Exhibit 10.01


 


Memorandum of Terms of
Settlement


 


1.                                       Whitney Information Network, Inc.,
WIN CR 11 Trust, and their respective affiliates, successors and assigns
(collectively, “WIN”) and Russell A. Whitney (“Whitney”), on the one hand, and
M. Barry Strudwick (“Strudwick”), Susan Weiss and Car] Weiss (Susan and Carl
Weiss collectively referred to as “Weiss”), on the other hand, agree to enter
into a binding and enforceable settlement agreement on the record in open Court
on or before Monday, September 14, 2009, or as soon after as the Court
will permit.


 


2.                                       WIN will pay to Strudwick and Weiss a
total principal amount of $3.8 million as follows:


 


a.                                       $600,000 no later than September 30,
2009;


 


b.                                      $200,000 no later than October 25,
2009;


 


c.                                       $200,000 no later than November 25,
2009;


 


d.                                      $200,000 no later than December 25,
2009;


 


e.                                       WIN will enter into a commercially
reasonable promissory note (“First Note”) in the amount of $2.3 million payable
in equal quarterly payments payable over 3 years with payments commencing on January 15,
2010 and occurring on the 15th day of each succeeding quarter until paid over 3
years.  Quarterly payments of simple interest will be payable on
outstanding principal at the rate of 6% per annum.  Late payments will
accrue interest at the rate of 8% per annum.  Payments will be in default
if not made within ten (10) days of the due date.  In the event of
default, the total unpaid First Note amount becomes immediately due and
payable.  The First Note will be governed by the laws of New York. 
The First Note will be secured by any interests of WIN, Whitney and any WIN and
Whitney related entities, directly or indirectly, in MDM and the Hotel (see
paragraph 5 below) and WIN’s interest in Tranquility Bay (see paragraph 6
below).  WIN will use commercially reasonably efforts to substitute the
aforementioned security with a Letter of Credit from a United States bank in
the amount of any then unpaid balance on the First Note, and will take such
commercially reasonably steps as necessary on a quarterly basis to obtain such
Letter of Credit.  WIN may prepay the First Note, in whole or in part, at
any time and from time to time.  The parties agree to the jurisdiction of
Judge Tomlinson to enforce the First Note and to enter a judgment thereon if
there is a default.


 


f.                                         WIN will enter into a second commercially
reasonable promissory note (“Second Note”) in the amount of $300,000.  The
Second Note is payable over four years, of which WIN will pay interest only in
years one through three, and principal and interest in year four.  WIN’s
payments will be payable in equal quarterly payments with payments commencing
on January 15, 2010 and occurring on the 15th day of each succeeding
quarter.  The Second Note will accrue simple interest at the rate of 8%
per annum.  Payments will be in default if not made within ten (10) days
of the due date.  In the event of default, the total unpaid Second Note
amount becomes immediately due and payable.  The Second Note will be
governed by the laws of New York.  The Second Note will be secured by any
interests of WIN, Whitney and any WIN and Whitney related entities, directly or
indirectly, in MDM and the Hotel (see paragraph 5 below) and WIN’s interest in
Tranquility Bay (see paragraph 6 below).  WIN will use commercially reasonably
efforts to substitute the aforementioned security with a Letter of Credit from
a United States bank in the amount of any then unpaid balance on the Second
Note, and will take such commercially reasonably steps as necessary on a
quarterly basis to obtain such Letter of Credit.  WIN may prepay the
Second Note, in whole or in part, at any time and from time to time.  The
parties agree to the jurisdiction of Judge Tomlinson to enforce the Second Note
and to enter a judgment thereon if there is a default.


 


g.                                      In the event that WIN pays in full the
First Note and the $1,200,000 (pursuant to subparagraphs 2(a) thru 2(d))
on or before 12 months after the date this agreement is placed on the record
(see paragraph 1 above), the principal of the Second Note will be reduced by
$150,000.


 


h.                                      All WIN payments will be made payable to
the Law Office of Arnold M.  Weiner, which will receive them on behalf of
Strudwick and Weiss.


 

















 


3.                                       The parties (for themselves, their
agents, entities, and business associates) mutually release any and all claims
they may have against one another, their business associates, entities and
attorneys except that: (i) all claims of WIN against Whitney and Whitney
against WIN are preserved, and (ii) all claims of WIN and Whitney against
Caputo, CPR, Rothstein, RRA, Rothstein Rosenfeldt Adler Consulting Group, and
Roger Stone are preserved.  WIN and Whitney also recognize that they are
releasing any and all claims they may have against William Ramirez and any of
Strudwick’s and Weiss’s attorneys (including Garcia, etc).  Excluding
claims as preserved in (i) and (ii) of this paragraph, all released
persons and entities will sign mutual global releases.


 


4.                                       The parties will cooperate in dismissing
all pending litigation between and among them.  The parties will also
cooperate as reasonably necessary to request that any criminal or
quasi-criminal prosecutions involving any of the parties and this litigation be
terminated.  The parties intend that this settlement end all litigation between
and among WIN and Whitney, on the one hand, and Strudwick and Weiss, on the
other hand, including each party’s respective business associates and entities,
and the parties are unaware of any contemplated additional claims and
litigation other than potential claims as referenced in subparagraphs 3(i) and
3(ii) above.


 


5.                                       Within 3 business days after the
agreement is placed on the record, Weiss will place into escrow (Law Offices of
Arnold Weiner) her shares in MDM and the Hotel.  Upon receipt by Strudwick
and Weiss of the first $1,200,000 in payments (pursuant to subparagraphs 2(a) through
(d) above), the escrow agent  will surrender to WIN Weiss’s shares in Monterey Del
Mar and the Hotel.  The parties will fully cooperate and take steps
reasonably necessary to effectuate the surrender of such shares.  Weiss also agrees to withdraw in writing any
claim of right to manage MDM and the Hotel, and agrees to relinquish any claim
to being an officer or director of MDM or the Hotel and to provide further
assurances as may be reasonably necessary to facilitate the transfer of MDM and
the Hotel.  Weiss further recognizes that she will not receive any payment
for her shares other than the payments as provided herein to Strudwick and
Weiss.


 


a.                                       All proceeds from the sale of MDM and the
Hotel payable to WIN, Whitney and any WIN and Whitney related entities,
directly or indirectly, whether for equity or debt, will be directly payable to
Strudwick and Weiss toward payment of any unpaid First Note and Second Note
amounts to either pay off the First Note and Second Note in full or be applied
to the principal so that the First Note and Second Note are paid off sooner.


 


6.                                       The Note will also be secured by WIN’s
interest in Tranquility Bay in Lee County, Florida.  In the event of
default by WIN on the First Note or Second Note, Strudwick and Weiss may
foreclose on WIN’s interest in the Tranquility Bay.  WIN may substitute as
security other comparable or better security, such as a Letter of Credit from a
United States bank or interest in real property valued at equal or greater
value.


 


7.                                       This settlement will be reduced to
writing but this settlement is not contingent upon being so reduced to writing,
The writing will include neutral recitals without admissions by any
party.  The parties agree that any disputes pertaining to this settlement
and its enforcement shall be decided by Judge Tomlinson.  In the event any terms are not spelled out herein and
the parties cannot agree, the parties agree to submit such issues to Judge
Tomlinson for her determination, which determination shall be binding on the
parties, final and not subject to appeal.  All parties to this agreement
consent to Judge Tomlinson exercising such jurisdiction.


 


 


	
  /s/ K. Stewart
  Evans, Jr.

  	
   

  	
  /s/ Arnold M. Weiner

  
	
  K. Stewart Evans, Jr.
  as counsel to

  	
   

  	
  Arnold M. Weiner, as
  counsel to

  
	
  Whitney Information
  Network, Inc.

  	
   

  	
  M. Barry Strudwick

  
	
  and WIN CRII Trust

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ David J. Shuster

  	
   

  	
  /s/ Paul Aloe

  
	
  David J. Shuster, as
  counsel to

  	
   

  	
  Paul Aloe, as counsel
  to Susan Weiss

  
	
  Russell A. Whitney

  	
   

  	
  and Carl Weiss