NEAL M. MAYER, JOHN GEE, ) Civil Action No VCS DON DIERINGER, DAVID HARROD, ) JOHN SHANAPHY, MARC STANLEY, ) CHUCK BURRALL AND DEB PUTT, )

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1 EFiled: May :03PM EDT Transaction ID Case No. Multi-Case IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE JAMES W. WILLIAMS, IV, ) INDIVIDUALLY AND ) DERIVATIVELY ON BEHALF OF ) THE PENINSULA COMMUNITY ) ASSOCIATION, INC., ) ) Plaintiff, ) Civil Action No VCS ) v. ) ) REDUS PENINSULA ) MILLSBORO, LLC, REDUS ) PROPERTIES, INC. AND WELLS ) FARGO BANK, N.A., ) ) Defendants. ) REDUS PENINSULA MILLSBORO, ) LLC and WELLS FARGO BANK, N.A., ) ) Plaintiffs, ) ) v. ) ) NEAL M. MAYER, JOHN GEE, ) Civil Action No VCS DON DIERINGER, DAVID HARROD, ) JOHN SHANAPHY, MARC STANLEY, ) CHUCK BURRALL AND DEB PUTT, ) ) Defendants. ) ) ) NEAL M. MAYER, JOHN GEE, ) DON DIERINGER, DAVID HARROD, ) JOHN SHANAPHY, MARC STANLEY, ) v3

2 CHUCK BURRALL AND DEB PUTT, ) INDIVIDUALLY AND AS CLASS ) REPRESENTATIVES, ) ) Counterclaim Plaintiffs, ) ) v. ) ) REDUS PENINSULA MILLSBORO, ) LLC and WELLS FARGO BANK, N.A., ) ) Counterclaim Defendants. ) STIPULATION OF COMPROMISE AND SETTLEMENT This Stipulation of Compromise and Settlement ("Stipulation") is made and entered into as of May 1, The parties to this litigation (each a "Party" and, collectively, the "Parties"), by and through their undersigned attorneys, have reached an agreement for the settlement of the above-captioned matters styled REDUS Peninsula Millsboro, LLC v. Mayer, C.A. No VCS (the "Class Action") and Williams v. REDUS Peninsula Millsboro, LLC C.A. No VCS (individually, the "Derivative Action", and together with the Class Action, the "Actions"), both filed in the Court of Chancery of the State of Delaware (the "Court") and related matters on the terms set forth below and subject to Court approval pursuant to Court of Chancery Rules 23 and This Stipulation is intended to fully, finally, and forever resolve, discharge, and settle all claims asserted in the Actions. The Parties to this Stipulation are: v3 2

3 Lead Plaintiff in the Derivative Action, James W. Williams, IV ("Williams" or "Derivative Plaintiff"), a homeowner and member of the Peninsula Community Association, Inc. (the "PCA"), who has prosecuted the Derivative Action by and on behalf of the PCA pursuant to Court of Chancery Rule 23.1; Lead Counterclaim Plaintiffs in the Class Action, Neal Mayer ("Mayer"), John Shanaphy ("Shanaphy"), Deb Putt ("Putt"), Charles Burrall ("Burrall"), Don Dieringer ("Dieringer"), John Gee ("Gee"), David Harrod ("Harrod"), and Marc Stanley (individually, "Stanley", and together with the other plaintiffs in the Class Action, the "Representative Plaintiffs"), all homeowners and members of the PCA, who have prosecuted the counterclaims in the Class Action on behalf of the Class (as defined below) pursuant to Court of Chancery Rule 23; REDUS Peninsula Millsboro, LLC ("REDUS"), REDUS Properties, Inc. ("REDUS Properties"), Wells Fargo Bank, National Association (individually, "Wells Fargo" and together with REDUS and REDUS Properties, the "Bank Parties"). WHEREAS, I. The Peninsula & The Peninsula Community Association 1. The Peninsula is a large master-planned community constructed and located in Sussex County, Delaware v3 3

4 2. Originally, The Peninsula was owned and developed by Peninsula at Longneck, LLC, ("Peninsula LLC" or the "Original Declarant"), which was in turned controlled by Sandler & Son, Inc. (the "Original Developers"). 3. To construct and operate The Peninsula, Peninsula LLC obtained a development loan and an acquisition loan (the "Peninsula Loans"), which exceeded $60,000,000 in financing, from Wachovia Bank, National Association ("Wachovia"). The Peninsula Loans were secured by multiple mortgage and security agreements, as well as multiple assignments, which, when aggregated, provided Wachovia with a security interest in both the real and personal property of Peninsula LLC. 4. The development plan for The Peninsula is comprised of numerous governing documents, chief among which is the Declaration of Covenants, Conditions, and Restrictions for The Peninsula, executed August 12, 2004 (the "Declaration"). 5. Article XV of the Declaration provides for Peninsula LLC or a designee, affiliate, joint venture including Peninsula LLC, or a subsidiary of Peninsula LLC (any of which to be referred to as the "Declarant Infrastructure Entity") to, at its sole discretion, install and provide a private infrastructure throughout The Peninsula (the "Telecommunications Infrastructure") for the provision of any combination of telephone, cable, video, telecommunications, v3 4

5 Internet, or security (the "Telecommunications Services") and to allow the provision of Telecommunications Services throughout The Peninsula through the Telecommunications Infrastructure. 6. Peninsula Infrastructure Management, LLC ("PIM") was formed in Virginia on December 14, 2004, and was the initial Declarant Infrastructure Entity. Larry Goldstein ("Goldstein") controlled a 25 percent interest in PIM, while the Original Developers controlled the remaining 75 percent interest. 7. PIM and the PCA, the latter under the authority granted by Article XV of the Declaration, entered into that certain Agreement to Obtain Communications Services (the "Contract") dated as of December 24, 2004 (the "Contract Date"). The Contract was for a 25 year term, and was renewable at PIM's option for an additional 40 years. 8. On the Contract Date, the Original Developers were the controlling interest holders in PIM, and had appointed all members of the Board of Directors of the PCA (the "Board"). Similarly, Goldstein controlled a minority interest in PIM and was the acting President of the PCA. The Contract was signed by Nathan Benson, an employee of the Original Developers, as manager for PIM, and Goldstein, as President of the PCA. II. The Contract v3 5

6 9. PIM was established for the purposes of managing and coordinating: (1) the implementation and maintenance of the Telecommunications Infrastructure; and (2) the provision of Telecommunications Services at The Peninsula. 10. The Contract obligated PIM to coordinate or arrange for the design, installation, and operation of the Telecommunications Infrastructure and to provide Telecommunications Services under the terms set forth in the Contract. 11. PIM was further obligated to arrange marketing for Telecommunication Services, to negotiate and enter into service agreements with service providers, as well as to terminate any designated service provider and replace it in the case this became necessary. III. The Bulk Services Agreement and the Marketing Agreement 12. On May 17, 2005, PIM entered into the Bulk Services Agreement with Verizon Services Corp. ("Verizon"), is for a term of 25 years. 13. Through the Bulk Services Agreement, PIM granted Verizon an easement under and throughout The Peninsula. Through this easement, Verizon constructed, installed, and maintains a fiber-optic infrastructure that serves as the Telecommunications Infrastructure through which the Telecommunications Services are provided throughout The Peninsula. To make this grant possible, Peninsula LLC granted to PIM the Private Easement for the Exclusive Provision of v3 6

7 Communications Services for The Peninsula on Indian River Bay (the "Private Easement"). 14. In consideration for Verizon's obligations under the Bulk Services Agreement, PIM agreed to a bulk payment arrangement. The bulk payment arrangement was alleged to provide economic justification for the otherwise costprohibitive construction of the Fiber-to-the-Home network ("FTTH") that was built at The Peninsula. In return for receiving a 100% service penetration rate, Verizon agreed to charge PIM $58.95 (the "Bulk Services Fee") on a monthly term based on the number of constructed homes. The Bulk Services Fee is comprised of a $25.00 payment for Bulk Video Services and a $33.95 payment for Bulk Internet Services. 15. In exchange for the Telecommunication Services provided under the Contract, the residents of The Peninsula (the "Homeowners"), were required to pay, and have paid, $90.00 per month (the "Contract Price") assessed quarterly. The entire Contract Price is paid to the PCA, and, until Wells Fargo assumed control of the Contract, was passed-through to PIM. 16. The difference between the Contract Price and the Bulk Services Fee is $31.05 (the "Price Differential"). Prior to Wells Fargo assuming control over The Peninsula, the Price Differential was retained by PIM for the sole benefit of the Original Developers and Goldstein. The Contract provides for compensation to PIM from the Contract Price v3 7

8 IV. Peninsula LLC Faces Insolvency 17. In 2009, Peninsula LLC was in default on its loan obligations to Wachovia. Wells Fargo, successor in interest to Wachovia, exercised its remedies against Peninsula LLC, by seeking the appointment of a receiver. No receiver was sought or appointed for PIM. PIM was not part of the receivership assets. The Receivership Complaint was granted by an order dated October 14, 2009 (the "Receivership Date"). 18. On May 4, 2012, following the appointment of the receiver, Wells Fargo foreclosed on PIM's telecommunication and other rights that PIM pledged as security for the indebtedness owed to Wells Fargo (the "Foreclosure Sale"). 19. At the Foreclosure Sale, REDUS, a wholly-owned indirect subsidiary of Wells Fargo, was the high bidder and purchased PIM's rights for a bid of $1,000,000. The documentation included the Foreclosure Bill of Sale and Assignment (the "Assignment"). By virtue of the Foreclosure Sale, REDUS owns PIM's rights in the Contract, the Bulk Services Agreement and the Marketing Agreement. 20. Wells Fargo gained the status of declarant through its separate and later foreclosure of the real property of Peninsula LLC. Through this control, Wells Fargo had the right to nominate a majority of the Board. As both declarant and the owner v3 8

9 of PIM's rights, Wells Fargo had the power to cancel or amend the Contract. Wells Fargo took no such action. V. The Class Action Litigation 21. On June 28, 2013, the Representative Plaintiffs filed an initial demand for arbitration (the "Initial Arbitration Demand") against REDUS and Wells Fargo before the American Arbitration Association ( AAA ). Wells Fargo responded to the Initial Arbitration Demand with a request for the Representative Plaintiffs to recast their demand to state a claim within the scope of the arbitration clause included in the Contract (the "Contract Arbitration Clause"). 22. The Contract Arbitration Clause limits the scope of arbitration to whether the pricing of Telecommunications Services exceeds the price set by providers of residential telecommunications services in the Sussex County, Delaware area. 23. After receiving Wells Fargo's request, the Representative Plaintiffs filed an amended complaint with AAA (the Amended Complaint ). In the Amended Complaint, the Representative Plaintiffs sought: (a) a refund of the Price Differential for each month paid extending back to January 2013; and (b) an order from the arbitrator directing Wells Fargo and REDUS to cease collecting the Price Differential, or any amount in excess of the Bulk Services Fee v3 9

10 24. On August 23, 2013, Wells Fargo and REDUS filed a Verified Complaint (the "Verified Complaint") seeking, amongst other relief, a declaratory judgment that the Representative Plaintiffs had no right to pursue their Amended Complaint in arbitration, alleging the complaint in arbitration was outside the scope of the arbitration clause. That same day, Wells Fargo and REDUS filed a Motion for Preliminary Injunction (the "Preliminary Injunction") in this Court seeking to enjoin the Representative Plaintiffs from pursuing the Amended Complaint before AAA. 25. On September 27, 2013, the Representative Plaintiffs filed the Answer and Counterclaim against REDUS and Wells Fargo (the "Class Counterclaim"). The Class Counterclaim as filed did not expressly seek class certification. The Class Counterclaim alleges, and the Bank Parties deny, that the Original Developers breached the fiduciary duty of loyalty, and that this breach should be imputed to REDUS and Wells Fargo (the "Imputation Claim"). The Representative Plaintiffs also alleged a host of contract claims in relation to the Contract, including that the Contract was unlawful, unconscionable, void as against public policy, and that REDUS and Wells Fargo had been unjustly enriched through receipt of the Price Differential following the Foreclosure Sale (individually, the "Contract Claims", and together with the Imputation Claim, the "Class Claims") v3 10

11 26. The Bank Parties vigorously defended against the Class Claims, and moved to dismiss those Claims. Substantial briefing was undertaken by the Parties, and the Court of Chancery heard the oral arguments of the Parties. 27. By Order dated August 29, 2014, the Court granted in part and denied in part the Bank Parties' motion to dismiss the Class Claims. The Court s Order granted the request to dismiss the Class Counterclaim with respect to the claims that the Contract was both an unlawful contract and void against public policy. The Court s Order denied the Bank Parties' motion to dismiss the Class Counterclaim with respect to the Class Claims of unconscionability, unjust enrichment, and the Imputation Claim (the "Remaining Class Claims"). VI. The Derivative Litigation 28. On October 13, 2014, Derivative Plaintiff James W. Williams, IV filed a complaint (the "Derivative Complaint") in Delaware Court of Chancery asserting a single derivative claim on behalf the PCA against the Bank Parties. The Derivative Complaint seeks derivative and direct relief against the Bank Parties with respect to the Contract. Lead Plaintiffs' Counsel in the Class Action, Robert J. Valihura, Jr., Esquire, also represents Plaintiff James W. Williams, IV in the Derivative Action. Among other things, the Derivative Complaint alleges, and the Bank Parties deny, that the Bank Parties breached their fiduciary duties by failing to reduce the Contract v3 11

12 Price to the amount of the Bulk Services Fee when the Bank Parties were in a position to do so (the "Derivative Claim"). 29. Lead Plaintiffs Counsel undertook and agreed to represent the Derivative Plaintiff on the Derivative Claim on a contingent fee basis, with payment for legal fees, costs and expenses, including deposition transcript costs, court costs, travel costs and those costs incurred in connection with retaining and working with or deposing expert witnesses, being awarded to Lead Plaintiffs Counsel solely upon (i) pursuit of the litigation and achieving a benefit for the PCA, and thereby the Homeowners, and (ii) upon application to the Court of Chancery, following the conclusion of the case, based on the factors set forth under well-established Delaware case law. 30. Shortly following the filing of the Derivative Action, the parties attorneys negotiated an agreement, which was memorialized as an Order of the Court of Chancery, that all discovery taken in the Class Action could be used in the Derivative Action. 31. The Bank Parties vigorously defended the Derivative Action and the Derivative Claims, and moved to dismiss the Derivative Action. Discovery in the Derivative and the Class Actions continued during the briefing and the outcome on the motion to dismiss. The parties submitted substantial briefing, and following oral argument before the Court of Chancery, the Court issued an Opinion and Order dated v3 12

13 July 13, 2015, in which the Court denied the Bank Parties motion to dismiss the Derivative Action finding that the Derivative Claim stated a cause of action under Delaware law sufficient to allow the matter to proceed. VII. Discovery in the Class and Derivative Actions 32. The Parties in the Class and Derivative Actions engaged in substantial discovery, including multiple sets of interrogatories and requests for admission. The Bank Parties, on behalf of themselves and the PCA, produced boxes of documents containing thousands of pages of documents concerning matters relating to the Class Claims and the Derivative Claims, including documents exchanged between the Original Developers, PIM, Goldstein, Verizon and the Bank Parties concerning the Contract, the Bulk Services Agreement, the Marketing Agreement as well as the Contract Price, Bulk Services Fee and the Price Differential. The Receiver and Verizon also engaged in substantial document production relating to those Claims and matters. Substantial additional effort by counsel, including many s, demand letters and verbal requests, went into ensuring that all documents relevant to the pending matters were produced by the Bank Parties and their affiliates. 33. The Homeowner Parties and the Derivative Representative, in turn, produced documents in their possession which related to the Class and Derivative Claims, and to meet demands by counsel for the Bank Parties, substantial effort went into ensuring that thousands of pages of documents relevant to the matters were v3 13

14 produced by them. Several sets of contention interrogatories were propounded and responded to during the course of the litigation. 34. Following review and consideration of the documents and discovery responses, the parties undertook depositions of the critical witnesses relevant for both the Class and Derivative Claims. Counsel for the Bank Parties took the deposition of the eight (8) Homeowner Parties, the Derivative Representative and several Homeowners and other witnesses, including a representative of PIM, which had been identified by counsel as being knowledgeable about the Class and Derivative Claims and who might be called at trials of the matters. Counsel in the Class and Derivative Actions prepared for, attended and defended each of those depositions, including those at The Peninsula and in Virginia Beach, Virginia. 35. Lead Plaintiffs Counsel in the Class and Derivative Actions took the all-day depositions of two (2) representatives of the Bank Parties in North Carolina, and one (1) additional representative of the Bank Parties in Delaware, and half-day depositions each of three (3) representatives of the Receiver, all in North Carolina, all of whom had been identified by counsel for the Bank Parties as being knowledgeable about the Class and Derivative Claims and all of whom might be called at trials of those matters. 36. The Parties each also designated expert witnesses, and counsel assisted in the preparation and production of documents and expert reports, and in the taking v3 14

15 and defending of the depositions of those two (2) expert witnesses, one of which was taken in Florida. 37. All of this discovery, deposition, document production and interrogatory responses, was available for use in both the Class and Derivative Actions. VIII. Dispositive Motion Practice in the Class Action 38. In the Class Action, the Bank Parties moved for summary judgment on their Verified Complaint (the "Arbitration Summary Judgment Motion") on December 8, Following the filing of multiple and substantial briefs by the Parties, and after oral argument before the Court of Chancery, the Court denied the Arbitration Summary Judgment Motion on July 13, Thereafter, on September 18, 2015, following the closing of discovery in the Class Action, the Bank Parties moved for summary judgment on the Class Counterclaim (the "Class Action Summary Judgment Motion"). Briefing on that Motion consisted of multiple and substantial briefs by the Parties, including multiple detailed affidavits and voluminous exhibits, and following that briefing, oral argument was held before Vice Chancellor John Noble. 40. While the Class Action Summary Judgment motion was under submission, the Vice Chancellor retired. His successor, Vice Chancellor Joseph R. Slights, III, was thereupon assigned to both the Class and Derivative Actions. On v3 15

16 March 29, 2016, Vice Chancellor Slights requested supplemental briefing on several issues he identified in the Class Action Summary Judgment Motion. 41. Following discussions among counsel for the Parties, on April 5, 2016, at the request of the Parties, the Court entered the Order Staying Litigation in both the Class and Derivative Actions to allow the Parties to engage in settlement negotiations. IX. Settlement of the Class Action and Derivative Litigation 42. In connection with efforts to settle the Actions, the Parties have engaged in arm's-length discussions and negotiations regarding a potential resolution of the claims asserted in the Actions. These negotiations included two (2) sets of allday mediation sessions in both May and December, 2016 with The Honorable Donald Parsons, former Vice Chancellor of the Court of Chancery. 43. After the initial mediation session concluded on May 24, 2016, counsel for the Parties reached an agreement-in-principle set forth in a Term Sheet (the "Term Sheet"). The Term Sheet provided, among other things, that once the contemplated settlement agreement was to be executed, the Contract, Bulk Services Contract, Marketing Agreement, and the Private Easement would be assigned to the PCA v3 16

17 44. Following the final mediation session held on December 13, 2016, the Parties agreed to a settlement (the "Settlement ") pending the Court's approval of the Stipulation and the settlement procedures included herein. 45. The Parties believe that the Settlement is in the best interests of the Parties, the Class, the PCA and the PCA's current and former members, and that the Stipulation which reflects the Settlement confers substantial benefits upon the PCA and the Class and that the interests of the Parties, the PCA, and the Class would best be served by settlement of the Actions on the terms and conditions set forth herein. X. Class and Derivative Claims and the Benefits of Settlement 46. Both the Representative Plaintiffs and the Derivative Plaintiff (collectively, the "Plaintiffs") believe that the claims asserted in the Actions have merit, but also believe that the settlement set forth below provides substantial and immediate benefits for the Class, the PCA, and the members of the PCA. In addition to these substantial benefits, the Plaintiffs and their counsel have considered: (i) the attendant risks of continued litigation and the uncertainty of the outcome of the Actions; (ii) the probability of success on the merits; (iii) the inherent problems of proof associated with, and possible defenses to, the claims asserted in the Actions; (iv) the desirability of permitting the settlement to be consummated according to its terms; (v) the expense and length of continued proceedings necessary to prosecute the Actions against the Bank Parties through trial and appeals; and (vi) the v3 17

18 conclusion of the Plaintiffs and their counsel that the terms and conditions of the Stipulation are fair, reasonable, and adequate, and that it is in the best interests of the Class, the PCA, and the members of the PCA to settle the action on the terms set forth herein. 47. Based on Lead Plaintiffs' Counsel's thorough review and analysis of the relevant facts, allegations, defenses, and controlling legal principles, Lead Plaintiffs' Counsel believes that the settlement set forth in this Stipulation is fair, reasonable, and adequate, and confers substantial benefits upon the Class, the PCA, and the members of the PCA. 48. Among the substantial benefits provided by this Settlement and considered by the counsel for Plaintiffs is that (i) the Contract and the related Telecommunications Services agreements will be transferred to the control of the PCA, the entity charged with managing the business and affairs of the community on behalf of the homeowners and other land holders at The Peninsula, (ii) an Advisory Committee of the Board of Directors of the PCA will be created that will provide advice to the Board concerning the provision of Telecommunication Services to the residents at The Peninsula and (iii) following the implementation of the Settlement, there will be a reduction of the quarterly Telecommunications Services assessment by the PCA from $ to $ per homeowner, or a total v3 18

19 savings of over $250, a year from all the current owners of homes at The Peninsula. Those terms would have remained in effect for another 13 years. 49. Based upon Lead Plaintiffs' Counsel's evaluation, as well as the Plaintiffs' own evaluation, the Plaintiffs have determined that the settlement is in the best interests of the Class, the PCA, and the members of the PCA, and have agreed to settle the Actions upon the terms and subject to the conditions set forth herein. NOW THEREFORE, IT IS HEREBY STIPULATED AND AGREED, BY AND AMONG THE PARTIES TO THIS STIPULATION, subject to the approval of the Court pursuant to Court of Chancery Rules 23 and 23.1, that the Actions shall be fully and finally compromised and settled, the Released Claims shall be released, and the Actions shall be dismissed with prejudice, upon and subject to the following terms and conditions of the Settlement, as follows: 1. The Parties have executed and agree to be bound by the terms of the Settlement Agreement dated May 1, 2017 (the Settlement Agreement ). A copy of the Settlement Agreement is attached hereto and incorporated herein by reference as Exhibit A to this Stipulation. 2. As soon as practicable after the Stipulation is executed, the Parties will jointly apply to the Court for an order in substantially the form attached hereto as Exhibit B (the "Scheduling Order"). The Scheduling Order provides for, and the Parties similarly request, the approval of the: notice (the "Notice"), in the form v3 19

20 attached as Exhibit B1; the summary notice (the "Summary Notice"), in the form attached as Exhibit B2; the final order (the "Final Judgment and Order"), in the form attached as Exhibit B3. 3. The Effective Date of the Settlement proposed by this Stipulation shall be the date on which the Final Judgment and Order dismissing all claims against all the Bank Parties becomes final in that it is no longer subject to further appeal or reargument, either because the time for an appeal or reargument has expired with no appeal or reargument being sought, or an appeal has been taken but has been dismissed with no further right of appeal or reargument, or it has been finally affirmed with no further right of appeal or reargument, or it has otherwise become final; provided, however that the Effective Date shall not be conditioned upon or subject to resolution of any appeal from the Court of Chancery's entry of the Final Order and Judgment if any such appeal relates solely to an award of attorneys' fees or reimbursement of expenses. 4. In accordance with the Scheduling Order, the Bank Parties shall mail, or cause to be mailed, by first class U.S. mail or other mail service if mailed outside the U.S., postage prepaid, the Notice to all members of the Class (defined below) at their last known address appearing in the records maintained by or on behalf of the PCA. Further, the Summary Notice will be published in the News Journal, or another newspaper of general circulation in Delaware. In addition, this Stipulation with v3 20

21 Exhibits, including the full Settlement Agreement, will be available for review at 5. All costs of preparing, delivering, serving and/or publishing the Notice and the Summary Notice, or any additional notice the Court of Chancery may order, shall be shared equally by the Parties and shall be paid in the manner set forth in the Settlement Agreement. 6. Solely for the purposes of this settlement, the Parties stipulate and agree (i) to certification of the action captioned Mayer v. REDUS Peninsula Millsboro, LLC, C.A. No VCS as a class action on behalf of the Class (defined below), pursuant to Rules 23(a), 23(b)(1) and 23(b)(2), as a non-opt-out class; (ii) that plaintiffs Mayer, Shanaphy, Putt, Burrall, Dieringer, Gee, Harrod, and Stanley have acted and shall continue to act as representatives of the Class; (iii) that the Lead Plaintiffs' Counsel, Robert J. Valihura, Jr. of The Law Office of Robert J. Valihura, Jr., has acted and shall continue to act as Class Counsel; and (iv) to a finding (a) that the Class is so numerous that joinder of all members thereof is impracticable, (b) that there are questions of law or fact common to the Class, (c) that the claims of the Representative Plaintiffs are typical of the claims of the Class, (d) that the Representative Plaintiffs and Class Counsel will fairly and adequately represent the interests of the Class, (e) that prosecution of separate actions would create a risk of inconsistent adjudications, (f) that the Bank Parties have acted or refused to act on v3 21

22 grounds generally applicable to the Class, thereby making appropriate final injunctive relief with respect to the Class as a whole, and (g) a class action is superior to individual litigation as a method for the fair and efficient adjudication of the Class Action. 7. The Class shall be composed of any and all record owners of property at The Peninsula or members of the PCA who held such property or membership at any time between December 24, 2004 and April 30, 2017, and their respective successors-in-interest, successors, predecessors-in-interest, predecessors, representatives, trustees, executors, administrators, heirs, assigns or transferees, immediate and remote, and any person or entity acting for or on behalf of, or claiming under, any of them, and each of them, together with their predecessors and successors and assigns, but excluding the Bank Parties and/or any of their family members, parent entities, associates, affiliates or subsidiaries and the Original Developers and Goldstein and/or any of their members, associates, affiliates or subsidiaries (the "Class"). 8. At the Settlement Hearing the Parties will jointly request the approval of the Settlement and the Settlement Agreement, the entry of the Final Judgment and Order and the approval of the award of fees, costs and expenses for Lead Plaintiffs Counsel, so long as the total amount sought does not exceed $200, v3 22

23 9. In the event this Settlement Agreement is not fully approved and consummated, the certification of the Class and appointment of the Representative Plaintiffs and Class Counsel shall automatically be vacated, and the Action shall proceed as though the Class had never been certified and the Representative Plaintiffs and Class Counsel had never been appointed. All other statements in any and all pleadings and other papers related to this settlement shall not be binding on any party if the Settlement Agreement is not consummated. However, this paragraph shall survive the termination of this Stipulation of Settlement. 10. Upon the Final Judgment and Order becoming final and subject to Section 5 of the Settlement Agreement, any and all past, present or future claims, actions, rights, damages, losses, equities, debts, notes, contracts, agreements, obligations, duties, causes of action, suits, demands, costs, expenses, matters or issues (whether known or unknown, contingent or absolute, accrued or unaccrued, apparent or unapparent) that have been or could have been asserted by the Derivative Plaintiff, the Class, the Class' beneficiaries, agents, representatives, or any other person acting or purporting to act on and member of the a Class Plaintiff's behalf, whether representative or absent, or by the PCA, or by any officer, director and/or member of the PCA acting or purporting to act on the PCA's behalf, against Wells Fargo, REDUS, REDUS Properties, LandTech Receiver Services, LLC, Peninsula LLC, PIM, OA-BP Marina Bay-Lakeside, LLC ("OA"), their present and former v3 23

24 affiliates, subsidiaries, associates, agents, employees, attorneys, insurers, advisors, heirs, executors, administrators, successors and assigns, whether or not served with process and whether or not such person(s) appeared in these Actions, that have arisen or could have arisen from any of the acts, facts, transactions, occurrences, representations or omissions set forth, alleged, or otherwise asserted in these Actions (the "Released Plaintiffs Claims"), shall be individually and collectively compromised, settled, released, discharged and dismissed with prejudice. Notwithstanding the foregoing, the following claims are unconditionally preserved and are not in any way compromised, settled, released, indemnified, discharged, dismissed and/or in any way otherwise affected: any claims to enforce the terms and conditions of the Stipulation, the Settlement itself, the Settlement Agreement executed simultaneously with this Stipulation, any agreement relating to the Settlement and/or any claims, rights or defenses in connection with any note, mortgage, security interest, or the like, in any fashion, held by Wells Fargo, REDUS, REDUS Properties, their beneficiaries, agents, representatives, or any other person acting or purporting to act on their behalf. 11. Upon the Final Judgment and Order becoming final and subject to Section 5 of the Settlement Agreement, any and all past, present or future claims, actions, rights, damages, losses, equities, debts, notes, contracts, agreements, obligations, duties, causes of action, suits, demands, costs, expenses, matters or v3 24

25 issues (whether known or unknown, contingent or absolute, accrued or unaccrued, apparent or unapparent) that have been or could have been asserted by the Bank Parties, their beneficiaries, agents, representatives, or any other person acting or purporting to act on their behalf against the PCA, the Class, or the Derivative Plaintiff, and/or their respective present and former affiliates, associates, agents, directors, officers, employees, attorneys, insurers, advisors, heirs, executors, administrators, successors and assigns whether or not served with process and whether or not such person(s) appeared in this Action, that have arisen or could have arisen from any of the acts, facts, transactions, occurrences, representations or omissions set forth, alleged, or otherwise asserted in this Action (individually, the "Released Defendants' Claims", and together with the Released Plaintiffs Claims, the "Released Claims"), shall be individually and collectively compromised, settled, released, discharged and dismissed with prejudice. Notwithstanding the foregoing, the following claims are unconditionally preserved and are in not any way compromised, settled, released, indemnified, discharged, dismissed and/or in any way otherwise affected: any claims to enforce the terms and conditions of any note, mortgage, security interest, or the like, in any fashion, held by Wells Fargo, REDUS, REDUS Properties, their beneficiaries, agents, representatives, or any other person acting or purporting to act on their behalf v3 25

26 12. Neither this Stipulation nor any of the negotiations, statements, transactions, or proceedings in connection with this Settlement shall constitute or be construed as an admission by any of the Bank Parties of any fault, wrongdoing, or liability whatsoever, or as an admission that the Representative Plaintiffs or the Derivative Plaintiff, the PCA, or any member of the PCA has suffered any damages, or as an admission by either the Representative Plaintiffs or the Derivative Plaintiff of any lack of merit of their claims. 13. If the Court does not approve the Settlement or an appellate court reverses, vacates or modifies the order approving the Settlement, then: (a) all provisions of this Stipulation shall become null and void for all purposes, and all negotiations, transactions and proceedings connected with it (i) shall be without prejudice to the rights of any party to assert any claim or defense in these Actions, (ii) shall not be deemed or construed as evidence or an admission by any party of any fact, matter, or thing, (iii) shall not be admissible in evidence or used in any subsequent proceedings in these Actions or any other action or proceeding; (b) no party shall be entitled to reimbursement from any other party for notification costs; and (c) nothing herein shall be deemed to foreclose any argument or claim that any member of the Class might assert if the Settlement is not approved. 14. The obligations of the Bank Parties under this Stipulation, other than the Bank Parties' obligation to pay all costs incurred with providing notice of the v3 26

27 proposed Settlement in the first instance, are conditioned upon the entry of the Final Judgment and Order and all transactions preparatory or incident thereto. Notwithstanding anything in this Stipulation to the contrary, the effectiveness of the releases relating to the settled claims and the other obligations of the Representative Plaintiffs, the Derivative Plaintiffs, and the Bank Parties under the Settlement shall not be conditioned upon or subject to the resolution of any appeal from the Court of Chancery's entry of the Final Order and Judgment that relates solely to the issue of Lead Plaintiffs' Counsel's application for an award of attorneys' fees and/or reimbursement of costs and expenses. 15. The Court may consider and rule upon the fairness, reasonableness, and adequacy of the Settlement independently of any award of attorneys' fees or expenses requested by Lead Plaintiffs' Counsel. 16. The Stipulation and its exhibits shall be deemed to have been mutually prepared by the settling parties and shall not be construed against any of them by reason of authorship. 17. The determination of all disputed questions of law and fact relating to the Settlement shall be under the authority of the Court. 18. Without further order of the Court, the parties may agree to reasonable extensions of time to carry out any of the provisions of this Stipulation v3 27

28 19. This Stipulation shall be deemed effective only (a) upon execution by all parties to this Stipulation, and (b) the simultaneous execution of the Settlement Agreement by all parties to such agreement. This Stipulation may be amended or any of its provisions waived only by a writing executed by all parties hereto, or their lawful successors or assigns. 20. Any failure by any party to insist upon the strict performance by any other party of any of the provisions of this Stipulation shall not be deemed a waiver of any of the provisions hereof, and such party, notwithstanding such failure, shall have the right thereafter to insist upon the strict performance of any and all of the provisions of this Stipulation. 21. This Stipulation shall be construed and enforced in accordance with the laws of the State of Delaware, without regard to the conflicts of law provisions thereof. Any action to enforce, construe or challenge any provision of this Stipulation shall be filed exclusively in the Delaware Court of Chancery. 22. The parties and their attorneys agree to cooperate fully with one another in seeking the Court's approval of this Stipulation and Settlement, and to use their best efforts to effect, as promptly as practicable, the consummation of the Settlement and the dismissal of the Action. All parties shall execute any documents reasonably necessary and required to effectuate the terms of this Stipulation and Settlement v3 28

29 23. This Stipulation may be executed in counterparts and all counterparts so executed shall together be deemed to constitute one complete agreement, and each such counterpart shall be deemed to be an original. Facsimile copies of this Stipulation and the signatures of the parties hereto shall be deemed to be originals. 24. The exhibits to this Stipulation constitute an integral part of the Stipulation. 25. This Stipulation shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. 26. The Representative Plaintiffs, the Derivative Plaintiff, and their counsel agree they will not either among themselves or in concert with anyone else, issue any press release or affirmatively seek any publicity relating to this Settlement (except to the extent necessary to give binding effect to the settlement). Moreover, if any party (or their representatives) receives any inquiry from any third party or the media or press relating to this Stipulation or the Settlement, they shall disclose only that the Action has settled and refer such third party to counsel for the Representative Plaintiffs and counsel may respond to such third party inquiries and/or refer the third party to the Court file and/or the Stipulation, but not in a way that encourages publicity to the general public. The parties acknowledge and agree that there is no adequate remedy at law with respect to the enforcement of this anti-publicity provision. Therefore, the parties agree that upon the unlikely violation of such v3 29

30 provision, the non-violating party is entitled to immediate and permanent injunctive relief to enforce the provisions of this paragraph. 27. Each of the attorneys executing this Stipulation on behalf of one or more parties hereto ( Client(s) ) warrants and represents that he or she has (a) reviewed the contents of this Stipulation with their respective Client(s) and such Client(s) fully understand the terms of this Stipulation and their Client(s) agree to be bound by all terms of this Stipulation and (b) been duly authorized and empowered to execute this Stipulation on behalf of each such Client(s). DATED: May 12, 2017 The Law Office of Robert J. Valihura, Jr. /s/ Robert J. Valihura, Jr. Robert J. Valihura, Jr. (#2638) 3704 Kennett Pike, Suite 200 Greenville, DE Counsel for James W. Williams, IV and Defendants/Counterclaim Plaintiffs Deb Putt, Neal Mayer and Charles Burrall and Respectfully submitted, McCarter & English LLP /s/ David White David White (# 2644) Renaissance Centre 405 N. King Street 8th Floor Wilmington, DE (302) and Michael Leo Hall Burr & Forman LLP 420 North 20th Street Suite 3100 Birmingham, AL (205) v3 30

31 Marks, O'Neill, O'Brien, Doherty & Kelly, P.C. /s/ Michael F. Duggan Michael F. Duggan (#3269) 300 Delaware Ave, Suite 900 Wilmington, DE Attorney for Plaintiffs, Counterclaim Defendants, and Derivative Defendants Counsel for Defendants/Counterclaim Plaintiff John Shanaphy and Whiteford, Taylor & Preston, LLC /s/ Chad J. Toms Chad J. Toms, Esq. (#4155) The Renaissance Centre 405 N. King St., Suite 500 Wilmington, DE Attorneys for Defendants/Counterclaim Plaintiffs Don Dieringer, John Gee, David Harrod and Marc Stanley v3 31