Exhibit 10.1
SETTLEMENT AGREEMENT
THIS SETTLEMENT AGREEMENT (“Agreement”) is entered into this 25th day of April,
2011 (the “Effective Date”), by and among AmT CADC Venture, LLC, f/k/a AmTrust
CADC Venture LLC (the “Lender”), successor-in-interest to Federal Deposit
Insurance Corporation as Receiver for AmTrust Bank (“AmTrust Bank”), Woodbridge
Holdings, LLC, successor by merger to Levitt Corporation (“Borrower”), and
Carolina Oak Homes, LLC successor to Levitt and Sons of Jasper County, LLC
(“Guarantor” or “Mortgagor”) (Borrower and Guarantor collectively “Obligors”),
agree as follows:
RECITALS
     A. On or about March 21, 2007, Ohio Savings Bank (the “Original Lender”),
and Levitt and Sons, LLC (the “Original Borrower”), entered into a Revolving
Working Capital Land Acquisition and Development and Residential Construction
Borrowing Base Facility Agreement (the “Loan Agreement”).
     B. In connection therewith, on or about March 21, 2007, Original Borrower
executed a Revolving Promissory Note (the “Original Note”) in the original
principal amount of One Hundred Million and No/100 dollars ($100,000,000.00).
     C. On or about March 21, 2007, Levitt and Sons of Jasper County, LLC (the
“Original Guarantor”) executed and delivered to Original Lender an Unconditional
and Continuing Guaranty and Indemnity Agreement (the “Guaranty”).
     D. The Original Note is secured by: (i) a Mortgage and Security Agreement
dated March 21, 2007 executed by Original Guarantor in favor of the Original
Lender as mortgagee, recorded in Official Records Volume 531, at Page 168 of the
Public Records of Jasper County, South Carolina (the “Mortgage”), which Mortgage
encumbers certain real property, together with the improvements located thereon,
situated in Jasper County, South Carolina (ii) an Assignment of Rents and Leases
and Agreements Effecting Real Estate (the “Assignment of Rents and Leases”)
dated as of March 21, 2007, recorded in Official Records Volume 531, at Page 179
of the Public Records of Jasper County, South Carolina, and (iii) a UCC-1
Financing Statement (the “UCC”) in favor of the Original Lender, as secured
party, recorded in Official Records Volume 531, at Page 189 of the Public
Records of Jasper County, South Carolina, For purposes hereof, the Mortgage,
Assignment of Rents and Leases and UCC are hereinafter collectively, the
“Security Documents”.
     E. On or about October 25, 2007, Levitt Corporation (“Levitt Corporation”),
successor to Original Borrower, Levitt and Sons, LLC and AmTrust Bank entered
into an Assumption and Modification of Note and Loan Agreement (“Assumption
Agreement”).
     F. AmTrust Bank was formerly known as Ohio Savings Bank. On April 24, 2007,
a Resolution approving a change in the name from Ohio Savings Bank to AmTrust
Bank was approved by the Board of Directors of Ohio Savings Financial
Corporation. On April 25 2007, the Office of Thrift Supervision of the
Department of the Treasury issued a Certificate of

 

--------------------------------------------------------------------------------

 

Corporate Existence (“Certificate”), recognizing AmTrust’s charter as being in
full force and effect.
     G. In connection with the Assumption Agreement, Levitt Corporation executed
and delivered to AmTrust Bank an Amended and Restated Revolving Promissory Note
(“Note”) in the original principal amount of One Hundred Million and No/100
Dollars ($100,000,000.00) (“Loan”).
     H. On or about October 25, 2007, Original Guarantor executed and delivered
to AmTrust Bank a Ratification of Guaranty (“Ratification.”)
     I. The Note, the Mortgage, the Security Documents, the Guaranty, the
Ratification and all other documents executed in connection with the Loan are
sometimes hereinafter collectively referred to as the “Loan Documents”.
     J. On November 15, 2009, AmTrust Bank made demand upon Borrower and
Guarantor for payment of the Loan in full.
     K. On or about November 24, 2009, AmTrust Bank filed its Complaint for
Damages against Borrower and Guarantor, currently pending in the action styled
AMT CADC VENTURE, LLC f/ka AMTRUST CADC VENTURE LLC, successor-in-interest to
FEDERAL DEPOSIT INSURANCE CORPORATION as RECEIVER for AMTRUST BANK v. WOODBRIDGE
HOLDINGS, LLC and CAROLINA OAK HOMES, LLC, Case No. 10-60318-CIV-SEITZ, in the
United States District Court for the Southern District of Florida (the
“Litigation”). On December 4, 2009, the FDIC was tendered the appointment as
Receiver of AmTrust Bank by the Office of Thrift Supervision in order to take
charge of its assets and affairs, On July 21, 2010, the FDIC as Receiver for
AmTrust Bank sold certain assets, including the assets at issue in this action,
to AmTrust CADC Venture, LLC n/k/a AmT CADC Venture, LLC.
     L. Lender presently owns and holds the Original Note, Note, Mortgage and
the other Loan Documents. Guarantor presently holds title to the Property in fee
simple, as described in Exhibit “A” hereto (“Property”).
     M. Lender, Borrower and Guarantor recognize the expense and inherent risk
of protracted civil litigation and, therefore, desire to amicably settle the
disputes described in the Litigation and dispose of all claims, matters and
controversies by and among them with respect to only the Loan, subject to, and
in accordance with, the terms and conditions of this Agreement.
AGREEMENT
NOW, THEREFORE, for and in consideration of the mutual promises, covenants and
conditions contained in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
     1. Recitals. The foregoing recitals are true and correct and by this
reference are incorporated as if fully set forth herein.

 

--------------------------------------------------------------------------------

 

     2. Transfer of Property. Mortgagor hereby agrees to transfer the Property
to the Lender, its successor or assigns, by Special Warranty Deed (the “Deed”),
and/or, at the sole and exclusive option of the Lender, to stipulate to the
entry of a judgment of foreclosure (and to also waive all defenses and other
opposition to entity of a foreclosure judgment for the full amount of principal,
interest, attorneys’ fees and costs owed to the Lender, as accurately
memorialized in the Lender’s Initial Disclosures served in the Lawsuit, a copy
of which is annexed hereto). If Lender chooses, in its sole and absolute
discretion, to effectuate the transfer of the Property by way of the Deed the
Lender shall prepare the Deed, and Mortgagor agrees to execute and deliver the
executed Deed to the Lender’s counsel within three (3) business days of Lender’s
written request for execution of said Deed. The form of the Deed shall be
substantially in the form attached hereto as Exhibit “B” (and such other Deed
reasonably requested by the Lender pursuant to the terms of this Agreement). In
such event, the Lender shall be responsible for any recording fees and
documentary stamp taxes due in order to record the Deed in the Public Records of
Jasper County, South Carolina. If the Lender seeks entry of a judgment of
foreclosure (“‘Foreclosure Proceeding”), then Mortgagor agrees to waive and
refrain from asserting any defenses or other opposition to entry of the
foreclosure judgment and to cooperate in connection with the Foreclosure
Proceeding and, once a foreclosure proceeding is commenced, Mortgagor will
execute a stipulation for the entry of a judgment of foreclosure for the full
amount of principal, interest, attorneys’ fees and costs owed to the Lender as
set forth in the attached Initial Disclosures of the Lender. Mortgagor agrees to
waive any and all defenses in the Foreclosure Proceeding, and agrees not to file
any counterclaims against Lender in the Foreclosure Proceeding or otherwise. The
stipulation shall provide that the Lender shall not pursue a deficiency judgment
against the Obligors. Lender shall notify Obligors of its intentions as to
transfer of the Property within ten (10) ten business days following the
execution of this Agreement, Notwithstanding anything contained in this
Agreement to the contrary, the Obligors’ waiver of defenses and other opposition
by Obligors in connection with any Foreclosure Proceeding and any Quiet Title
proceeding shall not negate, impair, limit or otherwise affect the terms of this
Agreement, expressly including, without limitation, (i) Lender’s agreement not
to pursue a deficiency judgment against Obligors or (ii) the provisions of
Section 8 of this Agreement, subject to all limitations and other terms of this
Agreement.
     3. General Assignment. To the extent assignable, Mortgagor does hereby
assign, grant, bargain and convey to Lender, and grant to Lender, and its
successor and assigns, all of Mortgagor’s right, title and interest in and to
all building and other permits, surveys, architectural and engineering plans and
specifications, wastewater and water capacity rights and irrigation hookup
rights, reimbursement agreements as to infrastructure improvements,
certifications, studies and work product prepared and hereafter prepared
relating to the design or construction of the construction of infrastructure
improvements and/or construction of residences on the Property (collectively,
the “Improvements”), governmental approvals, certificates of occupancy and
completion, licenses, authorizations, proceeds of insurance policies (including
but not limited to any Master policies) pertaining to the Property, agreements
with any utility companies, all deposits associated with the foregoing and any
other consents and approvals which Mortgagor may now own with respect to or in
connection with the Property or any portion thereof, including, without
limitation, all plans and specifications respecting the design and construction
of the Improvements.

 

--------------------------------------------------------------------------------

 

     To the best of the Borrower’s knowledge, Borrower has heretofore delivered
copies of any and all contracts, agreements, permits, engineering and other
plans, applications and commitments within the Borrower’s or Mortgagor’s
possession, with respect to which the Property or Mortgagor is subject or
otherwise relating to or affecting the ownership, development, use, occupancy,
leasing or operation of the Property or any portion thereof, and all amendments
or modifications thereto, including all contracts, agreements and commitments
with vendors supplying products and services to the Property and the businesses
conducted thereon (collectively, the “Contracts”). Borrower has not assigned or
granted a security interest in any Contracts to anyone other than Lender. Within
one hundred eighty (180) days following the execution of this Agreement, Lender
shall, in its sole discretion, inform Obligors as to which Contracts, if any,
Mortgagor or Borrower must assign (to the extent such contracts are assignable)
to Lender, its successors and assigns, without delay. Obligors, individually and
collectively, agree to execute and all documents which may be necessary to
comply with their respective obligations hereunder, with the form of Assignment
annexed hereto as Exhibit “C” being acceptable to the Obligors should the Lender
request this form for any assignments. If any additional Contracts are located
after the date of execution of this Agreement, the Obligors, individually and
collectively, agree to provide written notice of such Contracts to Lender, its
successors and assigns, and agree to assign such Contracts to the Lender, its
successors and assigns, upon written request by the Lender, its successors and
assigns.
     4. Foreclosure and Quiet Title Complaints. If Lender commences any
Foreclosure Proceeding and/or Quiet Title proceeding as to the Property,
Mortgagor hereby (i) authorizes and instructs its counsel, Stearns Weaver
Miller, et al, to accept service of any complaint filed in the Foreclosure
Proceeding and/or Quiet Title proceedings and (ii) agrees to enter into a
stipulated foreclosure judgment and waive all defenses and claims in the
Foreclosure Proceeding and any Quiet Title proceedings, and to enter into a
stipulation(s) as to the appointment of a receiver (and waive all opposition
thereto), at the sole and exclusive option of the Lender; provided, however,
that any such waiver shall not negate, impair, limit or otherwise affect the
terms of this Agreement, including, without limitation, (i) Lender’s agreement
not to pursue a deficiency judgment against Obligors and (ii) the provisions of
Section 8 of this Agreement, subject to all limitations and other terms set
forth in this Agreement. Mortgagor acknowledges that it may be necessary or
desirable for Lender to amend, supplement or assign its rights under the
Foreclosure Proceeding prior to a final judgment of foreclosure being entered by
the Court and in connection with any Quiet Title proceeding, and hereby consents
to any such amendment, supplement or assignment and, at the Lender’s sole and
exclusive option, to the appointment of a receiver for the Property in the
Foreclosure Proceeding.
     5. Payment. The Obligors agree that, in addition to the collateral Property
transfer, via Deed and/or the Foreclosure Proceeding, they will pay to Lender
the full and final settlement amount of Two Million Five Hundred Thousand and
No/100 Dollars ($2,500,000.00) (the “Settlement Amount”) in certified, clear and
unrestricted funds. The Obligors will transfer the Settlement amount by no later
than April 25, 2011 via wire transfer as follows:

 

--------------------------------------------------------------------------------

 

Collection Corporate Trust Clearing
Wells Fargo Bank
ABA # : 121-000-248
Account: 3970771416
FFC: 80463700
Reference: Loans 1003203 and 1003204
     6. Stipulation of Dismissal. Within five (5) Business Days of receipt of
clear funds in the Settlement Amount and execution of the Deed, counsel for
Lender and the Obligors shall file in the Litigation a Stipulation of Dismissal
Without Prejudice, in the form attached hereto as Exhibit “D”, with each party
to bear their own fees and costs.
     7. Obligors’ Release of Lender. Except for the obligations of this
Agreement, which are not hereby released and which shall survive the execution
hereof, Obligors, for themselves and for their respective successors and
assigns, hereby remise, release, acquit, waive, satisfy and forever discharge
the Lender, its predecessors, officers, directors, shareholders, members,
employees, counsel, agents, servants, representatives and insurers, and the
respective personal representatives, heirs, successors, and assigns of all of
them (collectively, the “Released Party”) from any and all claims, actions,
defenses, causes of action, damages or demands, both compensatory and punitive,
in whatever name or nature, in tort, in contract or by statute, in any manner
arisen, arising, or growing out of any and all damages, expenses, or losses
sought or claims, of whatever name or nature, past, present, or future, known or
unknown, direct or indirect, which in any way arise out of or pertain to the
causes of action in the Litigation, whether such claims, actions, causes of
action, damages or demands were asserted or unasserted in the Litigation. This
Release covers any and all claims of the Obligors which have arisen, arise, or
which may hereafter arise out of the incidents or matters which were alleged in,
or could have been alleged against the Released Party in the Litigation, whether
known or unknown, direct or indirect. Obligors represent and warrant that they
have not assigned to any third party the claims released herein.
     8. Lender’s Covenant Not to Sue/Release.
     (a) Covenant Not to Sue. Lender does hereby covenant and agree not to sue
or cooperate or participate in, directly or indirectly through its affiliates,
agents, representatives, or nominees, in any lawsuit against Obligors and their
respective heirs, executors, administrators, personal representatives,
successors, predecessors, counsel, assigns, and past, present, and future
affiliates, officers, directors, employees, shareholders, and agents
(collectively, the Obligor Indemnities”), on account of any and all liabilities,
duties, responsibilities, obligations, claims, demands, actions, damages, costs,
losses, and expenses now existing or hereafter arising out of or in any way
relating to or connected with, directly or indirectly, the Property, the Loan,
and the Loan Documents. The covenant not to sue set forth in this Section 8
covers and otherwise relates to any and all claims of the Lender which have
arisen, arise, or which may hereafter arise out of the incidents or matters
which were alleged in, or could have been alleged against the Obligor
Indemnities as to the Loan at issue in the Litigation, whether known or unknown,
direct or

 

--------------------------------------------------------------------------------

 

indirect subject to the terms of this agreement and EXCLUDING those matters and
subject to those limitations set forth at Section 8(b) below and otherwise in
this Agreement.
     (b) Exclusions and/or Limitations. Notwithstanding anything contained in
this Agreement to the contrary, the Covenant Not to Sue set forth in Section
8(a) of this Agreement and the Release set forth in Section 8(e) of this
Agreement expressly exclude and do not otherwise affect:
               (i) the obligations and liabilities of Obligors and rights,
remedies and entitlements in favor of the Lender arising under the specific
terms of this Agreement;
               (ii) all rights, remedies and causes of action that Lender would
have enjoyed or otherwise has against the Obligors with respect to: (a) any
Hazardous Substances (as defined in this Agreement) on the Property to the same
extent as if Lender foreclosed upon the Property instead of having its interest
transferred by the Mortgagor to the Lender or entity designated by the Lender
via the Deed; provided that such Hazardous Substances were not introduced to the
Property following the date of the delivery of the Deed to the Lender; (b) a
material breach of any of the representations, warranties and obligations of the
Borrower under this Agreement (c) a bankruptcy filing as provided in this
Agreement, the result of which is the Settlement Amount or the transfer of the
Property pursuant to this Agreement being rescinded, avoided, set aside,
rendered void and/or otherwise undone or required to be restored by Lender to
Obligors or to any creditors of either Obligor; and (d) any and all other rights
of the Lender and obligations of the Obligors, jointly and severally, under the
terms of this Agreement.
               (iii) the validity of the Mortgage and the Lender’s right to
enforce its rights and remedies thereunder, including but not limited to, its
right to institute Foreclosure Proceedings and/or any Quiet Title Proceedings as
to the Property or any portion thereof, in any event subject to the terms,
conditions and limitations set forth in this Agreement (with the Obligors
expressly waiving all defenses, claims and opposition in any such proceedings,
and with each of the Parties to this Agreement stipulating to the Lender’s right
to prosecute such proceedings to its/their conclusion including the Lender’s
right to obtain a judgment of foreclosure against the Mortgagor and all others
necessary parties to obtain marketable title); provided, however, that Lender
agrees not to pursue a deficiency judgment or money damages against Obligors;
and
               (iv) Lender’s right to institute and prosecute the Foreclosure
Proceeding to its conclusion including the right to obtain a judgment of
foreclosure against Mortgagor and all others necessary to obtain marketable
title and/or to institute and prosecute a Quiet Title proceeding to conclusion;
provided, however, that Lender agrees not to pursue a deficiency judgment
against Obligors or money damages against the Obligors in the Foreclosure
Proceeding, Quiet Title proceeding or any separate suit provided that the
Obligors have fully complied with the terms of this Agreement and the Lender has
retained the $2.5 Million dollar Settlement Amount and Property referenced in
this Agreement.
     (c) Additional Limitations on Covenant. Notwithstanding anything to the
contrary in this Agreement, in the event that the $2.5 million dollar Settlement
Amount to the Lender is

 

--------------------------------------------------------------------------------

 

disgorged in connection with a Bankruptcy Event, and Obligors fail to cure such
event within fifteen (15) days of the occurrence thereof, then this Agreement
(with the exception of the Obligors’ stipulation to transfer the Property via
Deed and waiver of opposition, claims, counterclaims and defenses in any
Foreclosure Proceeding or Quiet Title proceeding as to the Property), shall be
null and void, and Lender shall have all rights and remedies, in law and in
equity, as to the Loan and Loan Documents.
     (d) Release of Obligors’ Property. Lender hereby expressly releases the
claimed property and other assets of the Obligors (the “Released Property”)
listed at Exhibit “E” hereto from the liens arising under the Security Documents
and/or the Loan Documents. Within ten (10) business days from the date of this
Agreement, Lender shall execute any and all UCC amendments and/or similar
documents as may be required in order to amend any pending UCC filings to
release or exclude the Released Property.
     (e) Release of Obligors. Without limiting the effect of, and in addition
to, the limited Covenant Not to Sue as described at Section 8(a), 8(b) and 8(c)
of this Agreement, provided that (i) Obligors shall have paid the Settlement
Amount to Lender, (ii) no event set forth in Section 8(b)(ii)(b) shall have
occurred, and (iii) no Release Termination Event (as hereinafter defined) shall
have occurred, upon the conclusion of any Foreclosure Proceeding and Quiet Title
proceeding that is filed by the Lender, its successors and assigns, within one
(1) year following the Effective Date of this Agreement as to the Property (or
any portion thereof), Obligors and Obligor Indemnities shall automatically be
(without the requirement of any further instrument or document) remised,
released, acquitted, waived, satisfied and forever discharged of and from any
and all liabilities, duties, responsibilities, obligations, claims, demands,
actions, damages, costs, losses, and/or expenses now existing or hereafter
arising out of or in any way relating to or connected with, directly or
indirectly, the Property, the Loan, and the Loan Documents, provided that the
Release of Obligors shall not apply to the Obligors’ obligations under
Section 8(b), which shall remain in full force and effect. Notwithstanding the
foregoing, in the event that a Release Termination Event shall occur then the
release granted pursuant to this Section 8(e) shall be void and of no further
force or effect. As used herein, the term “Release Termination Event’ shall mean
a Bankruptcy Event which results in the Settlement Amount, the Property, or
both, being rescinded, avoided, set aside, rendered void and/or undone or
otherwise required to be restored by Lender to Obligors or to any creditors of
either Obligor. Lender hereby expressly acknowledges and agrees that the release
provided in this Agreement shall be self-operative and not require execution of
any additional documentation. Notwithstanding anything contained herein to the
contrary, Lender agrees that (i) in the event Lender fails to commence a
Foreclosure Proceeding or Quiet Title proceeding within one (1) year from the
Effective Date of this Agreement, then the release granted pursuant to this
Section 8.(e) shall automatically be deemed to have been given as of such date
being one (1) year from the Effective Date and, if an action is filed,
(ii) Lender shall prosecute and pursue the conclusion of any Foreclosure
Proceeding and/or Quiet Title proceeding with reasonable diligence.
     (f) Obligations of Released Parties. Notwithstanding anything contained in
this Agreement to the contrary and without limiting the provisions of Section 26
of this Agreement, subject to the terms, conditions and limitations of this
Agreement, Lender hereby expressly acknowledges and agrees that Lender’s
obligations and assignments under Section 8 of this

 

--------------------------------------------------------------------------------

 

Agreement shall be binding upon, and deemed to have been given by, each and any
Released Party (as such term is defined in Section 7 of this Agreement),
expressly including, without limitation, the grantee under the Deed.
     9. Obligors’ Representations and Warranties. Obligors represent and warrant
to the Lender as follows:
               a. Organizational Status. Borrower is duly organized and validly
existing, and in good standing under the laws of the State of Florida.
               b. Hazardous Substances. Except as disclosed in any environmental
report delivered to or obtained by Lender, Original Lender or AmTrust Bank in
connection with the Loan, to the best of the Obligors’ knowledge (a) no
spillage, leakage, dumping, discharge or disposal (whether accidental or
intentional) of any Hazardous Substances (defined below) has occurred on, under,
from or onto the Property, (b) there are no Hazardous Substances located on or
under the Property, (c) no condition exists at the Property which violates any
Environmental Requirements, or which requires cleanup or corrective action of
any kind under any Environmental Requirements, (d) no written notice of
violation, lien, complaint, suit, order or other written notice with respect to
the environmental condition of the Property is outstanding, nor has any such
notice been issued which has not been fully satisfied and complied with in a
timely fashion so as to bring the Property into full compliance with all
Environmental Requirements. “Hazardous Substances” means any hazardous, toxic or
dangerous waste, substance or material, pollutant or contaminant, as defined for
purposes of the Comprehensive Environmental Response, Compensation and Liability
Act of—1980 (42 U.S.C. Sections 9601 et seq.), as amended, or the Resource
Conservation and Recovery act (42 U.S.C. Sections 6901 et seq.), as amended, or
any other federal, state or local law, ordinance, rule or regulation applicable
to the Properties (collectively, the “Environmental Requirements”), or any
substance which is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic, or otherwise hazardous, or any substance
which contains gasoline, diesel fuel or other petroleum hydrocarbons,
polychlorinated biphenyls (PCBs), or radon gas, urea formaldehyde, asbestos or
lead; provided, however, that the above representation shall not apply to de
minimus amounts of Hazardous Substances which are allowed as a matter of law
pursuant to Environmental Requirements.
               c. Authority to Enter into Settlement Agreement. Borrower has
full power and authority to enter into this Agreement and consummate the
transactions contemplated hereby. No consent, approval or authorization by any
individual or entity or any court, administrative agency or other governmental
authority or agency is required in connection with (a) the execution and
delivery of this Agreement, or (b) the consummation of the transactions
contemplated by this Agreement by the Borrower. The consummation of the
transactions contemplated by this Agreement will not result in a breach of, or
constitute a default under, any mortgage, deed of trust, bank loan, credit
agreement or other instrument to which Borrower is a party or by which Borrower
may be bound or affected.

 

--------------------------------------------------------------------------------

 

               d. Conflicting Transactions of Borrower. The execution and
delivery of this Agreement by Borrower and the performance of its obligations
hereunder will not, to the best of Borrower’s knowledge, conflict with any
provision of any law or regulation to which Borrower is subject, or conflict
with, result in a breach of, or constitute a default under, any of the terms,
conditions or provisions of any of Borrower’s organizational documents or any
agreement or instrument to which Borrower a party or by which it is bound, or
any order or decree applicable to the Borrower, or result in the creation or
imposition of any lien on any of the Borrower’s assets or property.
               e. Pending Litigation. Except for the Litigation, there are no
actions, suits or proceedings pending against the Borrower or, to the knowledge
of Borrower, circumstances which could lead to such action, suits or proceedings
against or affecting the Borrower, or involving the validity or enforceability
of any of the Loan Documents, before or by any governmental authority; and to
the Borrower’s knowledge it is not in default with respect to any order, writ,
injunction, decree or demand of any court or any governmental authority.
Borrower has not filed a petition in any case, action, or proceeding under the
United States Bankruptcy Code or any similar state law; no petition in any case,
action, or proceeding under the United States Bankruptcy Code or any similar
state law has been filed against Borrower that has not been dismissed or
vacated; and Borrower has not filed an answer or otherwise admitted in writing
insolvency or inability to pay its debts or made an assignment for the benefit
of creditors.
          10. Mortgagor Representations and Warranties. Mortgagor represents and
warrants to the Lender as follows:
               a. Title. Mortgagor hereby warrants that (i) it is lawfully
seized of the Property in fee simple subject to (a) the Security Documents,
(b) any other matters disclosed in any title policy delivered to and/or obtained
by Lender, Original Lender or AmTrust in connection with the Loan as of the date
hereof or that are a matter of public record as of the date of this Agreement,
and (c) those matters provided on Exhibit “F” attached hereto (the matters set
forth in (a), (b) and (c) of this paragraph being collectively, the “Permitted
Exceptions”); (ii) Mortgagor has good right and lawful authority to sell and
convey the Property; and (iii) subject to the Permitted Exceptions, Mortgagor
holds title to the Property free of any encumbrances. To the best of the
Mortgagor’s knowledge, no condemnation or eminent domain proceeding has been
commenced or threatened against the Property. Mortgagor has not sold, assigned,
conveyed, pledged, encumbered, hypothecated nor otherwise transferred any
portion of the Property (including but not limited to any related personal
property pledged to secure the Loan)to any party except to Lender in accordance
with the terms of the Loan Documents.
               b. Organizational Status. Mortgagor is duly organized and validly
existing, and in good standing under the laws of the State of South Carolina.
               c. Intentionally Deleted.

 

--------------------------------------------------------------------------------

 

               d. Hazardous Substances. To the best of the Mortgagor’s knowledge
(a) no spillage, leakage, dumping, discharge or disposal (whether accidental or
intentional) of any Hazardous Substances (defined below) has occurred on, under,
from or onto the Property, (b) there are no Hazardous Substances located on or
under the Property, (c) no condition exists at the Property which violates any
Environmental Requirements, or which requires cleanup or corrective action of
any kind under any Environmental Requirements, (d) no written notice of
violation, lien, complaint, suit, order or written other notice with respect to
the environmental condition of the Property is outstanding, nor has any such
notice been issued which has not been fully satisfied and complied with in a
timely fashion so as to bring the Property into full compliance with all
Environmental Requirements. “Hazardous Substances” means any hazardous, toxic or
dangerous waste, substance or material, pollutant or contaminant, as defined for
purposes of the Comprehensive Environmental Response, Compensation and Liability
Act of—1980 (42 U.S.C. Sections 9601 et seq.), as amended, or the Resource
Conservation and Recovery act (42 U.S.C. Sections 6901 et seq.), as amended, or
any other federal, state or local law, ordinance, rule or regulation applicable
to the Properties (collectively, the “Environmental Requirements”), or any
substance which is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic, or otherwise hazardous, or any substance
which contains gasoline, diesel fuel or other petroleum hydrocarbons,
polychlorinated biphenyls (PCBs), or radon gas, urea formaldehyde, asbestos or
lead; provided, however, that the above representation shall not apply to de
minimus amounts of Hazardous Substances which are allowed as a matter of law
pursuant to Environmental Requirements.
               e. Authority to Enter into Settlement Agreement. Mortgagor and
Obligors have full power and authority to enter into this Agreement and
consummate the transactions contemplated hereby. No consent, approval or
authorization by any individual or entity or any court, administrative agency or
other governmental authority or agency is required in connection with (a) the
execution and delivery of this Agreement, or (b) the consummation of the
transactions contemplated by this Agreement, including the Mortgagor’s transfer
of the Property to Lender. The consummation of the transactions contemplated by
this Agreement will not result in a breach of, or constitute a default under,
any mortgage, deed of trust, bank loan, credit agreement or other instrument to
which Mortgagor is a party or by which Mortgagor may be bound or affected.
               f. Conflicting Transactions of Mortgagor. The execution and
delivery of this Agreement by Mortgagor and the performance of its obligations
hereunder will not, to the best of Mortgagor’s knowledge, conflict with any
provision of any law or regulation to which Mortgagor is subject, or conflict
with, result in a breach of, or constitute a default under, any of the terms,
conditions or provisions of any of Mortgagor’s organizational documents or any
agreement or instrument to which Mortgagor a party or by which it is bound, or
any order or decree applicable to the Mortgagor, or result in the creation or
imposition of any lien on any of the Mortgagor’s assets or property.
               g. Pending Litigation, Except for the Litigation, there are no
actions, suits or proceedings pending against the Mortgagor or the Property, or,
to the knowledge of Mortgagor, circumstances which could lead to such action,
suits or proceedings against or

 

--------------------------------------------------------------------------------

 

affecting the Mortgagor or the Property, or involving the validity or
enforceability of any of the Loan Documents, before or by any governmental
authority; and to the Mortgagor’s knowledge it is not in default with respect to
any order, writ, injunction, decree or demand of any court or any governmental
authority. Mortgagor has not filed a petition in any case, action, or proceeding
under the United States Bankruptcy Code or any similar state law; no petition in
any case, action, or proceeding under the United States Bankruptcy Code or any
similar state law has been filed against Mortgagor that has not been dismissed
or vacated; and Mortgagor has not filed an answer or otherwise admitted in
writing insolvency or inability to pay its debts or made an assignment for the
benefit of creditors. Mortgagor certifies that the acceptance of the Deed by the
Lender will not force the Mortgagor into insolvency. The Mortgagor further
certifies that the granting of the Deed is not a preference for bankruptcy
purposes or a fraudulent conveyance.
As used in this Agreement, the terms “Borrower’s knowledge’, “Mortgagor’s
knowledge”, “best of Borrower’s knowledge”, “best of Mortgagor’s knowledge”
and/or words of similar meaning shall mean and be limited to the actual
knowledge of or notice to Seth Wise, in his capacity as President or Member of
the Borrower, and any present employee of Borrower.
          11. Lender’s Representations and Warranties. Lender represents and
warrants to Obligors as follows:
               a. Organizational Status. Lender is duly organized and validly
existing, and in good standing under the laws of the State of Delaware.
               b. Authority to Enter into Settlement Agreement. Lender has full
power and authority to enter into this Agreement and consummate the transactions
contemplated hereby. No consent, approval or authorization by any individual or
entity or any court, administrative agency or other governmental authority or
agency is required in connection with (a) the execution and delivery of this
Agreement, or (b) the consummation of the transactions contemplated by this
Agreement, including, without limitation, (i) Lender’s agreement not to pursue a
deficiency judgment against Obligors and (ii) Lender’s agreements under
Section 8 of this Agreement.
               c. Conflicting Transactions of Lender. The execution and delivery
of this Agreement by Lender and the performance of its obligations hereunder
will not, to the best of Lender’s knowledge, conflict with any provision of any
law or regulation to which Lender is subject, or conflict with, result in a
breach of, or constitute a default under, any of the terms, conditions or
provisions of any of Lender’s organizational documents or any agreement or
instrument to which Lender is a party or by which it is bound, or any order or
decree applicable to the Lender.
               d. Ownership of Loan Documents. Lender has not assigned, pledged
or otherwise conveyed the Loan Documents or any portion thereof, such that
Lender presently owns and holds the Original Note, Note, Mortgage and the other
Loan Documents.
          12. Automatic Stay Waiver, Etc. Obligors hereby agree that, in
consideration for Lender’s entry into this Agreement, in the event that the
Obligors shall (i) file with any

 

--------------------------------------------------------------------------------

 

bankruptcy court of competent jurisdiction or be the subject of any petition
under Title 11 of the U.S. Code, as amended (''Bankruptcy Code”); (ii) be the
subject of any order for relief issued under the Bankruptcy Code; (iii) be the
subject of any petition seeking reorganization, arrangement, composition,
readjustment, liquidation, dissolution, or similar relief under any present or
future federal or state act or law relating to bankruptcy, insolvency, or other
relief for debtors; (iv) have sought or consented to or acquiesced in the
appointment of any trustee, receiver (with respect to Obligors, separate from
the receiver with respect to the Property), conservator, or liquidator; or
(v) be the subject of an order, judgment or decree entered by any court of
competent composition, readjustment, liquidation, dissolution, or similar relief
under any present or future federal or state act or law relating to bankruptcy,
insolvency or relief for debtors (i) through (v) each a “Bankruptcy Event” then,
subject to court approval, Lender shall thereupon be entitled, and Obligors
hereby consent to and agree to stipulate to relief from any automatic stay
imposed by Section 362 of the Bankruptcy Code, or otherwise, on or against the
exercise of the rights and remedies otherwise available to Lender as provided in
the Loan Documents, and as otherwise provided by law, and Obligors hereby
irrevocably waive any rights to object to such relief. This covenant is a
material inducement for Lender to accept this Agreement.
     13. Notices. Notices to be given pursuant to this Agreement must be in
writing and shall be deemed delivered if delivered by hand-delivery, U.S. Mail,
or by overnight delivery. Such notice shall be delivered to the following
addresses, which any party may change by giving notice to other parties by the
means set forth herein.
     If to Lender, such notices shall be sent to;
Dora F. Kaufman, Esq.
Liebler, Gonzalez & Portuondo, P.A.
Courthouse Tower, 25th Floor
44 West Flagler Street
Miami, FL 33130
AND
Maureen Connaughton, General Counsel
Milestone Asset Resolution Company, LLC
(servicer for Lender)
4675 MacArthur Court, Suite 1595
Newport Beach, CA 92660
     If to Obligors:
Jose G. Sepulveda
Stearns Weaver Miller, et al.
150 West Flagler Street, Suite 2200
Miami, FL 33130
AND

 

--------------------------------------------------------------------------------

 

Seth Wise
President, Woodbridge Holdings
2100 West Cypress Creek Road
Ft. Lauderdale, 33309
     14. Due Dates Falling on Weekends or Holidays. In the event that the date
of any act required to be performed by this Agreement (including, but not
limited to, the payment of any money) falls on a weekend or a federal holiday,
then the same shall not be required to be performed until the next business day
thereafter.
     15. Entire Agreement. This Agreement sets forth the entire understanding of
the parties and no verbal or written warranties or representations have been
made or have been relied upon which do not appear in writing within this
Agreement. Any reliance on verbal or other representations which do not appear
within this Agreement shall be deemed unjustifiable reliance.
     16. Arm’s-Length Transaction. The parties to this Agreement acknowledge
that all terms of this Agreement have been negotiated at arm’s length, and that
each party, being represented by counsel, is acting to protect its own interest.
Each party acknowledges that it was represented by counsel conferred with their
respective counsel prior to the execution of this Agreement and the related
documents and that each party is executing this Agreement and any related
document freely.
     17. No Joint Venture. The relationship between Obligors and the Lender is
that of debtors (on the part of Borrower and Guarantor) and creditor (on the
part of the Lender). Nothing contained in this Agreement will be deemed to
create a partnership or joint venture between the Lender and the Borrower,
between the Lender and the Guarantor, or between the Lender with any other
party, or to cause the Lender to be liable or responsible in any way for the
actions, liabilities, debts or obligations of the Borrower, Guarantor or any
other party.
     18. Modification of Agreement. This Agreement may not be amended or
modified except by written instrument signed by all of the parties hereto, and
the parties agree that this provision may not be waived except in writing.
     19. Waiver. The rights of the parties under this Agreement are to be
considered cumulative, and the failure on the part of any party to exercise or
enforce properly or promptly any rights arising out of this Agreement shall not
operate to forfeit or serve as a waiver of any of those or other rights. The
waiver by one party of the performance of any covenant or condition herein shall
not invalidate this Agreement, nor shall it be considered to be a waiver by such
party of any other covenant or condition herein. The waiver by any party of the
time for performing any act shall not constitute a waiver of the time for
performing any other act or an identical act required to be performed at a later
time.
     20. Cooperation. The parties hereto agree to fully cooperate in the
execution of any documents or performance in any way which may be reasonably
requested by any of the parties hereto (or their agents or representatives) or
by any title company to carry out the purposes of this

 

--------------------------------------------------------------------------------

 

Agreement and to effectuate the intent of the parties hereto, whether such
documents or performance is requested prior to Closing or at any time
thereafter.
     21. No Admission of Liability. By this settlement, no party admits any
liability, but rather the parties have agreed to this settlement as a compromise
of disputed claims in the interests of avoiding the costs and uncertainty of
continued litigation.
     22. Time is of the Essence. Time is of the essence of this Agreement.
     23. Headings. The headings used in this Agreement are for convenience and
reference only and in no way define, describe, extend, or limit the scope or
intent of this Agreement or the intent of any provision in it.
     24. Severability. If any term, provision, covenant or condition of this
Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the provisions shall remain in full force and
effect and shall in no way be affected, impaired or invalidated. This Agreement
is, and shall be deemed to be, the product of joint drafting by the parties and
shall not be construed against any of them as the drafter hereof.
     25. Counterparts. This Agreement may be executed in counterparts (including
facsimile or e-mail (PDF) copies), each of which will be deemed an original
document, but all of which will constitute a single document. This document will
not be binding on or constitute evidence of a contract between the parties until
such time as a counterpart of this document has been executed by each party and
a copy thereof delivered to each other party to this Agreement.
     26. Benefit and Binding Effect. This Agreement shall inure to the benefit
of and be binding upon the parties, their heirs, successors and assigns. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument. The individuals signing below on behalf of entities represent and
warrant that they have the full authority to bind their respective entities to
all of the provisions hereof. Lender shall have the right to assign its rights
under this Agreement to a third party entity; provided that (i) such party
expressly assumes any and all obligations of Lender pursuant to this Agreement
and (ii) Lender shall continue to be subject to the requirements and limitations
set forth in Section 8 of this Agreement.
     27. Governing Law. This Agreement shall be governed by the laws of the
State of Florida, without regard to its principles of conflicts of law.
     28. Venue. The Parties hereto agree that any matter based upon or arising
out of this Agreement or the matters contemplated herein shall be initiated and
prosecuted in the Seventeenth Judicial Circuit in and for Broward County,
Florida and nowhere else,
     29. Attorneys’ Fees. In any litigation arising out of or relating to this
Agreement, or to the interpretation or enforcement hereof, the prevailing
party(ies) (as finally determined and/or adjudicated by a court of law having
jurisdiction over the applicable dispute) shall be entitled to

 

--------------------------------------------------------------------------------

 

recover the prevailing party’s(ies’) reasonable attorneys’ fees and costs from
the non-prevailing party(ies) at the trial and at all appellate levels.
     30. Reservation of Jurisdiction. The parties shall request the Court to
retain jurisdiction to enforce the terms of this Agreement.
     31. JURY TRIAL WAIVER. THE PARTIES HEREBY AGREE TO WAIVE THEIR RIGHT TO A
TRIAL BY JURY IN CONNECTION WITH ANY CLAIM, PROCEEDING, MATTER, CAUSE OF ACTION,
COUNTERCLAIM, OR OTHERWISE ARISING OUT OF OR RELATING TO THE TERMS OF THIS
AGREEMENT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO
THIS AGREEMENT, WHICH THEY DO SO KNOWINGLY AND VOLUNTARILY.
(Signature pages to follow)