SETTLEMENT AND RELEASE AGREEMENT 

This SeUiemcnt and Release Agreement ("AgJ:ccment") is made as of this 15th day of 

July, 2013, by, between, and among the fo11owing undersigned parties: 

The Federal Deposit Insurance Corporation, as receiver for Rainier Pacific Bank, 

Tacoma, Washington ("FDIC"), and Stephen l3ader, Edward Brooks, Charles Cunetto, John 

Hull, Brian Knutson, Carolyn Middleton, Victor Toy, Alfred Trelevcn, III, Bruce Valentine, and 

Dat·ren Zemanek (collectively, the "Settling Defendants") (individually, the FDIC and the 

Settling Defendants may be referred to herein as a "Party'' and collectively as the "Patties"). 

RECITALS 

WHEREAS: 

Prior to February 26, 2010, Rainier l)acific Bank ("Bank") was a depository institution 

organized and existing under the laws ofthe State of Washington. 

On February 26, 2010, the Bank was closed by the Washington Dcpattment of Financial 

Institutions and, pursuant to 12 U.S.C. § 1821(c), the FDIC was appointed receiver. In 

accordance with 12 U.S.C. § 1821(d), the J.'DIC a8 receiver succeeded to all rights, titles, powers, 

and privileges of I he Dnnk, including those with respect to its assets. 

Among the assets to which the FDIC as receiver succeeded were any and all of the 

Bank's claims, demands, and causes of action against its former directors, officers, and 

employees arising from the performance, nonperformance, and manner of performance of their 

respective functions, duties, and acts as directors, officers, and/or employees of the Bank. 

The FDIC hns asserted claims against the Settling Defendants, who had each served at 

various times as directors, officers, and/or employees of the Bank. The Settling Defendants have 

denied and continue to deny liability for the FDIC's claims. 

The undersigned Parties deem it in their best interests to enter into this Agrccrm;nt to 

avoid the uncertainty, trouble, and expense of litigation. 

NOW, THEREFORE, in consideration of the pro.roiscs, undertakings, payments, and 

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releases stated herein, the sufficiency ofwhich consideration is hereby acknowledged, the 

undersigned Pa1tics agree, each with the other, as follows: 

SECfiON 1: Payment to FDIC 

A. As an essential covenant and condition to this Agreement, the Settling 

Defendants, collectively, agree to pay the FDIC the sum of $375,000 (the "Settlement Funds"). 

B. Within 10 days of the execution of an original, or originals in countcrpaLt, of this 

Agreement by all of the undersigned Parties to this Agreement, but no later than August 15, 

2013, the Settlement Funds shall be delivered to the PDIC by direct wire transfer into an account 

designated by the FDIC or by certified or cashier's check drawn upon a depository institution 

acceptable to the FDTC and delivered to an address provided by the FDIC. 

In the event that the Settlement Funds arc not delivered to the FDIC (or its 

counsel) by August 15, 2013, inturcst shall accrue on all unpaid amounts at the rate of 5% per 

annum from At1gust 15, 2013until the date of payment. However, if said Settlement Funds arc 

not delivered to the FDIC by August 15, 2013 as a result of the FDIC's failure to execute this 

Agreement, the FDIC's failure to designate an account for payment by wire transfer, or the 

FDIC's failure to accept or reject the sufficiency of the depository institution upon which the 

Settling Defendants propose to draw a certified or cashiet·'s check for the Settlement Funds, no 

interest shall accrue until ten cloys after the FDIC cures such failure(s). 

C. Without waiving any rights of the FDIC under this Agt·eemcnt, in the event that 

all Settlement Funds are not received by the FDIC by August 15, 2013, the FDTC, in its sole 

discretion, shall have the right to declare this Agreement null and void, shall have the right to 

extend the payment term of this Agreement for any period of time until it receives all Settlement 

Funds (including all accrued interest), and/or shall haw the right to enforce this Agreement 

against the Parties, in which event the Parties agree to submit to the jurisdiction of the United 

States District Court for the Western District of Washington for purposes of any action to 

enforce this Agreement and Settling Defendants agree to pay all of the FDIC's reasonable 

attorney's fees expended in enforcing the terms of this Agreement. Any decision by the FDIC to 

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extend the payment tcnn of this Agreement ot· to accept partial payment of the Settlement Funds 

shall not prejudice its rights to declare this Agreement null and void if it has not received all 

Settlement Funds (including all accrued interest) by August 15, 2013, or to enforce the terms of 

this Settlement Agreement; provided however, that in the event the FDIC declares this 

Agreement null and void, the FDIC will retum all amounts paid to it under this Agreement. 

SECTION 11: Releases 

A. Release of Individual Settling Defendants by FDIC. 

Effective upon receipt in full of the Settlement Funds and, if appl.icable, any accrued 

interest described in SEG'TJON I above, and without any further action by anyone, and except as 

provided in SECTION II.D. below, the FDIC, for itself and its employees, offi cers, directors, 

representatives, successors, administrators, agents, and assigns, shall be deemed to have, and by 

operation of law shall have, irrevocably, absolutely, unconditionally, fully, finally, and forever 

released, relinquished, waived, and discharged each of the Settling Defendants and their 

respective heirs, executors, administrators, agents, representatives, predecessors, successors, 

marital communities, and assigns, from any and all claims, demands, obligations, damages, 

actions, liabilities, and causes of action, direct or indirect, in law or in equity, whether based on 

federal law, state Jaw, or common law, whether foreseen or unforeseen, matured or unmatured, 

known or unknown, accrued or not accrued, existing now or to he created in the future, that arise 

fi·om or relate to the performance, nonperformance, or manner of performance ofthc Settling 

Defendants' respective functions, duties, or other actions taken as employees, officers, and/or 

directors of the Bank. 

B. Release of FDIC by the Settling cn nts. 

Effective simultaneously with the release granted in SECTION H.A. above, and without 

any further action by anyone, and except as provided in SECTlON II.D. below, the Settling 

Defendants, on behalf of themselves individually, and their respective heirs, executors, 

administrators, agents, representatives, predecessors, successors, marital communWes, attorneys, 

and assigns, shall be deemed to have, and by operation of law shall have, it'revocably, absolutely, 

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unconditionaJly, fully, finally, and forever released, relinquished, waived, and discharged the 

FDIC, and its employees, officers, directors, representatives, successors, administrators, agents, 

and assigns, from any and all claims, demands, obligations, damages, actions, liabilities, and 

causes of action, direct or indirect, in law or in equity, whether based on federal law, state law, or 

common law, whether foreseen or unforeseen, matured or unmatured, known or unknown, 

accrued or not accrued, existing now or to be created in the future, that arise from or relate to the 

Dank or to the performance, nonperformance, or manner of performance of the Settling 

Defendants' respective functions, duties, and actions as employees, officers, and/or directors of 

the Dank. 

C. Release by Settling DefeD~l!mts of Each Other. 

Effective simultaneously with the releases granted in SECTION II.B. above, and without 

any further action by anyone, the Settling Defendants, and their respective heirs, executors, 

administrators, agents, representatives, predecessors, successors, marital communities, attorneys, 

and assigns, shall be deemed to have, and by operation of law shall have, irrevocably, absolutely, 

unconditionally, fully, finally, and forever released, relinquished, waived, and discharged each 

other tram any and all claims, demands, obligations, damages, actions, liabilities, and causes of 

action, direct or indirect, in law or in equity, whether based on federal law, state law, or common 

law, whether foreseen or unforeseen, matured or unmatured, known or unknown, accrued or not 

accrued, existing now or to be created in the future, that arise from or relate to the performance, 

nonperformance, or manner of performance of their respective functions, duties, and actions as 

employees, offtcers, and/or directors of the Bank. 

D. Express Reservations From Releases. 

I. Notwithstanding any other provision in this Agl'eemcnt, the FDIC does not 

release, and expressly preserves fully and to the same extent as ifthe Agreement had not heen 

executed, any claims or causes of action: 

a. against Lhe Settling Defendants or any other person or entity for liability, if 

any, incurred as the maker, endorser, or guarantor of any promissory note or indebtedness 

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payable or owed to the FDIC, the Bank, or other FDIC-insured financial institution, including 

without limitation any such claims acquired by the FDIC as successor in interest to the Bank or 

any person or entity other than the Bank; 

h. against any person or entity not expressly released in this Agreement; and 

c. which ate not expressly released in SECTION II.A. above. 

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

Agreement shall be construed or interpreted as limiting, waiving, releasing, or compromising the 

jurisdiction and authority of the FDIC in the exercise of its supervisory or regulatory authority or 

to diminish its ability to institute administrative enforcement proceedings seeking removal, 

prohibition, or any other administrative enforcement action. 

3. Notwithstanding any other provision in this Agreement, this Agreement does 

not purport or intend to waive any claims which could be brought by the United States through 

either the Department of Justice, the United States Attorney's Office for the Western District of 

Washington, or any other federal judicial district. In addition, the :FDIC specifically reserves the 

right to seek court-ordered restitution pursuant to the relevant provisions of the Victim and 

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

4. Except as explicitly provided in SECTIONS II.B. and ILC. herein, the Settling 

Defendants do not release, and expressly preserve fully and to the same extent as if the 

Agreement had not been executed, all other claims and causes of action against any person or 

entity related to any matte1·, including without limitation any claim some or all of the Settling 

Defendants have against their respective insurers, with respect to the FDIC claims that arc 

resolved by this Agreement. 

SECTION III: Insu•·ance Policies and Proceeds 

All rights of ownership or other interest in any insurance policy or policies that may 

provide insurance coverage to some or all of the Settling Defendants with respect to any or aU 

claims by the FDIC that are resolved by this Agreement, us well as the proceeds of any such 

policy or policies, belong solely to the Settling Defendants. The FD.TC hereby waives, releases, 

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and disclaims any ownership or other interest in any such .insut·anct.: policy or policies, or 

ownership or other interest in the proceeds of any such poJicy or policies. 

SECTION IV: Waiver of Dividends 

To the extent, if any, that Settling Defendants arc or were shareholders of the naok and 

by virtue thereof are or may have been entitled to a dividend, payment, or other pro 1'a/a 

distribution upon resolution ofthe receivership of the Bank, they hereby knowingly assign to the 

FDIC any and all rights, titles, and interest in and to any and all such dividends, payments, or 

other pro rata distributions. 

SRCTION V: Representations and Acknowlcdgemcn.ts 

A. N.9 .. A.~imission ofLiabWty. The undersigned Parties each acknowledge and agree 

that the matters set forth in this Agreement constitute the settlement and compromise of disputed 

claims, and that this Agreement is not an admission or evidence of liability by any ofthem 

regarding any claim. The Settling Defendants have denied and continue to deny any fault, 

liability, or wrongdoing as to any claims alleged or asserted by the FDIC. 

B. Execution in Counterparts. This Agreement may be executed in counterparts by 

one or more of the Patties named herein and all such counterparts when so executed shall 

together constitute the final Agreement, as if one document had been signed by all Parties hereto; 

and each such counterpart, upon execution and delivery, shall be deemed a complete original, 

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

Agreement. 

C. Binding Eff(!~t. Each of the undersigned persons represents and warrants that 

they arc a Party hereto ot' are authorized to sign this Agreement on behalf of the respective Party, 

and that they huve 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. This Agreement shall be interpreted, construed, and enforced 

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according to applicable federal law, or in its absence, the law:; of the State of Washington. 

F.. .[ill_tJ..re Agreement and 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 except by another written 

insti'Umcnt signed by the Pa11y or Parties to be bound thereby, or by their respective authorized 

attorney(s) or other rcprcsentative(s). 

F. Reasonable Cooperation. The undersigned Parties agree to cooperate in good 

faith to effectuate all of the terms and conditions of this Agreement. 

G. Advice of Counsel. Each Party hereby acknowledges that it has consulted with 

and obtained the advice of counsel prior to executing this Agreement, and that this Agreement 

has been explained to that Party by his or her counsel. 

H. :ntJc 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. Authorship/Con$truction. This Agreement sets fOtth terms and agreements jointly 

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

against any Party by reason of which Party drafted it. 

fN WlTNESS WHEREOF, the Parties herdo have caused this Agreement to be executed 

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

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