Raymond and Natalie,
I hope this message finds you well. I am writing following the binding Mediator's Term Sheet executed by all parties on December 4, 2024, at the conclusion of the two-day mediation before Hon. Gerald K. Matsuda (Ret.) at Westside Mediation Center on December 3–4.
The purpose of this email is to propose a detailed timeline and workflow for drafting, exchanging, and finalizing all settlement documentation in order to meet the target execution date of January 6, 2025 (the "Effective Date"), as contemplated by the Term Sheet. Francesca Morano is copied on this message and concurs with the proposed schedule set forth below.
**I. Key Contractual Deadlines**
For ease of reference, the following are the principal deadlines flowing from the Term Sheet and the January 6, 2025 Effective Date:
- **Effective Date** (execution of the Settlement Agreement by all parties): **January 6, 2025** - **Corrective Publication** posted on grizzlypeakresearch.com: within 5 business days of the Effective Date **(target: January 13, 2025)** - **Settlement Funds** ($14.75 million) deposited into escrow at Great Basin Trust Company, N.A.: within 30 calendar days of the Effective Date **(deadline: February 5, 2025)** - **Stipulated Dismissal with Prejudice** filed with the Superior Court of California, County of Los Angeles: within 10 business days of confirmation of escrow funding **(target: February 19, 2025)**
Working backward from the January 6 Effective Date, both sides will need approximately four weeks to complete the drafting, review, and revision cycles necessary to finalize the full suite of settlement documents. I would note that we will be notifying the court shortly — we intend to file a letter with Judge Yamamoto advising the court of the settlement-in-principle and requesting that all pending dates be vacated.
**II. Proposed Document Exchange Schedule**
I propose the following week-by-week schedule:
***Week 1 (December 9–13, 2024)***
Calderwood & Harkness will circulate initial drafts of the following:
1. **Settlement Agreement and Mutual Release.** This will be the core agreement incorporating all Term Sheet provisions, including: (a) the $14.75 million settlement payment — consisting of $10.25 million funded by Ironclad Surety & Insurance Co. under Policy No. ML-2023-07714 and $4.50 million from Grizzly Peak Research LLC and Grizzly Peak Capital Partners LP, jointly and severally; (b) mutual releases with carve-outs for ongoing settlement obligations; (c) a three-year mutual non-disparagement covenant; (d) confidentiality of the settlement amount; (e) retention of jurisdiction under Cal. Code Civ. Proc. § 664.6; and (f) a provision that each party shall bear its own attorneys' fees and costs.
2. **Escrow Agreement** among Redstone Gaming Corp., Grizzly Peak Research LLC, Grizzly Peak Capital Partners LP, and Great Basin Trust Company, N.A.
We anticipate circulating both documents by close of business on Friday, December 13.
***Week 2 (December 16–20, 2024)***
- CTB to return redlines and comments on the Settlement Agreement and Escrow Agreement. - Calderwood & Harkness will circulate initial drafts of the following exhibits and ancillary documents:
- **Exhibit A — Corrective Publication (Full Text).** This draft will be not fewer than 1,500 words and will acknowledge material inaccuracies in the three Grizzly Peak Research reports: (i) "House of Cards: Redstone Gaming's Manufactured Earnings" (published February 7, 2024); (ii) "Rigged Reels: How Redstone's Slot Software Cheats the Regulators" (published February 14, 2024); and (iii) "Double Down on Fraud: Redstone's Related-Party Shell Game" (published February 21, 2024). The Corrective Publication will specifically acknowledge that the revenue-fabrication allegation (approximately $410 million in purportedly fabricated revenue) was unfounded, that the RNG-manipulation allegation was disproven by the Nevada Gaming Control Board's findings issued March 29, 2024, and that the Vermilion Holdings LLC related-party allegation was based on incomplete information and was misleading. Per the Term Sheet, the Corrective Publication is to remain posted on grizzlypeakresearch.com for not less than 24 months.
- **Exhibit B — Social Media Corrective Statement.** Not fewer than 280 characters, to be posted on the @GrizzlyPeakRes account, with a link to the full Corrective Publication.
- **Exhibit C — Form of Stipulated Dismissal with Prejudice.** For Case No. 24STCV-01892 before Judge Patricia Yamamoto, Superior Court of California, County of Los Angeles, with retention of jurisdiction under § 664.6.
- **Exhibit D — Form of Stipulated Permanent Injunction.** This will permanently enjoin defendants from republishing the three reports identified above or any substantially similar statements concerning Redstone Gaming Corp., and will include a five-year bar on trading in RDGM securities (including derivatives), running through January 6, 2030.
***Week 3 (December 23–27, 2024)***
I recognize this is a holiday week. I propose an abbreviated schedule:
- CTB to return comments on Exhibits A through D. - Both sides to negotiate and finalize the corrective-statement language, which is subject to mutual approval per the Term Sheet. - Calderwood & Harkness will circulate a revised Settlement Agreement incorporating CTB's Week 2 comments.
I would ask that we aim to have all substantive comments exchanged by no later than Friday, December 27, so that the final week can be reserved for cleanup and execution logistics.
***Week 4 (December 30, 2024 – January 3, 2025)***
- Final round of comments and revisions on all documents. - Resolution of any remaining open issues. - Circulation of execution copies for signature by all parties: Redstone Gaming Corp. (to be executed by Derek Olafson, General Counsel), Grizzly Peak Research LLC, Grizzly Peak Capital Partners LP, and Tobias Fenchurch individually. - Coordination with Great Basin Trust Company, N.A. on execution of the Escrow Agreement. - Calderwood & Harkness to provide wire transfer instructions to Great Basin Trust Company. - Coordination with Ironclad Surety & Insurance Co. (Daniel Royce, Claims Adjuster) regarding the $10.25 million insurance-funded portion and wire-transfer logistics.
***Target Execution: January 6, 2025***
**III. Coordination Items**
A few additional items:
1. **Ironclad Surety & Insurance Co.** Could you please confirm whether Ironclad requires its own review or approval of any of the settlement documents? If so, I would ask that you loop in Daniel Royce or Ironclad's coverage counsel on the document exchange at the earliest opportunity so that insurer review does not become a bottleneck in the schedule.
2. **Corrective Publication Coordination.** Calderwood & Harkness will be coordinating separately with Crestline Equity Partners Group Inc., Redstone's crisis-communications advisor, regarding the public rollout of the corrective statements. Given those logistics, mutual agreement on the final text of the Corrective Publication (Exhibit A) will need to be reached by no later than **December 30, 2024**.
3. **Preliminary Call.** I would suggest that we schedule a brief call early in the week of December 16 — perhaps Monday or Tuesday — to discuss any preliminary issues either side may have with the proposed approach or the initial drafts. Please let me know what works on your end.
**IV. Attached Checklist**
For reference, I have attached a Settlement Document Checklist enumerating all documents we expect to draft and exchange in connection with the settlement:
1. Settlement Agreement and Mutual Release 2. Exhibit A — Corrective Publication (Full Text) 3. Exhibit B — Social Media Corrective Statement 4. Exhibit C — Form of Stipulated Dismissal with Prejudice 5. Exhibit D — Form of Stipulated Permanent Injunction 6. Escrow Agreement (with Great Basin Trust Company, N.A.) 7. Stipulation and [Proposed] Order for Dismissal with Prejudice (for court filing) 8. Stipulation and [Proposed] Order for Entry of Permanent Injunction (for court filing)
Please note that items 7 and 8 will substantively mirror Exhibits C and D, respectively, but will be formatted for submission to Judge Yamamoto.
* * *
We are committed to an efficient papering process and to meeting the January 6 target. If you or Natalie have any questions, concerns, or proposed modifications to the timeline outlined above, please do not hesitate to call me directly or respond by email. I am happy to discuss.
Best regards,
**Carlos Espinoza** Associate Calderwood & Harkness LLP 333 South Grand Avenue, Suite 4800 Los Angeles, CA 90071 T: (213) 555-4182 E: cespinoza@calderwoodharkness.com
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