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2025-01-14 Notice of Filing (Doc 306, received 2025-01-23Case 24-11647-MFW Doc 306 Filed 01/14/25 Page 1 of 2 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: SilverRock Development Company, et al., Debtors.' Chapter 11 Case No. 24-11647 (MFW) (Jointly Administered) RE: D.I. 246 NOTICE OF FILING OF REVISED 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 PLEASE TAKE NOTICE that, on December 12, 2024, the above -captioned debtors and debtors in possession (collectively, the "Debtors") filed the Motion of Debtors Pursuant to Sections 105, 361, 362,363, 364, and 507of 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 (the "Motion") with the United States Bankruptcy Court for the District of Delaware (the "Court"). PLEASE TAKE FURTHE NOTICE that the Motion included a proposed form of order granting the relief requested in the Motion (the "Proposed Order"). PLEASE TAKE FURTHER NOTICE that following negotiations with various parties, the Debtors have revised the Proposed Order (the "Revised Proper Order") and intend to present it to the Court at the January 15, 2025 hearing on the Motion. 'The Debtors in these chapter 11 cases, along with the last four digits of each Debtor's federal tax identification number, as applicable, are: SilverRock Development Company, LLC (5730), RGC PA 789, LLC (5996), SilverRock Lifestyle Residences, LLC (0721), SilverRock Lodging, LLC, (4493), SilverRock Luxury Residences, LLC (6598) and SilverRock Phase 1, LLC (2247). The location of the Debtors' principal place of business and the Debtors' mailing address is 343 Fourth Avenue, San Diego, CA 92101. Case 24-11647-MFW Doc 306 Filed 01/14/25 Page 2 of 2 PLEASE TAKE FURTHER NOTICE that a clean version of the Revised Proposed Order, which includes a new Exhibit 3, is attached hereto as Exhibit A. PLEASE TAKE FURTHER NOTICE that a redline of the Revised Proposed Order is attached hereto as Exhibit B. Dated: January 14, 2025 ARMSTRONG TEASDALE, LLP Wilmington, Delaware /s/Jonathan M. Stemerman Jonathan M. Stemerman (No. 4510) Eric M. Sutty (No. 4007) Denisse Guevara (No. 7206) 1007 North Market Street, Third Floor Wilmington, Delaware 19801 Telephone: (302) 416-9670 jstemerman@atllp.com esutty@atllp.com dguevara@atllp.com -and- Victor A. Vilaplana (Pro Hac Vice) P.O. Box 9038 La Jolla, CA 92037 Telephone: (619) 840-4130 vavilaplana@gmail.com -and- Benjamin M. Carson (Pro Hac Vice) 5965 Village Way STE E105 San Diego, CA 92130 Telephone: (858) 255-4529 ben@benjamincarson.com Counsel to the Debtors and Debtors in Possession 2 Case 24-11647-MFW Doc 306-1 Filed 01/14/25 Page 1 of 50 Exhibit A Case 24-11647-MFW Doc 306-1 Filed 01/14/25 Page 2 of 50 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: SilverRock Development Company, et al., Debtors.' Chapter 11 Case No. 24-11647 (MFW) (Jointly Administered) Re: Docket No. 246 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 Upon the motion (the "Motion") dated December 12, 2024, of Debtors in the above - captioned chapter 11 cases (collectively, the "Cases"), pursuant to sections 105, 362, 363, and 364 of title 11 of the United States Code, 11 U.S.C. §§ 101, et seq. (the "Bankruptcy Code"), Rules 4001 and 9014 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules") and the corresponding local rules of this District (the "Local Rules"), requesting entry of an Order authorizing the Debtors to, among other things: (i) Obtain senior secured postpetition financing in an aggregate principal amount not to exceed $11,000,000.00 (the "DIP Credit Facility2"), pursuant to the terms and conditions of the Term Sheet, including the Memorandum of Understanding (collectively, the "Term Sheet"), the DIP Documents (as defined below), and this Order; 'The Debtors in these chapter 11 cases, along with the last four digits of each Debtor's federal tax identification number, as applicable, are: SilverRock Development Company, LLC (5730), RGC PA 789, LLC (5996), SilverRock Lifestyle Residences, LLC (0721), SilverRock Lodging, LLC, (4493), SilverRock Luxury Residences, LLC (6598) and SilverRock Phase 1, LLC (2247). The location of the Debtors' principal place of business and the Debtors' mailing address is 343 Fourth Avenue, San Diego, CA 92101. 2 The DIP Credit Facility amount includes and rolls up the $2,690,965 previously loaned by DIP Lender to Debtors post -petition on an interim basis (the "Interim DIP Credit Facility"). Case 24-11647-MFW Doc 306-1 Filed 01/14/25 Page 3 of 50 (ii) Enter into (a) the executed Term Sheet, substantially in the form attached as Exhibit 1 hereto, by and among the Debtors and the City of La Quinta (the "DIP Lender") and (b) the documents necessary and appropriate pursuant to the Term Sheet and the DIP Credit Facility (t h e "DIP Documents ") (iii) Borrow, pursuant to the DIP Documents and the Order (as defined below), postpetition financing in an aggregate principal amount of up to $11,000,000.00; (iv) Execute and deliver the Term Sheet and the other DIP Documents to the DIP Lender; (v) Grant to the DIP Lender the DIP Liens (as defined below) on all of the DIP Collateral (as defined below), senior to any and all liens on the DIP Collateral to secure the DIP Credit Facility and all obligations owing and outstanding thereunder and under the DIP Documents, as applicable, and this Order, as applicable (collectively, the "DIP Obligations"); (vi) Grant to the DIP Lender allowed superpriority administrative expense claims in the Cases for the DIP Credit Facility and all DIP Obligations; and (vii) Use the proceeds of the DIP Credit Facility in accordance with the Term Sheet and the Budget, a copy of which Budget is attached hereto as Exhibit 2; and (viii) Grant such other and further relief as this Court deems necessary and just. The Court having considered the Motion, the Declaration of Debtors' Chief Restructuring Officer Douglas Wilson ("CRO") in Support of the Motion (the "Wilson Declaration"), the Declaration of Debtors' sole Independent Manager Christopher S. Sontchi in Support of the Motion (the "Sontchi Declaration"), the exhibits attached thereto, the Term Sheet, the Budget, and the evidence submitted or adduced and the arguments of counsel made at the hearing on this Motion; and notice of the Motion and the hearing on the Motion having been given in accordance with 2 Case 24-11647-MFW Doc 306-1 Filed 01/14/25 Page 4 of 50 Bankruptcy Rules 4001 and 9014; held and concluded; and it appearing that granting the relief requested in the Motion is fair and reasonable and in the best interests of the Debtors, their estates and their creditors, and is essential for the preservation of the value of the Debtors' property; and all objections, if any, to the entry of this Order having been withdrawn, resolved or overruled by the Court; and after due deliberation and consideration, and good and sufficient cause appearing therefor: I. IT IS FOUND AND CONCLUDED3: A. Petition Date. On August 5, 2024 (the "Petition Date"), the Debtors filed voluntary petitions under chapter 11 of the Bankruptcy Code with this Court. B. Jurisdiction and Venue. This Court has jurisdiction over these proceedings, pursuant to 28 U.S.C. §§ 157(b) and 1334 and the Amended Standing Order of Reference from the United States District Court for the District of Delaware, and over the persons and property affected hereby. Venue for the Chapter 11 Case and proceedings on the Motion is proper in this district pursuant to 28 U.S.C. §§ 1408 and 1409. Consideration of the Motion constitutes a core proceeding under 28 U.S.C. § 157(b)(2). This Court may enter a final order consistent with Article III of the United States Constitution. C. Notice. Notice of the hearing on the Motion and the relief requested therein has been served by the Debtors pursuant to Bankruptcy Rules 2002 and 4001(b), (c), and (D) and in accordance with the Local Rules on (i) the Office of the United States Trustee for the District of Delaware; (ii) the Debtors' thirty (30) largest unsecured creditors (excluding insiders); (iii) counsel to the DIP Lender; (iv) all known holders of liens upon the DIP 3 The findings and conclusions set forth herein constitute the court's findings of fact and conclusions of law pursuant to Bankruptcy Rule 7052, made applicable to this proceeding pursuant to Bankruptcy Rule 9014. To the extent that any of the following findings of fact constitute conclusions of law, they are adopted as such. To the extent any of the following conclusions of law constitute findings of fact, they are adopted as such. 3 Case 24-11647-MFW Doc 306-1 Filed 01/14/25 Page 5 of 50 Collateral; and (v) all parties that have filed notices of appearance pursuant to Bankruptcy Rule 2002. The notice constitutes good and sufficient notice of the relief requested herein, and no further notice of the relief granted by this Order is necessary or shall be required. D. Additional Findings and Conclusions. i. All Debtors are Borrowers. The entirety of Debtors' property and assets, including without limitation all interests in real property, personal property, tangible and intangible property, claims and causes of action, property that is known to exist, or unknown and proceed and products of all of the foregoing, comprises the DIP Collateral (the "DIP Collateral"). The capital structure of the Project and the DIP Collateral, including a list of those creditors with a secured interest in the DIP Collateral (collectively, the "Prepetition Secured Creditors"),4 is more fully laid out in the Green Declarations and in the Debtors' Bankruptcy Schedules and Statements of Financial Affairs, both of which are incorporated herein by reference. Those amounts owed to the Prepetition Secured Creditors shall be referred to herein as the "Prepetition Secured Obligations."6 ii. The DIP Lender provided the Interim DIP Credit Facility pursuant to the interim DIP orders [Docket Nos. 162, 188, 208, & 243] (the "Interim DIP Orders"). 4 For the avoidance of doubt, nothing herein (including the definition of Prepetition Secured Parties) shall grant adequate protection to any liens or claims held by any party subject to or as identified in the Motion of the Debtors Pursuant to Bankruptcy Rule 9019, Local Rule 9013-1 and 11 U.S.C. §§ 105(a) and 363(b) Authorizing and Approving Certain Unwind Agreements and Reconveyance of Deeds of Trust by and Between the Debtors and Certain Settling Creditors [Docket No. 240], the Complaint for Avoidance of Promissory Notes and the Deeds of Trusts Given to Secure the Promissory Notes, under 11 U.S.C. §§ 544, 547, 548, and 550 and California Civil Code § 3439.05, and to Preserve Avoided Liens and Interests for the Benefit of the Bankruptcy Estates Under 11 U.S.C. § 55/filed in Case No. 24-50261-MFW, The Robert Green Company, Robert Green Residential or any related affiliates 5 Capitalized terms not defined herein shall have the meanings ascribed to them in the Motion. 6 Nothing herein shall constitute a finding or determination concerning the lien priority of any Prepetition Secured Obligations. 4 Case 24-11647-MFW Doc 306-1 Filed 01/14/25 Page 6 of 50 iii. The DIP Lender shall not be deemed to be a control person or insider (as defined in section 101(31) of the Bankruptcy Code) of any Debtor by virtue of providing the DIP Credit Facility; iv. the Prepetition Secured Creditors are entitled, pursuant to sections 361, 363(e) and 364(d)(1) of the Bankruptcy Code, to adequate protection of their respective interests in the DIP Collateral, solely to the extent of any diminution in the value of their prepetition collateral occurring from and after the Petition Date (the "Diminution"), that may be caused by or arising as a result of, among other things, the grant of a lien under section 364 of the Bankruptcy Code. E. Findings Regarding the DIP Credit Facility. (i) Need for the DIP Credit Facility. Debtors need to obtain funds to, among other things, maintain their real estate, preserve the value of the Project opportunity, pay administrative expenses during the pendency of these bankruptcy proceedings, hire a broker to market and sell the Project opportunity, complete a thorough and robust sales process, and confirm a Chapter 11 Plan for the benefit of all the constituencies of the estates. The only choice of such funds is the DIP Credit Facility. (ii) Priming of Anv Prepetition Liens. Upon the entry of and subject to the terms of the Order (all as expressly limited by Exhibit 3 hereto), the pruning of any existing liens on any of the DIP Collateral, as contemplated by the Term Sheet and as further described below, is a condition to the Debtors' borrowings under the DIP C'redit Facility, which borrowing is necessary for the Debtors to be able to continue to complete a robust process for selling the Project opportunity and reorganizing to maximize returns for all constituencies of the bankruptcy estates. (iii) No Credit Available on More Favorable Terms. The Debtors have been 5 Case 24-11647-MFW Doc 306-1 Filed 01/14/25 Page 7 of 50 unable to obtain (a) unsecured credit allowable under Bankruptcy Code section 503(b)(1) as an administrative expense, or (b) secured credit on more favorable terms and conditions than those provided in the Term Sheet, DIP Documents, and this Order. The Debtors are unable to obtain credit without granting to the DIP Lender the DIP Protections (as defined below). F. Effect of Reversal; Good Faith. The DIP Lender has indicated a willingness to provide financing to the Debtors in accordance with the Term Sheet, the MOU and this Order, provided that the DIP Obligations, DIP Liens and other protections granted by this Order (all as expressly limited by Exhibit 3 hereto) and the Teiui Sheet will not be affected by any subsequent reversal or modification of this Order as provided in section 364(e) of the Bankruptcy Code. The DIP Lender has acted in good faith in agreeing to provide the DIP Credit Facility approved by this Order. G. Business Judgment and Good Faith Pursuant to Section 364(e). (i) The teens and conditions of the DIP Credit Facility, the Tenn Sheet, DIP Documents, Budget and the fees paid and to be paid thereunder are fair, reasonable, and the best available under the circumstances, reflect the Debtors' exercise of prudent business judgment, and are supported by reasonably equivalent value and consideration; (ii) the Term Sheet and DIP Documents were negotiated in good faith and at arrns' length between the Debtors and the DIP Lender; and (iii) the DIP Credit Facility loan proceeds to be obtained pursuant to the Term Sheet and DIP Documents will be advanced in good faith, and for valid business purposes and uses, as a consequence of which the DIP Lender is entitled to the protection and benefits of section 364(e) of the Bankruptcy Code. 6 Case 24-11647-MFW Doc 306-1 Filed 01/14/25 Page 8 of 50 H. Prepetition Secured Creditors Have Either Consented to the DIP Credit Facility or are Adequately Protected. All Prepetition Secured Creditors, except Poppy Bank ("Poppy"), have consented to Debtors borrowing from the DIP Credit Facility pursuant to the Term Sheet and DIP Documents, including the priming liens and other terms set forth on Exhibit 3 hereto. With respect to Poppy, Poppy will be adequately protected upon implementation of the DIP Credit Facility loan and granting of the DIP Liens (as defined below). Poppy's adequate protection results from the substantial equity cushion in its prepetition collateral, even after imposition of the DIP Liens, and the DIP Lender's agreement to cap pruning as to the collateral in which Poppy asserts a first priority lien in the amount of $7,000,000 as set forth on Exhibit 3, and as is more fully described in the Motion and supporting exhibits. The equity cushion and the DIP Lender's agreement to cap its priming together are sufficient to adequately protect Poppy. I. Stipulation Regarding Planning Area 7,8,9 i. The Debtors and the DIP Lender stipulate and agree that disproportionate amount of priming with respect to Planning Area 7,8,9 (as defined on Exhibit 3) (when compared to the percentage of these parcels to the estates' total parcels' in both size and value) is appropriate because, among other reasons: (a) Planning Area 7,8,9 is comprised of some of the most valuable parcels included in the DIP Collateral; (b) there exists a substantial equity cushion in favor of the holder of the first deed of trust on the parcels comprising Planning Area 7,8,9, even taking into account the DIP Lender's $7 million priming lien; and (c) the equity cushion in favor of the holder of the first deed of trust on the Planning Area 7,8,9 parcels is greater than the aggregate equity cushion, if any, of the holders of the first trust deeds on the estates' other parcels combined. J. Immediate Entry of Order. The Debtors have requested immediate entry of this Order pursuant to Bankruptcy Rule 4001(c)(2) and Local Rule 4001-2(b). The permission granted 7 Case 24-11647-MFW Doc 306-1 Filed 01/14/25 Page 9 of 50 herein for the Debtors to obtain postpetition financing from the DIP Lender pursuant to the Term Sheet, to obtain funds thereunder and to use the proceeds of this postpetition financing pursuant to this Order is necessary to avoid immediate and irreparable harm to the Debtors. Entry of this Order is in the best interests of the Debtors' respective estates and creditors as its implementation will, among other things, allow for access to the financing necessary for the continued administration of Debtors' estates, preservation of Debtors' real estate and the Project opportunity, enhancement of the Debtors' prospects for a successful sale of substantially all of their assets, and confirmation of a successful Chapter 11 plan. Based upon the foregoing findings, acknowledgements, and conclusions, and upon the record made before this Court at the hearing on the Motion (the "Hearing"), and good and sufficient cause appearing therefor; NOW, THEREFORE, based upon the foregoing findings and conclusions, and upon consideration of the Motion and the record made before this Court with respect to the Motion, including the record created during the Hearing, and with the consent of the Debtors and the DIP Lender to the form and entry of this Order, and good and sufficient cause appearing therefor, and the Court being otherwise fully advised in the premises; IT IS HEREBY ORDERED AND ADJUDGED THAT: 1. Motion Granted. The Motion is GRANTED in accordance with the terms and conditions set forth in this Order (all as expressly limited by Exhibit 3 hereto), Term Sheet, MOU, and DIP Documents. Any objections to the Motion with respect to entry of this Order to the extent not withdrawn, waived or otherwise resolved, and all reservations of rights included therein, are hereby denied and overruled on the merits. 2. The Term Sheet, MOU and the DIP Documents. 8 Case 24-11647-MFW Doc 306-1 Filed 01/14/25 Page 10 of 50 (a) Approval of Entry into the Term Sheet and DIP Documents. The Debtors are authorized to execute, deliver and perform in accordance with the Teiui Sheet (including the MOU), the DIP Documents and to incur and to perform the DIP Obligations in accordance with, and subject to, the terms of this Order (all as expressly limited by Exhibit 3 hereto), and to execute and deliver all instruments and documents which may be required or necessary for the performance by the Debtors under the Term Sheet, subject to the priming limitations and other conditions set forth on Exhibit 3 hereto. The Debtors are hereby authorized to do and perform all acts, pay the principal, interest, fees, expenses, and other amounts described in the Term Sheet and all other DIP Documents as such become due, subject to the priming limitations and other conditions set forth on Exhibit 3 hereto. The form and substance of both the Term Sheet and DIP Documents are hereby approved. The Debtors and the DIP Lender are hereby authorized to modify the DIP Documents, and such shall be deemed approved by this Order provided they do not materially alter the terms and conditions of the DIP Credit Facility or the priming limitations or other conditions set forth on Exhibit 3 hereto. (b) Enforceable Obligations. The Term Sheet shall constitute and evidence the valid and binding obligations of the Debtors, which obligations shall be enforceable jointly and severally against the Debtors, their estates and any successors thereto, any subsequently appointed trustee, parties in interest, and the Debtors' creditors or representatives thereof, in accordance with their terms. (c) Termination. Notwithstanding anything in this Order, the DIP Lender's commitments under the Term Sheet and the DIP Documents shall continue until the first to occur of (a) December 15, 2025; (b) occurrence of an Event of Default; or (c) the Maturity Date (the "Commitment Termination Date"); provided, however, that upon the occurrence of an event 9 Case 24-11647-MFW Doc 306-1 Filed 01/14/25 Page 11 of 50 that, with the passage of time and/or the giving of notice would become an Event of Default (a "Default"), the funding commitment shall be suspended unless and until Borrowers have cured such Default. For the avoidance of doubt, none of (i) a Default, (ii) an Event of Default, or (iii) a termination in accordance with this Paragraph 2(c) shall affect the priming limitations or other conditions set forth in Exhibit 3 hereto, which shall remain in full force and effect. (d) Protection of the DIP Lender and Other Rights. The Debtors shall use the proceeds of the DIP Credit Facility only for the purposes specifically set forth in the Term Sheet, the DIP Documents, and this Order and in strict compliance with the Budget subject to permitted variances (at a 10% level) determined on the basis of aggregate cash disbursements (the "Permitted Variances"). The Debtors shall inform the DIP Lender promptly of any disbursement made based on Permitted Variances. Any adjustments to the Budget (other than the Permitted Variances) shall be approved by the DIP, for which approval shall not be unreasonably withheld, provided that the adjustment does not cause the total Budget to exceed the maximum amount of the Funding Cap. The Debtors are hereby bound by, and shall comply with, the terms, conditions, covenants and obligations set forth in the Term Sheet and the MOU, all of which are incorporated herein by reference. 3. The DIP Lien Priority. (a) To secure the DIP Obligations, the DIP Lender is hereby granted pursuant to and in accordance with 364(c)(1), and 364(d) of the Bankruptcy Code, valid, enforceable and fully perfected lien in the DIP Collateral comprising all of Debtors' assets (the "DIP Liens"),7 subject in all respects to the Carve -Out; 7 Without limiting the generality of the foregoing, the scope of the DIP Liens includes certain property known as "PA 9," which purportedly is (or was) subject to a 42.8% tenant in common interest in favor of SilverRock Land II, LLC, an entity owned by the Traub Family Revocable Trust. 10 Case 24-11647-MFW Doc 306-1 Filed 01/14/25 Page 12 of 50 (b) The DIP Liens shall be effective immediately upon the entry of this Order, and, except to the extent expressly provided in Exhibit 3, the DIP Liens shall be senior to, and not at any time be made subject or subordinated to, or made pari passu with, any other lien, security interest or claim existing as of the Petition Date or created thereafter, other than the Carve -Out; (c) The DIP Liens shall be and hereby are deemed fully perfected liens and security interests, effective and perfected upon the date of the Order, without the necessity of execution by the Debtors of mortgages, security agreements, pledge agreements, financing agreements, financing statements, account control agreements or any other agreements, filings or instruments, such that no additional actions need be taken by the DIP Lender or any other party (including, without limitation, any depository bank or securities intermediary) to perfect such interests. (d) At all times prior to indefeasible payment in cash in full of the DIP Obligations, the priority of the DIP Liens will: i. Pursuant to Section 364(d)(1) of the Bankruptcy Code, be perfected first priority, senior priming liens on all DIP Collateral (except to the extent expressly provided in Exhibit 3); ii. Be valid and enforceable against any trustee appointed in the Cases, upon the conversion of any of the Cases to a case under Chapter 7 of the Bankruptcy Code (a "Successor Case"), or upon the dismissal of the any of the Cases or Successor Case; and 4. Superpriority Administrative Claim. The DIP Lender is hereby granted an allowed superpriority administrative expense claim (the "DIP Superpriority Claim", together with the DIP Liens, the "DIP Protections") pursuant to section 364(c)(1) of the Bankruptcy Code in each of the Cases and in any Successor Case(s) for all DIP Obligations, having priority over any 11 Case 24-11647-MFW Doc 306-1 Filed 01/14/25 Page 13 of 50 and all other claims against the Debtors, now existing or hereafter arising, of any kind whatsoever, but subject in all respects to the Carve -Out, including, without limitation, and to the extent authorized by the Bankruptcy Code, all administrative expenses of the kinds specified in or arising or ordered under sections 105(a), 326, 328, 330, 331, 503(a), 503(b), 506(c), 507(a), 507(b), 546(c) , 546(d), 726, 1113, and 1114 and any other provision of the Bankruptcy Code or otherwise, whether or not such expenses or claims may become secured by a judgment lien or other non- consensual lien, levy or attachment, which allowed DIP Superpriority Claim shall be payable from and have recourse to all pre- and post -petition property of the Debtors and all proceeds thereof. The DIP Superpriority Claim shall be subject and subordinate in priority of payment only to prior payment of the Carve -Out. The DIP Superpriority Claim shall be senior in all respects to any superpriority claims granted in these Cases, if any. 5. Authorization to Use Proceeds of the DIP Credit Facility. Pursuant to the terms and conditions of this Order, the Term Sheet, and DIP Documents and in accordance with the Budget and any variances thereto that may be permitted pursuant thereto or pursuant to the Term Sheet or DIP Documents, the Debtors are authorized to use the postpetition financing proceeds pursuant to the Term Sheet, DIP Documents and Budget. 6. Authorization and Direction for Payment of DIP Financing Fees and Expenses. The Debtors are hereby authorized to pay such fees, costs, and expenses in accordance with the Term Sheet, the DIP Documents, and this Order (all as expressly limited by Exhibit 3 hereto), without any requirement that the Debtors, the DIP Lender or their respective attorneys file any further application or other pleading, notice, or document with the Court for approval or payment of such fees, costs or expenses. 7. Carve -Out. 12 Case 24-11647-MFW Doc 306-1 Filed 01/14/25 Page 14 of 50 a. The DIP Liens and the DIP Superpriority Claim (as defined below) shall be subject and subordinate to the payment of: (a) fees payable to the United States Trustee pursuant to 28 U.S.C. Section 1930(a)(6), together with the statutory rate of interest, which shall not be limited by any budget ("Statutory Fees"); (b) fees payable to the clerk of the Bankruptcy Court; (c) to the extent expenses are incurred prior to the Carve -Out Trigger: (i) allowed fees and expenses incurred by the Independent Manager in the amount set forth in the Budget, not exceeding $60,000.00 per month plus reasonable expenses; (ii) allowed fees and costs of defense with respect to indemnification obligations owed by Debtors 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 D&O (Directors and Officers) insurance; (iii) allowed fees and costs plus the payment of the Independent Manager's allowed legal fees and expenses in connection with the Chapter 11 Cases; (iv) allowed fees and expenses incurred by the CRO up to the maximum amount set forth in the Budget, subject to the Term Sheet's Permitted Variances; (v) allowed fees and expenses incurred by Debtors' other court approved professionals up to the maximum aggregate amount set forth in the Budget, subject to the Term Sheet's Permitted Variances; and (vi) up to a maximum amount equal to the lesser of (a) $400,000, or (b) amounts remaining available under the Budget (without reference to the Carve -Out Trigger, as that phrase is defined by the Term Sheet) for unpaid documented fees, costs and expenses accrued or incurred by the Independent Manager and other retained professionals following the occurrence of the Carve -Out Trigger, payable under sections 330 and 331 of the Bankruptcy Code and subsequently allowed by order of the Bankruptcy Court (collectively, the "Carve -Out"). Notwithstanding anything to the contrary herein, the amounts of each carve out set forth above shall be reduced by the amounts paid from the DIP Facility (whether pursuant to the Interim Orders or this Order) to or for the 13 Case 24-11647-MFW Doc 306-1 Filed 01/14/25 Page 15 of 50 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 (i) the Commitment Termination Date, and (ii) 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 Facility, provided, however, that the foregoing shall not limit the Debtors' obligations to pay Statutory Fees on all disbursements made by or on behalf of the Debtors; (4) absent the City's express written agreement, the amount of the carve outs set forth in the 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 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 Budget for the payment of fees or expenses, the maximum amount of the Carve Out shall be reduced accordingly. For clarification purposes, except (x) to the extent that the DIP Lender has not fully funded the DIP Credit Facility; and (y) with respect to the Independent Manager's rights to indemnification under section 7(a)(ii) above, the Carve Out shall be paid and satisfied solely from the funds advanced by the DIP Lender as part of the DIP Credit Facility, and not from any other DIP Collateral or proceeds thereof. b. "Carve -Out Trigger" shall mean upon delivery (by email or otherwise) by the City of written notice to the Debtors, the Debtors' lead bankruptcy counsel, and the United States Trustee of the occurrence of an Event of Default. 8. Payment of Compensation. Nothing herein shall be construed as consent to the allowance of any professional fees or expenses of the Debtors or affect the right of any party in interest to object to the allowance and payment of such fees and expenses. 14 Case 24-11647-MFW Doc 306-1 Filed 01/14/25 Page 16 of 50 9. Maturity Date. Unless otherwise agreed to by the DIP Lender, the maturity date (the "Maturity Date") shall be the first to occur of: a. The effective date of a chapter 11 plan for any of the Debtors in the Bankruptcy Case (the "Effective Date"). b. The closing of a sale, assignment or transfer of all or substantially all of the Debtors' assets (the "Closing"). c. The occurrence of an Event of Default under or with respect to the Facility. d. The dismissal or conversion of the Bankruptcy Case (or the case of any of the Debtors), or appointment of a trustee with respect to any of the Debtors. e. The termination or resignation of Christopher Sontchi as the manager of any of the Debtors. f. The termination or resignation of Douglas Wilson as chief restructuring officer of any of the Debtors. g. December 31, 2025. 10. Other Rights and Obligations. (a) Good Faith Under Section 364(e) of the Bankruptcy Code. The DIP Lender has acted in good faith in connection with negotiating the Term Sheet, the DIP Documents, and the loans to be made pursuant thereto, and their reliance on this Order is in good faith. Based on the findings set forth in this Order and the record made during the Hearing, and in accordance with section 364(e) of the Bankruptcy Code and Bankruptcy Rules 4001(b) and (c), in the event any or all of the provisions of this Order are hereafter reversed, modified amended or vacated by a subsequent order of this or any other Court, the DIP Lender is entitled to all of the benefits and protections provided in section 364(e) of the Bankruptcy Code. (b) Binding Effect. The DIP Liens, DIP Superpriority Claim and other rights and remedies granted under this Order (all as expressly limited by Exhibit 3 hereto) shall be valid and enforceable against any trustee appointed in any or all of the Debtors' Cases and upon the 15 Case 24-11647-MFW Doc 306-1 Filed 01/14/25 Page 17 of 50 dismissal of any or all of the Debtors' Cases, or in any Successor Case(s), and such liens and security interests shall maintain their first priority as provided in this Order (all as expressly limited by Exhibit 3 hereto) until all the DIP Obligations have been indefeasibly paid in full in cash and the DIP Lender's commitments have been terminated in accordance with the Term Sheet, DIP Documents and this Order. (c) The DIP Lender's Liability for Collateral. So long as the DIP Lender complies with reasonable commercial lending practices, the DIP Lender shall not in any way or manner be liable or responsible for: (a) the safekeeping of the DIP Collateral; (b) any loss or damage thereto occurring or arising in any manner or fashion from any cause; (c) any diminution in the value thereof; or (d) any act or default of any carrier, warehouseman, bailee, forwarding agency, or other person whomsoever. (d) Remedies Cumulative. The DIP Lender's rights and remedies under the Term Sheet, the DIP Documents, and all other agreements shall be cumulative. The DIP Lender shall have all other rights and remedies not inconsistent herewith as provided by law, or in equity, subject to the requirements of the Bankruptcy Code. No exercise by the DIP Lender of one right or remedy shall be deemed an election. No delay by the DIP Lender shall constitute a waiver, election, or acquiescence by it. No waiver by the DIP Lender shall be effective unless made in a written document signed on behalf of the DIP Lender and then shall be effective only in the instance and for the purpose for which it was given. (e) Remedies. With respect to enforcement of remedies upon an Event of Default, the DIP Lender shall provide a Carve -Out Trigger notice to the Borrowers and the U.S. Trustee five (5) Business Days prior to taking any such action (the "Remedies Notice Period"), and after the expiration of the Remedies Notice Period, the DIP Lender shall be authorized and 16 Case 24-11647-MFW Doc 306-1 Filed 01/14/25 Page 18 of 50 entitled to exercise all rights and remedies provided in the DIP Documents, the Term Sheet or this Order (as applicable) and under applicable law. During the Remedies Notice Period (including as extended pursuant to this subparagraph (e)), the Debtors may use cash in their operating account in the ordinary course of business, consistent with past practices and the 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 City's exercise of any rights and remedies and funds in the operating account may be used for this purpose; provided, however, that if an emergency hearing is requested to be heard before the end of the Remedies Notice Period but is scheduled for a later date by the Court, then the Remedies Notice Period shall be automatically extended until the Court issues an order or other ruling with respect thereto. (f) Relief From Automatic Stay. Upon the expiration of the Remedies Notice Period, and except as the Court may otherwise order pursuant section 10(e) of this Order, and without further order of this Court, the automatic stay set forth in Section 362 of the Bankruptcy Code is hereby modified to permit the DIP Lender, its agents, attorneys and representatives, to take all action to enforce the DIP Lender's rights and remedies under or with respect to the DIP Credit Facility, the Term Sheet, the DIP Documents and applicable non -bankruptcy law, including without limitation, taking possession of DIP Collateral, foreclosure and sale of respect to DIP collateral, application of proceeds from the disposition of DIP Collateral to amounts due under the DIP Credit Facility, the Term Sheet, the DIP Documents or applicable non -bankruptcy law, to the extent such disposition is consistent with the priming limitations and other conditions set forth on Exhibit 3 hereto. 17 Case 24-11647-MFW Doc 306-1 Filed 01/14/25 Page 19 of 50 (g) No Priming of DIP Lender. It shall be an Event of Default if the Debtors in any way prime or seek to prime (or otherwise cause to be subordinated in any way) the liens provided to the DIP Lender by offering a subsequent lender or any party -in -interest a superior or pari passu lien or claim with respect to the DIP Collateral pursuant to section 364(d) of the Bankruptcy Code or otherwise. (h) Indemnification. The Debtors, their bankruptcy estates, and the Debtors' successors and assigns shall indemnify the DIP Lender for all claims and liability arising from or in connection with the transactions contemplated herein, except to the extent of liability that is determined by final order to result from the DIP Lender's intentional or willful misconduct or gross negligence. (i) Waivers. Subject to the terms of this Order, the Debtors, on behalf of themselves, their successors or assigns, and any subsequently appointed trustee or fiduciary, and the Debtors' creditors and equity holders who received actual notice of the DIP Motion, hereby forever waive and release any and all rights to take any of the following actions, absent the advance written consent of the DIP Lender: (1) to assert the "equities of the case" exception in Bankruptcy Code Section 552(b); (2) to surcharge any of the DIP Collateral under Bankruptcy Code Section 506(c); (3) to require marshalling by the DIP Lender with respect to any of the DIP Collateral; (4) to seek or obtain entry of an order priming (under section 364(d) of the Bankruptcy Code) the DIP Liens or the prepetition liens, security interests and/or other property interests of the DIP Lender in any real or personal property of the Debtors (including without limitation the DIP Lenders' repurchase options); (5) to sell, transfer, assign or revest any of the DIP Collateral free and clear of any of the DIP Liens, or the prepetition liens, security interest and/or other property interests of the DIP Lender in any real of personal 18 Case 24-11647-MFW Doc 306-1 Filed 01/14/25 Page 20 of 50 property of the Debtors (including without limitation the DIP Lenders' repurchase options); and (6) to file or seek approval or confirmation of a motion or plan that would effectuate any of the foregoing. Such waivers and releases shall survive repayment of the indebtedness and satisfaction of other obligations under the DIP Credit Facility. The Debtors and the DIP Lender hereby waive their respective rights to terminate the Term Sheet pursuant to Section 19 of the Term Sheet; provided, however, that this waiver shall not require that the DIP Lender fund any advances upon the occurrence of an Event of Default or other failure of conditions set forth in the Term Sheet or DIP Documents. (j) Administrative Expense Claims. Until such time as all DIP Obligations are paid in full and the Cases have been closed, subject in all respects to the Carve - Out, the Debtors shall not in any way or at any time seek allowance of any administrative expense claim against the Debtors of any kind or nature whatsoever, that is superior to or pari passu with the DIP Lender's superpriority administrative expense claim against the bankruptcy estates, as described more fully in the Term Sheet and this Order (the "Superpriority Claim"); and (k) Use of Proceeds of the DIP Credit Facility. Proceeds of the DIP Credit Facility shall be used solely as permitted in the Term Sheet, this Order, and the Budget. 11. Survival of Order and Other Matters. The provisions of this Order and any actions taken pursuant hereto shall survive entry of any order which may be entered (i) confirming any Plan in the Cases, (ii) converting any of the Cases to a case under chapter 7 of the Bankruptcy Code or a Successor Case, (iii) to the extent authorized by applicable law, dismissing the Cases, (iv) withdrawing the reference of the Cases from this Court, or (v) providing for abstention from handling or retaining of jurisdiction of the Cases in this Court and this Order. The terms and 19 Case 24-11647-MFW Doc 306-1 Filed 01/14/25 Page 21 of 50 provisions of this Order (all as expressly limited by Exhibit 3 hereto) shall be binding upon the Debtors and the DIP Lender, the Prepetition Secured Creditors and each of their respective successors and assigns, and shall inure to the benefit of the Debtors and the DIP Lender, the Prepetition Secured Creditors and each of their respective successors and assigns including, without limitation, any trustee, examiner with expanded powers, responsible officer, estate administrator or representative, or similar person appointed or elected in a case for any Debtor under any chapter of the Bankruptcy Code, including any Successor Case. The terms and provisions of this Order (all as expressly limited by Exhibit 3 hereto) shall also be binding on all of the Debtors' creditors and equity holders who received notice of the DIP Motion, and all other parties in interest, including, but not limited to a trustee appointed or elected under chapter 7 or chapter 11 of the Bankruptcy Code. (a) Enforceability. This Order shall constitute findings of fact and conclusions of law pursuant to the Bankruptcy Rule 7052 and shall take effect and be fully enforceable immediately upon entry of this Order. Notwithstanding Bankruptcy Rules 4001(a)(3), 6004(h), 6006(d), 7062, 9024, or any other Bankruptcy Rule, or Rule 62(a) of the Federal Rules of Civil Procedure, this Order shall be immediately effective and enforceable upon its entry and there shall be no stay of execution or effectiveness of this Order. (b) Obiections Overruled. All objections to the Motion to the extent not withdrawn or resolved, are hereby overruled. 12. Governmental Consents. Except as otherwise provided herein, the execution, delivery and performance by the Debtors of the DIP Documents and the consummation of the transactions contemplated by the DIP Documents do not and will not require any registration with, consent or approval of, or notice to, or other action to, with or by, any governmental authority. 20 Case 24-11647-MFW Doc 306-1 Filed 01/14/25 Page 22 of 50 13. Interim DIP Orders. Upon entry of this Order, the terms of the Interim DIP Orders shall be superseded and replaced in their entirety with the terms set forth in this Order, the Term Sheet and the DIP Documents. 14. Priority of Terms. To the extent of any conflict between or among (a) the express terms or provisions of the Term Sheet, DIP Documents, the Motion or any other agreements, on the one hand, and (b) the terms and provisions of this Order, on the other hand, unless such term or provision herein is phrased in terms of "as defined in" "as set forth in" or "as limited by" or "as more fully described in" the DIP Documents (or words of similar import), the terms and provisions of this Order shall govern. 15. Retention of Jurisdiction. This Court has and will retain jurisdiction to enforce this Order. 21 Case 24-11647-MFW Doc 306-1 Filed 01/14/25 Page 23 of 50 EXHIBIT 1 (Term Sheet) )ocusign Envelope ID: 451A7ttgpl2499 1 9j8RI 323�OC 306-1 Filed 01/14/25 Page 24 of 50 Docusign Envelope ID: 451A7f�$Pap9[r1lg918 r 323uoc 306-1 Filed 01/14/25 Page 25 of 50 Docusign Envelope ID: 451A76 - pwg8IEtf9l§ufipw323�OC 306-1 Filed 01/14/25 Page 26 of 50 Docusign Envelope ID: 451A7Cdf 181I*9r8 f 323voc 306-1 Filed 01/14/25 Page 27 of 50 Jocusign Envelope ID: 451A7thgEtt1:181*97 323�OC 306-1 Filed 01/14/25 Page 28 of 50 Docusign Envelope ID: 451A7�6.M6291:181*918 f 323uoc 306-1 Filed 01/14/25 Page 29 of 50 Docusign Envelope ID: 451A7eftgs481En918 r 323U0C 306-1 Filed 01/14/25 Page 30 of 50 Docusign Envelope ID: 451A7ftgg$Ite18 323uoc 306-1 Filed 01/14/25 Page 31 of 50 Docusign Envelope ID: 451A7t/ gg81E69r8 323uoc 306-1 Flied 01/14/25 Page 32 of 50 �bl LttSb1A, Case 24-11647-MFW Doc 306-1 Filed 01/14/25 Page 33 of 50 Agreed SilverRock Development Company, LLC, RGC PA 789, LLC, SilverRock Lifestyle Residences, LLC, SilverRock Lodging, LLC, SilverRock Luxury Residences, LLC, and SilverRock Phase 1, LLC By: Name: Douglas Wilson Chief Restructuring Officer By: Name: Christopher Sontchi Independent Manager City of La Quinta Jon McMillen, City Manager By: Attest: By: 12/11/2024 Monika Radeva, City Clerk Approved as to form: By: (.c>`4:... . _ William H. Ihrke, City Attorney )ocusign Envelope ID: 451A7ttgFteSittri8 f 4323�OC 306-1 Filed 01/14/25 Page 34 of 50 Docusign Envelope ID: 451A76BA-C82B-49D8-BF69-87DE46832301 Talus La Quinta 12.09.2024 DIP budget - 14 months CONT.IDEMIAL SINerRock Phase I, LLC, Silver -Rock Development Company, LLC, ROC PA 789, LLC SlNerRock Luxury Residences, LLC, SilverRock Lifestyle Residences, LLC SilverRock lodging, LLC Month 4 Inflows DIP funding Total Inflows Outflows Operational outflows: Rent - mock up room Rent -trailers & containers Rent - temp fencing Water - Mock up room Water - Dust control Electricity Finance/Accounting Management Finance/Accounting Support Consultant -Residential sales Insurance -D&O Insurance Property Insurance - Mock up Room Payment & Performance Bond premium Property tares(2024/2025) Escape Taxes Income Taxes - FT8 Mist office expenses Appraisal - ORE: Appraisal - HV5: Property Condition Report 5:te protection Site Management Site Management (August - November) Dust & erosion control Cost to Complete Cost Estimating Construction Dean -Up I Dust 8 Erosion Control 51te Maintenance Costs Earthwork Repair (Allowance) Broker Listing Claims Process Contingency Total operational outflows descdotlon Lease renews In April 2025 FGS Realty Advisor, LLC Post -petition (August - November 12, 2024) J. Yamiguchi Independent Manager & CRO Estimate (Due 12/10,4/10) (Due 12/10,4/10) 6 Entities Intern. Estimate Proposed 10/14/2024 Proposed by Cumming (1508 . Engineer Costs) Security, Monitoring & Barricades See Project management Costs Tab Post -petition Costs -Site Management PM-10 & Water Truck Rental R.D. Olson: Updated as of 10/31 Sanitation Stations, Fuel, Tools & Equipment Grading and repair after rain/ weather event ALL Deposit 1 2024 August 2 2024 September 4,100 29,218 10,363 100 750 2,155 31,500 13,039 Case 24-11647-MFW Doc 306-1 Filed 01/14/25 Page 35 of 50 3 2024 October 250,000 325,000 250,000 325,000 9,100 29,211 10,363 100 750 2,155 31,500 13,039 4 2024 November 5 6 7 8 9 2024 2025 2025 2025 2025 December lanrvuaFeF March McI( 2,115,027 2,500,000 1,500,000 1,250,000 2,115,027 2,500,000 1,500,000 1,250,000 10 2025 Mav 11 2025 lune 12 2025 2� 1,250,000 1,250,000 13 2025 August 14 2025 September 15 2025 October 1,500,000 1,500,000 16 2025 November 17 2025 December 4,100 29,218 10,363 100 750 2,155 31,500 13,039 10,000 9,100 29,218 10,363 100 750 2,155 31,500 13,039 257,400 2,611 - 33,278 4,800 1,299 1,299 1,299 1,299 4,264 4,384 4,264 4,384 20,000 20,000 20,000 20,000 4,192 4,192 4,192 4,192 20% 31,374 24,220 26,196 188,243 145,320 157,176 76,660 459,960 4,100 4,100 29,218 29,218 10,363 10,363 100 100 750 750 2,155 2,155 31,500 31,500 4,100 4,100 4,300 29,218 29,218 29,218 10,363 10,363 10,363 100 100 100 750 750 750 2,155 2,155 2,155 31,50D 31,500 - 10,000 10,000 10,000 10,000 286,51 27,395 1,299 1,299 30,000 45,000 750,000 3135,187 27,656 9,300 4,300 29,218 29,218 10,363 10,363 100 100 750 750 2,155 2,155 35,000 4,300 29,218 10,363 100 750 2,155 2,800 1,299 1,299 1,299 1,299 1,299 1,299 100,000 100,000 - - - 4,264 4,264 4,384 4,264 4,264 20,000 20,000 20,000 20,000 20,000 4,192 4,192 55,000 - 328,522 328,522 3,890 250,000 250,000 75,000 118,293 175,071 24,390 28,366 18,106 42,130 16,106 1,273,801 1,050,424 896,341 170,197 521,480 252,781 96,637 4,384 20,000 4,264 20,000 4,264 20,000 4,192 4,192 4,192 4,192 4,192 4,192 3,890 3,890 20,000 3,890 3,890 20,000 3,890 3,890 20,000 20,666 123,997 4,300 29,218 10,363 100 750 2,155 4,300 29,218 10,363 100 750 2,155 1,299 1,299 4,264 20,000 4,192 4,300 29,218 10,363 100 750 2,155 4,300 29,218 10,363 100 750 2,155 4,300 29,218 10,363 100 750 2,155 404,446 1,299 1,299 1,299 • 4,264 4,264 4,264 9,264 20,000 20,000 20,000 20,000 4,192 9,192 4,192 4,192 3,890 3,890 20,000 16,106 96,637 20,106 120,637 3,890 3,890 20,000 16,106 96,637 20,106 120,637 3,890 16,105 501,084 12/10/2024 2:22 PM 20;& Docusign Envelope ID: 451A76BA•C82B-4908-BF69-87DE46832301 Talus la Quinta 12.09.2024 DIP budget-10 months CONFIDENTIAL 51IverRock Phase I, LLC, Sllverlock Development Company, LLC, RGC PA 789, LLC SllverRock Luxury Residences, LLC, SllverRock Lifestyle Residences, LLC SllverRock Lodging, LLC Month 0 Restructuring outflows Professional fes Professional fes Professiona If es Professional Fees Professional fees Total Restructuring outflows seiellsirdlenefOreeseeeelisemeieseeli. NET CASH FLOW CUMULATIVE OUTFLOWS, Cash requirement Beginning balance Net stash flow Ending cash balance DIP Facility Beginning balance Interest/Origination fees/exit fees Interest payment DIP financing funding Ending balance de pHon Legal BK restructuring CRO BK restructuring Independent Manager Legal- Independent Manager Trustee fees (Ties to line 85) Case 24-11647-MFW Doc 306-1 Filed 01/14/25 Page 36 of 50 12/10/2024 2:22 PM 1 2024 August - - 2 2024 September 3 4 2024 2024 October November 5 2024 December 6 7 2025 2025 3anuar0 Few 8 2025 March 110,000 75,000 60,000 25,000 23,616 9 2025 Bprf( 110,000 75,000 60,000 25,000 - 10 2025 MAg 110,000 75,000 60,000 50,000 - 11 2025 June 110,000 75,000 60,000 50,000 13,847 12 2025 l 110,000 75,000 60,000 25,000 - 13 2025 August 110,000 75,000 60,000 25,000 - 14 2025 Seotember 15 2025 October 16 2025 November 17 2025 pecember - - - - 1,334 110,000 110,000 85,000 75,000 - 60,000 - 75,000 - - 110,000 75,000 60,000 75,000 21,807 110,000 110,000 75,000 75,000 60,000 60,000 50,000 25,000 - - 110,000 75,000 60,000 25,000 9,210 110,000 75,000 60,000 25,000 - 110,000 75,000 60,000 25,000 - 110,000 75000 600002'�`,. 25,000 12,227 1,334 195,000 320,000 341,807 295,000 270,000 293,616 270,000 295,000 308,847 270,000 270,000 279,210 270,000 270,000 282,227 ... I.. . - . a. fit. _.. . -..:,' __.�__J64� _•E. ... � -_ �a - ,_, .. .. _- - 'Y _ _ ... .. � ....,., .: ..,_.. ....yam .. rr,.,.„. 088,2431 103,346 127,176) 1779,9601 499,419 1,154,576 333659 (463,813) 458,520 (547,781)_ (405,4841 856,003 (366,637) (399,847) 1,133,363 1390,6371 1783,3111 ,, 188,243 - (188,243) 334,897 (188,243) 103,346 687,073 1,467,033 (84497) (112,073) (27,176) (779,960) 3,082,641 (892,033) 499,419 4,428,065 5,594,406 (392,614) 761,962 1,154,576 333,659 6,058,219 1,095,621 (463,813) 6,849,699 631,808 458,520 7,397,480 1,090,328 (547,781) 7,802,96S 542,547 (405,484) 8,196,962 137,062 856,003 8,563,599 993,065 (366,637) 8,963,446 626,428 (399,847) 9,330,083 226,581 1,133,363 9,720,721 1,359,944 (390,637) 10504031 969,306 (783,311) ,�R1E 1.1'tS (188,243) (84,897) (112,073) (892,0331 (392,614) 761,962 1,095,621 631,808 1,090,328 542,547 137,062 993,065 626,428 226,581 1,359,944 969,306 185996 - 250 000 250,000 575,000 325,000 - 575,000 2,425,000 3,000,000 5,500,000 2,500 00 1503,000 7,000,000 7,000,000 1,250,000 8,250,000 8,250,000 - 8,250,000 1,250,000 9,500,000 - 9.500,000 9,500,000 1,500,000 11,000,000 11,000,000 1€[ 3>1 250,000 575,000 575,000 3,000,000 5,500,000 7,000,000 7,000,000 8,250,000 8,250,000 8,250,000 9,500,000 9,500,000 9,500,000 11,000,000 11,000,000 11,000,000 ., Docusign Envelope ID: 451A7tBF -f f 9lytER97 323�OC 306-1 Filed 01/14/25 Page 37 of 50 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 et seq Docusign Envelope ID: 451A7C�3gplt 18I1t491§ 323�OC 306-1 Filed 01/14/25 Page 3 of 50 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 Lenders Liens and Super - Priority Claims; (III) Scheduling a Final Hearing; and (IV) Granting Related Relief 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 Second 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 Third Interim Order (1) 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 Fourth 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 Docusign Envelope ID: 451A7tV 62g81Itf918 323 joc 306-1 Filed 01/14/25 Page 39 of 50 )ocusign Envelope ID: 451A7ftF gp9g811g9r8 r 323ioc 306-1 Filed 01/14/25 Page 40 of 50 et seq Docusign Envelope ID: 451A7t3Pa-g8? tyfel§Rr KV323�OC 306-1 Filed 01/14/25 Page 41 of 50 Docusign Envelope ID: 451A7t3MpIttatIg497RM323E.J0C 306-1 Filed 01/14/25 Page 42 of 50 Vow) AsetA eArsatev�a,+. Case 24-11647-MFW Doc 306-1 Filed 01/14/25 Page 43 of 50 Agreed: SilverRock Development Company, LLC, RGC PA 789, LLC, SilverRock Lifestyle Residences, LLC, SilverRock Lodging, LLC, SilverRock Luxury Residences, LLC, and SilverRock Phase 1, LLC By: Name: Douglas Wilson Chief Restructuring Officer By: Name: Christopher Sontchi Independent Manager City of La Quinta By: Jon McMillen, City Manager Monika Rad'eva, City Clerk Approved as to form: By: .-4. .G. _ _ William H. Ihrke, City Attorney Docusign Envelope ID: 451A7t3Pagg sgBlwisf8 f 323�OC 306-1 Filed 01/14/25 Page 44 of 50 Case 24-11647-MFW Doc 306-1 Filed 01/14/25 Page 45 of 50 EXHIBIT 2 (Approved Budget) Talus La Dolma DIP budget-14 months 12.09.2024 CONFIDENTIAL 5ilverRock Phase I, LLC, SllverRock Development Company, LLC, RGC PA 789, LLC 5ilverRock Luxury Residences, LLC, SilverRock Lifestyle Residences, LLC 511verRock Lodging, LLC Month 0 Inflows DIP funding Total Inflows Outflows Operational outflows: Rent - mock up room Rent -trailers & containers Rent - temp fencing Water - Mock up room Water - Dust control Electricity Finance/Accounting Management Finance/Accounting Support Consultant - Residential sales Insurance - D&O Insurance Property Insurance - Mock up Room Payment & Performance Bond premium Properly taxes(2024/2025) Escape Taxes Income Taxes - FTB Misc office expenses Appraisal - CORE: Appraisal - NV5: Property Condition Report Site protection Site Management Site Management (August - November) Dust& erosion control Cost to Complete Cost Estimating Construction Clean -Up !Dust & Erosion Control Site Maintenance Cons Earthwork Repair (Allowance) Broker Us0ng Claims Process Contingency Total operational outflows descd0ti0n Lease renews in April 2025 FGS Realty Advisor, LLC Post -petition (August - November 12, 2024) J. Yamiguchi Independent Manager & CRO Estimate (Due 12/10, 4/10) (Due 12/10, 4/10) 6 Entities Internet Estimate Proposed 10/14/2024 Proposed by Cumming (150( ♦ Engineer Costs) Security, Monitoring & Barricades See Project management Costs Tab Post -petition Costs - Site Management PM-10 & Water Truck Rental R.O. Olson: Updated as of 10/31 Sanitation Stations, Fuel. Tools & Equipment Grading and repair after rain/ weather event ILL Deposit 1 2024 Aueust 2 2024 September Case 24-11647-MFW Doc 306-1 Filed 01/14/25 Page 46 of 50 3 2024 October 250,000 325,000 250,000 325,000 4 2024 November 5 2024 December 6 2025 Ianuary 7 8 9 2025 2025 2025 February March April 2,115,027 2,500,000 1,500,000 - 1,250,000 2,115,027 2,500,000 1,500,000 - 1,250,000 10 2025 May 11 2025 lune 12 2025 1,250,000 1,250,000 13 2025 Aueust 14 2025 September 15 2025 October 1,500,000 1,500,000 16 2025 November 17 2025 December 4,100 29,218 10,363 100 750 2,155 31,500 13,039 2,611 33,278 4,100 29,218 10,363 100 750 2,155 31,500 13,039 4,100 29,218 10,363 100 750 2,155 31,500 13,039 10,000 4,100 29,218 10,363 100 750 2,155 31,500 13,039 257,400 4,800 1.299 1,299 1,299 1,299 4,264 4,384 4,264 4,384 20,000 20,000 20,000 20,000 4,192 4,192 4,192 4,192 20% 31,374 24.220 26,196 188,243 145,320 157,176 4,100 4,100 4,100 4,100 4,300 29,218 29,218 29,218 29,218 29,218 10,363 10,363 10,363 10,363 10,363 100 100 100 100 100 750 750 750 750 750 2,155 2,155 2,155 2,155 2,155 31,500 31,500 31,500 31,500 10,000 10,000 10,000 10,000 286,651 27,395 1.299 1,299 30,000 45,000 100,000 100,000 4,264 4,264 20,000 20,000 4,192 4,192 55,000 328,522 328,5/2 3,890 750,000 385,187 27,656 1,299 1,299 1,299 4,384 4,264 4,264 20,000 20,000 20,000 4,192 4,192 4,192 • 3,890 3,890 3,890 20,000 - 24,390 28,366 18,106 459,960 1,273,801 1,050,424 896.341 170,197 521,480 250,000 250,000 76,660 118,293 175,071 4,300 29,218 10,363 100 750 2,155 35,000 4,300 29,218 10,363 100 750 2,155 4,300 29,218 10,363 100 750 2,155 2,800 4,300 29,218 10,363 100 750 2,155 4,300 29,218 10,363 100 750 2,155 1,299 1,299 1,299 1,299 1,299 4,384 20,000 4,264 20,000 4,192 4,192 3,890 20,000 3,890 75,000 - 42,130 16,106 252,781 96,637 4,264 20,000 4,192 3,890 20,000 20,666 123,997 4,264 20,000 4,192 4.264 20,000 4,192 3,890 3,890 20,000 16,106 96,637 20,106 120,637 4,300 29,218 10,363 100 750 2,155 1,299 4,264 20,000 4,192 3,890 16,105 96,637 4,300 29,218 10,363 100 750 2,155 4,300 29,218 10,363 100 750 2,155 404,446 1,299 1,299 4,264 20,000 4,264 20,000 4,192 4,192 3,890 20,000 3,890 20,106 16,106 120,637 501,084 12/10/2024 2:22 PM 29,69027 Talus La Q2Inta 12.09.2024 DIP budget -14 months CON1IDENTIAL SllverRock Phase I, LIC, SilverRock Development Company, LLC, RGC PA 789, LLC SilverRock luxury Residences, LLC, SllverRock Lifestyle Residences, LLC SIMertod Lodging, LLC Month 0 Restructuring outflows Professional fees Professional fees Professional fees Professional Fees Professional fees Total Restructuring outflows Tool. NET CASH FLOW CUMULATIVE OUTFLOWS: Cash requirement Beginning balance Net cash flow Ending cash balance DIP Facility Beginning balance Interest/Origination fees/exit tees Interest payment DIP financing funding Ending balance des ri orlon Legal - 86 restructuring CRO- BK restructuring Independent Manager Legal- Independent Manager Trustee fees (Ties to Line 85) Case 24-11647-MFW Doc 306-1 Filed 01/14/25 Page 47 of 50 12/10/2024 2:22 PM 1 2024 Aueust - - - - - 2 3 2024 2024 September October 4 2024 November 5 2024 December 6 2025 lanuary 7 2025 eF Erua0T 8 2025 M3[ch 110,000 75,000 60,000 25,000 23,616 9 2025 Anil 110,000 75,000 60,000 25,000 - 10 2025 Jay 110,000 75,000 60,000 50,000 - 11 2025 Nos 110,000 75,000 60,000 50,000 13,847 12 2025 J920 110,000 75,000 60,000 25,000 13 2025 August 110,000 75,000 60,000 25,000 - 14 2025 5eotember 15 2025 October 16 2025 November 17 2025 December Theat Budget 1,650,000 1,135,000 840,000 525,000' 82.0111 - 110,000 - 85,000 - - - - 1,334 - 110,000 75,000 60,000 75,000 - 110,000 75,000 60,000 75,000 21,807 110,000 75,000 60,000 50,000 - 110,000 75,000 60,000 25,000 - 110,000 75,000 60,000 25,000 9,210 110,000 75,000 60,000 25,000 - 110,000 75,000 60,000 25,000 - 110,000 75,000 60,000 25,000 12,227 - 1,334 195,000 320,000 341,807 295,000 270,000 293,616 270,000 295,000 308,847 270,000 270,000 279,210 270,000 270,000 282,227 I48.513 iAf4 �. -.:. ,ixa�lar. -.. 1* 1,k1SA.ti1 Ak6,U24 i1643g1 ..463433 191,W0 - . Wa1e1 408,04 DI9117 366A. 899.847 466027 7 7g3i14 10J104p81 188,243i 103,346 (27,176J 1779,9601 499,419 1,154,576 333,659 L463,8133 458,520 [547,7813 1405,484 856,003 1366,637, (399,8471 1,133,363 !390,6371 1783,311 188,243 - (188,243) 334,897 687,073 (188,243) (84,897) 103,346 (27,176) 1,467,033 (112,073) (779,960) 3,082,641 (892,033) 499,419 4,428,065 (392,614) 1,154,576 5,594,405 761,962 333,659 6,058,219 1,095,621 (463,813) 6,849,699 631,808 458,520 7,397,480 1,090,328 (547,781) 7,802,965 542.547 (405,484) 8,196,962 137,062 856,003 8,563,599 993,065 (366,637) 8,963,446 626,428 (399,847) 9,330,083 226,581 1,133,363 9,720,721 1,359,944 (390,537) 10,504,031 969,306 (783,311) .. I _ - (188,243) (84,897) (112,073) (892,033) (392,614) 761,962 1,095,621 631,808 1,090,328 542,547 137,062 993,065 626,428 226,581 1,359,944 959,306 185,996 '_ 7 - - 250,000 250000 325,000 575,000 - 575,000 2,425,000 3,000,000 2,500.000 5,500,000 1,500,000 7,000,000 7,000,060 1,250,000 8,250,000 8,250,000 - 8,250,000 1,250,000 9,500,000 - 9,500,000 9,500,000 1,500,000 11,000,000 11,000,000 ,}y IP 250,000 575,000 575,000 3,000,000 5,500,000 7,000,000 7,000,000 8,250,000 8,250,000 8,250,000 9,500,000 9,500,000 9,500,000 11.000,000 11,000,600 11,000,000 Case 24-11647-MFW Doc 306-1 Filed 01/14/25 Page 48 of 50 Exhibit 3 Case 24-11647-MFW Doc 306-1 Filed 01/14/25 Page 49 of 50 Exhibit 3 to Final DIP Financing Order 1. The extent of the DIP Lender's priming under Section 364(d) of the Bankruptcy Code with respect to the parcels of real property specified in this paragraph 1 shall be limited to $1,000,000. The parcels subject to this paragraph 1, are: a. 777-510-001 Leasehold Interest b. 777-510-002 Leasehold Interest c. 777-510-003 Leasehold Interest d. 777-510-004 Leasehold Interest e. 777-510-005 Leasehold Interest f. 777-510-006 g. 777-510-007 h. 777-510-008 i. 777-510-009 Leasehold Interest j. 777-510-010 Leasehold Interest k. 777-510-011 Leasehold Interest 1. 777-510-012 Leasehold Interest m. 777-510-013 n. 777-510-014 o. 777-510-015 Leasehold Interest p. 777-510-016 Leasehold Interest q. 777-520-001 r. 777-520-002 Leasehold Interest s. 777-520-003 Leasehold Interest t. 777-520-004 u. 777-520-005 v. 777-520-006 w. 777-520-007 x. 777-520-008 y. 777-520-009 z. 777-520-010 aa. 777-520-011 Leasehold Interest bb. 777-520-012 Leasehold Interest cc. 777-520-013 Leasehold Interest 2. The extent of the DIP Lender's priming under Section 364(d) of the Bankruptcy Code with respect to the parcels of real property specified in and subject to this paragraph 2 ("Planning Area 7.8.9") shall be limited to $7,000,000, i.e., approximately 58% of the total DIP Credit Facility. The Debtors and the DIP Lender stipulate and agree that the disproportionate amount of priming with respect to Planning Area 7,8,9 (when compared to the percentage of these parcels to the estates' total parcels' in both size and value) is appropriate because, among other reasons: (a) Planning Area 7,8,9 is comprised of some of the most valuable parcels included in the DIP Collateral; and (b) there exists a substantial equity cushion in favor of the holder of the first deed of trust on the parcels comprising Planning Area 7,8,9, even taking into account the DIP Lender's $7 million priming lien.; and (c) the equity cushion in favor of the holder of the first deed of trust on the Planning Area 7,8,9 parcels is greater than the aggregate equity cushion, if any, of the holders of the first trust deeds on the estates' other parcels combined. Planning Area 7,8,9 is comprised of: Case 24-11647-MFW Doc 306-1 Filed 01/14/25 Page 50 of 50 a. 777-060-075 b. 777-060-083 c. 777-060-085 d. 777-060-078 3. Debtor RGC PA 789 LLC owns an undivided 57.2% interest in a portion of parcel no. 10 of Parcel Map. No. 37207 APN 777-060-076, described in greater detail in that certain Membership Interest Purchase and Sale Agreement dated as of April 13, 2023 (the "Planning Area 9"). The remaining 42.8% interest in the Planning Area 9 is owned by SilverRock Land II, LLC ("SR Land"). The membership interests in SR Land are owned by the Traub Family Revocable Trust dated June 22, 2015 (the "Traub Trust"). SR Land and the Traub Trust hereby consent to the sale of the Planning Area 9 by the Debtors pursuant to Section 363(h) of the Bankruptcy Code as part of a plan or a separate sale motion under section 363 of the Bankruptcy Code, provided that the provisions of any plan or order approving the sale of SR Land's interest shall in substance implement the terms of this paragraph, and shall be in a form reasonably acceptable to SR Land. In consideration of such consent, upon the closing of a sale of the Planning Area 9 pursuant to section 363 or a plan, SR Land shall be paid the sum of $3,816,000 plus 15% interest compounding quarterly beginning on April 14, 2024, less the allocable share of costs and expenses per section 363(j) of the Bankruptcy Code. Absent agreement of the parties, the Court shall determine the allocable share of such costs and expenses. Such payment shall be made solely from the net proceeds of sale, after deducting payments made to lenders secured by Planning Area 9. 4. The Debtors, the DIP Lender, and Cypress Point Holdings, LLC shall enter into that certain Stipulation Between the Debtors, the City of La Quinta, California, and Cypress Point Holdings, LLC Regarding 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 5. The extent of the DIP Lender's priming under Section 364(d) of the Bankruptcy Code with respect to the parcels of real property specified in this paragraph 5 shall be limited to $7,000,000. The parcels subject this paragraph 5 are: a. 777-490-040 b. 777-490-041 c. 777-490-042 d. 777-490-043 e. 777-490-044 f. 777-490-045 Case 24-11647-MFW Doc 306-2 Filed 01/14/25 Page 1 of 26 Exhibit B Case 24-11647-MFW Doc 306-2 Filed 01/14/25 Page 2 of 26 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: SilverRock Development Company, et al., Debtors.' Chapter 11 Case No. 24-11647 (MFW) (Jointly Administered) Re: Docket No. 246 FINAL ORDER (I) AUTHORIZING THE DEBTORS TO OBTAIN POSTPETITION SECURED FINANCING, (II) GRANTING PRIMING LIENS AND SUPERPRIORITY ADMINISTRATIVE EXPENSE STATUS, AND (IH) GRANTING RELATED RELIEF Upon the motion (the "Motion") dated December 12, 2024, of Debtors in the above - captioned chapter 11 cases (collectively, the "Cases"), pursuant to sections 105,362,363105, 362, 363, and 364 of title 11 of the United States Code, 11 U.S.C. §§ 101, et seq. (the "Bankruptcy Code"), Rules 4001 and 9014 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules") and the corresponding local rules of this District (the "Local Rules"), requesting entry of an Order' authorizing the Debtors to, among other things: (i) Obtain senior secured postpetition financing in an aggregate principal amount not to exceed $11,000,000.00 (the "DIP Credit Facility), pursuant to the terms and conditions of the Term Sheet, including the Memorandum of Understanding (collectively, the "Term Sheet"), the DIP Documents (as defined below), and this Order; 'The Debtors in these chapter 11 cases, along with the last four digits of each Debtor's federal tax identification number, as applicable, are: SilverRock Development Company, LLC (5730), RGC PA 789, LLC (5996), SilverRock Lifestyle Residences, LLC (0721), SilverRock Lodging, LLC, (4493), SilverRock Luxury Residences, LLC (6598) and SilverRock Phase 1, LLC (2247). The location of the Debtors' principal place of business and the Debtors' mailing address is 343 Fourth Avenue, San Diego, CA 92101. �-{�c�-�e-��-4i�#arc:ef>f-c#�ittbF-kl�-1-�;emler•-�s�tiE!-+e�=iewir b�#r�r4er��9=-tli-is-birder-and-xeser-G�es-the-r�F�t-#}-meli� furEher changes. 3- 2 The DIP Credit Facility amount includes and rolls up the S2,690,965 previousyloaned by DTP Lender to Debtors post -petition on an interim basis (the "Interim DIP Credit Facility"). Case 24-11647-MFW Doc 306-2 Filed 01/14/25 Page 3 of 26 (ii) Enter into (a) the executed Term Sheet, substantially in the form attached as Exhibit 1 hereto, by and among the Debtors and the City of La Quinta (the "DIP Lender") and (b) the documents necessary and appropriate pursuant to the Term Sheet and the DIP Credit Facility (the "DIP Documents' ") (iii) Borrow, pursuant to the DIP Documents and the Order (as defined below), postpetition financing in an aggregate principal amount of up to $11,000,000.00; (iv) Execute and deliver the Term Sheet and the other DIP Documents to the DIP Lender; (v) Grant to the DIP Lender the DIP Liens (as defined below) on all of the DIP Collateral (as defined below), senior to any and all liens on the DIP Collateral to secure the DIP Credit Facility and all obligations owing and outstanding thereunder and under the DIP Documents, as applicable, and this Order, as applicable (collectively, the "DIP Obligations"); (vi) Grant to the DIP Lender allowed superpriority administrative expense claims in the Cases for the DIP Credit Facility and all DIP Obligations; and (vii) Use the proceeds of the DIP Credit Facility in accordance with the Term Sheet and the Budget, a copy of which Budget is attached hereto as Exhibit 2; and (viii) Grant such other and further relief as this Court deems necessary and just. The Court having considered the Motion, the Declaration of Debtors' Chief Restructuring Officer Douglas Wilson ("CRO") in Support of the Motion (the "Wilson Declaration"), the Declaration of Debtors' sole Independent Manager Christopher S. Sontchi in Support of the Motion (the "Sontchi Declaration"), the exhibits attached thereto, the Term Sheet, the Budget, and the 2 Case 24-11647-MFW Doc 306-2 Filed 01/14/25 Page 4 of 26 evidence submitted or adduced and the arguments of counsel made at the hearing on this Motion; and notice of the Motion and the hearing on the Motion having been given in accordance with Bankruptcy Rules 4001 and 9014; held and concluded; and it appearing that granting the relief requested in the Motion is fair and reasonable and in the best interests of the Debtors, their estates and their creditors, and is essential for the preservation of the value of the Debtors' property; and all objections, if any, to the entry of this Order having been withdrawn, resolved or overruled by the Court; and after due deliberation and consideration, and good and sufficient cause appearing therefor: I. IT IS FOUND AND CONCLUDED 3: A. Petition Date. On August 5, 2024 (the "Petition Date"), the Debtors filed voluntary petitions under chapter 11 of the Bankruptcy Code with this Court. B. Jurisdiction and Venue. This Court has jurisdiction over these proceedings, pursuant to 28 U.S.C. §§ 157(b) and 1334 and the Amended Standing Order of Reference from the United States District Court for the District of Delaware, and over the persons and property affected hereby. Venue for the Chapter 11 Case and proceedings on the Motion is proper in this district pursuant to 28 U.S.C. §§ 1408 and 1409. Consideration of the Motion constitutes a core proceeding under 28 U.S.C. § 157(b)(2). This Court may enter a final order consistent with Article III of the United States Constitution. C. Notice. Notice of the hearing on the Motion and the relief requested therein has been served by the Debtors pursuant to Bankruptcy Rules 2002 and 4001(b), (c), and (D) and in accordance with the Local Rules on (i) the Office of the United States Trustee for the The findings and conclusions set forth herein constitute the court's findings of fact and conclusions of law pursuant to Bankruptcy Rule 7052, made applicable to this proceeding pursuant to Bankruptcy Rule 9014. To the extent that any of the following findings of fact constitute conclusions of law, they are adopted as such. To the extent any of the following conclusions of law constitute findings of fact, they are adopted as such. 3 Case 24-11647-MFW Doc 306-2 Filed 01/14/25 Page 5 of 26 District of Delaware; (ii) the Debtors' thirty (30) largest unsecured creditors (excluding insiders); (i4iii) counsel to the DIP Lender; (iiiiv) all known holders of liens upon the DIP Collateral; and ( ) all parties that have filed notices of appearance pursuant to Bankruptcy Rule 2002. The notice constitutes good and sufficient notice of the relief requested herein, and no further notice of the relief granted by this Order is necessary or shall be required. D. Additional Findings and Conclusions. i. All Debtors are Borrowers. The entirety of Debtors' property and assets, including without limitation all interests in real property, personal property. tangible and intangible property, claims and causes of action, property that is known to exist, or unknown and proceed and products of all of the foregoing, comprises the DIP Collateral: (the "DIP Collateral"), The capital structure of the Project and the DIP Collateral, including a list of those creditors with a secured interest in the DIP Collateral (collectively, the "Prepetition Secured Creditors" ),4 is more fully laid out in the Green Declaration and in the Debtors' Bankruptcy Schedules and Statements of Financial Affairs, both of which are incorporated herein by reference. Those amounts owed to the Prepetition Secured Creditors shall be referred to herein as the "Prepetition Secured Obligations." t 4 For the avoidance of doubt, nothing herein (including the definition of Prepetition Secured Parties) shall grant adequate protection to any liens or claims held by any party subject to or as identified in the Motion of the Debtors Pursuant to Bankruptcy Rule 9019. Local Rule 9013-1 and 11 U.S.C. ¢¢ 105(a) and 363(b) Authorizing and Approving Certain Unwind Agreements and Reconveyance of Deeds of Trust by and Between the Debtors and Certain Settling Creditors [Docket No. 2401, the Complaint for Avoidance of Promissory Notes and the Deeds of Trusts Given to Secure the Promissory Notes. under 11 U.S.C. cY§ 544. 547. 548. and 550 and California Civil Code § 3439 05 and to Preserve Avoided Liens and Interests for the Ben fit o the B nkru 3tcv Estates Under 11 US.C. 55lfiled in Case No 24-50261-MFW, The Robert_Green Company, Robert Green Resickntial or any related affiliates Capitalized terms not defined herein shall have the meanings ascribed to them in the Motion. 6 Nothing herein shall constitute a finding or determination concerning the lien priority of any Prepetition Secured Obligations. 4 Case 24-11647-MFW Doc 306-2 Filed 01/14/25 Page 6 of 26 ii. The DIP Lender provided the Interim DIP Credit Facility pursuant to the interim DIP orders [Docket Nos. 162, 188, 208, & 243] (the "Interim DIP Orders"). iii. Neither theThe DIP Lender nor the Prepetition Secured Creditors i shall not be deemed to be a control person or insider (as defined in section 101(31) of the Bankruptcy Code) of any Debtor by virtue of providing the DIP Credit Facility; iv. the Prepetition Secured Creditors are entitled, pursuant to sections 361, 363(e) and 364(d)(1) of the Bankruptcy Code, to adequate protection of their respective interests in the DIP Collateral, solely to the extent of any diminution in the value of the DIP C 11atte altheir prepetition collateral occurring from and after the Petition Date (the "Diminution"), that may be caused by or arising as a result of (C) the subordination of the Prepetition Secured Obligations to the DIP Superpriority Claim, and (D) imposition of the automatic stay pursuant t , among other things, the grant of a lien under section 3364 of the Bankruptcy Code. E. Findings Regarding the DIP Credit Facility. (i) Need for the DIP Credit Facility. Debtors need to obtain funds to, among other things, maintain their real estate, preserve the value of the Project opportunity, pay administrative expenses during the pendency of these bankruptcy proceedings, hire a broker to market and sell the Project opportunity, complete a thorough and robust sales process, and confirm a Chapter 11 Plan for the benefit of all the constituencies of the estates. The only choice of such funds is the DIP Credit Facility. (ii) Priming of Any Prepetition Liens. Upon the entry of and subject to the terms of the Order (all as expressly limited by Exhibit 3 hereto), the priming of any existing liens 5 Case 24-11647-MFW Doc 306-2 Filed 01/14/25 Page 7 of 26 on any of the DIP Collateral, as contemplated by the Term Sheet and as further described below, is a condition to the Debtors' borrowings under the DIP Credit Facility, which borrowing is necessary for the Debtors to be able to continue to complete a robust process for selling the Project opportunity and reorganizing to maximize returns for all constituencies of the bankruptcy estates. (iii) No Credit Available on More Favorable Terms. The Debtors have been unable to obtain (a) unsecured credit allowable under Bankruptcy Code section 503(b)(1) as an administrative expense, or (b) secured credit on more favorable terms and conditions than those provided in the Term Sheet, DIP Documents, and this Order. The Debtors are unable to obtain credit without granting to the DIP Lender the DIP Protections (as defined below). F. Effect of Reversal; Good Faith. The DIP Lender has indicated a willingness to provide financing to the Debtors in accordance with the Term Sheet, the MOU and this Order, provided that the DIP Obligations, DIP Liens and other protections granted by this Order (all as expressly limited by Exhibit 3 hereto) and the Term Sheet will not be affected by any subsequent reversal or modification of this Order as provided in section 364(e) of the Bankruptcy Code. The DIP Lender has acted in good faith in agreeing to provide the DIP Credit Facility approved by this Order. G. Business Judgment and Good Faith Pursuant to Section 364(e). (i) The terms and conditions of the DIP Credit Facility, the Term Sheet, DIP Documents, Budget and the fees paid and to be paid thereunder are fair, reasonable, and the best available under the circumstances, reflect the Debtors' exercise of prudent business judgment c nsistent with their fiduciary duties, and are supported by reasonably equivalent value and consideration; 6 Case 24-11647-MFW Doc 306-2 Filed 01/14/25 Page 8 of 26 (ii) the Term Sheet and DIP Documents were negotiated in good faith and at arms' length between the Debtors and the DIP Lender; and (iii) the DIP Credit Facility loan proceeds to be obtained pursuant to the Term Sheet and . °DIP Documents will be advanced in good faith, and for valid business purposes and uses, as a consequence of which the DIP Lender is entitled to the protection and benefits of section 364(e) of the Bankruptcy Code. H. Prepetition Secured Creditors Have Either : Consente to the DIP Credit Facility or are Adequately Protected. TAIL Prepetition Secured Creditors, except Popov Bank "Po .._ " have either -consented to Debtors borrowing from the DIP Credit Facility pursuant to the Term Sheet and DIP Documents, ^r. + the extent +b ey have n+ ^set including the priming liens and other terms set forth on Exhibit 3 hereto. With respect to Poppy Poppy will be adequately protected upon implementation of the DIP Credit Facility loan and granting of the DIP Liens (as defined below). Poppy's adequate protection results from the substantial equity cushion in the DIP Collateralits prepetition collateral, even after imposition of the DIP Liens, and the DIP Lender's agreement to cap priming as to the collateral in which Poppy asserts a first priority lien in the amount of $7,000,000 as se forth on Exhibit 3 and as is more fully described in the Motion and supporting exhibits. The equity cushion and the DIP Lender's agreement to cap its priming together are sufficient to adequately protect try—'ia 5, d Credito;sPoppy. I. In PI nn i. The Debtors and the DIP Lender stipulate and agree that disproportionate amount of priming with respect to Planning Area 7 8 9 (as defined on Exhibit 3) (when compared to the percentage of these parcels to the estates' total parcels' in both size and value) is appropriate 7 Case 24-11647-MFW Doc 306-2 Filed 01/14/25 Page 9 of 26 because, among other reasons: (a) Planning Area 7,8,9 is comprised of some of the most valuable parcels included in the DIP Collateral; (b) there exists a substantial equity cushion in favor of the holder of the first deed of trust on the parcels comprising Planning Area 7,8,9, even taking into account the DIP Lender's $7 million primin lien. and c the e. ui cushion in favor of the holder of the first deed of trust on the Planning Area 7 8 9 parcels is greater than the aggregate equity cushion, if any, of the holders of the first trust deeds on the estates' other parcels combined. J. L Immediate Entry of Order. The Debtors have requested immediate entry of this Order pursuant to Bankruptcy Rule 4001(c)(2) and Local Rule 4001-2(b). The permission granted herein for the Debtors to obtain postpetition financing from the DIP Lender pursuant to the Term Sheet, to obtain funds thereunder and to use the proceeds of this postpetition financing pursuant to this Order is necessary to avoid immediate and irreparable harm to the Debtors. Entry of this Order is in the best interests of the Debtors' respective estates and creditors as its implementation will, among other things, allow for access to the financing necessary for the continued administration of Debtors' estates, preservation of Debtors' real estate and the Project opportunity, enhancement of the Debtors' prospects for a successful sale of substantially all of their assets, and confirmation of a successful Chapter 11 plan. Based upon the foregoing findings, acknowledgements, and conclusions, and upon the record made before this Court at the hearing on the Motion (the "Hearing"), and good and sufficient cause appearing therefor; NOW, THEREFORE, based upon the foregoing findings and conclusions, and upon consideration of the Motion and the record made before this Court with respect to the Motion, including the record created during the Hearing, and with the consent of the Debtors and the DIP Lender to the form and entry of this Order, and good and sufficient cause appearing therefor, and the Court being otherwise fully advised in the premises; 8 Case 24-11647-MFW Doc 306-2 Filed 01/14/25 Page 10 of 26 IT IS HEREBY ORDERED AND ADJUDGED THAT: 1. Motion Granted. The Motion is GRANTED in accordance with the terms and conditions set forth in this Order (all as expressly limited by Exhibit 3 hereto), Term Sheet, MOU, and DIP Documents. Any objections to the Motion with respect to entry of this Order to the extent not withdrawn, waived or otherwise resolved, and all reservations of rights included therein, are hereby denied and overruled on the merits. 2. The Term Sheet, MOU and the DIP Documents. (a) Approval of Entry into the Term Sheet and DIP Documents. The Debtors are authorized to execute, deliver and perform in accordance with the Term Sheet al(including the MOU), the DIP Documents and to incur and to perform the DIP Obligations in accordance with, and subject to, the terms of this Order; (all as expressly limited by Exhibit 3 hereto), and to execute and deliver all instruments and documents which may be required or necessary for the performance by the Debtors under the Term Sheet, subject to the priming limitations and other conditions set forth on Exhibit 3 hereto. The Debtors are hereby authorized to do and perform all acts, pay the principal, interest, fees, expenses, and other amounts described in the Term Sheet and all other DIP Documents as such become due, subject to the priming limitations and other conditions set forth on Exhibit 3 hereto. The form and substance of both the Term Sheet and DIP Documents are hereby approved. The Debtors and the DIP Lender are hereby authorized to modify the DIP Documentsand such shall be deemed annroved by this Order provided they do not materially alter the terms .nd conditions of the DIP Credit Facili or the priming limitations or other conditions set forth on Exhibit 3 hereto. (b) Enforceable Obligations. The Term Sheet shall constitute and evidence the valid and binding obligations of the Debtors, which obligations shall be enforceable jointly and 9 Case 24-11647-MFW Doc 306-2 Filed 01/14/25 Page 11 of 26 severally against the Debtors, their estates and any successors thereto-aftd4hei , any subsequently appointed trustee, parties in interest, and the Debtors' creditors or representatives thereof, in accordance with their terms. (c) Termination. Notwithstanding anything in this Order, the DIP Lender's commitments under the Term Sheet and the DIP Documents shall continue until the first to occur of (a) December 15, 2025; (b) occurrence of an Event of Default; or (c) the Maturity Date (the "Commitment Termination Date"); provided, however, that upon the occurrence of an event that, with the passage of time and/or the giving of notice would become an Event of Default (a "Default"), the funding commitment shall be suspended unless and until Borrowers have cured such Default. For the avoidance of doubt, none of (i) a Default, (ii) an Event of Default, or (iii) a termination in accordance with this Paragraph 2(c) shall affect the priminer limitations or other conditions set forth in Exhibit 3 hereto, which shall remain in full force and effect. (d) Protection of the DIP Lender and Other Rights. The Debtors shall use the proceeds of the DIP Credit Facility only for the purposes specifically set forth in the Term Sheet, the DIP Documents, and this Order and in strict compliance with the Budget subject to permitted variances (at a 10% level) determined on the basis of aggregate cash disbursements (the "Permitted Variances"). The Debtors shall inform the DIP Lender promptly of any disbursement made based on Permitted Variances. Any adjustments to the Budget (other than the Permitted Variances) shall be approved by the DIP, for which approval shall not be unreasonably withheld, provided that the adjustment does not cause the total Budget to exceed the maximum amount of the Funding Cap. The Debtors are hereby bound by and shall comply with, the terms, conditions, covenants and obligations set forth in the Term Sheet and the MOU, all of which are incorporated herein by reference. 10 Case 24-11647-MFW Doc 306-2 Filed 01/14/25 Page 12 of 26 3. The DIP Lien Priority. (a) To secure the DIP Obligations, the DIP Lender is hereby granted pursuant to and in accordance with 364(c)(1), and 364(d) of the Bankruptcy Code, valid, enforceable and fully perfected lien in the DIP Collateral comprising all of Debtors' assets (the "DIP Liens"),7 subject only to prior payment otin all respects to the Carve -Out; (b) The DIP Liens shall be effective immediately upon the entry of this Order, and, except to the extent expressly provided in Exhibit 3, the DIP Liens shall be senior to, and not at any time be made subject or subordinated to, or made pari passu with, any other lien, security interest or claim existing as of the Petition Date or created thereafter, other than paymentf the Carve -Out; (c) The DIP Liens shall be and hereby are deemed fully perfected liens and security interests, effective and perfected upon the date of the Order, without the necessity of execution by the Debtors of mortgages, security agreements, pledge agreements, financing agreements, financing statements, account control agreements or any other agreements, filings or instruments, such that no additional actions need be taken by the DIP Lender or any other party (including, without limitation, any depository bank or securities intermediary) to perfect such interests. (d) At all times prior to indefeasible payment in cash in full of the DIP Obligations, the priority of the DIP Liens will: Code, be perfected first priority liens on all Collateral; i. •ii,----Pursuant to Section 364(d)(1) of the Bankruptcy Code, be perfected first priority, Without limiting the generality of the foregoing, the scope of the DIP Liens includes certain property known as "PA 9," which purportedly is (or was) subject to a 42.8% tenant in common interest in favor of SilverRock Land II, LLC, an entity owned by the Traub Family Revocable Trust. Case 24-11647-MFW Doc 306-2 Filed 01/14/25 Page 13 of 26 senior priming liens on all DIP Collateral (except to the extent expressly provided in Exhibit 3); Be valid and enforceable against any trustee appointed in the Cases, upon the conversion of any of the Cases to a case under Chapter 7 of the Bankruptcy Code (a "Successor Case"), or upon the dismissal of the any of the Cases or Successor Case; and 4. Superpriority Administrative Claim. The DIP Lender is hereby granted an allowed superpriority administrative expense claim (the "DIP Superpriority Claim", together with the DIP Liens, the "DIP Protections") pursuant to section 364(c)(1) of the Bankruptcy Code in each of the Cases and in any Successor Case(s) for all DIP Obligations, having priority over any and all other claims against the Debtors, now existing or hereafter arising, of any kind whatsoever but subject in all respects to the Carve -Out, including, without limitation} and to the extent authorized by the Bankruptcy Code, all administrative expenses of the kinds specified in or arising or ordered under sections 105(a), 326, 328, 330, 331, 503(a), 503(b), 506(c), 507(a), 507(b), 546(c) , 546(d), 726, 1113, and 1114 and any other provision of the Bankruptcy Code or otherwise, whether or not such expenses or claims may become secured by a judgment lien or other non-consensual lien, levy or attachment, which allowed DIP Superpriority Claim shall be payable from and have recourse to all pre- and post -petition property of the Debtors and all proceeds thereof. The DIP Superpriority Claim shall be subject and subordinate in priority of payment only to prior payment of the Carve -Out. The DIP Superpriority Claim shall be senior in all respects to any superpriority claims granted in these Cases if any. 12 Case 24-11647-MFW Doc 306-2 Filed 01/14/25 Page 14 of 26 5. Authorization to Use Proceeds of the DIP Credit Facility. Pursuant to the terms and conditions of this Order, the Term Sheet, and DIP Documents and in accordance with the Budget and any variances thereto that may be permitted pursuant thereto or pursuant to the Term Sheet or DIP Documents, the Debtors are authorized to use the postpetition financing proceeds pursuant to the Term Sheet, DIP Documents and Budget. 6. Authorization and Direction for Payment of DIP Financing Fees and Expenses. The Debtors are hereby authorized to pay such fees, costs, and expenses in accordance with the Term Sheet, the DIP Documents, and this Order (all as expressly limited by Exhibit 3 hereto), without any requirement that the Debtors, the DIP Lender or their respective attorneys file any further application or other pleading, notice, or document with the Court for approval or payment of such fees, costs or expenses. 7. Carve -Out. a. The DIP Liens and the DIP Superpriority Claim (as defined below) shall be subject and subordinate to the payment of: (a) fees payable to the United States Trustee pursuant to 28 U.S.C. Section 1930(a)(6), together with the statutory rate of interest, which shall not be limited by any budget ("Statutory Fees"); (b) fees payable to the clerk of the Bankruptcy Court; (c) to the extent expenses are incurred prior to the Carve -Out Trigger: (i) allowed fees and expenses incurred by the Independent Manager in the amount set forth in the Budget, not exceeding $60,000.00 per month plus reasonable expenses; (ill allowed fees and costs of defense with respect to indemnification obligations owed by Debtors 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 D&O (Directors and Officers) insurance; (iii) allowed fees and costs plus the payment of the Independent Manager's allowed legal fees and expenses in connection 13 Case 24-11647-MFW Doc 306-2 Filed 01/14/25 Page 15 of 26 with the Chapter 11 Cases; (iv) allowed fees and expenses incurred by the CRO inup to the maximum amount set forth in the Budget, subject to the Term Sheet's Permitted Variances; (v) allowed fees and expenses incurred by Debtors' other court approved professionals iup to the maximum aggregate amount set forth in the Budget, subject to the Term Sheet's Permitted Variances; and (vi) up to a maximum amount equal to the lesser of (a) $400,000, or (b) amounts remaining available under the Budget (without reference to the Carve -Out Trigger, as that phrase is defined by the Term Sheet) for unpaid documented fees, costs and expenses accrued or incurred by the Independent Manager and other retained professionals following the occurrence of the Carve -Out Trigger, payable under sections 330 and 331 of the Bankruptcy Code and subsequently allowed by order of the Bankruptcy Court (collectively, the "Carve -Out"). Notwithstanding anything to the contrary herein, the amounts of each carve out set forth above shall be reduced by the amounts paid from the DIP Facility (whether pursuant to the Interim Orders or this Order) 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 (i) the Commitment Termination Date, and (ii) 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 Facility, provided, however, that the foregoing shall not limit the Debtors' obligations to pay Statutory Fees on all disbursements made by or on behalf of the Debtors; (4) absent the City's express written agreement, the amount of the carve outs set forth in the 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 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 Budget for the payment of fees or 14 Case 24-11647-MFW Doc 306-2 Filed 01/14/25 Page 16 of 26 expenses, the maximum amount of the Carve Out shall be reduced accordingly. For clarification purposes. except (x) to the extent that the DIP Lender has not fully funded the DIP Credit Facility. and v) with respect to the Independent Manager's rights to indemnification under section 7(a ii above, the Carve Out shall be paid and satisfied solel from the funds advanced b the DIP Lender as part of the DIP Credit Facility, and not from an of , er DIP Collateral or . roceeds thereof. b. "Carve -Out Trigger" shall mean upon delivery (by email or otherwise) by the City of written notice to the Debtors, the Debtors' lead bankruptcy counsel, and the United States Trustee of the occurrence of an Event of Default. 8. Payment of Compensation. Nothing herein shall be construed as consent to the allowance of any professional fees or expenses of the Debtors or affect the right of any party in interest to object to the allowance and payment of such fees and expenses. 9. Maturity Date. TheUnless otherwise agreed to by the DIP Lender the maturity date (the "Maturity Date") shall be the first to occur of: a. The effective date of a chapter 11 plan for any of the Debtors in the Bankruptcy Case (the "Effective Date"). b. The closing of a sale, assignment or transfer of substantially all or substantially all of the Debtors' assets (the "Closing"). c. The occurrence of an Event of Default under or with respect to the Facility. d. The dismissal or conversion of the Bankruptcy Case (or the case of any of the Debtors), or appointment of a trustee with respect to any of the Debtors. e. The termination or resignation of Christopher Sontchi as the manager of any of the Debtors. f. The termination or resignation of Douglas Wilson as chief restructuring officer of any of the Debtors. December 31. 2025. 10. Other Rights and Obligations. 15 Case 24-11647-MFW Doc 306-2 Filed 01/14/25 Page 17 of 26 (a) Good Faith Under Section 364(e) of the Bankruptcy Code. The DIP Lender has acted in good faith in connection with negotiating the Term Sheet, the DIP Documents, and the loans to be made pursuant thereto, and their reliance on this Order is in good faith. Based on the findings set forth in this Order and the record made during the Hearing, and in accordance with section 364(e) of the Bankruptcy Code and Bankruptcy Rules 4001(b) and (c), in the event any or all of the provisions of this Order are hereafter reversed, modified amended or vacated by a subsequent order of this or any other Court, the DIP Lender is entitled to all of the benefits and protections provided in section 364(e) of the Bankruptcy Code. (b) Binding Effect. The DIP Liens, DIP Superpriority Claim and other rights and remedies granted under this Order (all as expressly limited by Exhibit 3 hereto) shall be valid and enforceable against any trustee appointed in any or all of the Debtors' Cases and upon the dismissal of any or all of the Debtors' Cases, or in any Successor Case(s), and such liens and security interests shall maintain their first priority as provided in this Order (all as expressly limited by Exhibit 3 hereto) until all the DIP Obligations have been indefeasibly paid in full in cash and the DIP Lender's commitments have been terminated in accordance with the Term Sheet, DIP Documents and this Order. (c) The DIP Lender's Liability for Collateral. So long as the DIP Lender complies with reasonable commercial lending practices, the DIP Lender shall not in any way or manner be liable or responsible for: (a) the safekeeping of the DIP Collateral; (b) any loss or damage thereto occurring or arising in any manner or fashion from any cause; (c) any diminution in the value thereof; or (d) any act or default of any carrier, warehouseman, bailee, forwarding agency, or other person whomsoever. 16 Case 24-11647-MFW Doc 306-2 Filed 01/14/25 Page 18 of 26 (d) Remedies Cumulative. The DIP Lender's rights and remedies under the Term Sheet the DIP Documents, and all other agreements shall be cumulative. The DIP Lender shall have all other rights and remedies not inconsistent herewith as provided by law, or in equity, subject to the requirements of the Bankruptcy Code. No exercise by the DIP Lender of one right or remedy shall be deemed an election. No delay by the DIP Lender shall constitute a waiver, election, or acquiescence by it. No waiver by the DIP Lender shall be effective unless made in a written document signed on behalf of the DIP Lender and then shall be effective only in the instance and for the purpose for which it was given. (e) Remedies. With respect to enforcement of remedies upon an Event of Default, the Givy, DIP Lender shall provide a Carve -Out Trigger notice to the Borrowers and the U.S. Trustee five (5) Business Days'— prior to taking any such action (the "Remedies Notice Period"), and after the expiration of the Remedies Notice Period, the €iyDIP Lender shall be authorized and entitled to exercise all rights and remedies provided in the DIP Documents, the Term Sheet or this Order (as applicable) and under applicable law. During the Remedies Notice Period. the Borrowers (including as extended pursuant to this subparagraph (e)), the Debtors may use cash in their operating account in the ordinary course of business, consistent with past practices and the 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 City's exercise of any rights and remedies and funds in the operating account may be used for this purpose:; provided, however, that if an emergency hearing is requested to be heard before the end of the Remedies Notice Period but is scheduled for a later date by the Court, then the Remedies Notice Period shall be automatically extended until the Court issues an order or other ruling with respect thereto. 17 Case 24-11647-MFW Doc 306-2 Filed 01/14/25 Page 19 of 26 Relief From Automatic Stay. Upon the expiration of the Remedies Notice Period, and except as the Court may otherwise order pursuant section 10(e) of this Order, and without further order of this Court, the automatic stay set forth in Section 362 of the Bankruptcy Code is hereby modified to permit the DIP Lender, its agents, attorneys and representatives, to take all action to enforce the DIP Lender's rights and remedies under or with respect to the DIP Credit Facility, the Term Sheet. the DIP Documents and applicable non -bankruptcy law, including without limitation. taking possession of DIP Collateral, foreclosure and sale of respect to .DIP collateral, application of proceeds from the disposition of DIP Collateral to amounts due under the DIP Credit Facility, the Term Sheet, the DIP Documents or applicable non -bankruptcy law, to the extent such disposition is consistent with the priming limitations and other conditions set forth on Exhibit 3 hereto. 44-No Priming of DIP Lender. It shall be an Event of Default if the Debtors shall not in any way prime or seek to prime (or otherwise cause to be subordinated in any way) the liens provided to the DIP Lender by offering a subsequent lender or any party - in -interest a superior or pari passu lien or claim with respect to the DIP Collateral pursuant to section 364(d) of the Bankruptcy Code or otherwise:. (h) (g) Indemnification. The Debtors ° } their bankruptcy estates, and the Debtors' successors and assigns shall indemnify the DIP Lender for all claims and liability arising from or in connection with the transactions contemplated herein, except to the extent of liability that is determined by final order to result from the DIP Lender's intentional or willful misconduct or gross negligence;_ (i) '� }�T48°4 e - Waivers. Subject to the terms of this Order, the Debtors on behalf of themselves, their successors or assigns, and any subsequently appointed trustee 18 Case 24-11647-MFW Doc 306-2 Filed 01/14/25 Page 20 of 26 or fiduciary -shall, and the Debtors' creditors and equity holders who received actual notice of the DIP Motion, hereby forever waive and release ad -any and all rights, with respect to this - Order to to take an of the followin a tions absent the advance written consent of the DIP Lender: (1) to assert the "equities of the case" exception in Bankruptcy Code Section 552(b); (2) to surcharge rights inany of the DTP Collateral under Bankruptcy Code Section 506(c), or; (3) to require marshalling by the DTP Lender with respect to any of the DIP Collateral; (41 to seek or obtain entry of an order priming (under section 364(d) of the Bankruptcy Code) the DIP Liens or the prepetition liens, security interests and/or other property interests of the DIP Lender in any real or personal property of the Debtors (including without limitation the DIP Lenders' repurchase options); (5) to sell, transfer, assign; or revest any of the DIP Collateral- free and clear of any of the DIP Liens, or the prepetition liens, securit interest and/or other •ro.ert interests of the DIP Lender in any real of personal property of the Debtors (including without limitation— the DIP Lender'sLenders' repurchase options:); and (6) to file or seek approval or confirmation of a motion or plan that would effectuate any of the forgoing Such waivers and releases shall survive repayment of the indebtedness and satisfaction of other obligations under the DIP Credit Facility. The Debtors and the DIP Lender hereby waive their respective rights to terminate the Term Sheet pursuant to Section 19 of the Term Sheet provided, however, that this waiver shall not require that the DIP Lender fund any advances upon the occurrence of an Event of Default or other failure of conditions set forth in the Term Sheet or DIP Documents. (j) i--Administrative Expense Claims. Until such time as all DIP Obligations are paid in full and the Cases have been closed, subject in all respects to the Carve- 19 Case 24-11647-MFW Doc 306-2 Filed 01/14/25 Page 21 of 26 Out, the Debtors shall not in any way or at any time seek allowance of any administrative expense claim against the Debtors of any kind or nature whatsoever, that is superior to or pari passu with the DIP Lender's superpriority administrative expense claim against the bankruptcy estates, as described more fully in the Term Sheet and this Order (the "Superpriority Claim"); and (k) f3 -Use of Proceeds of the DIP Credit Facility. Proceeds of the DIP Credit Facility shall be used ' solely as permitted in the Term Sheet, this Order, and the Budget. 11. Survival of Order and Other Matters. The provisions of this Order and any actions taken pursuant hereto shall survive entry of any order which may be entered (i) confirming any Plan in the Cases, (ii) converting any of the Cases to a case under chapter 7 of the Bankruptcy Code or a Successor Case, (iii) to the extent authorized by applicable law, dismissing the Cases, (iv) withdrawing the reference of the Cases from this Court, or (v) providing for abstention from handling or retaining of jurisdiction of the Cases in this Court and this Order. The terms and provisions of this Order (all as expressly limited by Exhibit 3 hereto) shall be binding upon the Debtors and the DIP Lender, the Prepetition Secured Creditors and each of their respective successors and assigns, and shall inure to the benefit of the Debtors and the DIP Lender, the Prepetition Secured Creditors and each of their respective successors and assigns including, without limitation, any trustee, examiner with expanded powers, responsible officer, estate administrator or representative, or similar person appointed or elected in a case for any Debtor under any chapter of the Bankruptcy Code, including any Successor Case. The terms and provisions of this Order (all as expressly limited by Exhibit 3 hereto) shall also be binding on all of the Debtors' creditors.- and equity holders who received notice of the DIP Motion, and all other 20 Case 24-11647-MFW Doc 306-2 Filed 01/14/25 Page 22 of 26 parties in interest, including, but not limited to a trustee appointed or elected under chapter 7 or chapter 11 of the Bankruptcy Code. (a) Enforceability. This Order shall constitute findings of fact and conclusions of law pursuant to the Bankruptcy Rule 7052 and shall take effect and be fully enforceable immediately upon entry of this Order. Notwithstanding Bankruptcy Rules 4001(a)(3), 6004(h), 6006(d), 7062, 9024, or any other Bankruptcy Rule, or Rule 62(a) of the Federal Rules of Civil Procedure, this Order shall be immediately effective and enforceable upon its entry and there shall be no stay of execution or effectiveness of this Order. (b) Objections Overruled. All objections to the Motion to the extent not withdrawn or resolved, are hereby overruled. 12. Governmental Consents. Except as otherwise provided herein, the execution, delivery and performance by the Debtors of the DIP Documents and the consummation of the transactions contemplated by the DIP Documents do not and will not require any registration with, consent or approval of, or notice to, or other action to, with or by, any governmental authority. 13. Interim DIP Orders. Upon entry of this Order, the terms of the Interim DIP Orders shall be superseded and replaced in their entirety with the terms set forth in this Order, the Term Sheet and the DIP Documents. 14. Priority of Terms. To the extent of any conflict between or among (a) the express terms or provisions of the Term Sheet, DIP Documents, the Motion or any other agreements, on the one hand, and (b) the terms and provisions of this Order, on the other hand, unless such term or provision herein is phrased in terms of "as defined in" "as set forth in" or "as limited by" or "as more fully described in" the DIP Documents (or words of similar import), the terms and provisions of this Order shall govern. 21 Case 24-11647-MFW Doc 306-2 Filed 01/14/25 Page 23 of 26 15. Retention of Jurisdiction. This Court has and will retain jurisdiction to enforce this Order. 22 Case 24-11647-MFW Doc 306-2 Filed 01/14/25 Page 24 of 26 EXHIBIT I LTerm Sheet) Case 24-11647-MFW Doc 306-2 Filed 01/14/25 Page 25 of 26 F.XHIB1T 2 (Approved Budget) Case 24-11647-MFW Doc 306-2 Filed 01/14/25 Page 26 of 26 [Different first page link -to -previous setting changed from off in original to on in modified} Exhibit 3 [Different first page link -to -previous setting changed from off in original to on in modified". RI4-132424966v4-