Exhibit 10.2
SETTLEMENT AGREEMENT
This Settlement Agreement ("Agreement") is entered into between Whitemark
Homes, Inc., a Colorado corporation ("Whitemark Homes"); Xxxxxxx Xxxxxxxx Xxxxx
("White"); Xxxxxxxx Xxxxxx ("Xxxxxx"); Xxxxx X. Xxxxx ("Xxxxx"); Xxxx Xxxxxxx,
Xx. ("Xxxxxxx"); Xxxxxxxx Older ("Older"); Xxxxx Xxx ("Xxx"); Alstar
Enterprises, L.L.C. ("Alstar Enterprises"); Alstar Development Group, Inc.
("Alstar Development"); Cabana Beach Club, L.L.C. ("Cabana Beach"); Cabana Cove,
L.L.C. ("Cabana Cove"); Destin Parks, Inc. ("Destin"); Emerald Beach Corporation
("Emerald Beach"); Emerald Sea Development, Inc. ("Emerald Sea"); Long Point
Cove, L.L.C. ("Long Point"); LPG, Inc. ("LPG"); Magnolia Landing Development,
Inc. ("Magnolia"); Muirfield Development Corporation ("Muirfield"); North
Florida Consulting, Inc. ("NFC"); Panhandle Development, Inc. ("Panhandle"); Sea
Oat Properties, Inc. ("Sea Oat"); Sunshine Development Group, Inc. ("Sunshine");
Torel, Inc. ("Torel"); Troon Development Corporation ("Troon"); Whitemark Homes
of Florida, Inc., a Florida corporation (collectively the "Whitemark Homes
Group"); AND Xxxxxxx Xxxxxxx Xxxxxxxx ("Xxxx Xxxxxxxx"), Xxxx Xxxxxxxx, Xxxxx
Xxxxx Xxxxxxxx ("Xxxxx Xxxxxxxx"), Gulf Destination Enterprises, Inc. ("GDE"),
Castle Development Properties, Inc. ("Castle") and Concourse, Inc. (collectively
the "Xxxxxxxx Group"); AND Xxxx X. Xxxxxxxx, Esq., Xxxx X. Xxxxxxx. Esq.,
Xxxxxxxx & Xxxxxxx, P.A. and Destin Land & Title, Inc. (collectively the
"Xxxxxxxx Group"). The Xxxxxxxx Group, Whitemark Homes Group and Xxxxxxxx Group
have agreed to resolve all disputes between them and all claims or causes of
action, which have arisen, or which might arise in the future (with the
exception of enforcing the provisions of this Agreement) based upon any business
relationships and transactions (including any disputes arising out of the
Agreement for Exchange of Corporate Stock by and between Whitemark Homes and
Xxxx Xxxxxxxx, Xxxxx Xxxxxxxx and Xxxx Xxxxxxxx dated August 31, 2001 (the
"Exchange Agreement"); Closing Agreement pursuant to the Exchange Agreement
("Closing Agreement"); Guaranty and Indemnity Agreement by and between Whitemark
Homes and Xxxx Xxxxxxxx, Xxxx Xxxxxxxx and Xxxxx Xxxxxxxx ("Guaranty
Agreement"); Voting Agreement by and among Whitemark Homes and Xxxx Xxxxxxxx,
Xxxx Xxxxxxxx and Xxxxx Xxxxxxxx ("Voting Agreement"); profit participation
agreements; Security & Funding Agreement; joint venture agreements; and
Employment Agreement between Whitemark Homes and Xxxx Xxxxxxxx ("Employment
Agreement"), and all other agreements executed in connection with the Exchange
Agreement. Therefore, in consideration of the mutual promises and valuable
consideration provided in this Agreement, the parties hereby agree as follows:
I. DISMISSAL OF LAWSUITS.
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A. On or before April 25, 2003, the parties shall do the following
matters:
1. Execute and file of record a joint dismissal with prejudice of their
claims in Whitemark Homes, Inc., et al. x. Xxxxxxxx, (Xxxxxx County
Circuit Court Case No. 03CA000055)
("Replevin/Counterclaim/Counter-Counterclaim Action").
2. Execute and file of record a joint dismissal with prejudice of their
claims in Muirfield Development Corporation, et al. x. Xxxxxxxx, et
al. (Orange County Circuit Court at Case No. 2003 CA 2532 #39)
("Xxxxxxxx Action").
3. Execute and file of record a joint stipulation requesting the court
enter an order approving the dismissal with prejudice of the
Shareholder Derivative Action docketed at Xxxxxxxx, et al. v.
Whitemark Homes, et al., (Xxxxxx County Circuit Court Case No.
03CA000073) ("Shareholder Derivative Action"), without the necessity
of a hearing.
4. Execute and file of record a joint dismissal with prejudice of
Whitemark Homes/NFC/Troon/Muirfield claims against Xxxx Xxxxxxxx,
Xxxx Xxxxxxxx, Xxxxx Xxxxxxxx, Castle and GDE pending in the matter
docketed at Whitemark Homes, Inc., et al. x. Xxxxxxxx, et al. (Xxxxxx
County Circuit Court Case No. 03CA000110) ("Quiet Title Action").
This will not affect any claims between Xxxx Xxxxxxxx, Xxxxx
Xxxxxxxx, Xxxx Xxxxxxxx, Castle, GDE and Southeastern Consulting &
Development Company ("Southeastern") in said Quiet Title Action.
B. All parties further agree that they will not file, or aid or assist
others in filing, any charges or commencing any lawsuits, investigations,
administrative proceedings or other proceedings or actions against any other
party to this Agreement regarding any claims released in this Agreement
including commencing or filing any claims with the Securities and Exchange
Commission ("SEC"), except as required by law. To the extent any party is
required to report, notice, testify or otherwise participate in such charges,
lawsuits, investigations, administrative proceedings or other proceedings or
actions, said person or entity shall provide the other parties with ten (10)
calendar days written notice before participating, disclosing or taking any
action described in this subparagraph IB. Notice shall be given pursuant to the
notice section below.
II. FEES AND COSTS
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The parties agree that each will bear its own costs and fees (including
all attorneys' fees and expenses) incurred in any way with respect to the
prosecution or defense of the Replevin/Counterclaim/Counter-Counterclaim Action,
the Xxxxxxxx Action, the Shareholder Derivative Action and the Quiet Title
Action referenced herein, or the negotiation and execution of this Agreement.
The parties further agree that this Agreement shall not be interpreted so as to
render either party as a prevailing party for purposes of any statute or
otherwise. In the event of a dispute between the parties in enforcing the terms
of this Agreement, the prevailing party shall be entitled to reasonable
attorneys fees and costs.
III. COVENANT NOT TO XXX.
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The parties agree to not file, request, notice or make any lawsuit,
charge, other legal action, administrative proceeding, and/or investigation
based on a claim purportedly released by this Agreement, except as required by
law. To the extent any party is required to report, notice, testify or otherwise
participate in such charges, lawsuits, investigations, administrative
proceedings or other proceedings or actions, said person or entity shall provide
the other parties with ten (10) calendar days written notice before
participating, disclosing or taking any action described in this paragraph III.
The parties will dismiss with prejudice all pending lawsuits that may
already be filed (including, but not limited to, the
Replevin/Counterclaim/Counter-Counterclaim Action, the Xxxxxxxx Action, the
Shareholder Derivative Action and the Quiet Title Action.). The parties promise
never to seek or accept any damages, remedies, or other relief for themselves
personally (as to any right to which the parties hereby release and waive) by
commencing or filing any claims with the SEC or a lawsuit with any court, or
otherwise, with respect to any claim purportedly released by this Agreement. The
parties shall not make any complaints, report or notice any securities
violations including, but not limited to, violations of the Securities Exchange
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Act of 1934 and the Xxxxxxxx-Xxxxx Act of 2002, except as required by law. To
the extent any party is required to report, notice, testify or otherwise
participate in such charges, lawsuits, investigations, administrative
proceedings or other proceedings or actions, said person or entity shall provide
the other parties with ten (10) calendar days written notice before
participating, disclosing or taking any action described in this paragraph III.
Notice shall be given pursuant to the notice section below.
IV. SETTLEMENT BENEFITS.
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A. Xxxx Xxxxxxxx, Xxxx Xxxxxxxx, Xxxxx Xxxxxxxx, Xxx Xxxxxxxx and Xxxxx
Xxxxxxxx (collectively the "Shareholders") each shall execute and deliver
temporarily to Xxxxxx Xxxxxxx (hereinafter "Escrow Agent") Whitemark Homes
irrevocable stock powers transferring all ownership rights in the 5,000,000
shares of Whitemark Homes restricted common stock owned by the Shareholders
("Whitemark Stock"), subject to the collateral pledge of the Whitemark Stock in
favor of Beach Community Bank, Commerce South Bank and Bank of Bonifay for loans
totaling $2,700,000. The parties shall mutually agree to a substitute Escrow
Agent on or before April 30, 2003. The irrevocable stock powers shall be held by
Escrow Agent pursuant to an escrow agreement and not released to Whitemark Homes
until such time as Xxxx Xxxxxxxx'x guaranties are released by Admiralty Bank.
Whitemark, Ltd. performs as described in subparagraph Y. Whitemark Homes will
take title to the Whitemark Stock subject to $2,700,000 in outstanding loans in
favor of Beach Community Bank, Commerce South Bank and Bank of Bonifay. All new
stock certificates will be re-delivered to Beach Community Bank, Commerce South
Bank and Bank of Bonifay to be held by them pursuant to their collateral
documents. The Shareholders will have no legal liability to Whitemark Homes to
pay these loans and if the Whitemark Stock is seized by these banks to satisfy
the loans, then Whitemark Homes can either satisfy the loans itself, or allow
the banks to foreclose. Regardless, Xxxxx Xxxxxxxx, Xxxx Xxxxxxxx, Xxxx
Xxxxxxxx, Xxx Xxxxxxxx and Xxxxx Xxxxxxxx will have no liability to Whitemark
Homes. Whitemark Homes shall have the right to effect the transfer of the
Whitemark Stock at a time of its choosing and until such time Xxxxxxx Xxxxxxxx
Xxxxx shall have the right to vote the shares in accordance with the terms of
the Voting Agreement. Xxxx Xxxxxxxx shall have the right to re-finance the
$2,700,000 loans to Beach Community Bank, Commerce South Bank and Bank of
Bonifay, and Whitemark Homes shall execute instruments required by these lenders
for refinancing or extensions of the loans for which the Whitemark Stock remains
as collateral for the $2,700,000 loans. Any refinancing is subject to default
notice provisions set forth in subparagraph R, and the maturity shall be
extended by six (6) months. Xxxx Xxxxxxxx shall not be entitled to increase the
loans in excess of $2,700,000. The Shareholders warrant and represent that they
will not own any Whitemark Homes stock in the future either individually,
indirectly through another person or entity, or as part of a group owning or
exercising control of a voting block of Whitemark Homes stock, with the
exception of Xxxx Xxxxxxxx and/or his affiliates acquiring Whitemark Homes stock
in consideration for resolving any disputes with investors. To the extent Xxxx
Xxxxxxxx and/or his affiliates acquire Whitemark Homes stock under this
exception, Xxxx Xxxxxxxx and/or his affiliates waive any right to and agree not
to commence any lawsuits against Whitemark Homes arising out of the ownership of
this stock including shareholder derivative actions. Moreover, Whitemark Homes
shall have a 60 day option to acquire said stock from Xxxx Xxxxxxxx for the
price Xxxx Xxxxxxxx paid for the stock, or the fair market value of said stock,
whichever is greater. The option shall expire 30 calendar days following written
notice from Xxxx Xxxxxxxx. The Shareholders further warrant and represent that:
(i) they have good, absolute and marketable title to the Whitemark Stock free
from all liens, claims and encumbrances, except for liens in favor of Beach
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Community Bank, Bank of Bonifay and Commerce South Bank and (ii) they have
authority to convey the Whitemark Stock subject to the outstanding loans in
favor of Beach Community Bank, Commerce South Bank and Bank of Bonifay, and
(iii) that the Whitemark Stock is not otherwise encumbered.
B. Neither Whitemark Homes and its subsidiaries, on the one hand, nor
NFC,Long Point, Alstar Enterprises, Muirfield, Troon, Destin and
Cypress Breeze, on the other hand, shall be liable to the other for any
intercompany debt owed and existing as of the date of this Agreement. The
Xxxxxxxx Group and Whitemark Homes Group shall attach to a Closing Statement
agreed upon balance sheets for the entities being transferred herein as of
December 31, 2002. The Whitemark Homes Group shall identify as an attachment to
the Closing Statement any debt, contracts or other obligations effecting those
entities transferred to the Xxxxxxxx Group herein for the period of January 1,
2003 to the date of execution of this Agreement as to only those debts,
contracts and obligations incurred without the signatory authority or verbal
instruction of the Shareholders.
C. With the exception of the intercompany debt described in subparagraph
B above, any debts, obligations, and liabilities owed by NFC, any of NFC's
subsidiaries, and the Xxxxxxxx Group to any entity or person, including, but not
limited to, any lenders, vendors, mortgagees, X'Xxxxxxxx Xxxxx LLP, Xxxxxxxx &
Xxxxxxx, P.A., Xxxxxxx X'Xxxx (only as to the two promissory notes in the
original principal sums of $70,000 and $50,000 as shown on NFC `s December 31,
2002 balance sheet), trade creditors, and/or members of the Xxxxxxxx Group,
whether known or unknown, (including the $12,400,000 Xxxx Xxxxxxxx alleges he is
owed by Whitemark Homes) shall be the sole responsibility of the entities or
real properties transferred or conveyed to any member of the Xxxxxxxx Group, or
their assigns or designees. Whitemark Homes shall have no liability to pay,
assume or discharge any such debts, obligations or liabilities of NFC, any of
NFC's subsidiaries or any of Whitemark Homes' subsidiaries. Notwithstanding
anything to the contrary, no member of the Xxxxxxxx Group or any entity or
person taking title to the companies and properties transferred pursuant to this
Agreement, shall be liable for any debts, obligations or contracts incurred by
Whitemark Homes, NFC or their subsidiaries that were not incurred as a result of
signature authority or approval of the Shareholders, as that term is defined in
this Agreement.
D. Alstar Development and Torel will convey to Xxxx Xxxxxxxx or his
designee their combined 100% membership interest in Alstar Enterprises. All
Whitemark Homes, NFC and their subsidiaries' intercompany debt will not be
assumed. All furniture, fixtures, equipment and inventory shall be on the
balance sheets accepted by Xxxx Xxxxxxxx or his designee and attached to the
Closing Statement. The transfers are subject to the debt of Alstar Enterprises
with the exception of the debt described in subparagraphs B and C above.
E. Magnolia Landing will convey all its real estate to Alstar
Enterprises,
subject to Commerce South Bank's existing note and mortgage in the approximate
amount of $694,000. The transfers are subject to the debt associated with the
real estate being transferred herein with the exception of the debt described in
subparagraphs B and C above.
F. Emerald Sea and LPG will convey to Xxxx Xxxxxxxx or his designee
their combined 100% membership interest in Long Point. The transfers are subject
to the debt of Long Point with the exception of the debt described in
subparagraphs B and C above and the treatment of the mortgage/note as described
in subparagraph Y.
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G. Destin Parks will convey its 50% membership interest in Cypress
Breeze, L.L.C. to Xxxx Xxxxxxxx, or his designee. The transfers are subject to
the debt of Destin Parks with the exception of the debt described in
subparagraphs B and C above.
H. NFC shall convey Courtyard E-1 through E-5, and E-11, to Xxxx
Xxxxxxxx, or his designees. Destin Land & Title ("DLT") will handle the closing.
The transfers are subject to the outstanding notes and mortgages in favor of The
Bank and Beach Community Bank, respectively, as well as all debt with the
exception of the debt described in subparagraphs B and C above.
I. NFC shall convey the White Cliffs lot to Xxxx Xxxxxxxx, or his
designees. DLT will handle the closing. The transfer is subject to the
outstanding note and mortgage in favor of Commerce South Bank, as well as all
debt with the exception of the debt described in subparagraphs B and C above.
J. NFC shall convey 100% of the Troon and Muirfield stock to Xxxx
Xxxxxxxx, or his designees. The conveyance is subject to the outstanding note
and mortgage to Western Assurance (hereafter defined) and the additional
mortgages to Castle and GDE, as well as all debt with the exception of the debt
described in subparagraphs B and C above.
K. Whitemark Homes shall cause the release of Xxxx Xxxxxxxx'x personal
guaranty on the Whitemark Homes' debt with Admiralty Bank within sixty (60)
days. Simultaneously hereto Whitemark Homes is executing an indemnification and
hold harmless agreement in favor of Xxxx Xxxxxxxx guaranteeing their obligation
in this subparagraph K. If Whitemark Homes fails to release Xxxx Xxxxxxxx'x
guaranty with Admiralty Bank within 60 days, Whitemark Homes hereby grants to
Xxxx Xxxxxxxx a second lien security interest in the Whitemark Stock subject to
the $2,700,000 loans to Beach Community Bank, Commerce South Bank and Bank of
Bonifay.
L. Xxxx Xxxxxxxx shall convey his house in Orlando, Florida to Whitemark
Homes, or its designee, and Whitemark Homes shall cause Xxxx Xxxxxxxx to be
released from his liability to EMC simultaneously therewith, all to occur within
60 days. Whitemark Homes shall continue to make the lease payments to Xxxx
Xxxxxxxx and insure the house as required by EMC until Xxxx Xxxxxxxx is released
from his guaranty with EMC. Whitemark Homes shall produce a certificate of
insurance naming Xxxx Xxxxxxxx and EMC as loss payees, up to the amount of the
EMC mortgage balance on or before April 25, 2003. Xxxxx Xxxxx will handle the
closing. The conveyance shall be free of all debt with the exception of the
liability to EMC, and the outstanding lease between Xxxx Xxxxxxxx and Whitemark
Homes of Florida, Inc. If Whitemark Homes fails to have Xxxx Xxxxxxxx released
from his EMC Guaranty within 60 days, Xxxx Xxxxxxxx shall be free to sell his
house without restriction from the Whitemark Homes Group. Until such time Xxxx
Xxxxxxxx sells his house, Whitemark Homes shall pay all principal, interest,
taxes, insurance, maintenance and repair expenses associated with the house.
X. Xxxxx will convey his mobile home in Florida to Xxxx Xxxxxxxx, or his
designee, and Xxxx Xxxxxxxx will cause White to be released from his liability
on the mobile home simultaneously therewith, all to occur within 60 days. DLT
will handle the closing. The conveyance shall be free of all debt.
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N. Xxxx Xxxxxxxx shall cause Bank of Bonifay to have Whitemark Homes and
White released from their guaranties within sixty (60) days.
O. Except as otherwise provided herein, the parties agree to terminate,
cancel and release from all obligations to perform any of the following: (1) the
Exchange Agreement; (2) Closing Agreement; (3) the Guaranty Agreement; (4)
Employment Agreement, (5) Security and Funding Agreement; (6) all profit
participation agreements; (7) any joint venture agreements; and (8) any other
document or agreement executed in connection with any of the foregoing with the
exception of the Voting Agreement, which Voting Agreement shall remain in effect
subject to subparagraph W.
P. Xxxx Xxxxxxxx, Xxxxx Xxxxxxxx and Xxxx Xxxxxxxx shall resign from all
positions with Whitemark Homes and any entity retained by Whitemark Homes.
Q. 1. The Xxxxxxxx Group, the Whitemark Homes Group, the Xxxxxxxx Group,
the X'Xxxxxxxx Xxxxx Group (as defined in the Mutual Release), Xxxxxxx Xxxxxx,
Xxxxx X. Xxxxxxxx and Xxxxx Xxxxxxx, shall enter into Mutual Releases (the
"Releases"), which are attached to this Agreement, are consideration for this
Agreement, and are incorporated as if fully set forth herein.
2. In lieu of Releases from C. Xxxxx Xxxxx ("Xxxxx"), Xxxxx X.
Xxxxxxx, Xx. ("Xxxxxxx") and/or Xxxxx X. Xxxxx, III ("Xxxxx"), Xxxx Xxxxxxxx,
Xxxxx Xxxxxxxx and Xxxx Xxxxxxxx warrant and promise that they will not directly
or indirectly cooperate, assist, aid, participate, fund or share in the proceeds
of any claims or lawsuits filed or brought, at least in part, by Xxxxx, Xxxxxxx
and/or Xxxxx against the Whitemark Homes Group, except as required pursuant to a
subpoena or court order. Further Xxxx Xxxxxxxx, Xxxxx Xxxxxxxx and Xxxx Xxxxxxxx
shall not directly or indirectly disclose to any person or entity any
confidential information about the Whitemark Homes Group obtained during the
course of their employment with Whitemark Homes or NFC, except as required by
law. To the extent any party is required to report, notice, testify or otherwise
participate in such charges, lawsuits, investigations, administrative
proceedings or other proceedings or actions, said person or entity shall provide
the other parties with ten (10) calendar days written notice before
participating, disclosing or taking any action described in this subparagraph
Q2. The Whitemark Homes Group and Xxxxxxxx Group further agree to cooperate with
each other to the extent any of them are sued by Xxxxx, Xxxxxxx and/or Xxxxx.
R. With respect to the usury counterclaims of Muirfield and Troon
againstWestern United Life Assurance Company ("Western Assurance"), Xxxx X'Xxxxx
as Troon/Muirfield's lead counsel shall prosecute the counterclaim on behalf of
the counterclaim plaintiffs. Xxxx Xxxxxxxx shall obtain a six (6) month
extension on the indebtedness secured by the Whitemark Stock pledged to Beach
Community Bank, Commerce South Bank, and Bank of Bonifay. The extension shall
include notice provisions whereby each lender is required to provide Whitemark
Homes with fifteen (15) days prior written notice prior to either a default
and/or the sale or other disposition of the Whitemark Stock held as collateral.
Any recovery from the counterclaim shall be used first before any reduction for
any attorneys' fees, costs, expert fees or all other expenses incurred in the
prosecution of the counterclaim ("Initial Recovery") to satisfy all loans
secured by the Whitemark Stock held as collateral by Beach Community Bank,
Commerce South Bank, and Bank of Bonifay and thereafter in any manner that
Troon/Muirfield so determine. To the extent any portion of the Whitemark Stock
held as collateral is purchased by Whitemark Homes in foreclosure proceedings or
otherwise, the Initial Recovery first shall be used to reimburse Whitemark Homes
for its actual purchase price paid by Whitemark Homes for such Whitemark Stock.
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Whitemark Homes affirms that NFC owns the Troon and Muirfield stocks subject
only to the Western Assurance collateral loan documents, and the Troon and
Muirfield stocks are unencumbered except as to the Western Assurance loan
documents. Xxxx Xxxxxxxx will irrevocably notify lenders to return all Whitemark
Stock to Whitemark Homes upon satisfaction of corresponding loan. To the extent
that the Initial Recovery is treated as a setoff or reduction in the
indebtedness, then within 90 days Xxxx Xxxxxxxx, Xxxx Xxxxxxxx and Xxxxx
Xxxxxxxx shall cause the Whitemark Stock to be delivered to Whitemark Homes
without any liens or, in the event Whitemark Homes purchased the stock, pay
Whitemark Homes the purchase price paid for such stock. By virtue of Whitemark
Homes' rights under this subparagraph R, including its interest in having the
above referenced $2,700,000 encumbrance on the Whitemark Stock satisfied from
Muirfield's and Troon's Usury counterclaims, the Xxxxxxxx Group, Muirfield and
Troon stipulate and agree that Whitemark Homes (i) has a direct and immediate
claim and interest in the demand, and resulting proceeds of the demand, which is
the subject alter of the Usury Counterclaims; (ii) will directly gain or lose by
direct legal operation and effect of any settlement, compromise or judgment if
the Usury Counterclaims; and (iii) has sufficient grounds and legal interest in
the Usury Counterclaims to be a proper intervenor under Rule 1.230 of the
Florida Rules of Civil Procedure. Accordingly, Muirfield, Troon and Whitemark
Homes agree to file a joint motion under Rule 1.230 to allow Whitemark Homes to
intervene in the Usury Counterclaims. The remaining parties to this Agreement
agree to consent to and not oppose or object to this intervention. In the event
the court denies the intervention, Whitemark Homes reserves the right, and the
Xxxxxxxx Group consents to the right, to commence a third party or related cause
of action against Muirfield, Troon and the Xxxxxxxx Group to preserve Whitemark
Homes' interest in the settlement, compromise or judgment obtained in the Usury
Counterclaims.
S. Xxxx Xxxxxxxx will provide sworn testimony before a court reporter in
response to questions by Whitemark Homes counsel, in Destin, Florida, concerning
information about NFC and/or the NFC Subsidiaries' financial information and
other disclosure information related to Whitemark Homes' filings under the
Securities Exchange Act of 1934 for the time period January 1, 2003 through the
date this Settlement Agreement is executed by all parties. The court in the
Replevin/Counterclaim/Counter-Counterclaim Action shall retain jurisdiction to
rule upon any motions to compel, motions for protective order, instructions to
not answer, invocations of privilege, and violations of the Florida Rules of
Civil Procedure. The deposition shall take place on or before April 30, 2003.
T. Whitemark Homes will pay up to $15,000 of all closing costs in
connection with this Settlement Agreement, in addition to the costs described in
Y. Xxxx Xxxxxxxx, or his designee, will be responsible for the remainder of the
closing costs, with the exception of the Whitemark Homes Group attorney fees.
U. NFC shall assign to Xxxx Xxxxxxxx, or his designee, the existing
Construction Contracts for homes being built for Xxxxx Xxxxxxxx and Xxx Xxxxxxxx
(at Cypress Breeze); and Xxxxxxx Xxxxxxxxxx (at Emerald Lakes). Xxxx Xxxxxxxx,
or his designee, will assume all obligations under the construction contracts.
V. Whitemark Homes is permitted to disclose the terms of this Agreement
in its filings under the Securities Exchange Act of 1934.
W. Xxxx Xxxxxxxx, Xxxx Xxxxxxxx and Xxxxx Xxxxxxxx irrevocably
relinquish any and all rights and benefits that any of them may have under the
Voting Agreement including without limitation any right to appoint a member to
the Whitemark Homes' Board of Directors.
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X. Xxxx Xxxxxxxx, Xxxx Xxxxxxxx and Xxxxx Xxxxxxxx shall withdraw their
January 21, 2003 shareholder demand letter (attached as Exhibit "A" to the
Verified Complaint filed in the Shareholder Derivative Action).
Y. Within 60 days from the date of this Agreement, Whitemark Homes
shall cause Whitemark at Long Point Cove, Ltd. ("WLPC"), the lender of Phase II
of Long Point Cove Project ("Project"), to execute documents necessary to modify
the Note/Mortgage encumbering the Project to reflect an amount owed not to
exceed $1,800,000 due and payable within six (6) months of the date of this
Agreement. Long Point shall execute a special warranty deed ("Deed") in favor of
WLPC as to the property encumbered by the mortgage, and deliver said Deed to a
mutually agreeable escrow agent ("Escrow Agent"). If $1,800,000 is not paid to
WLPC on or before 6 months following the date of this Agreement, then the Deed
shall be released to WLPC. Simultaneously with Long Point's execution and
delivery of the Deed to Escrow Agent, WLPC shall deliver the original $1,800,000
Note, Mortgage, Xxxx Xxxxxxxx Guaranty, GDE Guaranty and a Satisfaction of
Mortgage to Escrow Agent. In the event the $1,800,000 is paid on or before 6
months following execution of this Agreement, or in the event the Deed is
delivered to WLPC as provided for herein, than Escrow Agent shall deliver the
original Note, Mortgage, Xxxx Xxxxxxxx Guaranty, GDE Guaranty and Satisfaction
of Mortgage to Xxxx Xxxxxxxx. In any event, WLPC shall provide Xxxx Xxxxxxxx and
GDE thirty (30) days prior written notice to cure any default on the Note and
Mortgage. Whitemark Homes shall sign an indemnification and hold harmless
agreement in favor of Xxxx Xxxxxxxx for their guaranty in this subparagraph Y or
grant to Xxxx Xxxxxxxx a second lien security interest in the Whitemark Stock
subject to the $2,700,000 loans to Beach Community Bank, Commerce South Bank and
Bank of Bonifay.
Z. Whitemark Homes will retain stock ownership of Magnolia, Panhandle,
Sunshine, Emerald Sea, Sea Oat, Emerald Beach, LPG, Alstar Development and
Torel.
AA. In consideration of the Mutual Releases the Xxxxxxxx Group and
X'Xxxxxxxx Xxxxx Group, and their, officers, directors, partners and employees,
shall be entitled to provide professional services to the Xxxxxxxx Group, and
their investors and related entities and affiliates, and the Whitemark Homes
Group waives all conflict of interest, past, present or future, as to any
knowledge of the foregoing in their prior dealings with the Whitemark Homes
Group.
BB. All persons/employees/agents of the Whitemark Homes Group and its
subsidiaries whom have spoken to Southeastern or its officers, principals and
attorneys, shall provide taped or written statements under oath to Xxxx X'Xxxxx
in Orlando, Florida before April 25, 2003.
CC. The Whitemark Homes Group shall indemnify and hold harmless Xxxx X.
Xxxxxxxx and Xxxxxxxx & Xxxxxxx, P.A., and its employees, from any and all
claims made by Trimark Catastrophe as a result of any action taken by an
authorized agent of Whitemark Homes concerning the Whitemark Homes/Trimark
Catastrophe contract dated March 29, 2002.
DD. The obligations of the Xxxxxxxx Group and the Whitemark Homes Group
pursuant to this Agreement shall not be dischargeable by either of them in
bankruptcy. If this Agreement, or any part thereof, or any document executed by
the parties as contemplated herein, should be set aside by a Court of competent
jurisdiction, or a bankruptcy court, for any reason whatsoever, then in such
event, this Agreement and the documents executed pursuant hereto shall be null
and void, and the Xxxxxxxx Group and the Whitemark Homes Group shall have the
right to reinstate the lawsuits described in paragraph A.1-4 herein, and shall
have any and all causes of action against each other as if they never signed
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this Agreement and the documents executed pursuant hereto. In addition to the
foregoing, the Whitemark Homes Group additionally stipulates, covenants and
agrees that neither Whitemark Homes or any of its subsidiaries will file for
protection under the bankruptcy laws of the United States, and specifically
under Title 11 of the United States Code, for a period of at least one (1) year
from the date of this Agreement ("Preference Period"). In the event that
Whitemark Homes or any of its subsidiaries commences any proceeding under Title
11 of the U.S. Code within or before the Preference Period, and the Xxxxxxxx
Group is compelled to disgorge any benefits received herein as a preference,
then the Xxxxxxxx Group shall have and hereby reserves all rights to assert any
and all claims otherwise realized herein, including but not limited to
objections to discharge or dischargeability in such proceeding, to object to any
claims of exemption, or to assert any other rights which it may have in such
proceeding.
EE. The Whitemark Homes Group, and each member thereof, consents to the
continued representation of Xxxx Xxxxxxxx, Xxxxx Xxxxxxxx, and Xxxx Xxxxxxxx by
the Xxxxxxxx Group and its officers, directors and employees, and further
consents to the future representation by the Xxxxxxxx Group of the Xxxxxxxx
Group, as well as Troon, Muirfield, Alstar Enterprises, Long Point Destin,
Cypress Breeze, and NFC:
1. In connection with the previously executed Exchange Agreement,
as amended, Plan of Merger, and Closing Agreement and related
documents, including any disputes which arose in connection
therewith and any efforts to enforce or protect rights in
connection therewith, including such efforts in connection with
the Guaranty and Indemnity Agreement dated November 6, 2001.
2. In connection with any other matters.
The Xxxxxxxx Group has not represented any parties in connection with this
Agreement. The parties to this Agreement acknowledge that they have consulted
with their respective counsel in this matter regarding the giving of this
consent.
The parties stipulate and agree that to the extent any confidential
information concerning the above described transactions as described in FF-1 was
conveyed to M&H by the Whitemark Homes Group, such information also was in the
possession of the Xxxxxxxx Group, and that the Whitemark Homes Group waives any
claim that M&H would otherwise be disqualified from representing the Xxxxxxxx
Group or any other person based on receipt of any such information in the course
of representing the Xxxxxxxx Group or otherwise. The Whitemark Homes Group
hereby consents for Xxxxx Xxxxx, Esq. to withdraw from all representation of any
matters he is handling for NFC, Troon, Muirfield, Alstar Enterprises, Cypress
Breeze, Destin and Long Point ("Represented Entities"), and to execute a
stipulation for substitution of counsel with whatever attorney Xxxx Xxxxxxxx so
designates. Neither of the Represented Entities shall be responsible for any
attorney fees, costs and expenses owed Xxxxx Xxxxx for his representation. The
Whitemark Homes Group shall be solely responsible for any attorney fees, costs
and expenses owed Xxxxx Xxxxx.
FF. The Xxxxxxxx Group, and each member thereof, consents to the
continued representation of White by Xxxxx Xxxxx ("Xxxxx"), and further consents
to the past and future representation by Xxxxx of the Whitemark Homes Group:
9
1. In connection with the previously executed Exchange Agreement,
as amended, Plan of Merger, and Closing Agreement and related
documents, including any disputes which arose in connection
therewith.
2. In connection with any other matters.
The parties to this Agreement acknowledge that they have consulted with
their counsel in this matter regarding the giving of this consent.
V. REPRESENTATIONS AND WARRANTIES.
-------------------------------
A. The Whitemark Homes Group makes the following representations and
warranties to the best of their knowledge as to the limited liability company
(hereinafter "Companies") membership interests (hereinafter "Units") being
transferred pursuant to this Agreement from Alstar Development, Torel, LPG,
Emerald Sea and Destin (collectively hereafter "Transferring Entities") to Xxxx
Xxxxxxxx, or his designees (collectively hereafter "Receiving Entities"):
1. Title. The Transferring Entities have good, absolute, and
marketable title to the Units, free from all liens, claims, and
encumbrances. The Transferring Entities have not previously
assigned any interest in the Units to third parties, pledged the
Units as collateral for any loans, hypothecated the Units or
otherwise transferred any interest in the Units to third
parties. The Transferring Entities have the unfettered right,
power, and authority to transfer all of the Units pursuant to
this Agreement. Delivery of the Units to the Receiving Entities
as contemplated by this Agreement will vest unencumbered title
to the Units in Receiving Entities.
2. Litigation. The Whitemark Homes Group has no knowledge of any
litigation, arbitration, or other legal, judicial,
administrative, or government actions against the Transferring
Entities or the Units, other than as described below:
Tamtech v. NFC
Prescott v. NFC
First Premiere v LPC
Western United Life Assurance v. Troon/Muirfield/NFC
Peoples Bank x. Xxxxx/NFC
Threatened foreclosure by Whitemark at Long Point Cove, Ltd.
Neither the Transferring Entities nor the Companies are aware of
any facts that might give rise to such a proceeding.
3. Disclosure. No representation or warranty furnished by the
Transferring Entities to the Receiving Entities in this
Agreement or otherwise contains or will contain any untrue
statement of a material fact or omits or will omit any material
fact required to make such statements not misleading.
B. The Whitemark Homes Group makes the following representations and
warranties to the best of their knowledge as to the Troon and Muirfield
(hereafter "Corporations") corporate stock (hereafter "Stock") being transferred
10
pursuant to this Agreement from NFC (hereafter "Transferring Entity") to Xxxx
Xxxxxxxx, or his designees (collectively hereafter "Receiving Entities"):
1. Title. The Transferring Entity has good, absolute, and
marketable title to the Stock, free from all liens, claims, and
encumbrances. The Transferring Entity has not previously
assigned any interest in the Stock to third parties, pledged the
Stock as collateral for any loans, hypothecated the Stock or
otherwise transferred any interest in the Stock to third
parties. The Transferring Entity has the unfettered right,
power, and authority to transfer all of the Stock pursuant to
this Agreement. Delivery of the Stock to the Receiving Entities
as contemplated by this Agreement will vest unencumbered title
to the Stock in Receiving Entities. Notwithstanding the
foregoing, Receiving Entity acknowledges the pledge of Stock to
Western Assurance as described in paragraph R of this Agreement
2. Litigation. The Whitemark Homes Group has no knowledge of any
litigation, arbitration, or other legal, judicial,
administrative, or government actions against the Transferring
Entities or the Stock, other than as described below:
Tamtech v. NFC
Prescott Architects v. NFC
First Premiere v. LPC
Western United Life Assurance v. Troon/Muirfield/NFC
Peoples Bank x. Xxxxx/NFC
Neither the Transferring Entities nor the Companies are aware of
any facts that might give rise to such a proceeding.
3. Disclosure. No representation or warranty furnished by the
Transferring Entity to the Receiving Entities in this Agreement
or otherwise contains or will contain any untrue statement of a
material fact or omits or will omit any material fact required
to make such statements not misleading.
VI. TAXES.l The Whitemark Homes Group shall be solely responsible for filing tax
returns for NFC, Troon, Muirfield, Loong Point, Alstar Enterprises, Destin and
Cypress Breeze ("Tax Paying Entities") for the calendar year 2002, and pay any
taxes that may be owed by the Tax Paying Entities.
VII. ACKNOWLEDGEMENT OF CONSIDERATION. The parties to this Agreement acknowledge
that the Settlement Benefits, described above, are being offered in exchange for
execution of the Agreement and the related releases, and they would not
otherwise be entitled to this consideration in the absence of this Agreement.
VIII. KNOWING AND VOLUNTARY WAIVER. The parties specifically acknowledge that
the waivers of the parties' respective claims against each other are knowing and
voluntary and that these waivers are part of this Agreement, which has been
written in a manner calculated to be, and which is, understood by the parties.
IX. NON-ADMISSION. This Agreement is not to be construed as an admission of
wrongdoing or of any liability by any party to this Agreement.
11
X. ENTIRE AGREEMENT. This Agreement is the entire mediation settlement agreement
between the parties relating to the subject matter of this Agreement. The
parties acknowledge that they have not made any representations or promises to
each other, other than those in or referred to by this Agreement. If any
provision in this Agreement is found to be unenforceable, all other provisions
will remain fully enforceable.
XI. PLAIN MEANING AND HEADERS. This Agreement shall be interpreted in accordance
with the plain meaning of its terms and not for or against the drafter's rights
hereunder. The headers describing the contents of the provisions are simply for
identification purposes and shall not be construed as a substantive part of the
provision.
XII. EXECUTION OF AGREEMENT. The parties acknowledge and agree that in deciding
to execute this Agreement: (a) each party relied entirely on each party's own
judgment and that of any legal counsel,; (b) the parties understand the terms of
this Agreement; (c) the parties have been advised to consult with legal counsel
and have been provided with time to consult with legal counsel prior to the
execution of this Agreement; (d) all promises made in connection with this
Agreement or as inducement to sign same are expressly set forth in full in the
other paragraphs of this Agreement; and (e) the parties were given a reasonable
amount of time to consider this Agreement before signing it.
XIII. BREACH OF SETTLEMENT AGREEMENT AND DOCUMENTS TO BE SIGNED AT CLOSING
PURSUANT HERETO. In the event of any action or proceeding brought by either
party against the other under this Agreement, the prevailing party shall be
entitled to recover all costs and expenses, including the fees of its attorneys
in such action or proceeding (including efforts to modify or vacate any
automatic stay or injunction, appeals and any anticipated post-judgment
collection services), in such amount as the court may deem reasonable. In the
event either party incurs any attorney's fees and costs in enforcing this
Agreement, whether or not action is instituted, the defaulting party shall
reimburse the non-defaulting party for such attorney's fees and costs upon
demand.
XIV. BINDING EFFECT. The terms and conditions hereof shall bind and the benefits
inure to the parties hereto, and their respective heirs, devises, personal
representatives, successors, and assigns.
XV. FURTHER ASSURANCE. Each of the parties agree to do such further acts and
things and to exercise and deliver such additional agreements and instruments as
may be reasonably required to consummate, evidence or confirm this Agreement, or
any other agreement contained herein in the manner contemplated hereby.
XVI. INTERPRETATION. Each party to this Agreement and their counsel have
reviewed and revised this Agreement. The normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of this Agreement or of any amendments or
exhibits to this Agreement, or any of the documents executed pursuant to or
otherwise in connection with this Agreement.
XVII. NOTICES. All notices, demands, requests or other communications which may
or shall be given or served by any party to this Agreement upon any other
parties to this Agreement, shall be addressed to the address below and either
(a) sent by certified mail, return receipt requested, in which case notice shall
be deemed delivered (i) 5 days after deposit, postage prepaid in the U.S. mail,
or (ii) upon deposit if a copy is also sent via facsimile to the number below at
the time of deposit; or (b) sent by a nationally recognized overnight courier
for next day morning delivery, in which case notice shall be deemed delivered 1
12
business day after deposit with such courier. The addresses below may be changed
by written notice to the other party; provided, however, that no notice of a
change of address shall be effective until actual receipt of such notice. Copies
of notices are for informational purposes only, and a failure to give or receive
copies of any notice shall not be deemed a failure to give notice.
If to the Xxxxxxxx
Group: c/o Xxxx Xxxxxxxx
00000 Xxxxxxx Xxxxx Xxxxxxx
Xxxxxx, Xxxxxxx 00000
Facsimile No: (000) 000-0000
With a copy to
Legal Counsel: Xxxxxxxx & Xxxxxxx, P.A.
Attention: Xxxx X. Xxxxxxxx
000 Xxxxxxx 00 Xxxx
Xxxxxx, Xxxxxxx 00000
Facsimile No: (000) 000-0000
and Xxxx X'Xxxxx
0000 Xxxx Xxx Xxxx., Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
If to WTMK: Whitemark Homes, Inc.
Attn: Mr. Xxxxx Xxxxx
000 X. Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
With a Copy to
Legal Counsel: Xxxxx X. Xxxxx, Esq.
Law Offices of Xxxxx X. Xxxxx, P.A.
000 X. Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
and Xxxxxxxxxxx & Xxxxxxxx, L.L.P.
Attn: April X. Xxxxx, Esq.
000 Xxxxx Xxxxxxxx Xxxx., 00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
XVIII. SURVIVAL. All covenants, terms, provisions, representations and
warranties set forth in this Agreement, except as specifically provided
otherwise, shall survive execution of the closing documents described in this
Agreement.
13
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
14
I FULLY UNDERSTAND AND AGREE WITH ALL OF THE TERMS OF THIS AGREEMENT AND
WILL BE BOUND BY ALL OF ITS TERMS.
IN WITNESS WHEREOF, the parties hereto execute this Agreement as of the
date written below.
ACCEPTED AND AGREED TO:
WHITEMARK HOMES, INC. ALSTAR ENTERPRISES, L.L.C.
By: By:
------------------------------ ---------------------------------
Name: Name:
----------------------------- -------------------------------
Title: Title:
-------------------------- ------------------------------
Dated: Dated:
-------------------------- ------------------------------
ALSTAR DEVELOPMENT GROUP, INC. CABANA BEACH CLUB, L.L.C.
By: By:
------------------------------ ---------------------------------
Name: Name:
----------------------------- -------------------------------
Title: Title:
-------------------------- ------------------------------
Dated: Dated:
-------------------------- ------------------------------
CABANA COVE, L.L.C. DESTIN PARKS, INC.
By: By:
------------------------------ ---------------------------------
Name: Name:
----------------------------- -------------------------------
Title: Title:
-------------------------- ------------------------------
Dated: Dated:
-------------------------- ------------------------------
EMERALD BEACH CORPORATION EMERALD SEA DEVELOPMENT, INC.
By: By:
------------------------------ ---------------------------------
Name: Name:
----------------------------- -------------------------------
Title: Title:
-------------------------- ------------------------------
Dated: Dated:
-------------------------- ------------------------------
15
LONG POINT COVE, L.L.C. LPG, INC.
By: By:
------------------------------ ---------------------------------
Name: Name:
----------------------------- -------------------------------
Title: Title:
-------------------------- ------------------------------
Dated: Dated:
-------------------------- ------------------------------
MAGNOLIA LANDING DEVELOPMENT, INC. MUIRFIELD DEVELOPMENT CORPORATION
By: By:
------------------------------ ---------------------------------
Name: Name:
----------------------------- -------------------------------
Title: Title:
-------------------------- ------------------------------
Dated: Dated:
-------------------------- ------------------------------
NORTH FLORIDA CONSULTING, INC. PANHANDLE DEVELOPMENT, INC.
By: By:
------------------------------ ---------------------------------
Name: Name:
----------------------------- -------------------------------
Title: Title:
-------------------------- ------------------------------
Dated: Dated:
-------------------------- ------------------------------
SEA OAT PROPERTIES, INC. SUNSHINE DEVELOPMENT GROUP, INC.
By: By:
------------------------------ ---------------------------------
Name: Name:
----------------------------- -------------------------------
Title: Title:
-------------------------- ------------------------------
Dated: Dated:
-------------------------- ------------------------------
TOREL, INC. TROON DEVELOPMENT CORPORATION
By: By:
------------------------------ ---------------------------------
Name: Name:
----------------------------- -------------------------------
Title: Title:
-------------------------- ------------------------------
Dated: Dated:
-------------------------- ------------------------------
16
---------------------------------- -----------------------------------
XXXXXXX XXXXX XXXXX XXXXXXXX XXXXXX
Dated: Dated:
-------------------------- -----------------------------
---------------------------------- -----------------------------------
XXXXX X. XXXXX XXXX XXXXXXX, XX.
Dated: Dated:
-------------------------- -----------------------------
WHITEMARK HOMES OF FLORIDA, INC.
----------------------------------
XXXXXXXX OLDER
By:
--------------------------------
Dated:
---------------------------- Name:
------------------------------
Title:
-----------------------------
Dated:
-----------------------------
GULF DESTINATION ENTERPRISES, INC. CASTLE DEVELOPMENT PROPERTIES, INC.
By: By:
------------------------------ ---------------------------------
Name: Name:
----------------------------- -------------------------------
Title: Title:
-------------------------- ------------------------------
Dated: Dated:
-------------------------- ------------------------------
CONCOURSE, INC.
-----------------------------------
By: XXXXXXX XXXXXXX XXXXXXXX
------------------------------
Name: Dated:
----------------------------- -----------------------------
Title:
----------------------------
Dated:
--------------------------
-----------------------------------
XXXXX XXXXXXXX
Dated:
-----------------------------
17
---------------------------------- -----------------------------------
XXXX XXXXXXXX XXXX XXXXXXXX
Dated: Dated:
---------------------------- -----------------------------
-----------------------------------
XXXX X. XXXXXXX
---------------
DATED:
-----------------------------
XXXXXXXX & XXXXXXX, P.A. DESTIN LAND & TITLE, INC.
By: By:
------------------------------ ---------------------------------
Name: Name:
----------------------------- -------------------------------
Title: Title:
-------------------------- ------------------------------
Dated: Dated:
-------------------------- ------------------------------
18
