Page 1 

SETTLEMENT AND RELEASE AGREEM.ENT 

This Settlement and Release Agreement ("Agreement") is made effectjve September 5, 

2012, by, between, and among the following undersigned parries; 

Federal Deposit Insurance Corporation. as Receiver for Westsound Bank ("FDIC·R")~ 

Richard N. Christopherson, Donald F. Cox} Jr., Brett T. Green, David K. Johnson, James H. 

La.'Ub, Brian B. McLellan~ Rodney R. Parr, Dean M. Reynolds, Donald H. Tucker, Louis J. Weir, 

and Lany C. Westfall (collectively, the "Defendants'\ and Bancln.sure, Inc. ("BancJnsure" or 

the '"Insurance Company'~) (individually~ the FDJC-R, the Defendants and the Insurance 

Company may be referred to herein as "Party" and collectively as the ''Parties"). WSB Financial 

Group, Inc. (aWSB Financial") is a limited party to this Agreement only as specifically provided 

for. 

RECITALS 

WHEREAS: 

1. Prior to May 8, 2009, Westsound Bank ("Bank") was a depository institution 

organized and existing under the laws of ll-J.e State of Washington; 

2. The Bank was a wholly owned subsidiary of WSB Financial. WSB is a limited 

party to this Agreement only as provided for jn Section IJI.F below. 

3. On May 8, 2009, the Bank was closed by the Washington State Department of 

Financial Tnstitutions and pursuant to 12 U.S.C. § 1821(c), the Federal Deposit Insurance 

Corporation was appointed Receiver. In accordance with 12 U.S.C. § 182l(d), the FDIC-R 

succeeded to all rights, titles, powers and privileges of the Bank~ including those with respect to 

its assets. 

4. Among the assets to which the FDIC-R succeeded were any and all of the Bank's 

claims, demands, and causes ofaction against its former directors, officers and employees arising 

from the pe1fonnance, nonperformance and manner of performance of their respective functions, 

duties and acts as directors and/or officers ofthe Bank; 

5. On November 18, 2011, the FDIC-R filed a complaint for money damages against 

the Defendants~ each of whom served at various times as directors and/or officers of the Bank. 

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

Washington in the matter FDIC v. Johnson, Civil No. 11-cv-05953 (the "D&O Action"). The 

Defendants have denied liability. Bancinsure issued Directors' and Ofticers' Liability Insurance 
Page 2 

Policy Including Company Reimbursement number I jtthe ''Policy'.') to WSB {~1(4.1 

Financial and the Bank. The Policy includes Lender Liability, Employment Practices, Bankers 

Errors & Omissions and Securities Claims Endorsements. The Policy was terminated effective 

July 23, 2008 and a one~year Extended Reporting Period was purchased expiring on July 23, 

2009. The Defendants provided notice and tender of the D&O Action for coverage under the 

Policy. BancJnsure denied coverage for the D&O Action based on its interpretation of the Policy 

and its view that a settlement and release agreement executed in September, 2008 precluded 

coverage. Notwithstanding its denial of coverage, Banclnsure agreed to reimburse defense costs 

under a full reservation of rights including the right to cease reimbursing defense costs and to 

seek reimbursement ofpaid defense costs. The Defendants disagreed with Banclnsure's coverage 

position and the amount ofcoverage potentially available under the Policy for the D&O Action. 

6. 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, t')e 

undersigned Parties agree, each \Vith the otherl as follows: 

SECTION I. Payment to the FDIC-R 

A. As an essential covenant and condition to this Agreement, within five (5) days 

after ful I execution of tl1is Agreement, Banclnsurc, on behalf ofitself and the Defendants, agrees 

to deliver the sum ofOne Million Seven Hundred and Thirty Thousand Dollars ($1,730,000.00) 

("the Settlement Payment") to Nixon Peabody, LLP, to be held in trust (the aTrust Account") 

pending distribution as set forth below, The only condition to the disbursement to the funds in 

the Trust Account to FDIC~R shall be entry ofan order of dismissal with prejudice ofthe D&O 

Action ("Order ofDismissal."). Upon Order ofDismissal, the Settlement Payment and balance of 

the Trust Account shall be disbursed by Nixon Peabody, LLP to FDIC-R. 

B. Banclnsure shall deliver the Settlement Payment to Nixon Peabody, LLP by direct 

wire transfer to the Trust Account as follows: 

(b)( 4) 

:~~~~r:~·~::J:~:::e:~:;~::,::" Account 

(b)( 4) ACCOUNT.,... I 

2 

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C. In the event that the Order of Dismissal is not entered v.ithin sixty (60) days after 

deposit of the Settlement Payment into the Trust Account, at FDIC-R's option, the Settlement 

Payment and balance of the Tn1st Account shall be disbursed by Nixon Peabody, LLP to 

Bancinsure and this Agreement shall become null and void and the Parties returned to their prior 

positions} or the FDICwR may elect to extend the escrow period for up to ninety (90) days. Jf 

after ninety (90) days from deposit ofthe Settlement Payment into the Tmst Account the Order 

of Dismissal has still not been entered, this Agreement shall become null and void, the 

Settlement Payment and balance ofthe Trust Account shall be disbursed by Nixon Peabody, LLP 

to Banclnsure and the Parties returned to their prior positions unless a further extension is agreed 

to by BancJnsure. 

SECTION II. Stipulation nnd Dismissal 

Upon full execution of this Agreement by each of the Parties, and the deposit of the 

Settlement Payment into the Trust Account, the FDIC-R and the Defendants shalJ promptly file a 

stipulation of dismissal. with prejudice, executed by the attorneys for all Parties hereto, jn the 

form attached hereto as Exhibit A. 

SECTION III. Releases 

A. The FDIC-R's Release. Upon its receipt of the Settlement Payment pursuant to 

Section I, and except as provided in Paragraph lll.D below and any claims asserting a breach of 

this Agreement, the FDJC-R, solely in its capacity as receiver and not in its corporate capacity, 

for itself and its successors and assigns, hereby releases and discharges: 

1. Defendants and their respective heirs, executors, administrators, agents, 

attorneys, representatives, successors and assigns, from any and all claims, demands, contracts, 

obligations~ damages, actions) and causes of action, direct or indirect, in law or in equity, known 

or unknown (hereinafter, "Claims") belonging to the FDIC-R (i) arising out of or related to the 

Defendants' conduct as directorst officers} consultants, employees, trustees, agents or 

representatives of the Bank including but not limited to alleged dishonest or fraudulent acts, 

and/or (ii) alleged or related to the aHegations in the D&O Action against the Defendants, and/or 

(iii) which could have been asserted against the Defendants in the D&O Action related to the 

Defendants' negligence~ gross negHgence. or breaches of fiduciary duty as directors, officers~ 

consultants, employer, trustees, agents or representatives of the Bank including but not limited to 

alleged dishonest or fraudulent acts; and 

3 

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2. Banclnsure, its parents, subsidiaries, affiliates, and reinsurers, and their 

e:rnpl.oyees, officers, directors, agents, representatives, attorneys, successors and assigns, for any 

and all Claims, k.novvn or lmkno\vn, that arise from or relate to the Policy} coverage under the 

Policy, or claims handling, and including but not limited to all claims, demands, damages, 

liabilities and causes of suit or action of any kind or nature whatsoever, including any 

extracontractual or bad faith claims or claims under Washington1S Insurance Fair Conduct Act, 

in any way related to a claim or losses, based on or in any way connected vvith the Policy or any 

duty related to the Policy. 

B. The Defendants' Release. Effective simultaneously \\~th the release in Paragraph 

HI.A. above, and except any claims asserting a breach of this Agreement, the Defendants, on 

behalf of themselves individually, and their respective heirs} executors, administrators, agents, 

represematives, successors and assigns, hereby release and discharge: 

l. FDIC~R and its employees, officers, directors) agents, representatives) 

attorneys, administrators, successors and assigns, from any and all Claims that arise from or 

relate to the Bank, except with respect to any Claims ·which are not released by the FDIC~R 

pursuant to Section IILD, and Defendants expressly reserve all defenses, rights and claims they 

have with respect to any Claims which are not released by the FDIC-R pursuant to Section JII.D; 

and 

2. Bandnsure and its employees, officers~ directors, agents, representatives, 

attorneys, reinsurers~ successors and assigns, from any and all Claims, known or unknown, that 

arise from or relate to the Policy, coverage under the Policy, or claims handling, and including, 

but net limited to all claims, demands, damages, liabilities and causes of suit or action of any 

kind or nature whatsoever: including any extracontractual or bad faitl1 claims or claims U..'lder 

Washington's Insurance Fair Conduct Act in any way related to a claim or losses, or unpaid 

defense expenses or costs, based on or in any way co1111ected ·with the Policy or any duty related 

to the Policy. 

C. Banclnsure's Release. Effective simultaneously with the releases granted in 

Paragraphs IJL A. and B. above, and except any claims asserting breach of this Agreement, 

Banclnsure, for itself and its successors and assigns, and on behalf of its parents, subsidiaries, 

affiliates, and reinsurers, and their successors and assigns, hereby releases and discharges: 

4 
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1. The FDIC-R, and its employees~ officers, directors, agents, 

representatives, attorneys, administrators, successors and assigns, from any and all Claims that 

arise from or relate to the Policy; and 

2. Each of the Defendants and their 1·espective heirs, executors, 

administrators. agents, attomeys, representatives, successors and assigns from any and all Claims 

that arise from or relate to the Policy, including, without limitation, any claims for payment or 

reimbursement. recoupment or subrogation rights with respect to the Claims, including, but not 

limited to, any and all attorney fees and other defense costs paid by Banclnsure. 

D. Exceotions from Releases. 

..I 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 Defendants 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 ("Excluded Obligations"), including without limitation any Excluded Obligations 

acquired by FDIC-R as successor in interest to the Ban.."< 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. However, FDJC-R acknowledges and agrees that timely notice of Claim or 

potential Claim under the Policy and Extended Reporting Period was not provided to Banclnsure 

except with respect to Defendants, and that the Tolling Agreement between FDIC·R, 

Banclnsure, and Defendants has expired and is no longer in effect. 

c. against Banc1nsure under Banclnsure Financial Institution Bond 

(b)(4)............ 	 . ..............J......_·-··______,~vith respect to the Proof of Loss submitted by FDIC-R dated January 22, 

20 10 and for which Banclnsure has denied coverage. 

2. Notwithstanding any other provision of this Agreement~ nothing herein 

limits, waives, releases, diminishes or compromises the jurisdiction and authority ofthe Federal 

Deposit Insurance Corporation in the exercise of its supervisor; or regulatory authority to 

institute administrative enforcement or other proceedings seeking removal, prohibition, civil 

5 

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penalties, restitution or other relief it is authorized to seek pursuant to its supervisory or 

regulatory authority against any person. 

3. Norv..lithstanding any other provision of this Agreement, this Agreement 

does not waive any claims which could be brought by the United States through the Department 

of Justice, the United States Attorney's Office for any federal judicial districi, 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 

ofthe Victim and Witness Protection Act, 18 U.S.C. § 3663, et. seq., if appropriate. 

E. Exnress Reservation ofRights of Bond Carrier. 

Notwithstanding any other provision) nothing in this Agreement shall release or prejudice the 

rights of Bnnclnsure, Inc., or any other undenvriter of any financial institution bond, fidelity 

bond, or banker's blanket bond on which the Bank is an insured, to bring any claims by way of 

subrogation to the claims of the FDIC-R~ against (a) any directors, officers, or employees of the 

Bank in their capacities as directors, officers, or employees of the Bank or in any other capacity} 

but excluding any of the Defendants, or( b) any other individual or entity, but excluding any of 

the Defendants, for dishonest or fraudulent conduct that directly caused any losses to the Bank, 

including any Loss or Claim under Bancinsure Financial Institution Bond No.I . ·ml· . (p)(4.) 

F. Policv Release. 

l. The FDIC-R, the Defendants, and WSB Financial agree and aclmowledge 

that Banclnsure's Settlement Payment as provided for herein, fully exhausts Banclnsure's and 

any of its reinsurers' obligations under the Policy and all Endorsements for all claims that were 

made or could be made in the future under the Policy and all Endorsements, including but not 

Jirnited to those excepted from the FDIC-R's release as provided for in Paragraph UI.D (t)(a)­

(b), above. For the avoidance of doubt, as between the FDIC~R and WSB Financial, this 

Agreement does NOT create any contractual obligation or rights, and it does NOT in any way 

release or compromise any rights or obligations. WSB Financial is a pru1y to this agreement 

.solely with regard to its relationship to the Defendants and Banclnsure. 

2. The FDIC-R, the Defendants, and WSB Financial further agree a,.~d 

acknowledge that Banclnsure's and any of its reinsurers' obligations under the Policy and all 

Endorsements are fully discharged and that all rights any insured may have under the Policy and 

all Endorsements are released. 

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SECTION lV. Waiver of Dividends and Proceeds from LUigation 

To the extent, if any, that the Defendants are or were shareholders ofthe Bank or WSB 

Financial Group, Inc. and by virtue thereof are or may be entitled to a dividend1 payment, or 

other disttibution upon resolution of the receivership of the Bank or proceeds in any litigation 

that has been or could be brought 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 FHLBB, OTS, RTC, 

FDlC, the FSLIC Resolution Fund or the United States government in connection with the Bank, 

its conservatorship or receivership; they hereby knowingly assign to the FDIC-R any and all 

rights, titles and interest in and to any a.'l'ld all such dividends, payments or other dis~ributions, or 

such proceeds. 

SECTION V. Financial DisclosuresSpecific Representations 1 Warranties and Disclaimer 

A. Each Defendant has submitted to the FDIC-R a signed and notarized Financial 

Disclosure Form (FDIC form 7600/01). The Parties expressly acknowledge 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 each Defendant to the FDIC-R. The FDIC-R 

has no obligation to independently verify the completeness and accuracy of each Financial 

Disclosure Form. 

B. Subsequent to the execution of this Agreement, if the FDIC·R establishes that, in 

his Financial Disclosure Form., a Defendant has intentionally failed to disclose any material 

interest, legal, equitable, or beneficial, in any asse1, that such Defendant agrees to cooperate fully 

with the FDIC-R to transfer his interest in that asset to the FDIC-R1 if requested, and to sign all 

documents necessary to effectuate that transfer. Additionally, if, in his Financial Disclosure 

Form} a Defendant has intentionally failed to disclose any material interest, legal, equitable, or 

beneficial, in any asset, the FDIC·R~ in. its sole discretion, may exercise one or more or all of the 

following remedies: (a) the FDIC-R may declare the release granted to such Defendant and his 

release of FDIC-R as null and void; (b} the FDIC-R may retain the $1.73 million in Settlement 

Payment, including any proportionate share allocated to such Defendant; and (c) the FDIC~R 

may sue such Defendant for damages, an injunction, and/or specific performance for breach of 

this Agreement. Each Defendant agrees that if: in his Financial Disclosure Form) he has 

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

such Defendant consents to the reinstatement of the FDJC-R1

s Claims and waives any statute of 

7 

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(b)(6)............ . 


(b)(6) 

limitations that would bar any of the FDIC:·R's Ciaims against him. Such Defendant shall be 

entitled to an offset as against the FDIC-R's damages of his proportionate share of the $1.73 

million settlement. Notwithstanding the FDJC-R's right to exercise the remedies set forth in this 

Section, the releases provided by the FDIC-R to the other Defendants, the releases and Policy 

Release provided by the FDJC·R, WSB Financial and the Defendants (including, without 

limitation, such Defendant) to Banclnsure, and Banclnsure's releases of FDIC~R and t~e 

Defendants (including, without limitation~ such Defendants) shall remain valid and i.."l effect 

SECTION VI. Termination. 

In the event the FDIC-R exercises its right to terminate this Agreement pursuant to 

Section LC, then~ for the purposes of any statute of limitations or other time-based defense to any 

of the claims of the FDIC-R the Parties to this Agreement shall be deemed to have reverted to 

their respective status as of5:00p.m. Eastern Time of the date this Agreement was signed by the 

FDIC-R. 

SECTION Vll. Notices. 

Any notices required hereunder shall be sent by registered mail 1 first class~ return receipt 

requested, and may also be sent by email, to the following: 

lfto the FDIC-R: 

David C. Joseph 


Senior Attomey, Professional Liability & Financial Crimes Section 


Federal Deposit Insumnce Corporation 


l60 1 Bryan Street 


Dallas, Texas 75201 


l····· I 

with a copy to: 

Kathleen M. Balderston 


Nixon Peabody LLP 


437 Madison Avenue 


New York, NY 1 0022 


8 

•• 

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If to the Defendants: 

Curt Roy Hineline 

Bracewell & Giuliani LLP 

701 Fifth A venue, Suite 6200 

Seattle, WA 981 04-70 J8 

(b)(6) ............ .. ~m I 

Counsel for Defendant David K. Jolmson 

James A. Krueger 

Vandeberg, Johnson & Gandara1 LLP 

1201 Pacific Avenue, Suite 1900 

POBox 1315 

Tacoma, WA 98401-1315 

(b)(6)_ m ......................... ................................ . I
 I 

Counsel for Defendant Rooney R Parr 

Jerry H. Kindinger 

Ryan, Swanson & Cleveland, PLLC 

1201 Third Avenue, Suite 3400 

Seattle, WA 98101-3034 

(b)(6) . ... I---E~~~;~ifb;·Detendant Donald F. Cox Jr. 

Thomas A. Sterken 

Law Offices ofKeller Rohrback L.L.P. 

1201 Third Avenue, Suite 3200 

Seattle~ Washington 98101-3052 

(b)(6) . 1 cc;i;nseii6~Z~i~na:m I<Jcnara 1. Christopherson. 

James H. Lamb, Brian B. McLellan, Dean M. Reynolds, 

Donald H. Tucker, Louis J. Weir and Larry C. Westfall 

James E. Howard 

Dorsey & Whimey LLP 

701 Fifth Avenue, Suite 6100 

Seattle, Washington 98104-7043 

.J ... - ... I (b)(6)••••• ••••••••••••"moo 

Counsel for Defendant Brett T. Green 

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If to BancJnsure: 

Jim Cross 


BancJnsure, Jnc. 


51 04 N. Francis Ave., Suite i 0 i 


Oklal1oma City, Okla.i-Ioma 73118 


(b)(6) ........................................j............................. 	 I 


with a copy to: 

. 	 Loren D. Podwill, Esq. 


Bullivant Houser Bailey PC 


300 Pioneer Tower 


888 SW FifthAvenue 


Portland, Oregon 97204 


(b )(6) ..........................,........................................... 


SECTION VIII. Representations and. Acknowledgements 

A. No Admission of Liabllitv. The undersigned Parties each acknowledge and agree 

that this Agreement and a1J negotiations, discussions and proceedings in connection v..ith this 

settlement shall not be deemed or constitute an admission by Defendants of fault: liability or 

wrongdoing as to any facts or claims alleged or asserted in the D&O Action or in any other 

actions or proceedings, and shall not be offered or received in evidence or otherwise used by any 

person in the D&O Action, or itt any other action or proceeding for any purpose, except in 

connection 'With a proceeding to enforce this Agreement. The Defendants deny any fault, liability 

or wrongdoing as to any facts or claims alleged or asserted by FDIC in the D&O Action a.'1d in 

any other actions or proceedings. 

B. Execution in Countemarts. This Agreemen1 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 ifone document had been signed by all Parties hereto; 

and each such counterpart, upon execution and deliver)'~ shall be deemed a complete original, 

binding the Party or Parties subscribed thereto upon the execution by all Parties to this 

Agreement Signed signature pages may be delivered by facsimile, e-mail or pdf transmission, 

which will constitute complete delivery without the necessity of delivery of originally signed 

signature pages. 

C. Bindin~r Efiee;t. Each ofthe undersigned persons represents and warrants that they 

are a Party hereto or are authorized to sign thls Agreet·nent on behalf of the respective Party, and 

!0 
Page 11 

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/Forum. This Agreement shall be interpreted, construed and 

enforced according to applicable federal Jaw, or in its absence, the laws of the State of 

Washington. Any legal action brought to enforce this Agreement shall be brought in the United 

States District Court for the Western District of Washington, unless that Court lacks jurisdiction, 

in which eventj or upon. a final order detennining a iack of jw-isdiction, the Parties agree to 

jurisdiction in the Washington State Superior Court, King County. 

E. Entire Agreement an.d 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, nor may any of its pro·visions 

be waived, except by another written instmment signed by the Party or Parties to be bound 

thereby, or by their respective authorized attomey(s) or other representative(s). 

F. Reasonable Cooperation. 

1. The undersigned Parties agree to cooperate in good faith to effectuate all 

the terms and conditions of this Agreement~ and to do whatever is reasonably necessary to 

effectuate the signing, delivery, execution, filing, recording, and entry, of any documents 

necessary to conclude the D&O Action, and to othen:vise perform the tenm of this Agreement 

2. Further, the Defendants agree to cooperate fully with the FDIC-R and 

Bancinsure in connection with any fidelity bond claims. Any such cooperation that involves any 

out of pocket costs is subject to reasonable reimbursement by Banclnsure or the FDlC-R 

pursuant to its internal guidelines and policy for such reimbursement. Such cooperation shall 

consist of: 

a. producing all documents requested by the FDIC-R or Bancinsure 

and in the possession of such Defendant. without the necessity of subpoena, as determined by the 

FDIC-R or Banclnsure, in their sole discretion, to be relevant to the Bank; 

b. making themselves available upon request of the FDIC-R or 

Banclnsure, at reasonable times and places for interviews regarding facts, as determined by the 

FDIC-R or Banclnsure in their sole discretion, to be relevant to the Bank; 
Page 12 

c. appearing to testify, upon request by the FDIC·R or Banclnsure, in 

any matter determined by the FDIC·R or Bnncinsure in their sole discretion to be related to the 

Ba:1k, without the necessity of subpoena; 

d. signing truthful affidavits upon request by the FDIC-R or 

Ban.cinsure, regarding any matter, as determined by the FDIC-R or Bancinsure in their sole 

discretion, to be relevant to the Bank. 

3. Notwithstanding the failure or aileged failure of any Defendant to 

cooperate with the FDIC-R and/or Banclnsure pw·suant to the foregoing Section F.2, the releases 

provided by FDIC-R to the other Defendants, the releases a.'1d Policy Release provided by the 

FDIC·R, WSB Financial and the Defendants (including, without limitation, such Defendant) to 

Banclnsure, and Bancinsure's releases ofthe FDIC-R and the other Defendants shall remain in 

full force alld effect. The FDIC-R and Bancinsurc. as applicable) may sue any such Defendant 

for breach ofhis obligations under Section F.2, for damages, injunction and/or specific 

performance, and exercise ail other remedies available by law, statute or equity with respect to 

such Defendant. 

G. Advice of Counsel. Each Party hereby acknowledges t.".lat 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. 

H. Title and Cal,;ltions, All section titles and captions contained in this Agreement are 

for convenience only and shall not affect the interpretation ofthis Agreement. 

I. Authorship/Construction. This Agreement sets forth terms and agreements jointly 

negotiated by the Parties. It is expressly agreed that this Agreement shall not be construed for or 

against any Pruty by reason of which Party drafted it 

.12 

Page 13 

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 DEPOSJT INSURANCE CORPORATION 


As Receiver for Westsound Bank 


(b)(6) 

By: ~m • David C. Joseph(/ 


Senior Attorney 


Dated: 7 J..oil.. 


RICHARD N. CHRISTOPHERSON, an individual 

Dated: 

DONALD F. COX, JR.~ an individual 

Dated: 

BRETT T. GREEN. an individuai 

Dated: 

13 
p.1 Page 14 

IN WITh'ESS W11EREOF, the Parties hereto have caused this Agreement to be executed 

by each oftbem or theirduly au!:horl~ed representatives on the da1es hereinafter subscribed 

FEDERAL DEPOSIT INSURANCE CORPORAT[ON 

As Receiver for WestSound BaJ"~l< 

By: 


David C. Joseph 


Senior AUomey 


D~ed: . -----­-------------------­

RICHARD N. CHRISTOPHERSON, an individual 

(b)(6 ~~--~----------

DONALD F. COX, JR.. an individual 

Dared: 

BRETT T. ORREN, an individual 

Dated: 

13 

I' .. 

Page 16 

rN WITNESS WHEREOF, the Parties hereto have caused tl1!s Agreement to be executed 

by each ofthem or their duly authorized representatives on the dates hereinafter subscribed. 

FEDERAL DEPOSIT INSURANCE CORPORATION 

As Receiver for West.sound Bank 

By: 


David C. Joseph 


Senio.: Attorney 


Dated:-------------­

RICHARD N. CHRISTOPHERSON, an individual 

Dated: 

DONALD F. COX, JR., an individual 

(b)(6)__ __ 

13 

Page 17 

DAVlD K, JOHNSON, an individual 

(b)(6) 

JAMES H. LAMB, an individual 

Dated: 


BRIAN B. McLELLA..N, an individual 


Dated: 


RODNBYR. PARR, an individual 


Dated: 


DEAN M. REYNOLDS, an individual 


Dated: 


DONALD H. TUCKER, an individual 


Dated: 

' 14 
Page 18 

DAVID K. JOHNSON, an individual 

Dated; 


JAMES H. LAMB~ an individuaL 


(b)(6) 

Dated: 1 November 2012 

BRIAN B. McLELLAN} an individual 

Dated: 


RODNEY R. PARR an individual 


Dated: 


DEAN M. REYNOLDS, an individual 


Dated: 


DONALD H. TUCKER, an individual 


Dated: 

14 

11-05-' 12 17:02 FRQ'1-WINDERMERE BELFAIR Pa~1:97-5005 T-441 P0002/00B2 F-795 

DAVID K. JOHNSON, an individual 

Dated: 

JAMES H. LAMB, an individual 

Dated: 

(b )(6) 

Dated: ~~~ '3, :te\;:t 

RODNEY R: PARR, at~ individual 

Dated: 


DEAN M. REYNOLDS. an individual 


Dated: 


DONALD H. TUCKER, an individual 


Dated: 


14 
Page 20 

D..at.<:d: 

JAMF..S'..H. LAMB, nn·individuu1 

ba: t~cl: 

:SRlAN B. McLELLAN, an itdiyidua; 

Dated; 

(b )(6) ·-IL_..,.....······················ _ _ -=·········..································----::==:::r----_,____.._.N....... ~;;...._ •.·. ~;id .I ~ 

bated: v 

l)EAN M. ~EYNOLDS, an individual 

'Da.tei:l: 


:DONi\LD R. TUCKER, an individual. 


bl.'ted: 

14 
Page 21 

DAVlD K JOHNSON, ao individual 

JAMES: H . .LAMB; art .individual 

.Dated: 

BRIAN B. McLELLAN, an lndividttal 

Dated! 


RODNEY&. PARR~ an individual. 


Dat~d: 

DEAN M .. REYNOLDS. an individtlal 

(b)(6) H 

0 00 0 

DONALD' H; TUC~ an.individual 

Dated:. 

14 

Nov 06 12 04:14p Pat Tucker Page 22 9072476796 p.1 

DAVID K. JOHNSONt an individual 

Dated; 


JAMES H. LAMB, an indivtdual 


Dated: 


BR!k~ B. McLELLAN, .an individual 


Dated: 


RODNEY R. PARR, an individual 


: Dat~d: 

DEAN M. RE'\'NOLDS, an indivjdual 

Dated: 

(b )(S) I~~~~LD H. TIJCI<ER. a.~ individual 

7- 2£!Jt·2--

Dmec.: 

14 

(b)(6) 

Dated: 

LARRV C. 'W'BSTPALL, tlJ1 tndhridu.l 

Dated: 

BANCJNSURB. INC, 

lJy! 

Name: )1M Crou 


Thl~: V1ce¥Pmidml Claim!! 


WSB F!NANCIALOROVP,INC. 

(Sol.oly fbr pu.'pot~~s otStet!on UtF) 

13~: -----·-------­ Na.mc: 

,1tle: 

IS 


ta·d 
11/05/2012 13:15 l36eB953282 PagEF:2k:fs PAGE 132102 

LOUJS J. WEIR, an individual 

J.'Jated: 

LARRY C. WESTFALL, an individual 

(b )(6) 

----1--­ l 

Dated: 

BANCINSLTRF!, INC. 

8y: 

Narne: ,1i rn Cros!l 

Ti Ue: ice-Presidcr~t Claims 

Dnto: 

WSB FINANCIAL GRO'tJP, INC. 

(Solely for purposes ofSe:!tlcn m.F) 

By: 

am~: 

Tille: 

Date: 

141~ . ! 

15 
Page 25 

LOUIS J. WEIR. an individual 

Dated: 


LARRY C. WESTFALL, an individual 


Dated: 


BANCINSURE. INC. 


(b)(6) OOOOOOOOOOOOOO Ho 


0 


Date: 

WSB FINANCIAL GROUP, INC. 

(Solely for purposes of Section IH.F) 

By: 

Name: 

Title: 

Date; 

15 

Page 26 

Dateru· 

LARRY C. WESTFALL, an individual 

Dated: 

BAi~CINSURE; INC•. I. 

! ~ ; : 

By: 


N;nne; JUn. Cross · 


Ti.tle: Vice;President c.fu\ims 


WSB.'};ttNANCIAL GROUP~ INC. 

(~olel~ for ofSeetkm IIH"t· 

(b)i.6) 

1n ' ·································································•················ 

By: 

Name; 

Title: 

Daw: 
5 

10 

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20 

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Page 27 

Hon. Ronald B. Leighton 

Walter E. Barton, WSBA # 26408 2 Karr Tuttle CampbeH 


3 1201 Third Avenue~ Suite 2900 


Seattle, Washington 98101 


4 Telephone: (206) 223~ 1313 


Fax: (206) 682-7100 


6 	 Kathleen M. Balderston, NY Bar #2252534 


KristinJamberdino, NY Bar#4393005 


7 Admitted Pro Hac Vice 


8 
 Nixon Peabody LLP


4 3 7 Madison A venue 


9 	 New York, New York 10022 
 IEXHIBIT A

Telephone: (212) 940-3000 


Fax; (212) 940~31 l 1 


11 

Gregory P. O'Hara} CA #131963 12 Admitted Pro Hac Vice 

13 Nixon Peabody LLP 

2 Palo Alto Square 

14 	 3000 El Camino Real, Suite 500 

Palo Alto. California 94306 

Telephone: (650) 320-7700 

16 	 l Fax: (650)320-7701 ! 


l 


l 7 I

l Attorneys for Plaintiff 

1s 1 

19 li UNITED STATES DISTRICT COURT 


II VIESTERN DISTRICT OF WASHINGTON 


I AT TACOMA

21 	 I> 

i FEDERAL DEPOSIT INSURANCE 
 22 II CORPORA TlON AS RECEIVER FOR NO. 3:1 l~cv"05953-RBL

23 II WESTSOlJND BANK, STIPULATION AND ORDER RE 

24 Plaintiff, DISMISSAL WITH PREJUDICE 

V. 

26 DAVID K. JOHNSON, eta/., 

27 Defendants. 

28 

STIPULATION AND ORDER 

RE DISMISSAL WTfH PREJUDICE 

#846437 vJ I 44469·002 

KA RR, TU TTLE·Cl>. MPB ELL 

.11 J"ttjttfWI'<~rs~.~·."t c~~»l'll•~ 

·~el 't!t!«< Avo•••· !ia!:o t!JQ~. Stault, w..b!of:.. S!l"·S~2a 

'l'cl•ptoo~ (~J ~!.l-¥.3!~, f•~ilm:l!~ {:U) 4i~-·noo 
5 

10 

15 

20 

25 

Page 28 

Bon. Ronald B. Leighton 

Walier E. Barton, WSBA # 26408 2 Karr Tuttle Campbell 


3 j 120 I Third A venue, Suite 2900 


I Seattle, Washington 98101 


4 Telephone; (206) 223-1313 


Fax: (206) 682-7100 


6 	 Kathleen M. Balderston, NY Bar #2252534 


Kristin Jamberdino, NY Bar #4393005
 7 Admitted Pro Hac Vice 


8 Nixon Peabody LLP 


437 Madison Avenue 


9 
 New York, New York 10022 


Telephone: (212) 940-3000 


Fax: (212) 940-3111 


11 

Grego.ry P. 0'Hara, CA #131963 

12 Admitted Pro Hac Vice 

13 Nixon Peabody LLP 

2 Palo Alto Square 

14 3000 El Camino Real, Suite 500 


Palo Alto, California 94306 


Telephone: (650) 320-7700 


16 Fax: (650)320-7701 

17 Attorneys for Plaintiff 

18 

19 UNITED STATES DISTRJCT COURT 

\\-'ESTERN DISTRICT OF WASHINGTON 

AT TACOMA 

21 	 II 

22 I 

t 

FEDERAL DEPOSIT INSURANCE 

ICORPORATION AS RECEIVER FOR NO. 3: ll·cv~05953~R.BL 

23 WESTSO"UND BANK, STIPULATION AND ORDER RE 

24 Plaintiff, DISMISSAL WITH PREJUDICE 

v. 

26 DAVJD K. JOHNSON, eta/., 

2.,,, Defendants. 

28 

STIPULATION AND ORDER 

RE DISMISSAL WlTH PREJUDfCE 

#846437 vi i 44469-002 

L•~CiJiw 

KARR·TUTTL E>CAM? BELL 

l~&l Third .\"rll~~~S~~hz2;t30.SQ~t\da. W3a~'~;l$Jn Q6HJ1.-30n 

-r•••,~~b1: c:~, ~n~un. '•tttll••:• t~tmti•Z..1l® 
Page 29 

1 STIPULATION 

2 , WHEREAS, Plaintiff and Defendants have entered into and executed a v.-Titten senlement 

3 Iagreement ("Settlement Agreement") resolving all claims and defenses in this action; and, 


4 ! 


WHEREAS, the Settlement Agreement requires the dismissal with prejudice of the entire 


5 
 ! 

action as to all pa.rties; :

i 

6 l 

l 

7 NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED by and among all !

l 


8 ! 


the parties hereto that this action be dismissed with prejudice as to all parties and that each party 1 

9 ! 

shall bear its own attorneys' fees and costs. The parties further stipulate and agree that the Court 

10 

shall retain jurisdiction over all disputes among the parties relating to the Settlement Agreement, 11 

12 i11cluding but not limited to interpretation and enforcement of the terms of the Settlement 

Agreement 

14 

DATED: 

15 

lsi Walter E. Barton 

16 Walter E. Barton, WSBA #26408 

Karr Tuttle Campbell 17 

1201 Third Avenue, Suite 2900 

18 Seattle, Washington 98101 

Telephone: (206) 223-1313 19 Fax: {206) 682-7100 

20 Email: I ............................................................J.................................................... (l:>)('?..) 

21 Kathleen M. Balderston} NY Bar #2252534 

Kristin Jamberdino, NY Bar #4393005 22 

Admitted Pro Hac Vice 

23 Nixon Peabody LLP 

437 Madison Avenue 24 New York. New York l 0022 

Telephone: (212) 940-3000 

Fax: (212) 940~311 1 

26 

Email:l I············ (p)('?.) 27 

28 

i.4w0ffius 

KA R R·TUTTLE·CAMll BELL STIPULATION AND ORDER A ~"Jfu:i'..~i',4.(J,tf.:i« C;t;~r,o~iM 

RE DISMISSAL WITH PREJUD1CE I ~'ll Tbb'd 4'hoeo.~H-. S\IHa St:a,, Stt5Hlt, W\'1-l-.:"r::lM 9!l~~-$~a 

Telapt.one. (21>1) z::~-nt~,l.>•i:!litt:.l~e \"..CG) n:~ll~ #846-13 7 \' l/44469·002 
5 

10 

15 

20 

25 

Page 30 

2 


3 


4 

6 


7 


8 


9 


11 

12 

l3 

14 

16 

17 

18 

19 

21 

22 

23 

24 

26 

27 

28 

STIPULATION Al'-:D ORDER 

RE DlSMJSSAL WITH PREJUDICE 

#846437 ¥! i 44469-002 

Gregory!'. O'Hara, CA #131963 

Admitted Pro Hac Vice 

Nixon Peabody LLP 

2 Palo Alto Square 

3000 El Camino Real, Suite 500 

Palo Alto, California 94306 

Telepholle: (650) 320-7700 

Fax: (650)320-7701 

Email:~...!________;==~··! 

Atromeys for Plaintiff 1

.(0.}(§) 

Mr. James E. Howard 

Ms. Lauren Rainwater 

Dorsey & Whitney LLP 

70 l Fifth Avenue, Suite 6100 

Seattle~ Washington 98104-704 3 

Attorneys for Defendant Brett T. Green 

Mr. Curt Roy Hineline 

Mr. Robert M. Crowley 

Ms. Carolyn D. Robbs 

Bracewell & Giuliani LLP 

70 1 Fifth Avenue, Suite 6200 

Seattle~ WA 98104·7018 

Attorneys for Defendant David K. Johnson 

Mr. Henry Andrew Saller, Jr. 

Mr. James A. Krueger 

Ms. Lucy Russell Clifthome 

Vandeberg, Johnson & Gandara, LLP 

1201 Pacific Avenue, Suite 1900 

PO Box 1315 

Tacoma, WA 98401-1315 

Attorneys for Defendant Rodney R. Pan 

!..t.~;,; Offi::~ 

KA RR,TUTTLE·CA M PB EI,L 

l~~l "Moi;.l llov~R<.I:I:'o Suito :i~:>. s~.-itle~ Wa.!ll~Q,taD Ml:l1...3~~ 

'f'dopt~:.o t%03) z;:.. ~~ t3, F-e•jn•l~~ t2f.f.1 ~8~•~11>0 
5 

10 

15 

20 

---

25 

Page 31 

Mr. Jerry H. Kindinger 

Mr. Roger J. Kindley .., 

.) 	 Mr. Bryan C. Graff 

Ryan, Swanson & Cleveland, PLLC 


4 
 1201 Third Avenue, Suite 3400 

Seattle, WA 981 01-3034 

Altomeys for Defendant Donald E Cox, Jr. 

6 

7 Mr. Thomas A. Sterken 

8 
 Ms. Juli E. Farris

Law Offices of Keller Rohrback LL.P. 


9 
 1201 Third Avenue, Suite 3200 

Seattle, Washington 98101-3052 

Attomeys for Defendants Louis J. Weir, 

l I 	 Dean M. Reynolds, Larry C. Westfall, 

Richard N. Christopherson, James H. Lamb, 

• 

! 

•

• 

12 Brian B. McLellan an.d Donald H. Tucker 

13 

14 ORDER 

BASED UPON I THE FOREGOING STIPULATION, IT IS ORDERED: 

16 I 

l Thi~ action is dismissed with prejudie:. as. to.ail. p~ies and eac~ party shall bear its o~.m I 17 

! attorneys' tees and costs. The Court shall retain JUnsdJcton over all disputes among the part1es ! 18 

relating to the Settlement Agreement, including but not limited to interpretation and enforcement I 

19 

of the term.s of the Settlemenl Agreement. 

2] DATED: 

')"} 

Hon. Ronald B; Leighton 23 United States District Court 

24 ! 

1 

j 

! 

26 

27 

28 

STJPULATION AND ORDER 

RE DISMISSAL WITH PREJUDICE 

#&46437 vI! 44469·002 

KARR·TUTTLE CAMPBELL 

l:ll:t'H TbhV AntHills s~n~ 79i!»t BMtil~, Walhho~gtrul &•'l0l·:W~8 

'!"••eph\}~t t~:l&l ~23·\~lS, fMJ:Air~il• ~tS) ea;:.,,~ 
5 

10 

15 

20 

25 

21 

Page 32 

CERTJFICATE OF SERVJCE I 

2 I hereby certify that on the _th day of October, 20121 I electronically filed the foregoing !

i 

' ' 3 with the Clerk ofthe Court using the C't>1JECF system, which will send noiification of such filing i

' 

4 : to the following; 

6 i Mr. Curt Roy Hineline 


Mr. Robert M. Crowley 


7 Ms. Carolyn D. Robbs 


Bracewell & Giuliani LLP
 8 701 Fifth Avenue, Suite 6200 


9 Seattle, WA 98 t04-7018 


ll Mr. Jerry H. Kindinger 

Mr. Roger J. Kindley 

12 Mr. Bryan C, Graff 

Ryan, Swanson & Cleveland, PLLC l3 

1201 Third Avenue, Suite 3400 

14 Seattle, WA 98101-3034 

Mr. James E, Howard 

16 Ms. Lauren Rainwater 

Dorsey & Whitney LLP 

17 701 Fifth Avenue, Sui.re 6100 

Seattle, Washington 98104-7043 18 

19 

DATED this _th day of October 2012. 

22 

23 

24 I 

i

I 

I 

26 1 

21 I 

28 II 

l.<itn()OS l 

STIPULATJON AND ORDER 

RE DISMlSSAL WITH PREJUDICE #84~4)7 vl! 44469-002 

I 

Mr. Henry Andrew Saller, Jr. I

Mr. James A. Krueger I Ms. Lucy Russell Clifthorne I 

Vandeberg, Johnson & Gandara, LLP ! i201 Pacific Avenue} Suite 1900 

PO Box 1315 

Tacoma, WA 9840 1·1315 I 

I 

Mr. Thomas A. Sterken 

Ms. JuliE. Farris 

Law Offices of Keller Rohrback L.L.P. 

1201 Third A venue~ Suite 3200 

Seattle, Wa."lhington 98101-3052 

Mr. Victor M. Minjares 

Washington State Attorney General 

Government Compliance & Enforcement Div. 

}125 Washington Street SE 

PO Box 40i00 

Olympia, WA 98504-0100 

Is! Walter E. Barton 

Walter E. Barton, WSBA # 26408 

Karr Tuttle Campbell 

120 l Third A venue~ Suite 2900 

Seattle, Washington 98101 

Telephone: (206) 223-1313 

Fax: (206) 682-7100 

E-mail: I ······································· m•l. ·································· (b)(6) ······································ ·········· 

f.4w(l.O;.~ 

KARR·TUTTLE·CAMPBEL L 

A Pn:jluiiM~fJr~~-u CD:pt>r.ni:• 

n:Ot 'ftt}rd i~\'t:t~~. tl~i~t £!J,C. Staid•. Wr:~J~f~n<t~ tlfl:l!U..:J~r~ 

Tf:Z;,p~un~• t:Otl) U.)·U !1, :F•~ilr:t~'~e t:tl» I&'J..'HDC