SETTLEMENT AGREEMENT 

This Settlement Agreement ("Agreement") is entered into as of January 30, 2015 (the 

"Effective Date"), by and between the Federal Deposit Insurance Corporation (the "FDIC") in its 

capacity as Receiver of Carson River Community Bank (hereinafter "FDIC-W') and James M. 

Jacobs ("Jacobs"). The FDIC-R and Jacobs are hereinafter referred to as "Settling Parties". 

RECITALS 

WHEREAS, Jacobs served as a member of the Board of Directors of the Carson River 

Community Bank ("Bank") and as a member of the Bank's Senior Loan Committee; 

WHEREAS, the Financial Institutions Division of the Nevada Department of Business 

and Industry closed the Bank on February 26, 201 0 and the FDIC-R accepted appointment as 

the Bank's receiver; 

WHEREAS, in accordance with 12 U.S. C. §182 l(d), the FDIC-R succeeded to aU rights, 

titles, powers, and privileges of the Bank and its stockholders, accountholders, and depositors; 

WHEREAS, on February 22, 2013, the FDIC-R filed suit against Jacobs in a case styled 

FDIC v. Jacobs, et al, 3: 13-CV -84 (Dist. Nevada) (the "FDIC-R Lawsuit"); 

WHEREAS, the FDIC-R seeks tort damages in the FDIC-R Lawsuit against Jacobs; 

WHEREAS, this Agreement is entered into to settle the FDIC-R Lawsuit against Jacobs; 

and 

WHEREAS, the FDIC-R and Jacobs deem it in their respective best interests to enter into 

this Agreement to avoid the uncertainty, trouble, risk and expense of further litigation. 

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

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

FDIC-R and Jacobs agree, each with the other, as follows: 

1. Settlement Consideration As an essential covenant and condition of this 

Agreement, Jacobs shall pay the FDIC-R the sum of $100,000 in certified funds ("Settlement 

Funds") on or before February 27, 2015. The Settlement Funds shall be made payable to the 

(b)(4) ................. 1............. .............. I In addition, Jacobs shall execute and deliver to the 

FDIC-R the Unconditional Assignment attached as Exhibit A, and Jacobs irrevocably assigns to 

the FDIC-R alJ of his rights, interests, claims, defenses, and causes of action (hereinafter 

collectively "rights") against Banclnsure, Inc. its receiver, any state insurance guaranty insurance 

associations, any insurers or reinsurers, and their respective agents, brokers, employees, and 

off1cers with respect to the following matters: (A) any rights arising out of the Policy, including 

but not limited to Jacobs' right to coverage under Extended Professional Liability Insurance 

(b )(6)__ PQlic..)'._No ... ---~ I (''Policy''); (B) any rights arising out of Bane Insure's coJ1duct 

regarding the Policy, including but not limited to, Banc!nsure's conduct in denying coverage 

Page 1 of6 
under the Policy, and Bancinsure's refusal to settle and pay on behalf of ,Jacobs the claims 

asserted in the FDIC-R notice of claims letter dated January 7, 2013 ("Claims Letter") and the 

FDIC-R Lawsuit; (C) any rights to insurance coverage or payment for the claims asserted in a 

lawsuit instituted by Banclnsure styled Banclnsure, Inc. v. Jacobs. et al, 3: 13-CV-302 (Dist. 

Nev.) ("Insurance Coverage Action") and FDIC-R Lawsuit; and (D) any rights to prosecute or 

defend the Insurance Coverage Action. The foregoing assigned rights arc hereinafter referred to 

as the "Assigned Claims." The FDIC-R shall have sole and unf~ttered discretion, ownership, 

and control of the prosecution of the Assigned Claims, including without limitatio;n, the right to 

settle and dismiss the Assigned Claims. The FDIC-R also may, in its sole discretion, continue to 

prosecute the Assigned Claims in the name of Jacobs w1less otherwise required by federal or 

state law. 1l1e FDIC-R shall have the sole right to select counsel to prosecute the Assigned 

Claims. The DJC~R is solely responsible for all efforts relating to the Assigned Claims and all 

such efforts, fees and costs will be undertaken solely at its own risk and expense. 

2. Release of Jacobs by FDIC-R. Conditioned upon payment of the Settlement 

Funds and the execution and delivery of the Unconditional Assignment, and subject to the 

reservations set forth in paragraph 6, the FDIC-R, on its own behalf, and on behalf of its agents, 

attorneys, representatives, successors and assigns, releases and discharges Jacobs, and his 

respective heirs, and executors, administrators, agents, attorneys 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-R, that arise from· or relate to, the 

performance, nonperformance, or manner of performance of Jacobs' functions, duties and 

actions as a director and/or Senior Loan Committee member of the Bank, including the claims 

asserted or which could have been asserted in the FDIC-R Lawsuit. This release does not rel ease 

or discharge Jacobs from his obligations under this Agreement. 

3. Release of FDIC-R by Jacobs. Conditioned upon payment of the Settlement 

Funds and execution and delivery of the Unconditional Assignment, Jacobs, on behalf of hil)'lself 

individually, and his respective heirs, executors, minist~tors, agent~, attorneys, 

representatives, successors and assigns, release and discharge the FDIC-R, arid its employees, 

representatives, agents, attorneys, successors and assigns, from any and ~11 laims~ demands, 

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

belonging to Jacobs that arise from or relate to the Bank or the FDIC-R Lawsuit. This release 

does not release or discharge the FDlC-R from its obligations under this Agr eeq1ent. 

4. Dismissal with Pre,judice. Upon payment of the Settlement Funds and execution 

and delivery of the Unconditional Assignment, the FDIC-R shall take steps. _to dismiss Jacobs 

with pr~judice from the FDIC-R Lawsuit and Jacobs shall take steps to dismiss with prejudice 

his cro.ssclaims against other parties to the FDJC-R Lawsuit. 

5. Disputed Claims. This Agreement is a compromise of disputed claims. Nothing 

in this Agreement is an admission of liability by Jacobs, and nothing in this Agreement may be 

interpreted as an admission of liability. 

Page 2 of6 
6. Res ervations from Release 

A. The FDIC-R expressly preserves fully and to the same extent as if the Agreement had 

not been executed, rights to sue upon any claims or causes of action: (a) against any 

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 the FDIC~R, the 

Bank, other financial institutions, or any other person or entity, including without 

limitation any d aims acquired by the FDJC-R as successor in interest to the Bank or 

any person or entity other than the Bank; and (b) against any person or entity not 

expressly subject to the covenant in this Agreement. 

B. Notwithstanding any other provision, this Agreement does not preclude any claims or 

actions that could be brought by any agency or instrumentality of the United States 

government, other than the FDIC-R. 

C. To the extent, if any, that Jacobs is or was a shareholder of the Bank and by vhtue 

thereof is or may have been entitled to a dividend, payment, or other prorata 

distribution upon resolution of the receivership of the Bank, Jacobs hereby knowingly 

assigns to the FDIC-R any and all rights, titles and interest in and to any and all such 

dividends, payments or other pro rata distributions. 

7. Recitals. The Recitals are incorporated into and constitute a part of this 

Agreement. 

8. Execution in Counterparts. This Agreement shall not be binding on any pa1iy 

until signed and delivered by all Settiing Parties; provided, however, it may be executed in one 

or more counterparts and delivered by facsimile or email, and each such counterpart, upon 

execution and delivery, shall be deemed a complete original, binding the.party subscribed thereto 

upon execution by all Settling Parties to this Agreement. Such counterparts when so executed 

shall together constitute the final Agreement. Photocopies and/or facsimile and/or e~mail 

transmissions of original signatures shall be considered in all respects equivalent to original 

signatures. 

9. Binding Effect. The FDIC-R ~md Jacobs represent and warrant that they are a 

party hereto or are authorized to sign this Agreement on behalf of the re~p i\~e party, and 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 

Settling Parties and their respective heirs, executors, administrators, representatives, successors 

and assigns. · 

10. Choice of Law. This Agreement shall be interpreted, cor1strued and enforced 

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

11. Entire Agreement and Amendments. This Agreement, including exhibits, 

constitutes the entire agreement and understanding between the FDIC~R and Jacobs concerning 

Page 3 of6 
the matters set forth herein. This Agreement may not be amended or modified except by another 

writren instrument signed by the Settling Pa1iies, or by their respective authorized attorney(s) 0r 

other representative(s). 

12. No Prior Transfer of Claims. The FDIC-R warrants and represents that it (i) 

owns the claims asserted against Jacobs in the FDIC-R Lawsuit, and (ii) has not assigned, sold, 

or otherwise transferred or disposed of any of those claims. 

13. Reasonable Cooperation. The Settling Parties agree to cooperate in good faith 

to effectuate all the terms and conditions of this Agreement, including 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 perform the terms of this 

Agreement. 

14. Advice of Counsel. Each party hereby acknowledges that such party has 

consulted with or has had the opportunity to consult with counsel prior to executing this 

Agreement. 

15. Notices. Any notices relating to or arising out of this Agreement shall be sent by 

regular mail and e-mail, shall be considered delivered when recei,;ed by the party to ·whom it was 

sent, and shall be addressed to the following recipients: · 

To the FDIC-R: 

Bob J. Rogers, Esq. 

Senior Attorney 

Professional Liability Unit, Legal Division 

Federal Deposit Insurance Corporation 

1 60 I Bryan Street 

Room 15068 

Dallas, Texas 75201 

(b)(6) I ......................................... .. .................. ............................. "''"L;"";;;_ " ________ _, 

with a copy to: 

Joel R. Hogue, Esq. 

Sprouse Shrader Smith PLLC 

701 S. Taylor, Suite 500 

Amarillo, TX 79101 

(b)(6) ___ t::b====-==:....___ ____ _j 

To James M . .Jacobs: 

(b)(6) tPage 4 of6 
(b)(6t .. 

16. Preparation of Agreement. This Agreement has been prepared by the combined 

efforts of the Settling Parties and their respective attorneys. The Settling Parties represent and 

wanant that each of them has had the unfettered oppm1unity to fully consult with an attorney of 

their own choice. This Agreement shall, therefore, be construed without regard to the authorship 

of the language and without an y presumption or interpretation or construction in favor of any 

person, entity or party. 

17. Costs and Expenses. All costs and expenses incurred in closing and carrying out 

the transactions contemplated by this Agreement shall be borne by the respective party incurring 

such costs and expenses. 

18. Survival. All representations and warranties made herein shall continue and 

survive the execution of this Agreement, and remain binding upon the person or persons making 

the representation or warranty, even after this Agreement is executed. 

19. Severability. 1n the event that any provision of this Agreement is declared or 

deemed to be invalid or unenforceable, such invalidity or unenforceability shall not affect the 

validity or enforceability of the remaining portions of this Agreement. 

20. Attorneys' Fees. If any lawsuit is brought to enforce any term or provision of 

this Agreement, or in connection with any dispute arising from or relating to this Agreement or 

to the alleged breach of thjs Agreement, the prevailing party shall be entitled to recover its 

reasonable and necessary attorneys' fees and costs incurred in connection with anysuch lawsuit 

or proceeding, throughout trial and all appeals. 

IN WITNESS WHEREOF, the Parties have executed this Agreement to be effective as 

of the Effective Date. · 

FEDERAL DEPOSIT INSURANCE 

CORPORATION, AS RECEIVER FOR 

CARSON RJVE R COMMUNITY BANK 

~'}OJ J?JIS"' -s;j - L 

Printed Name R q& ·qr-t s; I s f-oe. kf-c/"'"" 

Title f<es-a( ,._j .~ i1. S 'j_(~fo>l~fj 5' ll1<riV~er 

Page 5 of 6 
APPROVED AS TO FORM AND CONTENT: 

Datc:_ .. _._ .tf--=- 3o_,t...:....: / =----- SPROUSE SHRADER SMITH, PLLC 

By~~~~~--~~--~-------­ o R. Hogue 

orney for Federal Deposit Insurance 

Corporation, as Receiver of Carson River 

Community Bank 

Page 6 of6 
RED ROCK INSURANCE COMPANY flkJa BANCINSURE, in Receivership 

3613 NW 56, Suite 330 

Oklahoma City, Oklahoma 73112 

UNCONDITIONAL ASSIGNMENT 

In consideration of $1.00 and other valuable consideration, the receipt and sufficiency of 

which is hereby acknowledged, James Jacobs, hereinafter refened to as "Claimant", does hereby 

grant, bargain, sell, convey and unconditionally assign to the Federal Deposit Insurance 

Corporation, as Receiver of Carson River Community Bank, hereinafter referred to as "Agent", 

all of his right, title, and interest in and to Claimant's claim against Red Rock Insurance 

Company, in Receivership, and Claimant does hereby authorize the Receiver to deal directly 

with the Agent in this matter, and the Receiver is hereby relieved of any and all duties to deal 

with Claimant relative to this claim, and the Receiver may deal with the Agent in all rnatters 

relating to this claim. 

Claimant 

STATE OF - --··-··-··-·-·-···-- ) 

) 

COUNTY OF ) --------

This instrument was acknowledged before me on this __ day of ______ _ 201 5by ________________________ ___ 

Notary Public 

(SEAL) 

Commission Expires: 

Commission No.: 

-------

Unconditional Assignment (Jacobs) 
RED ROCK INSURANCE COMPANY f/k/a BANCINSURE, in Receivership 

3613 NW 56, Suite 330 

Oklahoma City, Oklahoma 73112 

UNCONDITIONAL ASSIGNMENT 

In consideration of $1 .00 and other valuable consideration, the receipt and sufficiency of 

which is hereby acknowledged, James M. Jacobs, hereinafter referred to as "Claimant", does 

hereby grant, bargain, sell, convey and unconditionally assign to the Federal Deposit Insurance 

Corporation, as Receiver of Carson River Community Bank, hereinafter referred to as ((Agent", 

all of his right, title, and interest in and to Claimant's claim against Red Rock Insurance 

Company, in Receivership, and Claimant does hereby authorize the Receiver to deal directly 

with the Agent in this matter, and the Receiver is hereby relieved of any and all duties to deal 

with Claimant relative to this claim, and the Receiver may deal with the Agent in all matters 

relating to this claim. 

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

sTATE oF Ntvad tA. ) 

) 

COUNTY OF lA.JasYJO~ -· ) 

This instrument was acknowledged before ri1e on this 1lt'dav. of :J'O V\U(!Ill:::L_, 2o1s by~ :So. cobs . . J q 

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Notary Pubhc 

(S EAL) 

Commission Expires: /f-6._--LY-O-=--- Commission No.:Gf/- 2102 2