CALDERWOOD & HARKNESS LLP Attorneys at Law
CALDERWOOD & HARKNESS LLP 333 South Grand Avenue, Suite 4800 Los Angeles, California 90071 Telephone: (213) 891-7400 Facsimile: (213) 891-7401 www.calderwoodharkness.com
January 3, 2025
VIA Severin Partners LLC PRIORITY OVERNIGHT AND EMAIL
Great Basin Trust Company, N.A.
Attention: Escrow Services Department
3960 Howard Hughes Parkway, Suite 500 Las Vegas, NV 89169
Re: Escrow Account — Settlement Funds Matter: Redstone Gaming Corp. v. Grizzly Peak Research LLC, et al. Case No.: 24STCV-01892 (Superior Court of California, County of Los Angeles) Settlement Agreement: Settlement Agreement and Mutual Release dated January 6, 2025 (anticipated effective date) Escrow Agreement: Escrow Agreement dated January 6, 2025, among Redstone Gaming Corp., Grizzly Peak Research LLC, Grizzly Peak Capital Partners LP, and Great Basin Trust Company, N.A.
Dear Sir or Madam:
This firm serves as litigation counsel to Redstone Gaming Corp. ("RGC"), a Nevada corporation headquartered at 8800 Crimson Ridge Parkway, Suite 1200, Las Vegas, NV 89113 (Nasdaq: RDGM; EIN: 88-0412793), in connection with the above-referenced matter. As you are aware, RGC and the defendants in the above-captioned action — Grizzly Peak Research LLC ("GPR") and Grizzly Peak Capital Partners LP ("GPCP," and together with GPR, the "Defendants") — have negotiated and expect to execute that certain Settlement Agreement and Mutual Release (the "Settlement Agreement"), anticipated to become effective on January 6, 2025 (the "Effective Date"), in connection with Case No. 24STCV-01892 pending in the Superior Court of California, County of Los Angeles.
The purpose of this letter is to provide Great Basin Trust Company, N.A. ("Great Basin" or the "Escrow Agent"), in its capacity as the designated escrow agent under the Escrow Agreement dated January 6, 2025 (the "Escrow Agreement"), with wire transfer instructions and related information necessary for the deposit of settlement funds totaling Fourteen Million Seven Hundred Fifty Thousand Dollars ($14,750,000.00) (the "Settlement Funds") into the escrow account established under the Escrow Agreement (the "Escrow Account"). Pursuant to Section 3.1 of the Settlement Agreement, all Settlement Funds are due and payable within thirty (30) calendar days of the Effective Date, meaning the deposit deadline is February 5, 2025. We respectfully request that you review the instructions below and confirm your readiness to receive these funds in accordance with the timeline set forth herein.
1. Escrow Account Information
All wire transfers of Settlement Funds should be directed to the Escrow Account using the following information:
Please confirm that the account name and number set forth above correspond to the Escrow Account established under the Escrow Agreement. If any of the foregoing details require correction or amendment, we ask that you notify us immediately at the contact information provided in Section 5 below so that we may issue corrected instructions to the funding parties without delay.
2. Identification of Funding Sources and Expected Wire Transfers
The Settlement Funds totaling $14,750,000.00 are expected to be deposited into the Escrow Account via two (2) separate wire transfers from distinct funding sources. The details of each expected wire transfer are set forth below.
2.1 Wire Transfer No. 1 — Ironclad Surety & Insurance Co.
Originating Party: Ironclad Surety & Insurance Co. Address: 200 Park Avenue South, 14th Floor, New York, NY 10003 Amount: $10,250,000.00 Basis for Payment: Payment of insurance proceeds under Directors & Officers / Media-Liability Insurance Policy No. ML-2023-07714 (the "Ironclad Policy"), issued by Ironclad Surety & Insurance Co. ("Ironclad") to Grizzly Peak Research LLC, in satisfaction of Ironclad's coverage obligations arising out of the claims asserted in Case No. 24STCV-01892. Claims Adjuster Contact: Daniel Royce, Senior Claims Adjuster, Ironclad Surety & Insurance Co., 200 Park Avenue South, 14th Floor, New York, NY 10003; telephone: (212) 554-0871; email: daniel.royce@ironcladinsurance.com. Expected Wire Reference: The wire transfer is expected to include references to both Case No. 24STCV-01892 and Policy No. ML-2023-07714 in the originator-to-beneficiary information field.
Please note that Calderwood & Harkness LLP has separately corresponded with Ironclad (by letter dated December 12, 2024) to confirm Ironclad's funding commitment and anticipated wire transfer timeline. Based on that correspondence, we expect that Ironclad will initiate its wire transfer promptly following the Effective Date and, in any event, no later than the February 5, 2025 deposit deadline. We will provide Great Basin with a copy of any updated correspondence from Ironclad regarding the timing of its wire transfer as such information becomes available.
2.2 Wire Transfer No. 2 — Grizzly Peak Research LLC and Grizzly Peak Capital Partners LP
Originating Parties: Grizzly Peak Research LLC (EIN: 85-3291064) and Grizzly Peak Capital Partners LP (EIN: 85-3291078), jointly and severally. Principal Office: 44 Maiden Lane, 7th Floor, San Francisco, CA 94108 Amount: $4,500,000.00 Basis for Payment: Direct contribution by the Defendants pursuant to Section 4.2(b) of the Settlement Agreement, representing the portion of the Settlement Funds in excess of available insurance proceeds under the Ironclad Policy. Origination Note: This wire transfer may originate either (a) directly from a bank account of GPR or GPCP, or (b) from the attorney trust account (IOLTA) of Caldwell, Tseng & Barrow LLP, counsel for the Defendants, located at 555 California Street, Suite 3100, San Francisco, CA 94104. We will endeavor to confirm the originating institution in advance of the wire transfer; however, Great Basin should be prepared to receive this wire from either source. Expected Wire Reference: The wire transfer is expected to include a reference to Case No. 24STCV-01892 in the originator-to-beneficiary information field.
2.3 Aggregate Settlement Funds
The aggregate Settlement Funds expected to be deposited into the Escrow Account are as follows:
As noted above, the Settlement Funds may arrive in two separate wire transfers, and Great Basin should be prepared to receive, identify, and reconcile both incoming transfers against the total amount of $14,750,000.00. It is possible, though unlikely, that the Defendants' portion may arrive as more than one wire (for example, one wire from GPR and a separate wire from GPCP). In the event that the Settlement Funds are received in more than two wire transfers, we ask that Great Basin promptly notify us so that we may verify the legitimacy of the additional transfer(s).
All Settlement Funds must be received and credited to the Escrow Account no later than February 5, 2025, which is thirty (30) calendar days from the Effective Date of January 6, 2025, as required by Section 3.1 of the Settlement Agreement. Failure to receive the full amount of the Settlement Funds by that date may constitute a material breach of the Settlement Agreement and could give rise to certain remedies in favor of RGC, including but not limited to the right to enforce the Settlement Agreement or reinstate the claims in Case No. 24STCV-01892. We respectfully request that Great Basin notify us immediately if, as of the close of business on February 5, 2025, the full amount of the Settlement Funds has not been received and credited to the Escrow Account.
3. Confirmation of Receipt
We respectfully request that Great Basin Trust Company, N.A., as Escrow Agent, provide written confirmation (by email or letter) to Calderwood & Harkness LLP promptly upon receipt of each wire transfer of Settlement Funds into the Escrow Account. Each confirmation should include the following information:
(a) the date and time (Pacific Time) of receipt of the wire transfer;
(b) the amount received and credited to the Escrow Account;
(c) the identity of the originating party and the originating financial institution;
(d) the Fedwire reference number (or equivalent unique transaction identifier) for the wire transfer; and
(e) the running total of Settlement Funds received and held in the Escrow Account as of the date of confirmation.
Confirmations should be sent to the following individuals at Calderwood & Harkness LLP:
Primary — Responsible Partner: Francesca Morano, Partner Calderwood & Harkness LLP 333 South Grand Avenue, Suite 4800 Los Angeles, CA 90071 Telephone: (213) 891-7418
Email: fmorano@calderwoodharkness.com
Primary — Lead Associate: Carlos Espinoza, Associate Calderwood & Harkness LLP 333 South Grand Avenue, Suite 4800 Los Angeles, CA 90071 Telephone: (213) 891-7442
Email: cespinoza@calderwoodharkness.com
In addition, copies of each confirmation should be provided to the following individuals:
Client — General Counsel: Derek Olafson, General Counsel Redstone Gaming Corp. 8800 Crimson Ridge Parkway, Suite 1200 Las Vegas, NV 89113
Email: dolafson@redstonegaming.com
Defense Counsel: Raymond Caldwell, Partner / Natalie Orenstein, Partner Caldwell, Tseng & Barrow LLP 555 California Street, Suite 3100 San Francisco, CA 94104
Email: rcaldwell@ctblaw.com / norenstein@ctblaw.com
The provision of confirmations to defense counsel is consistent with Section 5.4 of the Escrow Agreement, which requires the Escrow Agent to notify all parties to the Escrow Agreement upon receipt of any deposit into the Escrow Account.
4. Disbursement Instructions
Please be advised that the disbursement of funds from the Escrow Account shall be governed exclusively by the terms and conditions of the Escrow Agreement dated January 6, 2025. No disbursement of any portion of the Settlement Funds shall be made by the Escrow Agent without the prior joint written instruction of the parties to the Escrow Agreement, or as otherwise expressly permitted under the terms thereof, including any provisions governing disbursement upon court order, mutual written consent, or the occurrence of specified conditions precedent.
Separate and specific disbursement instructions for the release of Settlement Funds to RGC (or to such other payees as may be designated under the Settlement Agreement) will be provided to Great Basin in writing upon the satisfaction of all conditions precedent set forth in the Settlement Agreement, including, without limitation, the entry of a stipulated dismissal with prejudice and the execution and delivery of all mutual releases contemplated therein. Until such time, all Settlement Funds received into the Escrow Account should be held and invested (if applicable) in accordance with the terms of the Escrow Agreement.
Nothing in this letter shall be construed to modify, amend, or supersede any term or provision of the Escrow Agreement.
5. Contact Information for Questions
Should you have any questions regarding the wire transfer instructions set forth in this letter, the Settlement Agreement, the Escrow Agreement, or any other matter relating to the above-referenced case, please do not hesitate to contact the following individuals:
Primary Contact:
Carlos Espinoza, Lead Associate Calderwood & Harkness LLP 333 South Grand Avenue, Suite 4800 Los Angeles, CA 90071 Telephone: (213) 891-7442 Facsimile: (213) 891-7401
Email: cespinoza@calderwoodharkness.com
Secondary Contact:
Hannah Brinkley, Associate Calderwood & Harkness LLP 333 South Grand Avenue, Suite 4800 Los Angeles, CA 90071 Telephone: (213) 891-7459 Facsimile: (213) 891-7401
Email: hbrinkley@calderwoodharkness.com
For Questions Regarding the Ironclad Surety Wire Transfer:
Daniel Royce, Senior Claims Adjuster Ironclad Surety & Insurance Co. 200 Park Avenue South, 14th Floor New York, NY 10003 Telephone: (212) 554-0871
Email: daniel.royce@ironcladinsurance.com
We thank Great Basin Trust Company, N.A. for its services as escrow agent in connection with this matter. We respectfully request your written acknowledgment of receipt of this letter and the wire transfer instructions contained herein at your earliest convenience, and in any event no later than January 10, 2025. Given the significance of the February 5, 2025 deposit deadline and the consequences that may flow from a failure to receive the Settlement Funds by that date, we wish to ensure that all parties and their respective financial institutions are fully aligned on the account details and procedures set forth above. Should you require any additional documentation — including copies of the Settlement Agreement, evidence of authority to act on behalf of RGC, or supplemental identification information — please do not hesitate to contact us, and we will provide such materials promptly.
We look forward to your confirmation.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Francesca Morano, Partner California State Bar No. 287419
cc: (via email)
Derek Olafson, General Counsel, Redstone Gaming Corp. Samuel Eklund, Billing Partner, Calderwood & Harkness LLP Raymond Caldwell, Caldwell, Tseng & Barrow LLP Natalie Orenstein, Caldwell, Tseng & Barrow LLP Daniel Royce, Ironclad Surety & Insurance Co.
Enclosure: Copy of Escrow Agreement dated January 6, 2025
| Field | Details | |
| Account Name | RGC/GPR Settlement Escrow Account | |
| Escrow Agent | Great Basin Trust Company, N.A. | |
| ABA Routing Number | 122400789 | |
| Account Number | 8851-0047-3926 | |
| SWIFT Code | GBTNUS33 | |
| Bank Address | Great Basin Trust Company, N.A., 3960 Howard Hughes Parkway, Suite 500, Las Vegas, NV 89169 | |
| Reference / Memo Line | "Redstone Gaming Corp. v. Grizzly Peak Research LLC — Settlement Escrow — Case No. 24STCV-01892" | |
| Wire Transfer | Source | Amount |
| Wire Transfer No. 1 | Ironclad Surety & Insurance Co. | $10,250,000.00 |
| Wire Transfer No. 2 | Grizzly Peak Research LLC / Grizzly Peak Capital Partners LP | $4,500,000.00 |
| Total | $14,750,000.00 |