SETTLEMENT AND REI ,RASE AGREEMENT 

This Settlement and Release Agreement C'Agrecment") is made as of this~¥-day of 

September, 20 13, by, between, and among the following undersigned parties: 

The Federal Deposit lnsurance Corporation, as receiver of Mainstreet Dank ("FDIC"), 

and Bruce Soma, David B. Chichila, David C. Coen, Kelly Dunn, James E. Friend, Patrick T. 

Stead and Barbara L. Toy (collectively, the "Settling Defendants"), and Federal Insurance 

Company ("Federal"). Individually, the FDlC, the Settling Defendants and Federal may be 

referred to herein as "Partf' and collectively as the "Parties." 

IlliCIT AI ,s 

WHEREAS: 

Prior to August 28, 2009, Mainstreet Bank ("Bank") was a depository institution 

organi7.ed and existing under the laws of Mitmesota; 

On August 28, 2009, the Bank was closed by tho Minnesota Department of Commerce 

("MDC") and pursuant to 12 U.S.C. § 182l(c), the FDIC was appointed receiver. Tn accordance 

with 12 U.S.C. § 182l(d), the FDIC as receiver succeeded to all rights, titles, powers and 

privileges of the Bank, including those with respect to its assets; 

Among the assets to which the FDIC as receiver succeeded were any a11d all of the 

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

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

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

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

various times as officers and/or directors of the Bank. The Settling Defendants have denied 
liability for the FDIC~s claims; 

Federal issued directors' and officers~ liability policy nwnbcrL..I __ ·······-·······-·······_,kthc···'~Poliey'-'), .......... Jl:>)(4.) 

which insured the directors and officers of the Bank according to the terms, provisions and 

conditions of the Policy. The Settling Defendants have assetted claims for coverage under the 

Policy. Federal has reserved its rights to deny coverage under the Policy for claims asserted by 

FDIC against the Settling Dcfcndattts; 

The undersigned parties deem it in their best interests to enter into this Agreement to 

avoid the uncertainty, trouble, and expense of litigation. 

NOW, THEREFORE, in consideration of the promises, undertakings, payment, and 

releases stated herein, the sufficiency of which consideration is hereby acknowledged, the 

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

SECTION 1: Payment to FDIC 

A. As an essential covenant and condition to this Agreement, Federal agrees to pay 

the FDIC the swn of Three Million Dollars ($3,000,000) (the "Settlement Payment"). 

B. The Settlement Payment shall be delivered to FDIC on or before thirty (30) days 

after Federal's receipt of this Agreement executed by the FDIC and the Settling Defendants (the 

"Due Date"). 

C. In addition, and without waiving any other rights that the FDIC may have, in the 

event that the Settlement Payment is not received by the FDIC on or before the Due Date, then 

the FDIC shall have the right to enforce this Agreement. In such event, Federal agrees to pay all 

of the FDIC's reasonable attorney's fees expended in enforcing the terms of this Agreement. 

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SECTION II: Releases 

A. Release by the FDIC. 

Effective upon receipt in full of the Settlement Payment described in SECTION I above, 

and except as provided in PARAGRAPH II.H. below, the FDIC, for itself and its successors and 

assigns, hereby releases and discharges each of the Settling Defendants, all directors and officers 

of Bane Midwest Corp. ("Holding Company"), all directors and officers of the Bank, and aU 

other employees of the Bank and the Holding Company (collectively, the "Releasees''), and the 

Releasccs' heirs, executors, administrators, representatives, successors and assigns, from any and 

all claims, demands, obligations, damages, actions, and causes of action, direct or indirect, in law 

or in equity, belonging to the FDIC, that arise from or relate to, their performance, 

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

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

B. Release of the FDIC by the Settling Defendants. 

Effective simultaneously with the release granted in PARAGRAPH li.A. above, the 

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

administrators, agents, representatives, successors and assigns, hereby release and discharge the 

FDIC, and its employees, officers, directors, representatives, successors and assigns, from any 

and all claims, demands, obligations, damages, actions, and causes of action, direct or indirect, in 

law ot' in equity, that arise from or relate to the Bank ot' to the performance, nonperformance, or 

matmer of performance of the Settling Defendants' respective functions, duties and actions as 

officers, directors, and employees of the Bank. 

C. Release by Settling Defendants of Each Other. 

Effective simultaneously with the releases granted in Paragraph II.B. above, the Settling 

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Defendants and their respective heirs, executors, administrators, representatives, successors and 

assigns, hereby release and discharge each other from any and all claims, demands, obligations, 

damages, actions, and causes of action, direct or indirect, in law or in equity, that arise from or 

relate to the performance, nonperformance, or manner of performance of their respective 

functions, duties and actions a..c:; officers, directors, and employees of the Banlc 

D. Release of Federal by the :FDIC. 

Effective simultaneously with the releases granted in Paragraphs II. A. and II.B. above, 

the FDIC, for itself and its successors and assigns, hereby releases and discharges Federal, its 

parents, subsidiaries, affiliates and reinsurers, and their respective employees, officers, directors, 

agents, representatives, successors and assigns, from any and all claims, demands, obligations, 

damages, actions and causes of action, direct or indirect, in law or in equity, that arise from m· 

relate to the Policy. The FDIC agrees that any interest or claim it may have under the Policy is 

extinguished. 

E. Release o(Fcderal by Settling Defendants. 

Effective simultaneously with the releases gt·anted in Paragraphs !I.A. and II.B. above, 

the Settling Defendants, on behalf of themselves individually, and their respective heirs, 

executors, administrators, agents, representatives, successors and assigns, hereby release and 

discharge Federal, its parents, subsidiaries, affiliates and reinsurers, and their respective 

employees, officers, directors, agents, representatives, successors and assigns, from any and all 

claims, demands, obligations, damages, actions and causes of action, direct or indirect, in law or 

in equity, that arise from ot· relate to the claims being released by the FDIC under paragraph II.A 

above. 

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F. R~le_ase of the FDIC by Federal. 

Effective simultaneously with the release gratttcd in Pat·agraph II.D. above, Federal, 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 the FDIC and its 

employees, officers, directors, agents, representatives, successors and assigns, from any and all 

claims, demands, obligations, damages, actions, and causes of action, direct or indirect, in law or 

in equity, that arise from or relate to the Policy. 

G. Release of Settling Defendants by Federal 

Effective simultaneously with the releases granted in Paragraph II. E. above, Federal, 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 each of the Settling 

Defendants, and theil' respective heirs, executors, administrators, agents, representatives, 

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

causes of action, direct or indirect, in Jaw or in equity, that arise from or relate to the claims 

being released by the FDIC under paragraph II.A. above. 

H. Reservations From Releases 

1. Notwithstanding any other provision, by this Agreement, the FDIC does not 

release, and preserves fully and to the same extent as if the Agreement ha<;f not been executed, 

any claims or causes of action: 

n. against the Settling Defendants or any other person or entity for liability, if 

any, incutTcd as the maker, endorser m· guarantor of any promissory note or indebtedness 

payable or owed by them to the FDIC, the Hank, other financial institutions, or any other person 

or entity, including without limitation any claims acquired by FDIC as successor in interest to the 

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Bank or any person or entity other than Bank; 

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

c. which arc not released in Paragraphs II.A. or JI.D. above. 

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

construed 01' interpreted as limiting, waiving, releasing or compromising the jurisdiction and 

authority of the l~DIC in the exercise of its supervisory or regulatory authority or to diminish its 

ability to institute administrative enfi>rcement proceedings seeking removal, prohibition or any 

other administrative enforcement action which may arise by operation of law, ·rule or regulation. 

3. Notwithstanding any other provision, this Agreement docs not purport to 

waive, or intend to waive, any claims which could be brought by the United States tlrrough either 

the Depa11mcnt of Justice, the United States Attorney's Office for the District of Minnesota or 

any other federal judicial district. In addition, the FDIC specifically reserves the right to seek 

cotiiiordered restitution pursuant to the relevant provisions of the Victim and Witness Protection 

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

4. Notwithstanding any other provision in this Agreement, David Coen and 

others do not release the claim made to Federal to recover unpaid deferred compensation that is 

(b)(4) ... th~suhjectofFcdcralclaimnumbcrl I Federal makes no representation with respect to 

coverage of such claim but acknowledges and agrees that the request for coverage under claim 

(b)(4) __ ................................. numbcr._l_-······-·· ___.lis not included in the releases above. 

I. Express Reservation of Rights of Bond Carrier. 

I. Notwithstanding any other provision, nothing in this Agreement shall release 

or prejudice the rights of Federal or any of its affiliates or any other underwriter of any financial 

institution bond, fidelity bond. or banlcer,s blanket bond on which the Bank is an insured, to 

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bring any claims by way of subrogation to the claims of the FDIC, against a) any directors~ 

officers, or employees of the Bank, including but not limited to the Settling Defendants, in their 

capacity as directors, officers~ or employees of the Dank or in any other capacity or b) any other 

individual or entity, for dishonest or fraudulent conduct that directly caused any losses to the 

Bank. 

2. Nothing herein shall be construed to admit the existence of, or to establish, any 

claim or cause of action on the part of Federal or any of its affiliates or any other bond 

underwriter by way of subrogation to claims of the FDIC, that would not exist had this 

Agreement not been executed. 

SECTION III: Waiver of Dividends 

To the extent, if any, that Settling Defen.dants arc or were shareholders of the Bank or its 

holding company, and by vhtue thereof are or may have been entitled to a dividend, payment, or 

other pro rata distribution upon resolution of the receivership of the B':J.nk, they hereby 

knowingly assign to the FDIC any and all rights, titles and interest in and to any and all such 

dividends, payments or othct· pro rata distributions. 

SECTION IV: Other Terms 

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

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

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

regarding any claim, and that this Agreement shall not be offered or received in evidence for m· 

against any Party hereto except to enforce its terms. 

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B. Execution in Counterparts. This Agreement 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 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 Effect. Each of the undersigned persons represents and warrants that 

they arc a Party hereto or arc authorized to sign this Agreement on behalf of the respective Party. 

and that they have the full power and authority to bind such Patty to each and every provision of 

this Agreement. This Agreement shall be binding upon and inure to the benefit of the 

undersigned Patties and their respective heirs, executors, administrators, representatives, 

successors and assigns . 

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

according to applicable federal law, or in its absence, the laws of the State ofMinnesota. 

E. Entire AgryeQJ.er~t~Qd Amendments. This Agreement constitutes the entire 

agreement and Wl.derstanding between and among thcundersigned Parties concerning the matters 

set forth herein. This Agreement may not be amended or modified except by another written 

instrwnent signed by the Party or Parties to be bound thereby, or by their respective authorized 

attorncy(s) or other representative(s). 

F. Specific Representations Warranties and Disclaimer, Each Settling Defendant has 

submitted to the FDIC financial infonnation, including a signed Financial Disclosure Fotm 

(FDIC form 7600/01). Each Settling Defendant acknowledges that, in determining to settle the 

claims released herein, the FDIC has reasonably and justifiably relied upon the accuracy of the 

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financial infonnation submitted by that Settling Defendant to the FDIC. The Settling Defendants 

severally, but not jointly, swear and affirm that all financial information in the Financial 

Disclosure Forms prepared by them and provided to the FDIC was true and accurate at the time 

of submission. The FDIC has no obligation to independently verify the completeness and 

accuracy of that financial information. If the FDIC establishes via a final adjudication in an 

appropriate judicial forum that, in his or her Financial Disclosure Fonn, a Settling Defendant has 

intentionally or negligently failed to disclose a material interest, legal, equitable, or beneficial, in 

any material asset, that Settling Defendant agrees to cooperate fully with the FDIC to transfer his 

or her interest in that asset to the FDIC and to sign any and all documents necessary to effectuate 

that transfer. 

G. Reasonable Cooperation. 

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

terms and conditions of this Agreement, including but not limited to doing, or causing their 

agents and attorneys to do, whatever is reasonably necessary to effectuate the signing, delivery, 

execution, filing, recording and entry, of any documents necessary to perfmm the terms of this 

Agreement. 

2. Further, the Individua] Defendants agree to cooperate fully with the FDIC in 

connection with any action required under this Agreement, and specifically with regard to the 

FDIC's claims as set forth in Paragraph II.I.l. Any such cooperation that involves any out of 

pocket costs is subject to reasonable reimbursement by the FDIC pursuant to its internal 

guidelines and policy for such reimbursement. Such cooperation shall consist of: 

a. producing all documents requested by the FDIC, without the necessity 

of subpoena, as determined by the FDIC, in its sole discretion, to he relevant to the Dank; 

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b. making themselves available upon request by the FDIC at reasonable 

times and places for interviews regarding facts, as determined by the FDIC in its sole discretion, 

· to be relevant to the Bank; 

c. appearing to testify, upon request by the FDIC, in any matter 

detcnnined by the FDIC in its sole discretion, to be related to the Bank, without the n~cessity of 

subpoena; 

d. signing tmthful affidavits upon request by the FDIC, regarding any 

matter, as determined by the FDIC in its sole discretion, to be relevant to the Bank. 

H. Forum. Any legal action brought to enforce this Agreement shall be brought in 

the United States District Court for the District of Millllesota, unless that Court lacks jurisdiction, 

in which event, upon a final order determining a lack of jurisdiction, the Patties agree to 

jul'isdiction in Hennepin County District Court, Minnesota. 

r: · Advice of Counsel. Each Party hereby acknowledges that he, she, ot· it has 

consulted with and obtained the advice of counsel prior to executing this Agt'eement, and that 

this Agreement has been explained to that party by his, her, or its counsel. 

J. Severability. If any provision of this Agreement is held unenforceable, then such 

provision will, if possible, be modified to be enforceable hut still reflect the Parties' intentions. 

In any event, the remaining provisions of this Agreement shall remain in full force and effect. 

J. Title and Captions. All section titles and captions contained in this Agreement are 

for convenience only and shall not affect the interpretation of this Agreement. 

K. Authorship/CQnstruction. 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 Party by reason of which Party drafted it. 

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IN WITNESS WHEREOF, the parties hereto have caused thls Agreement to be executed 

by each of them or their duly authorized representatives ott the dates hereinafter subset'! bed. 

FEDERAL DEPOSIT lNSURANCB CORPORATION 

As Receiver for Mainstreet Bank 

(b)(6) ---;;

c::alristlne P. H?ue> ' ' 

Its: Counsel 

Date: 1/rt{t S 

an Individual 

(b)(6) ___ -t 

DAVID CHIC HILA, au Individual 

Dated: 

DAVID C. COEN, an individual 

Dated: 

KELLY DUNN, an Individual 

Dated: 

ll 
(b )(6) -----

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed 

by each ofthem Ol' their duly authorized J'epresentatlves on the dates hereinafter subscribed. 

FBDERAL DEPOSIT INSURANCE CORPORATION 

As Receiver for Mainstrcet Bank 

By: 

Christine P. Hsu· 

Its: Counsel 

Date: 

BRUCE SOMA, an individual 

Dated: 

DAVID C. COBN, an individual 

Dated: 

KBLL Y DUNN, an individual 

Dated: 

L1 

. . --· ·--··------........ 
(b)(6) _ 

.TN WITNESS WHEREOF, tho patties hereto have caused this Agreemef)t to bo executed 

by eo.cb ofthcm or their duly authorized repre!lentatives on the dates hereinafter subscribed. 

FEDERAL DEPOSIT INSURANCE CORPORATION 

As Receiver for. Matnstrcct Bank 

By; 

Cbrlstlne .P. Hsu lt~t: Counsel 

BRUCE SOMA, an individual 

D~t&J: 

DAVID CH(CHILA, an hldlvidual 

Dated: 

Dated: '7 

KBJ..LY DUNN, an individual 

Dated; 

: 

1 I 
IN WITNESS WHEREOF> the parties hereto have caused this Agreement to be executed 

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

FEDERAL DEPOSIT INSURANCE CORPORATION 

As Receiver for Mainstreet Bank 

By: 

Christine P. Hsu 

Its: Counsel 

0(\tc: 

BRUCE SOMA, an individual 

Dated: 

DAVID CIJICHILA, an individual 

Dated: 

DAVID C. COEN, an individual 

Dated: 

(b)(e) fELLY DUNN, an Individual 

Dated: 'f-·~7_ /g. 

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JAMBS E. FRIEND. an Jndividual 

(b)(6) 

L 

PATRICK STEAD, an individual 

Dated: 

BARBARA TOY, an individual 

Dated: 

FEDERAL lNSURANCE COMPANY 

By: ________________ ~~------

Print Name: 

Title; --~---------~ 

Date:----~--------

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(b)(6) 

JAMES E. FRIEND, an individual 

Dated: 

--- --f~~:EAD. "" individUal 

Dated: .1- 3 .- '( 3 

BARBARA TOY, an individual 

Dated: 

FEDERAL INSURANCE COMPANY 

1' 

By: -----------------------------

Print Name: 

Title: ----------~------

Date: ____ _ 

12 
.IAMF,S F.. FRIF.ND, an individual 

l>ated: 

PATRlCK srEAD. Wl Individual 

llnted: 

RAR·RARA TOY, an individual 

(b)(6) 1-

c:m<?~ ,-y; othl' 

fEDERAL INSURANCll COMPANY . 

(b)(6) ___ B_:r-Jt--:,-----

"1/u 

PrintNsmc: t){C\.00'4\'1 

.. 

' . Q 

Title: \\-~ I \i . V · 

Date: 3 \ lx. \ \ '?.:> 

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1 

' 

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