ESCROW AGREEMENT
Dated as of January 6, 2025
among
REDSTONE GAMING CORP.
GRIZZLY PEAK RESEARCH LLC
GRIZZLY PEAK CAPITAL PARTNERS LP
and
GREAT BASIN TRUST COMPANY, N.A.
as Escrow Agent
ESCROW AGREEMENT
This ESCROW AGREEMENT (this "Agreement") is entered into as of January 6, 2025 (the "Agreement Date"), by and among:
(1) Redstone Gaming Corp., a corporation organized and existing under the laws of the State of Nevada ("Plaintiff" or "RGC"), with its principal headquarters located at 8800 Crimson Ridge Parkway, Suite 1200, Las Vegas, Nevada 89113 (EIN: 88-0412793);
(2) Grizzly Peak Research LLC, a limited liability company organized and existing under the laws of the State of Delaware ("GPR"), with its principal office located at 44 Maiden Lane, 7th Floor, San Francisco, California 94108 (EIN: 85-3291064);
(3) Grizzly Peak Capital Partners LP, a limited partnership organized and existing under the laws of the State of Delaware ("GPCP"), with its principal office located at 44 Maiden Lane, 7th Floor, San Francisco, California 94108 (EIN: 85-3291078); and
(4) Great Basin Trust Company, N.A., a national banking association chartered under the laws of the United States (the "Escrow Agent"), with its office located at 3960 Howard Hughes Parkway, Suite 500, Las Vegas, Nevada 89169.
RGC, GPR, and GPCP are referred to herein individually as a "Party" and collectively as the "Parties." RGC, GPR, GPCP, and the Escrow Agent are referred to herein individually as a "Signatory" and collectively as the "Signatories."
This Agreement is entered into in connection with that certain Settlement Agreement and Mutual Release of even date herewith (the "Settlement Agreement") among RGC, GPR, GPCP, and Tobias Fenchurch, an individual, executed in connection with the resolution of the litigation captioned Redstone Gaming Corp. v. Grizzly Peak Research LLC, et al., Case No. 24STCV-01892, pending in the Superior Court of California, County of Los Angeles (the "Litigation").
RECITALS
WHEREAS:
A. The Litigation. On February 5, 2024, RGC filed a civil action against GPR in the Superior Court of California, County of Los Angeles, bearing Case No. 24STCV-01892, asserting claims for trade libel, intentional interference with prospective economic advantage, and unfair business practices in violation of California Business and Professions Code section 17200 et seq. By First Amended Complaint filed on March 18, 2024, RGC added claims for negligent misrepresentation and joined GPCP and Tobias Fenchurch as additional defendants. The Litigation involves allegations regarding certain research reports and public statements published by GPR and disseminated through social media channels concerning RGC's business operations, financial condition, and regulatory compliance in the gaming industry.
B. The Settlement. Following extensive arm's-length negotiations, the Parties reached a settlement-in-principle on December 4, 2024, which was memorialized in a binding Mediator's Term Sheet signed before the Honorable Gerald K. Matsuda (Ret.) at Westside Mediation Center, located in Los Angeles, California. The Parties have subsequently executed the Settlement Agreement as of January 6, 2025 (the "Effective Date"), which provides for, among other things, the payment by the defendants of Fourteen Million Seven Hundred Fifty Thousand Dollars ($14,750,000) (the "Settlement Amount") to RGC, subject to the terms and conditions set forth in the Settlement Agreement and this Agreement.
C. The Escrow. The Settlement Agreement requires that the Settlement Amount be deposited into escrow and held by a neutral, independent escrow agent pending the satisfaction of certain disbursement conditions specified in the Settlement Agreement and this Agreement. The Parties have agreed to engage Great Basin Trust Company, N.A. as the Escrow Agent to receive, hold, invest, and disburse the Settlement Amount in accordance with the terms and conditions set forth herein.
D. Funding Sources. The Settlement Amount of $14,750,000 consists of two components: (i) Ten Million Two Hundred Fifty Thousand Dollars ($10,250,000) to be funded by Ironclad Surety & Insurance Co., a Pennsylvania corporation ("Ironclad"), pursuant to its obligations under directors-and-officers / media-liability insurance Policy No. ML-2023-07714 issued to GPR and its affiliates (such payment, the "Insurance Contribution"); and (ii) Four Million Five Hundred Thousand Dollars ($4,500,000) to be funded jointly and severally by GPR and GPCP from their own resources (such payment, the "Defendant Contribution").
E. Purpose. This Escrow Agreement is entered into for the purpose of governing the deposit, holding, investment, and disbursement of the Settlement Amount and any interest, earnings, or other accretions thereon (collectively, the "Escrow Funds"), and to set forth the rights, duties, and obligations of the Escrow Agent and the Parties with respect thereto.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Signatories hereby agree as follows:
ARTICLE I — DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Settlement Agreement.
"Business Day" means any day other than a Saturday, Sunday, or a day on which national banking associations in the State of Nevada or the State of California are authorized or required by law, regulation, or executive order to close.
"Defendant Contribution" means the sum of Four Million Five Hundred Thousand Dollars ($4,500,000), to be deposited into the Escrow Account jointly and severally by GPR and GPCP in accordance with Section 2.3 of this Agreement.
"Deposit Deadline" means thirty (30) calendar days from the Effective Date, which date is February 5, 2025. If February 5, 2025 falls on a day that is not a Business Day, the Deposit Deadline shall be extended to the next succeeding Business Day.
"Disbursement Conditions" means the conditions set forth in Section 4.1 of this Agreement that must be satisfied or waived in accordance with this Agreement before the Escrow Agent shall disburse the Escrow Funds to RGC.
"Effective Date" means January 6, 2025, which is the date of execution of the Settlement Agreement.
"Escrow Account" means the segregated, interest-bearing account established and maintained by the Escrow Agent at Great Basin Trust Company, N.A. for the sole purpose of holding the Escrow Funds in accordance with this Agreement.
"Escrow Funds" means, collectively, the Settlement Amount together with all interest, earnings, income, and other accretions thereon, as such amounts may exist from time to time in the Escrow Account.
"Insurance Contribution" means the sum of Ten Million Two Hundred Fifty Thousand Dollars ($10,250,000), to be deposited into the Escrow Account by Ironclad Surety & Insurance Co. pursuant to D&O / media-liability insurance Policy No. ML-2023-07714, in accordance with Section 2.2 of this Agreement.
"Ironclad" means Ironclad Surety & Insurance Co., a Pennsylvania corporation, the issuer of Policy No. ML-2023-07714.
"Joint Written Instructions" means written instructions that are signed by (a) an authorized representative of RGC and (b) an authorized representative of GPR (acting on its own behalf and on behalf of GPCP), or as otherwise expressly permitted under this Agreement. Joint Written Instructions shall bear original ink signatures or shall be executed via Brightwater Software or a comparable electronic-signature platform that complies with the requirements of the federal Electronic Signatures in Global and National Commerce Act (E-SIGN Act) and the Uniform Electronic Transactions Act as adopted in the applicable jurisdiction.
"Settlement Agreement" means that certain Settlement Agreement and Mutual Release dated as of January 6, 2025, among RGC, GPR, GPCP, and Tobias Fenchurch, as the same may be amended, modified, or supplemented from time to time in accordance with its terms.
"Settlement Amount" means the aggregate sum of Fourteen Million Seven Hundred Fifty Thousand Dollars ($14,750,000), consisting of the Insurance Contribution and the Defendant Contribution.
All references herein to "dollars" or "$" shall mean the lawful currency of the United States of America. All references to "days" shall mean calendar days unless otherwise specified. All references to sections, articles, or schedules shall refer to sections, articles, or schedules of this Agreement unless otherwise indicated.
ARTICLE II — ESTABLISHMENT OF ESCROW; DEPOSITS
Section 2.1 — Establishment of Escrow Account
Promptly following the execution of this Agreement, and in no event later than three (3) Business Days after the Agreement Date, the Escrow Agent shall establish a segregated, interest-bearing escrow account (the "Escrow Account") at Great Basin Trust Company, N.A. The Escrow Account shall be titled as follows:
"Great Basin Trust Company, N.A. as Escrow Agent — Redstone Gaming Corp. / Grizzly Peak Research LLC Settlement Escrow"
The Escrow Account shall be maintained at the offices of Great Basin Trust Company, N.A. located at 3960 Howard Hughes Parkway, Suite 500, Las Vegas, Nevada 89169. The Escrow Agent shall hold the Escrow Funds in the Escrow Account separate and apart from its own assets and from the assets of any other person or entity, except to the extent expressly permitted by Section 3.1 hereof with respect to commingling for investment purposes in a money-market fund. The Escrow Agent shall promptly notify all Parties in writing upon establishment of the Escrow Account, providing the account number and wire transfer instructions.
Section 2.2 — Deposit of Insurance Contribution
Ironclad Surety & Insurance Co. shall cause the Insurance Contribution of Ten Million Two Hundred Fifty Thousand Dollars ($10,250,000) to be deposited into the Escrow Account by federal funds wire transfer on or before the Deposit Deadline of February 5, 2025. The Insurance Contribution shall be funded by Ironclad pursuant to its obligations under D&O / media-liability insurance Policy No. ML-2023-07714.
GPR shall use commercially reasonable efforts to cause Ironclad to make timely payment of the Insurance Contribution in accordance with this Section 2.2. GPR shall provide RGC and the Escrow Agent with a copy of Ironclad's funding confirmation or payment authorization letter promptly upon receipt thereof, and in no event later than two (2) Business Days following GPR's receipt of such confirmation. For the avoidance of doubt, GPR's obligation to use commercially reasonable efforts to cause Ironclad's timely payment shall not excuse GPR's or GPCP's obligations under the Settlement Agreement in the event that Ironclad fails to timely fund the Insurance Contribution.
Section 2.3 — Deposit of Defendant Contribution
GPR and GPCP, jointly and severally, shall cause the Defendant Contribution of Four Million Five Hundred Thousand Dollars ($4,500,000) to be deposited into the Escrow Account by federal funds wire transfer on or before the Deposit Deadline of February 5, 2025. GPR and GPCP may deposit the Defendant Contribution in a single wire transfer or in multiple wire transfers, provided that the aggregate amount of the Defendant Contribution received in the Escrow Account on or before the Deposit Deadline equals or exceeds $4,500,000. Each wire transfer constituting a portion of the Defendant Contribution shall reference "Defendant Contribution — Case No. 24STCV-01892" to facilitate identification and proper crediting by the Escrow Agent.
Section 2.4 — Wire Transfer Instructions for Deposits
All deposits into the Escrow Account shall be made by federal funds wire transfer in accordance with the following instructions, which are also set forth in Schedule 1 attached hereto:
Bank: Great Basin Trust Company, N.A.
Address: 3960 Howard Hughes Parkway, Suite 500, Las Vegas, Nevada 89169
ABA Routing Number: To be provided by Escrow Agent upon establishment of the Escrow Account
Account Number: To be provided by Escrow Agent upon establishment of the Escrow Account
Account Name: "Great Basin Trust — RGC/GPR Settlement Escrow"
Reference: "Case No. 24STCV-01892 — Settlement Escrow"
The Escrow Agent shall confirm receipt of each deposit in writing (including by email) to all Parties and their respective counsel within two (2) Business Days of receipt of such deposit, specifying the amount received, the date of receipt, and the identity of the depositing party (to the extent determinable from the wire transfer information).
Section 2.5 — Failure to Deposit by Deposit Deadline
If the full Settlement Amount of Fourteen Million Seven Hundred Fifty Thousand Dollars ($14,750,000) has not been received in the Escrow Account by the close of business (5:00 p.m. Pacific Time) on the Deposit Deadline, the Escrow Agent shall promptly, and in no event later than the next Business Day, notify all Parties in writing, specifying the amount received to date and the amount of the shortfall. The consequences of late deposit, partial deposit, or non-deposit of the Settlement Amount are governed exclusively by the Settlement Agreement, and this Escrow Agreement does not independently create any remedies, penalties, or obligations with respect to late payment or non-payment. The Escrow Agent shall hold any partial deposits received in the Escrow Account and shall return or disburse such partial deposits only as directed by Joint Written Instructions or a final, non-appealable order of a court of competent jurisdiction.
Section 2.6 — Confirmation of Full Funding
Upon the Escrow Agent's receipt of deposits totaling Fourteen Million Seven Hundred Fifty Thousand Dollars ($14,750,000) in the aggregate, the Escrow Agent shall promptly, and in no event later than two (2) Business Days following receipt of the final deposit constituting the Settlement Amount, deliver written confirmation of full funding (the "Full Funding Confirmation") to each of the following:
(a) Calderwood & Harkness LLP, counsel for RGC, 333 South Grand Avenue, Suite 4800, Los Angeles, California 90071, Attention: Carlos Espinoza, Esq.; and
(b) Caldwell, Tseng & Barrow LLP, counsel for GPR and GPCP, 555 California Street, Suite 3100, San Francisco, California 94104, Attention: Natalie Orenstein, Esq.
The Full Funding Confirmation shall set forth the total amount deposited, the date on which full funding was achieved, and a breakdown of the Insurance Contribution and the Defendant Contribution as reflected in the Escrow Agent's records.
ARTICLE III — INVESTMENT OF ESCROW FUNDS
Section 3.1 — Permitted Investments
The Escrow Agent shall invest and reinvest the Escrow Funds, including all interest and earnings thereon, in one or more of the following categories of investments (collectively, "Permitted Investments"):
(a) Direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America, in each case with a remaining maturity of ninety (90) days or less at the time of purchase;
(b) Money-market mutual funds that are registered under the Investment Company Act of 1940, as amended, that maintain a constant net asset value per share, that are rated in the highest rating category by at least one nationally recognized statistical rating organization, and that invest exclusively in obligations described in clause (a) above; and
(c) Certificates of deposit or interest-bearing demand deposit accounts at Great Basin Trust Company, N.A., provided that such deposits are insured to the fullest extent available by the Federal Deposit Insurance Corporation ("FDIC").
The Escrow Agent may commingle the Escrow Funds with other funds for investment purposes only if such commingled investment is made in a money-market fund described in clause (b) above. In all other cases, the Escrow Funds shall be held in a segregated account. The Escrow Agent shall select Permitted Investments in its reasonable discretion, giving due consideration to the preservation of principal and the maintenance of liquidity consistent with the anticipated timing of disbursement under Article IV. In the absence of written investment instructions from the Parties, the Escrow Agent shall invest the Escrow Funds in an interest-bearing demand deposit account at Great Basin Trust Company, N.A. as described in clause (c) above.
Section 3.2 — Interest and Earnings
All interest, earnings, income, and other accretions on the Escrow Funds shall constitute part of the Escrow Funds and shall be held in the Escrow Account and disbursed together with the principal in accordance with Article IV of this Agreement, unless otherwise directed by Joint Written Instructions.
For tax reporting purposes, all interest and earnings on the Escrow Funds shall be reported to the Internal Revenue Service under the taxpayer identification number of RGC (EIN: 88-0412793), as RGC is the anticipated recipient of the Escrow Funds. The Escrow Agent shall file or cause to be filed all applicable IRS Forms 1099 (or successor forms) reflecting such interest and earnings under RGC's taxpayer identification number. RGC shall be solely responsible for the payment of any federal, state, or local tax liability arising from interest or earnings on the Escrow Funds. In the event that the Escrow Funds are returned to the depositors pursuant to Section 4.5, the Parties shall provide the Escrow Agent with revised Joint Written Instructions specifying the appropriate allocation of interest and earnings for tax reporting purposes, and the Escrow Agent shall issue corrected Forms 1099 as necessary.
Section 3.3 — Investment Risk
The Escrow Agent shall not be liable for any loss of principal or interest arising from the investment of the Escrow Funds in Permitted Investments, or from any decline in the value of such investments, except to the extent that such loss is directly caused by the Escrow Agent's gross negligence or willful misconduct. The Parties acknowledge that the Escrow Agent does not guarantee the rate of return or the preservation of principal with respect to Permitted Investments.
ARTICLE IV — DISBURSEMENT OF ESCROW FUNDS
Section 4.1 — Disbursement Conditions
The Escrow Agent shall disburse the Escrow Funds to RGC in accordance with Section 4.2 upon the Escrow Agent's receipt of Joint Written Instructions certifying that each of the following conditions (the "Disbursement Conditions") has been satisfied or waived in writing by the Party or Parties entitled to the benefit thereof:
(a) Full Funding. The full Settlement Amount of Fourteen Million Seven Hundred Fifty Thousand Dollars ($14,750,000) has been deposited into the Escrow Account in accordance with Article II of this Agreement.
(b) Corrective Publication. The Corrective Publication (as defined in the Settlement Agreement) has been posted and is accessible on the website located at www.grizzlypeakresearch.com, in accordance with the content, format, and placement requirements set forth in Exhibit A to the Settlement Agreement. Pursuant to the Settlement Agreement, the Corrective Publication is required to be posted within five (5) Business Days of the Effective Date, with a target posting date of January 13, 2025.
(c) Social Media Corrective Statement. The corrective statement required under the Settlement Agreement has been posted on the social media account identified as @GrizzlyPeakRes (or any successor account), in accordance with the content and format requirements set forth in Exhibit B to the Settlement Agreement, and such post remains publicly accessible at the time of the certification.
(d) No Restraining Order. No court order, injunction, stay, or other legal proceeding restraining, enjoining, or otherwise prohibiting the disbursement of the Escrow Funds to RGC is then in effect.
The Escrow Agent shall be entitled to rely conclusively on the Joint Written Instructions certifying satisfaction or waiver of the Disbursement Conditions without any obligation to independently verify the accuracy of such certification. The Escrow Agent shall have no duty to monitor compliance with the Disbursement Conditions or to determine whether any Disbursement Condition has been satisfied or waived.
Section 4.2 — Disbursement to RGC
Upon the Escrow Agent's determination that all Disbursement Conditions have been satisfied or waived as certified in Joint Written Instructions received by the Escrow Agent, the Escrow Agent shall disburse the entirety of the Escrow Funds (including all principal, accrued interest, and earnings) by federal funds wire transfer to RGC at the wire transfer instructions to be provided by Calderwood & Harkness LLP on behalf of RGC in a disbursement notice accompanying or attached to the Joint Written Instructions, substantially in the form set forth in Schedule 2 hereto. Disbursement shall be made within three (3) Business Days following the Escrow Agent's receipt of the Joint Written Instructions and the completed wire transfer instructions for the disbursement. The Escrow Agent's obligation to disburse shall be subject to its right to deduct any accrued and unpaid fees and expenses in accordance with Section 5.2 of this Agreement.
Section 4.3 — Partial Disbursement
No partial disbursement of the Settlement Amount principal shall be made from the Escrow Account except upon Joint Written Instructions expressly authorizing such partial disbursement or pursuant to a final, non-appealable order of a court of competent jurisdiction; provided, however, that accrued interest and earnings may be disbursed separately from the principal if so directed by Joint Written Instructions. Any partial disbursement shall specify the amount to be disbursed, the payee, and the wire transfer instructions for such payment.
Section 4.4 — Disputed Disbursement
In the event that the Escrow Agent receives conflicting, inconsistent, or ambiguous instructions from the Parties, or if the Escrow Agent has reasonable grounds to believe that a dispute exists among the Parties regarding the disposition of the Escrow Funds, the Escrow Agent may, in its sole and absolute discretion, take one or more of the following actions:
(a) Refrain from taking any action with respect to the disbursement of the Escrow Funds (other than continuing to invest the Escrow Funds in Permitted Investments) until it receives Joint Written Instructions that are not conflicting or a final, non-appealable order of a court of competent jurisdiction directing the disposition of the Escrow Funds;
(b) Commence an interpleader action pursuant to applicable law and deposit or interplead the Escrow Funds into the Superior Court of California, County of Los Angeles, in connection with Case No. 24STCV-01892, naming the Parties as defendants or respondents in such interpleader action; or
(c) Take such other action as the Escrow Agent deems appropriate under the circumstances, including but not limited to seeking a declaratory judgment or other judicial relief.
All costs, expenses, and attorneys' fees incurred by the Escrow Agent in connection with any interpleader action or other judicial proceeding commenced pursuant to this Section 4.4 shall be paid from the Escrow Funds, unless otherwise ordered by the court. The Escrow Agent shall be fully protected in suspending all activities under this Agreement (other than the continued investment of the Escrow Funds in Permitted Investments) until a resolution is obtained.
Section 4.5 — Return of Funds
In the event that the Settlement Agreement is terminated, rescinded, or voided in accordance with its terms, the Escrow Agent shall return the Escrow Funds (less any accrued and unpaid Escrow Agent fees and expenses permitted to be deducted under Section 5.2) to the respective depositors in proportion to their respective deposits, as follows:
(a) The Insurance Contribution of Ten Million Two Hundred Fifty Thousand Dollars ($10,250,000), together with a proportionate share of accrued interest and earnings (less the Escrow Agent's proportionate share of fees), shall be returned to Ironclad Surety & Insurance Co. at wire transfer instructions to be provided by Ironclad or by GPR on behalf of Ironclad; and
(b) The Defendant Contribution of Four Million Five Hundred Thousand Dollars ($4,500,000), together with a proportionate share of accrued interest and earnings (less the Escrow Agent's proportionate share of fees), shall be returned to GPR and/or GPCP at wire transfer instructions to be provided by Caldwell, Tseng & Barrow LLP on behalf of GPR and GPCP.
Such return shall be made by the Escrow Agent within five (5) Business Days following the Escrow Agent's receipt of Joint Written Instructions or a final, non-appealable court order directing such return and specifying the applicable wire transfer instructions. For purposes of this Section 4.5, the proportionate share of accrued interest and earnings attributable to each depositor shall be calculated based on the ratio that each depositor's original deposit bears to the total Settlement Amount deposited.
ARTICLE V — ESCROW AGENT PROVISIONS
Section 5.1 — Duties and Obligations
The Escrow Agent acts solely as a stakeholder and custodian of the Escrow Funds pursuant to the terms and conditions of this Agreement. The Escrow Agent shall have no duties or obligations other than those expressly set forth in this Agreement, and no implied duties or obligations shall be read into this Agreement against the Escrow Agent. The Escrow Agent shall not be deemed a trustee, fiduciary, or agent (except as a depositary) with respect to the Escrow Funds or any Party, and shall not be required to invest or manage the Escrow Funds except as expressly provided in Article III. The Escrow Agent is not a party to, and shall have no duties, obligations, or liabilities under, the Settlement Agreement or any other agreement among the Parties, and the Escrow Agent shall not be bound by or required to take notice of any provision of the Settlement Agreement except to the extent expressly set forth in this Agreement.
Section 5.2 — Escrow Agent Fees and Expenses
The Parties shall pay the Escrow Agent the following fees in consideration of the Escrow Agent's services hereunder:
(a) Establishment Fee. A one-time establishment fee of Two Thousand Five Hundred Dollars ($2,500), payable upon execution of this Agreement.
(b) Annual Administration Fee. An annual administration fee of Three Thousand Five Hundred Dollars ($3,500), prorated for any partial year in which this Agreement is in effect, payable on each anniversary of the Agreement Date during the term of this Agreement, or upon termination of this Agreement, whichever occurs first.
(c) Wire Transfer Fees. A fee of Fifty Dollars ($50) per outgoing wire transfer processed by the Escrow Agent in connection with this Agreement.
(d) Extraordinary Fees. The Escrow Agent shall be entitled to reasonable compensation for services rendered outside the ordinary scope of its duties hereunder, including without limitation responding to subpoenas, garnishments, levies, or other legal process, participating in litigation or interpleader proceedings, or performing any services not expressly contemplated by this Agreement. Such extraordinary fees shall be calculated at the Escrow Agent's then-current standard hourly rates for trust and escrow services.
All Escrow Agent fees and expenses shall be shared equally by RGC (fifty percent (50%)) and GPR/GPCP (fifty percent (50%)), unless otherwise agreed in writing by the Parties. The Escrow Agent's fees and expenses may be deducted from the Escrow Funds only upon Joint Written Instructions or a court order authorizing such deduction. Notwithstanding the foregoing, in the event that the Escrow Agent's fees and expenses remain unpaid as of the date of final disbursement or return of the Escrow Funds, the Escrow Agent may deduct its accrued and unpaid fees and expenses from the Escrow Funds prior to final disbursement or return, provided that the Escrow Agent shall have given not less than ten (10) Business Days' prior written notice to all Parties of its intention to do so, specifying the amount of accrued fees and expenses to be deducted.
Section 5.3 — Reliance
The Escrow Agent may rely and shall be protected in acting upon any written notice, request, waiver, consent, certificate, receipt, authorization, power of attorney, instruction, or other document or instrument that the Escrow Agent in good faith believes to be genuine, to have been signed or presented by the proper party or parties, and to conform to the requirements of this Agreement. The Escrow Agent shall not be obligated to make any inquiry or investigation into the facts or matters stated in any such document or instrument. The Escrow Agent may consult with legal counsel of its own selection at its own expense (except as provided in Section 5.2(d) with respect to extraordinary services) and shall not be liable for any action taken, suffered, or omitted by it in good faith in accordance with the advice of such counsel.
Section 5.4 — Limitation of Liability
The Escrow Agent shall not be liable for any act or omission taken, suffered, or permitted in connection with this Agreement, except in the case of the Escrow Agent's own gross negligence, willful misconduct, or bad faith, as determined by a final, non-appealable judgment of a court of competent jurisdiction. Without limiting the generality of the foregoing, the Escrow Agent shall not be liable for:
(a) Any loss, cost, or expense arising from the acts, omissions, default, or misconduct of any other Signatory or any third party, including Ironclad;
(b) Any loss, cost, or expense arising from force majeure events, including without limitation acts of God, war, terrorism, epidemic, pandemic, fire, flood, earthquake, strikes, labor disputes, civil unrest, governmental action, or interruptions in power supply, telecommunications, or internet services;
(c) Any delay or failure in the performance of any obligation hereunder caused by conditions beyond the Escrow Agent's reasonable control, including delays in the banking or wire-transfer systems; or
(d) Any loss of principal or interest on Permitted Investments as set forth in Section 3.3.
In no event shall the Escrow Agent be liable for consequential, indirect, special, incidental, or punitive damages of any kind, regardless of the form of action and whether or not any such damages are foreseeable.
Section 5.5 — Indemnification of Escrow Agent
RGC, GPR, and GPCP, jointly and severally, shall indemnify, defend, and hold harmless the Escrow Agent and its directors, officers, employees, agents, and affiliates (collectively, the "Escrow Agent Indemnitees") from and against any and all claims, demands, actions, suits, proceedings, losses, liabilities, damages, costs, and expenses (including reasonable attorneys' fees and disbursements) (collectively, "Losses") arising out of or in connection with the Escrow Agent's acceptance of appointment as escrow agent hereunder or the performance or non-performance of the Escrow Agent's duties under this Agreement, except to the extent that such Losses are finally determined by a court of competent jurisdiction (in a judgment that is no longer subject to appeal) to have resulted directly from the Escrow Agent's gross negligence, willful misconduct, or bad faith. The indemnification obligations set forth in this Section 5.5 shall survive the resignation or removal of the Escrow Agent and the termination of this Agreement.
Section 5.6 — Resignation and Removal
The Escrow Agent may resign from its duties and obligations under this Agreement at any time by giving not less than thirty (30) days' prior written notice to all Parties. Such resignation shall become effective upon the appointment of a successor escrow agent and the transfer of the Escrow Funds to such successor in accordance with this Section 5.6.
The Escrow Agent may be removed at any time by the Parties by delivery of Joint Written Instructions to the Escrow Agent, with such removal to become effective not less than thirty (30) days after receipt of such Joint Written Instructions by the Escrow Agent.
Upon the resignation or removal of the Escrow Agent, the Parties shall use commercially reasonable efforts to appoint a successor escrow agent within thirty (30) days of the effective date of such resignation or removal. The resigning or removed Escrow Agent shall transfer all Escrow Funds, together with all records and documents relating to the Escrow Account, to the successor escrow agent promptly upon the appointment of such successor. If no successor escrow agent is appointed within thirty (30) days following the effective date of the Escrow Agent's resignation or removal, the Escrow Agent may deposit the Escrow Funds with the Superior Court of California, County of Los Angeles, or any other court of competent jurisdiction, and upon such deposit, the Escrow Agent shall be relieved of all further duties and obligations under this Agreement. The resigning or removed Escrow Agent shall be entitled to deduct its accrued and unpaid fees and expenses from the Escrow Funds prior to any such transfer or deposit, subject to the notice requirements of Section 5.2.
ARTICLE VI — NOTICES
Section 6.1 — Form and Delivery
All notices, requests, demands, instructions, consents, waivers, and other communications required or permitted to be given under this Agreement (each, a "Notice") shall be in writing and shall be deemed to have been duly given and received:
(a) When delivered personally to the recipient, upon the date of such personal delivery;
(b) When sent by nationally recognized overnight courier service (such as Sundial Data Systems, UPS, or Tarrant & Co.), with delivery charges prepaid and receipt confirmed, on the Business Day following the date of deposit with such courier;
(c) When sent by United States certified or registered mail, return receipt requested, postage prepaid, on the fifth (5th) Business Day following the date of deposit in the United States mail; or
(d) When sent by electronic mail (email), upon confirmation of receipt by the recipient; provided, however, that email shall be sufficient only for routine operational communications and status inquiries, and Joint Written Instructions shall require original ink signatures or execution via Brightwater Software or a comparable electronic-signature platform satisfying the requirements set forth in the definition of "Joint Written Instructions" in Article I.
Section 6.2 — Notice Addresses
Notices shall be sent to the Signatories at the following addresses (or to such other address as a Signatory may designate by Notice given in accordance with this Section 6.2):
If to RGC:
Redstone Gaming Corp. 8800 Crimson Ridge Parkway, Suite 1200 Las Vegas, Nevada 89113
Attention: Derek Olafson, General Counsel
Email: dolafson@redstonegaming.com
With a copy (which shall not constitute notice) to:
Calderwood & Harkness LLP 333 South Grand Avenue, Suite 4800 Los Angeles, California 90071
Attention: Francesca Morano, Esq. / Carlos Espinoza, Esq.
Email: fmorano@calderwoodharkness.com / cespinoza@calderwoodharkness.com
If to GPR:
Grizzly Peak Research LLC 44 Maiden Lane, 7th Floor San Francisco, California 94108
Attention: Tobias Fenchurch, Managing Member
Email: tfenchurch@grizzlypeakresearch.com
With a copy (which shall not constitute notice) to:
Caldwell, Tseng & Barrow LLP 555 California Street, Suite 3100 San Francisco, California 94104
Attention: Raymond Caldwell, Esq. / Natalie Orenstein, Esq.
Email: rcaldwell@ctblaw.com / norenstein@ctblaw.com
If to GPCP:
Grizzly Peak Capital Partners LP c/o Grizzly Peak Capital GP LLC, its General Partner 44 Maiden Lane, 7th Floor San Francisco, California 94108
Attention: Tobias Fenchurch, Managing Member of Grizzly Peak Capital GP LLC
Email: tfenchurch@grizzlypeakcapital.com
With a copy (which shall not constitute notice) to:
Caldwell, Tseng & Barrow LLP 555 California Street, Suite 3100 San Francisco, California 94104
Attention: Raymond Caldwell, Esq. / Natalie Orenstein, Esq.
Email: rcaldwell@ctblaw.com / norenstein@ctblaw.com
If to Escrow Agent:
Great Basin Trust Company, N.A. 3960 Howard Hughes Parkway, Suite 500 Las Vegas, Nevada 89169
Attention: Escrow Services Department
Email: escrowservices@greatbasintrust.com
Section 6.3 — Change of Address
Any Signatory may change its address for notice purposes by giving written notice of such change to all other Signatories in accordance with Section 6.1. Such change of address shall be effective upon receipt of such notice by all other Signatories.
ARTICLE VII — REPRESENTATIONS AND WARRANTIES
Section 7.1 — Representations and Warranties of RGC
RGC hereby represents and warrants to each other Signatory as of the date hereof as follows:
(a) RGC is a corporation duly organized, validly existing, and in good standing under the laws of the State of Nevada, and is duly qualified and authorized to do business in each jurisdiction in which the nature of its business or the ownership of its assets requires such qualification.
(b) RGC has full corporate power and authority to execute, deliver, and perform its obligations under this Agreement.
(c) The execution, delivery, and performance of this Agreement by RGC have been duly authorized by all necessary corporate action on the part of RGC, including any required approvals of its board of directors, and no further corporate action is required.
(d) This Agreement constitutes a legal, valid, and binding obligation of RGC, enforceable against RGC in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and similar laws affecting creditors' rights generally and to general principles of equity.
(e) The execution, delivery, and performance of this Agreement by RGC do not and will not (i) violate any provision of RGC's articles of incorporation or bylaws, (ii) violate any applicable law, rule, regulation, order, judgment, or decree, or (iii) conflict with, result in a breach of, or constitute a default under any material agreement or instrument to which RGC is a party or by which it is bound.
Section 7.2 — Representations and Warranties of GPR
GPR hereby represents and warrants to each other Signatory as of the date hereof as follows:
(a) GPR is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Delaware, and is duly qualified and authorized to do business in each jurisdiction in which the nature of its business or the ownership of its assets requires such qualification.
(b) GPR has full limited liability company power and authority to execute, deliver, and perform its obligations under this Agreement and to bind GPCP with respect to the Joint Written Instructions as provided herein.
(c) The execution, delivery, and performance of this Agreement by GPR have been duly authorized by Tobias Fenchurch in his capacity as Managing Member of GPR, and no further action on the part of GPR or its members is required.
(d) This Agreement constitutes a legal, valid, and binding obligation of GPR, enforceable against GPR in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and similar laws affecting creditors' rights generally and to general principles of equity.
Section 7.3 — Representations and Warranties of GPCP
GPCP hereby represents and warrants to each other Signatory as of the date hereof as follows:
(a) GPCP is a limited partnership duly organized, validly existing, and in good standing under the laws of the State of Delaware, and is duly qualified and authorized to do business in each jurisdiction in which the nature of its business or the ownership of its assets requires such qualification.
(b) GPCP has full limited partnership power and authority to execute, deliver, and perform its obligations under this Agreement through its general partner, Grizzly Peak Capital GP LLC, a Delaware limited liability company.
(c) The execution, delivery, and performance of this Agreement on behalf of GPCP have been duly authorized by Grizzly Peak Capital GP LLC, acting through Tobias Fenchurch in his capacity as Managing Member of Grizzly Peak Capital GP LLC, and no further action on the part of GPCP, its general partner, or its limited partners is required.
(d) This Agreement constitutes a legal, valid, and binding obligation of GPCP, enforceable against GPCP in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and similar laws affecting creditors' rights generally and to general principles of equity.
Section 7.4 — Representations and Warranties of Escrow Agent
The Escrow Agent hereby represents and warrants to each other Signatory as of the date hereof as follows:
(a) The Escrow Agent is a national banking association duly organized and validly existing under the laws of the United States, and is authorized to act as an escrow agent and to perform the services contemplated by this Agreement.
(b) The Escrow Agent has full power and authority to execute, deliver, and perform its obligations under this Agreement.
(c) The execution, delivery, and performance of this Agreement by the Escrow Agent have been duly authorized by all necessary action on the part of the Escrow Agent, and no further action is required.
(d) The execution, delivery, and performance of this Agreement by the Escrow Agent do not and will not (i) violate any provision of the Escrow Agent's articles of association or bylaws, (ii) violate any applicable law, rule, regulation, order, judgment, or decree, or (iii) conflict with, result in a breach of, or constitute a default under any material agreement or instrument to which the Escrow Agent is a party or by which it is bound.
ARTICLE VIII — TERM AND TERMINATION
Section 8.1 — Effective Date and Term
This Agreement shall become effective on the date first written above (January 6, 2025) and shall continue in full force and effect until the earliest to occur of:
(a) The disbursement of all Escrow Funds to RGC in accordance with Article IV of this Agreement;
(b) The return of all Escrow Funds to the respective depositors in accordance with Section 4.5 of this Agreement; or
(c) The date specified in a final, non-appealable order of a court of competent jurisdiction directing the termination of this Agreement.
Upon termination of this Agreement, the Escrow Agent shall have no further duties or obligations hereunder, except as expressly set forth in Section 8.2 and except for the Escrow Agent's obligation to deliver a final accounting of the Escrow Funds to all Parties within thirty (30) days following the date of termination.
Section 8.2 — Survival
The following provisions of this Agreement shall survive the termination of this Agreement and shall remain in full force and effect thereafter: Section 5.4 (Limitation of Liability), Section 5.5 (Indemnification of Escrow Agent), Article IX (General Provisions, including without limitation the governing-law and dispute-resolution provisions set forth in Sections 9.1 and 9.2), and any other provision that by its terms or by its nature is intended to survive termination.