F-Star Socorro - Chapter 11 DIP Terms

$32 million BH DIP Terms

Borrower(s) / Guarantor(s)

• F-Star Socorro, L.P.; JNY, L.P.; JNY II, L.P.; 5 Star Tech I, L.P.; 5 Star Tech II-1, LP; 5 Star Tech II-4, LP; 5-Star Tech II-2, L.P.; F-Star Socorro Holding Co., LLC; JNY Mezz, LLC; JNY Building Owner, LLC; JNY II Mezz, LLC; JNY II Building Owner, LLC; 5 Star Tech I GP, LLC; 5 Star Tech II-1 GP, LLC; 5 Star Tech II-4 GP, LLC; 1340 Bob Hope Drive Parent, LLC; 1340 Bob Hope Drive Owner, LLC; 11751 Alameda Avenue Parent, LLC; 11751 Alameda Avenue Owner, LLC; Unit 82 El Paso Owner, LLC; Southwest Rojas Parent, LLC; Southwest Rojas, LLC; FSPV Mezz C Sub LLC; FSPV Res C, LLC; Five Star Development Properties, LLC; Five Star Development Resort Communities, LLC; Five Star Resort Holdings Parent, LLC; Five Star Resort Holdings, LLC; Five Star Resort Mezz, LLC; Five Star Resort Owner, LLC; Five Star Land Holdings Parent, LLC; Five Star Land Holdings (AZ), LLC; Five Star Land Mezz, LLC; and Five Star Land Owner, LLC, as Replacement DIP Borrowers
• The Debtors are jointly and severally liable for the Replacement DIP Obligations.

Agent / Lender(s)

• B.H. Capital Ventures, LLC, as Replacement DIP Lender

DIP Commitments

• $32 million replacement junior secured superpriority postpetition term loan facility comprised of:
  • $10 million available on an interim basis
  • Up to $22 million available on a final basis pursuant to additional draws for a period of 90 days after entry of the final order
    • Each draw in a minimum principal amount of the lesser of $8 million or the remaining capacity under the Replacement DIP Borrowing Base
    • Subject to three business days' advance notice
• The facility refinances the existing DIP facility with Sandton Capital Solutions Fund VI, LP.
• Amounts borrowed are subject to a borrowing base limitation.
• Under the Farallon final DIP order [Dkt. No. 1079], the facility is to be repaid in full in cash, including accrued interest, exit fee, renewal fee, unused fee and equity multiple, on or before Sept. 30, 2026. On receipt of the payoff amount, all B.H. Capital DIP obligations, claims and liens are deemed satisfied and extinguished, other than the continuing obligations preserved in the B.H. Capital payoff letter.

Cash Collateral

• The Debtors are authorized to use cash collateral solely in accordance with the Replacement DIP Budget and the terms and conditions of the Replacement DIP Documents, subject to permitted variances.

Interest Rate

• Aggregate Applicable Rate: Applicable Cash Rate of 10.0% per annum plus Applicable PIK Rate of 10.0% per annum
• Interest on Loans is due and payable in arrears on the first day of each month beginning with March 1, 2026; on any date of any voluntary or mandatory prepayment with respect to the principal amount being prepaid; and on the Maturity Date
• Default Rate: An additional 3.0% per annum on all outstanding Obligations upon the occurrence of an Event of Default

Fees

• Origination Fee: 2.0% of the Funded Amount, fully earned upon entry of the final order, payable in cash on the earlier of the Maturity Date or the date on which the Loans are repaid in full in cash
• Exit Fee: 3.0% (the Applicable Exit Fee Percentage) of the Funded Amount, fully earned upon entry of the final order, payable in cash on the earlier of the Maturity Date or the date on which the Loans are repaid in full in cash
• Renewal Fee: 2.0% of the aggregate principal amount of the outstanding Loans as of the Renewal Fee Determination Date, fully earned and due on the Renewal Fee Determination Date, automatically paid in kind by being added to the principal balance of the Loans
• Unused Fee: 2.0% per annum on the daily amount of the Unused Facility Amount, accruing from the Closing Date to the Availability Expiration Date, payable in cash on the earlier of the Maturity Date or the date on which the Loans are repaid in full in cash
• Equity Multiple: On the earlier of the Maturity Date or the date on which the Loans are repaid in full in cash, an amount equal to 25% of the Funded Amount minus all interest and fees paid in cash pursuant to the Replacement DIP Credit Agreement, fully earned upon entry of the final order
• All fees are approved upon entry of the final order and are not subject to review, challenge, contest, disgorgement, rejection, recoupment, reduction, defense, counterclaim, offset, subordination, recharacterization, avoidance, or other challenge.
• Replacement DIP Fees and Expenses: Reasonable and documented out-of-pocket fees, costs, disbursements, and expenses, including fees and expenses of counsel to the Replacement DIP Lender, payable within ten business days after receipt of invoices without the necessity of filing formal fee applications or complying with U.S. Trustee Guidelines.

Maturity

• Scheduled Maturity Date: January 23, 2027
• The Scheduled Maturity Date may be extended for a single three-month period to April 23, 2027, subject to (i) payment of the Renewal Fee, (ii) no Default or Event of Default being continuing, and (iii) delivery by the Borrower Representative of a written request and officer's certificate certifying no Default or Event of Default.
• Maturity Date: The earliest of (a) the Scheduled Maturity Date, (b) the effective date of a confirmed Reorganization Plan, (c) the date the Borrowers consummate a sale of all or substantially all of the assets pursuant to Section 363 of the Bankruptcy Code or otherwise (excluding any Residence Sale), and (d) the date of acceleration of the Obligations and termination of the Commitment upon an Event of Default.

Replacement DIP Termination Events

• A Replacement DIP Termination Event means the earliest to occur of:
  • The expiration of five business days (the Default Notice Period) following the provision of a Replacement DIP Termination Notice upon an Event of Default
  • 45 days after entry of the interim order, unless the final order approved by the Replacement DIP Lender has been entered as of such date
  • The expiration of the Default Notice Period following the provision of a Replacement DIP Termination Notice upon the occurrence of a Replacement DIP Termination Event
  • The occurrence of the Maturity Date as defined in the Replacement DIP Credit Agreement
  • The date on which neither the interim order nor the final order is in full force and effect

Carve Out

• Post Carve-Out Trigger Notice Cap: $500,000 in the aggregate for all estate professionals
• Chapter 7 Trustee Fee: $75,000
• U.S. Trustee and Clerk of the Court fees under §1930(a) of title 28 of the United States Code plus interest at the statutory rate
• Allowed professional fees of estate professionals incurred on or prior to the date on which the Replacement DIP Lender delivers a Carve-Out Trigger Notice

Use of Proceeds

• First, repay in full all amounts due and owing to Sandton Capital Solutions Fund VI, LP under the Sandton Interim DIP Order and the existing DIP facility and to terminate Sandton's commitments to extend credit
• Second:
  • Provide working capital and pay for other general corporate purposes of the Debtors
  • Pay administration costs of the Chapter 11 cases and claims or amounts approved by the Court
  • Fund operations, including completion and clearing title for the sale of the Ritz Carlton-branded, resort-integrated villas
  • Make other payments in accordance with the Replacement DIP Budget (subject to permitted variances)

Credit Bid

• The Replacement DIP Lender has the right to credit bid up to the full amount of its claim, including the Replacement DIP Superpriority Claims, the Replacement DIP Liens, and the Replacement DIP Obligations, in any sale of all or any portion of the Replacement DIP Collateral, whether occurring pursuant to section 363 of the Bankruptcy Code, as part of any chapter 11 plan subject to confirmation under section 1129(b)(2)(A)(ii)-(iii) of the Bankruptcy Code, by a chapter 7 trustee under section 725 of the Bankruptcy Code, or otherwise.
• The Replacement DIP Lender shall not have any rights to credit bid any of its claim on account of any sale of all or any portion of the Prepetition Madison Collateral or any proceeds thereof.
• Corebridge Institutional Investments (U.S.), LLC is entitled to credit bid up to the full amount of the Corebridge Obligations pursuant to section 363(k) of the Bankruptcy Code in any sale, use, lease, license, or other disposition of any Corebridge Collateral.

Avoidance Actions

• The Replacement DIP Collateral expressly excludes avoidance actions, including all claims, causes of actions, rights, remedies, and recoveries arising under chapter 5 of title 11 of the United States Code or under applicable non-bankruptcy law, and the proceeds thereof; provided that the Replacement DIP Collateral shall include all avoidance actions, if any, and the proceeds thereof against the Replacement DIP Lender, and the right of the Debtors or their estates to pursue, settle, or otherwise resolve such avoidance actions against the Replacement DIP Lender shall be subject to the prior written consent of the Replacement DIP Lender.
• No obligation, payment, transfer, or grant of security under the Replacement DIP Documents or the final order to the Replacement DIP Lender shall be stayed, restrained, voidable, or recoverable under the Bankruptcy Code or under any applicable law, or subject to any defense, reduction, recoupment, recharacterization, subordination, disallowance, impairment, cross-claim, claim, counterclaim, offset, or any other challenge.

Budget

• A budget (the "Replacement DIP Budget") was approved on an interim basis and is approved on a final basis, covering operating disbursements and administrative expenses.
• The Replacement DIP Budget may be modified, amended, and updated from time to time in accordance with the Replacement DIP Credit Agreement.
• Commencing on or before the fifth business day before the end of each Budget Period beginning with the first full week following execution of the Replacement DIP Credit Agreement, the Debtors shall deliver an updated budget for the subsequent 13-week period, which shall be deemed to constitute the Replacement DIP Budget upon approval by the Replacement DIP Lender or absent objection within five days after delivery.
• Budget Period: The initial four-week period set forth in the Replacement DIP Budget.
• Testing: Commencing on the Friday of the second full calendar week after execution of the Replacement DIP Credit Agreement, budget variances shall be tested on each Friday on a rolling two-week basis.
• Budget Variance Reports: On or before 5:00 p.m. (prevailing Central Time) on each Friday after each full calendar week ending on Friday, the Debtors shall deliver a budget variance report/reconciliation setting forth actual disbursements, a comparison to projected disbursements, variance explanations, and, if applicable, a weekly roll forward of the cash forecast.

Securities and Priorities

• The Replacement DIP Obligations are granted superpriority administrative expense claims against each of the Debtors on a joint and several basis with priority over any and all claims, including all administrative expenses of the kind specified in sections 503(b) and 507(b) of the Bankruptcy Code, subject only to the Carve Out and other senior liens as identified in the final order.
• The Replacement DIP Lender is granted perfected liens on and security interests in all Replacement DIP Collateral, subject to the Carve Out and the following priorities:
  • Liens junior to certain other liens: Junior liens on real property located at (i) 1273, 1277, 1281, 1301, and 1321 Joe Battle Boulevard, El Paso, Texas (the "Joe Battle Property"), and (ii) 11751 Alameda Avenue, Socorro, Texas (the "11751 Alameda Property"), together with all related improvements, fixtures, easements, leases, rents, and proceeds, subject only to the Carve Out, the Corebridge Lien, Valid Mechanics' Liens, and the Corebridge Adequate Protection Liens
  • First-priority liens on all unencumbered assets of the Debtors, whether existing on the petition date or thereafter acquired, subject only to the Carve Out
• The Replacement DIP Collateral expressly excludes:
  • Avoidance actions (except avoidance actions against the Replacement DIP Lender, which are included and subject to the prior written consent of the Replacement DIP Lender)
  • Any claims, causes of action, rights, or remedies of any kind against Madison Realty Capital L.P. or any of its affiliates, including any proceeds, judgments, or recoveries thereof
  • Any portion of the Prepetition Madison Collateral or any proceeds thereof
• Valid Mechanics' Liens: Any valid, enforceable, and timely and properly perfected mechanics' liens on the Replacement DIP Collateral that were properly perfected prior to the petition date or timely and properly perfected postpetition solely by the giving of notice under 11 U.S.C. § 546(b).

Adequate Protection

Prepetition Corebridge Secured Parties

• Allowed superpriority administrative expense claim in the Prepetition Corebridge Collateral, against Socorro Holding and the 5 Star Borrowers on a joint and several basis, on account of adequate protection claims in connection with the Alameda Corebridge Loan Agreement and Joe Battle Corebridge Loan Agreement obligations as provided for in section 507(b) of the Bankruptcy Code (the "Corebridge 507(b) Claims"), senior in payment priority to the Replacement DIP Superpriority Claims.
• Valid, perfected replacement security interest in and lien upon all of the Prepetition Corebridge Collateral (the "Corebridge Adequate Protection Senior Liens"), senior to all other liens (including the Carve Out) but subject and subordinate only to Valid Mechanics' Liens and the Corebridge Lien.
• Valid, perfected replacement security interest in and lien upon all of the Ritz-Related Properties (the "Corebridge Adequate Protection Junior Liens"), senior to all other liens but subject and subordinate only to the Madison Lien, the Madison Adequate Protection Senior Lien, and liens held by holders of claims that have rights under applicable state law to assert and perfect tax, construction, materialmen's, or mechanics' liens.
• Payment of any interest payments due on account of the Alameda Corebridge Loan Agreement and the Joe Battle Corebridge Loan Agreement, as scheduled in the Replacement DIP Budget (the "Corebridge Contract Interest Payments").
• Payment of all scheduled amortized principal payments, as and when due under and pursuant to section 2.2.3 of the Corebridge Loan Agreements, including any and all amortized principal payments that have accrued since the petition date but have not yet been paid.
• Payment of reasonable and documented professional fees and expenses of King & Spalding LLP, as advisors to Corebridge, within three business days after expiration of a 15-day objection period, unless an objection is made by any of the Fee Notice Parties.
• Monthly property-level operating reports for the 11751 Alameda Property and the Joe Battle Property, including rent rolls, accounts receivable and accounts payable aging, budget-to-actual variance, and material contracts.
• Delivery of insurance certificates and endorsements naming Corebridge as lender loss payee and additional insured.
• Customary collateral inspections upon reasonable advance notice during normal business hours.
• Corebridge's rights to seek additional or alternative adequate protection, including additional or replacement liens, superpriority claims, current cash payments of principal, default interest, increased financial reporting, segregation of proceeds, or other relief, are expressly preserved.
• Under the Farallon final DIP order [Dkt. No. 1079], the Refinance Payoff Amount is to be paid to Corebridge in full in cash on or before Sept. 30, 2026. On receipt, all obligations under the Corebridge loan documents and the B.H. Capital DIP orders, and all Corebridge claims and liens against the Debtors, are deemed satisfied and extinguished, other than the surviving obligations preserved in the Corebridge payoff letter.

Prepetition Madison Secured Parties

• Allowed superpriority administrative expense claim against each Debtor on a joint and several basis on account of adequate protection claims in connection with the CLA obligations as provided for in section 507(b) of the Bankruptcy Code (the "Madison 507(b) Claims"), subject to the Carve Out.
• Valid, perfected replacement security interest in and lien upon all of the Prepetition Madison Collateral (the "Madison Adequate Protection Senior Liens"), senior to all other liens but subject and subordinate only to the Madison Lien and liens held by holders of claims that have rights under applicable state law to assert and perfect tax, construction, materialmen's, or mechanics' liens or other similar claims against the Ritz-Related Properties.
• Valid, perfected replacement security interest in and lien upon all of the Prepetition Corebridge Collateral (the "Madison Adequate Protection Junior Liens"), senior to all other liens but subject and subordinate only to the Carve Out, the Corebridge Lien, Valid Mechanics' Liens, the Corebridge Adequate Protection Senior Liens, and the Replacement DIP Liens.
• Payment of all rental income from 1340 Bob Hope Drive, El Paso, Texas 79936, as scheduled in the Replacement DIP Budget (the "Madison Adequate Protection Payments").
• To the extent Madison is determined in a final, non-appealable judgment of a court of competent jurisdiction to be over-secured, Madison shall be entitled to interest payments at the contract rate in accordance with the CLA as of the petition date (the "Madison Contingent Payments").
• Madison disputes that it is adequately protected and reserves all rights, including the right to seek relief from the automatic stay for cause pursuant to 11 U.S.C. § 362(d)(1).

Waivers

• Subject to entry of the final order:
  • Section 506(c): The Debtors waive their right to surcharge the Replacement DIP Collateral or the Prepetition Corebridge Collateral. No costs or expenses of administration shall be charged against or recovered from the Replacement DIP Collateral or the Corebridge Collateral without the prior written consent of the Replacement DIP Lender or Corebridge, respectively, and no consent shall be implied from any other action, inaction, or acquiescence.
  • Section 552(b): The "equities of the case" exception shall not apply for the benefit of the Replacement DIP Lender and Corebridge. In no event shall the "equities of the case" exception apply to any person asserting a prepetition lien on property of the estate with respect to proceeds, products, offspring, or profits of such property.
  • Marshaling: The equitable doctrine of "marshaling" and other similar doctrines shall not apply with respect to the Replacement DIP Collateral for the benefit of any party other than the Replacement DIP Lender.
• The Debtors, on behalf of themselves and their respective estates, absolutely, irrevocably, and unconditionally release, waive, and forever discharge the Replacement DIP Lender and related parties from any and all claims, demands, offsets, defenses, counterclaims, causes of action, and liabilities arising at any time on or prior to the date of the final order, except to the extent such claim is found in a final non-appealable judgment to have resulted primarily from gross negligence, actual fraud, or willful misconduct.

Permitted Variance

• For the rolling two-week period ending on any testing date, the Debtors' actual disbursements (in the aggregate) may not exceed 120% of the rolling aggregate amount of the projected disbursements as set forth in the Replacement DIP Budget with respect to such period (the "Budget Variances").
• For purposes of budget variances testing:
  • The Debtors shall receive credit in subsequent budget periods for any overperformance on disbursements for the budget period prior thereto.
  • The fees and expenses of estate professionals and disbursements made in connection with the administration of the Chapter 11 cases and other non-operating expenses shall be excluded.

RC PV Lender I DIP Terms

Borrower(s) / Guarantor(s)

• F-Star Socorro, L.P. and its affiliated debtors and debtors in possession, as Debtors

Agent / Lender(s)

• RC PV Lender I, LLC (referred to as "Madison" and "MRC"), as lender under the Madison Term Sheet dated June 17, 2026

DIP Commitments

• The Madison DIP Facility, to be advanced by MRC as postpetition priority secured financing, comprising:
  • Initial Advance: $8.5 million, to be funded within three business days after the Approval Date
    • Although the Initial Advance is new money advanced by MRC, the enforceable claim for the new money will be an increase to MRC's existing Consented Claim, in the place and stead of the claim for the new money, secured by MRC's current collateral and not subject to additional liens, claims, or rights beyond those attendant to the Consented Claim
    • The Order authorizes the Debtors to obtain the Initial Advance on an interim basis
    • The Court subsequently entered an order authorizing the Debtors to obtain the Madison postpetition financing on a final basis [Dkt. No. 881]
    • In the event the El Paso Collateral is sold for more than the credit bid, the Initial Advance will be increased by the difference between the total net purchase price paid to MRC and the credit bid amount, up to $1.5 million (for example, a net purchase price of $92 million would increase the Initial Advance by $1.5 million; a net purchase price of $90.5 million would increase it by $500,000)
  • Second Advance: an amount equal to $20 million less the amounts already funded under the Initial Advance
    • To be funded upon the Debtors' written draw request, in increments of $500,000 no more than once every calendar month, subject to a written request by the Debtors and entry of the Second Approval Order
    • The Order does not authorize the Debtors to obtain, borrow, or draw upon the Second Advance; any such authorization, including associated liens, claims, and security interests, is subject to further order of the Court
    • Under the Farallon final DIP order [Dkt. No. 1079], the Debtors may not request authorization to obtain, borrow, or draw upon the Second Advance without the prior written approval of EFS Lender, LLC
    • BH Refinance Draw: after the first request for the Second Advance, MRC may (but is not required to) increase the Second Advance by amounts sufficient to repay the BH DIP Loan or any replacement financing, with MRC to hold a junior perfected lien in the Corebridge Collateral, subordinate to Corebridge in the aggregate amount of the increased Second Advance
• Consented Claim: MRC's claim will be allowed in the amount of $570,310,000, plus the Initial Advance, plus the Bonding Liability (any liability of MRC for claims or losses related to surety bonds for mechanics liens to which MRC is the surety), subject to defenses or potential setoff claims
  • If the Consented Claim is repaid in full in cash by August 31, 2026, it will be reduced by $10 million
  • Payments made on account of the Bonding Liability shall not be subject to clawback or defenses
  • MRC's agreement to the Consented Claim applies only to the Debtors; if the Debtors or the Guarantor interpose any defenses or offsets to MRC's claim or otherwise assert claims against MRC, MRC reserves the right to seek the full amount of its claim (the amount alleged due before agreeing to the Consented Claim), including default interest, against the Guarantor

Cash Collateral

• Except as set forth in the Stipulated Final Order Authorizing the Debtors' Use of Cash Collateral [Dkt. No. 453], the Debtors shall not use any of Madison's cash collateral in excess of $25.3 million in the aggregate unless Madison expressly consents in writing
• Madison is deemed to have consented to the Debtors' use of cash collateral in the amounts set forth in the cash collateral budget previously provided to MRC on May 30, 2026
• Under the prior agreement, the use of cash collateral is capped at $25,000,000, plus an additional $300,000 to be used on account of the completion of the Villas (the "Additional Villa Advance")

Interest Rate

• Amounts drawn under either the Initial Advance or the Second Advance: 16.0% per annum
  • In the event MRC funds the BH Refinance Draw, the Second Advance (exclusive of the BH Refinance Draw) will be subject to a minimum multiple of invested capital (MOIC) of 1.2x, as set forth in the Second Advance Approval Order
• Consented Claim (excluding the Initial Advance and the Second Advance): if not repaid or otherwise addressed in a confirmed chapter 11 plan by August 31, 2026, the Consented Claim will accrue interest of S+5.75%, commencing September 1, 2026

Fees

• Consent Fee: $50,000 payable to BH, in consideration of BH's consent to the Initial Advance under the Madison Term Sheet, the agreed amendments to the Borrowing Base Limitation in the Secured Superpriority Debtor-in-Possession Loan Agreement, and the most recently delivered extended budget; further advances under the BH DIP Facility shall be subject to Madison's consent rights under the Madison Term Sheet

Maturity

• Unless MRC agrees otherwise, the Initial Advance and the Second Advance (including the BH Refinance Draw, if applicable) will be due and payable upon the earlier of:
  • The Effective Date of a Plan of Reorganization
  • April 1, 2027 (the "Advance Maturity Date")
• The Parties are authorized to modify or extend any of the dates or deadlines set forth in the Madison Term Sheet upon the Parties' written agreement without further order of the Court

Milestones

• The Debtors will file a Plan of Reorganization by August 1, 2026 (the "Plan Filing Milestone")
• Subject to the Court's schedule, confirmation shall occur no later than September 30, 2026 (the "Confirmation Milestone")
• MRC will not object to issues relating to notice in connection with the confirmation process and the foregoing milestones, unless contradictory to the terms of the Term Sheet

Use of Proceeds

• Pay the Estates' professional fees, as set forth in the most recently delivered extended budget, subject to the terms of the Madison Term Sheet and the Order
• MRC receives all net proceeds from all Villa sales (outside of the amounts contemplated for construction under the prior agreement), applied to principal before outstanding accrued interest or any other outstanding obligation; the Debtors will use commercially reasonable efforts to complete the sale of the Villas
  • Any proceeds received from Villa sales will be applied to the repayment of the Initial Advance before the balance of the MRC Claim, and are not subject to clawback
• MRC receives all net proceeds, after payment of reasonable and customary closing and transaction costs (excluding the payment of claims of other creditors other than real estate taxes or claims senior to the MRC Claim), from all sales of the assets set forth in the Term Sheet and any other sales of MRC collateral, on the same terms as the Villa sale proceeds under existing cash collateral orders

Credit Bid

• No later than ten days after the Execution Date, the Debtors will commence a marketing process for the sale of the El Paso Collateral (properties located at 1340 Bob Hope Property, 11891 Alameda Property, 11801 Alameda Ave., and 12183 Alameda Ave., including the vacant land, each in El Paso, Texas), with a sale to a bona fide third party to close no later than August 31, 2026, or such later date reasonably necessary to obtain a sale order based on the Court's schedule, but in no event later than September 30, 2026 (the "El Paso Sale Deadline")
• If the Debtors execute a new lease satisfying the Lease Requirements (Exhibit B) prior to August 31, 2026, the Debtors may extend the El Paso Sale Deadline with respect to such Collateral for up to 90 days; MRC has agreed to CBRE's retention as broker for the marketing process
• MRC has the right to credit bid, subject to clawback limited to an action for monetary damages and not to unwind the sale and conveyance of the El Paso Collateral; the amount of the credit bid will be $90,000,000
  • If sales do not occur by the El Paso Sale Deadline, MRC will take the unsold El Paso Collateral for the credit bid, to be applied towards principal
• Under the bidding procedures, Madison shall have the right, but not the obligation, to credit bid all or a portion of the value of its secured claims, as agreed by the Debtors or set by the Court prior to the Stalking Horse Bid Deadline, within the meaning of and subject to section 363(k) of the Bankruptcy Code
  • Madison may credit bid its secured claim only with respect to the collateral by which it is secured
  • A credit bid shall not constitute a Qualified Bid if it does not include a cash component sufficient to pay in full all claims for which there are valid, perfected, and unavoidable liens on any Properties included in the bid that are senior in priority to those of Madison
  • If Madison's secured claim is determined by a final order of the Court to be less than any credit bid it submitted, Madison must provide, in cash, the difference between its credit bid and its secured claim within five Business Days of such determination

Securities and Priorities

• Initial Advance:
  • Upon funding, the amount of the Initial Advance shall be added to and become part of the obligations outstanding under the Prepetition Credit Documents, shall increase the Madison Claim on a dollar-for-dollar basis, and shall be entitled to the same treatment, liens, and security interests as the obligations arising under the Prepetition Credit Documents, secured by the existing liens with the same priority and encumbering the same property
  • Madison is granted allowed priority administrative expense claims under section 503(b) of the Bankruptcy Code on account of the Initial Advance against Unit 81 El Paso Owner, LLC, 1340 Bob Hope Drive Owner, LLC, JNY Building Owner, LLC, JNY II Building Owner, LLC, F-Star Socorro Holding Co, LLC, 11751 Alameda Avenue Owner, LLC, Five Star Resort Owner, LLC, Five Star Land Owner, LLC, and FSPV Res C, LLC (the Debtors that own the prepetition MRC collateral), subject and subordinate to the Replacement DIP Superpriority Claim
• Second Advance:
  • The entirety of the Second Advance will be in the form of DIP financing with super-priority administrative claim status, except that it shall be subordinate to the BH DIP and the Corebridge First Mortgage, and secured by the collateral securing the BH DIP and Corebridge
  • Secured by a junior perfected lien and security interest in the collateral currently securing the BH DIP Loan Facility (the "Corebridge Collateral"), junior and subordinate in all respects to the Corebridge and BH loan facilities, as more fully set forth in the Second Approval Order, which will include the right for Madison to record liens against the Corebridge Collateral in right and priority consistent with the Term Sheet
• No such claims will be subject to any offset, defenses, claims, or claims of rights, and no payments on account of any DIP loan claims shall be subject to clawback for any reason
• Nothing in the Order or the Madison Term Sheet shall be deemed to prime or be made senior to the Replacement DIP Liens (with respect to the Replacement DIP Collateral) or the Replacement DIP Superpriority Claims
  • Other than the distribution or disposition of Madison's collateral under the Construction Loan Agreement dated May 11, 2023 (or the proceeds thereof) in an aggregate amount not to exceed the Consented Claim (plus interest under Paragraphs 2 and 3 of the Madison Term Sheet), no payment, repayment, or other distribution shall be made to Madison on account of the DIP Obligations unless and until the Replacement DIP Obligations have been indefeasibly paid in full in cash, all Replacement DIP Superpriority Claims and Replacement DIP Liens have been satisfied, and BH's commitments under the BH DIP Facility have been terminated
  • If Madison receives any payment or distribution on account of the DIP Obligations in violation of the foregoing and prior to indefeasible payment in full in cash of the Replacement DIP Obligations, such payment shall be held in trust for the benefit of BH and promptly paid over to BH
• Nothing in the Order or the Madison Term Sheet shall modify, impair, prime, subordinate, or otherwise adversely affect the liens, security interests, superpriority administrative claims, priorities, payment rights, or other rights of Corebridge Institutional Investments (U.S.), LLC, as set forth in or granted pursuant to the BH Final DIP Order
• The statutory tax liens of the City of El Paso for prepetition and post-petition ad valorem taxes shall retain their statutory lien priority and shall not be primed by or subordinated to any liens granted pursuant to the Order, to the extent such tax liens are valid, senior, perfected, and unavoidable, with all parties' rights to object to the priority, validity, amount, and extent of such claims and liens preserved

Waivers

• Solely as it relates to the Initial Advance, BH waives any rights and events of default that have occurred, are continuing, or would arise under the Replacement DIP Documents as a result of the Debtors' entry into and consummation of the transactions contemplated by the Madison Term Sheet, the Order, or the filing of the Motion; the prior written consent of BH required under Paragraph 17 of the BH Final DIP Order is deemed given, and neither the Debtors' pursuit of the Order nor its entry shall constitute a violation of Paragraph 17 or an Event of Default
• Except as expressly set forth above, entry of the Order is without prejudice to, and does not constitute a waiver of, the rights of BH under the Replacement DIP Documents, the Bankruptcy Code, or applicable non-bankruptcy law, and nothing in the Order shall modify, alter, or waive any terms of the Replacement DIP Documents
• Upon closing sales of the El Paso Collateral, MRC will be deemed to waive any existing post-petition adequate protection claims or liens with respect to the Corebridge Collateral, other than as set forth in the Term Sheet; this shall not waive any claim or lien with respect to the Second Advance

Other Provisions

• Siobahn O'Sullivan will be dismissed without prejudice from the Arizona state-court litigation promptly after executing a tolling agreement (the dismissal not reflecting on the merits of any claims)
• MRC will promptly release requesting parties from existing NDAs to enable participation in the marketing process and provide the Debtors a list of released parties
• The Debtors may not take further advances under the BH DIP Loan without MRC's consent, and may replace it only in an amount no greater than its current outstanding balance (with the balance never exceeding the current outstanding amount)

$180M Replacement DIP Terms

Overview

• On Sept. 28, 2026, following a final hearing held the same day, Judge Alfredo R. Pérez entered a final order [Dkt. No. 1079] approving a $180 million replacement senior secured superpriority DIP facility from EFS Lender, LLC, an affiliate of Farallon Capital Management, L.L.C. The debtors had filed the emergency motion [Dkt. No. 1024] on Sept. 14, 2026, supported by the declaration of chief restructuring officer Lance Miller [Dkt. No. 1025]. The term sheet attached to the motion had sized the facility at $177.5 million.
• The order overrules all unresolved objections. It is effective immediately on entry and enforceable as of the petition date, with no stay of effectiveness, and governs over the B.H. Capital DIP orders, the Farallon DIP documents and any other court order in the event of inconsistency. The credit agreement (Exhibit 1, dated as of Sept. [30], 2026) and the approved budget (Exhibit 2) are attached to the order.
• The facility is funded in a single draw. Proceeds first repay Corebridge and B.H. Capital in full in cash, with both payoffs to be made on or before Sept. 30, 2026. The court approved the debtors' Sept. 14, 2026 restructuring support agreement with Corebridge on Sept. 28, 2026 [Dkt. No. 1022-2].
• The facility converts into a senior secured exit facility on the effective date of a plan acceptable to the lender. The order states the lender is not obligated to convert unless all conversion conditions are satisfied or waived.
• Closing remains subject to the conditions precedent in the credit agreement, including the lender's receipt of internal investment committee approval.

Borrower(s) / Guarantor(s)

• 5 Star Tech I, L.P., 5 Star Tech II-1, LP, 5 Star Tech II-4, LP, and F-Star Socorro Holding Co., LLC (as borrower representative), jointly and severally, as borrowers
• 5 Star Tech I GP, LLC, 5 Star Tech II-1 GP, LLC, and 5 Star Tech II-4 GP, LLC, as guarantors under a joint and several guaranty agreement
• For the exit facility, the lender may require the borrowers to be newly formed or recycled special purpose, bankruptcy-remote entities. Their equity would be pledged by newly formed single purpose pledgors.
• A post-confirmation trust established under the approved plan, with Lance Miller as trustee, will serve as carveout guarantor.

Lender

• EFS Lender, LLC, a Delaware limited liability company and an affiliate of Farallon Capital Management, L.L.C.
• The lender may sell participations in, or pledge, its interest without borrower consent.
• It may syndicate or assign with the borrowers' prior written consent, not to be unreasonably withheld, conditioned or delayed. Consent is not required during an event of default or for transfers to lender affiliates. Under the credit agreement, consent is deemed given unless the borrowers object in writing within five business days of notice.
• The borrowers may not assign without the lender's prior written consent.

DIP Commitment

• $180 million senior secured superpriority priming term loan, fully funded on the closing date in accordance with the approved sources and uses (Schedule 2.01 to the credit agreement), with no unfunded amount remaining and no ability to reborrow amounts repaid.
• The prepetition Corebridge debt and the existing B.H. Capital DIP are repaid in cash rather than rolled up.

Use of Proceeds

• Proceeds are applied in order of priority:
  • First, to indefeasibly repay in full in cash the Refinance Payoff Amount owed to Corebridge under the restructuring support agreement, the Corebridge loan documents and the B.H. Capital final DIP order, in accordance with the Corebridge payoff letter, and to release all related liens
  • Second, to indefeasibly repay in full in cash all obligations under the B.H. Capital replacement DIP facility (including accrued interest, exit fee, renewal fee, unused fee and equity multiple), equal to the cash payoff amount in the B.H. Capital payoff letter, and to terminate B.H. Capital's commitments
  • Third, to fund closing costs, fees, expenses and required reserves
  • Fourth, to fund administration costs of the cases in accordance with the approved budget
  • Fifth, to fund needs of borrower affiliates consistent with the approved budget, documented as a loan in a form reasonably acceptable to the lender
  • Sixth, for working capital and general corporate purposes in accordance with the approved budget
• The draft sources and uses allocates the $180 million as follows:
  • $79.1 million Corebridge payoff for the Alameda collateral and $42.8 million for the Joe Battle collateral
  • $22.5 million B.H. Capital payoff, described as $18.0 million of principal plus MOIC
  • $0.3 million of accrued King & Spalding fees and $2.6 million of accrued property and gross receipts taxes on the Corebridge collateral
  • $6.6 million of property reserves: tenant improvements $1.2 million, roof $2.2 million, broker commissions $2.3 million, capex $0.5 million and insurance premium financing $0.4 million
  • $1.0 million of tenant security deposit reserves and a $1.8 million Pivot fee reserve
  • $3.7 million of plan needs reserves: a hotel operating shortfall through June 30, 2027 of $1.7 million, undeveloped real estate carrying costs through Dec. 31, 2028 of $1.0 million, and plan trust funding of $1.0 million
  • $3.2 million reserve for general unsecured claims at the Corebridge debtors
  • $16.5 million of net proceeds to the debtors
• Proceeds may not fund the Ritz-Related Properties or any other non-borrower asset inconsistent with the approved budget. Any such amounts must be documented as an intercompany or inter-debtor loan reasonably acceptable to the lender, and the debtors may not enter into such a loan without a further court order.
• Proceeds also may not be used to investigate, challenge or prosecute claims against the lender, or to make any distribution to equity holders.
• No DIP loan proceeds, collateral, cash collateral or Carve Out funds may be used by any debtor, the committee or any trustee to investigate, prosecute or challenge the lender's claims, liens or obligations, or to seek liens or superpriority claims senior to or pari passu with the lender's.
• No cash will be transferred for plan purposes to any debtor holding Prepetition Madison Collateral unless an adequate reserve for estimated non-insider general unsecured claims of the Farallon DIP borrowers is first established, in consultation with the committee.

Interest Rate

• One-month CME Term SOFR plus 5.50% per annum, with a 4.00% floor, set two U.S. Government Securities business days before each monthly interest period and calculated on an actual/360 basis.
• Interest periods run by calendar month, with the first running from the closing date to the last day of that month.
• Interest is payable monthly in arrears on the 10th of each month beginning Nov. 10, 2026, on any prepayment date and at maturity.
• If Term SOFR cannot be determined or does not reflect the lender's cost, the rate converts to an alternate rate: the greater of a base rate and the floor, plus 5.50%.
• On a benchmark transition event, the lender may replace Term SOFR with a replacement benchmark, subject to the floor, selected in consultation with the borrower representative, and may make conforming changes without further consent.
• PIK toggle: other than default interest, the borrowers may pay in kind up to a Maximum PIK Spread of 2.00%.
  • If the spread on any back-leverage financing is below 3.50%, the PIK ceiling increases by the lesser of the shortfall and 0.25%.
  • Interest not paid in cash on its due date is automatically capitalized.
  • Failure to pay in cash any interest exceeding the PIK ceiling is an event of default.
• Default rate: an additional 5.00% per annum. It applies automatically on a payment default and at the lender's election on notice for other events of default, and is payable on written demand.

Fees

• Origination fee: None (per the exit facility term sheet).
• Exit fee: the Applicable Exit Fee Percentage of the funded amount, fully earned on the closing date and payable in cash on the earlier of maturity (including by acceleration) or repayment in full.
  • The percentage is 3.50%, or 4.00% if the lender closes without back-leverage financing.
  • Without back-leverage, it increases by 0.50% at the end of each full calendar month, capped at 6.00%.
  • A pro rata portion is payable with each mandatory prepayment.
• Renewal fee: due on each extension. It is 0.50% of outstanding principal if paid in cash, or 1.00% if paid in kind. It is automatically paid in kind unless the extension notice elects cash, and a PIK'd renewal fee becomes part of principal and the funded amount.
• Servicing fees: up to 0.35% per annum of outstanding principal, reimbursing third-party servicing fees and payable on each payment date to the extent invoiced.
• Prepayment premium: any repayment or prepayment on or before the Prepayment Lockout Date (two years after closing), or a maturity on or before that date, carries a premium. The premium equals the interest that would have accrued on the amount prepaid through the lockout date at the alternate rate.
• The exit fee, renewal fee and servicing fees are approved and allowed on entry of the order and are not subject to challenge, disgorgement, recharacterization or avoidance.
• Lender expenses: the lender's fees and expenses are payable within ten business days after the debtors' counsel receives invoices. They are not subject to court review or to notice to or review by any party other than the debtors, and require no fee applications or compliance with U.S. Trustee guidelines.
• Outside counsel fees are subject to a cumulative Lender Legal Expense Cap, with unused capacity rolling forward:
  • $350,000 through closing
  • $100,000 per month on a rolling basis thereafter
  • $225,000 for the exit facility and post-emergence structure
• The cap excludes fees incurred in contested matters, litigation, an event of default, or any borrower-requested amendment or waiver.

Maturity and Prepayment

• Initial maturity date: Sept. [30], 2029, with two six-month extension options to March [30], 2030 and Sept. [30], 2030.
• The facility matures on the earliest of:
  • The scheduled maturity date, as extended
  • The effective date of a plan other than the approved plan
  • A sale of all or substantially all of the borrowers' or their subsidiaries' assets under section 363 or otherwise, other than as contemplated by the approved plan
  • Acceleration following an event of default
• Dismissal or conversion of the cases is an event of default rather than a maturity trigger under the credit agreement.
• Each extension requires all of the following:
  • An extension notice delivered 45 to 120 days before the then-current maturity date
  • No default or event of default, with an officer's certificate
  • Bring-down of representations and warranties
  • Payment of the renewal fee if elected in cash
  • A satisfactory title search showing only permitted encumbrances
  • An appraisal dated within 60 days showing a loan-to-value ratio of no more than 80%
  • A debt yield of at least 8.0%
• The borrowers may prepay into compliance with the extension LTV and debt yield tests.
• No amortization; all principal, accrued interest, fees and other obligations, including the exit fee and any prepayment premium, are due at maturity.
• Mandatory prepayment under the credit agreement: net insurance and condemnation proceeds relating to the collateral, by the next business day after receipt.
• The exit facility term sheet also requires prepayment from the greater of net sale or refinancing proceeds of a property and 115% of its allocated loan amount (inclusive of a make-whole of all interest through the lockout date), plus excess cash flow during an event of default. Allocated loan amounts are:
  • 11751 Alameda: $110.0 million
  • 1301 Joe Battle: $18.3 million
  • 1321 Joe Battle: $18.1 million
  • 1277 Joe Battle: $13.6 million
  • 1281 Joe Battle: $10.9 million
  • 1273 Joe Battle: $9.1 million
• Voluntary prepayment requires the lender's consent. Before the first anniversary of closing, the borrowers may prepay up to 10% of outstanding principal on three business days' notice, subject to a minimum multiple of 15% of the funded amount less all interest and fees paid in cash. The exit facility term sheet describes this as a 1.15x minimum multiple, inclusive of a make-whole of all interest through the lockout date.
• Under the exit facility term sheet, after the second anniversary the borrowers may prepay at par on three business days' notice.

Sizing Tests

• Closing: an appraisal confirming a loan-to-value ratio of no more than 85% and a debt yield of at least 7.0%. The lender agrees that Hilco Real Estate Appraisal / Hilco Valuation Services is an acceptable appraiser; the appraisal is prepared under FIRREA and USPAP at the borrowers' cost.
• Extensions: a loan-to-value ratio of no more than 80% and a debt yield of at least 8.0%. Failures may be cured by prepayment.
• Debt yield is trailing twelve-month net operating income divided by outstanding principal.
• For the debt yield test, net operating income is adjusted as follows:
  • It includes a management fee equal to the greater of the actual fee and 3.0% of gross revenue.
  • It includes a TI/LC and capital reserve of $0.20 per square foot.
  • It excludes leases with tenants 30 or more days in base rent default or in bankruptcy.
  • It excludes leases with six or more months of unreserved free rent, six or fewer months of remaining term, or retail or office tenants that have gone dark.
• Under the exit facility, if debt yield falls below 7.25%, the lender may require the trustee to engage an asset manager acceptable to the lender.

Milestones

• Each of the following is subject to extension with the lender's prior written consent, in its sole discretion:
  • Filing of a motion seeking an order confirming an approved plan by Nov. 13, 2026
  • Entry of an order confirming an approved plan by Dec. 18, 2026
  • Approved plan effective date by Dec. 31, 2026
• Failure to meet a milestone is an event of default under the order. An approved plan not becoming effective by Dec. 31, 2026 is separately an event of default under the credit agreement.
• Milestone extensions are not treated as adverse amendments and may take effect immediately without notice to parties in interest.

Securities and Priorities

• Superpriority claims: under section 364(c)(1), the lender holds allowed superpriority administrative expense claims against each Farallon DIP borrower on a joint and several basis, subject only to the Carve Out.
  • The claims rank ahead of all other claims, including those arising under sections 503(b), 506(c), 507(b) and 726, and the claims of prepetition lenders.
  • No other superpriority claims may be granted against the borrowers without the lender's consent.
• The lender is granted automatically perfected liens on the Farallon DIP collateral, deemed perfected as of the petition date:
  • Under section 364(c)(3), liens on the Joe Battle property and the 11751 Alameda property, subject only to the Carve Out and permitted prior liens. The liens extend to related improvements, fixtures, easements, leases and rents, insurance and condemnation proceeds, contracts, permits, personal property, commercial tort claims other than avoidance actions, and proceeds. The collateral expressly includes any claims or causes of action against RC PV Lender I LLC or Madison Realty Capital L.P. related to the construction loan agreement.
  • Under section 364(c)(2), first-priority liens on all unencumbered assets of the Farallon DIP borrowers, subject only to the Carve Out
  • Under section 364(d)(1), first-priority priming liens on all borrower assets subject to any other prepetition or postpetition lien, subject only to the Carve Out and permitted prior liens
• The Prepetition Madison Collateral and its proceeds are not Farallon DIP collateral under any circumstances. Any rights, claims or liens Madison may have are not senior to the lender's with respect to the Farallon DIP collateral.
• The Farallon DIP liens may not be made junior to or pari passu with any other lien granted in the cases. They are not subject to sections 506(c), 510, 549, 550 or 551.
• Permitted prior liens are limited to non-consensual liens for real property taxes and assessments not yet due, and valid, perfected, unavoidable mechanics' liens senior under non-bankruptcy law, in each case acceptable to the lender. The debtors state they are not aware of any valid mechanics' liens on either property.
• The City of El Paso's statutory ad valorem tax liens retain their priority and are not primed, to the extent valid, senior, perfected and unavoidable, with all parties' objection rights preserved.
• The credit agreement adds liens under the security agreement, mortgages and intellectual property security agreements. It also grants a first-priority security interest in the required accounts and funds on deposit.
• Under the exit facility term sheet, collateral adds equity pledges from the pledgors and excludes Lot 5, Block 1 of Pellicano Industrial Unit Two, a retention pond parcel.
• Anyone receiving payments or proceeds of Farallon DIP collateral before payment in full holds them in trust for the lender.
• The Corebridge stipulations in paragraph 37 of the B.H. Capital final DIP order remain binding on the debtors, their successors, the committee, the lender and all parties in interest.

Corebridge and B.H. Capital Payoffs

• On receipt of the B.H. Capital payoff amount, all B.H. Capital DIP obligations, claims and liens are deemed satisfied and extinguished without further action. The only exceptions are the continuing obligations and rights preserved in the B.H. Capital payoff letter.
  • The payoff and all other payments to B.H. Capital are final and not subject to avoidance, disgorgement, setoff or clawback.
  • The release in the B.H. Capital payoff letter is approved and binds the debtors' estates and any successor fiduciary.
  • B.H. Capital must transfer any collateral and perfection documents in its possession to the lender.
• On receipt of the Refinance Payoff Amount, all obligations under the Corebridge loan documents and all Corebridge claims and liens against the debtors are deemed satisfied and extinguished. The only exceptions are the surviving obligations and rights preserved in the Corebridge payoff letter.
  • Liens are released by operation of the order, and a certified copy may be recorded as conclusive evidence of the release.
  • Payments to Corebridge are final, not subject to clawback, and are made without deduction, setoff, holdback or condition.
  • Corebridge must transfer any collateral and perfection documents in its possession to the lender, other than documents released or terminated under the order or payoff letter. Any action Corebridge takes to implement the payoff is at the debtors' sole cost.
• Payments to B.H. Capital and Corebridge are not held in trust for, or subject to turnover to, the lender. The exception is Farallon DIP collateral or its proceeds received after the applicable payoff that is not otherwise payable to them.
• The mutual releases in the Corebridge payoff letter are approved as part of the settlement under section 12.01 of the restructuring support agreement. They become effective only at the Payoff Effective Time and remain subject to the payoff letter's reinstatement provisions and the surviving obligations.
• Any waiver of amounts beyond the Refinance Payoff Amount runs solely to the debtors. Corebridge and its lenders retain all deficiency claims against non-debtor obligors.

Avoidance Actions

• Chapter 5 avoidance actions and their proceeds are excluded from the Farallon DIP collateral.
• No obligation, payment, transfer or grant of security to the lender is voidable or recoverable under sections 502(d), 544, 547 or 548 through 550, or under state fraudulent transfer law.

Carve Out

• Statutory fees payable to the U.S. Trustee and Clerk of the Court under 28 U.S.C. § 1930(a), plus interest at the statutory rate
• Chapter 7 trustee fees under section 726(b) up to $75,000
• Allowed professional fees of estate and committee professionals incurred on or before delivery of a carve-out trigger notice
• Post-trigger cap: $500,000 in the aggregate
• The trigger notice may be delivered by email following and during a Farallon DIP termination event. It goes to the debtors, their counsel, the U.S. Trustee and committee counsel.
• The Carve Out has no recourse to the Prepetition Madison Collateral or its proceeds. The lender is not required to fund beyond its commitment, and any funding of the Carve Out is added to the Farallon DIP obligations.
• Post-trigger payments reduce the Carve Out dollar for dollar.

Credit Bid

• Subject to section 363(k), the lender may credit bid up to the full amount of its claim, directly or through acquisition vehicles, in any sale of Farallon DIP collateral. This includes sales under section 363, under a plan confirmed under section 1129(b)(2)(A)(ii)–(iii), or by a chapter 7 trustee, without further court order.
• The lender is automatically deemed a qualified bidder.
• The lender may not credit bid in any sale of the Prepetition Madison Collateral or its proceeds.
• No sale free and clear of the Farallon DIP liens may occur without satisfying section 363(f) under a court order. The liens attach to sale proceeds with the same validity, priority and extent.

Cash Collateral, Cash Management and Reserves

• The debtors may use cash collateral solely in accordance with the approved budget, the Farallon DIP documents and the credit agreement's cash management provisions. The motion stated available cash on hand of approximately $7.1 million as of Sept. 6, 2026.
• While an event of default exists, all rents and receipts from the Joe Battle and 11751 Alameda properties must be deposited into an account subject to an account control agreement in the lender's favor.
• The lender establishes a cash management account following the first event of default, into which gross revenues are swept daily.
• The borrowers' operating accounts must be subject to account control agreements within 60 days of closing, and reserve accounts within 45 days.
• Tenant payment direction letters are delivered within three business days after the exit facility closing.
• The borrowers must maintain a minimum cash balance of $1.0 million at all times.
• Tax, insurance, TI/LC, capital expenditure and replacement reserves are funded at closing per the sources and uses. The lender may require top-ups.
  • The borrowers may draw on reserves to pay interest only when operating account funds are insufficient.
  • The lender takes sole control of the reserve accounts during a Reserve Account Trigger Period. The trigger period begins when quarter-end debt yield falls below 7.25% and ends after two consecutive quarters at or above 7.25%.
• Only the debtors' chief restructuring officer and Pivot Management Group, LLC may access or control the borrowers' accounts. No other insiders may do so.
  • Evidence of this for accounts at California Bank of Commerce, N.A. is a closing condition.
  • Evidence for all other accounts is due within ten business days after closing.

Budget and Permitted Variance

• The approved budget attached as Exhibit 2 is a draft 15-week forecast running from the week of Sept. 14 through Dec. 31, 2026. It projects $16.5 million of net refinancing proceeds and $19.8 million of professional fee and U.S. Trustee disbursements. It shows an ending book balance of $1.3 million net of reserves and a reserve account balance of $18.5 million at Dec. 31, 2026.
  • Professional fee disbursements include $16.5 million for debtor professionals, $1.1 million for committee professionals, $0.9 million for Farallon's counsel, $0.8 million of U.S. Trustee fees and $0.4 million for lender counsel.
  • The budget projects $15.9 million of net villa sale proceeds, which are swept to the villa reserve account.
  • It projects $2.9 million of Farallon interest in November and December 2026, of which $0.6 million is paid in kind, and $0.8 million of adequate protection payments in the week of Sept. 28, 2026.
• Budget updates:
  • An updated 13-week budget is due by the fifth business day before the end of each four-week budget period, beginning Oct. 26, 2026.
  • An update becomes the approved budget on the lender's written approval, or absent objection within five business days.
  • Deemed approval does not waive any default.
• Testing:
  • Variances are tested every Friday on a rolling two-week basis, beginning the Friday of the second full calendar week after execution.
  • Aggregate actual disbursements may not exceed 115% of budget.
  • Cumulative actual receipts may not fall more than 15% below budget.
  • Overperformance on disbursements carries forward. Estate professional fees, the lender's fees and expenses, and case administration disbursements are excluded.
• Weekly variance reports and cash balance reports are due by 5:00 p.m. each Friday, beginning the week of Oct. 5, 2026.
• Any disbursement in violation of the approved budget is an event of default regardless of materiality.

Events of Default and Remedies

• Events of default under the order include:
  • Material failure to perform under the Farallon DIP documents, or any event of default under the credit agreement
  • Another lender exercising remedies, or a third party obtaining relief, that materially impairs the lender's rights. RC PV Lender I LLC is excepted solely as to the Prepetition Madison Collateral.
  • Filing of a valid mechanics' lien on the collateral, unless it arises in the ordinary course and is not more than 30 days overdue, or is contested in good faith with adequate reserves
  • Failure to pay in full at maturity
  • Entry of an order modifying the final order, appointing a chapter 11 trustee or an examiner with enlarged powers, dismissing or converting the cases, or granting stay relief that materially impairs the collateral
  • Failure to pay property taxes on the collateral, unless contested with reserves
  • Failure to meet any milestone
• The credit agreement adds:
  • Payment defaults, with two business days' cure for interest and five days for fees and other amounts
  • Breach of any negative covenant, with no cure period
  • Reporting covenant breaches, with two business days' cure after notice, unless the lender issued a late-reporting notice in the prior six calendar weeks; other covenant breaches, with five business days' cure
  • Misrepresentations, invalidity of loan documents, and challenges to the DIP liens
  • A change of control, including control by any person other than Gerald Ayoub
  • Case events, including the filing of a non-approved plan, termination of exclusivity, financing or sales that do not pay the facility in full, a section 506(c) surcharge, and impairment of the lender's credit bid rights
• A Farallon DIP termination event occurs on the earliest of:
  • Five business days after a termination notice following an event of default
  • The maturity date
  • The date the order ceases to be in full force and effect
• On a termination event, the obligations become immediately due, and the debtors' authority to use the facility and the lender's cash collateral ceases.
• Before exercising remedies, the lender must file an emergency stay relief motion on at least five business days' notice to the debtors, committee counsel and the U.S. Trustee, which may run concurrently with the default notice period. Any exercise remains subject to the Carve Out and permitted prior liens.
• At any related hearing, the debtors may raise only whether an event of default has occurred, and waive relief under section 105.
• The debtors must oppose any order modifying the lender's rights other than through the approved plan. Entry of such an order is an event of default.
• No additional or replacement financing is effective, and no related liens or claims attach, until the Farallon DIP obligations are paid in full in cash. Any financing obtained in violation of the order must turn over its cash proceeds to the lender.
• The debtors may not request the Second Advance under the Madison Term Sheet without the lender's prior written approval.

Adequate Protection — Madison

• The Madison borrowers are:
  • Five Star Resort Owner, LLC
  • Five Star Land Owner, LLC
  • FSPV Res C, LLC
  • Unit 82 El Paso Owner, LLC
  • F-Star Socorro, L.P.
  • JNY Building Owner, LLC
  • JNY II Building Owner, LLC
  • 1340 Bob Hope Drive Owner, LLC
  • 11751 Alameda Avenue Owner, LLC
• They are party to the May 11, 2023 construction loan agreement with RC PV Lender I LLC. The loan is purportedly secured by the Prepetition Madison Collateral:
  • The Ritz-Related Properties at 7000 East Lincoln Drive, Paradise Valley, Arizona
  • 1340 Bob Hope Drive, 11891 Alameda Avenue and 11091 Alameda Avenue, El Paso
  • Vacant land at 12183 Alameda Avenue, Clint, Texas
  • Parcels at 11751 Alameda Avenue (a parcel distinct from the 11751 Alameda property) and 11801 Alameda Avenue, Socorro
• The debtors have not investigated the validity, perfection, priority or enforceability of the Madison lien and reserve the right to do so.
• Madison receives adequate protection solely for postpetition diminution in value, consisting of:
  • An allowed section 507(b) superpriority claim against each debtor on a joint and several basis, subject to the Carve Out and the Farallon superpriority claims
  • Replacement liens on the Joe Battle and 11751 Alameda properties, subordinate to the Carve Out, permitted prior liens and the Farallon liens
  • Contract-rate interest if a final, non-appealable judgment determines Madison to be oversecured. Parties reserve the right to seek recharacterization of these payments as principal if no diminution is found.
  • All rental income from 1340 Bob Hope Drive, El Paso, to the extent scheduled in the approved budget
  • Continued maintenance and insurance of the Madison and Farallon collateral, naming the lender as loss payee and additional insured
• All Madison adequate protection claims, liens and obligations are expressly subordinated to the Farallon DIP obligations. The order makes no finding of diminution in value; that question is reserved.
• Under the order at Dkt. No. 881, Madison's adequate protection obligations with respect to the Farallon DIP collateral are extinguished on a sale of the El Paso Collateral. On closing, Madison is deemed to waive its postpetition adequate protection claims and liens on that collateral and its right to the 1340 Bob Hope rent payments, other than as set forth in the Madison Term Sheet (dated June 17, 2026 and approved June 30, 2026 [Dkt. No. 793]).
• Madison's rights to seek additional or alternative adequate protection are preserved.
• Madison did not oppose the order in reliance on the debtors' agreement to work in good faith to file, within 14 days, a section 363 motion to sell the Villas to Madison.
• The order makes no finding on whether the Farallon facility violates the Madison Term Sheet so as to terminate the litigation standstill. All parties' rights on that dispute are preserved.

Waivers, Release and Indemnification

• Section 506(c): no administration costs may be charged against the Farallon DIP collateral without the lender's written consent.
• Section 552(b): the lender receives its benefits, and the "equities of the case" exception does not apply.
• Marshaling and similar doctrines are waived as to the collateral.
• Release: effective on entry of the order, the debtors and their estates, including any successor trustee, release the lender and its related parties from all claims arising on or before the order date. This includes lender liability, equitable subordination, recharacterization and chapter 5 claims. Claims found by final judgment to result primarily from gross negligence, actual fraud or willful misconduct are excepted, and rights under the DIP documents are preserved.
• The lender is indemnified and held harmless, subject to the same gross negligence, fraud and willful misconduct exception.
• The court found the facility was negotiated in good faith and at arm's length. The lender receives section 364(e) protection if the order is reversed or modified on appeal.
• The lender is not deemed in control of the debtors, owes no fiduciary duty, and is not an owner or operator under CERCLA.
• The lender has no obligation to monitor the debtors' use of proceeds and is not liable for safekeeping, loss or diminution in value of the collateral; all risk of loss is borne by the debtors.
• The lender has no obligation to permit use of collateral by, or extend financing to, any chapter 7 or chapter 11 trustee.
• The lender is not required to file proofs of claim.
• The debtors waive any discharge of remaining obligations under section 1141(d)(4). The liens and claims survive conversion, dismissal, a section 363 sale or plan confirmation until payment in full.

Conversion to Exit Facility

• The debtors agree to work in good faith to solicit and confirm an approved plan on the terms of the exit facility and trust term sheet (Exhibit F to the credit agreement). The term sheet may be modified only with the lender's prior written consent and must provide for payment of Pivot's commission on terms acceptable to Pivot and the lender.
• Exit facility terms:
  • Three-year term from the DIP closing date, plus two six-month extension options
  • Interest, default rate, amortization, sizing tests, cash management, reserves, leasing and assignment the same as the DIP, using the DIP appraisal
  • 3.50% exit fee on the aggregate commitment, or 4.00% escalating to a 6.00% cap without back-leverage
  • Customary events of default, including any change in the trustee's identity or in the beneficial ownership of the lender's collateral
  • No distributions to equity or to trust beneficiaries
• Conditions to conversion:
  • A confirmation order, approved plan and carveout guarantor trust agreement acceptable to the lender in its sole discretion, providing for survival of the facility, liens and loan documents
  • No event of default
  • Satisfaction of the LTV test
  • A carveout guaranty and environmental indemnity from the trust
  • Updated title policies, UCC searches, opinions and organizational documents
  • Selection by the trustee of a property manager and leasing agent acceptable to the lender, which may be Five Star, with all prior management and leasing agreements rejected under section 365
  • No material adverse change
  • Estoppels and SNDAs from major tenants
  • Environmental insurance
  • Sole trustee control over the borrowers' bank accounts
  • Payment of fees
• Recourse: the exit facility is non-recourse to the borrowers and their equity holders. Customary bad-boy carve-outs are guaranteed by the carveout guarantor, together with a full environmental indemnity.
• Carveout guarantor trust — governance:
  • The trust, with Lance Miller as trustee, will control 100% of the equity of the applicable debtors.
  • It will administer the approved plan, reconcile claims and wind down the estates.
  • Beneficiaries hold economic rights only.
  • Jerry Ayoub and the committee co-chair have non-binding consultation rights. The committee's right expires on the earlier of the committee's dissolution or completion of claims reconciliation.
  • Each property-owning entity has an independent manager whose consent is required for any voluntary bankruptcy filing. The lender approves the initial independent manager and any replacement, and the trust may not file for bankruptcy without the lender's consent.
  • To the extent permitted by law, the trust is structured so as not to be a business trust eligible to be a debtor under the Bankruptcy Code.
  • The trustee may resign on 60 days' notice to the lender, effective only once a successor is in place, and may be removed for cause by final order of the bankruptcy court.
  • Any successor trustee must be acceptable to the lender. After an event of default, the lender may require the trustee's replacement.
  • The lender waives potential conflicts arising from the trustee and Pivot also administering a plan trust for the non-borrower debtors.
  • If the trust agreement conflicts with the confirmation order, the confirmation order controls.
• Carveout guarantor trust — economics:
  • Asset management fee of 1.0% of base rent before an event of default
  • Hourly administration fees subject to a cap still to be determined
  • A 1.5% transaction fee on sales or refinancings, payable only after the exit facility is repaid in full
  • Pivot's $1.8 million commission on the Farallon DIP placement is deferred until all exit facility principal is repaid. It accrues at a 15% annual compounding rate, with the accrued increment payable only after principal and interest are repaid, and is an administrative expense of the trust senior to all others.
• The debtors and the lender may obtain back-leverage financing or restructure the facility into mortgage and mezzanine loans without further court approval. A restructured DIP financing requires five days' notice to the notice parties and is deemed approved absent objection.
• Non-adverse amendments to the DIP documents need no court order. Adverse amendments require five days' notice, and court approval if a timely objection is not resolved.

Conditions Precedent to Closing

• Entry of the final DIP order, in full force and not appealed, reversed, vacated, stayed or materially modified without the lender's consent
• Executed loan documents, KYC and PATRIOT Act clearance, and a committed loan notice
• Accuracy of representations and warranties, and no default
• No trustee or examiner with expanded powers, no restraining litigation, and no development materially and adversely affecting net operating income or value
• Release of any senior deeds of trust
• An appraisal confirming an LTV of no more than 85%, and evidence of a debt yield of at least 7.0%
• Property and title diligence:
  • Insurance evidence, a title insurance commitment and ALTA/NSPS surveys
  • Organizational documents
  • Flood zone determination
  • Environmental, property condition and zoning reports
  • Rent rolls, leases, tenant financials, historical operating statements and CAM reconciliations
• Evidence that only the chief restructuring officer and Pivot control the accounts at California Bank of Commerce, N.A.
• No material adverse change since Sept. 14, 2026
• Receipt of the lender's internal investment committee approval
• The lender's approval of the exit facility term sheet and carveout guarantor trust agreement
• Payment of fees and lender expenses, subject to the legal expense cap
• Post-closing requirements:
  • Estoppels and, if required, SNDAs from major lease tenants within 30 days, extendable while the borrowers pursue them with commercially reasonable efforts
  • Insurance certificates within two business days, and loss payee and additional insured endorsements within 45 days
  • Transfer by deed within 30 days of the catchment pond lot adjacent to 1273 Joe Battle Boulevard (Tract 2, Lot 5) to a commonly owned non-borrower entity. The borrowers represent the lot has no material value.

Reporting, Covenants and Other Terms

• Reporting:
  • Weekly variance and cash balance reports
  • Monthly operating statements, rent rolls and aged receivables within 30 days of month-end, beginning Oct. 31, 2026
  • Monthly property-level operating reports for the Joe Battle and 11751 Alameda properties
  • Quarterly financial statements within 45 days, beginning with the quarter ending March 31, 2027
  • Annual financial statements within 90 days, beginning fiscal 2026 (consolidated from fiscal 2027), with an annual operating and capital budget
  • Compliance certificates, and copies of pleadings, budgets and variance reports
  • Notice within two business days of any default or material adverse effect, and within five days of any mechanics' or similar lien asserted against the collateral
• Negative covenants restrict:
  • Liens, investments, indebtedness and fundamental changes
  • Dispositions, other than permitted dispositions of up to $100,000. Under the order, the debtors may not sell, transfer, lease or encumber Farallon DIP collateral outside the ordinary course without the lender's prior written consent.
  • Restricted payments and new subsidiaries
  • Affiliate transactions, other than those permitted, including budgeted services from non-debtor management and developer affiliates
  • Disbursements outside the approved budget
  • Capital expenditures outside the ordinary course and the budget
• Leasing: lender approval, not to be unreasonably withheld, is required to enter into, modify or terminate any major lease, defined as covering more than 25% of a building's rentable area or more than 100,000 rentable square feet.
  • Non-major leases may proceed without approval if they meet the leasing guidelines' standard-form and arm's-length requirements.
  • Approval is deemed given if the lender does not respond within five business days of a second notice.
• Governing law: New York, except that mortgages and other security documents are governed by Texas law.
• Jurisdiction: the bankruptcy court retains exclusive jurisdiction. If it lacks or abstains from jurisdiction, actions go to the Texas state courts in Harris County or the U.S. District Court for the Southern District of Texas.

Background

• The debtors filed Chapter 11 on Nov. 4, 2025, and the cases were jointly administered on Nov. 5, 2025 [Dkt. No. 10]. The debtors own a diversified commercial real estate portfolio spanning hotel, retail, office and industrial assets. The U.S. Trustee appointed an unsecured creditors' committee on Nov. 18, 2025 [Dkt. No. 94].
• The portfolio's centerpiece is a 122-acre mixed-use development on the Paradise Valley and Scottsdale, Arizona border anchored by The Ritz-Carlton, Paradise Valley. It comprises:
  • A newly constructed 215-room resort to be managed on completion by The Ritz-Carlton Hotel Company, a Marriott International subsidiary
  • 80 Ritz-Carlton-branded villas and 32 estate homes within a 12-acre resort enclave, several of them occupied, under construction or under contract
  • A fully entitled 29-acre site planned for luxury retail and mixed-use development
  • A nine-acre parcel designated for future condominium development
• The El Paso and Socorro commercial and industrial properties are financed by Corebridge, and the debtors state significant equity value exists in them.

Existing Capital Structure and Takeout Economics

• Corebridge is successor administrative agent under two loans AIG Asset Management (U.S.), LLC made on Dec. 27, 2023:
  • A $77 million loan to F-Star Socorro Holding Co., LLC secured by the 11751 Alameda property
  • A $41.8 million loan to the three 5 Star Tech borrowers secured by the Joe Battle property
• Each loan is evidenced by promissory notes issued to American General Life Insurance Company, National Union Fire Insurance Company of Pittsburgh, PA, and SV 2022-1 Commercial Mortgage Holdings Company, LLC. Principal outstanding at the petition date was approximately $77 million and approximately $41.8 million, respectively.
• The motion states no other liens are filed against 11751 Alameda, though Madison filed an unrecorded notice of entitlement against that property on Jan. 20, 2025.
• The draft sources and uses sizes the Corebridge payoff at $79.1 million for Alameda and $42.8 million for Joe Battle.
• The court entered an interim order approving a DIP from Sandton Capital Solutions Master Fund VI, LP on Nov. 7, 2025 [Dkt. No. 66]. It then entered an interim order approving the B.H. Capital replacement DIP on Jan. 23, 2026 [Dkt. No. 366], authorizing up to $10 million.
  • The final order approving up to $32 million was entered Feb. 12, 2026 [Dkt. No. 467].
  • $18 million was drawn as of the filing of the Farallon motion, and the draft sources and uses sizes the B.H. Capital payoff at $22.5 million.
  • That facility carries junior liens on the 11751 Alameda and Joe Battle properties, a first-priority lien on all otherwise unencumbered assets other than avoidance actions, their proceeds and claims against Madison, and a joint and several superpriority claim.
• Madison's May 11, 2023 construction loan agreement provided for funding of up to $585 million toward the Paradise Valley project. Madison asserts the facility is fully funded; the amount owed remains heavily disputed.
  • The debtors state substantial disputes exist as to amount, allowance, treatment and setoff.
  • They have not investigated the validity, perfection, priority or enforceability of the asserted liens and reserve all rights.
• Under the restructuring support agreement with Corebridge, paying Corebridge by Sept. 30, 2026:
  • Yields a net decrease of approximately $2.6 million in aggregate Corebridge obligations
  • Relieves the debtors of the obligation to pay Corebridge's legal fees under the B.H. Capital DIP order
  • Obviates a sale process for the commercial properties
• Absent timely payment, the restructuring support agreement instead contemplates resolving Corebridge through a sale of its collateral.

Collateral Properties

• The collateral is a six-property El Paso and Socorro, Texas industrial portfolio:
  • Five fully occupied warehouse and distribution buildings at 1273, 1277, 1281, 1301 and 1321 Joe Battle Boulevard, El Paso, totaling over 775,000 square feet of net rentable area on over 40 acres
  • A fully occupied warehouse and distribution facility at 11751 Alameda Avenue, Socorro, totaling over 1,445,000 square feet on over 66 acres
• Schedule I to the term sheet gives a portfolio total of over 2,220,000 square feet on over 106 acres. It notes that net rentable area and acreage come from the first-day pleadings and remain subject to confirmation by survey, rent roll and the appraisal.
• The properties are almost fully leased to multiple tenants under leases expiring from 2026 to 2036, with several up for renewal in the next 18 months. The debtors state average in-place rents are approximately 30% below market.
• Schedule I notes that 11751 Alameda Avenue is variously described in the debtors' pleadings as located in El Paso and in Socorro, and that the legal description will control.

Marketing Process

• Pivot launched formal DIP outreach on or around Oct. 20, 2025 to 26 parties, yielding three term sheets and several rounds of negotiation.
• The debtors initially selected Sandton and obtained an interim order approving that financing. They then concluded the B.H. Capital facility was more favorable and obtained the final order approving it.
• Pivot, with Trinity Real Estate Finance and Jones Lang LaSalle, subsequently explored alternative postpetition and exit financing, producing the Farallon term sheet.
• The court found the Farallon facility is the best financing available and that the debtors could not obtain unsecured or less favorable secured credit.