New Settlement Proposal for Fraud, Bad Faith, etc Claims against Colbert Matsumoto, an Individual

Bobby N. Harmon, CPCU, ARM

xxxxx

July 27, 2009

VIA Certified Mail & Fax: 808-275-8222

Mr. Colbert Matsumoto, CEO

Island Insurance Company

1022 Bethel Street

Honolulu, Hawaii 96806

Re: New Settlement Proposal for Fraud, Bad Faith, Professional Liability, Obstruction of Justice, etc., Claims Against Colbert Matsumoto, Esq., An Individual

Date of First Notice of Claim: September 1, 2006

Date of Last Notice of Claim: April 25, 2009

Dear Mr. Matsumoto:

This is to advise you that, as I have not received a reply to any of my previous notices of claims against Island Insurance Company et al, I am hereby withdrawing all previous global settlement proposals and making the following NEW settlement offer:

For the sum of $10,000,000, I will release Colbert Matsumoto, Esq., as an individual, from any and all past and future claims of damages arising from any and all acts performed in connection with these prior claims. This new offer DOES NOT RELEASE Island Insurance Company, Roy Hughes, Michael Tanoue, or any related parties, from any of their wrongful acts regarding these claims.

You will find further information regarding these claims at the following web addresses:

http://www.kycbs.net

http://www.kycbs.net/Confessions.htm

http://www.kycbs.net/CV05-00030-OUST-vs-Harmon.htm

http://www.kycbs.net/HarmonArbitration.htm

http://www.kycbs.net/Whistler.htm

http://www.kycbs.net/Freedom-To-Sing.htm

http://www.kycbs.net/JUSTICE.htm

http://www.kycbs.net/SLAPP.htm

http://www.kycbs.net/Claims-Branch-Island.htm

http://www.kycbs.net/CV05-00030-Witness-Matsumoto-Colbert.htm

Again, I would point out that Hawaii has a Mandatory Reporting requirement for suspected claims fraud, and immunity provisions which grant individuals immunity from prosecution relative to good faith reporting of suspected insurance fraud information. Also, please be reminded that I submitted a fraud report on February 26, 2008, to the National Association of Insurance Commissioners (NAIC Fraud ID: 9019048316).

Therefore, I request a good-faith response from you within 15 days to this new Settlement Proposal.

Very truly yours,

Bobby N. Harmon, CPCU, ARM

cc: Colbert Matsumoto, Esq., CEO, Island Insurance Co. (via fax: 808-564-8456)

Michael Tanoue, Esq., Atty. for Island Insurance Co. (mtanoue@paclawgroup.com)

Roy Hughes, Esq. (hthughes@hawaii.rr.com)

John Goemans, Esq. (wip@kamuela.com)

Arnold Phillips, Esq., (via fax @ 808-528-3911)

John D. Marshall, Esq., Nagle & Marshall, LLP (lawyer@hawaiilaw.com)

Carol Muranaka, Curtis Ching, Gayle Lau, James Nicholson, and David C. Farmer, Office of the U.S. Trustee, c/o Steven Guttman, Esq., Kessner Duca, et al., (via Fax @ 808-529-7177 and e-mail: sguttman@kdubm.com)