STIPULATED MOTION AND ORDER TO CONFIRM APPROVAL FOR FINAL DISPOSITION OF POTALA TOWER RELATED ASSETS

NOTE ON MOTION CALENDAR: Date of Filing per [Local Civil Rules 10(g), 7(d)1]

JAMES L. ROBART, District Judge.

STIPULATED MOTION

PLEASE TAKE NOTICE that Michael A. Grassmueck (the "Receiver"), the Court-appointed receiver for Path America, LLC; Path America SnoCo, LLC; Path America Farmer's Market, LP; Path America King Co, LLC; Path America Tower, LP; Path Tower Seattle, LP; Potala Tower Seattle, LLC; Potala Shoreline, LLC; Potala Village Kirkland, LLC; Dargey Development, LLC; Dargey Enterprises, LLC; Path Farmer's Market, LLC; and Dargey Holdings, LLC, Plaintiff Securities and Exchange Commission ("SEC"), and Defendant Lobsang Dargey and Relief Defendant Path Othello, LLC (together "Dargey")1, hereby file this stipulated motion ("Stipulated Motion") for an order confirming approval for the final disposition of Potala Tower Seattle, LLC related assets in connection with the restructuring transaction ("Restructuring Transaction") for the commercial development project located at 2116 Fourth Avenue, Seattle, Washington ("Tower Project") in light of a potential new construction lender.

WHEREAS, on May 20, 2016, the Court entered an Order approving the Receiver's recommendation ("Preliminary Approval Order") to select the proposal submitted by Binjiang Tower Corp. ("Binjiang"), an affiliate of PH Seattle Tower I, LLC ("Molasky"), and Lobsang Dargey and certain affiliated companies for the Restructuring Transaction;

WHEREAS, in accordance with the terms of the Preliminary Approval Order, on June 23, 2016, the Receiver filed a Motion for Final Approval of Disposition of Potala Tower Related Assets ("Final Approval Motion"), which seeks the final approval of this Court for the Restructuring Transaction;

WHEREAS, on July 15, 2016, the Court entered its Order Granting Final Approval of Disposition of Potala Tower Related Assets ("Final Approval Order"), granting final approval of the terms of the Restructuring Transaction as memorialized in the final agreements ("Final Agreements") previously submitted as Exhibit B to the Receiver's Declaration filed in support of his Final Approval Motion and as sealed exhibits to the Stipulated Motion filed on June 29, 2016 in support of the Final Approval Motion;

WHEREAS, the terms of the Final Agreements, the Preliminary Approval Order and the Final Approval Order, contemplated and require the Restructuring Transaction to be closed on or before August 31, 2016;

WHEREAS, as a condition to closing the Restructuring Transaction, the Final Agreements, and specifically Section 12.1(c) of the fully-executed Master Agreement dated June 23, 2016 ("Master Agreement"), require a $100 million construction loan ("Construction Loan") to be secured in order to provide construction financing for the Tower Project, and further contemplate that the Construction Loan would be obtained from Voya Investment Management ("Voya"), or other construction lender, and closed by no later than August 31, 2016;

WHEREAS, on August 26, 2016, the Parties filed a stipulated motion ("Stipulated Motion") confirming Binjiang and Molasky's efforts to secure the closing of the Construction Loan from Voya and Guardian Life Insurance ("Guardian"), and seeking an order to extend the deadline for closing the Restructuring Transaction to October 24, 2016;

WHEREAS, on August 26, 2016, the Court-entered an order granting the Stipulated Motion and setting a closing deadline of October 24, 2016 for the Construction Loan to be closed "through the issuance of a combined $100 million loan from Voya and Guardian or other construction lenders" (the "Extension Order");

WHEREAS, since entry of the Extension Order, Binjiang and Molasky have diligently attempted to finalize the Construction Loan with Voya and Guardian, but have encountered various delays in the approval process;

WHEREAS, given the delays in securing approval from Voya and Guardian for the Construction Loan, and in order to avoid any further delays to closing the Restructuring Transaction, Binjiang and Molasky have proposed that the entire $100 million Construction Loan be obtained from Binjiang Limited Partnership, a Delaware limited partnership ("Binjiang Limited") and an affiliate of Binjiang, who will issue the Construction Loan on terms substantially identical to the material loan terms negotiated with Voya and Guardian;

WHEREAS, the Receiver and Binjiang Limited have tentatively agreed to an escrow agreement whereby Binjiang Limited will deposit the entire $100 million in Construction Loan funds into a domestic account at the Los Angeles branch of the Bank of China, a federally chartered branch of Bank of China Limited ("Bank of China"). The entire $100 million will be maintained in the Bank of China account until $25 million has been drawn on the Construction Loan to finance the costs of construction pursuant to the terms of the Final Agreements. At that time, Binjiang Limited may withdraw $50 million from the Bank of China account but will be obligated to replenish the account in $25 million installments whenever the account balance falls below $1 million;

WHEREAS, the Receiver believes that while a non-arms length affiliate relationship exists between Binjiang and Binjiang Limited, the contemplated escrow terms provide substantial assurance that the construction funds will be available for construction post-restructuring;

WHEREAS, although the terms of the Final Agreements, the Preliminary Approval Order and the Final Approval Order already authorize securing the Construction Loan from "other construction lenders," the Parties wish to expressly confirm authorization by this Court to close the contemplated Construction Loan with Binjiang Limited as part of the closing of the Restructuring Transaction;

THEREFORE, the Parties hereby STIPULATE and AGREE as follows:

1. The Restructuring Transaction may proceed with the Construction Loan provided by Binjiang Limited and close pursuant to the Final Approval Order and the Extension Order.

IT IS SO STIPULATED.

ORDER

The Court, having read the Stipulated Motion and Proposed Order To Confirm Approval For Final Disposition Of Potala Tower Related Assets ("Stipulated Motion"), filed by Michael A. Grassmueck, the Court-appointed receiver for Path America, LLC; Path America SnoCo, LLC; Path America Farmer's Market, LP; Path America KingCo, LLC; Path America Tower, LP; Path Tower Seattle, LP; Potala Tower Seattle, LLC; Potala Shoreline, LLC; Potala Village Kirkland, LLC; Dargey Development, LLC; Dargey Enterprises, LLC; Path Farmer's Market, LLC; and Dargey Holdings, LLC, Plaintiff Securities and Exchange Commission, and Defendant Lobsang Dargey and Relief Defendant Path Othello, LLC — which seeks an order confirming this Court's prior approval of the final disposition of Potala Tower Seattle, LLC related assets in connection with the restructuring transaction ("Restructuring Transaction") for the commercial development project located at 2116 Fourth Avenue, Seattle, Washington ("Tower Project"), in light of the potential $100 million construction loan for completion of the Tower Project ("Construction Loan") from Binjiang Limited Partnership, a Delaware limited partnership ("Binjiang Limited") who is also an affiliate of Binjiang Tower Corp. ("Binjiang") — and good cause appearing therefor, hereby ORDERS as follows:

1. The Court confirms its approval of the Restructuring Transaction as set forth in the Final Approval Order and the Extension Order, with Binjiang Limited as a potential lender on the Construction Loan.

IT IS SO ORDERED.