What to look for in a deed-in-lieu foreclosure approval letter?

I have applied for a deed-in-lieu foreclosure for a property in Maryland (I tried short sale without success). There are 2 liens on the house.

The 2nd lender has agreed to release the 2nd lien if I pay them a small amount of money. They are drafting a letter of approval (to give to the 1st lender) and a promissory note to pay off that small amount.

1. What should I look for in those letters?

2. Does it mean that the 2nd lender will waive any deficiency judgment once I pay them the agreed-upon amount to release the 2nd lien?

3. What are the tax implications?

4. Are there any surprises I am not aware of? 

Thank you for your feedback.