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Richard M. Pachulski (CA Bar No. 90073) Dean A. Ziehl (CA Bar No. 84529) PACHULSKI STANG ZIEHL & JONES LLP 10100 Santa Monica Boulevard, Suite 1100 Los Angeles, California 90067 Telephone: (310) 277-6910 Facsimile: (310) 201-0760

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FILED & ENTERED NOV 20 2009 CLERK U.S. BANKRUPTCY COURT Central District of California BY daniels DEPUTY CLERK

Edward Soto (admitted pro hac vice) Shai Waisman (admitted pro hac vice) WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, NY 10153-0119 Telephone: (212) 310-8000 Facsimile: (212) 310-8007 Counsel for Lehman ALI, Inc., Northlake Holdings LLC and OVC Holdings LLC UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA SANTA ANA DIVISION In re: Case No.: 8:08-bk-17206-ES Palmdale Hills Property, LLC, and Its Related Debtors, Jointly Administered With Case Nos. Jointly Administered Debtors and 8:08-bk-17209-ES; 8:08-bk-17240-ES; Debtors-In-Possession. 8:08-bk-17224-ES; 8:08-bk-17242-ES; ____________________________________________________________________________________ 8:08-bk-17225-ES; 8:08-bk-17245-ES; Affects: 8:08-bk-17227-ES; 8:08-bk-17246-ES; All Debtors 8:08-bk-17230-ES; 8:08-bk-17231-ES; Palmdale Hills Property, LLC 8:08-bk-17236-ES; 8:08-bk-17248-ES; SunCal Beaumont Heights, LLC 8:08-bk-17249-ES; 8:08-bk-17573-ES; SCC/Palmdale, LLC 8:08-bk-17574-ES; 8:08-bk-17575-ES; SunCal Johannson Ranch, LLC 8:08-bk-17404-ES; 8:08-bk-17407-ES; SunCal Summit Valley, LLC 8:08-bk-17408-ES; 8:08-bk-17409-ES; SunCal Emerald Meadows, LLC 8:08-bk-17458-ES; 8:08-bk-17465-ES; SunCal Bickford Ranch, LLC 8:08-bk-17470-ES; 8:08-bk-17472-ES; Acton Estates, LLC and 8:08-bk-17588-ES Seven Brothers, LLC Chapter 11 SJD Partners, Ltd. SJD Development Corp. INTERIM ORDER (A) APPROVING Kirby Estates, LLC STIPULATION PURSUANT TO 11 SunCal Communities I, LLC U.S.C. §§ 362, 363, 364, AND 507: SunCal Communities III, LLC (1) APPROVING SENIOR SECURED SCC Communities, LLC SUPERPRIORITY POSTPETITION North Orange Del Rio Land, LLC FINANCING; (2) GRANTING LIENS Tesoro SF, LLC AND PROVIDING SUPERPRIORITY LB-L-SunCal Oak Valley, LLC ADMINISTRATIVE EXPENSE SunCal Heartland, LLC STATUS; AND (3) MODIFYING LB-L-SunCal Northlake, LLC AUTOMATIC STAY TO THE SunCal Marblehead, LLC EXTENT NECESSARY, AND (B) SunCal Century City, LLC SCHEDULING FINAL HEARING SunCal PSV, LLC Delta Coves Venture, LLC Final Hearing: SunCal Torrance, LLC Date: November 23, 2009 SunCal Oak Knoll, LLC Time: 10:30 A.M. Place: Courtroom 5A

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(1) Approving Senior Secured Superpriority Postpetition Financing; (2) Granting Liens and

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Providing Superpriority Administrative Expense Status; and (3) Modifying the Automatic Stay to the

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Extent Necessary (the “Stipulation”),1 attached hereto as Exhibit 1, by and between Lehman ALI,

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Inc. (“Lehman ALI”), on the one hand, and the chapter 11 trustee (the “Chapter 11 Trustee”) on

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behalf of certain of the Trustee Debtors affected by the Stipulation (collectively, the “Borrowers”),

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on the other hand, it is hereby

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ORDERED THAT: 1.

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The Stipulation is approved, with the exception of the following provisions, which are

subject to the entry of a final order: a.

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Upon consideration of the Stipulation Pursuant to 11 U.S.C. §§362, 363, 364, and 507:

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The repayment by Borrowers to Lehman ALI of the April 2009 DIP Loan

Amounts, pursuant to paragraph 3 of the Stipulation. b.

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The continued effectiveness of the April 2009 DIP Stipulation and the waiver

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of the Trustee’s defenses to the April 2009 DIP Stipulation, including, without limitation, the

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validity, perfection or enforceability of the April 2009 DIP Liens or the April 2009 Superpriority

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Claim, or the payment of the April 2009 DIP Loans as provided under the April 2009 DIP

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Stipulation, pursuant to paragraph 6 of the Stipulation. 2.

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DIP Liens on the proceeds of avoidance actions pursuant to paragraph 8 of the

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Stipulation shall be granted to Lehman ALI solely on avoidance actions under chapter 5 of the

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Bankruptcy Code against the Lehman Entities and LCPI. For the avoidance of doubt, DIP Liens

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shall not be granted on an interim or final basis to Lehman ALI on any avoidance actions under

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chapter 5 of the Bankruptcy Code against any entity other than the Lehman Entities or LCPI. 3.

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Pending the Final Hearing (as defined below), and subject to the terms and conditions

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of the Stipulation, the Borrowers are authorized to borrow from Lehman ALI, and Lehman ALI shall

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make available to each Borrower, DIP Loans in the total amount of $660,000, the proceeds of which

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shall be used by the respective Borrower solely for purposes of paying the costs and expenses

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attributable to each such Borrower as set forth in the interim budget attached hereto as Exhibit 2.

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Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Stipulation.

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4.

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In the event the DIP Loans under the Stipulation are not approved by the Court on a

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final basis, any DIP Loans made pursuant to this Order by Lehman ALI to the Borrowers shall be

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repaid by the Borrowers to Lehman ALI on the earlier of (i) the effective date of any plan of

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reorganization or liquidation in these cases and (ii) the date upon which the Borrowers obtain

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financing pursuant to any other loan(s).

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5.

The hearing to consider approval on a final basis of the provisions set forth in

paragraph 1 herein will be held on November 23, 2009 at 10:30 A.M. (the “Final Hearing”).

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DATED: November 20, 2009

United States Bankruptcy Judge

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Richard M. Pachulski (CA Bar No. 90073) Dean A. Ziehl (CA Bar No. 84529) PACHULSKI STANG ZIEHL & JONES LLP 10100 Santa Monica Boulevard, Suite 1100 Los Angeles, California 90067 Telephone: (310) 277-6910 Facsimile: (310) 201-0760 Edward Soto (admitted pro hac vice) Shai Waisman (admitted pro hac vice) WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, NY 10153-0119 Telephone: (212) 310-8000 Facsimile: (212) 310-8007 Counsel for Lehman ALI, Inc., Northlake Holdings LLC and OVC Holdings LLC UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA SANTA ANA DIVISION In re: Case No.: 8:08-bk-17206-ES Palmdale Hills Property, LLC, and Its Related Debtors, Jointly Administered With Case Nos. Jointly Administered Debtors and 8:08-bk-17209-ES; 8:08-bk-17240-ES; Debtors-In-Possession. 8:08-bk-17224-ES; 8:08-bk-17242-ES; ____________________________________________________________________________________ 8:08-bk-17225-ES; 8:08-bk-17245-ES; Affects: 8:08-bk-17227-ES; 8:08-bk-17246-ES; 8:08-bk-17230-ES; 8:08-bk-17231-ES; All Debtors 8:08-bk-17236-ES; 8:08-bk-17248-ES; Palmdale Hills Property, LLC 8:08-bk-17249-ES; 8:08-bk-17573-ES; SunCal Beaumont Heights, LLC 8:08-bk-17574-ES; 8:08-bk-17575-ES; SCC/Palmdale, LLC 8:08-bk-17404-ES; 8:08-bk-17407-ES; SunCal Johannson Ranch, LLC 8:08-bk-17408-ES; 8:08-bk-17409-ES; SunCal Summit Valley, LLC 8:08-bk-17458-ES; 8:08-bk-17465-ES; SunCal Emerald Meadows, LLC 8:08-bk-17470-ES; 8:08-bk-17472-ES; SunCal Bickford Ranch, LLC and 8:08-bk-17588-ES Acton Estates, LLC Seven Brothers, LLC Chapter 11 SJD Partners, Ltd. SJD Development Corp. STIPULATION PURSUANT TO 11 Kirby Estates, LLC U.S.C. §§ 362, 363, 364, AND 507: SunCal Communities I, LLC (1) APPROVING SENIOR SECURED SunCal Communities III, LLC SUPERPRIORITY POSTPETITION SCC Communities, LLC FINANCING; (2) GRANTING LIENS North Orange Del Rio Land, LLC AND PROVIDING SUPERPRIORITY Tesoro SF, LLC ADMINISTRATIVE EXPENSE LB-L-SunCal Oak Valley, LLC STATUS; AND (3) MODIFYING SunCal Heartland, LLC AUTOMATIC STAY TO THE LB-L-SunCal Northlake, LLC EXTENT NECESSARY SunCal Marblehead, LLC SunCal Century City, LLC Hearing: SunCal PSV, LLC Date: October 15, 2009 Delta Coves Venture, LLC Time: 2:00 P.M. SunCal Torrance, LLC Place: Courtroom 5A SunCal Oak Knoll, LLC

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EXHIBIT 1 52063-001\DOCS_NY:19026.5

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ALI”), on the one hand, and the chapter 11 trustee (the “Chapter 11 Trustee”) on behalf of certain of

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the Trustee Debtors2 affected by this Stipulation (collectively, the “Borrowers”), on the other hand.

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Lehman ALI and the Borrowers (together, the “Parties”) hereby enter into this Stipulation and agree

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as follows: RECITALS

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WHEREAS, on November 6, 7 and 19, 2008, the Voluntary Debtors3 filed their respective

7 8

voluntary petitions under title 11 of the United States Code (the “Bankruptcy Code”). The

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Voluntary Debtors continue to manage their affairs and property as debtors in possession pursuant to

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sections 1107 and 1008 of the Bankruptcy Code. WHEREAS, on November 12, 14 and 19, 2008, involuntary petitions were filed against the

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This stipulation (the “Stipulation”) is made by and between Lehman ALI, Inc. (“Lehman

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Trustee Debtors. WHEREAS, on or about January 8, 2009, the Court entered orders for relief in the Trustee

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Debtors’ cases. WHEREAS, on or about January 15, 2009, the Court entered orders requiring the

15 16

appointment of a chapter 11 trustee in each of the Trustee Debtors’ cases. Thereafter, the Office of

17

the United States Trustee appointed Steven M. Speier as the Chapter 11 Trustee for the Trustee

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Debtors. WHEREAS, Lehman ALI, Northlake Holdings LLC, and OVC Holdings LLC (collectively

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for purposes of this Stipulation, the “Lehman Entities”) and Lehman Commercial Paper Inc.

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2

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The Trustee Debtors in these cases consist of: SunCal Heartland, LLC (Case No. 8:08-17407-ES); LB-L-SunCal Northlake, LLC (Case No. 8:08-17408-ES); SunCal Marblehead, LLC (Case No. 8:08-17409-ES); SunCal Century City, LLC (Case No. 8:08-17458-ES) (“SunCal Century City”); SunCal PSV, LLC (Case No. 8:08-17465-ES); Delta Coves Venture, LLC (Case No. 8:08-17470-ES); SunCal Torrance, LLC (Case No. 8:08-17472-ES); LB-L SunCal Oak Valley, LLC (Case No. 8:08-17404-ES); and SunCal Oak Knoll, LLC (Case No. 8:08-17588-ES). For the avoidance of doubt, this Stipulation does not affect SunCal Century City. 3 The Voluntary Debtors in these cases consist of : Palmdale Hills Property, LLC (Main Case) (Case No. 8:08-17206ES); Acton Estates LLC (Case No. 8:08-17236-ES); Kirby Estates, LLC (Case No. 8:08-17246-ES); North Orange Del Rio (Case No. 8:08-17574-ES); SCC Communities, LLC (Case No. 8:08-17573-ES); SCC/Palmdale, LLC (Case No. 8:08-17224-ES); Seven Brothers, LLC (Case No. 8:08-17240-ES); SJD Development Corp. (Case No. 8:08-17245-ES); SJD Partners, Ltd. (Case No. 8:08-17242-ES); SunCal Beaumont Heights, LLC (Case No. 8:08-17209-ES); SunCal Bickford Ranch LLC (Case No. 8:08-17231-ES); SunCal Communities I, LLC (Case No. 8:08-17248-ES); SunCal Communities III, LLC (Case No. 8:08-17249-ES); SunCal Emerald Meadows LLC (Case No. 8:08-17230-ES); SunCal Johannson Ranch, LLC (Case No. 8:08-17225-ES); SunCal Summit Valley LLC (Case No. 8:08-17227-ES); and Tesoro SF, LLC (Case No. 8:08-17575-ES). The Voluntary Debtors and the Trustee Debtors shall be referred to herein as the “Debtors.” 52063-001\DOCS_NY:19026.5

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(“LCPI”) assert secured claims against the Debtors in excess of $2.0 billion. Included within the

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scope of the collateral pledged to the Lehman Entities is certain real and personal property owned by

3

the Trustee Debtors. WHEREAS, on April 2, 2009, Lehman ALI, the Voluntary Debtors, and the Trustee for the

5

Trustee Debtors, by and through their counsel, entered into that certain Stipulation with Lehman ALI,

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Inc. Pursuant to 11 U.S.C. §§ 362, 363, 364, and 507: (1) Approving Senior Secured Superpriority

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Postpetition Financing; (2) Granting Liens and Providing Superpriority Administrative Expense

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Status; and (3) Modifying Automatic Stay to the Extent Necessary (the “April 2009 DIP Stipulation”)

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affecting certain of the Voluntary Debtors and certain of the Trustee Debtors as set forth specifically

10

therein (the “April 2009 Borrowers”). The April 2009 DIP Stipulation was approved by the Court

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by the entry of an order on April 17, 2009.

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WHEREAS, pursuant to the April 2009 DIP Stipulation, among other things, (a) the April

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2009 Borrowers were authorized to borrow from Lehman ALI, and Lehman ALI was authorized to

14

make available to each April 2009 Borrower, individual loans (collectively, the “April 2009 DIP

15

Loans”) in an aggregate amount equal to $1,790,572.00 (the “April DIP Loan Amount”), and (b) in

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order to secure the payment of the April 2009 DIP Loans, Lehman ALI was granted, among other

17

things, (i) continuing, valid, binding, enforceable, non-avoidable and automatically and properly

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perfected, senior postpetition security interests in and liens (the “April 2009 DIP Liens”) on any and

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all presently owned and hereafter acquired personal property, real property and other assets of the

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April 2009 Borrowers, whether owned or consigned by or to, or leased from or to April 2009

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Borrowers, regardless of where located, including, without limitation, the assets set forth in clauses

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(1) through (4) of paragraph 8 of the April 2009 DIP Stipulation (collectively, the “April 2009 DIP

23

Collateral”), and (ii) an allowed superpriority administrative expense claim in these cases (the “April

24

2009 DIP Superpriority Claim”) for all April 2009 DIP Loans, subject only to the Senior Danske

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Claims (as defined in the April 2009 DIP Stipulation) in respect of any collateral securing the Senior

26

Danske Claims.

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WHEREAS, the Trustee Debtors presently hold available amounts borrowed under the April 2009 DIP Loans as set forth in Exhibit B (the “Remaining April 2009 DIP Loan Amounts”).

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good and valuable consideration (the receipt and sufficiency of which are acknowledged), it is

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hereby stipulated and agreed by and between the Parties as follows:

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NOW THEREFORE, in consideration of the mutual covenants contained herein, and other

AGREEMENT

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1.

Court Approval. The provisions of this Stipulation are subject to approval of the

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Court and shall have no force and effect until approved by the Court. Immediately upon entry of an

7

order approving this Stipulation by the Court (notwithstanding any applicable law or rule to the

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contrary), the terms and provisions of this Stipulation shall become valid and binding upon and inure

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to the benefit of Lehman ALI, the Borrowers, the other Lehman Entities, all other creditors of the

10

Trustee Debtors, the Official Committee of Unsecured Creditors appointed in the Trustee Debtors’

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cases, and all other parties in interest and their respective successors and assigns, including any

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successor trustee, trustee or other fiduciary hereafter appointed in any of the Trustee Debtors’ cases

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or upon dismissal of any of the Trustee Debtors’ cases.

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2.

DIP Financing. Each Borrower is authorized to borrow from Lehman ALI, and

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Lehman ALI shall make available to each Borrower, individual loans (each, a “DIP Loan” and,

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collectively, the “DIP Loans”) in an aggregate amount not to exceed $2,110,350 (the “DIP Loan

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Amount”), the proceeds of which shall be used by the respective Borrower solely for purposes of

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paying the costs and expenses attributable to each such Borrower as set forth in the 120-day budget

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attached hereto as Exhibit A (the “Budget,” as such Budget may be revised or amended with the

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written consent of Lehman ALI, which consent may be granted or withheld in Lehman ALI’s sole

21

and absolute discretion). The maximum amount of each DIP Loan to each Borrower shall be equal

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to the applicable amount in the Budget for each Borrower’s respective costs and expenses as set

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forth in the Budget. The Borrowers are to use the DIP Loan proceeds as directed by the Budget and

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shall maintain appropriate documentation related to the expenditure of any and all DIP Loan

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Amounts. The Borrowers shall provide to Lehman ALI, upon its reasonable request, a breakdown of

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all amounts spent as of the date of the request and provide all documentation relating to the monies

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spent as of the date of the request. The Budget shall not be modified without the prior written

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consent of Lehman ALI, except that each Borrower may expend funds for any particular line items

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allocable to such Borrower as set forth in the Budget (the “Budget Items”), with the sole exception

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of Budget Items for management fees, in excess of the respective amounts provided for such Budget

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Items for a particular Borrower, so long as such excess amount is equal to or less than 5% of the

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amount allocated to that particular Borrower for a particular Budget Item and provided that the

5

aggregate amount for all such Budget Items for a particular Borrower is not increased.

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Notwithstanding the foregoing, and for the avoidance of doubt, the DIP Loan proceeds shall not be

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reallocated from one Borrower to another Borrower, without the prior written consent of Lehman

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ALI, which consent may be granted or withheld in Lehman ALI’s sole and absolute discretion.

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Funding under the DIP Loans shall only be available through and including January 31, 2010. Any

10

amounts borrowed under the DIP Loans that are not expended by, and remain in the possession of,

11

the Borrowers by February 28, 2010, shall be immediately refunded to Lehman ALI on such date

12

and shall be applied by Lehman ALI to the payment of the accrued and unpaid interest on and then

13

to the repayment of the outstanding principal of the respective DIP Loans to which such unexpended

14

proceeds relate.

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3.

Return Of April DIP Loan Amounts. Upon the date of the entry of an order

16

approving this Stipulation, the Trustee Debtors shall repay to Lehman ALI the Remaining April

17

2009 DIP Loan Amounts set forth in Exhibit B.

18

4.

Interest. The DIP Loans shall accrue interest at the rate of ten percent (10%) per

19

annum, payable on the Maturity Date (as defined below). There are no other fees associated with the

20

DIP Loans. All accrued interest on the DIP Loans shall be added to the outstanding principal

21

amount of the DIP Loans and shall be repaid by the Borrowers to Lehman ALI by the Maturity Date.

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5.

Maturity Date/Plan Treatment. The Borrowers expressly stipulate and acknowledge

23

that the DIP Loans shall be treated as administrative expenses under the Bankruptcy Code and, as

24

such, must be paid in full, in cash, on the effective date of any confirmed plan of reorganization or

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liquidation. The DIP Loans shall be due and payable in full, in cash, without notice or demand, upon

26

the effective date of any confirmed plan of reorganization or liquidation in the above-captioned cases

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(the “Cases”), or, in the event no plan is confirmed in the Cases, the earlier of dismissal of the Cases

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or conversion of the Cases to chapter 7 (the “Maturity Date”). For the avoidance of doubt, the

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Borrowers hereby agree to repay the DIP Loans to Lehman ALI out of the Borrowers’ respective

2

available cash from either unencumbered cash or funds provided by a plan proponent (excluding any

3

cash which any of the Lehman Entities assert is “cash collateral” under section 363 of the

4

Bankruptcy Code or subject to a superpriority lien or claim) on the effective date of any plan of

5

reorganization or liquidation and in no event shall Borrowers repay such amounts from the proceeds

6

of the sale of any of the real property owned by the Borrowers in which Lehman ALI or any of the

7

other Lehman Entities asserts a security interest.

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6.

Continued Effectiveness of April 2009 DIP Stipulation/Waiver of Defenses. Except

as expressly set forth herein, nothing contained herein shall be deemed to modify the terms of the

10

April 2009 DIP Stipulation, and the April 2009 DIP Stipulation shall continue in full force and

11

effect. The Trustee, on behalf of the Trustee Debtors, hereby irrevocably waives any defenses to,

12

and shall not contest or object to any terms of the April 2009 DIP Stipulation, including, without

13

limitation, the validity, perfection or enforceability of the April 2009 DIP Liens or the April 2009

14

Superpriority Claim, or the payment of the April 2009 DIP Loans as provided under the April 2009

15

DIP Stipulation.

16

7.

DIP Obligations. This Stipulation constitutes and evidences the validity and binding

17

effect of the DIP Loans, which obligations shall be enforceable against the Borrowers, their estates

18

and any successors thereto, including without limitation, any successor trustee, trustee or other estate

19

representative appointed in the Trustee Debtors’ Cases, or any case under chapter 7 of the

20

Bankruptcy Code upon the conversion of any of the Trustee Debtors’ Cases, or in any other

21

proceedings superseding or related to any of the foregoing. The DIP Loans include all loans,

22

reimbursement obligations, and any other indebtedness or obligations, contingent or absolute, which

23

may now or from time to time be owing by the Borrowers under this Stipulation, including, without

24

limitation, all principal, accrued interest, costs, fees, expenses and other amounts owed pursuant to

25

the DIP Loans.

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8.

DIP Liens and DIP Collateral. In order to secure the payment of the DIP Loans,

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Lehman ALI is hereby granted continuing, valid, binding, enforceable, non-avoidable and

28

automatically and properly perfected, senior postpetition security interests in and liens (the “DIP

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Liens”) on any and all presently owned and hereafter acquired personal property, real property and

2

other assets of Borrowers, whether owned or consigned by or to, or leased from or to Borrowers,

3

regardless of where located, including, without limitation, the assets set forth in clauses (1) through

4

(4) below (collectively, the “DIP Collateral”): (1) all presently owned and hereafter acquired assets

5

of the Borrowers and their estates, and any proceeds and products thereof, including without

6

limitation, accounts, deposit accounts, cash, as-extracted collateral, chattel paper, investment

7

property, letter-of-credit rights, securities accounts, commercial tort claims, investments,

8

instruments, documents, inventory, contract rights, general intangibles, intellectual property, real

9

property, fixtures, goods, equipment and other fixed assets and proceeds and products of all of the

10

foregoing (including insurance proceeds); (2) proceeds of avoidance actions against the Lehman

11

Entities and LCPI under chapter 5 of the Bankruptcy Code; (3) any rights under Section 506(c) of

12

the Bankruptcy Code; and (4) any unencumbered assets of the Borrowers. 9.

13

DIP Lien Priority. Except with respect to the April 2009 DIP Liens, which remain

14

senior to the DIP Liens, the DIP Liens securing the DIP Loans shall be senior in priority and

15

superior to all other security interests, mortgages, collateral interests, liens or claims on or to any of

16

the DIP Collateral. Other than as set forth herein, the DIP Liens shall not be made subject to or pari

17

passu with any lien or security interest heretofore or hereinafter granted in these cases. The DIP

18

Liens shall be valid and enforceable against any successor trustee, trustee or other estate

19

representative appointed in the Trustee Debtors’ Cases or upon the conversion of any of the Trustee

20

Debtors’ Cases to a case under chapter 7 of the Bankruptcy Code, and/or upon the dismissal of any

21

of the Trustee Debtors’ Cases. The DIP Liens shall not be subject to sections 506(c), 510, 549, or

22

550 of the Bankruptcy Code. No lien or interest avoided and preserved for the benefit of any estate

23

pursuant to section 551 of the Bankruptcy Code shall be made pari passu with or senior to the DIP

24

Liens.

25

10.

Cross-Collateralization and Cross-Defaults. The DIP Liens shall not be cross-

26

collateralized (i.e., each DIP Loan shall be secured by that portion of the DIP Collateral owned by

27

the Borrower to whom such DIP Loan was made) but shall be cross-defaulted such that any default

28

related to any particular DIP Loan or DIP Lien will result in a default with respect to all DIP Loans

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2

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and DIP Liens. 11.

DIP Superpriority Claim. In order to further secure the payment of the DIP Loans,

3

Lehman ALI is hereby granted, pursuant to section 364(c)(1) and 507(b) of the Bankruptcy Code, an

4

allowed superpriority administrative expense claim against the Trustee Debtors in the Trustee

5

Debtors’ Cases (the “DIP Superpriority Claim”) for all DIP Loans. Except with respect to the April

6

2009 Superpriority Claim and paid fees and expenses of the Trustee and any professionals retained

7

by the Trustee in the Trustee Debtors’ Cases, which shall remain senior to the DIP Superpriority

8

Claim, the DIP Superpriority Claim shall have priority over any and all administrative expenses and

9

unsecured claims against the Trustee Debtors or their estates in the Trustee Debtors’ Cases, at any

10

time existing or arising, of any kind or nature whatsoever, including, without limitation,

11

administrative expenses of the kinds specified in or ordered pursuant to sections 105, 326, 328, 330,

12

331, 365, 503(a), 503(b), 506(c), 507(a), 507(b), 546(c), 546(d), 726 (to the extent permitted by

13

law), and any other provision of the Bankruptcy Code, and at all times be senior to the rights of the

14

Trustee Debtors and their estates, any successor trustee or other estate representative to the extent

15

permitted by law, or any other creditor of the Trustee Debtors in the Trustee Debtors’ Cases.

16

12.

Modification of Automatic Stay. The automatic stay imposed under section 362(a) of

17

the Bankruptcy Code is modified as necessary to effectuate all of the terms and provisions of this

18

Stipulation, including, without limitation, to: (a) permit the Borrowers to grant the DIP Liens and

19

DIP Superpriority Claims; (b) permit the Borrowers to perform such acts as Lehman ALI may

20

request to assure the perfection and priority of the liens granted herein; (c) permit the Borrowers to

21

incur all liabilities and obligations to Lehman ALI in connection with the DIP Loans; (d) authorize

22

the repayment by the Borrowers of the DIP Loans to Lehman ALI and the retention and application

23

of such payments by Lehman ALI in accordance with the terms of this Stipulation; and (e) enable

24

the enforcement, protection and preservation of the DIP Loans, the DIP Liens, the DIP Collateral

25

and all of the rights and remedies with respect thereto or otherwise under this Stipulation.

26

13.

Perfection of DIP Liens. This Stipulation shall be sufficient and conclusive evidence

27

of the validity, perfection, and priority of the DIP Liens without the necessity of filing or recording

28

any financing statement, mortgage, notice, or other instrument or document which may otherwise be

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1

required under the law or regulation of any jurisdiction or the taking of any other action (including,

2

for the avoidance of doubt, entering into any deposit account control agreement) to validate or

3

perfect (in accordance with applicable non-bankruptcy law) the DIP Liens, or to entitle Lehman ALI

4

to the priorities granted herein. Notwithstanding the foregoing, Lehman ALI is authorized to file, as

5

it deems necessary or advisable in its sole discretion, such financing statements, mortgages, notices

6

and other instrument or documents to perfect in accordance with applicable non-bankruptcy law or

7

to otherwise evidence the DIP Liens, and all such financing statements, mortgages, notices and other

8

documents shall be deemed to have been filed or recorded as of the commencement of the Trustee

9

Debtors’ Cases; provided, however, that no such filing or recordation shall be necessary or required

10

in order to create, evidence or perfect the DIP Liens. The Borrowers are authorized and directed to

11

execute and deliver promptly upon demand to Lehman ALI all such financing statements,

12

mortgages, title insurance policies, notices, instruments, and other documents as Lehman ALI may

13

reasonably request. Lehman ALI, in its sole discretion, may file a photocopy of this Stipulation as a

14

financing statement or notice with any filing or recording office or with any registry of deeds or

15

similar office, in addition to or in lieu of such financing statements, mortgages, notices of lien,

16

instrument, or similar document.

17

14.

Events of Default. The following occurrences shall constitute an “Event of Default”

18

under this Stipulation: (a) failure of the Borrowers to comply with any term of this Stipulation; or

19

(b) the use of the proceeds of DIP Loans other than in strict compliance with the Budget or the terms

20

of this Stipulation; or (c) the failure to repay the DIP Loans on the Maturity Date.

21

15.

Remedies. Immediately upon the occurrence and during the continuation of an Event

22

of Default, Lehman ALI shall: (a) declare via written notice to counsel for the Trustee all DIP Loans

23

to be immediately due and payable; (b) terminate, reduce or restrict the use of any of the proceeds of

24

the DIP Loans or any further commitment to extend credit to the Borrowers to the extent any such

25

commitment remains; and/or (c) seek relief from the automatic stay under section 362 of the

26

Bankruptcy Code.

27

16.

28

Good Faith. Lehman ALI and the Borrowers have acted in good faith in connection

with the Stipulation. In accordance with section 364(e) of the Bankruptcy Code, in the event any or

52063-001\DOCS_NY:19026.5

8

Case 8:08-bk-17206-ES

all of the provisions of this Stipulation are hereafter modified, amended or vacated by a subsequent

2

order of this Court or any other court, Lehman ALI is entitled to the protections provided in section

3

364(e) of the Bankruptcy Code. Any such modification, amendment or vacatur shall not affect the

4

extent, validity, perfection, priority, allowability, enforceability or non-avoidability of any advances

5

previously made or made hereunder, or lien, claim or priority granted, perfected, authorized or

6

created hereby. Any liens or claims granted to Lehman ALI hereunder arising prior to the effective

7

date of any such modification, amendment or vacatur of this Stipulation shall be governed in all

8

respects by the original provisions of this Stipulation, including entitlement to all rights, remedies,

9

privileges and benefits granted herein.

11 12 A TTORNEYS A T L AW L OS A NGELES , C ALIFORNIA

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1

10 P ACHULSKI S TANG Z IEHL & J ONES LLP

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17.

Section 552(b). Lehman ALI shall be entitled to all of the rights and benefits of

section 552(b) of the Bankruptcy Code solely with respect to the DIP Loans. 18.

Reservation of Rights. Notwithstanding anything to the contrary herein, this

13

Stipulation is without prejudice to, and does not constitute a waiver of, expressly or implicitly, any

14

rights, claims or privileges (whether legal, equitable or otherwise) of the Parties with respect to any

15

issues that are not expressly addressed herein. Specifically, the Parties reserve all rights in all

16

aspects of pending litigation between them, including any matters involving equitable subordination

17

of the claims and liens held by the Lehman Entities or LCPI, substantive consolidation of any of the

18

estates in these Cases, or any other action against the Lehman Entities or LCPI. The Parties further

19

agree that entry into this Stipulation, and extension of the DIP Loans contemplated hereunder, shall

20

not be used in any manner in litigation amongst the Parties, whether as, for instance, a basis for or

21

against substantive consolidation or otherwise.

22

19.

No Modification. Until and unless the DIP Loans have been indefeasibly paid in full

23

in cash to Lehman ALI pursuant to the terms of this Stipulation and all commitments to extend the

24

DIP Loans have been terminated, the Borrowers irrevocably waive the right to seek and shall not

25

seek or consent to, directly or indirectly, without the prior written consent of Lehman ALI (which

26

consent may be granted or withheld in Lehman ALI’s sole and absolute discretion) (i) any

27

modification, stay, vacatur or amendment to this Stipulation (and no such consent shall be implied

28

by any other action, inaction or acquiescence of Lehman ALI); or (ii) a priority claim for any

52063-001\DOCS_NY:19026.5

9

Case 8:08-bk-17206-ES

administrative expense or unsecured claim against the Borrowers (now existing or hereafter arising

2

of any kind or nature whatsoever, including, without limitation any administrative expense of the

3

kind specified in sections 503(b), 507(a) or 507(b) of the Bankruptcy Code) in the Trustee Debtors’

4

Cases or any successor cases equal or superior to the DIP Superpriority Claim; or (iii) any lien on

5

any of the DIP Collateral with priority equal or superior to the DIP Liens, except that,

6

notwithstanding any other provision of this Stipulation, the Borrowers may consent to and seek

7

approval of a lien on any of the DIP Collateral with priority equal or superior to the DIP Liens in the

8

event the Court makes a finding that such lien is necessary to finance costs and expenses associated

9

solely with health and safety issues related to the Borrowers’ property. The Lehman Entities’ rights

11 12 A TTORNEYS A T L AW L OS A NGELES , C ALIFORNIA

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1

10 P ACHULSKI S TANG Z IEHL & J ONES LLP

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13

with respect to any such request are hereby reserved. 20.

Jurisdiction. The Court shall retain jurisdiction to resolve any disputes or

controversies arising from or related to this Stipulation. 21.

Further Cooperation. The Parties agree to and will cooperate fully with each other in

14

the performance of this Stipulation, and will execute such additional agreements, documents or other

15

instruments as may reasonably be required to carry out the intent of this Stipulation.

16

22.

Signatures. This Stipulation may be signed in any number of counterparts (and by

17

each Party hereto on different counterparts), each of which constitutes an original, but all such

18

counterparts when taken together shall constitute one and the same agreement. This Stipulation may

19

be executed by facsimile signature and delivered by facsimile transmission with the same effect as

20

delivery of a manually executed counterpart of this Stipulation.

21

23.

Compromise. The Parties agree that this Stipulation is a compromise of certain use of

22

cash collateral issues. Neither this Stipulation nor anything contained in this Stipulation shall be

23

construed as, treated as or characterized as an admission by any Party of any fact or liability or as

24

evidence of any allegation of any Party. Neither this Stipulation nor anything in this Stipulation

25

shall be admissible in any proceeding as evidence of liability or wrongdoing by any of the Parties.

26

This Stipulation may be introduced, however, in any proceeding to enforce the terms of this

27

Stipulation.

28

24.

Authority. Each person who signs this Stipulation represents and warrants that he or

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1

she has the authority and capacity to act on behalf of the Party for whom he or she is signing and to

2

bind that Party to the terms of this Stipulation. 25.

3

Entire Agreement. This Stipulation contains the entire agreement between the Parties

4

and may not be amended or modified except by a writing executed by the Parties. All prior oral and

5

written agreements, if any, are expressly superseded hereby and are of no further force and effect.

6

WEIL, GOTSHAL & MANGES LLP

7 8

Dated:

October 15, 2009

- and PACHULSKI STANG ZIEHL & JONES LLP

9 By

/s/ Richard M. Pachulski Richard M. Pachulski Dean A. Ziehl

11

Attorneys for Lehman ALI, Inc., Northlake Holdings LLC and OVC Holdings LLC

12 A TTORNEYS A T L AW L OS A NGELES , C ALIFORNIA

P ACHULSKI S TANG Z IEHL & J ONES LLP

10

13

Dated:

October 15, 2009

THE LOBEL FIRM, LLP

14 15

By

/s/ Mike D. Neue William N. Lobel Mike D. Neue General Insolvency Counsel for Steven M. Speier, the Chapter 11 Trustee for the Trustee Debtors

16 17 18 19 20 21 22 23 24 25 26 27 28

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Desc

EXHIBIT A

Lehman Projects - Budget for Trustee Debtors 120 Day Funding Needs Summary Projects

Palm Springs Village Delta Coves Heartland Marblehead Northlake Oak Knoll Oak Valley Unpaid Insurance (1) Total

October 2009 Entitlements/ Supervision, Health/Safety Non- Preservation Reporting, & Professional /Insurance Compliance of Value Management Other Fees 96,950 1,000 2,250 10,909 0 0 105,484 720 0 10,909 0 0 31,036 0 0 10,909 0 0 36,220 102,273 50,000 20,000 0 0 2,480 4,000 0 2,000 0 0 158,023 0 0 10,909 0 0 30,458 25,000 7,500 10,909 0 0 111,216 571,866 132,993 59,750 76,545 0 0

Projects

Palm Springs Village Delta Coves Heartland Marblehead Northlake Oak Knoll Oak Valley Unpaid Insurance Total

November 2009

Total 111,109 117,113 41,945 208,493 8,480 168,932 73,867 111,216 841,154

Entitlements/ Supervision, Health/Safety Non- Preservation Reporting, & /Insurance Compliance of Value Management 20,325 0 2,250 10,909 35,000 0 0 10,909 13,036 25,000 0 10,909 28,050 95,773 45,000 20,000 2,480 4,000 0 2,000 125,190 0 0 10,909 15,058 0 20,000 10,909 239,139

124,773

67,250

December 2009

97,773

9,750

76,545

0 0 0 0 0 0 0

76,545

0

0

0

Total 29,984 45,909 18,945 143,823 6,480 121,099 22,867 0 389,107

Entitlements/ Supervision, Health/Safety Non- Preservation Reporting, & /Insurance Compliance of Value Management 13,100 0 2,250 10,909 35,000 0 0 10,909 6,036 0 0 10,909 28,050 75,773 0 20,000 2,480 2,000 0 2,000 110,190 0 0 10,909 3,958 0 0 10,909 198,814

77,773

2,250

Other 0 0 0 0 0 0 0

76,545

0

Summary by Category

Palm Springs Village Delta Coves Heartland Johansen Ranch Joshua Ridge II Marblehead Northlake Oak Knoll Oak Valley Unpaid Insurance Total

Health/Safety Non/Insurance Compliance 147,200 1,000 210,484 720 58,144 25,000 0 0 120,370 369,592 9,920 12,000 503,593 53,932 25,000 111,216 0 1,214,858 433,312

52063-001\DOCS_NY:19047v4

Total 33,484 45,909 48,945 188,823 8,480 136,099 45,967 0 0 507,707

Subtotal 144,593 163,022 90,890 397,316 16,960 305,031 119,834 111,216 1,348,861

January 2010

Entitlements/ Supervision, Health/Safety Non- Preservation Reporting, & Professional /Insurance Compliance of Value Management Other Fees 16,825 0 2,250 10,909 0 0 35,000 0 0 10,909 0 0 8,036 0 0 10,909 0 0 28,050 95,773 0 20,000 0 0 2,480 2,000 0 2,000 0 0 110,190 0 0 10,909 0 0 4,458 0 7,500 10,909 0 0 205,039

Other

Professional Fees 0 0 0 0 0 0 0

Entitlements/ Supervision, Preservation Reporting, & Professional of Value Management Other Fees Grand Total 9,000 43,636 0 0 200,836 0 43,636 0 0 254,840 0 43,636 0 0 126,780 0 0 0 0 0 0 0 0 0 0 95,000 80,000 0 0 664,962 0 8,000 0 0 29,920 0 43,636 0 0 547,229 35,000 43,636 0 0 157,568 0 0 0 0 111,216 139,000 306,180 0 0 2,093,350

Total per Trustee Projects Oak Knoll Fire Hydrant Report

$ 2,093,350 17,000

Total Funding Needed

$ 2,110,350

Note: Total Funding Needed $ does NOT include any budget for UST Fees or Trustee Bonds.

Professional Fees 0 0 0 0 0 0 0

Total 26,259 45,909 16,945 123,823 6,480 121,099 14,867 0 0 355,382

Subtotal 56,243 91,818 35,890 267,646 12,960 242,198 37,734 0 744,489

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Desc

EXHIBIT B Trustee Debtor LB-L-SunCal Oak Valley, LLC SunCal Heartland, LLC LB-L-SunCal Northlake, LLC SunCal Marblehead, LLC SunCal Century City, LLC SunCal PSV, LLC Delta Coves Venture, LLC SunCal Torrance, LLC SunCal Oak Knoll, LLC

April 2009 DIP Loan Amounts* $249,534.00 $163,231.00 $46,909.00 $455,009.00 N/A $48,809.00 $302,307.00 $0.00 $250,876.00 $1,516,675.00

Trustee Debtor Cash Balance $336,194.32 $56,202.61 $291,696.90 $416,177.20 N/A $2,789.26 $443,213.00 $38,462.38 $12,187.87 $1,596,923.54

Available Amounts for Repayment** $249,534.00 $56,202.61 $46,909.00 $416,177.20 N/A $2,789.26 $302,307.00 $0.00 $12,187.87 $1,086,106.94

* The April 2009 DIP Loan amounts set forth herein are based on the April 2009 DIP Budget [D.E. 336]. These amounts may have been modified due to line item changes made after approval of the April 2009 DIP Budget and do not include interest accrued on such loans pursuant to the April 2009 DIP Stipulation. ** These amounts do not include interest accrued on April 2009 DIP Loans pursuant to the April 2009 DIP Stipulation.

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SunCal Companies Emergency Budget

Issue Oak Knoll Budget Delta Coves Insurance Policy Utility Bills on various projects

Budget $

Comments

547,229 72,771 40,000 _____________ $ 660,000

See attached budget for details. Insurance Policy expires 10/31/09, see attached budget. Various electric/utility bills on Trustee properties.

$

Total

EXHIBIT 2

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CONTINUATION/MAINTENANCE BUDGET PROJECT NAME: Oak Knoll LOCATION: Oakland, CA ACREAGE:

172.5

LOTS DELIVERED: LOTS REMAINING: TOTAL LOTS:

0 960 960

STATUS: YEAR PURCHASED: PURCHASE PRICE:

Owned 2006-2009 $117m Oct-09 Budget

Category Ref Cost Items A. Health/Safety/Insurance Insurance

Nov-09 Budget

Dec-09 Budget

Jan-10 Budget

Total

8,523

8,523

8,523

8,523

Fire Prevention - Weed Abatement

30,000

15,000

15,000

15,000

Fire Prevention - Remove Wood Stock Piles

15,000

15,000

Security

On site Security

66,667

66,667

66,667

66,667

Security

Perimeter Fence repairs

10,000

10,000

10,000

-

-

-

10,000

10,000

10,000

Demolition Buildings - Not including Hospital Air Monitoring

Fire Hydrant Survey $

158,023

$

125,190

$

110,190

$

$

-

$

-

$

-

$

34,092

-

$

-

$

-

$

General & Administrative

10,909 Subtotal

$

10,909

10,909 $

10,909

10,909 $

10,909

$

E. Other

$

-

Grand Total

$

547,229

Remove Wood piles from site per Notice of Violation

$

266,668

10,000

$

40,000

-

$

-

10,000

$

40,000

Need to monitor air quality to make sure no asbestos becomes airborne

$

17,833

Per proposal from San Jose Construction Company to survey the hydrant situation at Oak Knoll . This proposal is just to do the investigation to find out which hydrants work and what the reasons are that some don’t work and what it should take to repair the hydrants and / or lines. Survey will result in recommendations that would result in costs that cannot be budgeted at this time.

$

503,593

$

-

-

$

-

-

-

$

-

10,909

$

43,636

10,909

$

43,636

$

-

$

GRAND TOTAL

547,229

30,000

E. Other

Subtotal

$

75,000

D. Supervision, Reporting and Management D-1

Subtotal

$

$ $

503,593 43,636

$

110,190

$

C. Entitlements/Preservation of Value

Subtotal

$ $ $ $

Explanation/Consequence

B. Non-Compliance

Subtotal

Summary A. Health/Safety/Insurance B. Non-Compliance C. Entitlements/Preservation of Value D. Supervision, Reporting and Management

General Liability To complete the project weed abatement. This project is in a high fire zone. Per Notice of Violation

17,833 Subtotal

Desc

$

-

$

-

$

-

$

-

$

$

168,932

$

136,099

$

121,099

$

121,099

$

-

547,229

On site Security - per Notce of Violation - 5 security guards Repairs to perimeter fencing. Trespassers are constantly cutting holes to get in. Per Notice of Violation Demo dilapitated buildings per Notice of Violation

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CONTINUATION/MAINTENANCE BUDGET PROJECT NAME: Delta Coves LOCATION: Bethel Island, CA ACREAGE:

310

LOTS DELIVERED: LOTS REMAINING: TOTAL LOTS:

0 590 590

STATUS: YEAR PURCHASED: PURCHASE PRICE:

Owned 2006 $50m

Category Ref A. Health/Safety/Insurance

Cost Items Insurance

Oct-09 Budget

Nov-09 Budget

Dec-09 Budget

Jan-10 Budget

Total -

$

72,771

$

-

$

72,771

-

$

-

$

-

$

-

$

-

$ $

-

$

-

$

-

$

-

-

$

72,771

-

-

Subtotal

$

72,771

$

-

$

-

Subtotal

$

-

$

-

$

Subtotal

$

-

$

-

$

-

$

-

B. Non-Compliance

C. Entitlements/Preservation of Value

D. Supervision, Reporting and Management Subtotal E. Other

Subtotal

GRAND TOTAL

$

-

$

-

$

-

$

-

$ $ $ $

$

72,771

$

-

$

-

$

-

$

72,771

Contract/PO Number

Desc

Summary A. Health/Safety/Insurance B. Non-Compliance C. Entitlements/Preservation of Value D. Supervision, Reporting and Management

$ $ $ $

72,771 -

Subtotal

$

72,771

E. Other

$

-

Grand Total

$

72,771

Explanation/Consequence General Liability Renewal due in 9/09 - Renewal is for 2 years

Case 8:08-bk-17206-ES In re:

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Desc

PALMDALE HILLS PROPERTY, LLC. AND ITS RELATED DEBTORS, Debtor(s).

CASE NUMBER 08-17206-ES

NOTE: When using this form to indicate service of a proposed order, DO NOT list any person or entity in Category I. Proposed orders do not generate an NEF because only orders that have been entered are placed on the CM/ECF docket.

PROOF OF SERVICE OF DOCUMENT I am over the age of 18 and not a party to this bankruptcy case or adversary proceeding. My business address is: 10100 Santa Monica Blvd., 11th Floor, Los Angeles, CA 90067 A true and correct copy of the foregoing document described as [PROPOSED] INTERIM ORDER (A) APPROVING STIPULATION PURSUANT TO 11 U.S.C. §§ 362, 363, 364, AND 507: (1) APPROVING SENIOR SECURED SUPERPRIORITY POSTPETITION FINANCING; (2) GRANTING LIENS AND PROVIDING SUPERPRIORITY ADMINISTRATIVE EXPENSE STATUS; AND (3) MODIFYING AUTOMATIC STAY TO THE EXTENT NECESSARY, AND (B) SCHEDULING FINAL HEARING will be served or was served (a) on the judge in chambers in the form and manner required by LBR 5005-2(d); and (b) in the manner indicated below: I. TO BE SERVED BY THE COURT VIA NOTICE OF ELECTRONIC FILING (“NEF”) – Pursuant to controlling General Order(s) and Local Bankruptcy Rule(s) (“LBR”), the foregoing document will be served by the court via NEF and hyperlink to the document. On I checked the CM/ECF docket for this bankruptcy case or adversary proceeding and determined that the following person(s) are on the Electronic Mail Notice List to receive NEF transmission at the email address(es) indicated below:

Service information continued on attached page II. SERVED BY U.S. MAIL OR OVERNIGHT MAIL(indicate method for each person or entity served): On October 23, 2009 I served the following person(s) and/or entity(ies) at the last known address(es) in this bankruptcy case or adversary proceeding by placing a true and correct copy thereof in a sealed envelope in the United States Mail, first class, postage prepaid, and/or with an overnight mail service addressed as follows. Listing the judge here constitutes a declaration that mailing to the judge will be completed no later than 24 hours after the document is filed. JUDGE’S COPY [Overnight Delivery] The Honorable Erithe A. Smith United States Bankruptcy Court - Central District of California Ronald Reagan Federal Building and United States Courthouse 411 West Fourth Street, Suite 5041 Santa Ana, CA 92701-4593 Service information continued on attached page III. SERVED BY PERSONAL DELIVERY, FACSIMILE TRANSMISSION OR EMAIL (indicate method for each person or entity served): Pursuant to F.R.Civ.P. 5 and/or controlling LBR, on _________________ I served the following person(s) and/or entity(ies) by personal delivery, or (for those who consented in writing to such service method), by facsimile transmission and/or email as follows. Listing the judge here constitutes a declaration that personal delivery on the judge will be completed no later than 24 hours after the document is filed.

Service information continued on attached page I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct.

October 23, 2009

Melisa DesJardien

/s/ Melisa DesJardien

Date

Type Name

Signature

This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California. January 2009

F 9013-3.1

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Desc

PALMDALE HILLS PROPERTY, LLC. AND ITS RELATED DEBTORS, Debtor(s).

CASE NUMBER 08-17206-ES

II. SERVED BY U.S. MAIL III. SERVED BY E-MAIL (1) counsel for the Voluntary Debtors: Paul Couchot - [email protected] Marc J Winthrop - [email protected] Charles Liu - [email protected] (2) counsel for the Trustee Debtors: William Lobel - [email protected] (3) counsel for the Voluntary Debtors’ Committee: Alan Friedman - [email protected] Kerri A Lyman - [email protected] (4) counsel for the Trustee Debtors’ Committee: Lei Lei Wang Ekvall - [email protected] Hutchison B Meltzer - [email protected] (5) Office of the United States Trustee: Michael Hauser - [email protected] Louis Miller - [email protected] Martin Pritikin – [email protected] Steven N. Speier (Chapter 11 Trustee, c/o Squar Nilner) - [email protected]; [email protected] Edward Soto - [email protected] Carrolynn H. G. Callari - [email protected] John Sieger - [email protected] Atty for Bond Safeguard & Lexon - [email protected] Palmdale Hills Property, LLC and its related entities - [email protected]

This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California. January 2009

F 9013-3.1

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PALMDALE HILLS PROPERTY, LLC. AND ITS RELATED DEBTORS, Debtor(s).

CASE NUMBER 08-17206-ES

NOTE TO USERS OF THIS FORM: 1) Attach this form to the last page of a proposed Order or Judgment. Do not file as a separate document. 2) The title of the judgment or order and all service information must be filled in by the party lodging the order. 3) Category I. below: The United States trustee and case trustee (if any) will always be in this category. 4) Category II. below: List ONLY addresses for debtor (and attorney), movant (or attorney) and person/entity (or attorney) who filed an opposition to the requested relief. DO NOT list an address if person/entity is listed in category I.

NOTICE OF ENTERED ORDER AND SERVICE LIST Notice is given by the court that a judgment or order entitled INTERIM ORDER (A) APPROVING STIPULATION PURSUANT TO 11 U.S.C. §§ 362, 363, 364, AND 507: (1) APPROVING SENIOR SECURED SUPERPRIORITY POSTPETITION FINANCING; (2) GRANTING LIENS AND PROVIDING SUPERPRIORITY ADMINISTRATIVE EXPENSE STATUS; AND (3) MODIFYING AUTOMATIC STAY TO THE EXTENT NECESSARY, AND (B) SCHEDULING FINAL HEARING was entered on the date indicated as “Entered” on the first page of this judgment or order and will be served in the manner indicated below:

I. SERVED BY THE COURT VIA NOTICE OF ELECTRONIC FILING (“NEF”) B Pursuant to controlling General Order(s) and Local Bankruptcy Rule(s), the foregoing document was served on the following person(s) by the court via NEF and hyperlink to the judgment or order. As of October 23, 2009, the following person(s) are currently on the Electronic Mail Notice List for this bankruptcy case or adversary proceeding to receive NEF transmission at the email address(es) indicated below.

Service information continued on attached page

II. SERVED BY THE COURT VIA U.S. MAIL: A copy of this notice and a true copy of this judgment or order was sent by United States Mail, first class, postage prepaid, to the following person(s) and/or entity(ies) at the address(es) indicated below:

Service information continued on attached page

III. TO BE SERVED BY THE LODGING PARTY: Within 72 hours after receipt of a copy of this judgment or order which bears an “Entered” stamp, the party lodging the judgment or order will serve a complete copy bearing an “Entered” stamp by U.S. Mail, overnight mail, facsimile transmission or email and file a proof of service of the entered order on the following person(s) and/or entity(ies) at the address(es), facsimile transmission number(s) and/or email address(es) indicated below:

Service information continued on attached page

This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central Distri ct of California. January 2009

F 9021-1.1

Case 8:08-bk-17206-ES In re:

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PALMDALE HILLS PROPERTY, LLC. AND ITS RELATED DEBTORS, Debtor(s).

CASE NUMBER 08-17206-ES

I. SERVED BY NEF

8:08-bk-17206-ES Notice will be electronically mailed to: (1)

Selia M Acevedo for Interested Party Courtesy NEF [email protected], [email protected];[email protected]

(2)

Joseph M Adams for Defendant The City of San Juan Capistrano [email protected]

(3)

Raymond H Aver for Debtor Palmdale Hills Property, LLC [email protected]

(4)

James C Bastian for Creditor ARB, Inc. [email protected]

(5)

John A Boyd for Interested Party Oliphant Golf Inc [email protected]

(6)

Brendt C Butler for Creditor EMR Residential Properties LLC [email protected]

(7)

Carollynn Callari for Creditor Danske Bank A/S London Branch [email protected]

(8)

Dan E Chambers for Creditor EMR Residential Properties LLC [email protected]

(9)

Shirley Cho for Creditor Lehman ALI, Inc. [email protected]

(10)

Vonn Christenson for Interested Party Courtesy NEF [email protected]

(11)

Vincent M Coscino for Petitioning Creditor CST Environmental Inc [email protected]

(12)

Paul J Couchot for Debtor ACTON ESTATES, LLC [email protected], [email protected]

(13)

Jonathan S Dabbieri for Interested Party Courtesy NEF [email protected]

(14)

Ana Damonte for Creditor Top Grade Construction, Inc. [email protected]

(15)

Melissa Davis for Creditor City of Orange [email protected]

(16)

Daniel Denny for Interested Party Courtesy NEF [email protected]

(17)

Caroline Djang for Creditor Lehman ALI, Inc. [email protected]

(18)

Donald T Dunning for Creditor Hertz Equipment Rental Corporation [email protected]

(19)

Joseph A Eisenberg for Creditor Lehman ALI, Inc. [email protected]

(20)

Lei Lei Wang Ekvall for Creditor Committee Joint Committee of Creditors Holding Unsecured Claims [email protected]

(21)

Richard W Esterkin for Debtor Palmdale Hills Property, LLC [email protected]

(22)

Marc C Forsythe for Attorney Robert Goe [email protected]

(23)

Alan J Friedman for Attorney Irell & Manella LLP [email protected]

(24)

Christian J Gascou for Creditor Arch Insurance Company [email protected]

(25)

Robert P Goe for Attorney Robert Goe [email protected], [email protected];[email protected]

(26)

Eric D Goldberg for Interested Party Courtesy NEF [email protected]

(27)

Kelly C Griffith for Creditor Bond Safeguard Insurance Co [email protected]

(28)

Asa S Hami for Debtor Palmdale Hills Property, LLC [email protected]

(29)

Michael J Hauser for U.S. Trustee United States Trustee (SA) [email protected] This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central Distri ct of California.

January 2009

F 9021-1.1

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PALMDALE HILLS PROPERTY, LLC. AND ITS RELATED DEBTORS, Debtor(s).

CASE NUMBER 08-17206-ES

(30)

D Edward Hays for Creditor Philip Dowse [email protected]

(31)

Michael C Heinrichs for Interested Party Courtesy NEF [email protected]

(32)

Harry D. Hochman for Creditor Lehman ALI, Inc. [email protected], [email protected]

(33)

Michelle Hribar for Plaintiff EMR Residential Properties LLC [email protected]

(34)

Lawrence A Jacobson for Creditor BKF Engineers [email protected]

(35)

Stephen M Judson for Petitioning Creditor The Professional Tree Care Co [email protected]

(36)

David I Katzen for Interested Party Bethel Island Municipal Improvement District [email protected]

(37)

Christopher W Keegan for Creditor SC Master Holdings II LLC [email protected], [email protected];[email protected];[email protected]

(38)

Irene L Kiet for Creditor BNB Engineering, Inc. [email protected]

(39)

Mark J Krone for Creditor Bond Safeguard Insurance Co [email protected]

(40)

Leib M Lerner for Creditor Steiny and Company, Inc. [email protected]

(41)

Peter W Lianides for Debtor Palmdale Hills Property, LLC [email protected], [email protected]

(42)

Charles Liu for Debtor Palmdale Hills Property, LLC [email protected]

(43)

Kerri A Lyman for Attorney Irell & Manella LLP [email protected]

(44)

Mariam S Marshall for Creditor RGA Environmental, Inc. [email protected]

(45)

Robert C Martinez for Creditor TC Construction Company, Inc [email protected]

(46)

Hutchison B Meltzer for Creditor Committee Joint Committee of Creditors Holding Unsecured Claims [email protected]

(47)

Joel S. Miliband for Creditor RBF CONSULTING [email protected]

(48)

James M Miller for Debtor Palmdale Hills Property, LLC [email protected]

(49)

Louis R Miller for Plaintiff Palmdale Hills Property, LLC [email protected]

(50)

Mike D Neue for Trustee Steven Speier [email protected], [email protected]

(51)

Robert Nida for Creditor Kirk Negrete, Inc [email protected]

(52)

Henry H Oh for 3rd Party Plaintiff Joint Provisional Liquidators of Lehman RE Ltd [email protected], [email protected]

(53)

Sean A Okeefe for Debtor Palmdale Hills Property, LLC [email protected]

(54)

Robert B Orgel for Creditor Lehman ALI, Inc. [email protected], [email protected]

(55)

Penelope Parmes for Creditor EMR Residential Properties LLC [email protected]

(56)

Ronald B Pierce for Creditor Griffith Company [email protected]

(57)

Katherine C Piper for Interested Party Anaverde, LLC [email protected]

(58)

Raymond A Policar for Creditor Williams+Paddon Architects+Planners, Inc. [email protected]

(59)

Cassandra J Richey for Creditor Patricia I Volkerts, as Tru stee, et al [email protected]

(60)

Debra Riley for Interested Party City of Palmdale [email protected] This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central Distri ct of California.

January 2009

F 9021-1.1

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PALMDALE HILLS PROPERTY, LLC. AND ITS RELATED DEBTORS, Debtor(s).

CASE NUMBER 08-17206-ES

(61)

Martha E Romero for Creditor San Bernardino County Tax Collector [email protected]

(62)

Kenneth N Russak for Interested Party Central Pacific Bank - TO BE SERVED BY LODGING PARTY BY E-MAL [email protected], [email protected];[email protected]

(63)

John E Schreiber for Defendant Fenway Capital, LLC [email protected]

(64)

William D Schuster for Creditor HD Supply Construction Supply LTD [email protected]

(65)

Wendy W Smith for Creditor Castaic Union School District [email protected]

(66)

Steven M Speier for Trustee Steven Speier [email protected], [email protected]

(67)

Michael St James for Creditor MBH Architects, Inc. [email protected]

(68)

Todd L Turoci for Creditor Philip Dowse [email protected]

(69)

United States Trustee (SA) [email protected]

(70)

Jason Wallach for Interested Party Courtesy NEF [email protected]

(71)

Joshua D Wayser for Other Professional D. E. Shaw & Co., L.P. [email protected]

(72)

Christopher T Williams for Creditor Danske Bank A/S London Branch [email protected], [email protected]

(73)

Marc J Winthrop for Debtor Palmdale Hills Property, LLC [email protected]

(74)

David M Wiseblood for Creditor Bethel Island Municipal Improvement District [email protected]

(75)

Arnold H Wuhrman for Creditor Wayne Lee [email protected]

(76)

Dean A Ziehl for Creditor LV Pacific Point, LLC [email protected], [email protected]

-

TO BE SERVED BY LODGING PARTY BY E-MAIL

III. TO BE SERVED BY LODGING PARTY BY E-MAIL (1) counsel for the Voluntary Debtors: Paul Couchot - [email protected] Marc J Winthrop - [email protected] Charles Liu - [email protected] (2) counsel for the Trustee Debtors: William Lobel - [email protected] (3) counsel for the Voluntary Debtors’ Committee: Alan Friedman - [email protected] Kerri A Lyman - [email protected] (4) counsel for the Trustee Debtors’ Committee: Lei Lei Wang Ekvall - [email protected] Hutchison B Meltzer - [email protected] (5) Office of the United States Trustee: Michael Hauser - [email protected] Louis Miller - [email protected] Martin Pritikin – [email protected] Steven N. Speier (Chapter 11 Trustee, c/o Squar Nilner) - [email protected]; [email protected] Edward Soto - [email protected] Carrolynn H. G. Callari - [email protected] John Sieger - [email protected] Atty for Bond Safeguard & Lexon - [email protected] Palmdale Hills Property, LLC and its related entities - [email protected] This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central Distri ct of California. January 2009

F 9021-1.1

Case 8:08-bk-17206-ES In re:

Doc 792 Filed 11/20/09 Entered 11/20/09 14:59:20 Main Document Page 27 of 27CHAPTER 11

Desc

PALMDALE HILLS PROPERTY, LLC. AND ITS RELATED DEBTORS, Debtor(s).

CASE NUMBER 08-17206-ES

III. TO BE SERVED BY LODGING PARTY BY E-MAIL Kenneth N. Russak for Interested Party Central Pacific Bank [email protected], [email protected]; [email protected] Todd L. Turoci for Creditor Philip Douse [email protected]

This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central Distri ct of California. January 2009

F 9021-1.1