STIPULATION RE: (1) RELEASE OF VALLEY MORTGAGE INVESTMENTS, INC.'S CLAIM FOR ATTORNEYS' FEES AND COSTS; AND (2) WITHDRAWAL OF RECEIVER'S SURCHARGE DEMAND; [PROPOSED] ORDER THEREON

LAWRENCE J. O'NEILL, Chief District Judge.

STIPULATION

The following Stipulation re: (1) Release of Valley Mortgage Investments, Inc.'s Claim for Attorneys' Fees and Costs; and (2) Withdrawal of Receiver's Surcharge Demand (the "Stipulation") is made by and between (1) David P. Stapleton (the "Receiver"), the Court-appointed receiver for Defendants BIC Real Estate Development Corporation and its subsidiaries and affiliates, including but not limited to, WM Petroleum; Target Oil & Gas Drilling, Inc.; Tier 1 Solar Power Company; Tier 1 Solar Power Company, LLC; and Home Sweet Holdings (collectively, the "Receivership Entities"); (2) Plaintiff Securities and Exchange Commission (the "SEC"); and (3) Valley Mortgage Investments, Inc. ("VMI") (collectively, with the Receiver and the SEC, the "Parties") by and through their respective counsel of record, and in reliance on and with respect to the following facts:

A. Pursuant to this Court's April 8, 2016 Stipulated Preliminary Injunction and Orders (1) Freezing Assets, and (2) Appointing a Permanent Receiver (Dkt. No. 42), the Receiver was vested with exclusive authority and control over the property of the Receivership Entities, including more than sixty (60) residential real properties (the "Properties") which comprised a substantial portion of the receivership estate (the "Estate") in the above-entitled action. VMI maintained a security interest in thirty-six (36) of these Properties.

B. Pursuant to a January 18, 2017 stipulation between the Parties (ECF No. 153) and this Court's January 23, 2017 order thereon (ECF No. 154), the Receiver has set aside a total of $87,000 from the net proceeds of the Court approved sales of those Properties against which VMI has claimed a secured interest, other than those Properties abandoned by the Receiver pursuant to Court orders or that were subject to other disposition.

C. Having completed his disposition of the Properties, including the Properties in which VMI and the beneficiaries under VMI's associated deeds of trust (the "VMI Lenders") have claimed a secured interest, on November 2, 2018, the Receiver filed an Omnibus Motion for Order: (1) Approving Receiver's Recommended Treatment of Claims; and (2) Authorizing Recommended Distribution on Allowed Claims (ECF No. 393) (the "Claims Allowance and Distribution Motion"), in connection with which the Receiver made recommendations to the Court regarding his proposed treatment of all timely claims against the Receivership Entities, including VMI's claim (the "VMI Claim") against the Receivership Entities, which included a claim for reimbursement of attorneys' fees and costs.

D. On November 2, 2018, the Receiver also filed a Motion for Order Instructing Valley Mortgage Investments, Inc. to Make Payment to the Receiver (ECF Nos. 394, 395) (the "Surcharge Motion") in which the Receiver requested the Court to direct VMI to make payment to the Receiver in the amount of $467,087.00 as reimbursement for administrative expenses incurred in connection with the management and disposition of the Properties in which VMI claimed a secured interest.

E. On November 29, 2018, VMI filed a Counter-Motion for Allowance and Payment of Attorney's Fees (ECF No. 398) (the "VMI Counter-Motion") in which VMI requested the Court allow VMI's attorneys' fees and costs in an amount not less than $116,753.14, with the acknowledgment that the unreimbursed portion of its attorneys' fees was $110,753.14. In the VMI Counter-Motion, VMI also requested the Court direct the Receiver to pay the $87,000, previously set aside by the Receiver, to VMI.

F. On May 17, 2019, this Court entered its Memorandum Decision (ECF No. 423) addressing the Receiver's Claims Allowance and Distribution Motion and Surcharge Motion, including with respect to the VMI Claim, including the VMI Counter-Motion for attorneys' fees and costs, and the Receiver's request for payment from VMI. Specifically, in pertinent part, the Court:

(i) denied the Receiver's Surcharge Motion, without prejudice to the Receiver's submitting a renewed surcharge demand against VMI;

(ii) without prejudice to a renewed request for attorneys' fees and expenses by VMI, denied the attorneys' fee and expense component of the VMI Claim and the VMI Counter-Motion, the remainder of which the Parties agree and acknowledge has been satisfied by the payment to VMI of proceeds from the Receiver's Court-approved sales of the Properties in which VMI claimed a secured interest, or by VMI's actual or pending foreclosures of Properties abandoned by the Receiver pursuant to prior to this Court orders; and

(iii) approved the Receiver's recommended treatment of claims, with the exception of the attorneys' fee and expense component of the VMI Claim, but denied the Receiver's proposed distribution on allowed claims, pending the resolution of, among other things, the Receiver's surcharge demand against VMI and the attorneys' fee and expense component of the VMI Claim and the VMI Counter-Motion.

STIPULATION AND AGREEMENT

Accordingly, and in consideration of the foregoing, the Parties hereby STIPULATE and AGREE as follows:

1. VMI, on behalf of itself and the VMI Lenders, withdraws the attorneys' fee and expense component of the VMI Claim and acknowledges and agrees that the VMI Claim has been satisfied, in full. VMI, on behalf of itself and the VMI Lenders, further forever releases the Receiver and the Receivership Entities from any claims or demands for payment arising from or in connection with the Properties, the VMI Claim, or any attorneys' fees and expenses incurred by VMI in connection with any of the Properties;

2. The Receiver withdraws and forever releases VMI and the VMI Lenders from any surcharge demand for payment or reimbursement of administrative fees and expenses incurred in connection with the management and disposition of the Properties in which VMI and the VMI Lenders claimed a secured interest; and

3. The $87,000.00 in sales proceeds from the Properties previously set aside by the Receiver pursuant to a stipulation between the Parties and order of this Court thereon is immediately released to the Receivership Entities, free and clear of any claim by VMI or the VMI Lenders.

SO STIPULATED.

ORDER

The above stipulation is APPROVED.

IT IS SO ORDERED.