time to be received on or before the due dates thereof to: Armistead
Mechanical, Inc., 168 Hopper Ave., Waldwick, New Jersey 07463, Attn: Robert P. Armistead,
Chief Financial Officer.
	 
	 	3.	 	COI agrees to execute and consents to the entry of a Consent Judgment in favor of
Armistead and against COI in the sum of $1,029,000.00 in the form annexed hereto as Exhibit
“B”. The Parties agree that the amount due pursuant to the Consent Judgment at any time
shall be calculated in accordance with Exhibit “A” and that interest shall accrue at 6% per
annum on the unpaid principal indicated on Exhibit “A” at such time as Armistead shall
enforce the Consent Judgment.

 

 

	 	4.	 	Armistead agrees that it shall be entitled to docket the Consent Judgment but agrees it
shall forebear from any efforts to enforce the Consent Judgment so long as COI complies
with all terms and conditions set forth in this Agreement.
	 
	 	5.	 	COI agrees that its failure to make any payment when due shall constitute a material
default. In the event COI defaults on any of its obligations, Armistead shall notify COI
via written notice sent by courier, mail, facsimile or email to William J. Linton, Esq.,
Wilentz Goldman & Spitzer, PA, 90 Woodbridge Center Drive, Suite 100, Woodbridge, New
Jersey 07095. In the event COI fails to cure the default by delivering the past due
payment(s) to Armistead within ten (10) days after receiving Armistead’s notice, Armistead
will have the option to enforce the Consent Judgment in the amount of the unpaid balance
calculated in accordance with Exhibit “A.”
	 
	 	6.	 	Upon receipt of the First Payment, and this fully executed Agreement, Armistead shall
withdraw the AAA Demand.
	 
	 	7.	 	Within five days of the date on which Armistead has received the final payment due and
owing under this Agreement, COI and Armistead will exchange releases and Armistead will
provide COI with a signed stipulation of dismissal, discharge of lien claim, and Warrant of
Satisfaction of Judgment; provided, however, that all of the aforementioned documents shall
be deemed to be held in escrow by each party, and none of them shall be filed or recorded,
until 125 days after the date on which Armistead has received the said final payment.
	 
	 	8.	 	Provided that the First Payment has been received by Armistead, COI shall have the
option of paying off the $1,029,000.00 lien claim balance owed in a) one lump sum payment
of $600,000.00 which shall be payable on or before December 31, 2009, or b) in one lump sum
payment of $600,000 payable after January 1, 2010 but on or before April 30, 2010 provided
that COI is current on all monthly payments required under Paragraph 1(b) hereof, and
further provided that if payment is made in accordance with this subparagraph 8(b), COI
shall receive credit for all payments made prior to its exercise of this option, in
accordance with Exhibit “A”. Upon receipt of the lump sum payment by Armistead by wire
transfer or other immediately available funds and in the correct amount, the account will
be deemed satisfied in full and the parties shall then proceed as stated in Paragraph 7
above respecting the last monthly payment.
	 
	 	9.	 	From and after the date of this Agreement, Armistead shall defend, indemnify, and hold
COI harmless against any and all unresolved claims or liens asserted or filed by Armistead
itself or by any of Armistead’s subcontractors or suppliers, now or in the future, arising
from or relating to the Contract, except that Armistead shall not be responsible for claims
or liens asserted by subcontracts or suppliers who did not perform work while Armistead was
performing on the project. Work performed after Armistead’s contract was terminated shall
not be Armistead’s responsibility
	 
	 	10.	 	Armistead and COI agree that Armistead shall have no further responsibilities under the
Contract including without limitation, responsibilities with respect to punch list work,
warranties, or outstanding change orders. Armistead does not object to future inquiries of
Armistead by COI for Armistead to assist, but any further work to be

 

 

	 	 	 	performed by Armistead shall only be performed pursuant to a new, written, mutually
acceptable agreement.
	 
	 	11.	 	COI will execute on its behalf, at the request of Armistead, any Consent Order or
orders that stay the litigation until Armistead has been paid in full.
	 
	 	12.	 	This Agreement shall be binding upon the parties hereto, and their predecessors,
successors, assigns, parents, subsidiaries, divisions, and/or affiliates.
	 
	 	13.	 	This Agreement may be executed in counterparts which taken together shall comprise one
and the same Agreement.
	 
	 	14.	 	The Parties agree that the terms and conditions of this Agreement shall not be changed,
amended or modified, except in a writing executed by the Parties, or their duly authorized
representatives.
	 
	 	15.	 	The Parties acknowledge that (i) neither promises or agreements of any kind have been
made to them or with them by any person or entity whatsoever to cause them to sign this
Agreement; (ii) execution of this Agreement has been voluntary and has been duly authorized
by all requisite corporate action; (iii) they had adequate opportunity to and have, in
fact, consulted with advisors of their own choosing, legal or otherwise, regarding the
Agreement; and (iv) they read and fully understand the meaning and the consequences of
signing this Agreement
	 
	 	16.	 	The Parties agree that this Agreement was executed in and shall be construed in
accordance with the laws of the State of New Jersey.
	 
	 	17.	 	The Parties consent to the personal jurisdiction of the Superior Court of New Jersey
for the purposes of enforcing this Agreement.

AGREED TO AND ACCEPTED:

	 	 	 	 	 	 	 	 	 	 	 
	Converted Organics, Inc.	 	 	 	Armistead Mechanical, Inc.	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 

	 	 
	 	Robert T. Armistead, PresidentExhibit 10.1

EXHIBIT 10.1

OFFICER EMPLOYMENT AGREEMENT

THIS AGREEMENT is made effective as of May 15, 2009 by and between MOUNTAIN NATIONAL BANK and
MOUNTAIN NATIONAL BANCSHARES, INC. (The “Bank”), Sevierville, Tennessee; and G. Devon McKinzie (the
“Executive”).

WHEREAS, the Bank wishes to assure itself of the services of Executive for the period provided
in the Agreement; and

WHEREAS, the Executive is willing to serve in the employment of the Bank on a fulltime basis
for said period.

NOW, THEREFORE, in consideration of the mutual covenants herein contained, and upon the other
terms and conditions hereinafter provided, the parties hereby agree as follows:

	 	1.	 	POSITION AND RESPONSIBILITIES

	 
	 	 	 	During the period of her employment hereunder, Executive agrees to serve as
Executive Vice President/Chief Lending Officer of the Bank.

	 
	 	2.	 	TERMS AND DUTIES

	 	(a)	 	The term of this Agreement shall be deemed to have commenced as
of the date first above written and shall continue for a period of thirty-six
(36) full calendar months thereafter.

	 
	 	(b)	 	During the period of her employment hereunder, except for
periods of absence occasioned by illness, vacation periods, and leaves of
absence, Executive shall devote substantially all of her business time,
attention, skill, and efforts to the faithful performance of her duties
hereunder including activities and services related to the organization,
operation and management of the Bank; provided, however; that, subject to the
terms of this Agreement, from time to time, Executive may serve, or continue to
serve, on the boards of directors of, and hold any other offices or positions
in, companies or organizations, which will not materially affect the
performance of Executive’s duties pursuant to this Agreement.

	 	3.	 	COMPENSATION AND REIMBURSEMENT

	 	(a)	 	The compensation specified under this Agreement shall
constitute the salary and benefits paid for the duties described in Sections 1
and 2. The Bank shall pay Executive as compensation a salary of One Hundred
Fifty Five Thousand Dollars ($155,000.00) per year of service (“Base
Salary”). Such Base Salary shall be payable in accordance with the
customary payroll practices of the Bank. During the period of this
Agreement, Officer’s Base Salary shall be reviewed at least annually; the
first such review will be made no later than one year from the date of this
Agreement. Such review shall be conducted by the President/Chief Executive
Officer of the Bank.

 

1

 

	 	(b)	 	Executive will be entitled to participate in or receive
benefits under any employee benefit plans including, but not limited to, stock
options, retirement plans, supplemental retirement plans, pension plans,
profit-sharing plans, health and accident plans, medical coverage or any other
employee benefit plan or arrangement made available by the Bank in the future
to its key management executives, subject to, and on a basis consistent with,
the terms, conditions and overall administration of such plans and
arrangements. Executive will be entitled to incentive compensation and bonuses
as provided in any plan, or pursuant to any arrangement of the Bank, in which
Executive is eligible to participate. Nothing paid to the Executive under any
such plan or arrangement will be deemed to be in lieu of other compensation to
which the Executive is entitled under this Agreement, except as provided under
Section 4 (e).

	 
	 	(c)	 	Executive will be reimbursed for reasonable travel and
entertainment expenses.

	 	4.	 	CHANGE IN CONTROL

	 	(a)	 	No benefit shall be paid under this Section 4 unless there
shall have occurred a Change in Control of the Bank. For purposes of this
Agreement, a “Change in Control” of the Bank shall be deemed to occur if and
when:

	 	(i)	 	there occurs an acquisition in one or more
transactions of at least 15 percent but less than 25 percent of the
Common Stock by any Person, or by two or more Persons acting as a group
(excluding officers and directors of the Bank), and the adoption by the
Board of Directors of a resolution declaring that a change in control
of the Bank has occurred; or

	 
	 	(ii)	 	there occurs a merger, consolidation,
reorganization, recapitalization or similar transaction involving the
securities of the Bank upon the consummation of which more than 50
percent in voting power of the voting securities of the surviving
corporation(s) is held by Persons other than former shareholders of the
Bank; or

	 
	 	(iii)	 	25 percent or more of the directors elected by
shareholders of the Bank to the Board of Directors are persons who were
not listed as nominees in the Bank’s then most recent proxy statement.

 

2

 

	 	(b)	 	If any of the events described in Section 4 (a) hereof constituting a Change in
Control have occurred or the Board Directors of the Bank has determined that a Change
in Control has occurred, Executive shall be entitled to the benefits provided in
paragraphs (c), (d) and (e) of this Section 4, upon her subsequent involuntary
termination of employment at any time during the term of this Agreement (other than for
Cause, following a Change in Control following any demotion, loss of title, office or
significant authority, reduction in her annual compensation or benefits, or relocation
of her principal place of employment by more than 50 miles from its location
immediately prior to the Change in Control).

	 
	 	(c)	 	Upon the occurrence of a Change in Control followed by the termination of
Executive’s employment in the manner set forth in Section 4 (b), the Bank shall pay
Executive, or in the event of her subsequent death, her beneficiary or beneficiaries,
or her estate, as the case may be, as severance pay or liquidated damages, or both, a
sum equal to 2.99 times the Executive’s “base amount,” within the meaning of 280G(b)(3)
of the Internal Revenue Code of 1986 (“Code”), as amended. Such payment shall be made
in thirty-six equal monthly installments beginning on the first day of the month
following the month in which the Executive is terminated and thereafter payable on the
first day of each month thereafter until paid in full.

	 
	 	(d)	 	Upon the occurrence of a Change in Control followed by the termination of
Executive’s employment in the manner set forth in Section 4(b), the Bank will cause to
be continued life, medical, dental and disability coverage substantially identical to
the coverage maintained by the Bank for Executive prior to her severance for a period
of three years from such Date of Termination; provided, however, that Executive shall
no longer be entitled to receive such benefits if Executive competes with the Bank or
the surviving financial institution in the manner prohibited by Section 10 during such
three-year period. In addition, Executive shall be entitled to receive the value of
employer contributions that would have been made on the Executive’s behalf over the
remaining term of the agreement to any tax-qualified retirement plan sponsored by the
Bank as of the Date of Termination.

	 
	 	(e)	 	Upon the occurrence of a Change in Control, the Executive shall be entitled to
receive benefits due to her under, or contributed by the Bank on her behalf, pursuant
to any retirement, incentive, profit sharing, bonus, performance, disability or other
employee benefit plan maintained by the Bank on the Executive’s behalf to the extent
that such benefits are not otherwise paid to the Executive upon a Change in Control.

	 
	 	(f)	 	Notwithstanding the preceding paragraphs of this Section 4, in the event that
the aggregate payments or benefits to be made or afforded to the Executive under this
Section would be deemed to include an “excess parachute payment” under 280G of the
Code, such payments or benefits shall be payable or provided to Executive in equal
monthly installments over the minimum period necessary to reduce the present value of
such payments or benefits to an amount which is one dollar($1.00) less than three (3)
times the Officer’s “base amount” under 280G(b)(3) of the Code.

 

3

 

	 	(g)	 	Upon the occurrence of a Change in Control followed by the termination of
Executive’s employment for any reason other than cause, the Executive agrees that she
will not compete with the Bank or the successor or surviving financial institution for
the period of time during which the Executive is accepting benefits pursuant to Section
4 (d) hereof, in each case, in any city or town in which the Bank operates a branch or
main office. For purposes of this paragraph, the term “compete” shall have the same
meaning as more fully defined in Section 10, Non-Competition.

	 	5.	 	TERMINATION FOR DISABILITY

	 	(a)	 	If the Executive shall become disabled as defined in the Bank’s then current
disability plan (or, if no such plan is then in effect, if the Executive is disabled
within the meaning of Section 409(A)(a)(2)(c) of the Code as determined by a physician
designated by the Board), the Bank may terminate Executive’s employment for
“Disability.”

	 
	 	(b)	 	Upon the Executive’s termination of employment for Disability, the Bank will
pay Executive, as disability pay, a bi-weekly payment equal to two-thirds (2/3) of
Executive’s biweekly rate of Base Salary on the effective date of such termination.
These disability payments shall commence on the effective date of Executive’s
termination and will end on the earlier of (i) the date Executive returns to the
full-time employment of the Bank in the same capacity as she was employed prior to her
termination for Disability and pursuant to an employment agreement between Executive
and the Bank; (ii) Executive’s full-time employment by another employer; (iii)
Executive attaining the normal expected retirement age or age 65 if the Executive so
elects; or (iv) Executive’s death. The disability pay shall be reduced by the amount,
if any, paid to the Executive under any plan of the Bank providing disability benefits
to the Executive.

	 
	 	(c)	 	The Bank will cause to be continued life, medical, dental and disability
coverage substantially identical to the coverage maintained by the Bank for Executive
prior to her termination for Disability. This coverage and payments shall cease upon
the earlier of (i) the date Executive returns to the full-time employment of the Bank,
in the same capacity as she was employed prior to her termination for Disability and
pursuant to an employment agreement between Executive and the Bank; (ii) Executive’s
full-time employment by another employer; (iii) Executive’s attaining normal retirement
age or age 65 if the Executive so elects;
or (iv) the Executive’s death.

	 
	 	(d)	 	Notwithstanding the foregoing, there will be no reduction in the compensation
otherwise payable to Executive during any period during which Executive is incapable of
performing her duties hereunder by reason of temporary disability.

 

4

 

	 	(e)	 	Executive agrees that she will not compete with the Bank in any city or town in
which the Bank operates a branch or main office for a period of twelve (12) months
following her termination for “Disability” from her employment by the Bank. For
purposes of this paragraph, the term “compete” shall have the same meaning as more
fully defined in Section 10, Non-Competition

	 	6.	 	TERMINATION UPON RETIREMENT OR DEATH OF EXECUTIVE

	 
	 	 	 	Termination by the Bank of Executive based on “Retirement” shall mean termination at
age 65 or such other age determined in accordance with any retirement arrangement
established with Executive’s consent with respect to her. Upon termination of
Executive upon Retirement, Executive shall be entitled to all benefits under any
retirement plan of the Bank and other plans to which Executive is a party. Upon the
death of the Executive during the term of this Agreement, the Bank shall pay to
Executive’s estate, within ten (10) days of the end of such month, the compensation
due to the Executive through the last day of the calendar month in which her death
occurred.

	 	7.	 	TERMINATION FOR CAUSE.

	 
	 	 	 	For purposes of this Agreement, “Termination for Cause” shall include termination
because of the Executive’s personal dishonesty, incompetence, willful misconduct,
breach of fiduciary duty involving personal profit, intentional failure to perform
assigned duties, willful violation of any law, rule, or regulation which negatively
impacts the Bank (other than traffic violations or similar offenses) or final
cease-and-desist order, or material breach of any provision of this Agreement. For
purposes of this Section, the term “willful” is defined to include any act or
omission which demonstrates an intentional or reckless disregard for the duties and
responsibilities owed to the business of the employer by Executive. The Executive
shall not have the right to receive any compensation or other benefits, including
those provided for herein, for any period after the Date of Termination for any
Termination for Cause. Any stock options granted to Executive under any stock
option plan or any unvested awards granted under any other stock benefit plan of the
Bank, or any subsidiary or affiliate thereof, shall become null and void effective
upon Executive’s receipt of Notice of Termination for Cause pursuant to Section 8
hereof, and shall not be exercisable by Executive at any time subsequent to such
Termination for Cause.

	 	8.	 	 SIX MONTH DELAY OF CERTAIN PAYMENTS

	 
	 	 	 	Notwithstanding any other provision of this Agreement, in the event that the receipt
of amounts payable pursuant to Sections 4 or 5 of this Agreement within six months
of the Date of Termination would cause Executive to incur any penalty under Section
409A of the Code then payment of such amounts shall be delayed until the date that
is six months following Executive’s Date of Termination (the “Earliest Payment
Date”). If this provision becomes applicable, it is anticipated that payments that
would have been made prior to the Earliest Payment Date in the absence of this
provision would be paid as a lump sum on the Earliest Payment Date and the remaining
severance benefits or other payments would be paid according to the schedule
otherwise applicable to the payments.

 

5

 

	 	9.	 	NOTICE

	 	(a)	 	Any purported termination by the Bank or by Executive shall be communicated by
Notice of Termination to the other party hereto. For purposes of this Agreement, a
“Notice of Termination” shall mean a written notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
Executive’s employment under the provision so indicated.

	 
	 	(b)	 	“Date of Termination” shall mean the date specified in the Notice of
Termination.

	 
	 	(c)	 	The Executive and the Bank shall resolve any claim, controversy or dispute
arising out of or in connection with this Agreement, or relating to or arising out of
Executive’s employment with the Bank, by compulsory, binding arbitration in Knoxville,
Tennessee. Any such arbitration shall be conducted according to the Commercial
Arbitration Rules of the AAA. Notwithstanding the provisions of this Section 9 (c),
the Bank may seek and obtain appropriate restraining orders and temporary or permanent
injunctions in a court proceeding without engaging in arbitration with respect to any
alleged violation of the covenants contained in Section 10. The Executive shall invoke
her right to arbitrate any claim, controversy or dispute with or against the Bank only
after first attempting to resolve it in good faith through the exhaustion of the
employee problem solving mechanism contained in the Bank’s Employee Handbook without
first obtaining results reasonably satisfactory to the Executive.

	 
	 	(d)	 	In any dispute which is finally resolved through arbitration, the prevailing
party (as defined below) shall be entitled to reimbursement for all reasonable
attorneys’ fees, witness expenses and all fees and expenses of the arbitrators. The
“prevailing party” shall be determined by the arbitrator.

	 	10.	 	NON-COMPETITION/CONFIDENTIALITY.

	 
	 	 	 	Executive agrees and acknowledges that during the term of her employment with Bank,
she will have access to and be provided confidential and proprietary information of
Bank, including but not limited to customer lists, loan portfolios, lending
guidelines, pricing guidelines and the like. Additionally, Executive will
be provided with special training and educational opportunities at the expense of
Bank. In consideration of her employment and the mutual premises contained herein,
the receipt and sufficiency of which are hereby acknowledged, Executive agrees that
upon any termination of Executive’s employment hereunder, including a termination
for Cause, as defined in Section 7, Executive agrees not to compete with or work for
a competitor of the Bank for a period of twelve (12) months following such Date of
Termination in any county in which the Bank operates a 

 

6

 

	 	 	 	branch or main office, or in
any county in which the Bank conducts its banking business, determined as of the
Date of Termination, including but not limited to Sevier, Blount, Knox, Cocke, or
Jefferson Counties. Executive agrees that during such period and within such
counties, Executive shall not work for or advise, consult or otherwise serve with,
directly or indirectly, any entity whose business materially competes or intends to
compete with the depository, lending or other business activities of the Bank.
Executive also agrees that, during the term of this Agreement and for a one (1) year
period following this termination of employment, Executive will not attempt to
induce or persuade any former, current or future employee, agent, officer, executive
or Director of Bank to terminate such employment or other relationship with Bank in
order to enter into any relationship with the Executive, any competing business
organization in which the Executive is a participant in any capacity whatsoever, or
any other business organization in competition with the Bank’s business. Executive
further agrees and acknowledges that she will not use any contracts, proprietary
information, trade secrets, confidential information, customer lists, mailing lists,
goodwill, or other intangible property used in connection with Bank’s business.
The parties hereto, recognizing that irreparable injury will result to the Bank, its
business and property in the event of Executive’s breach of this Section 10, agree
that, notwithstanding anything to the contrary in this Agreement, in the event of
any such breach by Executive, the Bank will be entitled, in addition to any other
remedies and damages available, to an injunction to restrain the violation hereof by
Executive, Executive’s partners, agents, servants, employers, employees and all
persons acting for or with Executive. Executive represents and admits that in the
event of the termination of her employment, Executive’s experience and capabilities
are such that Executive can obtain employment in a business engaged in other lines
and/or of a different nature than the Bank, and that the enforcement of a remedy by
way of injunction will not prevent Executive from earning a livelihood. Nothing
herein will be construed as prohibiting the Bank from pursuing any other remedies
available to the Bank for such breach or threatened breach, including the recovery
of damages from Executive. The parties also agree that, should a court of competent
jurisdiction determine that the temporal and/or geographic scope of the foregoing
restrictions on competition are overbroad, the court should modify the restrictions
to the minimal extend needed to render them enforceable under applicable law.

	 	11.	 	SOURCE OF PAYMENTS.

	 
	 	 	 	All payments provided in this Agreement shall be timely paid in cash or check from
the general funds of the Bank.

	 
	 	12.	 	EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.

	 
	 	 	 	This agreement contains the entire understanding between the parties hereto and
supersedes any prior employment agreement between the Bank or any predecessor of the
Bank and Executive, except that this Agreement shall not affect or operate to reduce
any benefit or compensation inuring to the Executive of a kind elsewhere provided.
No provision of this Agreement shall be interpreted to mean that Executive is
subject to receiving fewer benefits than those available to her without reference to
this Agreement.

 

7

 

	 	13.	 	NO ATTACHMENT; SUCCESSORS AND ASSIGNS.

	 	(a)	 	Except as required by law, no right to receive payments under
this Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation, or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to affect any such action shall be null,
void, and of no effect.

	 
	 	(b)	 	This Agreement shall be binding upon, and inure to the benefit
of, Executive and the Bank and their respective successors, heirs, executors
and assigns.

	 	14.	 	MODIFICATION AND WAIVER

	 	(a)	 	This Agreement may not be modified or amended except by an instrument in
writing signed by the parties hereto.

	 
	 	(b)	 	No term or condition of this Agreement shall be deemed to have been waived, nor
shall there by any estoppel against the enforcement of any provision of this Agreement,
except by written instrument of the party charged with such waiver or estoppel. No
such written waiver shall be deemed a continuing waiver unless specifically stated
therein, and each such waiver shall operate only as to the specific term or condition
waived and shall not constitute a waiver of such term or condition for the future as to
any act other than that specifically waived.

	 	15.	 	SEVERABILITY

	 
	 	 	 	If, for any reason, any provision of this Agreement, or any part of any provision,
is held invalid, such invalidity shall not affect any other provision of this
Agreement or any part of such provision not held so invalid, and each such other
provision and part thereof shall to the full extent consistent with the law continue
in full force and effect.

	 
	 	16.	 	HEADINGS FOR REFERENCE ONLY

	 
	 	 	 	The headings of sections and paragraphs herein are included solely for convenience
of reference and shall not control the meaning or interpretation of any of the
provisions of this Agreement.

 

8

 

	 	17.	 	GOVERNING LAW.

	 
	 	 	 	This Agreement shall be governed by the substantive laws and procedural provisions
of the State of Tennessee, unless otherwise specified herein; provided, however,
that in the event of a conflict between the terms of this Agreement and any
applicable federal or state law or regulation, the provisions of such law or
regulation shall prevail.

	 
	 	18.	 	PAYMENT OF LEGAL FEES.

	 
	 	 	 	All reasonable legal fees paid or incurred by the Bank or the Executive pursuant to
any dispute or question of interpretation relating to this Agreement shall be paid
or reimbursed by the prevailing party in such judgment, arbitration or settlement.

	 
	 	19.	 	INDEMNIFICATION.

	 
	 	 	 	The Bank shall provide Executive with coverage under a standard directors’ and
officers’ liability insurance policy at its expense, or in lieu thereof, shall
indemnify Executive to the fullest extent permitted under applicable Tennessee and
Federal law and the Bank’s Articles of the Association against all expenses and
liabilities reasonably incurred by her in connection with or arising out of any
action, suit or proceeding in which she may be involved by reason of her having been
a director or officer of the Bank (whether or not she continues to be a director or
officer at the time of incurring such expenses or liabilities), such expenses and
liabilities to include, but not be limited to, judgment, court costs and attorneys’
fees and the cost of reasonable settlements.

	 
	 	20.	 	SUCCESSOR TO THE BANK.

	 
	 	 	 	The Bank shall require any successor or assignee, whether direct or indirect, by
purchase, merger, consolidation or otherwise, to all or substantially all the
business or assets of the Bank, expressly and unconditionally to assume and agree to
perform the Bank’s obligations under this Agreement, in the same manner and to the
same extent that the Bank would be required to perform if no such succession or
assignment had taken place.

 

9

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and their
seal to be affixed hereunto by a duly authorized Director, and Executive has signed this
Agreement, all on the 15th day of May, 2009.

	 	 	 	 	 	 	 	 	 
	ATTEST:

	 	 	 MOUNTAIN NATIONAL BANK

MOUNTAIN NATIONAL BANCSHARES, INC. 
	 
	/s/ Beverly J. Brosch	 	 	 	 By:	 	/s/ Dwight B. Grizzell
	 	 	 	 	 	 	 
	(SEAL)

	 	 	 	 	 	Name:
	 	Dwight B. Grizzell
	 

	 	 	 	 	 	Title:
	 	President/Chief Executive Officer
	 
	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 
	WITNESS:
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	/s/ Vicki V. Scott	 	 	 	  EXECUTIVE:	 	/s/ G. Devon McKinzie	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:
	 	G. Devon McKinzie
	 	 
	 

	 	 	 	 	 	
Title:
	 	
Executive Vice President/Chief
Lending Officer	 	 

 

10

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00171-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00171-of-00352.parquet"}]]