Contract analysis

Section 1.1 Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not defined in this Article I shall have the meanings ascribed to them elsewhere in this Agreement. (a) "Agreement" means this Settlement Agreement and Mutual Release, together with all Exhibits attached hereto, as the same may be amended or modified from time to time in accord

ARTICLE II — SETTLEMENT PAYMENT

Section 2.1 Total Settlement Amount. In consideration of the mutual covenants, promises, releases, and obligations set forth in this Agreement, and in full and final settlement and resolution of all Claims among the Parties arising out of or relating to the Hurricane Callista Losses and/or the Policies, the Insurer Parties shall pay to VHG the aggregate sum of Forty-Seven Million Three Hundred Thousand Dollars ($47,3

Section 2.2 Allocation of Settlement Amount. The Settlement Amount shall be allocated among the Insurer Parties as follows: (a) Ironclad Indemnity Corporation shall pay Twenty-Four Million Five Hundred Thousand Dollars ($24,500,000.00); (b) Pinnacle Surplus Lines Inc. shall pay Twelve Million Two Hundred Thousand Dollars ($12,200,000.00); (c) Montclair Assurance Company shall pay Six Million Eight Hundred Thousand Do

Section 2.3 Payment Terms. Each Insurer Party's share of the Settlement Amount, as set forth in Section 2.2, shall be paid in a single lump-sum payment by wire transfer of immediately available funds in United States Dollars within forty-five (45) calendar days of the Effective Date. Given that the Effective Date is December 19, 2023, the payment deadline shall be February 2, 2024 (the "Payment Deadline"). All paymen

Section 2.4 Late Payment. In the event that any Insurer Party fails to remit its respective share of the Settlement Amount on or before the Payment Deadline, the unpaid amount shall bear interest at the rate of twelve percent (12%) per annum, or the maximum rate permitted under applicable Florida law, whichever is less, computed from the day immediately following the Payment Deadline until the date upon which such pa

Section 2.5 Tax Treatment. Each Party shall be solely responsible for its own tax obligations, if any, arising from the settlement or the payments made pursuant to this Agreement. No Party makes any representation or warranty to any other Party regarding the tax treatment or tax consequences of the Settlement Amount or any portion thereof. VHG acknowledges and agrees that no Insurer Party, nor any agent, employee, or

ARTICLE III — DISMISSAL OF LITIGATION

Section 3.1 Stipulation of Dismissal. Within ten (10) business days following receipt by VHG (through the trust account of Calderwood & Harkness LLP) of the full Settlement Amount from all Insurer Parties, the Parties shall jointly execute and file a Joint Stipulation of Dismissal with Prejudice of all claims, counterclaims, cross-claims, and affirmative defenses in the Litigation, Case No. 2022-CA-031547, in the Ele

Section 3.2 Costs and Fees. Except as otherwise expressly provided in this Agreement, each Party shall bear its own costs, expenses, and attorneys' fees incurred in connection with the Litigation and the negotiation, preparation, and execution of this Agreement. Without limiting the generality of the foregoing, VHG's engagement of Calderwood & Harkness LLP as its litigation counsel and the fees, costs, and expenses i

Section 3.3 Withdrawal of Pending Motions. Upon the filing of the Joint Stipulation of Dismissal with Prejudice in the Litigation, all pending motions in the Litigation shall be deemed withdrawn and rendered moot, including without limitation: (a) VHG's Motion for Partial Summary Judgment Regarding the Applicability of the Named-Windstorm Sub-Limit to Business-Interruption Losses, filed on November 1, 2023; and (b) t

Section 4.1 Release by VHG. Effective upon VHG's receipt of the full Settlement Amount from all Insurer Parties, VHG, on behalf of itself and all VHG Parties, hereby irrevocably and unconditionally releases, acquits, and forever discharges each and every Insurer Party, and each of their respective parents, subsidiaries, affiliates, officers, directors, employees, agents (including, without limitation, Arbor Claims Se

Section 4.2 Release by Insurer Parties. Effective upon payment of the full Settlement Amount by all Insurer Parties to VHG, each Insurer Party, on behalf of itself and its respective parents, subsidiaries, affiliates, officers, directors, employees, agents, underwriters, reinsurers, predecessors, successors, and assigns, hereby irrevocably and unconditionally releases, acquits, and forever discharges VHG and all VHG

Section 4.3 Scope of Release. The releases set forth in Sections 4.1 and 4.2 of this Agreement are intended to be as broad and comprehensive as permitted by law and extend to all Claims, whether known or unknown, suspected or unsuspected, disclosed or undisclosed, matured or unmatured, accrued or not yet accrued, that exist as of the Effective Date and that arise from, relate to, or are in any way connected with the

Section 4.4 Carve-Out — Enforcement of This Agreement. Notwithstanding anything to the contrary in this Article IV, nothing in this Agreement shall release any Party from its obligations, covenants, representations, or warranties set forth in this Agreement. Each Party expressly retains the right to enforce the terms and conditions of this Agreement, to seek specific performance of any obligation hereunder, and to pu

Section 4.5 No Release of Third-Party Claims. The releases set forth in this Article IV do not extend to, and shall not be construed to release or affect, any claims VHG may have against third parties that are not signatories to this Agreement, including but not limited to Tidewater Risk Advisors LLC, or any other broker, agent, or consultant. Similarly, the releases set forth in this Article IV do not extend to, and

ARTICLE V — NO ADMISSION OF LIABILITY

Section 5.1 No Admission. This Agreement and the settlement reflected herein are the result of a compromise of disputed claims and shall not be construed as an admission of liability, fault, wrongdoing, or the validity or invalidity of any claim or defense by any Party. Without limiting the generality of the foregoing: (a) No Insurer Party admits or concedes that any coverage was owed to VHG under any of the Policies

Section 6.1 Confidential Settlement Amount. The Parties agree that the specific dollar amount of the Settlement Amount and the allocation of the Settlement Amount among the Insurer Parties as set forth in Section 2.2 and Exhibit A hereto shall be treated as strictly confidential information. No Party shall disclose the Settlement Amount, the individual allocation amounts, or any other financial terms of this Agreemen

Section 6.2 Existence of Settlement. Notwithstanding Section 6.1, the Parties agree that the existence of this settlement and the fact that the Litigation has been resolved may be publicly disclosed by any Party. The Parties may state publicly that the Litigation has been settled on terms agreeable to all Parties without disclosing the specific financial terms of the settlement.

Section 6.3 Permitted Disclosures. Notwithstanding Section 6.1, the Parties may disclose the financial terms and other confidential provisions of this Agreement: (a) To their respective legal counsel, accountants, auditors, and tax advisors, on a need-to-know basis, as reasonably necessary for the purpose of obtaining legal, accounting, auditing, or tax advice, provided that such recipients are advised of the confide

Section 6.4 Public Statements. No Party shall issue any press release, public statement, or public filing regarding the specific terms of this settlement, including the Settlement Amount or the allocation thereof, without the prior written consent of all other Parties, except as expressly permitted under Sections 6.2 and 6.3 of this Agreement. Any press release or public statement regarding the existence of the settl

ARTICLE VII — REPRESENTATIONS AND WARRANTIES

Section 7.1 Authority. Each Party represents and warrants to the other Parties that: (a) it has full corporate or organizational power and authority to enter into this Agreement and to perform all of its obligations hereunder; (b) the execution, delivery, and performance of this Agreement have been duly authorized by all necessary corporate or organizational action on the part of such Party; (c) this Agreement consti

Section 7.2 No Assignment. Each Party represents and warrants that it has not assigned, transferred, conveyed, pledged, encumbered, or otherwise disposed of any of the Claims released herein, or any portion thereof, to any other person or entity, and that no other person or entity has any interest in any of the Claims released herein.

Section 7.3 Voluntary Execution. Each Party represents and warrants that it has carefully read this Agreement, fully understands each of its terms and provisions, and executes this Agreement voluntarily, knowingly, and without duress, coercion, undue influence, or misrepresentation by any other Party or any other person. Each Party acknowledges that it has been represented by legal counsel of its own choosing through

Section 7.4 Good Standing. Each Party represents and warrants that it is duly organized, validly existing, and in good standing under the laws of its jurisdiction of organization, and that it has all requisite corporate or organizational power and authority to own its properties and conduct its business as currently conducted.

ARTICLE VIII — INDEMNIFICATION

Section 8.1 VHG Indemnification. VHG shall indemnify, defend, and hold harmless each Insurer Party and each of their respective officers, directors, employees, agents, predecessors, successors, and assigns from and against any and all claims, demands, actions, causes of action, suits, losses, liabilities, damages, costs, and expenses (including reasonable attorneys' fees and costs of defense) arising out of or result

Section 8.2 Insurer Party Indemnification. Each Insurer Party shall indemnify, defend, and hold harmless VHG and each of its officers, directors, employees, agents, predecessors, successors, and assigns from and against any and all claims, demands, actions, causes of action, suits, losses, liabilities, damages, costs, and expenses (including reasonable attorneys' fees and costs of defense) arising out of or resulting

ARTICLE IX — MISCELLANEOUS PROVISIONS

Section 9.1 Governing Law. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Florida, without regard to any conflict-of-laws principles that would require the application of the laws of any other jurisdiction.

Section 9.2 Jurisdiction and Venue. Any action, suit, or proceeding arising out of or relating to this Agreement, including any action to enforce the terms hereof, shall be subject to the exclusive jurisdiction of the courts of the State of Florida located in Miami-Dade County, including the Eleventh Judicial Circuit of Florida. Each Party hereby irrevocably consents and submits to the personal jurisdiction of such c

Section 9.3 Entire Agreement. This Agreement, together with Exhibit A (Payment Allocation Schedule) and Exhibit B (Form of Joint Stipulation of Dismissal with Prejudice) attached hereto and incorporated herein by reference, constitutes the entire agreement among the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous negotiations, representations, warranties, commitments, of

Section 9.4 Amendments. This Agreement may not be amended, modified, supplemented, or waived except by a written instrument duly executed by all Parties. No oral modification of this Agreement shall be effective for any purpose.

Section 9.5 Severability. If any provision of this Agreement, or the application thereof to any person or circumstance, is held by a court of competent jurisdiction to be invalid, illegal, or unenforceable for any reason, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and the remaining provisions shall continue in full force and effect and shall be enforceable

Section 9.6 Waiver. No waiver of any provision of this Agreement, or of any right or remedy hereunder, shall be effective unless set forth in a written instrument signed by the Party to be bound thereby. No single or partial exercise of any right or remedy shall preclude any other or further exercise thereof, or the exercise of any other right or remedy. No waiver of any breach or default shall constitute a waiver of

Section 9.7 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors, assigns, heirs, executors, administrators, and personal representatives. No Party may assign or transfer this Agreement or any right or obligation hereunder without the prior written consent of all other Parties, except that any Party may assign this Agreement to a su

Section 9.8 No Third-Party Beneficiaries. This Agreement is not intended to, and shall not, confer any rights, benefits, or remedies upon any person or entity other than the Parties hereto and their respective released parties as specifically identified in Article IV. Nothing in this Agreement, express or implied, is intended to or shall create any third-party beneficiary rights in any person or entity that is not a

Section 9.9 Notices. All notices, requests, demands, consents, and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given when: (a) delivered personally; (b) sent by registered or certified mail, return receipt requested, postage prepaid; (c) sent by nationally recognized overnight courier service; or (d) sent by electronic mail (with confirmati

Section 9.10 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. A signed copy of this Agreement delivered by facsimile, electronic mail, or other means of electronic transmission (including portable document format (.pdf)) shall be deemed to have the same legal effect as delivery o

Section 9.11 Headings. The article and section headings used in this Agreement are for convenience of reference only and shall not affect the meaning, interpretation, or construction of any provision of this Agreement.

Section 9.12 Construction. This Agreement has been negotiated at arm's length among the Parties, each of which has been represented by independent legal counsel of its own choosing, and shall not be construed against any Party as the drafter. The Parties acknowledge that each Party and its counsel have reviewed and revised this Agreement, and that any rule of construction to the effect that ambiguities are to be reso

Section 9.13 Further Assurances. Each Party agrees to execute and deliver, or to cause to be executed and delivered, such additional documents, instruments, conveyances, and assurances, and to take such further actions, as may be reasonably required or requested by any other Party in order to carry out and effectuate the provisions, purposes, and intent of this Agreement. [Remainder of this page intentionally left bl

1. The Parties have reached a full and final settlement of all claims, counterclaims, cross-claims, and disputes at issue in this action.

2. Pursuant to Florida Rule of Civil Procedure 1.420(a)(1)(B), the Parties hereby stipulate to the dismissal, with prejudice, of all claims asserted by Plaintiff against Defendants, and all counterclaims and affirmative defenses asserted by Defendants against Plaintiff, in this action.

3. This dismissal is with prejudice to the re-filing of any of the dismissed claims, counterclaims, or cross-claims by any Party.

4. Each Party shall bear its own costs and attorneys' fees incurred in connection with this action, except as otherwise agreed among the Parties.

5. All pending motions in this action, including Plaintiff's Motion for Partial Summary Judgment filed November 1, 2023 and Defendants' Cross-Motion for Partial Summary Judgment filed November 15, 2023, are hereby withdrawn and deemed moot.

6. The Court shall retain jurisdiction solely for the purpose of enforcing the terms of the Settlement Agreement and Mutual Release entered into by the Parties effective December 19, 2023. WHEREFORE, the Parties respectfully request that the Court enter an order dismissing this action in its entirety, with prejudice, and in accordance with the terms of this Joint Stipulation. CALDERWOOD & HARKNESS LLP Counsel for Pla