2025-01-23 Promissory Note for DIP Credit AgrmtDocusign Envelope ID: CFE5F4FB-5F00-4318-9383-11824AB72D32
PROMISSORY NOTE SECURED BY DEED OF TRUST
Dated as of: January 23, 2025
San Diego, California
Loan Amount: $11,000,000.00
FOR VALUE RECEIVED, 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 I, LLC (2247) (each, a "Borrower" and collectively, the "Borrowers"),
promises to pay to the CITY OF LA QUINTA, a California municipal corporation ("Lender"), at
78-495 Calle Tampico, La Quinta, CA 92253, or at such other location as the Lender hereof may
from time to time designate, the principal sum of all draws hereunder, plus such other costs,
charges, and fees which may be owing from time to time, all subject to the terms and conditions
set forth in this Promissory Note Secured by Deed of Trust (this "Promissory Note").
Reference is made to:
The Debtor -In -Possession Credit Facility Loan and Security Agreement dated as of January
23, 2025 ("DIP Credit Agreement") between Lender, and Borrowers which sets forth terms
and conditions for the Loans to Borrowers, as may be amended from time to time. Defined
terms used, but not defined, in this Promissory Note shall have the definition as stated in
the DIP Credit Agreement; and
The Deeds of Trust executed and delivered by SilverRock Development Company, LLC
and RGC PA 789, LLC, each dated January 23, 2025, (together, the "Deed of Trust"),
securing this Promissory Note; and
The INTERIM ORDER (I) AUTHORIZING THE DEBTORS TO OBTAIN INTERIM
POST -PETITION SECURED FINANCING, (II) GRANTING NON -PRIMING LIENS
AND SUPER -PRIORITY ADMINISTRATIVE EXPENSE STATUS, AND (III)
SCHEDULING A FINAL HEARING, entered October 1, 2024 in the United States
Bankruptcy Court for the District of Delaware, Case No. 24-11647-MFW (the
"Bankruptcy Case"), Docket Entry #162 ("First Interim DIP Financing Order"); and
The SECOND INTERIM ORDER (I) AUTHORIZING THE DEBTORS TO OBTAIN
ADDITIONAL INTERIM POSTPETITION SECURED FINANCING, (II) GRANTING
NON -PRIMING LIENS AND SUPERPRIORITY ADMINISTRATIVE EXPENSE
STATUS, AND (III) SCHEDULING A FINAL HEARING, entered October 18, 2024 in
the Bankruptcy Case, Docket Entry # 188 ("Second Interim DIP Financing Order"); and
The THIRD INTERIM ORDER (I) AUTHORIZING THE DEBTORS TO OBTAIN
ADDITIONAL INTERIM POSTPETITION SECURED FINANCING, (II) GRANTING
NON -PRIMING LIENS AND SUPERPRIORITY ADMINISTRATIVE EXPENSE
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STATUS, AND (III) SCHEDULING A FINAL HEARING, entered October 31, 2024 in
the Bankruptcy Case, Docket Entry # 188 ("Third Interim DIP Financing Order"); and
The FOURTH INTERIM ORDER (I) AUTHORIZING THE DEBTORS TO OBTAIN
ADDITIONAL INTERIM POSTPETITION SECURED FINANCING, (II) GRANTING
NON -PRIMING LIENS AND SUPERPRIORITY ADMINISTRATIVE EXPENSE
STATUS, AND (III) SCHEDULING A FINAL HEARING, entered December 6, 2024 in
the Bankruptcy Case, Docket Entry #243 ("Fourth Interim DIP Financing Order" and
together with the First Interim DIP Financing Order, the Second Interim DIP Financing
Order and the Third Interim DIP Financing Order, the "Interim DIP Orders");
The FINAL ORDER (I) AUTHORIZING THE DEBTORS TO OBTAIN
POSTPETITION SECURED FINANCING, (II) GRANTING PRIMING LIENS AND
SUPERPRIORITY ADMINISTRATIVE EXPENSE STATUS, AND (III) GRANTING
RELATED RELIEF, entered January 23, 2025 in the Bankruptcy Case, Docket Entry #330
("Priming DIP Financing Order"); and
The AMENDED FINAL ORDER (I) AUTHORIZING THE DEBTORS TO OBTAIN
POSTPETITION SECURED FINANCING, (II) GRANTING PRIMING LIENS AND
SUPERPRIORITY ADMINISTRATIVE EXPENSE STATUS, AND (III) GRANTING
RELATED RELIEF, entered April 15, 2025 in the Bankruptcy Case, Docket Entry #437
("Final DIP Financing Order").
Capitalized terms herein shall have the meaning given to such terms in the DIP Credit
Agreement.
1. LOAN DISBURSEMENT.
a. Subject to the term and conditions of the DIP Credit Agreement, the Lender agrees
to make during the Commitment Period a term loan or term loans (each a "Loan"
and, collectively, the "Loans") to the Borrowers in an aggregate principal amount
not to exceed $11,000,000.00, including amounts previously advanced on an
interim basis pursuant to the Interim DIP Orders and the Priming DIP Financing
Order, as the same may be reduced from time to time or terminated pursuant to the
provisions of this Promissory Note (the "Commitment"), on the applicable date of
Borrowing. Interest shall accrue on the outstanding principal advanced by the City
at the Local Agency Investment Fund ("LAIF") rate in effect from time to time on
the amounts advanced by Lender to Borrowers (Such rate as of the date of this
Promissory Note is 4.71% per annum. From and after a default with respect to the
Loan, default interest shall accrue and be payable on the outstanding principal under
the Loan at the rate of 5.0% (which shall be in addition to the LAIF rate, or the
maximum allowable interest rate per California law, whichever is less). Interest
shall accrue from the date of each advance through and including the date of
repayment, regardless of the date of this Promissory Note or the date of the DIP
Credit Agreement (the Borrowers acknowledging that advances were made
pursuant to the Interim Orders and the Priming DIP Order before the date of the
Promissory Note or the DIP Credit Agreement).
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b. The Commitment shall automatically be permanently reduced on each date of
Borrowing of Loans (after giving effect to the Loans incurred on such date) by an
amount equal to the aggregate principal amount of the Loans incurred on such
Borrowing date.
c. The Commitment shall terminate in its entirety on the earlier of the Commitment
Termination Date or the Maturity Date.
2. REPAYMENT AND PREPAYMENT.
a. The aggregate principal amount of the Loans outstanding on the Maturity Date,
together with all accrued and unpaid interest and fees thereon, shall become due and
payable in full on the Maturity Date.
b. The Borrowers may voluntarily repay the Loans in full at any time without premium
or penalty upon at least three (3) Business Days' prior written notice (or such
shorter period as agreed by the Lender in its sole discretion), which notice shall
specify that the commitment of Lender to fund further advances is terminated. Any
prepayment of Loans shall be accompanied by all accrued interest and fees on the
amount of such repaid Loans.
c. All amounts shall be payable in lawful money of the United States of America.
Payments shall be made to City of La Quinta at 78-495 Calle Tampico, La Quinta,
CA 92253, or at such other location as the Lender hereof may from time to time
designate in writing to Borrowers.
d. Anything contained in this Promissory Note to the contrary notwithstanding, (i) in
no event shall the aggregate principal amount of the Loans at any time outstanding
exceed the amount permitted to be outstanding hereunder pursuant to the Final DIP
Financing Order, in each case as the foregoing limits may be in effect from time to
time and (ii) the Borrowers agree to immediately prepay the Loans in the amounts
and at the times as may be necessary to comply with the foregoing clause (i).
3. EVENTS OF DEFAULT. Notwithstanding the provisions of Section 362 of the
Bankruptcy Code and without application or motion to, or order from, the Bankruptcy Court, the
occurrence of any circumstance identified in the DIP Credit Agreement as an Event of Default
shall constitute an Event of Default under this Promissory Note.
4. REMEDIES FOR DEFAULT.
a. Upon the occurrence and continuance of any Event of Default, the Lender shall
have all rights and remedies specified in the DIP Credit Agreement, the Final DIP
Financing Order, and/or applicable law.
5. COLLECTION COSTS; ATTORNEY'S FEES. If this Promissory Note is not paid
when due, whether at maturity or by acceleration, Borrowers shall pay all costs of collection,
including, but not limited to, attorneys' fees and all expenses incurred in connection with the
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protection or realization of the collateral securing the payment hereof or enforcement of any
guarantee, incurred by Lender on account of such collection, whether or not suit is filed hereon.
6. NO WAIVER BY LENDER. No waiver of any breach, default, or failure of condition
under the terms of this Promissory Note or the Deed of Trust or the obligations secured thereby
shall be implied from any failure of the Lender to take action, or any delay be implied from any
failure by the Lender in taking action, with respect to such breach, default, or failure from any
prior waiver of any similar or unrelated breach, default, or failure.
7. NO ASSIGNMENT. This Promissory Note shall not be assignable or assumable except
as permitted in and pursuant to the terms and conditions of the DIP Credit Agreement.
8. SEVERABILITY; GOVERNING LAW; AMENDMENT. The unenforceability or
invalidity of any provision or provisions of this Promissory Note as to any persons or
circumstances shall not render that provision or those provisions unenforceable or invalid as to
any other provisions or circumstances, and all provisions hereof, in all other respects, shall remain
valid and enforceable. This Promissory Note has been executed and delivered by Borrowers in the
State of California and is to be governed and construed in accordance with the laws thereof,
without respect to conflict of law principles. Neither this Promissory Note nor any term hereof
may be waived, amended, discharged, modified, changed, or terminated orally; nor shall any
waiver of any provision hereof be effective, except by an instrument in writing signed by Lender.
9. JOINT AND SEVERAL OBLIGATIONS. The obligations, indebtedness and liability
of the Borrowers hereunder shall be joint and several.
IN WITNESS WHEREOF, Borrowers have executed this Promissory Note as of the date and year
first written above.
SilverRock Development Company, LLC,
RGC PA 789, LLC,
SilverRock Lifestyle Residences, LLC,
SilverRock Lodging, LLC,
SilverRock Luxury Residences, LLC, and
SilverRock Phase I, LLC
Signed by:
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Sit SOVdt i
By: Name: C rUiUstotper S. Sontchi
Sole Manager of Each Borrower
DocuSigned by:
By: L0�4a(iLSetit,
bbbbtlitl4 bUtl4Ib
Name: Doug as Wilson
Chief Restructuring Officer
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