2022 SilverRock - Estoppel CertificateESTOPPEL CERTIFICATE
To: SilverRock RGC Preferred, LLC (the "Borrower")
SilverRock Development Company, LLC (the "Developer")
SilverRock Phase I, LLC (the "SRPT')
SilverRock Resort Investment LLC and SilverRock Resort Investment M LLC
(collectively, the "Lender")
Fidelity National Title (the "Title Company")
Re: SilverRock Development/La Quinta, California
This Certificate is delivered in connection with SilverRock RGC Preferred, LLC's borrowing of
funds from Lender to purchase certain preferred equity interests of SRPI and, in turn, SRPI shall
use the proceeds derived from the Loans (as defined in those Loan and Security Agreements by
and between Borrower and each Lender the "Loan Agreements") to finance the acquisition,
development, construction, and operation of an approximately 500-acre site, which includes,
among other proposed uses and option for Developer to purchase approximately 190 acres, the
development, construction, and operation of two hotels, (i) a full service, 134 room luxury hotel
("Luxury Hotel") and 29 branded single-family luxury residences (the "Luxury Residences")
branded by Montage and (ii) a full -service 200-room lifestyle hotel (the "Lifestyle Hotel") and
55 condominium style residences branded by Pendry (the "Lifestyle Residences"), located in
Riverside County, California at 79179 Ahmanson Lane, La Quinta, California to be commonly
referred to as the SilverRock Resort & Residences (collectively, the "Project"). The following
documents encumber the Project and have been entered into with the City of La Quinta (the
"City"):
1. Purchase, Sale and Development Agreement dated November 19, 2014, as
amended by that certain Amendment No. 1 to Purchase, Sale and Development Agreement dated
October 29, 2015, as amended by that certain Amendment No. 2 to Purchase, Sale and
Development Agreement dated April 18, 2017, as amended by that certain Amendment No. 3 to
Purchase, Sale and Development Agreement dated November 28, 2018, and as amended by that
certain Amendment No. 4 to Purchase, Sale and Development Agreement dated October 21,
2021 (collectively, the "PSDA");
2. Memorandum of Purchase, Sale, and Development Agreement (Phase IA
Property — PSDA Amendment No. 2) dated May 3, 2017 recorded on November 6, 2017 as
Document No. 2017-0463953, together with that certain Amendment to Memorandum of
Purchase, Sale, and Development Agreement (Phase 1A Property — PSDA Amendment No. 2)
dated November 28, 2018 recorded November 28, 2018 as Document No. 2018-0464672
(collectively, the "Amendment 2 Memorandum");
3. Memorandum of Purchase, Sale, and Development Agreement (Phase 1B
Property — PSDA Amendment No. 3) dated November 28, 2018 and recorded on November 28,
2018 as Document No. 2018-0464675 (the "Amendment 3 Memorandum");
Estoppel Certificate - SilverRock Development/City of La Quinta
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4. Development Agreement 2014-1001 Approved by Ordinance No. 520 dated
December 18, 2014 recorded December 18, 2014 as Document No. 2014-0484106 (the
"Development Agreement");
5. Grant Deed (Phase - lA Property - PSDA Amendment No. 2) dated May 3, 2017
recorded November 6, 2017 as Document No. 2017-0463950, as amended by the Amendment To
Grant Deed (Phase - lA Property - PSDA Amendment No. 2) dated November 7, 2018 recorded
November 28, 2018 as Document No. 2018-0464670 (the "Phase 1A Grant Deed");
6. Grant Deed (Phase - 1B), dated November 7, 2018, and recorded November 28,
2018 as Document 2018-464674) (the "Phase 1B Grant Deed");
7. Agreement Containing Covenants, Conditions and Restrictions Affecting Real
Property (Luxury Hotel) dated May 3, 2017 and recorded November 6, 2017 as Document No.
2017-0463952, as amended and restated by that certain Amended and Restated Agreement
Containing Covenants, Conditions and Restrictions Affecting Real Property (Luxury Hotel)
dated November 28, 2018 and recorded November 28, 2018 as Document No. 2018-0464671,
and amended by that certain Amendment No. 1 to Amended and Restated Agreement Containing
Covenants, Conditions and Restrictions Affecting Real Property (Luxury Hotel) dated October
12, 2021 and recorded October 13, 2021 as Document No. 2021-0606108 (collectively, the
"Luxury CCR");
8. Agreement Containing Covenants, Conditions, and Restrictions Affecting Real
Property (Lifestyle Hotel) dated November 28, 2018 recorded November 28, 2018 as Document
No. 2018-0464678, as amended by that certain Amendment No. 1 to Agreement Containing
Covenants, Conditions, and Restrictions Affecting Real Property (Lifestyle Hotel) dated October
12, 2021 and recorded October 13, 2021 as Document No. 2021-0606083 (collectively, the
"Lifestyle CCR");
9. Covenant Affecting Real Property (Golf Course Use) recorded May 11, 2017 as
Document No. 2017-0189004, together with that certain Release of Covenant Affecting Real
Property (Golf Course Use) dated November 28, 2018 recorded November 28, 2018 as
Document No. 2018-0464679 (collectively, the "GC Covenant");
10. Covenant Affecting Real Property (Perimeter Landscaping and Trails) recorded
May 11, 2017 as Document No. 2017-0189266 (the "Trails Covenant");
11. Covenant Affecting Real Property (Ahmanson Ranch House) recorded May 11,
2017 as Document No. 2017-0189769 (the "Ranch Covenant');
12. Option Agreement Phase lA Property & Phase 1B Property (Excluding Planning
Areas 7, 8 and 9) and Termination of Prior Phase 1A Option Agreement dated November 28,
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2018 recorded on November 28, 2018 as Document No. 2018-0464676 (the "Phase 1A Option
Agreement");
13. Option Agreement (Phase 1B Property — PA7, 8 and 9) dated November 28, 2018
recorded November 28, 2018 as Document No. 2018-0464677 (the "Phase 1B Option
Agreement");
14. Grant of Easement and Agreement dated November 28, 2018 recorded November
28, 2018 as Document No. 2018-0464680 (the "Grant of Easement");
15. Declaration of Conditions and Reservation of Easements dated November 28,
2018 recorded November 28, 2018 as Document No. 2018-0464669 (the "Declaration and
Reservation of Easements");
16. Special Domestic Water System, Sanitation System, and Irrigation System
Modification Installation Agreement, by and among Coachella Valley Water District (CVWD),
Developer, and City, dated September 12, 2019, recorded September 13, 2019 as Document No.
2019-0359003 (the "Tri-Party Water Agreement");
17. Agreement to Share Transient Occupancy Tax Revenue (Luxury Hotel) dated
November 19. 2014 (the "TOT Luxury Agreement");
18. Agreement to Share Transient Occupancy Tax Revenue (Lifestyle Hotel) dated
November 19, 2014 (the "TOT Lifestyle Agreement"); and
19. Golf Course Realignment Funds Disbursement Agreement dated May 10, 2017
("GC Realignment Agreement").
The GC Realignment Agreement, TOT Lifestyle Agreement, TOT Luxury Agreement, Tri-Party
Water Agreement, Declaration and Reservation of Easements, Grant of Easement, Phase 1B
Option Agreement, Phase lA Option Agreement, Ranch Covenant, Trails Covenant, GC
Covenant, Lifestyle CCR, Luxury CCR, Phase 1B Grant Deed, Phase 1A Grant Deed,
Development Agreement, Amendment 3 Memorandum, Amendment 2 Memorandum, and
PSDA are collectively referred to herein as the "Project Documents." Any capitalized terms
which are not defined herein shall have the same meaning as provided in the Project Documents.
The City certifies that it is a party to, or beneficiary of covenants in, the Project
Documents and further certifies the following as of the date hereof:
1. The Project Documents remain in full force and effect, have not been amended
except as provided above or as follows (if none, state NONE):
Modified by Assignment and Assumption Agreements of Developer to affiliates of Developer,
with the consent of the City, such as by Document No. 2018-0465379, recorded Nov. 29, 2018,
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and Document No. 2019-0120800, recorded April 10, 2019.
[Ident fy any amendments to the Project Documents or attach an annex hereto]
2. Notwithstanding any public utility or standalone easement documents, the Project
Documents consist of all of the conditions, restrictions, covenants, and development agreements
related to the Project except (if none, state NONE):
Without having conducted title review or obtaining a current title report, and having no
obligation to do so, the City is unaware of construction deeds of trust or UCC Financing
Statements which may contain conditions, restrictions, covenants, and development agreements
related to the Project. With this admonition, the City is unaware of other agreements that may
relate to the Project.
[Identify any additional documents to the Project Documents or attach an annex hereto].
3. As of the undersigned date, there are [no defaults] [the following defaults} under
the Project Documents:
There are no pending notices of default issued by City under the Project Documents.
[Identify any defaults to the Project Documents or attach an annex hereto]
4. As of the undersigned date, there are [no outstanding obligations] [the following
outstanding obligations] under the Project Documents:
Under Section 14(a) of the Tri-Party Water Agreement, Developer owes City approximately
$900,900 for costs and expenses incurred by the City for the construction of the SilverRock Way
improvements ("City SRW Improvements" as defined therein). The City acknowledges payment
will be made through Developer's senior loan closing anticipated to occur within sixty (60) days
from the date hereof.
[Identify any outstanding obligations to the Project Documents or attach an annex hereto]
5. As of the undersigned date, there are [no violations] [the following violations]
under the Project Documents:
Under the Schedule of Performance for the PSDA (Amendment No. 4), the following have not
been timely commenced or completed: (1) Completion of Luxury Hotel Guest Room Framing,
(2) Start of Lifestyle Hotel Vertical Construction, and (3) Completion of the Permanent Golf
Clubhouse Vertical Construction; Items (1) and (2) are "Project Milestones" (as defined) that
have not been met.
The violations of the Schedule of Performance under the PSDA, identified above, are also a
violation of Section 2.1.1 of the Development Agreement.
The violation of Section 14(a) of the Tri-Party Water Agreement, identified above.
[Identify any violations to the Project Documents or attach an annex hereto]
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6. While the violations under the PSDA and Development Agreement identified
above may trigger the City's remedies under the Project Documents, as of the date hereof, the
City has not exercised any such remedies thereunder. Further, the City has not delivered written
notice to Developer to such violations or exercise of any City remedies, and the City does not
intend to exercise any such remedies under the Project Documents as long as Developer (or its
approved Affiliates) proceeds to close on Developer's senior loan (referenced in Paragraph 4,
Page 4 of this Estoppel) and timely resumes full -capacity construction of the Project (including
any remedial construction measure necessary to resume full -capacity construction based on the
recent slow -down of construction).
7. While the financing described herein does not meet the requirements necessary
for City consent, the City hereby acknowledges the financing between Borrower and Lender as
provided above.
8. Lender, Borrower, Developer, SRPI and Title Company may rely on this Estoppel
Certificate in connection with the financing identified above.
[Signatures appear on following page.]
Estoppel Certificate — SilverRock Development/City of La Quinta
Page 6
Dated as of 12/02 , 2022.
ATTEST
By:
Name: Monika Radeva
Title: City Clerk
APPROVED AS TO FORM:
By:
Name: William H. Ihrke
Title: City Attorney
CITY:
CITY OF LA QUINTA,
a California municipal corporation and charter city
By:
e: Jon McMillen
Title: City Manager