united states bankruptcy court district of …$100.0 million" relating to damages allegedly...

UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE

In re: ) Jointly Administered

LANDSOURCE COMMUNITIES ) Case No. 08-11111 (KJC) DEVELOPMENT, LLC, et al., )

) Chapter 11 Reorganized Debtors.

STIPULATION WITHDRAWING BRIARWOOD CAPITAL LLC CLAIM

The parties to this stipulation, appearing by and through counsel, are Leslie

Gladstone, the duly appointed Chapter 11 Trustee for the bankruptcy estate of Briarwood

Capital, LLC, a Delaware limited liability company ("the "Briarwood Trustee") and The

LandSource Class 5 Creditor Liquidating Trust (the "Class 5 Trust"), created under the Class 5

Trust Agreement, dated July 31, 2009. The Briarwood Trustee and the Class 5 Trust (together,

the "Parties") hereby enter into this stipulation (the "Stipulation") and agree as follows:

RECITALS

WHEREAS, on June 8, 2008, The Newhall Land and Farming Company, A

California Limited Partnership and certain of its affiliates, including Lennar Land Partners H

(collectively, the "Debtors") each filed a voluntary petition for relief under chapter 11 of title 11

of the United States Code.

WHEREAS, on or about November 14, 2008, Briarwood Capital, LLC

("Briarwood") filed a Proof of Claim, registered as Claim No. 644, in an amount "in excess of

$100.0 million" relating to damages allegedly incurred in connection with a certain real estate

venture referred to as the "Bridges" located in San Diego, California and which claims were the

DOCS_SF:77527. I 5137-003

¨0¤q+++(8 !\«

0811111110824000000000001

Docket #3312 Date Filed: 8/24/2011

subject matter of certain litigation filed in the San Diego Superior Court (Case No. GIC 877446)

(the "Proof of Claim").

WHEREAS, on or about June 1, 2009, debtor, Lennar Land Partners H, filed an

objection to the Proof of Claim. The objection to the Proof of Claim remains pending.

WHEREAS, by order dated July 20, 2009, this Court confirmed (the

"Confirmation Order") the Second Amended Joint Chapter 11 Plans of Reorganization for

LandSource Communities Development LLC and Each of Its Affiliated Debtors Proposed by

Barclays Bank PLC, as Administrative Agent, Under the Super-Priority Debtor-in-Possession

First Lien Credit Agreement, as Modified (the "Plan"). The effective date of the Plan was July

31, 2009.

WHEREAS, the Class 5 Trust was created pursuant to the Class 5 Trust

Agreement, dated July 31, 2009 and KDW Restructuring & Liquidation Services LLC is the

trustee of the Class S Trust.

WHEREAS, the purpose of the Class 5 Trust, among other things, is to file and

prosecute objections to all disputed claims in Classes 5(a)-(u) (General Unsecured Claims)

("Class 5 Claim(s)") and distribute the Class 5 Trust assets to the holders of allowed Class 5

Claims under the Plan.

WHEREAS, on February 23,2010, Briarwood filed a voluntary chapter 11

petition in the United States Bankruptcy Court for the Southern District of California, currently

pending as Case No. 10-02677 ("Briarwood Bankruptcy Court"). Thereafter, the Briarwood

Trustee was appointed as the Chapter 11 Trustee!of the Briarwood bankruptcy case.

OOCS_S1;77527.1 51357-003 2

WHEREAS, on or about July 13,’201 I, the Briarwood Bankruptcy Court entered

an Order On Chapter 11 Trustee’s Motion to (A/ Sell Estate Assets and Compromise

Controversy and (B) Retain Gordon & Holmes Nunc Pro Tunc, approving a certain Settlement

Agreement between the Briarwood Trustee, Lennar Corporation, Lennar Homes of California,

Inc. (and their present and former affiliates, including Lennar Land Partners II) (collectively,

"Lennar"), and others in which the Briarwood Trustee released Lennar and others of all claims

"occurring from the beginning of time to the Effective Date" of the Settlement Agreement (the

"Settlement Order"). A copy of the Settlement Agreement is attached hereto as Exhibit A and

incorporated herein.

WHEREAS, the Class 5 Trust understands that as a result of the Settlement

Agreement and Settlement Order, the Briarwood Trustee no longer asserts any claims against the

Debtors or the Class 5 Trust by way of the Proof of Claim.

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

and other good and valuable consideration (the receipt and sufficiency of which are

acknowledged), it is hereby stipulated and agreed by and between The Briarwood Trustee and

the Class 5 Trust as follows:

AGREEMENT

I. Upon execution of this Stipulation, the Proof of Claim shall be deemed

withdrawn and expunged.

2. The Bankruptcy Court shall retain jurisdiction to resolve any disputes or

controversies arising from or related to this Stipulation.

DOCS_SF:77527.1 51357-003

3. Nothing in this Stipulation shall be construed, applied, or interpreted to

change the terms of the Plan or the Confirmation Order in any respect.

4. The Parties agree to and will cooperate fully with each other in the

performance of this Stipulation.

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

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

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

may be executed by facsimile signature and delivered by facsimile transmission with the same

effect as delivery of a manually executed counterpart of this Stipulation.

6. This Stipulation is binding upon the Parties and any of their respective

successors and assigns.

7. This Stipulation contains the entire agreement between the Parties with

respect to the matters addressed herein and may not be amended or modified except by a writing

executed by the Parties. The terms of this Stipulation are contractual and not mere recitals.

8. This Stipulation shall be effective immediately upon execution by both

Parties. Article IX of the Plan and Section 5.2 of the Class 5 Trust Agreement authorize the

trustee of the Class 5 Trust to enter into this Stipulation without any further approval of the

Bankruptcy Court. The Briarwood Trustee acknowledges that this Stipulation may be filed with

the Bankruptcy Court.

III

I/I

DOcS_SF:77527.1 51357.003 4

Dated: August J)2O1 1

Dated: August 2011

PACHULSIU STANG ZIEHL & JONES LLP

BRIARWOOD TRUSTEE

Miriam kjattbu’

Jesse Frnlayso Counsel for the trustee of the Class 5 Trust

Attorney for Leslie Gladstone, chapter 11 trustee of Briarwood Capital, LLC

DOCS.JR77527.1 51357-003 5

Case 10-02677-PBII Filed 05/03/11 Doc 365-1 Pg. 1 of 68

EXHIBIT A

Case 10-02677-PBI 1 Filed 05/03/11 Doc 365-1 Pg. 2 of 68

SETTLEMENT AGREEMENT

This SETTLEMENT AGREEMENT (this "Agreement") is entered into this 29th day of

April 2011 (the "Agreement Date"), by and among LESLIE GLADSTONE, as the duly

appointed Chapter 11 Trustee for the bankruptcy estate of Briarwood Capital, LLC, a Delaware

limited liability company (the "Briarwood Trustee"), LENNAR CORPORATION, a Delaware

corporation ("Lennar Corp."), LENNAR HOMES OF CALIFORNIA, INC. a California

corporation ("Lennar Homes" and, collectively with Lennar Corp. and theft present and former

affiliates, including Lennar San Jose Holdings, Inc., Lennar Land Partners II, LL Partners, Inc.,

LLPII HCC Holdings, LLC, HCC Investors, LLC ("HCC"), and Lennar Bridges, LLC ("Lennar

Bridges"), ’Lenxiar"), KBR GROUP, LLC, a California limited liability company (collectively

with its affiliates, including KBR Opportunity Fund I, LP, and KBR Opportunity Fund II, LP,

"KBR"), KRMW REAL ESTATE INVESTMENT GROUP, LLC ("KRMW"), and CITY

NATIONAL BANK, N.A., a national banking association ("CNB" and collectively, with the

Briarwood Trustee, Lennar, KBR and KRMW, the "Parties"; and- each, a "Party"), with reference

to the following:

RECITALS

A. The Bankruptcy Cases. This Agreement is made in reference to the following

bankruptcy cases and litigations: -

1. Briarwood Bankruptcy Case. On February 23, 2009 (the "Briarwood

Petition Date"), Briarwood Capital, LLC ("Briarwood") filed a voluntary petition for

relief under chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the Southern

District of California (the "Bankruptcy Court"), which was assigned Case No. 10-02677-

PB11 (the "Briarwood Bankruptcy Case"). On August 6, 2010, the Bankruptcy Court

approved the appointment of the Bri-arwood Trustee as the Chapter 11 Trustee for the

Briarwood bankruptcy estate (the "Briarwood Estate"). - -

1 LA3:1173504.6

Case 10-02677-PB11 Filed 05/03/11 Doc365-1 Pg. 3 of 68

2. Marsch Bankruptcy Case. On February 25, 2010 (the "Marsch Petition

Date" and, collectively with the Briarwood Petition Date, the "Petition Dates"), Nicolas

Marsch III ("Marsch") filed a voluntary petition for relief under chapter 11 of the

Bankruptcy Code in the Bankruptcy Court, which was assigned Case No. 10-02939-PB 11

(the "Marsch Bankruptcy Case"). On August 4, 2010, the Bankruptcy Court approved

the appointment of James L. Kennedy (the "Marsch Trustee") as the chapter 11 trustee

for Marsch and his bankruptcy estate (the "Marsch Estate").

3. Colony Bankruptcy Cases. On February 25, 2010; Colony Properties

International, LLC ("Colony I") filed a voluntary petition for relief under chapter 11 of

the Bankruptcy Code in the Bankruptcy Court, which was assigned Case No. 10-02937-

pBl I (the "Colony I Bankruptcy Case"). On February 28, 2010, Briarwood Capital, Inc.

flied an involuntary petition for Colony Properties International II, LLC ("Colony II") for

relief under chapter 11 of the Bankruptcy Code in the Bankruptcy Court, which was

assigned Case No. 10-03361 -P811 (the "Colony II Bankruptcy Case" and, together with

the Colony I Bankruptcy Case, the "Colony Bankruptcy Cases" and, together with the

Briarwood Bankruptcy Case and the Marsch Bankruptcy Case, the "Bankruptcy Cases").

The Bankruptcy Court entered its order for relief with respect to Colony II on-April 1,

2010. On June 10, 2010, Richard Kipperman (the "Colony Trustee") was appointed

chapter 11 trustee. for Colony I and Colony II and thôir bankruptcy estates (the "Colony

Estates"). On December 10, 2010, KBR and the Colony Trustee filed a chapter 11 plan

in the Colony Bankruptcy Cases (as amended, the "Colony Plan").

B. Lennar Litigation and Claims. There are a number of lawsuits presently pending

between and among Lennar, the Briarwood Estate, the Marsch Estate, and Marsch (collectively

referred to as the "Lennar/Briarwood Litigation"):

1. McCrink Action. On November 13, 2006, Briarwood filed an action

against Lennar and others in the San Diego Superior Court entitled Briarwood Capital,

LLC v. Lennar Land Partners II,et al., Case No. GIC 875457 (the "McCrink Action").

2 LA3;1113504.6

Case 10-02677-FBi 1 Filed 05t0311 1 Doc 365-1 Pg. 4 of.68

2. Bridges Action. On December 22, 2006, Briarwood filed an action against

Lennar in the San Diego Superior Court entitled Briarwood Capital, LLC v. HCC

Investors LLC, et al., Case No. GIC 877446 (the "Bridges Action"). Lennar cross-

claimed against Marsch, Briarwood, and Colony Properties, LLC ("Colony US") in the

Bridges Action. On January 14, 2011, judgment was entered in Lennar’s favor and

against Marsch, Briarwood, and Colony US for approximately $17.5 million (the

"Bridges Final Judgment"). On March 30, 2011, Lennar was awarded approximately

$36.4 million in attorneys’ fees (the "Bridges Fees Award"). A cost bill for Lennar in the

amount of approximately $1.5 million is currentlypending.

3. HCC Action. On September 3, 2009, Briarwood filed an action against

HCC entitled Briarwood Capital, LLC v. HCC. Investors LLC, Case No. 37-2009-

00097749-CU-BC-CTL (the "HCC Action"). The HCC Action was stayed by stipulation

pending the outcome of the Bridges Action.

4. Florida Action Stay Adversary Proceeding. On February 28, 2010,

Briarwood filed in the Bankruptcy Court an adversary proceeding entitled Briarwood

Capital, LLC v Lennar Corporation and Lennar Homes of California, Inc, (Adv. Pro. No.

10-90118-PB) (the "Florida Action Stay Adversary Proceeding"). This matter is

presently pending before the Bankruptcy Court.

5. HCC Adversary Proceeding. On April 5, 2010, Briarwood filed in the

Bankruptcy Court an adversary proceeding entitled Briarwood Capital, LLC v. HCC

Investors LLC, (Adv. Pro. No. 10-90184-PB) (the "HCC Adversary Proceeding"). This

matter is presently pending before the Bankruptcy Court.

6. Florida Action. Prior to the Petition Dates, Lennar sued Briarwood,

Marsch, Barry Minkow ("Minkow") and the Fraud Discovery Institute, Inc. ("j") in

Florida state court in an action entitled Lennar Corporation, ºt, al. v. Briarwoad Capital,

LLC, et. al., Case No. 08-55740 CA40 (the "Florida Action")

3. LA3:1 173504.6

Case 10-02677-PBI I Filed 05/03/11 Doc 365-1 Pg. 5 of 68

7. DLA Actions. Prior to the Petition Dates, Lennar filed two related actions

against Marsch and certain other defendants in the San Diego Superior Court entitled

Lennar Homes of California, Inc. V. DLA Piper US LLP, et al., Case No. 37-2008-76811-

CU-PN-CTL ("DLA1"), and Lennar Homes of California, Inc., et al. v. DLA Piper US

LLP, et al., Case No. 37-2008-92842-CU-PN-CTL, ("DLA2" and, collectively with

DLAI, the "DLA Actions").

8. Marsch-HCC Action. On February 16, 2011, Marsch filed suit in the

Superior Court for San Diego County entitled Nicolas Marsch, III v. Jonathan Jaffe, et al.

(the "Marsch-HCC Action"). This matter has been removed to the Bankruptcy Court and

ispresently pending as Adversary Proceeding No. 10-0677-PB11.

9. KBR3. On October 26, 2009, Briarwood filed a suit against Lennar and

KBR, among others, in the San Diego Superior Court entitled Briarwood Capital LLC, et

al. v. KBR Group, LLC, et al., Case No. 09-CV-2680 (KBR3").

10. Lennar Claims. In the Briarwood Bankruptcy Case, Lennar filed proofs of

claim asserting claims related, inter alia, to the litigation described above; such proofs of

claim were filed by Lennar Corp., Len nar Homes, Lennar Land Partners II, Lennar San

Jose Holdings, Inc., LLPII HCC Holdings, LLC, Lennar Bridges, and HCC (collectively,

the "Lermar Claims").

C. KBR Litigation and Claims. Prior to the Petition Dates, Bria.rwOod filed three

lawsuits against KBR or KBR’s management, among others, in San Diego Superior Court: (i)

Briar-wood Capital, LLC, et al. V. KBR Group, LW, et al., Case No. 37-2009-00090247-CU-BC-

CTL ("KBR1"), (ii) Briarwood Capital, LLC, et al. v. KBR Group, LLC, et al., Case No. 37-

2009-00090462-CU-BC-CTL ("KBR2" and, together with KBR1 and KBR3, the "Y-BR

Actions"), and (iii) KBR3. KBR filed five adversary proceedings in the Bankruptcy Court. Four

of the adversary proceedings (Adv. Pro. Nos, 10-90132-PBI 1, 10-90133-PB11, 10-90134-PB11

and 10-90135-PB 11) sought declaratory relief that KBR had properly taken control of

Briarwood, KRMW, Colony I and Colony II and injunctive relief enjoining Marsch from

4 LA3:1173504.6

Case 10-02677-PB1 1 Filed 05/03/11 Doc 365-1 Pg. 6 of 68

exercising control over those entities. The fifth adversary proceeding (Adv. Pro. No. 10-90322-

PB 1.1) sought declaratory relief regarding the ownership of proceeds of the litigation against

Lennar, the ownership of the membership interest in HCC, the ownership interest in Lennar

Bridges and KBR’s rights under the operating agreement of KRMW. (Adv. Pro. Nos. 10-90132-

PB1 1, 10-90133-PB1 1, 10-90134-PB1 I, 10-90135-FBI 1 and 10-90322-PB1 1 are collectively

referred to herein as the "KBR Adversary Proceedings".) The Briarwood Estate, Marsch Estate,

Colony I Estate and Colony H Estate jointly filed counter-claims to and in the KBR Adversary

Proceedings asserting claims similar in nature to those asserted in the KBR Actions (collectively,

the "KBR Adversary Counterclaims"). In the Briarwood Bankruptcy Case, KBR filed proofs of

claim asserting claims related to, inter alia, the litigation described above and the transactions

that are the subjects of that litigation. Such proofs of claim were filed by KBR Group, LLC,

KBR Opportunity Fund II, LP, KRM W, Michel Kucinski, Randy Rivera and ShawnR. Wamstad

(collectively, the "KBR Claims").

D. CNB Claims. On October 5, 2010, CNB filed a proof of claim in both the Marsch

and Briarwood Bankruptcy Cases asserting that it is owed $7,020,810.12. On February 25, 2011,

CNB filed an amendment to this proof of claim to assert that the claims are secured by any

claims that Briarwood and Marsch may have against Lennar (as amended, the "CNB Claim").

CNB represents and warrants that the amount of the CNB Claim does not include postpetition

interest.

B. Colony Claims. On February 11, 2011, Colony I and Colony II each filed

separate Proofs of Claim in the amount of $3,500,000.00 in the Briarwood Bankruptcy Case

(collectively, the "Colony Claims").

F. Good Faith Negotiations. This Agreement is the product of extensive good faith

negotiations among the Parties, including mediation overseen by the Hon. John Ryan (Ret.).

AGREEMENT

5 LA3: 1173504.6

Case 10-02677-FBI 1 Filed 05/03/11 Doc.365-1 Pg. 7 of 68

NOW, THEREFORE, based on the mutual promises contained in this Agreement

and for other good and valuable consideration, the receipt and sufficiency of which are hereby

acknowledged, the Parties hereby agree as follows:

1. Bankruptcy Court Approval.

a. Effective Date. This effectiveness of this Agreement is expressly

conditioned on approval by the Bankruptcy Court. This Agreement shall become

effective (the "Effective Date") on the first business day, or as soon thereafter as is.

practicable, after satisfaction of the following conditions: (1) the entry of an order of the

Bankruptcy Court approving this Agreement (the "Approval Order"), which Approval

Order shall (a) contain provisions including: (i) approval of the settlements contained in

this Agreement pursuant to Federal Rule of Bankruptcy Procedure 9019, (ii) approval of

the sale of the HCC Interest and the Lennar Bridges Interest (as those terms are defined in

paragraph 2 below) by the Briarwood Trustee to Lennar pursuant to Section 363 of the

Bankruptcy Code, free and clear of all liens, claims, encumbrances and interests, and (iii)

approval of the release of all claims released by the Briarwood Trustee and the Briarwood

Estate pursuant to this Agreement, and (b) not be stayed, modified, or set aside; provided,

that if after entry of the Approval Order and prior to the Effective Date, a motion is filed

in respect of the Approval Order for a new trial, to stay, modify, set aside or amend the

Approval Order, for relief from the Approval Order, or for other "reconsideration" of the

Approval Order under Federal Rules of Civil Procedure 59 or 60, Federal Rules of

Bankruptcy Procedure 9023 or 9024 or other applicable law or rules of court, then any

Party may elect to delay the occurrence of the Effective Date until such date as the

Bankruptcy Court denies such motion or such motion is withdrawn, and (2) entry of an

order of the Bankruptcy Court sustaining an objection to or expunging all proofs of claim

filed in the Briarwood Bankruptcy Case by Colony I or Colony II, or the withdrawal of

such claims, other than a claim of Colony I in the amount of $57,248.62 and a claim of

Colony II in the amount of $54,705.44; provided, that this condition to the Effective Date

6 LA3:1 173504.6

Case 1 0-02677-PBI I Filed 05/03/11 Doc 365-1 Pg. 8 of 68

may be waived by the Briarwood Trustee and, if requested by another Party to do so, the

Briarwood Trustee will not unreasonably decline to so waive this condition. All

transfers, payments and delivery of documents provided in this Agreement to occur on

the Effective Date shall occur simultaneously. The Approval Order shall be consistent

with the terms of this Agreement and in a form reasonably acceptable to all Parties.

b. Approval Motion. As soon as reasonably practicable after the Agreement

Date, the Briarwood Trustee will file a motion to obtain the Approval Order

(the "Approval Motion"). In addition to the relief specified above, the Approval Motion

shall seek: (1) a determination that Section 363(m) of the Bankruptcy Code applies to the

transfer of the HCC Interest and the Lennar Bridges Interest, and (ii) a waiver of the stay

period contemplated by Federal Rule of Bankruptcy Procedure 6004(h) and any other

relevant stay periods after entry of an order approving the Approval Motion. The Parties

agree to use their reasonable best efforts to obtain Bankruptcy Court approval of this

Agreement and the Approval Motion as soon as reasonably practicable, including by

submitting supporting pleadings and, declarations as appropriate and to cooperate and to

coordinate with each other regarding the contents of such supporting pleadings and

declarations.

C. Deadline for Approval. If the Effective Date has not occurred within

seventy-five (75) days after the Agreement Date, any Party may elect to terminate its

obligations under this Agreement.

d. Appeal. Absent the granting of a stay pending appeal with respect to the

Approval Order by a court of competent jurisdiction pursuant to Federal Rule of

Bankruptcy Procedure 8005, each of the parties shall perform his obligations under this

Agreement notwithstanding the filing of an appeal of the Approval Order.

2. The Briarwood Trustee’s Sale of the HCC Interest and Lennar Bridges Interest to

Lennar. In consideration of the payment of the Purchase Price (as defined below) by Lennar to

the Briarwood Trustee as and when required by this Agreement, the Briarwood Trustee agrees to

7 LA3:1173504.6

Case 10-02677-PB11 Filed M.03/11 Doc 365-1 Pg. 9 of 68

sell to Lennar, free and clear of all liens, claims, encumbrances and interests, the following:

(a) any and all interests in HCC held by the Briarwood Estate (the "HCC Interest") and (b) any

and all interests in Lennar Bridges held by the Briar-wood Estate (the "Lennar Bridges Interest"):

a. Purchase Price. The purchase price (the "Purchase Price") for the

Briarwood Estate’s interest in the 11CC Interest and the Lennar Bridges Interest shall be

four million dollars ($4,000,000.00) payable as follows:

i. Initial Payment. Within five (5) business days after the Agreement

Date, Lemiar shall pay to the Briarwood Trustee five-hundred thousand dollars

($500,000.00) (the "Initial Payment"). If the Bankruptcy Court declines to

approve this Agreement or this Agreement is terminated pursuant to paragraph

1(c) hereof, Lennar will be repaid the amount of the Initial Payment less any

allowed administrative expenses accrued by the Briarwood Estate from the date of

the appointment of the Briarwood Trustee through the earlier of (i) the date that

the Bankruptcy Court declines to approve this Agreement or (ii) this Agreement is

terminated pursuant to paragraph 1(c) hereof.

ii. Balance of the Purchase Price. On the Effective Date, Lennar shall

pay to the Briarwood Trustee an additional three million five-hundred thousand

dollars ($3,500,000.00) (the "Effective Date Payment").

b. Transfer of the Briarwood Estate’s Interests in the 11CC Interest and the

Lennar Bridges Interest. On the Effective Date, the Briarwood Trustee shall sign and

deliver a transfer agreement, substantially in the form attached hereto as Exhibit A,

transferring the 11CC Interest and the Lennar Bridges Interest to LØnnar.

c. Actions Involving KRMW, On the Effective Date, KRMW will execute

an agreement, substantially in the form attached hereto as Exhibit A, (i) disavowing and

relinquishing to the Briarwood Estate any interest held by KRMW in the HCC Interest or

the Lennar Bridges Interest and (ii) consenting to the sale by the Brianvood Trustee to

8 LA3: 1173504.6

Case 10-02677-PB11 Filed 05/03/11 Doc 365-1 Pg. 10 of 68

Lennar of any interests held by KRMW or Briarwood in the HCC Interest or the Lennar

Bridges Interest..

3. Dismissal of Litigation by the Briarwood Trustee. Subject to the. performance of

Lennar’s duties under this Agreement, on the Effective Date, the Briarwood Trustee shall deliver

(a) to Lennar, requests or stipulations for dismissal with prejudice of (i) Briarwood’s appeal of

the Bridges Action, (ii) the ’McCrink Action, (iii) the HCC Action, (iv) the Florida Action Stay

Adversary Proceeding, and (v) the HCC Adversary Proceeding, substantially in the form

attached hereto as Exhibit B and (b) to KBR, requests or stipulations for dismissal with prejudice

of (i) the KBR Actions and (ii) the KBR Adversary Counterclaims.

4. The Marsch-HCC Action. On the Effective Date, the Briarwood Trustee shall

deliver to Lennar a letter, in the form attached hereto as Exhibit C, concerning the Marsch-I-ICC

Action.

5.’ The Bridges Final Judgment and Bridges Fees Award. The Briarwood Trustee

agrees to accept as final (i) the Bridges Final Judgment, including the September 30, 2010 Final

Statement of Decision in the Bridges Action and (ii) the Bridges Fees Award; provided, however,

that pursuant to the terms of this Agreement, Lennar will withdraw with prejudice all proofs of

claim against Briarwood and agrees not to take any distribution from the Briarwood Estate.

6. Re�conveyance of the Colony I and Colony II Leases. As soon as practicable

after the Agreement Date, the Briarwood Trustee shall cause to be released and re�conveyed to

Colony I and Colony lithe leases between First Place Equity, LLC and Colony I or Colony II of

(1) the - real property located in San Jose Del Cabo, Mexico commonly known as Unit 496 Villas

Del Mar and (ii) the real property located in San Jose Del Cabo, Mexico commonly known as

Unit 21 Villas Del Mar. Notwithstandihg any prior agreement between the Briarwood Trustee

and KBR and/or Colony I and Colony II, the Briarwóod Trustee shall not be entitled to any

separate payment for performance under the paragraph. If this Agreement is not approved and

terminates, KBR shall pay to the Briarwood Trustee $15,000.00 cash pursuant to the previous

agreement between KBR and the Briarwood Trustee.

9 LA3:1 173504.6

Case 10-02677-PB 11 Filed 05/03/11 Doc 365-1 Pg. 11 of 68

7. Support of the Colony Plan. Subject to the withdrawal or disallowance of all

claims asserted by Colony I and Colony II in the Briarwood Bankruptcy Case other than a claim

of Colony I in the amount of $57,248.62 and .a claim of Colony II in the amount of $54,705.44,

the Briarwood Trustee agrees to use reasonable effort to support confirmation of the Colony

Plan.

8. Allowed Claims against the Briarwood Estate.

a. As of the Effective Date, CNB shall (i) release any liens on the assets of

the Briarwood Estate, including, without limitation, the HCC Interest and the Lennar

Bridges Interest; and (ii) the CNB Claim be allowed as a general unsecured claim in the

Brjarwood Bankruptcy Case in the amount of $7,020,810.12 (the "Allowed CNB

Claim").

b. As of the Effective Date, KBR and KRMW shall (i) telºase any liens or

ownership claims on the assets of the Briarwood Estate including, without limitation, the

11CC Interest and the Lennar Bridges Interest; and (ii) have an allowed general unsecured

claim in the Briarwood Bankruptcy Case in the amount of $3,000,000 (the "Allowed

KBR Claim"). As set forth below, KBR shall waive all other claims and rights in the

Briarwood Bankruptcy Case asserted by it or its affiliates including the KBR Claims.

C. As of the Effective Date, (i) Colony I shall have an allowed general

unsecured claim in the Briarwood Bankruptcy Case in the amount of $57,248.62 and

� (ii) Colony II shall have an allowed general unsecured claim in the Briarwood

Bankruptcy Case in the amount of $54,705.44.

d. The Briarwood Trustee agrees to review and object to claims that, in the

reasonable judgment of the Briarwood Trustee under standards generally applicable to

bankruptcy trustees, are improper.

9. Withdrawal and/or Amendment of Proofs of Claim. On the Effective Date, or as

soon as is practicable thereafter, (a) Lennar shall withdraw, with prejudice, the Lennar Claims

filed in the Briarwood Bankruptcy Case; (b) KBR shall amend and/or withdraw the KBR Claims

10 LA3: 1173504.6


filed in the Briarwood Bankruptcy Case consistent with this Agreement, including to reduce the

amount of such claims to $3,000,000 total and waive any alleged security or ownership interest

in any property of the Briarwood Estate; (c) KBR shall, (i) if and when the Colony Plan is

confirmed (whether before or after the Effective Date), cause Colony I and Colony II to amend

the Colony Claims consistent with this Agreement and/or (ii) use its reasonable efforts to cause

the Colony Trustee to amend the Colony Claims consistent with this Agreement, including,

without limitation, to reduce the amount of such claims to $57,248.62 and $54,705.44,

respectively; and (d) CNB shall amend the CNB Claim filed in the Briarwood Bankruptcy Case

consistent with this Agreement,. including, without limitation, to waive any alleged security

interest in any property of the Briarwood Estate. If the Briarwood Trustee elects to object to

proofs of claim filed in the Briarwood Bankruptcy Case by Colony I and Colony II, other than

the claims of Colony I and Colony II to be allowed pursuant to this Agreement, KBR will file

with the Bankruptcy Court a pleading indicating its consent to that objection and will use its

reasonable efforts to cause the Colony Trustee to consent to that objection, and each Party agrees

not to oppose any such objection.

10. Briarwood Distributions. The Briarwood Trustee agrees to use reasonable efforts

to substantially complete distributions to creditors no later than April 30, 2015. Lennar shall

receive no distribution from the Briarwood Estate.

�11. Further Assurances. The Parties shall work cooperatively with respect to the

matters pertaining to this Agreement and shall take such other and further reasonable action,

including signing documents reasonably requested by the other Party, to affect the purpose and

intent of this Agreement. The Briarwood Trustee and KBR shall exercise their member interests

in KRMW as required to accomplish any of the matters covered by this Agreement.

12. Releases. . As of the Effective Date, the Parties hereby give the following releases:

a. . Lennar’s Release of the Briarwood Trustee. Lennar, for itself and its

successors and assigns, hereby waives any and all claims or rights against the Briarwood

Trustee and releases the Briarwood Trustee, and all professionals retained by the

11 LA3: 1173504.6

Case 1 0-02677-PB1 1 Filed 05/03/11 Doc 365-1 Pg. 13 of 68

Briarwood Trustee, jointly and severally, from any and all claims, demands, liens,

actions, suits, causes of action, obligations, controversies, debts, costs, attorneys’ fees,

expenses, damages, judgments, orders, and liabilities of whatever kind or nature in law,

equity or otherwise, whether now known or unknown, suspected or unsuspected, and

whether or not concealed or hidden, which have existed or may have existed, or which do

exist or which hereafter can, shall or may exist, based on any facts, events or omissions

occurring from the beginning of time to the Effective Date.

b. KBR/KRIvIW’s Release of the Briarwood Estate. Except as expressly

provided in this Agreement with respect to the Allowed KBR Claim, KBR and KRMW,

for themselves and their successors and assigns, hereby waive any and all claims or rights

against the Briarwood Estate and releases the Briarwood Trustee, the Briarwood Estate,

all property of the Briarwood Estate, and all professionals retained by the Briarwood

Trustee, jointly and severally, from any and all claims, demands, liens, actions, suits,

causes of action, obligations, controversies, debts, costs, attorneys’ fees, expenses,

damages, judgments, orders, and liabilities of whatever kind or nature in law, equity or

otherwise, whether now known or unknown, suspected or unsuspected, and whether or

not concealed or hidden, which have existed or may have existed, or which do exist or

which hereafter can, shall or may exist, based on any facts, events or omissions occurring

from the beginning of time to the Effective Date provided, however, that nothing herein

shall be deemed a waiver or release of any claims that KBR holds against any

professionals, including without limitation, Sullivan Hill Lewin Rez & Engel ("Sullivan

Hill") and professionals employed, by Sullivan Hill solely for matters arising prior to the

Briarwood Petition Date; provided, further, that nothing herein shall be deemed a waiver

or release by Sullivan Hill of its indemnification claims, if any, against any person or

entity.

C. CNB’s Release of the Briarwood Estate. Except as expressly provided in

this Agreement with respect to the Allowed CNB Claim, CNB, for itself and its

12 LA3: 1173504.6


successors and assigns, hereby waives any and all claims or rights against the Briarwood

Estate and releases the Briarwood Trustee, the Briarwood Estate, all property of the

Briarwood Estate, and all professionals retained by the Briarwood Trustee, jointly and

severally, from any and all claims, demands, liens, actions, suits, causes of action,

obligations, controversies, debts, costs, attorneys’ fees, expenses, damages, judgments,

orders, and liabilities of whatever kind or nature in law, equity or otherwise, whether now

known or unknown, suspected or unsuspected, and whether or not concealed or hidden,

which have existed or may have existed, or which do exist or which hereafter can, shall

or may exist, based on any facts, events or omissions occurring from the beginning of

time to the Effective Date.

d. The Briarwood Trustee’s Release of Lennar, KBR. and CNB. The

Briarwood Trustee, for the Briarwood Estate and any predecessors, successors and

assigns, hereby waives any and all claims and rights against Lennar, KBR, CNB and

releases Lennar, KBR, CNB, and, as applicable, their respective predecessors-in-interest,

successors, parents, subsidiaries, affiliates, partners, trustees, insurers, shareholders,

members, directors, officers, employees, agents, attorneys, advisors, consultants,

professionals, designees (including any professionals retained by such persons) and

assigns, from any and all claims, demands, liens, actions, suits, causes of action,





or may exist, based on’ any facts, events or omissions occurring from the beginning of

time to the Effective Date; provided, however, that nothing herein shall be deemed a

waiver or release by the Briarwood Trustee of any avoidance claims or actions against

CNB under Chapter 5 of the Bankruptcy Code.

13 LA3: 1173504.6


e. Releases by Lennar, KBR, KRMW and CNB of Lennar, KBR and CNB.

Lennar, KBR, KRMW and CNB, on behalf of themselves and, with respect to Lennar,

KBR and CNB, their respective predecessors-in-interest, successors, parents,

subsidiaries, affiliates, partners, trustees, insurers, shareholders, members, directors,

officers, employees, agents, attorneys, advisors, consultants, professionals, designees

(including any professionals retained by such persons) and assigns, hereby waive any and

all claims and rights against one another and fully and forever release and discharge

Lennar, KBR and CNB, and, as applicable, their respective predecessors-in-interest,

successors, parents, subsidiaries, affiliates, partners, trustees, insurers, shareholders,

members, directors, officers, employees, agents, attorneys, advisors, consultants,

professionals, designees (including any professionals retained by such persons) and

assigns, from any and all claims, demands, liens, actions, suits, causes of action,





or may exist, based on any facts, events or omissions occurring from the beginning of

time to the Effective Date that concern, pertain or relate in any way to Marsch,

Briarwood, the Bankruptcy Cases, the Lennar/Briarwood Litigation, the KBR Actions,

the CNB Claim, 11CC, Lennar Bridges, KRMW, or the real estate developments known

as The Bridges at Rancho Santa Fe and McCrink Ranch/The Lakes. Lennar, KJ3R,

KRMW and CNB, hereby agree that to the extent they have claims against Marsch or the

Marsch Estate, or liens on claims held by the Marsch Estate or Marsch, and any of them

acquire a claim against Lennar, KBR or CNB, they will cooperate with each other in

order to provide each other with releases of any such claims asserted against Lennar,

KBR and CNi3.

14 LA3:1173504.6


f. In making the releases set forth in this Agreement, the Parties

acknowledge that there is a possibility that, subsequent to the execution of this

Agreement, they will discover facts or incur or suffer claims which were unknown or

unsuspected at the time this Agreement was executed, and which if known by them at

that time may have materially affected their decision to execute this Agreement. The

Parties have been advised of the existence of Section 1542 of the California Civil Code,

which provides.:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS

WI11CH THE CREDITOR DOES NOT KNOW OR SUSPECT TO

EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING

THE RELEASE, WHICH IF KNOWN BY ifiM OR HER MUST

HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT

WITH THE DEBTOR.

Notwithstanding the provisions of Section 1542, the Parties agree that the releases set

forth in this Agreement shall constitute full releases in accordance with their terms. The

Parties hereto knowingly and voluntarily waive the provisions of Section 1542, as well as

any other federal or state statute, rule, or � common law principle of similar effect, and

acknowledge and agree that this waiver is an essential and material inducement to and

consideration for each Party’s execution. of this Agreement. Notwithstanding the

foregoing waiver, it is explicitly agreed and understood that the Parties are not releasing,

acquitting, discharging or waiving any of their rights specifically provided for in this

Agreement.

Notwithstanding any other provisions in this Agreement, nothing contained herein shall

in any way impact (including release or discharge) any claims, obligations, loans, claims,

contracts, judgments, or causes of action or other items between or among any of Lermar,

KBR and CNB unrelated to Briarwood, the Bankruptcy Cases, the Lennar/Briarwood

15 LA3: 1173504.6

Case 10-02677-PB11 Filed 05/03/11 -Doc 365-1 Pg. 17 of 68

Litigation, the KBR Actions, the CNB Claim, HCC, Lennar Bridges, KRMW, or the real

estate developments known as The Bridges at Rancho Santa Fe and McCrink Ranch/The

Lakes.

13. Gordon & Holmes Settlement and Release Agreement. On the Effective Date, the

Parties shall execute a settlement and release agreement with Gordon & Holmes, substantially in

the form attached hereto as Exhibit D.

� 14. No Affect on Claims Against the Marsch Estate and Against Nicolas Marsch III

Personally. Nothing in this Agreement or the Approval Order shall restrict or impair the ability

of any Party to pursue its claims against the Marsch Estate or Marsch personally. For the

avoidance of doubt, and without limitation: (a) Lennar is free to pursue its claims against the

Marsch Estate and Marsch Personally, including the claims asserted in the Bridges Action, the

Florida Action and the DLA Actions and any action related to whether such claims are

discharged, (b) KBR is free to pursue its claims against the Marsch Estate and Marsch

personally, including any action related to whether such claims are discharged, (c) CNB is free to

pursue its claims against the Marsch Estate and Marsch personally, including any action related

to whether such claims are discharged, and (d) any Party is free to pursue any other person or

entity not expressly, released in this Agreement, including Patricia Marsch, any transferees of

BriarwOod or Marsch, Barry Minkow (or any of his affiliates) or Jeffrey Sachs; provided,

however, that nothing herein shall be interpreted to constitute authority for any Party other than

the Briarwood Trustee to pursue causes of action that are property of the Briarwood Estate. The

Briarwood Trustee hereby agrees not to oppose lifting the automatic stay (to the extent the stay is

applicable) to allow Lennar, KBR and/or CNB to pursue such claims.

15. Availability of Counsel. Each Party to this Agreement acknowledges that it has

been advised by legal counsel of its, his or her choice regarding the meaning and consequences

of this Agreement, including but not limited, to the releases and the waiver of unknown and

unsuspected claims set forth above.

16 LA3:1 173504.6


16. Stay of All Litigation Pending. Effective Date. Pending approval of this

Agreement by the Bankruptcy Court, the Parties will hold in abeyance further action in any

litigation between them, including requesting extensions pending the Effective Date, except to

the extent that the action is required because certain deadlines cannot be extended.

17. Representations, Acknowledgments and Declarations. Each Party to this

Agreement represents and acknowledges that, in executing this Agreement, it does not rely and

has not relied on any representation or statement made by any other Party or any of their agents,

advisors, representatives or attorneys, with regard to the subject matter, basis or effect of this

Agreement or otherwie, other than as specifically stated in this Agreement. The Parties further

declare that, in making this Agreement, they rely entirely upon their own judgment, beliefs and

interest and the advice of their counsel and that they have had a reasonable period of time to

consider this Agreement and, if so desired, consult with counsel.

18. Authority to Execute. Each person who signs this Agreement represents and

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

or she is signing and to bind the Party to the terms of this Settlement Agreement (in the case of

the Briarwood Trustee, subject to Bankruptcy Court approval).

19. Transfer of Interests. Except as otherwise provided herein, each person who signs

this Agreement represents and warrants that the Party on behalf of whom he or she is signing

owns and has not assigned or otherwise transferred or purported to transfer, in whole or in part,

any interest in any of the rights and claims that are the subject of this Agreement to any other

person or entity. The representations and warranties provided in this Agreement shall survive

the Effective Date.

20. No. Admission of Liability. The Parties acknowledge that this Agreement

represents a compromise of disputed claims and that neither the payments provided for in this

Agreement nor anything contained in this Agreement shall be construed as an admission by any

Party to this Agreement of any liability of any kind on behalf of such Party to this Agreement or

any other Party to this Agreement.

17 LA3: 1173504.6

Case 10-02677-PB11 Filed 05/03/11 Doc 365-1 �Pg. 19 of 68

21. Successor and Assigns. This Agreement shall be binding upon the Parties and

their successors in interest and assigns, including any successor trustee appointed in any chapter

7 case to which the Briarwood Bankruptcy Case may be converted.

22. Governing Law and Enforcement Provisions. This Agreement is to be governed

by and construed in accordance with federal bankruptcy law, to the extent applicable, and where

state law is implicated, the laws of the State of California shall govern. By its execution and

delivery of this Agreement, each of the Parties hereby irrevocably and unconditionally agrees for

itself that any legal action, suit or proceeding against it with respect to any matter under or

arising out of or in connection with this Agreement or for recognition or enforcement of any

judgment rendered in any such action, suit or proceeding, may and shall be brought solely and

exclusively before the Bankruptcy Court, or before such successor court as may gain jurisdiction

over the Bankruptcy Cases.

23. Specific Performance. It is understood and agreed by each of the Parties that

money damages would not be a sufficient remedy for any breach of this Agreement by any Party

and each non-breaching Party hereto shall be entitled to specific performance and injunctive or

other equitable relief as a remedy for any such breach.

� 24. Supersedes Prior Agreements. This Agreement forms the entire agreement

between the Parties with respect to the settlement of the issues addressed herein and supersedes

all prior and contemporaneous written and oral agreements, discussions and representations

(except as expressly set forth herein and with respect to any releases granted in any previous

agreement) with respect to the settlement of the issues addressed herein. This Agreement may

not be modified, amended or supplemented without the prior written consent of each of the

Parties. This Agreement shall be binding upon and inure to the benefit of the respective

predecessors in interest, successors, trustees, shareholders, directors, officers, affiliates,

employees, agents, attorneys, advisors, consultants, professionals, designees . (including any

professionals retained by such persons) and assigns of the Parties hereto, to the extent permitted

by law. The terms of this Agreement are contractual and not mere recitals.

18 LA3: 1173504.6


25. Interpretation. Whenever the context so requires in this Agreement, all words

used in the singular shall be construed to have been used in the plural (and vice versa), each

gender shall be construed to include any other genders, the words "includes", "including" and

similar terms shall be construed as if followed by the words "without limitation", the words

"hereof’, "herein" and "hereunder" and other words of a similar import refer to this Settlement

Agreement as a whole and not to the individual paragraphs in which such terms are used, and the

word "person" shall be construed to include a natural person, a corporation, a firm, a partnership,

ajoint venture, a trust, an estate or any other entity.

26. Drafting Ambiguities. The Parties agree that each Party and its counsel have

reviewed this Agreement, and that each fully understands and voluntarily accepts all the

provisions contained in this Agreement. The language of all parts of this Agreement shall in all

cases be construed as a whole, according to its fair meaning and not strictly for or against any of

the Parties. The Parties further agree that this Agreement was the pro - duct of negotiations.

between the Parties and that any rule of construction that ambiguities are to be resolved against

the drafting party shall not apply in the interpretation of this Agreement or in any addenda,

amendments or exhibits to this Agreement.

27. Agreement Not Severable. Subject to the occurrence of Effective Date, each

provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

Every provision of this Agreement is critical to the agreement of the Parties. Should any

provision of this Agreement be determined by any court of competent jurisdiction to be illegal,

invalid or unenforceable, the Parties may elect (but are not required) to amend this Agreement to

address and rectify such illegal, invalid or unenforceable provisions.

28. Heading. The headings of the paragraphs of this Agreement have been included

only for convenience, and shall not be deemed in any manner to modify or limit any of the

provisions of this Agreement, or be used in any manner in the interpretation of this Agreement.

29. . Counterparts. This Agreement may be executed in counterparts and copies and/or

facsimile or e-mail transmittal signature pages may be used instead of originals. The executed

19 LA3:1173504.6


counterparts shall be construed as and constitute one and the same instrument that will be

binding on the Parties hereto.

30: Attorneys’ Fees. Each Party shall bear its, his or her own attorneys’ fees, court

costs and related expenses incurred by or on behalf of said Party in connection with their

underlying disputes and this Agreement.

[Remainder of page intentionally left blank]

20 LA3: 1173504.6


,AG1EJ. AS 01 THE ATEFllS.1’ WRW.EN ABOVE

LESLIE soiely:as the Chaptet 11 Trustee for Buarwood Capita! LLCiU..S 1�O677-P�B3 1.

By dstone.

LENNAR COR.PORA’i ION and its affihats

13:y �Nmc. fltte.

LL .: QF CiLIFOI 1A, ll:.C:. and itffihiats;

Thy: une

i’i.tle:

X94 GROUP’ LUC. qrl:Elliates�

Name; T1U

TYJ3TMET

By I ESLJE (3 LADS I ONL, so1ey as the Chapter 1 1 TrusteB 13r1 woç1 Capital, LLC m Ui, o 1 0-02677-PB 11

By Ghidstone

By: I<j:BR CI I?JFtfl..ITY FUND ii., LP By: ::mouILt.c By:

Titic: . .....

:21 LA-3: ft-133qiuj


AGREED AS OF THE DATE FIRST WRITTEN ABOVE:

LESLIE GLADSTONE, solely as the Chapter 11 Trustee for Briarwood Capital, LLC in U.S.B.C. Case No. 10-02677-PB11

By: Leslie Gladstone

LBNNAR CORPORATION and its affiliates

By Name: ç Title:-,/

LENNAR HOMES OF CALIFORNIA, INC. and its affiliates

Name: -s

Title:

KBR GROUP, LLC and its affiliates

m. Name: Title;

KRMW REAL ESTATE INVESTMENT GROUP, LLC

By: LESLIE GLADSTONE, solely as the Chapter 11 Trustee for Briarwood Capital, LLC inU.S.B.C. Case No. 10-02677-PB1I


By: KBR OPPORTUNITY FUND II, LP By: KBR GROUP, LLC

By: Name: Title:

� � 21 LA3:1173504.6



LESLIE GLADSTONE, solely as the Chapter Ii Trustee for Bilarwood Capital, LLC in U.S.B.C. Case No. 10-02677-PB! 1


LENNAR CORPORATION and its affiliates

Name: Title:


By:_____________________________ Name:_____________________________ Title:________________________________

KBR GROUP. LLC and it)af1iliates

By: 1/tA4 Name: Mt it

Title:


By: LESLIE GLADSTONE, solely as the Chapter 1 I Trustee for Briarwood Capital, LLC in U.S.B.C. Case No. 10-02677-PB!!


By: KBR OPPORTUNITY FUND JI, LP By: KBR GROUP. LLC

By: ;i4z§ ,

Name: fAt U Title:

21 1A3:I 173504.6


CITYNATIONAL BANK, N.A.

By.:. Name: Title:--! f .ptc/ ed

22


EXIUBITA

Form of Transfer Agreement

LA3:1 173504.6


ASSIGNMENT OF RIGHTS/MEMBERSHIP INTERESTS

This Assignment of Rights/Membership Interests (this "Agreement") is entered into this - day of June 2011 by and among LESLIE GLADSTONE, as the duly appointed Chapter 11 Trustee for the bankruptcy estate of Briarwood Capital, LLC, a Delaware limited liability company (the "Briarwood Trustee"), LENNAR HOMES OF CALIFORNIA, INC., a California corporation ("Lermar Homes"), K.BR GROUP, LLC, a California limited liability company (collectively with its affiliates, including KBR Opportunity Fund .1, LP, and KBR Opportunity Fund II, LP, "KBR"), and KRMW REAL ESTATE INVESTMENT GROUP, LLC ("KRMW"), with reference to the following:

RECITALS

A. WHEREAS, Lennar San Jose Holdings, Inc. ("Lennar San Jose") and Nicolas Marsch, III ("Marsch") entered into a June 17, 1997 Amended and Restated Formation Agreement (the "Formation Agreement") providing for, among other things, the formation of a limited liability company that would eventually be called HCC Investors, LLC ("HCC") for the purpose of acquiring and developing real property formerly known as the Horizon Country Club and presently known as The Bridges at Rancho Santa Fe (the "Bridges");

B. WHEREAS, Lennar San Jose and Marsch entered into an August 27, 1997 Limited Liability Company Agreement of 11CC Investors, LLC, which has since been amended from time to time in various respects (collectively, the "HCC Operating Agreement");

C. WHEREAS, subsequently Marsch transferred all of his interests in HCC and the Bridges to Briarwood Capital, LLC ("Briarwood") and the Schedules of Assets and Liabilities filed in Briarwood’s and Marsch’s bankruptcy cases indicate that Briarwood holds these interests in HCC and the Bridges and thatMarsch holds the equity in Briarwood;

D. WHEREAS, Briarwood brought a lawsuit entitled Briarwood Capital LLC v. HCC Investors, LLC, et al., San Diego Superior Court Case No. G1C877446 (the "Bridges Litigation"), against Lennar Homes, LLPII 11CC Holdings, LLC, Lennar San Jose, Lennar Land Partners II, LL Partners, Inc., and Lennar Corporation (collectively, "Lennar") relating to its membership interest in HC and a claimed membership interest in another limited liability company named Lennar Bridges LLC ("Lennar Bridges");

E. WHEREAS, Lennar disputed Briarwood’s claimed membership interest in Lennar Bridges in the Bridges Litigation and the San Diego Superior Court held in its September 30, 2010 Final Statement of Decision that Briarwood has no interest in Lennar Bridges;

F. WHEREAS, KBR asserts that, in 2008, Briarwood transferred to KRMW certain of Briarwood’s interests in 11CC and Briarwood’s purported interest in Lennar Bridges;

G. WHEREAS, the Briarwood Trustee disputes that Briarwood transferred to KRMW any interests in 11CC or Lennar Bridges and that, instead, such transactions were disguised financings with Briarwood retaining ownership of the interests purportedly conveyed to KRMW;

Case 10-02677-PBI1 Filed 05/03/11 Doc 365-1 Pg. 28 of 68

H. WHEREAS, on February 23, 2010 Briarwood filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the Southern District of California (the "Bankruptcy Court"), case number 10-02677-PB 11;

I. WHEREAS, on August 6, 2010, the Bankruptcy Court approved the appointment of the Briarwood Trustee with control over all assets of Briarwood (the "Briarwood Estate"); and

J. WHEREAS, the Briarwood Trustee, Lennar, KBR, and KRMW have concurrently herewith entered into a Settlement Agreement to resolve, among other things, the Bridges Litigation and any and all issues relating to the ownership of 11CC and Lermar Bridges.

NOW, THEREFORE, in exchange for valuable consideration, the receipt and sufficiency of which is hereby acknowledged:

HCC ASSIGNMENTS

1. The Briarwood Estate hereby assigns, conveys and transfers to Lennar Homes all of Briarwood’s actual or claimed right, title and interest in and to (a) any membership interest in HCC, including, without limitation, any economic interest in HCC and in the capital, profits, losses and distributions of HCC; (b) all rights arising under or related to the Formation Agreement; and (c) all rights arising under or related to the HCC Operating Agreement, including without limitation, Sections 3.05, 5.01, 5.02, 5.03, 5.04, 5.05, 6.02, and 6.05 thereof. Lennar Homes hereby accepts the foregoing assignment, conveyance and transfer and agrees to perform all the obligations of Briarwood to be performed from and after the date hereof with respect to the HCC membership interest, the Formation Agreement, and the HCC Operating Agreement.

2. KRMW and KBR hereby forever release, relinquish and disclaim in favor of the Briarwood Estate any and all interests in 11CC and consent to the transfer of such interests to Lennar Homes pursuant to this Agreement.

3. If and to the extent KRMW or KBR retain any interest in HCC notwithstanding the foregoing relinquishment of all such interests, KRMW and KBR hereby assign, convey and transfer to Lennar Homes all of KRMW’s and KBR’s actual orclaimed right, title and interest in and to (a) any membership interest in 11CC, including, without limitation, any economic interest in 11CC and in the capital, profits, losses and distributions of HCC; (b) all rights arising under or related to the Formation Agreement; and (c) all rights arising under or related to the HCC Operating Agreement, including without limitation, Sections 3.05, 5.01, 5.02, 5.03, 5.04, 5.05,

6.02, and 6.05 thereof. Lennar Homes hereby accepts the foregoing assignment, conveyance and transfer and agrees to perform all the obligations of KRMW or K.BR to be performed from and after the date hereof with respect to the HCC membership interest, the Formation Agreement, and the 11CC Operating Agreement.

LENNAR BRIDGES ASSIGNMENTS

4. The Briarwood Estate hereby assigns, conveys and transfers to Lennar Homes all of Briarwood’s actual or claimed right, title and interest in and to any membership interest in Lennar Bridges, including, without limitation, any economic interest in Lennar Bridges and in


the capital, profits, losses and distributions of Lennar Bridges. Lennar Homes hereby accepts the foregoing assignment, conveyance and transfer and agrees to perform all the obligations of Briarwood to be performed from and after the date hereof with respect to the Lennar Bridges membership interest.

5. KRMW and KBR hereby forever release, relinquish and disclaim in favor of the Briarwood Estate any and all interests in Lennar Bridges and consent to the transfer of such interests toLennar Homes pursuant to this Agreement.

6. If and to the extent KRMW or KBR retain any interest in Lennar Bridges notwithstanding the foregoing relinquishment of all such interests, KRMW and KBR hereby assign, convey and transfer to Lennar Homes all of KRMW’s and KBR’s actual or claimed right, title and interest in and to any membership interest in Lennar Bridges, including, without limitation, any economic interest in Lennar Bridges and in the capital, profits, losses and distributions of Lennar Bridges. Lennar Homes hereby accepts the foregoing assignment, conveyance and transfer and agrees to perform all the obligations of KRMW or KBR to be performed from and after the date hereof with respect to the Lennar Bridges membership interest.

IN WITNESS WHEREOF, the undersigned have executed this agreement effective as of June_, 2011.

ASSIGNORS: BRIARWOOD CAPITAL, LLC

By: LESLIE GLADSTONE, as the Chapter 11 Trustee for Briarwood Capital, LLC in U.S.B.C. Case No. 10-02677-PB 11

LE Leslie Gladstone


By: LESLIE GLADSTONE,solely as the Chapter 11 Trustee for Briarwood Capital, LLC in U.S.BC. Case No. 10-02677-PB1 1



By: Name:


Title:


By:____ Name: Title:

ASSIGNEE: LENNAR HOMES OF CALIFORNIA, INC., a California corporation

By: Name:


EXHIBIT B

Form of Dismissal Documents

LA3:1173504.6

Case 10-02677-PB11 Filed 05/03/11 Doc 365-1 Pg. 32 of 68 APP-005

TO BE FILED IN THE SUPERIOR COURT ATrORNEYOR PARTY WiTHOUT ATTORNEY (Name, stole barnumber, and address): FOR COURT USE ONLY

- Frederic L. Gordon (SBN 98994) GORDON & HOLMES 223 West Date Street San Diego, California 92101

TELEPHONE NO.; 619/696-0444 FAX NO. (Optional): 61 9/696-1 144 E-MAIL ADDRESS (Optional): fgordongordonandholmes.con

ATTORNEY FOR (Name): Plaintiff/Cross-Defendant Briarwood Capital, LLC SUPERIOR COURT OF CALIFORNIA, COUNTY OF SAN DIEGO

STREETADORESS: 330 West Broadway MAILING ADDRESS: .

CITY AND ZIP CODE: San Diego, California 92101 BRANCH NAME: Hall of Justice

PLAINTIFF/PETITIONER: Briarwood Capital, LLC Superior Court Case Number

GIC 877446

DEFENDANT/RESPONDENT: HCC Investors, LLC, et al.

Court of Appeal Case Number (if known):

ABANDONMENT OF APPEAL (UNLIMITED CIVIL CASE) D059379

The undersigned appellant hereby abandons the appeal filed on (date): 2/28/11 and 3/7/11

in the above-entitled action.

Date: June � , 2011

Frederic L. Gordon (for Pltf./Cross-Def. Briarwood Capital, LLC ONLY and for no other Appellant )

(TYPE OR PRINT NAME)

(SIGNATURE OF APPELLANT OR ATTORNEY)

NOTE: File this form in the superior court if the record has not yet been filed In the Court of Appeal. If the record has already been filed in the Court of Appeal, you cannot use this form; you must file a request for dismissal in the Court of Appeal. You can use form APP-007 to file a request for dismissal in the Court of Appeal.

Page 1 of 2

Form Approved for Optional Uee ABANDONMENT OF APPEAL (UNLIMITED CIVIL CASE) Gel. Ruts of Cour rule 0.244 w.wt(nfocagov Judicial Council of California

APP-OO (Rev. January 1 20071 (Appellate) I American LeQaINet,no. I ww.FormsVibrIrIow.corn


APP-005

CASE NAME: CASE NUMBER: Briarwood Capital, LLC v. HCC Investors, LLC, et al. GIC 877446

NOTICE TO PARTIES: A copy of this document must be mailed or personally delivered to the other party or parties to this appeal. A PARTY TO THE APPEAL MAY NOT PERFORM THE MAILING OR DELIVERY HIMSELF OR HERSELF. A person who is at least 18 years old and is not a party to this appeal must complete the information below and mail (by first-class mail, postage prepaid) or personally deliver the front and back of this document. When the front and back of this document have been completed and a copy mailed or personally delivered, the original may then be filed with the court.

PROOF OF SERVICE

Mail LI Personal Service

1. At the time of service I was at least 18 years of age and not a party to this legal action.

2. My residence or business address is (specify):

3. I mailed or personally delivered a copy of the Abandonment of Appeal (Unlimited Civil Case) as follows (complete either a orb):

a. Mall. I am a resident of or employed in the county where the mailing occurred.

(1) I enclosed a copy in an envelope and

(a)LI deposited the sealed envelope with the United States Postal Service, with the postage fully prepaid.

(b)LI placed the envelope for collection and mailing on the date and at the place shown ir items below, following our ordinary business practices. I am readily familiar with this business’s practice for collecting and processing correspondence for mailing. On the same day that correspondence is placed for collection and mailing, it is deposited in the ordinary course of business with the United States Postal Service, in a sealed envelope with postage fully prepaid.

(2) The envelope was addressed and mailed as follows:

(a) Name of person served:

(b) Address on envelope:

(c) Date of mailing:

(d) Place of mailing (city and state):

b. LI Personal delivery. I personally delivered a copy as follows:

(1) Name of person served;

(2) Address where delivered:

(3) Date delivered:

(4) Time delivered:

I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.

Date

(TYPE OR PRINT NAME)

(SIGNATURE OF DECLARANT)

APP-005 [Rev. January l.2007[ ABANDONMENT OF APPEAL (UNLIMITED CIVIL CASE) Page 2of2

(Appellate) American LogalNet. Inc. W*W,FO(TnSWW*IIOW.com

Case I 0-02677-PB1 1 Filed 05/03/11 Doc 365-1 Pg. 34 of 68 dy-ho

ATTORNEY OR PARTY IMThOUT ATTORNEY (Name, State Bar num ber, and address). ,

Frederic L. Gordon (SBN 98994) FOR COURT USE ONçY

GORDON&IIOLMES �223 West Date Street San Diego, California 92101

TELEPHONE NO.: 619/696-0444 FAX NO. (OptIonal): 6519/696-1144 E-MAIL ADDRESS (Optional): [email protected]

ATTORNEY FOR (Name): Plaintiff Briarwood Capital, LLC SUPERIOR COURT OF CALIFORNIA, COUNTY OF SAN DIEGO

STREET ADDRESS: 330 West Broadway MAILING ADDRESS:

CITY AND ZIP CODE: San Diego, California 92101 BRANCH NAME: Hall of Justice

PLAINTIFF/PETITIONER: Briarwood Capital, LLC

DEFENDANT/RESPONDENT: Lennar Homes of California,. et al.

REQUEST FOR DISMISSAL. Li Personal Injury, Property Damage, Wrongful Death or

CASE NUMBER

GIC 575457 Li Motor Vehicle Li Other.

Li Family Law Li Eminent Domain

Other (specify): Partnership/Contract .. .

- A conformed copy will not be returned by the clerk unless a method of return is provided with the document. -

TO THE CLERK: Please dismiss this action as follows: a. (1) With prejudice (2) Li Without prejudice

b. (1) M Complaint (2) Li Petition (3)Li Cross-complaint filed by (name): on (date):

(4)Li Cross-complaint filed by (name): on (date):

(5)Z Entire action of all parties and all causes of action (6)Li Other (Specify):*

2. (Complete in all cases except family law cases.)

LII Court fees and costs were waived fora party in this case. (This information maybe obtained from the clerk. If this box is

checked, the declaration on the back of this form must be completed).

Date: June _,2011 . .

Frederic L. Gordon

(TYPE OR PRINT NAME OF N ATTORNEY Li PAR1YWITJ-IOUTA1TORNEY) (SIGNATURE)

1f dismissal requested Is of specified parties Only of specified causes of action Attorney or party without attorney for: only, or of sr,eclfied cros.complaInta only, so state and identify the parties, causes of action, or cross-complaints to be dismissed. Plaintiff/Petitioner LI Defendant/Respondent

Li Cross�Complainant

3. TO THE CLERK: Consent to the above dismissal is hereby g iven. *a

Date:

(TYPE OR PRINT NAME OF ATTORNEY Li PARTY WITHOUT ATTORNEY) (SIGNATURE)

If a cross-complaint - or Response (Family Law) seeking affirmative Attorney or party without attorney for: relief- is on file, the attorney for cross-complainant (respondent) must fl Plaintiff/Petitioner Li Defendant/Respondent sign this Consent if required by Code of Civil Procedure section 581 (I) or U). . Li Cross�Complainant

(To be completed by clerk)

4. Li Dismissal entered as requested on (date):

5. 0 Dismissal entered on (date): as to only (name):

6. 0 Dismissal not entered as requested for the following reasons (specify):

7. a. Li Attorney or party without attorney notified on (date): b. Li Attorney or party without attorney not notified. Filing party failed to provide

Li a copy to be conformed D means to return conformed copy Date:

Clerk, by Deputy

Pauel of 2

Form Adopted for Mandatory Use REQUEST FOR DISMISSAL Code of Civil Procedure, § 581 01 seq.;

Judicial Council of California (30V. Cede, § 66637(c): Cal. Rules of Court, rule 3.1390

civ-iio [Rev. July 1, 20091 .. w.4W.COUrftflfO.C8.QOV


dy-lb

- PLAINTIFF/PETITIONER: CASE NUMBER: DEFENDANT/RESPONDENT:

Declaration Concerning Waived Court Fees

The court has a statutory lien for waived fees and costs on any recovery of $10, 000 or more in value by ;ettlement, compromise, arbitration award, mediation settlement, or other recovery. The courts lien must e paid before the court will dismiss the case.

1. The court waived fees and costs in this action for (name):

2. The person in item I (check one): a. El is not recovering anything of value by this action.

b. 0 is recovering less than $10,000 in value by this action. c. is recovering $10000 or more in value by this action. (If item 2c is checked item 3 must be completed.)

3. 0 All court fees and costs that were waived in this action have been paid to the court (check one): Yes D No

I declare under penalty of perjury under the laws of the State of California that the information above is true and correct.

Date:

(TYPE OR PRINT NAME OF ATTORNEY PARTY MAKING DECLARATION) (SIGNATURE)

Cf/-I ID (Rev. July I. 20091 REQUEST FOR DISMISSAL

Page 2 of 2

Americam LeINet. Inc. w.FormsVvb,kflcw.com

Case 10-02677-PB1I Filed 05/03/11 Doc 365-1 Pg. 36 of 68 civ-iio ATTORNEY OR PARTY WITHOUT ATTORNEY (Name State Bar number, and address):

Jonathan S. Dabbled (SBN 91963) FOR COURT USE ONLY

SULLIVAN, HILL, LEWIN, REZ & ENGEL 550 West "C" Street, Suite 1500 San Diego, California 92101

TELEPHONE NO.: 619/233-4100 FAX NO. (OpuonaO: 619/231-4372 E-MAIL ADDRESS (Optional); [email protected]

ATTORNEY FOR (Name): Plaintiff Briarwood Capital, LLC SUPERIOR COURT OF CALIFORNIA, COUNTY OF SAN DIEGO

STREETADORESS: 330 West BrOadway MAILING ADDRESS:

CITYANOZIP CODE: San Diego, California 92101 BRANCH NAME: Hall of Justice

PLAINTIFF/PETITIONER: Briarwood Capital, LLC DEFENDANT/RESPONDENT: HCC Investors, LLC

REQUEST FOR DISMISSAL CASE NUMBER

Personal Injury, Property Damage, or Wrongful Death 37-2009-97749-CU-BC-CTL fl Motor Vehicle El Other

fi Family Law fi Eminent Domain

Other (specify): Breach of Contract

- A conformed copy will not be returned by the clerk unless a method of return is provided with the document -

T. TO THE CLERK: Please dismiss this action as follows: a. (1) With prejudice (2) fi Without prejudice

b. (1) Complaint (2) fi Petition (3)Li Cross-complaint filed by (name): on (date):

(4)Li Cross-complaint filed by (name): on (date):

(5)X Entire action of all parties and all causes of action

(6)Li Other (specify):

2. (Complete in all cases except family law cases.)

fi Court fees and costs were waived for a party in this case. (This information maybe obtained from the clerk. If this box is checked, the declaration on the back of this form must be completed).

Date: June _,2011

Jonathan S. Dabbieri

(TYPE OR PRINT NAME OF M ATTORNEY F1 PARTY WITHOUT ATTORNEY) (SIGNATURE)

if dismissal requested is of specified parties only of specified causes of action Attorney or party without attorney for: only, or of specified cross-complaints only, so state and Identify the parties, causes of action, or cross-complaints to be dismissed. Plaintiff/Petitioner LI Defendant/Respondent

fi Cross�Complainant

3. TO THE CLERK: Consent to the above dismissal is hereby g iven. ** Date:

(TYPE OR PRINT NAME OF 11 ATTORNEY[] P°,RTY WITHOUT ATTORNEY) (SIGNATURE)

If a cross-complaint - or Response (Family Law) seeking affirmative Attorney or party without attorney for:

relief- is on tile, the attorney for cross-complainant (respondent) must fi Plaintiff/Petitioner fi Defendant/Respondent sign this consent if required by Code of Civil Procedure section 581 (I) or 0). . Li Cross�Complainant

(To be complotedby clerk) 4. El Dismissal entered as requested on (date): .

5. Li. Dismissal entered on (date): as to only (name):

6. fl Dismissal not entered as requested for the following reasons (specify):

7. a. Li Attorney or party without attorney notified on (date):

b. Li Attorney or party without attorney not notified. Filing party failed to provide a copy to be conformed Li means to return conformed copy

Date:

Clerk, by Deputy

Pagel of 2

Form Adopted for Mandalay Use REQUEST FOR DISMISSAL Code of Civil Procedure, § 581 81 seq.;

Judicial Council at California Gov. Code, § 68637(c); Cal. Rules of Court, rule 3.1390

CIV-11O (Rev. July 1, 2009] . . - w.vw.courifnfo.ca.gov

Case I 0-02677-PB1 1 Filed 05/03/11 Doc 365-1 Pg. 37 of 68

dy-lb

PLAINTIFF/PETITIONER: CASE NUMBER:

DEFENDANT/RESPONDENT:

Declaration Concerning Waived Court Fees

rhe court has a statutory lien for waived fees and costs on any recovery of $10,000 or more in value by ettIement, compromise, arbitration award, mediation settlement, or other recovery. The courts lien mus e paid before the court will dismiss the case.

1. The court waived fees and costs in this action for (name):

2. The person In item I (check one):

a. 0 is not recovering anything of value by this action. b. 0 is recovering less than $10,000 in value by this action, C. LJ is recovering $1 0,000 or more in value by this action. (If item 2c is checked, item 3 must be completed.)

3. [] All court fees and costs that were waived in this action have been paid to the court (check one): 0 Yes [J No

I declare under penalty of perjury under the laws of the State of California that the information above is true and correct.

Date:

(TYPE OR PRINT NAME OF 11 ATTORNEY F PARTY MAKING DECLARATION) (SIGNATURE)

CIV-1 10 (Rev. July 1, 20091 REQUEST FOR DISMISSAL

Page 2 of 2

American LegalNet, Inc. www.Fom,sWomflow.ccrn

UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF CALIFORNIA

In re:

� BRIARWOOD CAPITAL, LLC,

Debtor.

Case No. 10-02677-PB 11

Adv. No. 10-90184-PB

Chapter 1.1

NOTICE OF DISMISSAL

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


Gary B. Rudolph (S.B. # 101921) SULLIVAN HILL LEWIN REZ & ENGEL 550 West C Street, Suite 1500 San Diego, CA 92101 Telephone: 619.233.4100 Fax: 619.231.4372

Special Counsel for Leslie Gladstone, Chapter 11 Trustee for the bankruptcy estate of Briarwood Capital, LLC

Briarwood Capital, LLC,

Plaintiff, V.

HCC Investors, LLC,

Defendant.


PLEASE TAKE NOTICE that Leslie Gladstone, the duly appointed Chapter 11

Trustee for the bankruptcy estate of plaintiff Briarwood Capital, LLC, hereby dismisses,

with prejudice, the above-captioned adversary proceeding (Adv. No. 10-90184-PB 11) (the

"Adversary Proceeding"). The Adversary Proceeding was commenced with the filing of a

complaint on April 5, 2010. Dismissal by this Notice of Dismissal is authorized pursuant

to Rule 7041 of the Federal Rules of Bankruptcy Procedure because the defendant has not

yet served an answer or moved for summary judgment in the Adversary Proceeding.

Respectfully submitted, DATED: June ,2011

STiLL WAN HILL LB WIN REZ & ENGEL

By: Gary B. Rudolph Counsel for Leslie Gladstone, Chapter 11 Trustee

I

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

29


EXHIBIT C

Form of Briarwood Trustee Position Letter re March-HOC Action

LA3:1 173504.6


[FORM OF BRIARW000 TRUSTEE POSITION LETTERI

June 2011

VIA [DELIVERY METHOD]

Lennar Corporation and Lennar Homes of California Inc. do Ben H. Logan O’Melveny and Myers LLP 400 South Hope Street Los Angeles, CA 90071-2899

Re: Nicolas Marsch III ("Matsch ") v. Jonathan M. Jaffe, Marc Chasman and HCC Investors, LLC ("HCC"), Adv. Pro. No. 11-90081 (the "Action" ’)

Dear Ben:

This letter is delivered in connection with that certain Settlement Agreement dated. as of April 29, 2011 by and among Leslie Gladstone, as the duly appointed Chapter 11 Trustee for the bankruptcy estate of Briarwood Capital, LLC, a Delaware limited liability company (the "Briarwood Trustee"), Lennar Corporation, a Delaware corporation, Lennar Homes of California, Inc. a California corporation, KBR Group, LLC, a California limited liability company, and City National Bank, N.A., a national banking association.

It is hereby confirmed that the Action, initiated by March on February 15, 2011 in San Diego Superior Court against Mssrs. Jaffe, Chasman, and HCC and removed by defendants to the Bankruptcy Court was (i) not authorized by the Briarwood Trustee and (ii) is not supported by the Briarwood Trustee, The Briarwood Trustee supports the dismissal of the Action.

LAS: 1173528.2


EXIIIBITD

Form of Gordon & Holmes Settlement and Release Agreement

LA3: I 173504.6


GORDON & HOLMES SETTLEMENT AND RELEASE AGREEMENT

This SETTLEMENT AND RELEASE AGREEMENT (this "Agreement") is entered into

this 29th day of April 2011, by and among GORDON & HOLMES, FREDERIC L. GORDON,

RHONDA J. HOLMES, FREDERIC L. GORDON APC, and BEONDA J. HOLMES APC

(collectively, the "Gordon & Holmes Parties"), LESLIE GLADSTONE, as the duly appointed

Chapter 11 Trustee for the bankruptcy estate of Briàrwood Capital, LLC, a Delaware limited

liability company (the "Briarwood Trustee"), LENNAR CORPORATION, a Delaware

corporation ("Lennar Cp."), LENNAR HOMES OF CALIFORNIA, INC. a California

corporation ("Lennar Homes" and, collectively with Lennar Corp. and their present and former

affiliates, including Lennar San Jose Holdings, Inc., Lennar Land Partners II, LL Partners, Inc.,

LLPII 11CC Holdings, LLC,HCC Investors, LLC and Lemiar Bridges, LLC, "Lennar"), KJ3R

GROUP, LLC, a California limited liability company (collectively with its affiliates, including

KBR Opportunity Fund I, LP, and KBR Opportunity Fund II, LP, "KBR"), KRMW REAL

ESTATE INVESTMENT GROUP, LLC ("KRMW"), and CITY NATIONAL BANK, N.A., a

national banking association ("CNB" and collectively, with the Gordon & Holmes Parties, the

Briarwood Trustee, Lennar, KBR and KRMW the "Parties", and each, a "Party"), with reference

to the following:

RECITALS

A. WHERE-AS, concurrently herewith, the Parties (other than the Gordon & Holmes

Parties) have entered into that certain Settlement Agreement (the "Bankruptcy Settlement")

pursuant to which they have agreed to resolve certain issues in the chapter 11 bankruptcy case

filed by Briarwood (the "Briarwood Bankruptcy Case") in the Bankruptcy Court for th Southern

District of California (the "Bankruptcy Court");’

Capitalized term used and not otherwise defined herein shall have the meanings ascribed to them in the Bankruptcy

Settlement,

LA3:11735 12.7

Case 1 0-02677-PB1 I Filed 05/03/11 Doe 365-1 Pg. 44 of 68

B. WHEREAS, Gordon & Holmes was retained by Briarwood and Nicolas Marsch

III ("Marsch"), as debtors in possession, to represent the bankruptcy estate of Briarwood (the

"Briarwood Estate") and the bankruptcy estate of Marsch (the "Marsch Estate") as special

litigation counsel under Bankruptcy Code § 327(e) to handle certain litigation as set forth in that

certain Contingent Fee Legal Services Contract (the "Contingency Fee Agreement") dated as of

October 1, 2008 by and among Gordon & Holmes, Briarwood and Marsch;

C. )WHEREAS, on July 19, 2010, the Bankruptcy Court issued its order directing the

appointment of a chapter 11 trustee in the Briarwood Bankruptcy Case [Docket No. 209];

D. WHEREAS, on July 30, 2010 (the "Trustee Appointment Date"), the Briarwood

Trustee was appointed chapter 11 trustee in the Briarwood Bankruptcy Case [Docket No. 2301

and on August 6, 2010, the Bankruptcy Court issued its order approving the appointment of the

Briarwood Trustee as chapter 11 trustee in the Briarwood Bankruptcy Case [Docket No. 236];

and

E. WHEREAS, On December 10, 2010, Gordon & Holmes filed a Proof of Claim in

the amount of $6,867,089.27 in the Briarwood Bankruptcy Case and on December 10, 2010,

Gordon & Holmes filed a Proof of Claim in the amount of $6,867,089.27 in the Marsch

Bankruptcy Case (collectively with the Proof of Claim filed by Gordon & Holmes in the

Briarwood Bankruptcy Case, the "G&H Claims").

AREEMENT

NOW, THEREFORE, based on the mutual promises contained in this Agreement and in

the Bankruptcy Settlement and for other good and valuable consideration, the receipt and

sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

1. Retention of Gordon & Holmes by the Briarwood Trustee. The Briarwood

Trustee agrees to seek in the Approval Motion approval for the retention of Gordon & Holmes to

serve as special litigation counsel to the Briarwood Estate pursuant to Bankruptcy Code section

327(e), nunc pro tunc to the Trustee’ Appointment Date, with respect to the litigation matters

LA3:1173512.7 2


covered in the Contingency Fee Agreement including dismissing with prejudice the litigations

and appeals as set forth in the Bankruptcy Settlement, provided, however, that Gordon & Holmes

shall waive any and all claims for fees, costs or expenses for providing such services pursuant to

the terms of this Agreement.

2. Releases. As of the Effective Date, the Parties hereby give the following releases:

a. Gordon & Holmes’ Release of the Briarwood and Marsch Estates.

Gordon & Holmes, Frederic L. Gordon, Rhonda J. Holmes, Frederic L. Gordon APC, and

Rhonda J. Holmes APC, and each of them, for themselves and their successors and

assigns, hereby waive any and all claims and rights against the Briarwood Estate, the

Marsch Estate, the Colony I Estate and the Colony II Estate and releases the Briarwood

Trustee, Marsch Trustee, Colony Trustee, the Briarwood Estates, the Marsch Estates, the

Colony I Estate and the Colony II Estate, all property of the Briarwood Estate and

Marsch Estate, and all professionals retained by the Briarwood Trustee, the Marsch

Trustee and/or the Colony Trustee, jointly and severally, from any and all claims,

demands, liens, actions, suits, causes of action, obligations, controversies, debts, costs,

attorneys’ fees, expenses, damages, judgments, orders, and liabilities of whatever kind or

nature in law, equity or otherwise, whether now known or unknown, suspected or

unsuspected, and whether or not concealed or hidden, which have existed or may have

existed, or which do exist or which hereafter can, shall or may exist, based on any facts,

events or omissions occurring from the beginning of time to the Effective Date.

b. Gordon & Holmes’ Release of Lennar, KBR, KRMW, and CNB. Gordon

& Holmes, Frederic L. Gordon, Rhonda J. Holmes, Frederic L. Gordon APC, and Rhonda

J. Holmes APC, and each of them, for themselves and, as applicable, their respective

predecessors-in-interest, successors, parents, subsidiaries, affiliates, partners, trustees,

insurers, shareholders, members, directors, officers, employees, agents, attorneys,

advisors, consultants, professionals, designees (including any professionals retained by

such persons) and, assigns, hereby, waive any and all claims and rights against Lermar,

LA3:1173512.7 3


KER, KRMW, and CNB and hereby release Lennar, KBR, KRMW, and CNB, and, as

applicable, their respective predecessors-in-interest, successors, parents, subsidiaries,

affiliates, partners, trustees, insurers, shareholders, members, directors, officers,

employees, agents, attorneys, advisors, consultants, professionals, designees (including

any professionals retained by such persons) and assigns from any and all claims,







C. The Parties’ Release of the Gordon & Holmes. Parties. The Briarwood

Trustee, on behalf of herself and the Briarwood Estate and its predecessors, successors or

assigns, Lennar, KBR, KRMW, and CNB, for themselves and their successors and

assigns, and in the case of Lemiar, KBR, KRMW, and CNB, on behalf of their respective

parents, subsidiaries, affiliates, partners, trustees, insurers, shareholders, members,

directors, officers, employees, agents, attorneys, advisors, consultants, professionals,

designees (including any professionals retained by such persons), hereby waive any and

all claims and rights against Gordon & Holmes, Frederic L. Gordon, Rhonda J. Holmes,

Frederic L. Gordon APC, and Rhonda J. Holmes APC and release Gordon & Holmes,

Frederic L. Gordon, Rhonda J. Holmes, Frederic L. Gordon APC, and Rhonda J. Holmes

APC, and each of them, jointly and severally, from any and all claims, demands, liens,





LA3:117352.7 4




d. In making the releases set forth in this Agreement, the Parties


Agreement, they will discover -facts or incur or suffer claims which were unknown or




which provides:


WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO

EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING

THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST


WITH THE DEBTOR.

Notwithstanding the provisions of Section 1542, the Parties agree that the releases .set


Parties hereto knowingly and voluntarily waive the provisions of Section 1542, as well as

any other federal or state statute, rule, or common law principle of similar effect, and -


consideration for each Party’s execution of this Agreement. Notwithstanding the



Agreement, -

3. Obligations to CNB. The Gordon & Holmes Parties represent and warrant that

they have no obligations, including loan obligations or credit card obligations, to CNB.

LA3:1173512.7 5


4. Withdrawal of Proofs of Claim. Within five (5) business days after the Effective

Date, Gordon & Holmes shall withdraw, with prejudice, the G&H Claims filed in the Briarwood

Bankruptcy Case and the Marsch Bankruptcy Case. Gordon & Holmes agrees not to seek any

payment in the Briarwood or Marsch Bankruptcy Cases, by way of filing a fee application or

otherwise.

5. AvailabiIiy of Counsel. Each Party to this Agreement acknowledges that it has


of this Agreement, including but not limited to the releases and the waiver of unknown and

unsuspected claims set forth above.

6. Representations. Acknowledgements and Declarations. Each Party to this

Agreement represents and acknowledges that, in executing this Agreement, it does not rely and



Agreement or otherwise, other than as specifically stated in this Agreement. The Parties further





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








the Effective Date.

LA3:1173512.7 6

Case 10-02677-PB11 Filed 05/03/11, Doc 365-1 Pg. 49 of 68

9. No Admission of Liability. The Parties acknowledge that this Agreement









by and construed in accordance with federal bankruptcy law, to the extent applicable, and where







over.the Bankruptcy Cases.


money damages world not be a sufficient remedy for any breach of this Agreement by any Party



13. Supersedes Prior Agreements. This Agreement forms the entire agreement

between the Parties with respect to the subject matter hereof and supersedes all prior and

contemporaneous written and oral agreements, discussions and representations (except as

expressly set forth herein and with respect to any releases granted in any previous agreement).

This Agreement may not be modified, amended or supplemented without the prior written

consent of each of the Parties. This Agreement shall be binding upon and inure to the benefit of

LA3:1173512.7 7


the respective predecessors in interest, successors, trustees, shareholders, directors, officers,

affiliates, employees, agents, attorneys, advisors, consultants, professionals, designees (including

any professionals retained by such persons) and assigns of the Parties hereto, to the extent

permitted by law. The terms of this Agreement are contractual and not mere recitals.






Agreement as a whole and not to the individual sections in which such terms are used, and the


a joint venture, a trust, an estate or any other entity,





the Parties. The Parties further agree that this Agreement was the product of negotiations

between the Parties and that any rule of construction that ambiguities are to be resolved against



16. Agreement Not Severable. Subject to the occurrence of [Effective Datel, each






LA3:1173512.7 8


17. Headings. The headings of the paragraphs of this Agreement have been included



18. Counterparts. This Agreement may be executed in counterparts and copies and/or



binding on the Parties hereto.

19. Attorneys’ Fees. Each Party shall bear its, his or her own attorneys’ fees, court




LA3:1173512.7 9



LESLIE GLADSTONE, solely as the Chapter 11 Trustee for Briarwood Capital, LLC in U.S.B.C. Case No. 10-02677-PB 11



By:____ Namt Title:


By: � Name: Title:


By:

Title:


By: LESLIE GLADSTONE, solely as the Chapter 11 Trustee for Briarwood Capital, LLC in U.S.B.C. Case No. I0-02677-PBI1



By: Name: Title:

GORDON & HOLMES

By: Name:

LA3:1173512.7 10


FREDERIC L. GORDON

RHONDA J. HOLMES

FREDERIC L. GORDON APC

RHONDA J. HOLMES APC

CITY NATIONAL BANK, N.A.

Lin N

LA3:1173512.7 . 11

Case I 0-02677-PB1 1 Filed 05/03/11 Doc 365-1 Pg. 54 of 68

GORDON & HOLMES SETTLEMENT AND RELEASE AGREEMENT

This SETTLEMENT AND RELEASE AGREEMENT (this "Agreement") is entered into

this 29th day of April 2011, by and among GORDON & HOLMES, FREDERIC L. GORDON,

RHONDA J. HOLMES, FREDERIC L. GORDON APC, and RHONDA J. HOLMES APC

(collectively, the "Gordon & Holmes Parties"), LESLIE GLADSTONE, as the duly appointed

Chapter 11 Trustee for the bankruptcy estate of Briarwood Capital, LLC, a Delaware limited

liability company (the "Briarwood Trustee"), LENNAR CORPORATION, a Delaware

corporation ("Lennar Corp."), LENNAR HOMES OF CALIFORNIA, INC. a California

corporation ("Lennar Homes" and, collectively with Lennar Corp. and their present and former

affiliates, including Lennar San Jose Holdings, Inc., Lenriar Land Partners II, LL Partners, Inc.,

LLPIJ HCC Holdings, LLC, HCC Investors, LLC and Lerinar Bridges, LLC, "Lennar"), KBR

GROUP, LLC, a California limited liability company (collectively with its affiliates, including

KBR Opportunity Fund I, LP, and KBR Opportunity Fund II, LP, "KBR"), KRMW REAL

ESTATE INVESTMENT GROUP, LLC ("KRMW"), and CITY NATIONAL BANK, N.A., a

national banking association ("CNB" and collectively, with the Gordon & Holmes Parties, the

Briarwood Trustee, Lennar, KBR and KRMW the "Parties", and each, a "Party"), with reference

to the following:

RECITALS

A. WHEREAS, concurrently herewith, the Parties (other than the Gordon & Holmes

Parties) have entered into that certain Settlement Agreement (the "Bankruptcy Settlement")

pursuant to which they have agreed to resolve certain issues in the chapter 11 bankruptcy case

filed by Briarwood (the "Briarwood Bankruptcy Case") in the Bankruptcy Court for the Southern

District of California (the "Bankruptcy Court");’

Capitalized term used and not otherwise defined herein shall have the meanings ascribed to them in the Bankruptcy

Settlement.

L.A3:1173512.7


B. WHEREAS, Gordon & Holmes was retained by Briarwood and Nicolas Marsch

III ("Marsch"), as debtors in possession, to represent the bankruptcy estate of Briarwood (the

"Briarwood Estate") and the bankruptcy estate of Marsch (the "Marsch Estate") as special

litigation counsel under Bankruptcy Code § 327(e) to handle certain litigation as set forth in that

certain Contingent Fee Legal Services Contract (the "Contingency Fee Agreement") dated as of

October 1, 2008 by and among Gordon & Holmes, Briarwood andMarsch;

C. WHEREAS, on July 19, 2010, the Bankruptcy Court issued its order directing the

appointment of a chapter 11 trustee in the Briarwood Bankruptcy Case [Docket No. 209];

P. WHEREAS, on July 30, 2010 (the "Trustee Appointment Date"), the Briarwood

Trustee was appointed chapter 11 trustee in the Briarwood Bankruptcy Case [Docket No. 2301

and on August 6., 2010, the Bankruptcy Court issued its order approving the appointment of the

Briarwood Trustee as chapter 11 trustee in the Briarwood Bankruptcy Case [Docket No. 236];

and

B. WHEREAS, On December 10, 2010, Gordon & Holmes filed a Proof of Claim in

the amount of $6,867,089.27 in the Briarwood Bankruptcy Case and on December 10, 2010,

Gordon & Holmes filed a Proof of Claim in the amount of $6,867,089.27 in the Marsch

Bankruptcy Case (collectively with the Proof of Claim filed by Gordon & Holmes in the

Briarwood Bankruptcy Case, the "G&H Claims").

� AGREEMENT

NOW, THEREFORE, based on the mutual promises contained in this Agreement and in

the Bankruptcy Settlement and for other good and valuable consideration, the receipt and

sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

1. Retention of Gordon & Holmes by the Briar -wood Trustee. The Briarwood

Trustee agrees to seek in the Approval Motion approval for the retention of Gordon & Holmes to

serve as special litigation counsel to the Briarwood Estate, pursuant to Bankruptcy Code section

327(e), nunc pro tunc to the Trustee Appointment Date, with respect to the litigation matters

LA3:1173512.7 � 2


covered in the Contingency Fee Agreement including dismissing with prejudice the litigations

and appeals as set forth in the Bankruptcy Settlement, provided, however, that Gordon & Holmes

shall waive any and all claims for fees, costs or expenses for providing such services pursuant to

the terms of this Agreement.

2. Releases. As of the Effective Date, the Parties hereby give the following releases:

a. Gordon & Holmes’ Release of the Briarwood and Marsch Estates.

Gordon & Holmes, Frederic L. Gordon, Rhonda I. Holmes, Frederic L. Gordon APC, and

Rhonda J. Holmes APC, and each of them, for themselves and their successors and

assigns, hereby waive any and all claims and rights against the Briarwood Estate, the

Marsch Estate, the Colony I Estate and the Colony TI Estate and releases the Briarwood

Trustee, Marsch Trustee, Colony Trustee, the Briarwood Estates, the Maisch Estates, the

Colony I Estate and the Colony II Estate, all property of the Briarwood Estate and

Marsch Estate, and all professionals retained by the Briarwood Trustee, the Marsch

Trustee and/or the Colony Trustee, jointly and severally, from any and all claims,







b. Gordon & Holmes’ Release of Lennar, KBR, KRMW, and CNB. Gordon

& Holmes, Frederic L. Gordon, Rhonda J. Holmes, Frederic L. Gordon AFC, and Rhonda

J. Holmes APC, and each of them, for themselves and, as applicable, their respective

predecessors-in-interest, successors, parents, subsidiaries, affiliates, partners, trustees,

insurers, shareholders, members, directors, officers, employees, agents, attorneys,

advisors, consultants, professionals, designees (including any professionals retained by

such persons) and assigns, hereby waive any and all claims and rights against Lennar,

LA3:11735 12.7 3


KBR, KRMW, and CNB and hereby release Lennar, KBR, KRMW, and CNB, and, as

applicable, their respective predecessors-in-interest, successors, parents, subsidiaries,

affiliates, partners, trustees, insurers, shareholders, members, directors, officers,

employees, agents, attorneys, advisors, consultants, professionals, designees (including

any professionals retained by such persons) and assigns from any and all claims,







C. The Parties’ Release of the Gordon & Holmes Parties, The Briarwood

Trustee, on behalf of herself and the Briarwood Estate and its predecessors, successors or

assigns, Lennar, KBR, KRMW, and CNB, for themselves and their successors and

assigns, and in the case of Lennar, KBR, KRMW, and CNB, on behalf of their respective

parents, subsidiaries, affiliates, partners, trustees, insurers, shareholders, members,

directors, officers, employees, agents, attorneys, advisors, consultants, professionals,

designees (including any professionals retained by such persons), hereby waive any and

all claims and rights against Gordon & Holmes, Frederic L. Gordon, Rhonda J. Holmes,

Frederic L. Gordon APC, and Rhonda J. Holmes APC and release Gordon & Holmes,

Frederic L. Gordon, Rhonda J. Holmes, Frederic L. Gordon APC, and Rhonda J. Holmes

APC, and each of them, jointly and severally, from any and all claims, demands, liens,





LA3:I173512.7 4




d. In making the releases set forth in this Agreement, the Parties


Agreement, they will discover facts or incur or suffer claims which were unknown or




which provides:


WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO

EXIST IN HIS OR HER FAVOR AT. THE TIME OF EXECUTING

THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST


WITH THE DEBTOR.

Notwithstanding the provisions of Section 1542, the Parties agree that the releases set


Parties hereto knowingly and voluntarily waive the provisions of Section 1542, as well as.

any other federal or state statute, rule, or common law principle of similar effect, and


consideration for each Party’s execution of this Agreement Notwithstanding the



Agreement.

3. Obligations to CNB.. The Gordon & Holmes Parties represent and warrant that

they have no obligations, including loan obligations or credit card obligations, to CNB.

LA3:1173512.7 5


4. Withdrawal of Proofs of Claim. Within five (5) business days after the Effective

Date, Gordon & Holmes shall withdraw, with prejudice, the (}&H Claims filed in the Briarwood

Bankruptcy Case and the Marsch Bankruptcy Case. Gordon & Holmes agrees not to seek any

payment in the Briarwood or Marsch Bankruptcy Cases, by way of filing a fee application or

otherwise.

5. Availability of Counsel. Each Party to this Agreement acknowledges that it has


of this Agreement, including but not limited to the releases and the waiver of unknown and

unsuspected , claims set forth above.

6. Representations,. Acknowledgements and Declarations. Each Party to this

Agreement represents. and acknowledges that, in executing this Agreement, it does not rely and



Agreement or otherwise, other than as specifically stated in this Agreement. The Parties further





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








the Effective Date.

LA3:1173512.7 6

Case 1 0-02677-PB 11 Filed 05/03/11 Doc 365-1 Pg. 60 of 68

9. No Admission of Liability. The Parties acknowledge that this Agreement









by and construed in accordance with federul bankruptcy law, to the extent applicable, and where







over the Bankruptcy Cases.


money damages would not be a sufficient remedy for any breach of this Agreement by any Party



13; Supersedes Prior Agreements. This Agreement forms the entire agreement

between the Parties with respect to the subject matter hereof and supersedes all prior and

contemporaneous written and oral agreements, discussions and representations (except as

expressly set forth herein and with respect to any releases granted in any previous agreement).

This Agreement may not be modified, amended or supplemented without the prior written

consent of each of the Parties. This Agreement shall be binding upon and inure to the benefit of

LA3:1173512.7 7


the respective predecessors in interest, successors, trustees, shartholders, directors, officers,

affiliates, employees, agents, attorneys, advisors, consultants, professionals, designees (including

any professionals retained by such persons) and assigns of the Parties hereto, to the extent

permitted by law. The terms of this Agreement are contractual and not mere recitals.






Agreement as a whole and not to the individual sections in which such terms are used, and the


a joint venture, a trust, an estate or any other entity.





the Parties. The Parties further agree that this Agreement was the product of negotiations

between the Parties and that any rule of construction that ambiguities are to be resolved against�



16. Agreement Not Severable. Subject to the occurrence of [Effective Date], each






LA3:1173512.7 8


17. Headings. The headings of the paragraphs of this Agreement have been included



18. Counterparts. This Agreement may be executed in counterparts and copies and/or



binding on the Parties hereto

19. .Attorney’ Fees. Each Party shall bear its, his or her own attorneys’ fees, court




LA3:1113512.7 9


AGIU.EI) s or I IIC DA1 CI1RSJ WRIT[LN AI30VL

I I Tnistev Ibr Bi iaroix1 C iI, LLC m Ii S B C Cast.

::

1OtPB

Iy: �arn Title:

LBNAIIt0MES 01 CALI0RNA INC aid it afflhi3tcs

By:

1I’itIe: � . .

By. .Nthi:.

fly. I , l1R’ LADSIQNI solely is t lie. Cha)ter ii (n’tc for [lei podapijl, LLC n U S i C Casc NolO

8> KI3ROPPQRTUNIrI F1ThDJJII Iy K[3RQUP1LC

IsItie:.

.0R1)O.N& HOLMES.

Nam.c i1Ll�:

10

Case 107 02677-PBI 1 Filed 05/03/11 Doc 365-1 Pg. 64 of 68


LESLIE GLADSTONE, solely as the Chapter Ii Trustee for Briarwood Capital, LLC in U.S.B.C. Case No. 10-02677-PB1I


LENNAR CORPORATIONand its affiliates

Name-


By: Nanie Title:

ICBR GROUP, LLC and its affiliates

By: Name: Title:


By: LESLIE GLADSTONE, solely as the Chapter 11 Trustee for Briarwood Capital, LLC in U.S,B.C. Case No. 10-02677.PB1 1

Leslie Gladstone


By: Name: Title:

GORDON & HOLMES

By: Name: Title:

LA3:1173512.7 10


AGREE1)ASQI flU DATE URSC vurIrN AIOVI

LESUE.GLADSTONI. soleLy as the ChapUr I rrustee for Brat - wood Capkal, L.LC in U.S. B.0 Case

No. 1�002677-PB II

.8: Leslie Gladstone


By:. Nth: i’vlŁ

LENNAR OMES OF CALIFORNIA, WC and its aft

Bv________________________________

KBR GROUP,LLnd.I1s

--

KRM.WREAL ESTATE INVESTMENT GROUP, LLC

By LFSUC GLADS1 ONE, soielv as the Chapter II Trustee tor..Brhryod Capital, LLC:in U.S.W .C. Case Nol:a027-iI

By: -. .LeslieU}adstone

.L3y::KBR GROUP. LLC

GORDON. & HOLMES

Name;_____________________________________

L.A3:iI73c:27 . . 10

Case 10-02677-PB 11. Filed 05/03/11 Doc 365-1 Pg. 66 of 68


LESLIE GLADSTONE, solely as the Chapter 11 Trustee for Bnarwood Capital, LLC in U.S.B.C. Case No. I0-02677-PBl I

By:__________________________________ Leslie Gladstone


By:_____________________________ Name:.


By:_________________________________ Name:_____________________________________ Title:_______________________________________


By: Name:


By: LESLIE GLADSTONE, solely as the Chapter 11 - Trustee for Briarwood Capital, LLC in U.S.B.C. Case

No. 10-02677-PB 1 1 � By:____________________________

Leslie Gladstone

By: KBR OPPORTUNITY FUND II, LP � By: KBR GROUP, LLC

By:____________________________ Name:_________________________________ Title:____________________________________

GORDON & H~~;’,

Name:. 4 Title: ____________________

LA3:1 173512.7 10


FRBf5ERJC L. GORDON

RHONDA I HOLMES

FREDERIC L. GORDON APC

RHONDA I. HOLMES APC

CITY NATIONAL BANK, N.A.

By:

Title:

LA3:1 173512.7 Ii


FREDERJC L. GORDON

HQNDA I, HOLMES.

FREDERJCL. GORDON .APC

RHONDA.J.HOLMES APC

CITY NATIONAL BA4K,NA. .

By: . Name:_.

Title: V V

LA3:11735123 11

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

In re: ) Chapter 11 )

LANDSOURCE COMMUNITIES ) Case No. 08-11111 (KJC) DEVELOPMENT, LLC, et al., ’ )

) (Jointly Administered) Reorganized Debtors. )

CERTIFICATE OF SERVICE

I, Kathleen P. Makowski, hereby certify that on the 24th day of August, 2011, I

caused a copy of the following document to be served on the individuals on the attached service

lists in the manner indicated:

Stipulation Withdrawing Briarwci

The Debtors in these cases are California Land Company; Friendswood Development Company, LLC; Kings Wood Development Company, L.C.; LandSource Communities Development LLC; LandSource Communities Development Sub LLC; LandSource Holding Company, LLC; Lennar Bressi Ranch Venture, LLC; Lennar Land Partners II; Lennar Mare Island, LLC; Lennar Moorpark, LLC; Lennar Stevenson Holdings, L.L.C.; LNR-Lermar Washington Square, LLC; LSC Associates, LLC; NWHL GP LLC; The Newhall Land and Farming Company (A California Limited Partnership); The Newhall Land and Farming Company; Southwest Communities Development LLC; Stevenson Ranch Venture LLC; Tournament Players Club at Valencia, LLC; Valencia Corporation; and Valencia Realty Company.

DOCS_DE: 158473.7 51357-003

LandSource - Special Service List Case No. 08-11111 (KJC) Doe. No. 172533 01 - First Class Mail

First Class Mail (Counsel to Leslie Gladstone, Chapter 11 Trustee of Briarwood Capital, LLC) Jesse Finlayson, Esq. Finlayson Williams Toffer Roosevelt & Lilly LLP 15615 Alton Pkwy, Suite 250 Irvine, CA 92618

DOCSDE:172533.1 51357-004

LandSource - 2002 Service List Case No. 08-11111 (KJC) Doc. No. 138316 03 - Interoffice Delivery (LA & NY & SF) 31 - Hand Delivery 64 - First Class Mail

(Counsel to the Official Committee of Unsecured Creditors) Laura Davis Jones, Esquire Timothy P. Cairns, Esquire Pachulski Stang Ziehl & Jones LLP 919 N. Market Street, 17th Floor P.O. Box 8705 Wilmington, DE 19899-8705 (Courier 19801)

Interoffice Delivery (LA) (Counsel to the Official Committee of Unsecured Creditors) Richard M. Pachulski, Esquire Alan J. Kornfeld, Esquire Pachulski Stang Ziehl & Jones LLP 10100 Santa Monica Boulevard, Suite 1100 Los Angeles, CA 90067

Interoffice Delivery (NV) (Counsel to the Official Committee of Unsecured Creditors) John A. Morris, Esquire Pachuiski Stang Ziehl & Jones LLP 780 Third Ave., 36th Floor New York, NY 10017-2024

Interoffice Delivery (SF) (Counsel to the Official Committee of Unsecured Creditors) Debra Grassgreen, Esquire Pachuiski Stang Ziehl & Jones LLP 150 California Street, 15th Floor San Francisco, CA 94111-4500

Hand Delivery (Copy Service) Parcels, Inc. Vito I. DiMaio 230 North Market Street P.O. Box 27 Wilmington, DE 19899

Hand Delivery (United States Trustee) Office of the United States Trustee David L. Buchbinder, Esquire J. Caleb Boggs Federal Building 844 King Street, Suite 2207 Lockbox 35 Wilmington, DE 19801

Hand Delivery (Counsel to the Debtors) Mark D. Collins, Esquire Paul N. Heath, Esquire Richards Layton & Finger PA One Rodney Square 920 North King Street Wilmington, DE 19801

Hand Delivery (Counsel to the Los Angeles County Tax Collector & Psomas fka Psomas and Associates) Craig B Young, Esquire Marc J. Phillips, Esquire Connolly Bove Lodge & Hutz LLP 1007 N Orange St P0 Box 2207 Wilmington, DE 19801

Hand Delivery (Counsel to the Bank of New York) Adam G. Landis, Esquire Richard S. Cobb, Esquire Landis Rath & Cobb LLP 919 N. Market Street, 18 th Floor Wilmington, DE 19801

Hand Delivery (Counsel to PCL Construction Services, Inc., Southern California Edison Company, and R.C. Becker & Sons, Inc.) John D. Demmy, Esquire Joseph H. Huston, Jr., Esquire Stevens & Lee PC 1105 N. Market St., 7th Fl. Wilmington, DE 19801

Hand Delivery (Counsel to PCL Lennar Homes of California, Inc.) David B. Stratton, Esquire Pepper Hamilton LLP Hercules Plaza, Suite 5100 1313 N. Market Street Wilmington, DE 19801

Hand Delivery )

Delaware Attorney General Carvel State Office Building 820 N French St Wilmington, DE 19801

Hand Delivery

Delaware Dept. of Justice Attn: Bankruptcy Dept Div of Securities 820 N French St 6th Fl Wilmington, DE 19801

Hand Delivery

Department of Labor Division of Unemployment Ins 4425 N Market Street Wilmington, DE 19802

Hand Delivery

Randy R. Weller MS No 25 State of Delaware Division of Revenue 820 N French St 8th Floor Wilmington, DE 19801-0820

Hand Delivery )

Ellen W. Slights, Esquire US Attorneys Office 1007 Orange Street 7th Floor P0 Box 2046 Wilmington, DE 19899-2046

Hand Delivery (Counsel to Altfihlisch Contractors, Inc.) Frederick B. Rosner, Esquire Messana Rosner & Stern LLP 824 Market Street, Suite 810 Wilmington, DE 19801

Hand Delivery (Counsel to City of Santa Clarita, California) Richardo Palacio, Esquire Benjamin Keenan, Esquire Ashby & Geddes, P.A. 500 Delaware Ave., 81h Floor Wilmington, DE 19899

Hand Delivery (Counsel to Park West Landscape, Inc.) Thomas M. Horan, Esquire Womble Carlyle Sandridge & Rice, PLLC 222 Delaware Avenue, Suite 1501 Wilmington, DE 19801

Hand Delivery (Counsel to Environ Corp.) Warren T. Pratt, Esquire Drinker Biddle & Reath LLP 1100 N. Market Street, Suite 1000 Wilmington, DE 19801

Hand Delivery (Counsel to Caterpillar Financial Services Corp.) Peter J. Duhig, Esquire Buchanan Ingersoll & Rooney PC 1105 N. Market Street, Suite 1900 Wilmington, DE 19801

Hand Delivery (Counsel to DMJM Harris; Westchester Fire Insurance Company and ACE USA) Tobey M. Daluz, Esquire Katie A. D’Emilio, Esquire Ballard Spahr Andrews & Ingersoll, LLP 919 N. Market Street, 1 1th Floor Wilmington, DE 19801

Hand Delivery (Counsel to Southern Sun Construction Co., Inc., Counsel to Pacific Advanced Civil Engineering, Inc., Oakridge Landscape Inc. and Nature-Gro Corp.) Margaret F. England, Esquire Eckert, Seamans, Cherin & Mellott, LLC Suite 1210, 300 Delaware Avenue Wilmington, DE 19801

Hand Delivery (Counsel to Community Resource Systems Group) Stephen W. Spence, Esquire Scott L. Adkins, Esquire Phillips, Goldman & Spence, P.A. 1200 North Broom Street Wilmington, DE 19806

Hand Delivery (Counsel to GE Capital Commercial Inc f/k/a Citicorp Leasing, Inc.("GECCI")) Kimberly E. C. Lawson, Esquire Reed Smith LLP 1201 N. Market Street, Suite 1500 Wilmington, DE 19801

Hand Delivery (Counsel to Old Republic Insurance Company) Brett D. Fallon, Esquire Morris James LLP 500 Delaware Avenue, Suite 1500 Wilmington, DE 19899-2306

Hand Delivery (Counsel to CH2M Hill, Inc.) Eric Lopez Schnabel, Esquire Robert W. Mallard, Esquire Dorsey & Whitney LLP 300 Delaware Avenue, #1010 Wilmington, DE 19801

Hand Delivery (Counsel to National City Golf Finance, a Division of National City Commercial Capital Company, LLC, Successor by Merger with National City Commercial Capital Corporation ("National City")) Jeffrey S. Cianciulli, Esquire Weir & Partners LLP 825 Market Street, Suite 1001 Wilmington, DE 19899

Hand Delivery (Counsel to Steadfast Insurance Company) Tara L. Lattomus, Esquire Eckert Seamans Cherin & Mellott, LLC 300 Delaware Avenue Suite 1210 Wilmington, DE 19801

Hand Delivery (Counsel to Capri Construction Corp.) Carl K. Kunz, III, Esquire Ericka F. Johnson, Esquire Morris James LLP 500 Delaware Avenue, Suite 1500 P.O. Box 2306 Wilmington, DE 19899-2306

Hand Delivery (Counsel to Sam Hill & Sons, Inc.) William A. Hazeltine, Esquire Sullivan Hazeltine Allinson LLC 4 East 8th Street, Suite 400 Wilmington, DE 19801

Hand Delivery (Counsel to The Masonry Group California, Inc.) Brian J. McLaughlin, Esquire Monzack, Merksy, McLaughlin and Browder P.A. 1201 N. Orange Street, Suite 400 Wilmington, DE 19801

Hand Delivery (Counsel to Pacific Coast Elevator Corporation dlb/a Amtech Elevator Services) Ian Connor Bifferato, Esquire Bifferato, LLC 800 N. King Street, First Floor Wilmington, DE 19801

Hand Delivery (Counsel to American Heritage Landscape, LP) Michael D. DeBaecke, Esquire Victoria A. Guilfoyle, Esquire Blank Rome LLP 1201 N. Market Street, Suite 800 Wilmington, DE 19801

Hand Delivery (Counsel to ValleyCrest Landscape Companies) David M. Powlen, Esquire Barnes & Thornburg LLP 1000 North West Street, Suite 1200 Wilmington, DE 19801

First Class Mail (Counsel to the Debtors) Marcia L. Goldstein, Esquire Debra A. Dandeneau, Esquire Weil Gotshal & Manges LLP 767 Fifth Avenue New York, NY 10153

First Class Mail (Counsel to the Bank of New York) Andrew R. Rosenberg, Esquire Alice Belisle Eaton, Esquire Lindsay F. Cohen, Esquire Paul Weiss Rilkind Wharton & Garrison LLP 1285 Avenue of the Americas New York, NY 10019-6064

First Class Mail (Counsel to PCL Construction Services, Inc.) Thomas M. Byrne Sutherland Asbill & Brennan LLP 999 Peachtree St. Ne Atlanta, GA 30309-3996

First Class Mail (Counsel to the Los Angeles County Tax Collector & Psomas fka Psomas and Associates) Barry S. Glaser, Esquire Steckbauer Weinhart Jaffe, LLP 333 S. Hope Street, 36th Floor Los Angeles, CA 90071

First Class Mail (Counsel to Downrite Engineering Corp.) Jose M. Chanfrau IV, Esquire Legal Solutions Group, P.L. 18305 Biscayne Blvd., Suite 200 Aventura, FL 33160-2172

First Class Mail (Counsel to PCL Lennar Homes of California, Inc.) Ben Logan, Esquire Andrew Parlen, Esquire Emily R. Culler, Esquire Andrew Escobar, Esquire O’Melveny & Myers LLP 400 South Hope Street Los Angeles, CA 90071

First Class Mail (Counsel to Miami-Dade County Tax Collector) R.A. Cuevas, Jr., Esquire Miami-Dade County Attorney County Attorney’s Office 2810 Stephen P. Clark Center 111 N. W. First Street Miami, FL 33128-1993

First Class Mail )

Office of the State Treasurer Delaware 820 Silver Lake Boulevard, Ste. 100 Dover, DE 19904

First Class Mail )

Delaware Secretary of the State Division of Corporations Franchise Tax Division P0 Box 7040 Dover, DE 19903

First Class Mail )

Mark Schonfeld Regional Director Securities & Exchange Commission Northeast Regional Office 3 World Financial Center Room 4300 New York, NY 10281

First Class Mail )

Securities & Exchange Commission 100 F Street NE Washington, DC 20549

First Class Mail )

Securities & Exchange Commission 15th & Pennsylvania Avenue NW Washington, DC 20020

First Class Mail )

Michael B. Mukasey, Esquire US Attorney General US Department of Justice 950 Pennsylvania Ave NW Washington, DC 20530-0001

First Class Mail Internal Revenue Service P.O. Box 7346 Philadelphia, PA 19101-7346

First Class Mail (Claims Agent) LandSource Claims Processing do Kurtzman Carson Consultants 2335 Alaska Ave El Segundo, CA 90245

First Class Mail (Counsel to City of Santa Clarita, California) Joseph P. Buchman, Esquire Burke, Williams & Sorensen, LLP 444 South Flower Street, Suite 2400 Los Angeles, CA 90071-2953

First Class Mail (Counsel to Oakridge Landscape, Inc Southern Sun Construction Co., Inc.) Craig G. Margulies, Esquire Landsberg Margulies LLP 16030 Ventura Boulevard, Suite 470 Encino, CA 91436

First Class Mail and (Counsel to Bank of America, N.A.)

Brian Sirower, Esquire Quarles & Brady LLP Renaissance One Two North Central Avenue Phoenix, AZ 85004-2391

First Class Mail (Counsel to Southern California Edison Company) Russell R. Johnson, III, Esquire 2258 Wheatlands Drive Manakin-Sabot, VA 23103

First Class Mail (City of Vallejo) City Attorney’s Office City of Vallejo - City Hall 555 Santa Clara Street, 3rd Floor Vallejo, CA 94590

First Class Mail (Counsel to RT Frankian & Associates) Victor A. Sahn, Esquire Elissa D. Miller, Esquire SulmeyerKupetz 333 South Hope Street, 35th Floor Los Angeles, CA 90071

First Class Mail (Counsel to Pension Benefit Guaranty Corp. ("PBGC")) Deborah J. Bisco, Esquire Pension Benefit Guaranty Corporation Office of the Chief Counsel 1200 K Street, N.W. Washington, DC 20005-4026

First Class Mail (Counsel to Maricopa County Treasurer) Madeleine C. Wanslee, Esquire Gust Rosenfeld P.L.C. 201 E. Washington Street, Suite 800 Phoenix, AZ 85004-2327

First Class Mail (Counsel to Sprint Nextel Corporation) David I. Swan, Esquire Kenneth M. Misken, Esquire McGuireWoods LLP 1750 Tysons Boulevard, Suite 1800 McLean, VA 22102

First Class Mail (Counsel for Helix Electric, Inc.) Michael D. Breslauer, Esquire Solomon Ward Seidenwurm & Smith 401 B Street, Suite 1200 San Diego, CA 92101

First Class Mail (Counsel to County of Tulare, California) Tulare County Tax Collector Attn: John Whipple 221 S. Mooney Boulevard, Room 104-E Visalia, CA 93291-4593

First Class Mail (Counsel to SAP America, Inc.) Donald K. Ludman, Esquire Brown & Connery, LLP 6 North Broad Street, Suite 100 Woodbury, NJ 08096

First Class Mail (Counsel to California Public Employees Retirement System "Ca1PERS") Steven H. Felderstein, Esquire Paul J. Pascuzzi, Esquire Felderstein Fitzgerald Willoughby & Pascuzzi LLP 400 Capitol Mall, Suite 1450 Sacramento, CA 95814

First Class Mail (Counsel to Lennar Homes of California) William N. Lobe!, Esquire Alan J. Friedman, Esquire Irell & Manella LLP 840 Newport Center Drive Suite 400 Newport Beach, CA 92660

First Class Mail (Counsel to Westchester Fire Insurance Company and ACE USA) Robert MeL. Boote, Esquire Ballard Spahr Andrews & Ingersoll, LLP 1735 Market Street, 51st Floor Philadelphia, PA 19103-7599

First Class Mail (Los Angeles County Treasurer and Tax Collector) Joyce M. Owens Los Angeles County Treasurer and Tax Collector P.O. Box 54110 Los Angeles, CA 90054-0110

First Class Mail (Counsel to Iron Mountain Information Management, Inc.) Frank F. McGinn, Esquire Bartlett Hackett Feinberg P.C. 155 Federal Street, 91h Floor Boston, MA 02110

First Class Mail (Counsel to Katy ISD, Harris County, Cypress - Fairbanks ISD, Montgomery County) John P. Diliman, Esquire Linebarger Goggan Blair & Sampson, LLP P.O. Box 3064 Houston, TX 77253-3064

First Class Mail (Counsel to Golden Eagle Construction Corp.) Louis J. Esbin, Esquire Law Offices of Louis J. Esbin 25129 The Old Road, Suite 114 Valenica, CA 91381

First Class Mail )

Protection One Attn: P.B. Mason, Authorized P.O. Box 740933 Dallas, TX 75374

First Class Mail (Counsel to Tres Robles, Inc. dba Kovach Marketing) Lawrence G. Campitiello, Esquire Sullivan, Hill, Lewin, Rez & Engel A Professional Law Corporation 550 West C Street, Suite 1500 San Diego, CA 92101

First Class Mail Peter L. Stacy, Esquire Weil & Drage, APC 23212 Mill Creek Drive Laguna Hills, CA 92653

First Class Mail (Counsel to GE Capital Commercial Inc. f/k/a Citicorp Leasing, Inc.("GECCI")) Elena P. Lazarou, Esquire Debra S. Turetsky, Esquire Reed Smith LLP 599 Lexington Avenue, 30th Floor New York, NY 10022

First Class Mail (Counsel to Oberg Contracting Corp.) Russell H. Rapoport, Esquire Plotkin & Rapoport 16633 Ventura Boulevard, Suite 800 Encino, CA 91436

First Class Mail (Counsel to County of Riverside, California) Martha E. Romero, Esquire Romero Law Firm BMR Professional Building 6516 Bright Avenue Whittier, CA 90601

First Class Mail (Counsel to City of Miramar, Florida) Douglas R. Gonzales, Esquire Weiss Serota Helfman Pastoriza Cole & Boniske, P.L. 200 East Broward Boulevard, Suite 1900 Fort Lauderdale, FL 33301

First Class Mail (Counsel to Wine Central, LLC) Merle C. Meyers, Esquire Michele Thompson, Esquire Meyers Law Group, P.C. 44 Montgomery Street, Suite 1010 San Francisco, CA 94104

First Class Mail (Counsel to Old Republic Insurance Company) Margaret M. Anderson, Esquire Fox, Hefter, Swibel, Levin & Carroll, LLP 200 W. Madison Street, Suite 3000 Chicago, IL 60606

First Class Mail (Counsel to National City Golf Finance, a Division of National City Commercial Capital Company, LLC, Successor by Merger with National City Commercial Capital Corporation ("National City")) Sherry D. Lowe, Esquire Lamm Rubenstone LLC 3600 Horizon Blvd., Suite 200 Trevose, PA 19053

First Class Mail (Counsel to California Department of Fish and Game and California Dept. of Toxic Substance Control) Edmund G. Brown, Jr., Esquire Richard Magasin, Esquire Noah Golden-Krasner, Esquire Edward H. Ochoa, Esquire 300 South Spring Street, Suite 1700 Los Angeles, CA 90013

First Class Mail (Counsel to Touro University and Touro College) Nathan Schwed, Esquire Zeichner Ellman & Krause LLP 575 Lexington Avenue New York, NY 10022

First Class Mail (Counsel to Westye Group - West, Inc Denise Field, Esquire Craig Chiang, Esquire Buchalter Nemer, A Professional Corporation 333 Market Street, 25th Floor San Francisco, CA 94105-2130

First Class Mail (Counsel to Steadfast Insurance Company) Karen L. Turner, Esquire Eckert Seamans Cherin & Mellott, LLC Two Liberty Place 50 South 16th Street - 22nd Floor Philadelphia, PA 19102

First Class Mail (Counsel to R.C. Becker & Sons, Inc.) Elan S. Levey, Esquire Levinson Arshonsky & Kurtz, LLP 15303 Ventura Blvd., Suite 1650 Sherman Oaks, CA 91403

First Class Mail (Counsel to California Regional Water Quality Control Board, San Francisco Bay Region, and California State Water Resources Control Board) Mary E. Hackenbracht, Esquire Robert W. Byrne, Esquire 455 Golden Gate Avenue, Suite 11000 San Francisco, CA 94102-7004

First Class Mail (Counsel to Oracle Credit Corporation) Shawn M. Christianson, Esq. Buchalter Nemer, A Professional Corporation 333 Market Street, 25th Floor San Francisco, CA 94105-2126

First Class Mail (Counsel to Barclays Bank PLC) Bruce R. Zirinsky, Esquire Nathan A. Haynes, Esquire David Y. Wolnerman, Esquire Greenberg Traurig, LLP MetLife Building 200 Park Avenue New York, NY 10166

First Class Mail (Counsel to Barclays Bank PLC) Nancy A. Peterman, Esquire Greenberg Traurig, LLP 77 West Wacker Drive, Suite 3100 Chicago, IL 60601

First Class Mail (Counsel to the Debtors) Christopher R. Pace, Esquire Edward McCarthy, Esquire Weil, Gotshal & Manges LLP 1395 Brickell Avenue, Suite 1200

First Class Mail (Counsel for Bay South Community Development District) Michael C. Eckert, Esquire Hopping Green & Sams, P.A. 119 South Monroe Street, Suite 300 Tallahassee, FL 32301

First Class Mail )

William Cohen ValleyCrest Landscape Development, Inc. and its affiliate HRP Studio 24151 Ventura Boulevard Calabasas, CA 91302

First Class Mail (Counsel to ValleyCrest Landscape Development, Inc. and its affiliate HRP Studio) John W. Mills, Esquire Kilpatrick Stockton LLP Suite 2800 1100 Peachtree Street, NE Atlanta, GA 30309-4530

First Class Mail (Counsel to The Masonry Group California, Inc.) Lynsey M. Eaton, Esquire Ronald S. Sofen, Esquire Gibbs, Giden, Locher, Turner & Senet LLP 1880 Century Park East, 12th Floor Los Angeles, CA 90067

First Class Mail (Counsel to Steadfast Insurance Company) Mark G. Ledwin, Esquire Wilson, Elser, Moskowitz, Edelman & Dicker LLP 3 Gannett Drive

Miami, FL 33131 White Plains, NY 10604

First Class Mail (Counsel to Verizon Wireless (SCPM)) William H. Kiekhofer, III, Esquire McGuireWoods LLP 1800 Century Park East, 8th Floor Los Angeles, CA 90067

First Class Mail (Counsel to California Regional Water Quality Control Board, San Francisco Bay Region, and California State Water Resources Control Board, Creditor) Ellyn S. Levinson, Esquire 1515 Clay Street, Suite 2000 Oakland, CA 94612

First Class Mail (Counsel to Barclays Bank PLC) Joseph P. Davis III, Esquire Greenberg Traurig, LLP One International Place Boston, MA 02110

First Class Mail (Counsel to VII Pier Pointe Owner, LLC) Richard Levin, Esquire Cravath, Swain & Moore LLP Worldwide Plaza 825 Eighth Avenue New York, NY 10019

First Class Mail (Counsel to CH2M HILL Constructors Inc.) Michael A. Rosenthal, Esquire Rachel F. Castelino, Esquire Gibson, Dunn & Crutcher LLP 200 Park Avenue New York, NY 10166