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2025-05-09 DIP Financing Credit Facility Loan & Security AgrmtDocusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 DEBTOR -IN -POSSESSION CREDIT FACILITY LOAN AND SECURITY AGREEMENT dated as of January 23, 2025 between SILVERROCK DEVELOPMENT COMPANY, LLC, RGC PA 789, LLC, SILVERROCK LIFESTYLE RESIDENCES, LLC, SILVERROCK LODGING, LLC, SILVERROCK LUXURY RESIDENCES, LLC AND SILVERROCK PHASE I, LLC, as Borrowers, and CITY OF LA QUINTA, as Lender 1 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 DEBTOR -IN -POSSESSION CREDIT FACILITY LOAN AGREEMENT This DEBTOR -IN -POSSESSION CREDIT FACILITY LOAN AGREEMENT (as amended, amended and restated, supplemented or otherwise modified from time to time, this "Agreement"), dated as of January 23, 2025, between SILVERROCK DEVELOPMENT COMPANY, LLC, a Delaware limited liability company, RGC PA 789, LLC, a Delaware limited liability company, SILVERROCK LIFESTYLE RESIDENCES, LLC, a Delaware limited liability company, SILVERROCK LODGING, LLC, a Delaware limited liability company, SILVERROCK LUXURY RESIDENCES, LLC a Delaware limited liability company AND SILVERROCK PHASE I, LLC, a Delaware limited liability company (each, a "Borrower" or a "Debtor" and collectively, the "Borrowers" or the "Debtors"), and CITY OF LA QUINTA, a California municipal corporation, as Lender (the "City" or the "Lender"), with reference to the following recitals: RECITALS WHEREAS, on August 5, 2024 (the "Petition Date"), the Borrowers (as debtors each, a "Debtor" and collectively, the "Debtors") commenced chapter 11 cases, which have been administratively consolidated for procedural purposes only under Chapter 11 Case No. 24-11647 MFW (each case, a "Chapter 11 Case" and collectively, the "Chapter 11 Cases") in the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"). The Borrowers continue to operate their businesses and manage their properties as debtors -in -possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code; WHEREAS, on September 20, 2024, Debtors filed their Motion of Debtors Pursuant to Sections 105, 361, 362, 363, 364, and 507 of the Bankruptcy Code, Bankruptcy Rule 4001, and Local Rule 4001-2, for Interim and Final Orders (I) Authorizing Debtors to Obtain Postpetition Financing from the City of La Quinta; (II) Granting Non -Priming DIP Lender Liens and Super - Priority Claims; (III) Scheduling a Final Hearing; and (IV) Granting Related Relief [Docket No. 125] (the "Original DIP Financing Motion"), which included the Term Sheet, proposed order, and other terms and conditions for the proposed alternative DIP Financing to be provided by the Lender; WHEREAS, on October 1, 2024, the Bankruptcy Court entered the Interim Order (I) Authorizing the Debtors to Obtain Interim Postpetition Secured Financing, (II) Granting Non - Priming Liens and Superpriority Administrative Expense Status, and (III) Scheduling a Final Hearing [Docket No. 162] the ("First Interim DIP Order") granting the Original DIP Financing Motion, on an interim basis; WHEREAS, on October 18, 2024, the Bankruptcy Court entered the Second Interim Order (I) Authorizing the Debtors to Obtain Additional Interim Postpetition Secured Financing, (II) Granting Non -Priming Liens and Superpriority Administrative Expense Status, and (III) Scheduling a Final Hearing [Docket No. 188] (the "Second Interim DIP Order") granting the Original DIP Financing Motion, on an interim basis; WHEREAS, on October 31, 2024, the Bankruptcy Court entered the Third Interim Order (I) Authorizing the Debtors to Obtain Additional Interim Postpetition Secured Financing, (II) Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 Granting Non -Priming Liens and Superpriority Administrative Expense Status, and (III) Scheduling a Final Hearing [Docket No. 208] (the "Third Interim DIP Order"), granting the Original DIP Financing Motion, on an interim basis; WHEREAS, on December 6, 2024, the Bankruptcy Court entered the Fourth Interim Order (I) Authorizing the Debtors to Obtain Additional Interim Postpetition Secured Financing, (II) Granting Non -Priming Liens and Superpriority Administrative Expense Status, and (III) Scheduling a Final Hearing [Docket No. 243] (the "Fourth Interim DIP Order" and, together with the First Interim DIP Order, the Second Interim DIP Order, and the Third Interim DIP Order, the "Interim DIP Orders"), granting the Original DIP Financing Motion, on an interim basis; WHEREAS, pursuant to the Interim DIP Orders, the Borrowers obtained interim funding from the City on a non -priming basis in the aggregate principal amount of $2,690,965.00 pursuant to the Original Term Sheet (the "Interim DIP Financing"); WHEREAS, the Interim DIP Financing does not provide the necessary funding to complete a fulsome sale process for the Project (as defined herein), and the Borrowers require total DIP Financing in the estimated amount of $11 million, inclusive of the Interim DIP Financing, to fund their intended sale process and propose a chapter 11 plan; WHEREAS, the Borrowers have requested that the Lender provide a multiple draw secured superpriority debtor -in -possession term loan facility (the "DIP Facility"), in the maximum principal amount of $11,000,000.00, including principal amounts previously funded by the City on an interim basis in connection with the Interim DIP Financing; WHEREAS, on or about December 10, 2024, the Borrowers and the City negotiated and agreed to that certain Term Sheet for Debtor -In -Possession Financing Facility (the "Term Sheet") and Memorandum of Understanding (the "MOU"); WHEREAS, on December 12, 2024, the Borrowers filed their Motion of Debtors Pursuant to Sections 105, 361, 362, 363, 364, and 507 of the Bankruptcy Code, Bankruptcy Rule 4001, and Local Rule 4001-2 for an Order (I) Authorizing Debtors to Obtain Postpetition Financing; (II) Granting DIP Lender Priming Liens and Super -Priority Claims; and (III) Granting Related Relief [Docket Nol. 246] (the "Final DIP Financing Motion"); WHEREAS, on January 23, 2025, the Bankruptcy Court entered the Final Order (I) Authorizing the Debtors to Obtain Postpetition Secured Financing, (II) Granting Priming Liens and Superpriority Administrative Expense Status, and (III) Granting Related Relief [Docket No. 330] (the "Priming DIP Order"); WHEREAS, on April 15, 2025, the Bankruptcy Court entered the Amended Final Order (I) Authorizing the Debtors to Obtain Postpetition Secured Financing, (II) Granting Priming Liens and Superpriority Administrative Expense Status, and (III) Granting Related Relief [Docket No. 437] (the "Amended Final DIP Order"); and WHEREAS, the City has agreed to provide the DIP Facility on the terms and subject to the conditions set forth herein and in the Final DIP Order (as defined herein). 2 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 AGREEMENT NOW, THEREFORE, in consideration of the foregoing, and the conditions set forth below, the parties hereto, intending to be legally bound, hereby agree as follows: Section 1. Definitions. In addition to the capitalized words and phrases used elsewhere in this Agreement, the following terms shall have the meanings set forth below: "Affiliate" of a Person has the meaning set forth in Section 101(2) of the Bankruptcy Code and also includes any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. For the purposes of this definition, the term "control" (including the terms "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise. "Agreement" has the meaning as provided in the first paragraph of this Agreement. "Bankruptcy Code" means Title 11 of the United States Code (11 U.S.C. § 101 et seq.). "Bankruptcy Court" has the meaning as provided in the recitals to this Agreement. "Borrower" or `Borrowers" has the meaning as provided in the first paragraph of this Agreement. "Business Day" means any day except Saturday, Sunday, any day that is a legal holiday under the laws of the United States or the State of California, or a day on which banking institutions are authorized or required by law or other government action to close. "Capital Lease" means, with respect to any Person, any lease of any property (whether real, personal or mixed) by that person as lessee that, in conformity with GAAP, is accounted for as a capital lease on the balance sheet of that Person. "Carve -Out" has the meaning provided in Section 3(b). "Chapter 11 Case" or "Chapter 11 Cases" has the meaning as provided in the recitals to this Agreement. "City" means the City of La Quinta, a California municipal corporation. "Closing Date" means the date on which (x) Lender shall have received a counterpart of this Agreement executed by the Borrowers and the Lender and (y) the Bankruptcy Court shall have entered the Final DIP Order. "Commitment" means $11,000,000 in principal amount, including amounts previously advanced by the Lender under the Interim DIP Orders. 3 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 "Commitment Period" means the period commencing upon the entry of the Final DIP Order and ending on the Commitment Termination Date. "Commitment Termination Date" means the earlier of: (a) December 15, 2025; (b) occurrence of an Event of Default; or (c) the Maturity Date. "Confirmation Order" means a Final Order of the Bankruptcy Court, in form and substance reasonably acceptable to the Lender, confirming a chapter 11 plan. "Contracts" means, collectively, with respect to Borrowers, the Intellectual Property Licenses, all sale, service, performance, equipment or property lease contracts, agreements or leases, and grants and all other contracts, agreements, leases or grants (in each case, whether third party or intercompany), between such Borrower and any third party, and all assignments, amendments, restatements, supplements, extensions, renewals, replacements or modifications thereof. "Copyrights" means, collectively, with respect to Borrowers, all copyrights (whether statutory or common law, whether established or registered in the United States or any other country or any political subdivision thereof, whether registered or unregistered and whether published or unpublished), all tangible embodiments of the foregoing and all copyright registrations and applications made by such Borrower, in each case, whether now owned or hereafter created or acquired by or assigned to such Borrower, together with any and all (i) rights and privileges arising under applicable law and international treaties and conventions with respect to such Borrower's use of such copyrights, (ii) reissues, renewals, continuations and extensions thereof and amendments thereto, (iii) income, fees, royalties, damages, claims and payments now or hereafter due and/or payable with respect thereto, including damages and payments for past, present or future infringements thereof, (iv) rights corresponding thereto throughout the world and (v) rights to sue for past, present or future infringements thereof. "CRO" means Douglas Wilson in his capacity as chief restructuring officer of the Debtors appointed pursuant to the CRO Order. "CRO Order" means the Interim Order (I) Approving (A) The Engagement of Douglas Wilson Companies and (B) The Appointment of Douglas Wilson as Chief Restructuring Officer Effective as of August 5, 2024, and (II) Granting Related Relief [Docket No. 109], as such may be amended, and any successor orders. "Deed of Trust" means collectively one or more Deed(s) of Trust and Assignment of Rents made by Borrowers, as grantors, to Stewart Title (or such other person acceptable to Lender), as trustee, for the benefit of the Lender, which Deed of Trust shall secure the DIP Collateral, substantially in the form as Exhibit B attached hereto and incorporated herein by reference. "Default" shall mean any event, act or condition described in Section 7 which with notice or lapse of time, or both, would constitute an Event of Default. "Deposit Accounts" means, collectively, with respect to each Borrower, (i) all "deposit accounts" as such term is defined in the UCC and in any event shall include all accounts and sub - accounts relating to any of the foregoing accounts and (ii) all cash, funds, checks, notes and 4 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 instruments from time to time on deposit in any of the accounts or sub -accounts described in clause (i) of this definition. "DIP Budget" shall have the meaning set forth in Section 6(a) of this Agreement. "DIP Collateral" means all real and personal property of Borrowers, now owned or hereafter acquired, and the products and proceeds thereof, including without limitation all right, title and interest of the Borrowers, or any of them, in real or personal property that any of the Borrowers has granted a Lien to the Lender or any other person under this Agreement (including the Pledged Collateral) or any of the other Loan Documents that secures the DIP Obligations pursuant to the Final DIP Order. "DIP Facility" has the meaning as provided in the recitals to this Agreement. "DIP Liens" has the meaning as provided in the Final DIP Order. "DIP Obligations" means all obligations of every nature of the Borrowers to Lender under the Loan Documents, including, without limitation, any liability of the Borrowers on any claim of Lender, whether or not the right to payment in respect of such claim is reduced to judgment, liquidated, unliquidated, fixed or contingent, matured, disputed, undisputed, legal, equitable, secured or unsecured, and whether or not such claim is discharged, stayed or otherwise affected by any bankruptcy, insolvency, reorganization or other similar proceeding. Without limiting the generality of the foregoing, the obligations of the Borrowers to Lender under this Agreement include (a) the obligation to pay principal, interest, charges, expenses, fees, attorneys' fees and disbursements, indemnities and other amounts payable by the Borrowers under any Loan Document and (b) the obligation to reimburse any amount in respect of any of the foregoing that the Lender, in its sole discretion, may elect to pay or advance on behalf of the Borrowers. "Disclosure Statement" means a disclosure statement for an plan filed pursuant to Section 10(c) of this Agreement in form and substance reasonably satisfactory to the Lender (as amended, amended and restated, supplemented or otherwise modified from time to time). "Disclosure Statement Order" means an order of the Bankruptcy Court, in form and substance reasonably satisfactory to the Lender, approving the Disclosure Statement. "Disposition" means (a) the sale, conveyance, transfer, license, lease or other disposition, whether in a single transaction or a series of related transactions, of property or assets (including by way of a sale and leaseback transaction) of the Borrowers (in each case, other than qualified capital stock of the Borrowers) or (b) the issuance or sale of capital stock of the Borrowers, whether in a single transaction or a series of related transactions. "Dollars" or "U.S. Dollars" and the sign "$" mean the lawful currency of the United States of America. "Event of Default" has the meaning provided in Section 7. "Existing Obligations" means the "Obligations" of one or more of the Borrowers to holders of liens, claims and encumbrances appearing of record as of the Petition Date, subject to a 5 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 determination of the validity, priority, amount and avoidability, of such liens, claims and encumbrances. "Final DIP Order" means the Amended Final DIP Order, as the same may be amended, amended and restated, supplemented or otherwise modified from time to time with the express written consent of the Lender and the Borrowers. "Final Order" means an order entered by the Bankruptcy Court as to which no stay has been entered and which has not been reversed, vacated or overturned, and for which no appeal or motion to reconsider has been timely filed or, if timely filed, such appeal or motion to reconsider has been dismissed or denied unless the Lender waives such requirement in writing. "GAAP" means United States generally accepted accounting principles as in effect from time to time. "Governmental Authority" means the government of the United States or any other nation, or of any political subdivision thereof, whether state, regional, county, municipal or local, and any agency, authority, instrumentality, regulatory body, ministry, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government. "Indebtedness" means, with respect to any Person, without duplication, (a) all indebtedness of such Person for borrowed money, but excluding obligations to trade creditors incurred in the ordinary course of business that are unsecured and not overdue by more than three (3) months unless being contested in good faith, (b) all reimbursement and other obligations with respect to letters of credit, bankers' acceptances and surety bonds, whether or not matured, (c) all obligations evidenced by notes, bonds, debentures or similar instruments, (d) that portion of obligations with respect to Capital Leases which is properly classified as a liability on a balance sheet in conformity with GAAP, (e) all obligations of such Person under commodity purchase or option agreements or other commodity price hedging arrangements, in each case whether contingent or matured, (f) all obligations of such Person under any foreign exchange contract, currency swap agreement, interest rate swap, cap or collar agreement or other similar agreement or arrangement designed to alter the risks of that Person arising from fluctuations in currency values or interest rates, in each case whether contingent or matured, and (g) all indebtedness referred to above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property or other assets (including accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such indebtedness. "Independent Manager" shall mean Christopher Sontchi, in his capacity as the sole manager of each of the Borrowers. "Intellectual Property Licenses" means, collectively, with respect to Borrowers, all license and distribution agreements with, and covenants not to sue, any other party with respect to any Trademark, Copyright or Trade Secret or any other trademark, copyright or trade secret, whether such Borrower is a licensor or licensee, distributor or distributee under any such license 6 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 or distribution agreement, together with any and all (i) renewals, extensions, supplements and continuations thereof, (ii) income, fees, royalties, damages, claims and payments now and hereafter due and/or payable thereunder and with respect thereto including damages and payments for past, present or future infringements or violations thereof, (iii) rights to sue for past, present and future infringements or violations thereof and (iv) other rights to use, exploit or practice any or all of the Trademarks, Copyrights or Trade Secrets or any other patent, trademark, copyright or trade secret. "Intellectual Property Collateral" means, collectively, Trademarks, Copyrights, Trade Secrets, Intellectual Property Licenses and all other industrial, intangible and intellectual property "Interim DIP Order" has the meaning as provided in the recitals to this Agreement. "Investment" means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of any direct or indirect (a) advance, loan, time deposit or other extensions of credit (other than advances or extensions of credit to customers, suppliers, directors, officers or employees of any Person in the ordinary course of business, and excluding any debt or extension of credit represented by a bank deposit other than a time deposit), (b) capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), (c) incurrence of a guarantee of any obligation of, or (d) any purchase or acquisition of shares, other equity interests, indebtedness or other similar instruments issued by, in each case, such other Persons and all other items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP, as applicable. "Lender" means the City. "Lien" means, with respect to any assets or property, (a) any mortgage, deed of trust, trust, deemed trust (statutory or otherwise), lien (statutory or otherwise), pledge, encumbrance, claim, charge, assignment, hypothecation, security interest or encumbrance of any kind, including any easement, right-of-way or other encumbrance on title to real property, in each of the foregoing cases whether voluntary or imposed by law, and any agreement to give any of the foregoing, (b) the interest of a vendor or a lessor under any conditional sale agreement, Capital Lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such property and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities. "Loan" or "Loans" has the meaning as provided in Section 2(a). "Loan Documents" means this Agreement, Promissory Note, Deed of Trust or any mortgage, fixture filings, and each other document delivered to the Lender in connection with this Agreement and/or the credit extended hereunder, in each case, as amended, amended and restated, supplemented or otherwise modified from time to time. "Margin Stock" shall have the meaning provided in Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof. 7 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 "Maturity Date" means the first to occur of: a. The effective date of a chapter 11 plan for any of the Borrowers in the Chapter 11 Cases; b. The closing of a sale and/or assignment of all or a substantial portion of any of the Borrowers' assets; c. The occurrence of an Event of Default with respect to the DIP Facility. d. The dismissal or conversion of the Chapter 11 Cases (or the case of any of the Borrowers), or appointment of a trustee with respect to any of the Borrowers. e. The resignation or termination of Douglas Wilson as chief restructuring officer without the advance written consent of the City. f. The resignation or termination of Christopher Sontchi as the sole manager of any of the Borrowers without the advance written consent of the City. g. December 31, 2025. "Milestones" has the meaning provided in Section 6(b). "Permitted Dispositions" means: (a) the granting of Permitted Liens, (b) a Sale Transaction pursuant to a sale order or confirmed plan both of which comply with the terms of this Agreement, the Final DIP Order, the Term Sheet and the MOU, and (c) de minimis asset sales pursuant to one or more orders of the Bankruptcy Court. "Permitted Indebtedness" means: (a) Indebtedness under this Agreement; (b) the Existing Obligations; (c) other Indebtedness outstanding on the date hereof as disclosed to, and approved by, the Lender prior to the date hereof; and (d) Indebtedness consisting of (x) unsecured guarantees incurred in the ordinary course of business with respect to surety and appeal bonds, performance bonds, bid bonds, appeal bonds, completion guarantee and similar obligations as disclosed to, and approved by, the Lender prior to the incurring of such obligations; or (y) unsecured guarantees arising with respect to customary indemnification obligations to purchasers in connection with Permitted Dispositions as disclosed to, and approved by, the Lender prior to the incurring of such obligations. "Permitted Liens" means (a) Liens created under the Loan Documents or the Final DIP Order, (b) Liens securing the Existing Obligations, (c) Liens in respect of Permitted Indebtedness described in clauses (a), (b), and (c) of the definition thereof, (d) Liens for unpaid taxes, assessments, or other governmental charges or levies that are not yet overdue for more than 60 days or which constitute prepetition claims in the Chapter 11 Cases, (e) Liens securing judgments for the payment of money not constituting an Event of Default hereunder, (f) Liens in favor of warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, incurred in the ordinary course of business and not in connection with the borrowing of money, and which Liens are for sums not yet overdue for more than 60 days or which constitute prepetition claims in the Chapter 11 Cases, (g) Liens on amounts deposited to secure the Borrowers' and their Subsidiaries' 8 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 obligations in connection with worker's compensation or other unemployment insurance, (h) Liens on amounts deposited to secure the Borrowers' and their Subsidiaries' reimbursement obligations with respect to surety or appeal bonds obtained in the ordinary course of business, (i) with respect to any real property, easements, rights of way, and zoning restrictions that do not materially interfere with or impair the use or operation thereof, (j) rights of setoff or bankers' liens upon deposits of cash in favor of banks or other depository institutions, solely to the extent incurred in connection with the maintenance of such deposit accounts in the ordinary course of business, and (k) a lien in favor of the Independent Manager to secure the payment of his allowed costs of defense with respect to the Borrowers' indemnification obligations; provided that, in the case of clauses (d), (e), (f), (g), (h), and (j), solely to the extent any such Liens are permitted by the Bankruptcy Code and, as may be required by the Bankruptcy Code, or authorized by the Bankruptcy Court; and further provided that nothing herein shall limit the Lender's priming rights under or pursuant to the Final DIP Order. "Person" means (i) any person, individual, corporation, company, partnership, joint venture, firm, limited liability company, joint stock company, estate, business trust, unincorporated organization, trust or association, (ii) the U.S. Trustee, (iii) any Governmental Authority or any political subdivision thereof, or (iv) any other entity. "Petition Date" has the meaning as provided in the recitals to this Agreement. "Project" means the Talus (formerly known as SilverRock) development and operations, as that development and operations apply to real property currently owned by Debtors, comprised of two luxury resort hotels with attached residences, appurtenant golf clubhouse and conference center, and other amenities, as more particularly prescribed in the operative agreements for said project by and between Debtor SilverRock Development Company and the City including that certain Purchase, Sale, and Development Agreement, as amended (originally entered into on or about November 19, 2014, and collectively referred to as the "PSDA") and that certain Development Agreement 2014-1001entered into on or about even date as the PSDA and recorded in the Riverside County, California, Office of Official Records on December 18, 2014, as Document No. 2014-0484106 ("Statutory Development Agreement"); for reference purposes, the "Project" is more specifically described and detailed in that certain Declaration of Jon McMillen in Support of City of La Quinta's Opposition to Motion of Debtors Pursuant to Sections 105, 361, 362, 363, 364, and 507 of the Bankruptcy Code, Bankruptcy Rule 4001, and Local Rule 4001-2, for Interim and Final Orders (I) Authorizing Debtors to Obtain Postpetition Financing; (II) Granting DIP Lender Liens and Super -Priority Claims; (III) Scheduling a Final Hearing; and (IV) Granting Related Relief [Docket No. 67]. "Proceeds" means "proceeds" as such term is defined in section 9-102 of the Uniform Commercial Code and, in any event, shall include, without limitation, all dividends, distributions or other income from the DIP Collateral, collections thereon or distributions with respect thereto. "Promissory Note" "means the Promissory Note Secured by Deed of Trust, executed by Borrowers evidencing the Loan and Borrowers' obligation to repay the same, substantially in the form as Exhibit A attached hereto and incorporated herein by reference. 9 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 "Receivables" means all (i) Accounts (as defined in the UCC), (ii) rights to payment under all Chattel Paper (as defined in the UCC), (iii) Payment Intangibles (as defined in the UCC), (iv) rights to payment under all Instruments (as defined in the UCC), (v) rights to payment under all General Intangibles (as defined in the UCC), and (vi) to the extent not otherwise covered above, all other rights to payment, whether or not earned by performance, for goods or other property sold, leased, licensed, assigned or otherwise disposed of, or services rendered or to be rendered, regardless of how classified under the UCC together with all of Borrowers' rights, if any, in any goods or other property giving rise to such right to payment and all records relating thereto. "Requirements of Law" means, with respect to any Person, any and all requirements of any Governmental Authority applicable to such Person having the force of law, including any and all laws, judgments, orders, decrees, ordinances, rules, regulations, statutes or case law. "Restricted Payment" means any distribution (whether in cash, securities or other property) with respect to any equity interest of the Borrowers or any Subsidiary thereof, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, defeasance, acquisition, cancellation or termination of any such equity interest, or on account of any return of capital to the Borrowers' or their Subsidiary's stockholders, partners or members (or the equivalent Persons thereof). "Sale Transaction" means a sale of all or substantially all of the Debtors' assets pursuant to Section 363 of the Bankruptcy Code or pursuant to a Plan. "Subsidiary" of a Person means a corporation, partnership, limited liability company, or other entity in which that Person directly or indirectly (i) owns or controls the shares of capital stock, limited liability company interests, membership interests or partner interests having ordinary voting power to elect a majority of the board of directors (or appoint other comparable managers or general partners) of such corporation, partnership, limited liability company, or other entity, as applicable, or (ii) controls the day to day operation of such Person. "Taxes" has the meaning provided in Section 10(e). "Term Sheet" has the meaning provided in the Recitals. "Trade Secrets" means, collectively, with respect to Borrowers, all know-how, trade secrets, manufacturing and production processes and techniques, inventions, research and development information, technical, marketing, financial and business data and databases, pricing and cost information, business and marketing plans, customer and supplier lists and information, all other confidential and proprietary information and all tangible embodiments of the foregoing, together with any and all (i) rights and privileges arising under applicable law and international treaties and conventions with respect to such trade secrets, (ii) income, fees, royalties, damages, claims and payments now or hereafter due and/or payable with respect thereto including damages and payments for past, present or future misappropriations thereof, (iii) rights corresponding thereto throughout the world and (iv) rights to sue for past, present or future misappropriations thereof. 10 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 "Trademarks" means, collectively, with respect to Borrowers, all trademarks (including service marks), slogans, logos, symbols, certification marks, collective marks, trade dress, uniform resource locators (URL's), domain names, corporate names and trade names, whether statutory or common law, whether registered or unregistered and whether established or registered in the United States or any other country or any political subdivision thereof, that are owned by or assigned to such Borrower, all registrations and applications for the foregoing and all tangible embodiments of the foregoing, together with, in each case, the goodwill symbolized thereby and any and all (i) rights and privileges arising under applicable law and international treaties and conventions with respect to such Borrower's use of any trademarks, (ii) reissues, continuations, extensions and renewals thereof and amendments thereto, (iii) income, fees, royalties, damages and payments now and hereafter due and/or payable thereunder and with respect thereto, including damages, claims and payments for past, present or future infringements thereof, (iv) rights corresponding thereto throughout the world and (v) rights to sue for past, present and future infringements thereof. "UCC" means the Uniform Commercial Code, as adopted by the State of Delaware, as in effect from time to time; provided, however, that, in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, priority, or remedies with respect to the DIP Liens is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction other than the State of Delaware, the term "UCC" shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority, or remedies. To the extent that defined terms set forth herein shall have different meanings under different Articles under the Uniform Commercial Code, the meaning assigned to such defined term under Article 9 of the Uniform Commercial Code shall control. "U.S. Trustee" means the Office of the United States Trustee. "Withholding Taxes" has the meaning provided in Section 10(e). Section 2. The Commitment and Credit Extension. (a) Commitment and Borrowing. Subject to the terms and conditions set forth herein and in the Final DIP Order, and subject to Borrowers executing the Promissory Note and executing and recording (or cause the recording of) the Deed of Trust in the Official Records of the Assessor -County Clerk -Recorder for Riverside County, the Lender agrees to make during the Commitment Period a term loan or term loans (each a "Loan" and, collectively, the "Loans") to the Borrowers in an aggregate principal amount not to exceed the Commitment. (b) Draw Procedures. Subject to Section 2(a) of this Agreement, and the continued satisfaction of all conditions to borrowing under the Loan Documents, Borrowers shall be entitled to draw the full amount of the DIP Facility or, alternatively, in multiple draws no more often than monthly. If the Borrowers elect to utilize the multiple draw funding mechanism, draws may be requested by providing written notice to the Lender at least three (3) business days prior to each draw specifying the amount of the draw. Regardless of the funding mechanism selected by the Borrowers, the Borrowers may hold and maintain up to $2,000,000 in their operating accounts. All funds in excess of $2,000,000 shall be maintained in a segregated account subject to a security 11 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 interest in favor of the Lender (the "Secured Account"), which shall be deemed to be a perfected security interest pursuant to the terms of the Final DIP Order. Subject to the foregoing limitation, absent the pendency of a default under the Loan Documents, the Borrowers may transfer funds from the Secured Account to the Borrowers' operating account. During the pendency of a default under the Loan Documents, the Borrowers shall be precluded from transferring the funds in the Secured Account to the Borrowers' operating account, or otherwise disbursing or using such funds without the advance written consent of the Lender. Upon the occurrence of an Event of Default, the Borrowers shall transfer such funds to the Lender, to be held in a segregated account pending determination of amounts needed for funding expenses subject to the Carve Out, with any excess remitted to the Lender as a payment of the Borrowers' indebtedness under the DIP Facility. (c) Maturity Date. The aggregate principal amount of the Loans outstanding on the Maturity Date, together with all accrued and unpaid interest and fees thereon, shall become due and payable in full on the Maturity Date. (d) Interest. Interest shall accrue on the outstanding principal advanced hereunder at the rate of 4.71 % per annum. From and after an Event of Default, default interest shall accrue and be payable on the outstanding principal under the DIP Facility at the rate of 5.0% (which shall be in addition to the foregoing rate, or the maximum allowable interest rate pursuant to California law, whichever is less). (e) Mandatory Reduction of Commitments. The Commitment shall automatically be permanently reduced on each date such Loan is advanced by an amount equal to the aggregate principal amount of the Loans incurred on such borrowing date. (f) Termination of Commitment. The Commitment shall terminate in its entirety on the first to occur of (i) the Commitment Termination Date; or (ii) the occurrence of an Event of Default. The Commitment shall be suspended upon the occurrence of a Default until such time as such Default, to the extent such Default is susceptible of cure, is cured to the Lender's reasonable satisfaction. Section 3. Creation of Liens and Security Interests. (a) Grant of Liens in Real Property. As more fully stated and provided in the Deeds of Trust and the Final DIP Order, to secure the prompt payment and performance of all DIP Obligations, the Borrowers hereby pledge and grant to the Lender, and hereby create a continuing first priority lien in and to all of their respective interests in real property, including without limitation: all accessions and additions thereto; all replacements and substitutions therefor; all rents, profits, proceeds, products and distributions thereof; subject only to the Carve -Out and the limitations expressly stated in Exhibit 3 to the Final DIP Order. (b) Grant of Security Interest in Personal Property. To secure the prompt payment and performance of all DIP Obligations, the Borrowers hereby pledge and grant to the Lender, and hereby create. a continuing lien and security interest in favor of the Lender in and to, all of their right, title and interest in and to their respective right, title and interest of each such Borrower wherever located, whether now existing or hereafter from time to time arising or 12 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 acquired in all of the following tangible and intangible personal property, including without limitation all of the following (collectively, the "Pledged Collateral"): (i) All Accounts; (ii) All Receivables; (iii) All Equipment, Goods, Inventory Furniture and Fixtures; (iv) All Documents, Instruments and Chattel Paper; (v) All Contracts; (vi) All Commercial Tort Claims and other claims and causes of action; provided, however, that Lender's security interest in connection with Avoidance Actions shall extend only to the Proceeds of Avoidance Actions, and not to the Avoidance Actions themselves; (vii) All Letters of Credit and Letter -of -Credit Rights; (viii) All Securities Collateral; (ix) All Investment Property; (x) All Intellectual Property Collateral; (xi) All General Intangibles; (xii) All Money and all Deposit Accounts; (xiii) all books and records, customer lists, credit files, computer files, programs, printouts and other computer materials and records relating to the Pledged Collateral and any General Intangibles at any time evidencing or relating to any of the foregoing; and (xiv) to the extent not covered by clauses (i) through (xi) of this Section 3(b), all other assets, personal property and rights of such Borrower, whether tangible or intangible, all Proceeds and products of each of the foregoing and all accessions of and to, substitutions and replacements for, and rents, profits and products of, each of the foregoing, and any and all Proceeds of any insurance, indemnity, warranty or guaranty payable to such Borrower from time to time with respect to any of the foregoing. (c) Perfection of Security Interests and Further Assurances. The Borrowers hereby irrevocably authorize the Lender at any time and from time to time to file in any relevant jurisdiction any financing statements and amendments thereto that contain the information required by Article 9 of the UCC of each applicable jurisdiction for the filing of any financing statement or amendment relating to the DIP Collateral, including any financing or continuation 13 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 statements or other documents for the purpose of perfecting, confirming, continuing, enforcing or protecting the security interest granted by the Borrowers hereunder, without the signature of the Borrowers where permitted by law, including the filing of a financing statement describing the DIP Collateral as all assets now owned or hereafter acquired by the Lender, or words of similar effect, or any fixture filing. The Borrowers agree to provide all information required by the Lender pursuant to this section promptly to the Lender upon request. The Borrowers agree that at any time and from time to time, at the expense of the Borrowers, the Borrowers will promptly execute and deliver all further instruments and documents, obtain such agreements from third parties, and take all further action, that may be necessary or desirable, or that the Lender may request, in order to create and/or maintain the validity, perfection or priority of and protect any security interest granted or purported to be granted hereby or to enable the Lender to exercise and enforce its rights and remedies hereunder or under any other agreement with respect to any DIP Collateral. (d) Priority of the DIP Liens and Security Interests. The liens and security interests in the DIP Collateral are, and shall at all times continue to be, first -priority priming liens pursuant to Section 364(d)(1) of the Bankruptcy Code, senior to all other liens and security interests in the Borrowers' property (other than the prepetition property interests of the City), subject only to (a) the Carve -Out (as defined herein), and (b) with respect to liens in the Borrowers' real property, the limitations expressly provided in Exhibit 3 to the Final DIP Order. (e) Superpriority Administrative Expense. In addition to its liens and security interests, the Lender shall be entitled to a superpriority administrative expense claim to secure all indebtedness and obligations under the DIP Facility pursuant to Section 364(c)(1) of the Bankruptcy Code, senior to all other administrative expenses in the Borrowers' Chapter 11 Cases, subject only to the Carve -Out. (f) Carve -Out. The Lender's priming lien and superpriority administrative claim shall be subject and subordinate ("the Carve Out") for: (i) Fees payable to the United States Trustee pursuant to 28 U.S.C. Section 1930(a); (ii) Fees payable to the clerk of the Bankruptcy Court; (iii) To the extent such expenses are incurred prior to the Carve -Out Trigger: 1) Allowed fees and expenses incurred by the Independent Manager in the amount set forth in the DIP Budget, not exceeding $60,000.00 per month, plus reasonable expenses 2) Allowed fees and costs of defense with respect to indemnification obligations owed by the Borrowers to the Independent Manager; provided, however, that this Carve Out shall apply solely to the extent such fees and costs exceed the amount of coverage required to be provided by the Borrowers' directors & officers (D&O) insurance; 14 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 3) Allowed fees and costs plus the payment of the Independent Manager's allowed legal fees and expenses in connection with the Chapter 11 Cases; 4) Allowed fees and expenses incurred by the CRO up to the maximum amount set forth in the DIP Budget, subject to the Term Sheet's permitted variances; and 5) Allowed fees and expenses incurred by Borrowers' other court approved professionals up to the maximum amount set forth in the DIP Budget, subject to the Term Sheet's permitted variances. (iv) Up to a maximum amount equal to the lesser or (a) $400,000, or (b) amounts remaining available under the DIP Budget (without reference to the Carve - Out Trigger) for unpaid documented fees, costs and expenses accrued or incurred by the Independent Manager and other retained professionals following the delivery (by email or otherwise) by the Lender of written notice to the Borrowers, the Borrowers' lead bankruptcy counsel, and the U.S. Trustee of the occurrence of an Event of Default, payable under sections 330 and 331 of the Bankruptcy Code and subsequently allowed by order of the Bankruptcy Court (the "Post -Trigger Carve Out"); (v) Notwithstanding the foregoing: (1) the amounts of each carve out set forth above shall be reduced by the amounts paid from the DIP Facility to or for the benefit of the holder of each such carve out; (2) except to the extent of the Post - Trigger Carve Out, the Carve Outs shall be limited to fees and costs incurred prior to the first to occur of (a) the Commitment Termination Date, and (b) the occurrence of an Event of Default; (3) no carve out shall be available with respect to fees or expenses that are incurred with respect to matters that are not a permitted use of the proceeds of the loans under the DIP Facility; (4) absent the Lender's express written agreement, the amount of the carve outs set forth in the DIP Budget (subject to permitted variances) shall not increase by virtue of any extensions of time or increases in amounts as may be provided for in subsequent amendments to the DIP Budget; and (5) to the extent that any permitted variance, reallocation of funds, or other use of funds reduces the amount of funds available under the DIP Budget for the payment of fees or expenses, the maximum amount of the Carve Out shall be reduced accordingly. (vi) A "Carve -Out Trigger" occurs upon delivery (by email or otherwise) by Lender of written notice to the Borrowers, Borrowers' lead bankruptcy counsel, and the United States Trustee of the Occurrence of an Event of Default. 15 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 Section 4. Representations and Warranties. Each Borrower represents and warrants that: (a) The Borrowers are duly organized and validly existing and in good standing under the laws of the jurisdiction(s) in which they are organized. (b) The Borrowers' execution and delivery of this Agreement and all other Loan Documents, and their performance of their obligations under this Agreement and all other Loan Documents (i) are within the power of the Borrowers, (ii) have been duly authorized by all necessary organizational approval by the Borrowers, and (iii) constitute legal, valid, and binding obligations of the Borrowers. (c) This Agreement and the other Loan Documents have been duly executed and delivered by or on behalf of the Borrowers. (d) This Agreement constitutes, and each other Loan Document when delivered hereunder will constitute, a legal, valid and binding obligation of the Borrowers, enforceable against each such Borrower in accordance with its terms. (e) The independent manager represents that he has been duly appointed and elected as sole manager of the Borrowers in accordance with the relevant operating agreements and order of the bankruptcy court and is authorized to enter and perform this Agreement subject to Bankruptcy Court approval; the execution and performance of this Agreement do not violate any applicable laws or court orders to the best of Borrowers' or the independent manager's actual knowledge. (f) The independent manager is signing this agreement solely in his representative capacity and shall not have any personal liability for any obligations or liabilities of the Borrowers' estates. (g) 11 USC 364. The Borrowers have the authority to enter into this agreement pursuant to (h) Neither the Borrowers nor the independent manager make any representation or warranty, actual or implied, regarding the condition, quality, or otherwise of the DIP Collateral or the Intellectual Property Collateral under this Agreement. (i) The business operations of the Borrowers, however limited, have been and will continue to be conducted in compliance with all laws of each jurisdiction in which each business has been or is being carried on. (j) All proceeds of the Loans shall be used solely in accordance with the Budget. (k) No part of any Loan or the proceeds thereof will be used to purchase or carry any Margin Stock or to extend credit for the purpose of purchasing or carrying any Margin Stock. Neither the making of any Loan nor the use of the proceeds thereof will violate or be 16 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 inconsistent with the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System. (1) To the best of the Borrowers' actual knowledge, after their reasonable due diligence, neither the execution, delivery, nor performance by the Borrowers of this Agreement or any other Loan Document, nor compliance by it with the terms and provisions hereof or thereof, (i) will contravene any provision of any Requirement of Law or any order, writ, injunction or decree of any court or Governmental Authority, subject to entry of the Final DIP Order, or (ii) will violate any provision of the certificate or articles of incorporation, certificate of formation, limited liability company agreement or by-laws (or equivalent organizational documents), as applicable, of the Borrowers or any of their Subsidiaries. (m) To the best of the Borrowers' actual knowledge, the Borrowers are not, nor are they, or any of them, required to be registered as, an "investment company" within the meaning of the Investment Company Act of 1940, as amended. Section 5. Conditions Precedent. The funding of the Commitment during the Commitment Period shall be subject to the satisfaction of the following conditions precedent except as otherwise agreed between the Borrowers and the Lender: (a) The Final DIP Order shall be in full force and effect, shall not have been reversed, vacated or stayed and shall not have been amended, supplemented or otherwise modified without the prior written consent of the Lender. (b) The Lender shall have received an initial DIP Budget, in form and substance reasonably satisfactory to the Lender. (c) No Default or Event of Default shall exist at the time of, or immediately after giving effect to, the making of the Loans. (d) The representations and warranties of the Borrowers set forth in each Loan Document shall be true and correct in all material respects (or, to the extent qualified by materiality, in all respects) immediately prior to, and after giving effect to, the making of any Loans, except to the extent that such representation or warranty expressly relates to an earlier date (in which event such representations and warranties were true and correct in all material respects (or, to the extent qualified by materiality, in all respects) as of such earlier date). (e) The Lender shall have received all such agreements, instruments, approvals, and other documents, each reasonably satisfactory to the Lender in form and substance, as the Lender may reasonably request. (f) The Borrowers shall have complied with the Draw Procedures outlined in Section 2(b) hereof. Order. (g) The Borrowers shall be in compliance with the terms of the Final DIP (h) Approval of the City Council of the City of La Quinta. 17 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 (i) The CRO Order shall be in full force and effect, shall not have been reversed, vacated or stayed and shall not have been amended, supplemented or otherwise modified without the prior written consent of the Lender. (j) Each Borrower shall have filed its complete and accurate schedules and statement of financial affairs. (k) If the Borrower elects to utilize the multiple draw funding mechanism as detailed in Section 2.(b), delivery of a draw request that conforms to the terms of this Agreement to the Lender at least three (3) Business Days prior to the requested draw. (1) The Borrowers shall be in compliance with the terms of the Confirmation Order, to the extent that such order has been entered by the Bankruptcy Court. (m) The Independent Manager shall not have been terminated, removed, replaced, or had his powers and authority materially limited without the prior written consent of the Lender. (n) The Borrowers shall have signed a definitive agreement with RD Olson Construction, Inc. for the clean-up and dust control of the Project. (o) The Lender shall have received a binding commitment, in a form and substance acceptable to Lender, for a lender title insurance policy regarding the real property DIP Collateral. Section 6. Affirmative Covenants. On and after the effective date of this Agreement and until the date that the Commitment hereunder has terminated and the principal of, and interest on, each Loan and all fees, expenses and other amounts payable under any Loan Document (other than contingent indemnification obligations for which no claim or demand has been made) have been paid in full in cash: (a) Financial Reporting Requirements. The Borrowers shall provide to the Lender a monthly rolling cash flow forecast, in form and substance reasonably acceptable to the Lender (as amended, extended, varied, supplemented, or otherwise modified from time to time, the "DIP Budget") that shall set forth in reasonable detail (y) all receipts and disbursements of the Borrowers on a monthly basis for the immediately preceding month and (z) all expected receipts and disbursements of the Borrowers on a cumulative basis through such DIP Budget. An updated DIP Budget will be delivered by no later than Friday of the fourth week covered by the then - existing DIP Budget (but shall not be required to be filed with the Court). For the avoidance of doubt, the first DIP Budget shall be the budget attached to the Final DIP Order. The Borrowers shall also provide such other information or documents (financial or otherwise) with respect to the Borrowers and their Subsidiaries as the Lender may reasonably request. (b) Milestones. The Borrowers shall take commercially reasonable efforts to implement the following milestones (the "Milestones") with respect to the sale of the Borrowers' real property (the "Property"), which may be pursuant to a chapter 11 plan, and approval and consummation of a chapter 11 plan unless the City agrees in writing (which consent may be confirmed via e-mail by counsel on behalf of the City) to extend or waive any Milestone, and 18 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 provided that the Milestones that require an action of the Bankruptcy Court are subject to the availability of the Bankruptcy Court. Further, the parties agree that the Milestones may be subject to further revision upon consent of the Debtors and the City after further discussion with the broker retained with respect to the sale of the Property: (i) on or before December 12, 2024, the Borrowers shall have selected a broker, and filed an application to engage such broker; (ii) on or before January 3, 2025, the Borrowers shall have obtained an order approving engagement of the broker; (iii) on or before February 19, 2025, the Borrowers shall have filed a motion for approval of bid procedures; (iv) on or before February 21, 2025, the Borrowers shall have obtained a report regarding cost to complete the Project; (v) on or before March 12, 2025, the Borrowers shall have obtained an order approving the bid procedures; (vi) on or before May 16, 2025, the Borrowers shall have obtained an order authorizing the Borrowers' entry into a definitive agreement with a stalking horse purchaser; (vii) on or before July 1, 2025, final bids that are not contingent on due diligence or similar discretionary considerations must be submitted; (viii) on or before August 15, 2025, the Borrowers shall have selected the successful purchaser (and if appropriate a back-up bidder); (ix) on or before September 12, 2025, the Borrowers shall have obtained an order approving a sale of all or substantially all of the Project; (x) on or before October 10, 2025, closing of the sale (and if closing is to occur pursuant to the Borrowers' plan of reorganization, the Effective Date) shall have occurred; (xi) on or before December 31, 2025, irrespective of the closing date, the Effective Date of the Borrowers' plan of reorganization shall have occurred. (c) Other Affirmative Covenants. The following terms, conditions and covenants shall govern the Borrowers and the DIP Facility: (i) Borrowers and the Lender shall negotiate in good faith with each other regarding a possible consensual chapter 11 plan; 19 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 (ii) Subject to subparagraph (i), each of Borrowers and Lender agrees to fairly consider and evaluate any restructuring, financing or plan regarding the Debtors presented by the other party; (iii) Borrowers shall comply in all material respects with all Bankruptcy Court orders, including without limitation the CRO Order; (iv) Funds advanced under the DIP Facility shall be used solely for the purposes set forth in the DIP Budget subject to permitted variances at a 10% level determined on the basis of aggregate cash disbursements (the "Permitted Variances"). Borrowers shall inform the City promptly of any disbursement made based on Permitted Variances. Any adjustments to the DIP Budget (other than the Permitted Variances) shall be approved by the City, for which approval shall not be unreasonably withheld, provided that the adjustment does not cause the total DIP Budget to exceed the maximum amount of the Commitment; (v) Borrowers and Lender shall comply with the MOU; (vi) Borrowers and CRO shall provide to the Lender, if reasonably requested in writing and, subject to the MOU, to the extent such action is not in conflict with the Borrowers' fiduciary duties or any confidentiality obligation, all documents and written (which may be in electronic form) information in their possession, custody or control that the Lender from time to time may request in writing regarding: the condition or value of the Borrowers' assets; claims against Borrowers; negotiations and communications with prospective purchasers and/or financers of the Borrowers or their business; contracts between Borrowers and third parties; transfers and payments made by Borrowers; and dealings between Borrowers and their insiders; (vii) The above notwithstanding, Borrowers are not required to provide to the Lender any documents or information protected by attorney -client privilege or attorney -client confidentiality. Borrowers may request that the Lender execute one or NDAs with respect to any documents or information designated by Borrowers as confidential. All disputes pertaining to the designation of confidential material or to the enforceability of relevant NDAs shall be resolved by the Bankruptcy Court; (viii) Borrowers shall maintain security for the Project consistent with the disbursements provided for in DIP Budget with the manner it has maintained the security since the Petition Date. Such security measures shall include, consistent with the security measures provided since the Petition Date: fenced and locked access to all areas of construction including construction staging areas; security camera system to remain operational and to have sufficient storage capacity for at least two weeks of video recordings; and roadways and pathways adjacent to the Project site where the public has access must be maintained and protected if impacted by conditions related to the Project, this can include barricades or k-rail 20 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 to protect slopes, and or repair and maintenance associated with water, sand or debris from the Project site; (ix) Borrowers shall maintain fencing on the property as follows: fencing as described above for security where applicable shall include dust screening; all gated access to construction areas shall be lockable; and fencing shall be maintained to provide uninterrupted security of the site and reduce the spread of blowing sand or dust; (x) Borrowers and the CRO shall not enter into any binding contract, agreement or term sheet (other than contracts for ordinary course goods or services, including contracts necessary for Borrowers to comply with the security measures provided for above) without Bankruptcy Court approval. Prior to entering into such binding contracts, agreements or term sheets outside of the ordinary course of business, Borrowers shall consult with the Lender; (xi) Borrowers shall promptly notify the Lender of (and, in any event, no later than 5 Business Days after) the occurrence of any Default or Event of Default; (xii) Borrowers shall maintain the insurance in existence on the date hereof, with respect to the Project and the DIP Collateral; (xiii) Borrowers shall maintain D&O coverage for the Independent Manager in an amount not less than $10,000,000, with a tail not less than five (5) years. (xiv) Borrowers shall comply in all material respects with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all Governmental Authorities in respect of the conduct of their business and the ownership of their property (including applicable statutes, regulations, orders and restrictions relating to environmental standards and controls); (xv) Borrowers shall do or cause to be done, and cause their Subsidiaries to do or cause to be done to the extent commercially reasonable, all things necessary to preserve and keep in full force and effect their existence and their rights, franchises, licenses, permits, copyrights, trademarks and patents; (xvi) Borrowers shall promptly execute and deliver all further instruments and documents (including, without limitation, certificates, declarations, affidavits, reports and opinions) and take all further action that the Lender may require, to give effect to this Agreement, perfect and protect the DIP Liens or to enable the Lender to exercise and enforce its rights and remedies with respect to the DIP Collateral, subject to the terms and conditions set forth in the Final DIP Order; (xvii) Borrowers shall maintain detailed and materially accurate accounting and records of proceeds of the Loans; and 21 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 (xviii) Each Borrower shall continue to operate their businesses as such businesses were operated on the Petition Date (subject to the terms of this Agreement and any limitations imposed as a result of operation as debtors -in - possession under the Bankruptcy Code) including (A) subject to entry of the cash management order, maintaining its existing bank accounts and not closing any bank accounts or creating any new bank accounts without the consent of the Lender, acting reasonably, (B) maintaining its registered office in the jurisdiction indicated in the notice provisions of the Loan Documents to which it is party and not changing its name, the name under or by which it conducts its business, its organizational identification number, its jurisdiction of formation or organization, its type of organization or other legal structure or its chief executive office, and not permitting the documents and books in its possession or under its control evidencing the DIP Collateral to be moved, (C) not changing its accounting practices, policies, or treatment except to the extent required by applicable law, changes in GAAP or requirements of its independent accounts, (D) not becoming an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended, by virtue of an exemption other than pursuant to Section 3(c)(1) or Section 3(c)(7) thereof, and (E) not becoming a "covered fund" under Section 13 of the Bank Holding Company Act of 1956, as amended. (d) Negative Covenants. The Borrowers hereby covenant and agree, on and after the effective date of this Agreement and until the date that the Commitment hereunder has terminated and the principal of and interest on each Loan and all fees, expenses and other amounts payable under any Loan Document (other than contingent indemnification obligations for which no claim or demand has been made) have been paid in full in cash, the Borrowers will not, and will not permit any of their Subsidiaries to, subject to any provisions in a confirmed Chapter 11 Plan: (i) make any Disposition other than Permitted Dispositions approved by order of the Bankruptcy Court; (ii) make any payment, prepayment, purchase or defeasance (A) in respect of any existing (i.e., prior to the Petition Date) Indebtedness of the Borrowers, other than (x) the Existing Obligations under the Prepetition Debt Documents (including as contemplated herein); and (y) the DIP Obligations in accordance with this Agreement, or (B) otherwise prohibited by the DIP Order or any other Loan Document (otherwise be consented to in advance in writing by the Lender); (iii) create, assume, incur or suffer to exist any Indebtedness other than Permitted Indebtedness without the prior written consent of the Lender and, as may be required by the Bankruptcy Code, or an order of the Bankruptcy Court; (iv) create, incur, assume or suffer to exist any Liens on any of their properties or assets other than Permitted Liens without the prior written consent of 22 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 the Lender and, as may be required by the Bankruptcy Code, an order of the Bankruptcy Court; (v) change their names, fiscal years, amalgamate, consolidate with or merge into, dispose of all or substantially all of their assets, divide into two or more Persons pursuant to a "plan of division" or similar method, create, or reorganize into, one or more Persons or enter into any similar transaction with any other entity without the prior written consent of the Lender; (vi) make or hold any Investment without the prior written consent of the Lender and, as may be required by the Bankruptcy Code, an order of the Bankruptcy Court; (vii) declare or make, directly or indirectly, any Restricted Payment, except as set forth in the DIP Budget, without the prior written consent of the Lender; (viii) engage in any business other than the businesses engaged in by the Borrowers on the date hereof without the written consent of the Lender; (ix) enter into or permit to exist any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any Affiliate on terms that are less favorable to the Borrowers or their Subsidiaries, as the case may be, without the prior written consent of the Lender; (x) enter into after the date hereof or allow to exist any contractual obligations (other than this Agreement) that limit the ability of the Borrowers to create, incur, answer or suffer to exist Liens on property or assets of such Person in favor of the Lender with respect to the DIP Facility and the obligations hereunder; (xi) at any time, seek or consent to any reversal, modification, amendments, stay or vacation of the Final DIP Order, without the prior written consent of the Lender (such consent not to be unreasonably withheld or delayed); at any time, seek or consent to a priority for any administrative expense against any of the Debtors (now existing or hereafter arising) of any kind or nature whatsoever (including, without limitation, any administrative expenses of the kind specified in, or ordered under, Bankruptcy Code Sections 105(a), 326, 328, 330, 331, 503(b), 506(c), 507, 546(c), 726, 1113 and 1114 of the Bankruptcy Code) equal to or superior to the priority of the Lender in respect of the DIP Obligations except as expressly permitted in the DIP Order; or (xii) use the proceeds of Loans, other than for purposes set forth in, and the amounts stated in, the DIP Budget, without the prior written consent of the Lender. Section 7. Events of Default. Notwithstanding the provisions of Section 362 of the Bankruptcy Code and without application or motion to, or order from, the Bankruptcy Court, the 23 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 occurrence of any one or more of the following events, regardless of the reason therefore, shall constitute an "Event of Default" hereunder: (a) any Borrower's failure to comply in any material respects with the Loan Documents, this Agreement, the Term Sheet, the MOU, any Interim DIP Order, the Final DIP Order, the CRO Order, or any other order of the Bankruptcy Court; (b) Failure to achieve any Milestone by the date provided with respect to such Milestone in each case, as then in effect after giving effect to any extensions, waivers or amendments thereto made in accordance with the requirements of this Term Sheet (and without regard to the Borrowers' reasonable efforts to achieve such Milestones); (c) entry of an order (i) granting relief from the automatic stay on any portion of Borrowers' real estate; (ii) granting relief from the automatic stay on any other Borrower asset with a value in excess of $500,000; or (iii) converting or dismissing the Chapter 11 Cases, or appointing a trustee; (d) the failure of the Borrowers to pay any principal when due, whether at stated maturity, by acceleration, by required prepayment or otherwise, or shall fail to pay any installment of interest or other amount payable hereunder when due; (e) The Borrowers, or any of them, file a chapter 11 plan that is not reasonably acceptable to the Lender; (f) any representation, warranty or statement made or deemed made by the Borrowers herein or in any other Loan Document or other document related hereto or thereto or in any certificate delivered to the Lender pursuant hereto or thereto shall prove to be untrue in any material respect (or, in the case of any representation, warranty or statement qualified by materiality, in any respect) on the date as of which made or deemed made; (g) the Borrowers or any of their Subsidiaries fail to perform or observe any term, covenant or agreement contained in this Agreement in any material respect. (h) any debtor -in -possession financing is entered into by the Borrowers, or any of them, other than the DIP Facility or the Borrowers seek authorization from the Bankruptcy Court to enter into such facility without the prior written consent of the Lender, unless the financing provides for full and timely payment of the Loan; (i) entry of any order by the Bankruptcy Court reversing, amending, supplementing, staying for a period of fifteen (15) days or more, vacating or modifying the Final DIP Order, the Disclosure Statement Order or the Confirmation Order without the prior written consent of the Lender; (j) payment by the Borrowers of prepetition debt (other than as approved by the Bankruptcy Court and as otherwise contemplated by the DIP Budget, this Agreement, the Final DIP Order, or with the prior written consent of the Lender); 24 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 (k) other than as a result of action or inaction of Lender, the Final DIP Order shall cease to provide valid, enforceable, and perfected Liens on the DIP Collateral in favor of the Lender with the priority set forth therein or otherwise cease to be valid and binding and in full force and effect; (1) Any Lien on the DIP Collateral shall have priority that either is pari passu with, or senior to, the DIP Liens, except to the extent expressly provided in the Final DIP Order; (m) the filing of any motion by the Borrowers seeking relief from the automatic stay which could reasonably be expected to result in a material impairment of the rights or interests of the Lender without the prior written consent of the Lender; (n) one or more judgments, orders or decrees for the payment of money required to be satisfied as an administrative expense claim in the Chapter 11 Cases shall be allowed by the Bankruptcy Court in an aggregate amount (to the extent not paid or covered by insurance) in excess of $100,000.00; (o) actual or asserted (by the Borrowers or any Affiliate thereof) invalidity or impairment of this Agreement or any related Loan Document (including the failure of any Lien to remain perfected); (p) non-compliance by the Borrowers in any material respect with the terms of the Final DIP Order or any other order entered in the Chapter 11 Cases; (q) the Bankruptcy Court enters an order or orders (i) avoiding or requiring disgorgement by the Lender of any amounts received in respect of the DIP Obligations or (ii) permitting the grant of a Lien on the DIP Collateral other than the Permitted Liens; (r) the filing of any motion, pleading or proceeding by the Borrowers which could reasonably be expected to result in a material impairment of the rights or interests of the Lender or a determination by a court with respect to a motion, pleading or proceeding brought by another party which results in such a material impairment. Section 8. Remedies. Upon the occurrence of an Event of Default, the Lender shall provide a Carve -Out Trigger notice to the Borrowers five (5) Business Days' prior to taking such action (the "Remedies Notice Period"), and after the expiration of the Remedies Notice Period, the Lender shall be authorized and entitled to exercise all rights and remedies provided in the Loan Documents or Approval Order (as applicable) and under applicable law. During the Remedies Notice Period, the Borrowers may use cash in their operating account in the ordinary course of business, consistent with past practices and the DIP Budget, including for the purposes of funding the Carve Out. During the Remedies Notice Period, any party in interest shall be entitled to seek an emergency hearing with the Bankruptcy Court seeking to stay the Lender's exercise of any rights and remedies and funds in the operating account may be used for this purpose Subject to the provisions of the Final DIP Order governing the enforcement of remedies, upon the occurrence and continuance of any Event of Default, the Lender may (notwithstanding 25 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 the provisions of Section 362 of the Bankruptcy Code and without application or motion to, or order from, the Bankruptcy Court), declare the Commitment to be terminated forthwith, whereupon the Commitment, except with respect to expenses in the DIP Budget and incurred before the written notice of termination of the Commitment, shall immediately terminate, and/or, by notice to the Borrowers, declare their Loans hereunder, with accrued interest thereon, and all other DIP Obligations owed to it under this Agreement and the other Loan Documents to be due and payable forthwith, whereupon the same shall immediately become due and payable. Subject to the provisions of the Final DIP Order governing the enforcement of remedies, upon the occurrence and during the continuance of any Event of Default, the Lender may exercise all of its rights and remedies set forth in any of the Loan Documents and the Final DIP Order, in addition to all rights and remedies allowed under any applicable law, including the UCC. The Lender shall have no obligation of any kind to make a motion or application to the Bankruptcy Court to exercise its rights and remedies set forth or referred to in this Agreement or in the other Loan Documents. The enumeration of the foregoing rights and remedies is not intended to be exhaustive and the exercise of any right or remedy shall not preclude the exercise of any other rights or remedies, all of which shall be cumulative and not alternative. Subject to the Final DIP Order, upon the occurrence of an Event of Default, the Lender shall provide a Carve -Out Trigger notice to the Borrowers five (5) Business Days' prior to taking such action (the "Remedies Notice Period"), and after the expiration of the Remedies Notice Period, the Lender shall be authorized and entitled to exercise all rights and remedies provided in the Loan Documents or Final DIP Order (as applicable) and under applicable law. During the Remedies Notice Period, the Borrowers may use cash in their operating account in the ordinary course of business, consistent with past practices and the DIP Budget, including for the purposes of funding the Carve Out. During the Remedies Notice Period, any party in interest shall be entitled to seek an emergency hearing with the Bankruptcy Court seeking to stay the Lender's exercise of any rights and remedies and funds in the operating account may be used for this purpose The Borrowers waive (i) presentment, demand and protest and notice of presentment, dishonor, notice of intent to accelerate, notice of acceleration, protest, default, nonpayment, maturity, release, compromise, settlement, extension or renewal of any or all commercial paper, accounts, contract rights, documents, instruments, chattel paper and guaranties or other property at any time held by the Lender on which the Borrowers may in any way be liable and hereby ratify and confirm whatever the Lender may lawfully do in this regard, (ii) subject to the terms of the Final DIP Order, all rights to notice and hearing prior to the Lender taking possession or control of the DIP Collateral, or any bond or security which might be required by any court prior to allowing the Lender to exercise any of its remedies subject to the terms of the Final DIP Order, and (iii) the benefit of all valuation, appraisal and exemption laws. The Borrowers acknowledge that they have been advised by counsel of their choice with respect to the effect of the foregoing waivers and this Agreement, the other Loan Documents and the transactions evidenced by this Agreement and the other Loan Documents. Section 9. Application of Proceeds. Except to the extent that Lender, in its sole discretion and in writing otherwise directs or as otherwise provide for herein and in the Final DIP Order with respect to the Carve -Out, all or any part of proceeds, profits or other receipts or 26 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 payments from or constituting DIP Collateral and made in payment of the DIP Obligations shall be applied in the following order: First, to pay the incurred and unpaid fees, costs and expenses, indemnities and other obligations to the Lender required under the Loan Documents; Second, to pay accrued and unpaid interest on the Loans; Third, to pay all outstanding principal amounts in respect of the Loans; and Fourth, in payment to the Borrowers and their estates (as may be allocated among them and their respective creditors by the Bankruptcy Court). Section 10. Miscellaneous. (a) Communications. a. The parties shall maintain open and transparent communications regarding the sale process, the preparation of a plan and disclosure statement, the commencement of litigation, the Debtors' operations, conditions at the property and other material matters as may arise from time to time with respect to the Chapter 11 Cases. To the extent necessary or appropriate, the provision of information by one party to another may be subject to a customary non -disclosure agreement ("NDA"). All disputes pertaining to the designation of confidential material or to the enforceability of relevant NDA's shall be resolved by the Bankruptcy Court. To facilitate the orderly provision of information, the parties shall meet routinely with each other. b. Correspondence Regarding Pleadings. The Borrowers shall make a good faith effort (but are not required) to provide to the Lender a draft of all material motions and applications at least three (3) days prior to serving or filing such motion or application. In the event that the Lender raises a concern regarding any proposed motion or application, the Borrowers shall attempt to address such concerns in good faith. c. Information Sharing. Upon a request by the Lender in writing (which may be by email), the Borrowers and the CRO shall provide to the City all documents and information in their possession, custody or control that the Lender from time to time may request in writing regarding: the condition or value of the Debtors' assets; claims against Borrowers; negotiations and communications with prospective purchaser and/or financers of the Borrowers or their business; contracts between Debtors and third parties; transfers and payments made by Debtors; and dealings between Borrowers and their insiders; cost to complete the project; appraisal reports; information regarding prospective purchasers (including without limitation their financial wherewithal and experience); purchase proposals, letters of intent and term sheets. Any request by the Lender shall be reasonable in scope, and shall describe the type of documents or information requested. Notwithstanding the 27 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 foregoing, Borrowers are not required to provide to the Lender any documents or information protected by the attorney -client privilege. (b) Sale of Property. a. Broker. The Borrowers shall consult with the Lender regarding their selection of a broker, and the terms of employment of a broker, to be engaged with respect to the Borrowers' proposed sale of the Borrowers' real property. The Borrowers shall, at their sole discretion, include the Lender in communications with the selected broker. The Lender is authorized to have direct communications with the selected broker, but shall not communicate directly with the selected broker unless the Borrowers are invited to attend calls or meetings, or copied on written communications. b. Lender Consent Rights. The Lender shall have the right to consent to or reject the sale to any Developer/Purchaser as the Borrowers may propose. The Lender shall exercise its consent rights in good faith, giving due consideration to the experience, expertise and financial wherewithal of any proposed Developer/Purchaser, and the development terms, conditions and concessions as a proposed Developer/Purchaser may require. Absent the Lender's consent, the Borrowers shall not seek approval of, or consummate, a sale to a proposed Developer/Purchaser. The parties acknowledge and agree that the Lender has the right to negotiate all terms and conditions related to the development of the Project, and to enter into development agreements and related documents directly with the selected Developer/Purchaser; and that the development terms and conditions to which the Lender may agree may differ from terms and conditions as were in effect and/or under discussion prepetition. The parties further acknowledge and agree that absent the Lender's written consent, the Borrowers shall not seek to assume or assign the Purchase, Sale, and Development Agreement dated November 19, 2014, by and between SilverRock Development Company and City (the "Original PSDA"), as amended by Amendment No. 1, dated October 29, 2015, Amendment No. 2, dated April 18, 2017, Amendment No. 3, dated November 28, 2018, Amendment No. 4, dated October 12, 2021, and Amendment No. 5, dated November 16, 2023 (the "PSDA") or the Development Agreement, dated November 19, 2014, by and between SilverRock Development Company and City, adopted pursuant to California Government Code section 65864 et seq. and recorded in the Office of the Riverside County Official Records on December 18, 2014, as Document No. 2014-0484106 (the "Development Agreement"), and that effective on Closing to which the Lender consents in writing, the Lender shall not assert cure claims against the Borrowers' estates under section 365 of the Bankruptcy Code with respect to the PSDA or Development Agreement (without prejudice to the Lender's right to assert prepetition claims or rejection damage claims in connection with the PSDA and Development Agreement, and to enforce all rights and remedies with respect to the DIP Facility). c. Consultation. The parties agree to consult with each other in good faith regarding the selection of a stalking horse purchaser and the ultimate Developer/Purchaser of 28 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 the Property; the terms and conditions of the sale and development of the Property; the procedures for sale of the Property (including whether to sell pursuant to section 363 of the Bankruptcy Code or pursuant to a plan). (c) Plan and Disclosure Statement. a. Preparation of Plan and Disclosure Statement. If the sale transaction is consummated through a plan, the Borrowers shall provide an initial draft of a plan and disclosure statement to the Lender at least two (2) weeks prior to filing. If the sale transaction is not consummated through a plan, the Borrowers shall provide an initial draft plan and disclosure statement to the Lender at least five (5) business days prior to the filing. The Borrowers shall attempt in good faith to provide drafts of material amendments and supplements at least five (5) business days prior to filing The Lender and the Borrowers shall negotiate in good faith with respect to the Borrowers' plan, disclosure statement and amendments and supplements. b. Contents of a Plan. Any plan filed by the Borrowers shall contain terms and conditions consistent with the MOU and this Agreement. c. Exclusivity. The parties reserve their respective rights with respect to further extensions of exclusivity under section 1121 of the Bankruptcy Code. (d) Indemnity. Whether or not the transactions contemplated hereby shall be consummated, but subject to entry of the Final DIP Order, the Borrowers shall indemnify, pay and hold the Lender and its respective affiliates, and the members, partners, advisors, shareholders, officers, directors, employees and agents thereof (each, an "Indemnified Party"), harmless from and against any and all claims, liabilities, losses, damages, costs and expenses (whether or not any of the foregoing Persons is a party to any litigation), including, without limitation, attorneys' fees and costs (limited in the case of legal fees and expenses to reasonable and documented legal fees of counsel for any or all Indemnified Parties, taken as a whole, and, if necessary, one firm of counsel in each appropriate jurisdiction (which may include a single special counsel acting in multiple jurisdictions) for all Indemnified Parties taken as a whole (and, in the case of an actual or perceived conflict of interest, where the Indemnified Parties affected by such conflict informs the Borrowers of such conflict and thereafter retains their own counsel, of an additional counsel for each group of affected Indemnified Parties similarly situated, taken as a whole)) and costs of investigation, document production, attendance at a deposition, or other discovery, with respect to or arising out of this Agreement or the other Loan Documents or any use of proceeds hereunder or the Chapter 11 Cases or any transactions contemplated hereby or thereby, or any claim, demand, action or cause of action being asserted against the Borrowers (collectively, the "Indemnified Liabilities"); provided, that the Borrowers shall have no obligation hereunder with respect to Indemnified Liabilities with respect to a particular Indemnified Party (i) to the extent arising from the gross negligence or intentional or willful misconduct of any such Indemnified Party; (e) Taxes and Other Deductions. Unless an applicable exemption applies, on the Maturity Date and thereafter, Borrowers shall pay all applicable transfer taxes, recording fees and similar taxes, costs and charges that are required in connection with the DIP Facility and the recordation of instruments in connection with securing the DIP Facility. Payments by the 29 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 Borrowers hereunder or under any other related Loan Documents shall be made free and clear of and without reduction for or on account of any present or future taxes, levies, imposts, duties, charges, fees, deductions or withholdings of any kind or nature whatsoever or any interest or penalties payable with respect thereto now or in the future imposed, levied, collected, withheld or assessed by any country or political subdivision of a country (collectively, "Taxes"); provided, however, that if any Taxes are required by applicable law to be withheld ("Withholding Taxes") from any amount payable to the Lender, the amounts so payable to the Lender shall be increased to the extent necessary to yield to the Lender on a net basis after the payment of all Withholding Taxes the amount payable under this Agreement or any other related Loan Documents at the rate provided herein or therein and if requested by the Lender, the Borrowers shall provide evidence reasonably satisfactory to the Lender that the applicable Taxes have been withheld and remitted. (f) Lender's Legal Fees and Costs. On the Maturity Date and thereafter, Borrowers shall pay all reasonable and documented professional fees and costs incurred by the Lender in connection with the Borrowers' Chapter 11 Cases; provided, however, that the maximum amount of such fees and costs shall not exceed $600,000.00. Additionally, in the event that Borrowers default with respect to the DIP Facility, the Lender shall be entitled to recover reasonable and documented professional fees and costs, including without limitation attorneys' fees and costs incurred in connection with any action or proceeding to enforce or construe the Loan Documents, and/or to defend against any claims asserted by any person against the Lender in connection with the DIP Facility or the Borrowers' Chapter 11 Cases. The Lender's professional fees and costs subject shall not apply against the DIP Budget. The Lender's rights to recovery of its professional fees as set forth in this paragraph shall survive the repayment of Borrowers' indebtedness under the DIP Facility. Nothing in this paragraph shall limit the Lender's right to seek or obtain reimbursement or other consideration from a purchaser or developer on account of additional fees or expenses as may be incurred in connection with the negotiation, documentation or implementation of development or related agreements. (g) Assignments and Participations. The Borrowers may not assign or transfer any of their rights, obligations or interest hereunder without the prior written consent of the Lender (and any attempted assignment or transfer without such consent shall be null and void). The Lender may sell, assign, transfer, negotiate or grant participations to other financial institutions in all or part of the obligations of the Borrowers outstanding under the Loan Documents, provided that any such sale, assignment, transfer, negotiation or participation shall be in compliance with the applicable federal and state securities laws; provided, further, that any assignee or transferee agrees to be bound by the terms and conditions of this Agreement; provided, further, that any such sale, assignment, transfer, negotiation or participation shall not release Lender from or otherwise affect Lender's obligations hereunder or Borrowers' rights; provided, further, the Lender shall provide notice of such assignment or transfer to the Borrowers. The Lender may, in connection with any actual or proposed assignment or participation, disclose to the actual or proposed assignee or participant, any information relating to the Borrowers or any of their Subsidiaries. (h) Amendments. Neither this Agreement nor any terms hereof may be changed, waived, discharged or terminated unless such change, waiver, discharge or termination is in writing signed by the Borrowers and the Lender. 30 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 (i) Conflict. To the extent that there is any inconsistency between this Agreement and any of the other related Loan Documents once executed, this Agreement shall govern unless such other document specifically states otherwise; provided that, for the avoidance of doubt, to the extent that there is any inconsistency between this Agreement and the Final DIP Order, the Final DIP Order shall govern. (j) Effectiveness; Binding Effect; Governing Law. This Agreement shall become effective when it shall have been executed by the Borrowers and the Lender and thereafter shall be binding upon and inure to the benefit of the Borrowers, the Lender and their respective permitted successors and assigns. THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD TO CONFLICTS OF LAW RULES. (k) Waiver of Jury Trial; Judicial Reference. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAWS, EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR RELATIONSHIP THAT IS BEING ESTABLISHED HEREBY. TO THE EXTENT ANY DISPUTE HEREUNDER IS BROUGHT IN A JURISDICTION WHERE THE FOREGOING PREDISPUTE WAIVER IS INEFFECTIVE, THEN SUCH DISPUTE SHALL BE HEARD BY A REFEREE AND RESOLVED BY JUDICIAL REFERENCE PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 638 ET SEQ. (1) Consent to Jurisdiction; Venue. All judicial proceedings brought against any party hereto with respect to this Agreement and the Loan Documents shall be brought in the Bankruptcy Court or, upon the dismissal, abstention, or other resolution of the Chapter 11 Cases, in any state or federal court of competent jurisdiction in Riverside County, California, and by execution and delivery of this Agreement, each party hereto accepts for itself and in connection with its properties, generally and unconditionally, the exclusive jurisdiction and venue of the Bankruptcy Court, and irrevocably agrees to be bound by any judgment rendered thereby in connection with this Agreement. Each party hereto irrevocably waives any right it may have to assert the doctrine of forum non conveniens or to object to venue to the extent any proceeding is brought in accordance with this clause (1). (m) Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Electronic delivery of an executed counterpart of this Agreement by email shall be as effective as delivery of an original counterpart of this Agreement. (n) Headings. Article and Section headings used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement. 31 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 (o) Interpretive Provisions. The words "hereof', "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and section, subsection, paragraph, schedule, and exhibit references are sections, subsections, paragraphs, schedules, and exhibits to this Agreement unless otherwise specified. (p) Limitation on Liability. TO THE EXTENT PERMITTED BY APPLICABLE LAW, AND NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS: (I) NONE OF THE LENDER NOR ANY INDEMNIFIED PARTY SHALL BE LIABLE TO ANY PARTY FOR ANY INDIRECT, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES IN CONNECTION WITH THEIR RESPECTIVE ACTIVITIES RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, THE TRANSACTIONS CONTEMPLATED THEREBY, THE LOANS, OR OTHERWISE IN CONNECTION WITH THE FOREGOING; (II) WITHOUT LIMITING THE FOREGOING, EXCEPT IN CONNECTION WITH A BREACH OR THREATENED BRACH OF THE NDAS OR OTHER CONFIDENTIALITY OBLIGATIONS, NONE OF THE LENDER NOR ANY INDEMNIFIED PARTY SHALL BE SUBJECT TO ANY EQUITABLE REMEDY OR RELIEF, INCLUDING SPECIFIC PERFORMANCE OR INJUNCTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED THEREBY; AND (III) NONE OF THE LENDER NOR ANY INDEMNIFIED PARTY SHALL HAVE ANY LIABILITY TO THE BORROWERS, FOR DAMAGES OR OTHERWISE, ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED THEREBY FOR ANY ACT OR OMISSION PRIOR TO THE CLOSING DATE. (q) Notice. All notices, demands, and other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given (a) if personally delivered, when personally delivered, (b) when transmitted via electronic mail to the e-mail address (provided no error message or other message stating that such email was undeliverable), (c) when sent reputable national overnight courier service, when delivery is confirmed by such reputable national overnight courier service's online tracking tool, (d) when sent by certified or registered mail, postage prepaid, when delivery is confirmed to have occurred by the United States Postal Service's online tracking tool or return receipt. Unless another address has been previously, or hereafter is, specified in writing, notices, demands, and communications: To the Lender shall be sent to: Jon McMillen, City Manager City of La Quinta 78495 Calle Tampico La Quinta, California 92253 jmcmillen@laquintaca. gov with a required copy to William Ihrke, City Attorney 32 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 Rutan & Tucker, LLP 18575 Jamboree Road 9th Floor Irvine, California 92612 bihrke@rutan.com and to Bradford F. Englander Whiteford Taylor & Preston LLP 3190 Fairview Park Drive, Suite 800 Falls Church, Virginia 22042 benglander@whitefordlaw.com To the Borrowers shall be sent to: Christopher Sontchi, Independent Manager Sontchi, LLC sontchi@sontchillc.com and to Douglas Wilson, Chief Restructuring Officer Douglas Wilson Companies 1620 Fifth Ave, Suite 400 San Diego, CA 92101 dwilson@douglaswilson.com with a required copy to: Erin R. Fay Wilson Sonsini Goodrich & Rosati, P.C. 222 Delaware Avenue, Suite 800 Wilmington, Delaware 19801 efay@wsgr.com - and- Victor A. Vilaplana (Pro Hac Vice) 823 La Jolla Rancho Road La Jolla, California 92037 vavilaplana@gmail.com - and- Benjamin M. Carson 33 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 Law Offices of Benjamin M. Carson, P.C. 5965 Village Way, Ste. E105 San Diego, California 92130 ben@benjamincarson.com (r) Confidentiality. In connection with their performance under this Agreement, the Borrowers may disclose to the Lender certain non-public information regarding the Debtors and their Subsidiaries, their operations, assets, and the Chapter 11 Cases conspicuously designated as "confidential" ("Confidential Information"). The Lender agrees that any Confidential Information shall be treated by the Lender in a confidential manner, and shall not be disclosed by the Lender to Persons who are not parties to this Agreement, except: (i) to attorneys, other advisors, accountants, auditors, and consultants to the Lender and to their respective members, employees, directors, officers and, with respect to the City, various officials thereof (the Persons in this clause (i), "Representatives") on a "need to know" basis in connection with this Agreement and the transactions contemplated hereby and on a confidential basis, (ii) to Subsidiaries and Affiliates of the Lender, (iii) as may be required by regulatory authorities, (iv) as may be required by statute, decision, or judicial or administrative order, rule, or regulation, including but not limited to the California Public Records Act (Cal. Gov. Code § 7920.000 et seq.); provided that (x) prior to any disclosure under this clause (iv), the disclosing party agrees to provide the Borrowers with prior notice thereof, to the extent that it is practicable to do so and to the extent that the disclosing party is permitted to provide such prior notice to the Borrowers pursuant to the terms of the applicable statute, decision, or judicial or administrative order, rule, or regulation and (y) any disclosure under this clause (iv) shall be limited to the portion of the Confidential Information as may be required by such statute, decision, or judicial or administrative order, rule, or regulation, (v) as may be agreed to in advance in writing by the Borrowers, (vi) as requested or required by any Governmental Authority pursuant to any subpoena or other legal process; provided that, (x) prior to any disclosure under this clause (vi) the disclosing party agrees to provide the Borrowers with prior written notice thereof, to the extent that it is practicable to do so and to the extent that the disclosing party is permitted to provide such prior written notice to the Borrowers pursuant to the terms of the subpoena or other legal process and (y) any disclosure under this clause (vi) shall be limited to the portion of the Confidential Information as may be required by such Governmental Authority pursuant to such subpoena or other legal process, (vii) as to any such information that is or becomes generally available to the public (other than as a result of prohibited disclosure by the Lender or their respective Representatives), (viii) in connection with any assignment, participation or pledge of the Lender's interest under this Agreement; provided that, prior to receipt of Confidential Information any such assignee, participant, or pledgee shall have agreed in writing to receive such Confidential Information hereunder subject to the terms of this Section 10(r), (ix) in connection with any litigation or other adversary proceeding involving parties hereto which such litigation or adversary proceeding involves claims related to the rights or duties of such parties under this Agreement or the other Loan Documents, (x) in connection with, and to the extent reasonably necessary for, the exercise of any secured creditor remedy under this Agreement or under any other Loan Document. (s) Preservation of Lenders' Rights. Nothing in this Agreement or any other Loan Document supersedes, waives, releases or otherwise alters the Borrowers' covenants, obligations or waivers, or the Lender's rights and remedies, as set forth in the Final DIP Order or the MOU, all of which shall remain in full force and effect in accordance with their terms, despite 34 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 payment and satisfaction of Borrowers' obligations and indebtedness under this Agreement and other Loan Documents. [Signature page follows] 35 Docusign Envelope ID 4763EA87-411 B-4CD6-9864-E2D795A420B1 IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the date and year first written above. BORROWERS: SilverRock Development Company, LLC, RGC PA 789, LLC, SilverRock Lifestyle Residences, LLC, SilverRock Lodging, LLC, SilverRock Luxury Residences, LLC, and SilverRock Phase I, LLC By: DocuSigned by: VOIM A.S WitSbin, 6dboBs64AduBnIS.. Name: Douglas Wilson Chief Restructuring Officer "—Signed by: By: �(,u,►'lSfbspIAt,V'/Sbl�' Name: Christopher Sontchi Independent Manager LENDER: City ofLCau%ta jot& kd iiltuit, By: 91-9bFAbF )k3 j4 4... Jon McMillen, en, City Manager Attest: Signed by: E.etn ilia. I44AAAa. 9�FAa/FL7a8o4Fa... Monika Radeva, City Clerk By: Approved a.sgto,Form: &Rio% (A-. ((At, By: (T8708L/�tS4 t. Wiliam H. Kirke, City Attorney 0 docusign Certificate Of Completion Envelope Id: 4763EA87-411 B-4CD6-9864-E2D795A420B1 Subject: Complete with Docusign: SilverRock - DIP Credit Agreement [Execution Version].pdf Source Envelope: Document Pages: 37 Signatures: 5 Certificate Pages: 6 Initials: 0 AutoNav: Enabled Envelopeld Stamping: Enabled Time Zone: (UTC-08:00) Pacific Time (US & Canada) Status: Completed Envelope Originator: Lynzy McGee 650 Page Mill Rd Palo Alto, CA 94304 Imcgee@wsgr.com IP Address: 134.238.184.209 Record Tracking Status: Original 5/9/2025 8:53:22 AM Holder: Lynzy McGee Imcgee@wsgr.com Location: DocuSign Signer Events Signature Timestamp Christopher Sontchi sontchillc@gmail.com Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Accepted: 5/9/2025 10:55:18 AM ID:161092e2-d92e-48da-8162-83a712d7860f Douglas Wilson dwilson@douglaswilson.com CEO/Chairman Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Accepted: 4/24/2025 9:46:22 AM ID:734b4d02-55fc-41d9-86bb-416c7390ad0c Jon McMillen jmcmillen@laquintaca.gov Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Accepted: 5/9/2025 6:45:21 PM ID: 3b2979c4-0d76-4fa5-9c92-10ef7bf60d38 Monika Radeva mradeva@laquintaca.gov Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Accepted: 5/9/2025 6:42:30 PM ID: 00ebb3b4-64ad-48a4-95ff-bd2a8fb2e682 CSigned by: ,It iS619(u v Solk1-66 389500C3E4914F7... Signature Adoption: Pre -selected Style Using IP Address: 100.19.68.235 ,—DocuSigned by: NIA#YAS Kw& '-6666B3B4A60B415... Signature Adoption: Pre -selected Style Using IP Address: 72.220.75.156 DocuSigned by: 5 1A, 1F96EA6FDB45414... Signature Adoption: Pre -selected Style Using IP Address: 47.158.155.56 Signed using mobile Signed by: C�L/ bint(CA. fa.�ua 90FA47F279864F5... Signature Adoption: Pre -selected Style Using IP Address: 47.158.198.89 Sent: 5/9/2025 9:02:21 AM Viewed: 5/9/2025 10:55:18 AM Signed: 5/9/2025 10:55:47 AM Sent: 5/9/2025 9:02:19 AM Viewed: 5/9/2025 10:47:00 AM Signed: 5/9/2025 10:47:26 AM Sent: 5/9/2025 9:02:20 AM Viewed: 5/9/2025 6:45:21 PM Signed: 5/9/2025 6:46:30 PM Sent: 5/9/2025 9:02:21 AM Viewed: 5/9/2025 6:42:30 PM Signed: 5/9/2025 6:54:59 PM Signer Events Signature Timestamp William H. Ihrke bihrke@rutan.com Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Accepted: 5/9/2025 9:05:39 AM ID: 40ac5b47-78a2-4e5d-be20-acb3d099a406 Signed by: wAWt yy . ('...ct, E2C19708275B45E Signature Adoption: Pre -selected Style Using IP Address: 160.72.199.130 Sent: 5/9/2025 9:02:22 AM Resent: 5/9/2025 9:03:47 AM Viewed: 5/9/2025 9:05:39 AM Signed: 5/9/2025 9:06:11 AM In Person Signer Events Signature Timestamp Editor Delivery Events Status Timestamp Agent Delivery Events Status Timestamp Intermediary Delivery Events Status Timestamp Certified Delivery Events Status Timestamp Carbon Copy Events Status Timestamp Amanda Steele steele@rlf.com Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Not Offered via Docusign Brad Englander benglander@whitefordlaw.com Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Not Offered via Docusign Catherine Lyons clyons©wsgr.com Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Not Offered via Docusign Erin Fay EFAY@wsgr.com Member Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Not Offered via Docusign Matthew Milana milana@rlf.com Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Not Offered via Docusign COPIED COPIED COPIED COPIED COPIED Sent: 5/9/2025 9:02:22 AM Sent: 5/9/2025 9:02:23 AM Sent: 5/9/2025 9:02:23 AM Sent: 5/9/2025 9:02:23 AM Sent: 5/9/2025 9:02:24 AM Carbon Copy Events Status Timestamp Michele Vives mvives@douglaswilson.com Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Not Offered via Docusign Rich Riley rriley@pashmanstein.com Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Not Offered via Docusign COPIED COPIED Sent: 5/9/2025 9:02:24 AM Sent: 5/9/2025 9:02:24 AM Witness Events Signature Timestamp Notary Events Signature Timestamp Envelope Summary Events Status Timestamps Envelope Sent Envelope Updated Certified Delivered Signing Complete Completed Hashed/Encrypted Security Checked Security Checked Security Checked Security Checked 5/9/2025 9:02:25 AM 5/9/2025 9:03:46 AM 5/9/2025 9:05:39 AM 5/9/2025 9:06:11 AM 5/9/2025 6:54:59 PM Payment Events Status Timestamps Electronic Record and Signature Disclosure Electronic Record and Signature Disclosure created on: 3/31/2004 2:33:01 PM Parties agreed to: Christopher Sontchi, Douglas Wilson, Jon McMillen, Monika Radeva, William H. 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