SETTLEMENT AGREEMENT 

I. l,arties. The "Parties" to this Settlement Agreement ("Agreement") are as follows: 

A. Federal Deposit Insurance Corporation, as Receivel' for 1st Pacific Bank of 

California("FD I C-R "); · 

B. Bancinsurc, Inc. ("Bancinsure))); and 

C. James H. Burgess, Robert P. Cange ("Cange" or 11Loan Committee Chairman"), Ronald J. 

Carlson, Albert Colucci, James G. Knight, M.D., Susan Lew, Albert Logan, Glenn 

Marshall, Christopher S. McKellar, I .arry A. Prosi (''Prosin or "Chief Operating Officer"), 

Rlchal'd H. Revier ("Revier" or "Chief Credit Officer"), A. Vincent Siciliano ("Siciliano" 

or "ChicfExecu~ve Officer''), und Collette Southwick (co11cctivcly, ''D&Os''), each of 

whom arc former officers and/or directors of J st Pacific Bank of California ("1st Pacif1c" or 

"Bank"), 

2. Purposc.s. The purposes ofthts Agreement are to settle the FDIC-R's Claims (as defined 

below) against the D&Os and to establish a procedW'e to resolve the Coverage Dispute (as 

defined below) that has been raised by Ba.ncinsure in an expeditious and mutually agreeable 

manner, without the need for costly and time·conswning litigation of1he FDIC·R's Claims on 

the merits and without admissions by any Party 1:1s to the strengths or weaknesses of the Parties' 

claims or defenses. 

3. Definitions. · 

A. "Banclnstu·c Policy" means tbc Extended Professional Liability Insurance Policy No. PLI 

(b)( 4 ).... ................................. ...... J. .HH.. I as issued by Bane Insure to the Bank as a Nmned Insured and under which the 

D&Os qualify as 11lnsureds" (as defined in the Bancinsurc Policy) for the policy periods 

from October 15,2008 through October 15,2009, from October 15, 2009 through 

November 13,2009, and from November 13,2009 through November 13,2010. 

B. "FDIC-R's Claims" means only those claims assetted by the FDIC~R against ihe D&Os in a 

letter dated October 8, 20 l 0 and the statement of claims attached hereto as Exhibit A, and 

not any claims agains~ Bancinsure regarding insurance coverage. 

C. "Coverage Dispute" means the dispute among the Parties only as to whether: (1) Section IV 

(A) (21) of the Bancinsure Policy, the Insured v. Insured exclusion, precludes coverage for 

the D&Os for the FDIC-R's Claims; and (2) the damages sought by the FDIC-R for the 

PDIC-R Claims fnll within the defmition of"Loss" in Section III (U) ofthe Banclnsure 

Policy. 

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l - --- -- -·-·---·--.-n..-.-="c,....·avet1\ge·"Aetf6n"rneanSllie Iawsmt i0en1mea1n"Section4{B)OCIOW;frorrriz:::ts:-lfi~r~m=-=g=---- ·~··--~---j·-

' through Final Resolution (as defined below). 1 

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E. "Coverage Settlement" means a settlement between the .FDIC-R and Banclnsure that 

resolves the Coverage Dispute and all claims in the Coverage Action, 

F. "Final Judgment" means the final judgment in the Coveragll Action, including the 

exhaustion of rights of appeal. 

G. "Final Resolution" means a Final Judgment, a final. dismissal with prejudice of the 

Coverage Action, including the exhaustion of rights of appeal, or a Coverage Settlement. 

4. Terms, 

A. Initial Settlement Payment 

(1) Within 1 0 business days after this Agreement is fully executed by the 

Parties, Cango, Prosi, Revier, und Siciliano, collectively, agree to pa.y the FDIC-R the sum 

of $1 00,000 ("Initial Settlement Payment"). The Parties hereto aclmowledge and ngrce that 

such payment is sol~ly for the put'pose of settling the FDJC-R's Claims and shall not be 

deemed or constitute an admission by the D&Os or evidence of the D&Os' fault, liability, or 

wrongdoing. The Initial Settlement Payment and the D&Os' assignment of rights and 

claims against Bancinsure shall constitute the consideration the D&Os are providing for 

settling the t'DIC-R's Claims. 

(2) The Initial Settlement Payment is a non-refw1dablc payment that the 

FDIC-R shall retain under any and all circumstances. Under no circumstances shall 

Bane Insure or any of the D&Os have any right or claim to reimbursement, recoupment, or 

repayment against the FDIC-R relating to or arising out of all or ~my part of the Initial 

Settlement Payment, 

B. Coverage Action. 

(1) The Parties' Intent, In· the absence of a Coverage Settlement, the Parties' 

intent is to resolve the Coverage Dispute in the Coverage Action. As to the Coverage · 

Action, the Parties' intent is that: · 

(a) the FDIC-R and Banclnsure w111 be the parties and the D&Os will not 

be joined as parties unless required by the court; 

(b) the substance of the FI)JC-R's Claims will not be litigated, disputed, 

or interposed as or in suppolt of a coverage defense in the Coverage Action ot· in 

any other action or proceeding; 

(c) if it is determined that the Banclnsure Policy covers any of the D&Os 

·-----·· -· --------·-.. -----·-· ____ (Qr_F..P~Q::..K a$_ assignee) for any_g.f..thc FDIQ-:F/.~.Ql!l~mJ!. Banclnsure will par. 

$8.25 million to th~; }'OJC-R (the "Policy Payment"); and 

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(d) if it is determined that the Bancinsure Policy does not cover any of the 

D&Os (or FDIC·R as assignee) for any of the FDIC-R's Claims, Banclnsure will 

have no further obligation to any Party. 

(2) :Filing. Within one calendar year after this Agreement is fully executed by 

the Parties> the FDIC-R shall file an action in the United States District CoU1t for the 

·Southern District of California, naming Banclnsure as a defendant, for the purpose of · 

litigating the Coverage Dispute ("Coverage Actionn). In the ~;:vent the court or the Parties 

determine that Banclnsure is the proper plaintiff to file such action against the FDIC~R to 

litigate the Coverage Dispute~ Bane Insure shall, within 14 days of such determination, file 

the Coverage Action in the United States District Court for the Southern District of 

California, naming the FDIC~R as a defendant. 

(3) Coverage Action Liability. 

·(a) If it is determined in the Coverage Action that the Bancinsure Policy 

covers any of the D&Os (or FDIC-R as assignee) for any of the FDIC-R,s Claims, 

then upon Final Resolution Bancinsurc will pay the entire exact amount of the 

Policy Payment to the FDIC-R. · 

(b) If it is detennincd in the Coverage Action that the Banclnsure Policy 

does not cover any of the D&Os (or FDIC-R as assignee) for any of the FDIC-R's 

Claims, then upon Final Resolution Banclnsure will havo no further liability 

under the Bancinsure Policy, 

(c) h1 any event, the maximum amount ofBanclnsure's liability is $8.25 

million plus any post-judgment interest that may accrue after the Final Resolution 

of the Coverage Action as provided in Section 4(C) below. · 

(d) The Parties agree that, in the absence of a Coverage Settlement, all 

insurance coverage issues among them relating to the Banclnsure Policy shall bo 

adjudicated in the Coverage Action and not in any other forum, action, or 

proceeding. 

(4) FDIC-R's Claims Will Not Be Litigated. Banclnsure waives all 

challenges, objections to, and coverage deferu;es ba'led upon the merits or sufficiency of the 

FDIC-R's Claims or any element of the FDIC~R's Claims as to any of the D&Os. The 

FDIC~R's agre::cmcnt to look only to the Initial Settlement. Payment and the Banclnsure 

Policy shall not bar or reduce the FDIC-R's recovery from Bancinsure in the Coverage 

Action. Bancinsure stipulates and agrees that it will not contest that: (1) the D&Os each 

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committed a Wrongful Act (as used and defined in the Banclnsure Policy); (2) damages for l 

each D&O for the FDIC-R's Claims are in excess of the Policy Payment; and (3) nothing in : 

. !his AgreementJ.~ .. ~.-~cfcnsc to co:::~rage. Bancln~IJ.l:~ _also agree~.!~at a!!Y.:.r.~_g~~~J?~n.~.~L .. _ ... -·---j··· -·· . adjudication or judgment against the b&Os establishing a legal obligation to pay is hereby 

· waived and Banclnsurc covenants not to raise such requirement as a defense in the 

Coverage Action. · . 

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(5) D&Os' Assignment to FDIC~R. For valuable consideration, receipt of 

which is hereby acknowledged by the D&Os, and to advance the purposes of this 

Agreement, in addition to the Initial Settlement Payment, upon execution of this Agreement, 

the D&Os hereby irrevocably assign to the FDIC-R all of their rights, title and interest with 

respect to the Banclnsure Policy and any and all claims for ~:overage relating to or arising 

out of the Banclnsure Policy, the FDIC-R Claims, and/or the Coverage Action including but 

not limited to all statutory rights, contractual1ights, and rights arising in tort or otherwise, 

relating to Banclnsurc's duties to indemnify the D&Os for the FDIC-R Claims and to settle 

and pay the FDIC-R Claims in exchange for the FDIC-R's agreement not to pursue any 

further recovery for the FDIC-R's Claims from the D&Os assets other than the Banclnsm·c 

Policy(the "D&Os' Assigrunenf'). The FDIC-R hereby accepts the D&Os' Assignment 

and assuml:s all rights, title and interest of the D&Os with r~spcct to tho Banclnsure Policy 

and any all claims for coverage thereunder or related thereto. Banclnsuro hereby const:nts to 

the D&os• Assignment. The Parties hereby waive any requirement in Section X (I) or any 

other section of the Banclnsurc Policy that any consent to assignment be endorsed on the 

Banclnsure Policy. The Parties stipulate that the D&Os' Assignment satisfies any 

requirement in Section X (I) or any other section of the Banclnsure Policy that Banclnsure 

consent or consent in writing to this assigrunent, The D&Os' Assignment and/or the Initial 

Settlement Paym~nt shall not reduce the amount of loss othetwisc included in tho definition 

of"Loss, in Section III (U) or any other section ofthe Banclnsure Policy. No Party shall 

challenge or object to the D&os• Assignment in any manner or for any reason whatsoever. 

and each Pt\rty hereby waives all challenges and objections to the D&Os' Assignment. 

(6) If Court Requires Joinder of D&Os, In light of the D&Os' Assignment 

to the FDIC-R and the Parties' express intent and agreement in subsection (B)(l)(a) above, 

the Parties agr~e that the D&Os do not need to be joined or named as parti~s to thl.l 

Coverage Action to resolve the Coverage Dispute. If, however, a court determines that the 

D&Os must be joined or named as nominal parties in the Coverage Action because they ure 

found to be necessary, indispensable, or required parties, or otherwise, the D&Os hereby · 

consent to be joined or named as nominal parties for that purpose and hereby agree to accept 

service of the complaint and other pleadings and papers through the D&Os' counsel and in 

accordance with the notice provision in Section S(B) below. without the need for the filing 

party to incur the cost of personal service. To the extent that the D&Os are joined or named 

in the Coverage Action, Banc!nsure acknowledges that Section X (D) of the Banclnsure 

Policy hall no bearing upon, and the Banclmmre Policy shall not bar, such joinder or naming, 

(7) Additional Waivers, Service, State Court Fallback, Neither Bancinsure 

nor the FDIC-R shall challenge or object to the other· Party's participation in the Coverage 

Action based on subject matter jurisdiction, standing. or on ~ny other basis, and Banclnsure 

and the FDIC"R hereby waive a11 such potential challenges and objections. The defendant 

named in the Coverage Action hereby agrees to accept service of the complaint through its 

counsel a~E!.i.t:l..~.c~~!9~~ce. ~~~- !.~~-~!>tice erovisioi! . .P.elo:'!Y,j~m~~~t J~te .!?-eed for the filing 

party to incur the cost of personal service. In the event that, for any reason, the llnited 

States District Comt for the Southern District of Califomia refuses to hear the Coverage 

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Action, whether based on issues ofjurisdietion or otherwise, the FDIC-R shall file the 

Coverage Action in the San Diego County Superior Court for the State of California. 

(8) · Written Agreement and Adjudication Policy Requirements; 

Inadmissibility and Irrelevance of Section 5(A) of This Agreen1ent, The Parties agree 

that the D&Os and the FDICMR have fully satisfied Section X (D)(l) of the Banclnsure 

Policy and that this Agreement. constitutes the written agreement referenced in Section X 

(D)(l) of the Ban.clnsure Policy, Any requirement of an adjudication against the D&Os 

before an action is taken against Banelnsure is hereby we,ived hy the Parties. Banoinsurc 

hereby expressly aclrnowledges and agrees that no part of Section X (D) of the Banclnsurc 

Policy shall be assetted as a defense in or to the Coverage Action and also expressly 

acknowledges that, if the FDIC-R prevails in the Coverage Action or lfthe FDlC-R and 

Banclnsurc enter into a Coverage Settlement, the FDIC-R shall not be required to file an 

action ugajnst the D&Os or to otherwise establish any liability or damages against the 

D&Os in the Coverage Action o1· otherwise to obtain the Policy Payment or a Coverage 

Settlement amount. 

(9) Waiver of Attorneys' Fee.'!, Costs, and Extra-Contractual Claims. The 

Parties shall bear their own attorney's fees and costs for the Coverage Action. The FDIC-R 

agrees not to assert an extra-contractual or bad faith claim against Banclnsw:c and agrees 

that the maxirpum amount ofBancinsurc's liability to the FDICMR is $8.25 million plus any 

post-judgment interest that may accrue after the Final Resolution of the Coverage Action as 

provided in Section 4(C) below; provided, however, that nothing in this Agreement shall 

limit the Parties' rights to request or the court's right to impose sanctions under Rule 11 of 

the applicable federal rules of civil procedure or similar federal or state rules, and any 

sanctions imposed on Bancinsure shall be separate from and in addition to the Policy 

Payment amount and will not reduce the maximum amount ofBanclnsure's liability. 

C. Payment Timing; Enforcement of Final Judgment or Coverage Settlement. In the event 

the FDICMR prevails in the Coverage Action or the FDIC-R and Banclnsure settle by · 

entering into a Coverage Settlement, Bancins\}re shall pay the Policy Payment within 3 0 

days of Final Judgro~nt or, if applicable, shall pay the Coverage Settlement amount within 

30 days ofthe execution of the Coverage Settlement agreement. Interest shall accrue on the 

amount of any Final Judgment or settlement not paid within said 30-day period !!t the rate of 

10% per atmwn. IfBanclnsure fails to timely make payment as set forth above, then the 

FDIC-R shall be entitled to file a direct action for breach of contract and/or any other 

appropriate claim against Banclnsure to enforce the Final Judgment or Coverage Settlement, 

and the FDIC-R shall not be required to file an action against the D&Os or to otherwise 

establish any liability against them in order to obtain the Policy Payment. In the event that 

the FDIC-R files such a direct action against Banclnsure to enforce the Final Judgment or 

Coverage Settlement, the prevailing party shall be entitled to costs and reasonable attorney's 

fees, 

_ ...... ..,_,_ ................ :- .. --- -· - ., __ _.. ...... -~····· ··-· ---·----·---·-·--··--···· ________ . ___ ..__ ......... ~··· ·---· ----

D. Release of FDIC~R. Effective as of the Effective Date, the D&Os, on behalf of themselves 

individually and their respective heirs, executors, trustee!~, 11dministrators, agents, 

representatives, attomeys, successors, and assigns, hereby release and discharge the FDIC-R 

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and its employees, officers, directors, agents, representatives, attorneys, successors, and 

assigns, from any and all claims, demands, ob1igations, damages, actions, and causes of 

action, direct or indirect, in law or in equity, that arise from or relate to the Bank or the 

FDIC-R's Claims, except (1) those claims, counter-claims, or defenses that arise out of 

claims against the D&Os that arc expressly reserved in Section 5(!) below, or (2) an action 

for declaratory relief to interpret or enforce this Agreement. · 

E. Release of Banclnsurc by the D&Os. Except for those rights, title, and interests assigned 

by the D&Os to the FDlC-R, those claims, counter-claims, or defenses that arise out of 

claims·that are reserved by Banclnsure (if any) against the D&Os, an action to interpret or 

enforce this Agreement, or as otherwise provided in this Agreement,,thc D&Os, on behalf of 

themselves individually and their respective heirs, executors, administrators, agents, 

representatives, successors, and .assigns hereby release and discharge B!Ulclnsure and its 

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

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

equity, that arise from or relate to the Bank, the Bancinsw:c Policy, or the FDIC-R's Claims . 

. Waiver of Statutory Rights by the D&Os: In addition to the preceding paragraph, the D&Os 

hereby acknowledge that they may hereafter discover facts different from, or in addition to, 

those which they now claim or believe to be true with respect to the claims released herein, 

and agree that this Agreement shall be and remain effective in all respects notwithstanding 

the discovery of such different or additional facts. In furthcmnce of the releases set forth 

herein, the D&Os hereby acknowledge that they at'e knowingly and voluntarily waiving their 

rights under Section 1542 ofthe California Civil Code to the full extent that they may 

lawfully waive all such rights and benefits pertaining only to the subject matters released 

herein, and the consequence of such waiver has been explained to th~rn by their counsel 

and/or advisors. The D&Os acknowledge that they are familiar with the provisions of 

Californi11 Civil Code Section 1542, which provides: 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE 

CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER 

FAVOR AT THE 11ME OF EXECUTING THE RELEASE, WIIICH IF KNOWN 

BY HIM OR HER, MIGHT HAVE MATERIALLY AFFECTED IllS OR HER 

SETTLEMENT Wn'H Tl/E DEBTOR. 

F, No Contl'ibution by D&Os. Pursuant to this Agreement, the FDIC-R agrees to look only 

to the Initial Settlement Payment, and tu the Btmclnsure Policy and the Policy Payment to 

satisfy the FDIC-R's Claims. The Pl:lrtics acknowledge and agree that except for payment of 

the Irtitial Settlement Payment and the D&Os' Assignment, the D&Os shall not under any 

circumstances be required to contribute to any Covel'age Settlement, judgment, or othet· 

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fonn of payment, including payment for indemnification, to the FDIC-R, Banclnsure, or to ! 

···-··-----. -...... -··!ifi ~~~~f~Je~~~!~:!J~~l~;tih;~~~ ~~~~~~h~fei?ffd"~~~~~!~~~·~~~FDI~:B .............. ______ , ____ l· 

Bane Insure and its successors, receivers, and assigns. Banclnsurc agrees that nothing in 1his 

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Section 4(R) shall provide a defense or otherwise impair the FDIC-R's right to litigate the 

Coverage Action to Final Judgment and, if successful, to recover the Policy Payment. 

G. FDJC~R's Covenant Not To Sue D&Os. Upon execution of this Agreement and receipt of 

the Initial Settlement Payment in full, except as provided in Sections 4(13)(6) and S(I), the 

FDIC~R and Bancinsure, each on behalf of itself and its successors, receivers, and assigns, 

hereby covenant and agree not to bring any judicial proceeding relating to the FDIC-R's 

Claims or make or bring any new claims, demands, judicial proceedings, obligations, 

damages, actions, or causes of action, direct or indirect, in law or in equity, including, 

among other things, nny claims fo1· contribution or indemnity against the D&Os or their 

respective spouses, heirs, legal representatives, attomeys, agents, or assigns that arise from 

or relate to the pcrfonnancc, nonperfonnance, or manner of performance of their respective 

functions, duties, and actions as officers and/or directors of the Bank or for any claims for 

refunds, reimbursements, or other repayments to Bancinsute under or arising out of the 

Ranc!nsure Policy. This covenant not to sue does not apply to an action to interpret or 

enforce this Agreement, Bancinsurc agrees that nothing in this section 4(G) shall provide a 

defense or otherwise impair the FDIC-R's right to litigate the Coverage Action to Final 

Judgment and, if successful, to recover· the Policy Payment. 

H. Coverage Defenses Not Created or Supported by Agreement. Notwithstancling any other 

provision in this Agreement, the Parties agree that this Agreement docs not create, revive, 

provide any groWld or basis for, or constitute ariy evidence of any coverage defense. 

I. D&O Agreement. As part of and in further consideration fqr this Agreement, the D&Os 

warrant and agree, collectively and individually, that: (1) they arc not aware of any other 

claims or potential claims against them, other than the FDIC-R's Claims; (2) they will not 

assert that they have tendered any other claims for coverage under the Banclnsure Policy, 

other than the DIC~R's Claims; (3) they will not tender any other claims for coverage 

under the Bancinsure Policy; and (4) they have not sold, transferred or assigned any of their 

rights or claims against Bancinsure except in this Settlement Agreement. 

5. Additional Provisions. 

A. No Admission of Liability by D&Os. The Parties each acknowledge and agree that this 

Agreement and all negotiations, discussions, and proceedings, including mediations, in 

connection with this settlement shall not be deemed or consUtutc an admission by the D&Os 

or evidence of the D&Os' fault, liability, or wrongdoing, including Exhibit A attached 

hereto. The Parties agree that this Agreement is being entered into in good faith settlement 

of the FDIC~R' s Claims against the D&Os. Danclnsure agrees that this Section 5(A) does 

not create or give rise to any cove~age defense in the Coverage Action and does not affect 

coverage under the Banclnsure Policy, in tho Coverage Dispute, or in the Coverage Action . 

.. ··-----·---:!?.· .. N«?.!i~!J· NL!'!~tic_c~ r.~~U. ~<i. ~~-Q~iVCn.J!!.1.4().r.Mt_i~. ~N~ l'!? C!lt.~h~lQ.~jn Wilting aJ?:~L ....... -··--- -··--:·-· 

delivered to the addresses set forth below. 

lfto FDIC-R: Robert S. LaWrence 

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

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

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

Callahan & Blaine 

3 Hutton Centre Drive, Ninth Floor 

Santa Ana, CA 92707 

........................ j .. ..... ................. I. 

If to the D&Os: Jcff1·ey A. Tisdale 

·Tisdale & Nicholson LLP 

2029 Century Park East, Suite 900 

Los Angeles, CA 90067 

...... .......................... {... I 

Stanley H. Shure 

Law Offices of Stanley H. Shure 

23 55 Westwood Blvd. #3 7 4 

Los Angeles, CA 90064 

......... ... - ... - ..... Email: l-··--·· 

If to Banclnsurc: .Edward F. Donohue III 

Hinshaw & Culbertson LLP 

1 California Street, Suite 1800 

San Francisco, CA 94111 

C. Power and Authority to Execute Settlement Agreement. Each Party represents, warrants, 

and agrees that he, she, or it has the power lUld authority to enter into and perform this 

Agreement Each Party further represents, warrants, and agrees that he, she, or it has not 

· assigned or transferred any claim, demand, action, cause of action, or right encompassed 

within this Agreement, other than the D&Os' assignment to the FDIC-R in this Agreement. 

Each person signing this Agreement on behalf of an entity represents, warrants and agrees 

that he or she has the power and authority to execute this Agreement on behalf of such 

entity. 

D. Joint Drafting. The Parties each acknowledge that this Agreement was drafted jointly by 

them and, therefore, if any court of competent jurjsdiction finds a portion· or portions of this 

Agreement ambiguous, this Agrecm~nt shall not be construed for one party and against 

another. 

R. Integration Clause. The provisions of this Agreement comprise all ofthe tenns, 

conditions, agreements, and representations of the Parties with respect to the subject matter 

hereof. This Agreement supersedes all prior agreements, arrangements, and understandings, 

if any, relating to the subject matter hereof and may be amended only by an instnunent in 

writing executed jointly bythe Parties. All representations and promises made by any party l 

-------··--·-··-· ---~~~~·~:~~~ ~~-~~--~· "··-t· 

under this Agreement survive closing and do not merge in any judgment entered in the 

Coverage Action. · 

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F. Severability. If any pmtion or portions of this Agreement is or arc held by a court of 

competent jurisdiction to conflict with any federal, state, or local law, and as a result such 

portion or portions are declared to be invalid and of no force and effect in such Jurisdiction, 

all remaining provisions of this Agreement shall otherwise remain in full force and effect 

and shall be construed as jf such valid portion or portions has not been included herein. 

G. Execution; Facsimile Signatures; Counterparts. This Agreement may be executed by 

means of facsimile or scanned and e-mailed, IUld each copy of this Agreement bearing the· 

facsimile transmitted or scanned and e-mailed signature of each Pany or, in the case of an 

entity, its authorized rcprc:>entative, shall be deemed an originul. This Agreement may be 

executed in two or more counterparts, each of which shall be deemed an original, but all of 

which together shall constitute one and the same· instrwncnt. 

H. Governing Law, Venue, and Jurisdiction. This Agreement shall be governed by federal 

law and, to the extent that state law applies, the laws of the State of California. As to both 

the Coverage Action and any dispute that may arise relating to or arising out of this 

Agreement, the Parties consent to venue and personal jurisdiction in the United States 

District Court for the Southern District of California and, to the extent that an action must be 

filed in the San Diego County Superior Court for the State of California, the Parties consent 

to venue and personal jurisdiction in that location. 

I. FDIC-R Reservation of Claims. 

(1) Notwithstanding any other provision of this Agreement, the FDIC·R 

expressly preserves fully and to the same extent as if this Agz·ecment had not been executed, 

uny claims or causes of action against the D&Os or any other person or entity for liability, if 

any, incuned as the make1·, endorser or guarantor of any promissory note or indebtedness 

payable or owed by them to FDIC-R, the Bank, other fincmdal institutions, ot· any other 

person or entity, including without limitation any such claims acquired by FDIC·R as 

&'Uccessor in interest to the Bank or any person or entity other than Bank. 

(2) Notwithstanding any other provision of this Agreement, nothing in this 

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

compl'Omising the jurisdiction and authority of the Federal Deposit Insurance Corporation in 

the exercise of its supervisory or regulatory authority or to diminish its ability to institute 

administrative enforcement Ol' other proceedings seeking removal, prohibition, or any other 

relief it is authorized to seck _pursuant to its supervisory or regulatory authority against any 

person. 

(3) Notwithstanding any other provision of this Agreement, this Agreement 

does not purport to waive, or intend to waive, any claims that could be brought by the 

--·--·-H-··--HH_H ____ ... lJJ!it~-~_I__S!_~teS throughJhi? .. R~p~1!1}~!l(O_f}~~§tl~.e, the_Ul}j~~q._S_t~tcs J\ttomet§_Q_f_ft<t,~J()J ~Y-. . . _. _ federal judicial district, or any other department or agency of the United States as defined by 

18 U.S.C. § 6. In addition, the FDIC·R spocificnlly reserves the right to seek court-ordered 

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restitution pursuant to the relevant provisions of the Mandatory Victims Restitution Act, 18 

U.S.C. §§ 3322and 3663 ~t. seq., if appropriate. 

J. Careful Review and Understanding of Agreement. The Patties represent thnt they have 

careful1y read this Agreement and understand its terms and conditions without reservation. 

The Parties acknowledge that they have consulted with legal counsel of their choice 

rega)'ding this Agreement and have not relied on any representations or statement of any . 

other Party or counsel for any other Pw1y with respect to the subject matter of this 

Agreement. 

K. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the 

Parties and their heirs, legal representatives, attorneys, shareholders, officers, directors, 

employees, agents, divisions, parent companies, subsidiaries, affiliated corporations, 

successol's, receivers, and assigns, 

L. Financial Disclosure Representation. Each of the D&Os has submitted financial 

information to the FDIC~R including sworn personal financial statements and herein affirms 

that his/her financial infonnation .is true and accurate as of the date of this agreement. Each 

of the D&Os expressly acknowledges that, in determining to settle the claims herein, the 

FDIC~R has reasonably and justifiably relied upon the accuracy of the financial information 

submitted by the O&Os. 'The FDIC~R has no obligation to independently verify the 

completeness or accuracy of that financial infonnation. If the FDIC-R establishes via a final 

adjudication in an appropriate judicial forwn that a D&O failed to disclos~ any material 

interest, legal, equitable, or beneficial, in any asset, that D&O agrees to cooperate fully with 

the FDIC-R to provide updated financial information and to pay to the FDIC~R the lesser of 

(1) the value of the D&O's undisclosed material intljrcst in such asset(s); or (2) the wnount 

of unpaid damages alleged against that D&O, 

M. Reasonable Cooperation. 

(1) The Parties agree to cooperate in good faith to effectuate all the terms and 

conditions of this Settlement Agreement> including doing or causing their 

agents and attorneys to do whatever is reaf'lonably necessary to effectuate the 

signing, delivery, execution, fl.ling, recording, and entry of any docwnents 

necessary to perfonn the terms ofthis Settlement Agreement. 

(2) Further, the D&Os agree to cooperate fully with the FDIC-R and Banclnsure 

in connection with any action required under this Agreement, including the 

prosecution of the Coverage Action. Any such cooperation that involves any 

out of pocket costs is subject to reasonable reimbursement by Banclnsure. 

and/or by the FDIC~R pursuant to the FDIC~R's internal guidelines and 

policy for such reimbursement. Such cooperation shall consist of: 

----·-..... ----·- ...... --·---.. -----·Ea}-~producingall-non~-privileged-documents·Tcqucsted·by-the··FBIO=Ror- ............. --------

Bane Insure, without the necessity of subpoena, as determined by the ' 

FDIC~R and/or Banclnsure to be relevant to the Coverage Action; 

10 
. , 

·' 

·:· 

•! 

(b) making themselves available upon request by the FDIC"R and/or 

B!:lncinsure at reasonable times and places for interviews regarding facts, 

as determined by the FDJC-R or BancJnsure, to be relevant to the Bank; 

. . 

(c) appearing to testify 1,1pon request by the FDIC"R and/or Banclnsure in 

the Coverr;lge Action wi~out the neqessity of subpoenaj 

(d) signing truthful affidavits upon request by the FDlC-R and/ur 

Bancinsure regi:U'ding any matter, as determined by the FDIC-R or 

Banclnsure, to he relevant to tile Coverage Action. 

N, Attorney's Fees for Interpretation ot· Enforcement. Notwithstanding any other provision 

of this Agreement, in any proceeding to intecpret or enforce this Agreement, the party 

prevailing in that proceeding shall be entitled to his, hcl', m· its reasonable attorney's fees and 

costs, in addition to any other such relief gl'anted, Any award of attorney's fees and costs 

imposed on Banclnsure shall be separate from and in addition to the Policy Payment amount 

and will not reduce the maximum amount of Banclnsure's liabilit:r. · 

0. Effective Date. The Parties agree that this Agreement shall be effective only upon full 

payment of the Initial Settlement Payment and execution by all of the Parties. 

IN WITNESS WHEREOF, the Parties have executed this Settlement Agreement effective as of 

the Effective Date . 

FEDERAL DEPOSIT INSURANCE 

CORPORATION, AS RECEIVER FOR 1ST 

PACIFIC BANK OF CALIFORNIA 

By: . I . . I ............... __ (Ql.@) 

Samuel D. L~tz 

Counsel 

Legal Division, Professional Liability Unit 

Federal Deposit Insurance Corporation 

BANCJ.NSURE, 11'\C. 

By: ____________________ _ 

James N. Cross 

Vice President, Claims 

Bonclnsure, Inc. 

JAMF.S H. BURGESS 

11 
(b)(6) 

(b) Jnf\king thems.clves ·available upon l·eq\lest by. th~ ·FDIC~R a.nd16J' 

Banolflsm·e ·at 1'easomtble times ~nd_ places f~r h1toxviews r~gflr~fing fa~ts, 

as det!i\J'rilined by: the :pbiC~R .ov Ball.Ginsure; to he.1·ei~Yfln~ to the·B.an~j 

(c) .appead~g lo testify· uponrecjues(b>,/the FDIC-R tmd/et• :Brmclnsut:e= in 

the-Covei'a_g~Aotlon wftho.ut the nettessity of snbJ10enri;: 

(d) signin_g·tntthful nffidtwils 1l.pon.t•equcst.by the PDIC~R nnd/or 

Banc-l11sure tegarcfhrg (\lly m:afteJ', fls: determbted by 'the· }'l)IC~R o·t·_ 

Banclnsm.'e, t'o· be J'elev.ant to the Coverage .Action. 

N. Attorney's Fees fot• Intcrprctntion or Enforcement. Nnlwit1Hrtattdh1g any-othet' pt•ov1sion 

ofthis Agt·ccment, in any pt•oceeding to interp11:t or enforce tlus Agreemont, tho party · 

prevailing ln thnt pl'oceeding sbnll be e1ttitled to hls, her, Ol' its J~easonuble utlomcy's fees ·and 

costs, ip. Hddition to nny othel' su.ch l'ellef gt·anted, Any nwr.t·d of nttomei s fees atHf- costs 

imposed on Banclnsul'e shall be separl\te fnlln ·1md lit i\ddition to th~ 'Poli~y Payroent· MlQ\lll.t 

and vJtllnot J'r.ed'uoe the maximum nruoun( ofB-anolnsure'.s linbility, · 

0. EffeCtive Date. The Pa1·tles ngree that thiaAgt·e~meJlt shaU be·effective ot11y up0n fidl 

payment ofthe initial Settlemc~l!· Payment:and· exccllf·1oi1· by Etll of the Pat•Ues·. 

IN·WrrNESS WHEREOF, the Pm't-ics have c~ect1ted rhis.S'e'ttlem~nt Agr'eemcnt effective ns of 

tlte Eff~ctive Date. 

,FElJERAL DE10SIT INStJH:AN:CE CQIU)ORAl~O;N, AS Rl~CEIVER F.OR 1St 

PACIFIC BANKOF CALIFORNIA 

By,:----=----------- s·amm~l D, L\ltz 

Counsel 

Legal Division, 1'i'ofe.ss1onnl Liability Unit 

Federal DojJOsit lnsunmce Col'pomtlon 

DANCINSURE, INC. 

___ .... - ......... , .... '"' ......... ___ _. .... - .... ·"·••·~-'"":'--....,--••···'""''-'""''•'--·---·-..... -··"'•"•" • .---·---·---··-·--·•···• ... ···---. ·- ... ···•--. ....... ·•- -.. -........ _ ......... ,... ... ,.,-·.-.v-·•-·-·-......, .......... ..-.-· ... ,. ····-

~ 

JAMES .Jl. DllRGESS 

11 

l. 
I 

(b) making thems~lves available upon request by the FDIC-R and/or 

Banclnsur.e at reasonable times an~· places for inten.:iew.s regarding facts, 

as determined by the FDIC-R or Bancinsure, to. be relevant to the ~ank; 

(c) a.pp.earing to testify' upon request by the FDic-R andtor Banc!nsure in 

the Coverage Action without the necessity of subpoena; 

(d) signing truthful affidayits upon request by th~; FDJC-R and/or 

Banclnsure regarding uny matter, as detennined by the FDIC-R or 

Bancinsure, to be relevant to the Coverage Action. 

N. Attorney's Fees for Interpretation or Enforcement. Notwithstanding .any other provision 

of this Agreement, in any proceeding to interpret or enforce this Agreement, the party 

prevailing in that proceeding shall be entitled to his, her, or its reasonable attorney's fees ·and 

costs, in addition to any other such relief granted. Any award of attorney's fees and costs · 

imposed on Bane Insure shall be separate from and in addition to the Policy Payment amount 

. and will not r~Qucc the maximum amount ofBanclnsure's liability. · 

0. Effective Date. The Parties agree that this Agreement shall be effective only upon full 

payment of the Initial Settlement Payment and execution by aU of the Parties. 

IN WITNESS WH~REOF, ·the Parties have executed this Settlement Agreement effect.i¥e as of 

the Effective Date. 

FEDERAL DEPOSIT INSURANCE 

CORPORATION, AS RECEIVER FOR 1ST 

PACIIi'IC RANK OF CALIFORNIA . 

By:, ,"''"" • ','·----• "• •r.oo•O ~" "•"' o" .-...... " ,',•' 

·· s·ainuef B~'Lutz ... · 

Counsel 

Legal Division, PFofessional Liability Unit 

Fcder.al Deposit Insurance Corporation 

BANCtNSURE, INC. 

By:......... . .: .... Jame3·'N': Cross .~ ...................... ~ .. ••:i!::.:.:.. 

11 

Vice President, Claims 

Banclnsurc, Ine. 

r 
(b 6) __ ............. 

RONALD J. CARLSON 

A.LBER'J COLUCCI 

'' 

ALBERT LOGAN 

GLENN MARSHALl. 

CHRISl'OPHER S. MCI{J!:LLAR 

LARRY A. PROSl · 

IUCHARD H. REVIER 

A. J~C.ENr SICILIANO 

........ . 

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ALBERT CCI · 

l JAMES G. KNIGHT, M.D. 

' . 

' SUSAN LEW . 

ALBERT LOGAN 

GLENN :MARSHALL 

- - - --- - - ··-- CHRISTOPHER S. MCKELLAR 

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I..ARRY A. PROSI i 

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A. VINCENT SICILIANO 

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RONALD J. CARLSON 

ALBERT COLUCCI 

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

SUSAN LEW 

ALBERT LOGAN 

GLENN MARSHALL 

CHRISTOPHER S. MCKELLAR 

LARRY A. PROSI 

RJCHARU H. REVIER 

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GLEN~ MARSHALL 

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LA~Y A. PROSI 

RICHARD H. REVIER . 

A, VINCENT SICILIANO 

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-----·-----· -----·-- RONAL)) J. CAIU .. SON 

ALBERT COLUCCI 

- ------·· JAMES G. JOOGHT, 'M.J). 

____ .....;...._~------ .. --. S1JSANLEW' 

.................................................................................................................... ~, ~ ...................... =-=-:= .............................. ··············· ____,..,_...--1 

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GLENN MARSilALL 

---·----·- - CHRISTOPI-!ER S. MCKEJ .LA R 

········-·-· ----------- LARRY A. PROSI 

RICHARD H. REVIER 

A.. VC~C NT SlC(LL.c\NO 

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ROl\ALD J. CA.H..L"'ON 

·--- ---··-·---·---- - · ALBERT COLUCCl 

· JAJ.\IJE:s G. KNlGHT, M.D. 

,. ·-- - .......... _ SlJSANLE\V 

ALBitRf LOGAN 

---·-- ··· ·- - ·-·· ..... _ , ____ .,. __ CHHlSTOP.HER S. MCKFJ ,LAR 

--- - ---·------ LARRY A. PROSI 

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RONALD .J. CARLSON 

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SUSAN LE'V 

ALBRRT LOGAN 

GLENN 1\:JARSHALL 

CHRISTOPHER S. MCKELLAR 

RICHARD H. REVlER 

A. VINCENT SICILIANO 
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APPROVED AS TO FORM: 

CJDUS'I'OPHIW. ~. MVI<.KLLAK 

LARRY A. PROSI 

RICHARD H. REVIER 

. (1~ L/ ... e;l-te~ "C. !. ' 1 C$ t' 1..(+11 ~I<!. -·· 

CALLAHAN & DL INE 

By: __ _,___ 

~obert S. Lawt·ence 

Attorneys fol' Federal Deposit Insurance 

Col:poration1 as Receive1' for 1st Pacific 

B"nk of Califomia 

TISDALE & NICHOLSON LLP 

By: ___ ~-------

Jetfl·ey A. Tisdale 

Attol'iteys for James H. Burgoss, Robel't P. 

Cange, Ro:Uald J. Carlson, Albert Colucci, 

James 0. Knight. -M.D., Susan Lew, AJbeJ't 

Logan, Glenn Mat'shall, Chdstopllet• S, 

McKellat) Ltmy A. Prosi, R lcha~·d H. 

RevieJ',·and Collette Southwick 

LAW OFFICES OF STANLEY H. SHURE 

By: ________________ __ 

Stanley H. Shw·e . Attotnoy for A. Vincent SiciHano 

JHNSHAW & COI~BERTSON LLP 

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APPROVED AS TO FORM: 

CALLAHAN & BLAINE ./ 

By: _I~===-:--;:::::===-=======~! RobertS. Lamence 

Attorneys for Federal Deposit Insurance 

Corporation, as Rt:ceiver for 1st Pacific 

Bank of California 

TISDALE & NICHOLSON LLP 

By:-=-----=--=---:-~-- J ef.frcy A, Tisdale . 

Attorneys for James H. Burgess, Ro~ert P . Cange, Ronald J. Carlson, Albert Colucci, 

James G. Knight, M.D.; Susi:I.Il Lew, Albert 

Logan, Glenn Marshall, Christopher S. 

McKellar, J ,arry A. Prosi, Richard Il 

Revier, and Collette Southwick 

LAW OFFICES OF STANLEY H. SHGRE 

By:---...,.--=------ Stanley H. Shure . Attorney for A. Vincent Siciliano 

HINSHAW & CULBERTSON LLP 

By:--

13 

Edward F. Donohue ni 

Attorneys for BancJnsure, h1c. 
APPROVED AS TO FORM: 

CALLAHAN & BLAINE 

By: -,....---~ --·-------' Robert S. Lawrence 

Attomeyt> for Federal Deposit Insurance 

Cm'Poration, as Receiver for 1st Pacific 

Bank of California 

TISDALE & NICHOLSON LLP 

e 

A eys for James H. Burgess, Robert P. 

nge, Ronald J. Carlson, Albert Colucci, 

ames 0. K.ni~ht, M.D., Susan Lew, Albert- Logan, Okrm Marshall, Christopher S. 

McKellar, Larry A. Prosi, Richard H. Revier, and Collette Southwick 

LAW OFFICES OF STANLEY H. SHURE 

By: __ ~-= ---- Stanley H. Shure 

Attorney for A. V;ncent S"iciliano 

HINSHAW & CULBERTSON LLP 

By: --=-o--""'-""="-=-___,- ---- Edward F. Donohue iii 

Attomeys for Banclnsure, Inc. 

13 

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esteo/2014 14:5e 3104462El39 

A:PPROVED AS TO FORM; 

SHURE 

CALLAHAN & BLAINE 

By: __ ~~~~----------­ Robert S. Lawrence 

Attorneys for Federal Deposit Insurance 

Corporutioitt as Receiver for 1st Pacific 

Bank of California 

TISDALE & NICHOLSON LLP 

By: 

Jeffrey A. Tisdale 

PAGE e3t03 

Attorneys for James H. Burgess, Robert P. 

Cange, Ronald J. Carlson, Albert Colucci, 

James 0. Knight, M.D., Susan Lew, Albert 

Logan, Glenn Mar:shaU, ClU'istopher S. 

McKellar, L~rry A Prosi, Richal'd H. 

Revier, and Collette Southwick 

LAW OFFICES OF STANLEY H. SHURE 

HlNSHA. W & CULBERTSON LLP 

By: - ---;-:~----.-;::;-=----;--~·--­ Edward F. Donohue Ill 

Attorneys for Banclnsure, Inc. 

13 
APPROVED AS TO FORM: 

CALLAHAN & BLAINE 

By: __ =-~-=~------------­ Robert S. Lawrence 

Attorneys for Federal Deposit Insurance 

Corporatipn, as Receiver for 1st Pacific 

Bank of California. 

TISDALE & NICHOLSON LI.P 

By: __ =-~~~~-------- Jeffrcy A. Tisdale 

Attorneys for J urnes I I. B urgcss, Robert P. 

Cangc, Ronald J. CtU'lson, Albert Colucci, 

James G. Knight, M.D., Susan Lew, Albert 

Logan, Glenn Marshall, Christopher S. 

McKellar, Larry A. Prosi, Richard II. 

Revier, and Collette South111rick 

LAW OFFICES OJ.' STANLEY II. SHURE 

By: -::::-----.----~ Stanley H. Shure · Attorney for A. Vjncent Siciliano 

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13