Document:

exv10w2

Exhibit 10.2

	 	 	 	 	 

	1 North Wall Quay

Dublin 1

Ireland

	 	T +353 1 622 2000

F +353 1 622 2222

	 	

	 	 	 	 	 

	 

	 	Niall Tuckey
	 	Citibank Europe plc
	 

	 	Vice President
	 	1 North Wall Quay
	 

	 	ILOC Product
	 	Dublin 1, Ireland

Aspen Insurance Limited

Attn Bryan Astwood

Maxwell Roberts Building

1 Church Street

Hamilton

HM 11

Bermuda

12th August 2011

Dear Sir,

Pledge Agreement dated 17 January 2006 between Aspen Insurance Limited (“Aspen”) and Citibank
Europe Plc (the “Bank”), as successor to Citibank, N.A. pursuant to an Assignment Agreement dated
11 October 2006 (as previously amended, varied, supplemented, novated or assigned, the “Pledge
Agreement”)

We refer to (i) the Pledge Agreement; (ii) the letter from Citibank Ireland Financial Services (a
previous name of the Bank) to Aspen dated 27 January 2006 (the “2006 Letter”); and (iii) the letter
from the Bank to Aspen dated 28 October 2008 (the “2008 Letter”).

The purpose of this letter is to consolidate and restate the amendments made to the Pledge
Agreement in the 2006 Letter and in the 2008 Letter and to make certain other amendments to the
Pledge Agreement.

With effect from the date that the Bank receives the counter-signature of Aspen to this letter, the
Pledge Agreement shall be amended as set out in Annex A to this letter.

Save as expressly provided in this letter, the provisions of the Pledge Agreement shall remain in
full force and effect.

Please countersign and return the enclosed copy of this letter, which may be in any number of
counterparts (including facsimile counterparts).

Yours faithfully,

For and on behalf of

Citibank Europe plc

	 	 	 	 	 
	 	 	 
	 	/s/
Mary O’Neill
 	 
	 	Name:  	Mary O’Neill                 	 
	 	Date: 12 August 2011	 
	 

We hereby confirm our agreement to the above.

	 	 	 	 	 	 	 

	For and on behalf of

	 	 	 	For and on behalf of	 	 
	Aspen Insurance Limited

	 	 	 	Aspen Insurance Limited	 	 
	 
	 	 	 	 	 	 
	/s/ Bryan Astwood
 

Name:  Bryan  Astwood

	 	 
	 	/s/ David Skinner
 

Name:  David Skinner
	 	 
	Date: 8/12/2011

	 	 	 	Date: 8/12/2011	 	 

Citibank Europe plc

Directors: Aidan M Brady, Mark Fitzgerald, Jim Farrell, Bo J. Hammerich (Sweden), Brian Hayes, Mary Lambkin, Frank McCabe, William J. Mills (USA),
Terence O’Leary (U.K.), Cecilia Ronan, Patrick Scally, Christopher Teano (U.S.A.), Francesco Vanni d’Archirafi (Italy), Tony Woods.

Registered in Ireland: Registration Number 132781. Registered Office: 1 North Wall Quay, Dublin 1.

Ultimately owned by Citigroup Inc., New York, U.S.A.

Citibank Europe plc is regulated by the Central Bank of Ireland

 

 

			
	 	 	 
	 
	 	

Annex A

	1.	 	Section 6(k) shall be deleted in its entirety and replaced by the following:
	 
	 	 	“The Pledgor shall cause Securities of the type specified in Schedule 1 to be pledged as
Collateral so that at all times the Letter of Credit Value of such Securities shall equal or
exceed the aggregate amount of the then outstanding Credits and, without limiting the
foregoing, if at any time the Pledgor is not in compliance with the requirements of this
sub-section (k), the Pledgor shall forthwith cause additional Securities of the type
specified in Schedule 1 to be held as Collateral pursuant to Section 2 to the extent
required to cause the Pledgor to be in compliance with this sub-section (k).”
	 
	2.	 	Schedule 1 shall be deleted in its entirety and replaced as set out in Annex B.
	 
	3.	 	Appendix A shall be amended by the inclusion of the following definitions:
	 
	 	 	“Tranche I Credit” means any Credit issued under Tranche I of the facility letter from the
Pledgee to the Pledgor dated 12th August 2011.
	 
	 	 	“Tranche II Credit” means any Credit issued under Tranche II of the facility letter from the
Pledgee to the Pledgor dated 12th August 2011.

 

 

			
	 	 	 
	 
	 	

Annex B

SCHEDULE 1

Letter of Credit Value and Pledgee’s Requirements

	 	 	 	 	 	 	 	 	 
	Acceptable Financial	 	Pledgee’s Requirements	 	Letter of Credit
	Assets	 	Issuer	 	Rating	 	Value
	(A)

	 	Cash
	 	Cash Deposits held
at Citibank, N.A.
London Branch.
	 	N/A
	 	100%
	 
	 	 	 	 	 	 	 	 
	(B i)

	 	Government &

Agency

Securities
	 	Securities issued
by the US or
another OECD (the
“Organisation for
Economic
Co-operation and
Development”)
Government rated AA
or AA equivalent,
or issued by
agencies whose debt
obligations are
fully and
explicitly
guaranteed as to
the timely payment
of principal and
interest by the
full faith and
credit of the US
government, and
including
securities issued
by the FHLMC or
FNMA to the extent
the same shall be
under the
conservatorship of
the Federal Housing
Finance Agency.
	 	AA or AA

equivalent
	 	 89% of the fair
market value of
such Government &
Agency Securities
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Government and
Agency Securities
shall have a
maximum tenor of 20
years.	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Securities issued
by GNMA whose debt
obligations are
fully and
explicitly
guaranteed as to
the timely payment
of principal and
interest by the
full faith and
credit of the US
Government.	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	GNMA Securities
shall have a
maximum tenor of 30
years.	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(B ii)

	 	US Agency MBS

Securities:

FHLMC & FNMA
	 	Securities issued
by the FHLMC or
FNMA to the extent
the same shall be
under the
conservatorship of
the Federal Housing
Finance Agency.
	 	AA or AA

equivalent
	 	86.5% of the fair
market value of
such US Agency MBS
Securities
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	US Agency MBS
Securities shall
have a maximum
tenor of 30 years.	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(C)

	 	Multilateral

Lending Institution

Securities
	 	Securities issued
by multilateral
lending
institutions or
regional
development banks
in which the US
government is a
shareholder or
contributing
member, including
International Bank
for Reconstruction
and Development
(the World Bank),
the International
Finance
Corporation, the
Inter-American
Development Bank,
the Asian
Development Bank,
the African
Development Bank,
the European
Investment Bank,
the European Bank
for Reconstruction
and Development and
the Nordic
Investment Bank.
	 	AA or AA

equivalent or better
	 	88.5% of the fair
market value of
such Multilateral
Lending Institution
Securities.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Multilateral
Lending Institution
Securities shall
have a maximum
tenor of 20 years.	 	 	 	 

 

 

			
	 	 	 
	 
	 	

	 	 	 	 	 	 	 	 	 
	Acceptable Financial	 	Pledgee’s Requirements	 	Letter of Credit
	Assets	 	Issuer	 	Rating	 	Value
	(D)

	 	US or OECD

Government Agency

Securities
	 	Securities issued
by US or other OECD
government agencies
whose debt is
implicitly
guaranteed by the
US government or an
OECD government.
	 	AA or AA

equivalent or

better
	 	88.5% of the fair
market value of
such US or OECD
Government Agency
Securities
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	US or OECD
Government Agency
Securities shall
have a maximum
tenor of 20 years.	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(E)

	 	Corporate Bonds
	 	Non-convertible
publicly traded
securities,
excluding warrants
and perpetual
instruments, issued
by corporate
entities domiciled
in the US or other
OECD countries and
in each case with a
rating A or better
and with a
remaining tenor to
final maturity of
no greater than 15
years.
	 	A or A

equivalent or

better
	 	85% of the fair
market value of
such Corporate
Bonds where the
tenor of such
Corporate Bonds is
10 years or less.

	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	The Pledgor shall
not deliver
Corporate Bonds
such that 10% or
more of the Pledged
Securities is
constituted by
Corporate Bonds of
a single issuer.	 	 	 	80% of the fair
market value of
such Corporate
Bonds where the
tenor of such
Corporate Bonds is
greater than 10
years and less than
or equal to 15
	 

	 	 	 	Corporate Bonds
shall not exceed
35% of the
aggregate Letter of
Credit outstandings
at any time.exv10w1

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)

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