Case5:12-cv EJD Document1059 Filed06/11/15 Page1 of 122

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1 Case5:12-cv EJD Document1059 Filed06/11/15 Page1 of DAVID R. ZARO (BAR NO ) TED FATES (BAR NO ) ALLEN MATKINS LECK GAMBLE MALLORY & NATSIS LLP 515 South Figueroa Street, Ninth Floor Los Angeles, California Phone: (213) Fax: (213) dzaro@allenmatkins.com tfates@allenmatkins.com SECURITIES AND EXCHANGE COMMISSION, vs. Plaintiff, SMALL BUSINESS CAPITAL CORP.; MARK FEATHERS; INVESTORS PRIME FUND, LLC; and SBC PORTFOLIO FUND, LLC, Defendants. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION Case No. CV RECEIVER'S NINTH INTERIM FEE APPLICATION Date: September 17, 2015 Time: 9:00 a.m. Ctrm: 4-5th Floor Judge: Hon. Edward J. Davila LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP /SD Case No. CV RECEIVER'S NINTH INTERIM FEE APPLICATION

2 Case5:12-cv EJD Document1059 Filed06/11/15 Page2 of Thomas A. Seaman ("Receiver"), the Court-appointed permanent receiver for Small Business Capital Corp. ("SBCC"), Investors Prime Fund, LLC ("IPF"), SBC Portfolio Fund, LLC ("SPF") and their subsidiaries and affiliates (collectively, "Receivership Entities"), submits this ninth interim application for approval and payment of fees. This application covers the threemonth period November 1, 2014, through January 31, 2015 ("Ninth Application Period"). During the Ninth Application Period, the Receiver and his staff spent 1,119.9 hours at a weighted average hourly rate of $169 per hour for a total cost of $189, Effective August 1, 2014, the Court began reviewing the Receiver's invoices for loan servicing. The amount for loan servicing during the Ninth Application Period was $56, The total fees of $189,289.50, less these loan servicing fees of $56, is $132, The Receiver now seeks approval of his fees in full and authority to pay 90% of the remaining $132, on an interim basis, or $119, Significant progress in all aspects of the case was made during the Ninth Application Period. The Receiver prepared to make a second distribution of $7,000,000 to investors, which was completed on February 2, 2015; serviced the loan portfolios, which increased the cash balance in the receivership estate by $188, for the quarter; closed the sale of the 504/FMLP and non- SBA loan portfolios, which generated sale proceeds of more than $7.4 million; concluded bidding and prepared for the sale of the remaining 7-A loan portfolio and SBA license, which will generate approximately $5.2 million in cash; responded to investor inquiries; and otherwise executed the duties set forth in the Temporary Restraining Order and Order Appointing Receiver entered on June 26, 2012 ("TRO"), the Preliminary Injunction Order entered on July 10, 2012 ("PI"), and subsequent orders of the Court. Loan servicing work represents 30% of the amount requested herein. Marketing the loan portfolios and SBLC license for disposition and administering the sale process, which will lead to significant distributions to investors, comprised over 53% of the fees during the Ninth Application Period LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP /SD Case No. CV RECEIVER'S NINTH INTERIM FEE APPLICATION

3 Case5:12-cv EJD Document1059 Filed06/11/15 Page3 of LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP During the Ninth Application Period, the gross receipts from all sources were $9,600, The cash balance as of January 31, 2015, was $15,188, The Receiver's fees as a percentage of gross receipts during the Ninth Application Period were 1.97%. Inceptionto-date, the Receiver's fees as a percentage of gross receipts are 3.96%. The foregoing metrics indicate the amount of fees is reasonable based on the size of cash flow and receivership assets. In addition, the costs include fees related to the Receiver's activities, which are necessary and properly incurred, but do not generate revenue to the estate. These activities include supporting discovery requests of interested parties, quarterly reporting to the Court and interested parties, administration of claims, making distributions and communications with investors. During the Ninth Application Period, the Receiver and his agents responded to numerous investor inquiries about distribution checks and related matters. 1 The Receiver distributed $7,000,000 two days later on February 2, Case No. CV RECEIVER'S NINTH INTERIM FEE APPLICATION /SD -2- I. WORK PERFORMED BY THE RECEIVER During the Ninth Application Period, the Receiver and his agents and counsel worked diligently to operate the Receivership Entities and administer the receivership estate. Significant progress toward completion of the case has been achieved. With the motion to approve the sale of the 7-A loan portfolio on the Court's calendar for May 7, 2015, the only remaining tasks will be completing the litigation against CBB, final disposition of the SBA's claim, filing final tax returns, distributing the cash in the receivership estate to investors, and concluding the case, if approved and authorized by the Court. below. The Receiver's work during the Ninth Application Period is more specifically discussed A. Manage Loan Portfolios and Loan Servicing The Receiver and his staff manage the loan servicing operations of the Receivership Entities. The Receiver fulfills the servicing obligations of SBA lenders with the assistance of his staff, which includes a CPA and SBA loan specialist with 31 years' experience servicing SBA

4 Case5:12-cv EJD Document1059 Filed06/11/15 Page4 of LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP loans. The Receiver's staff collects loan payments and monitors payment status. The Receiver also properly accounts for loan payments and makes the corresponding payments to participating lenders. Management of the loan servicing operations also entails monitoring the credit status of borrowers and compliance with non-monetary covenants of the loans, including monitoring insurance coverage, status of property tax payments (many of which have been found to be delinquent), and obtaining and reviewing borrower financial statements. Management of the loan portfolios also requires resolving problem loans and enforcing the lender's rights. During the Ninth Application Period (up until the sale of the 504/FMLP loans was concluded in January 2015), there were eight loans on a watch list of potentially problem loans, either because of payment defaults, failure to pay property taxes, or other indicia of credit issues. During the Ninth Application Period, the Receiver made significant positive progress with regard to several slow paying or otherwise impaired loans. Currently, only one borrower is in monetary default and a foreclosure action was concluded in May, however, the foreclosure sale proceeds are being held in escrow until the final auditor's report is issued by the Maryland state court. Numerous borrowers have been in default on loan covenants, in particular with regard to keeping property taxes current, submitting financial statements, maintaining adequate insurance, and other non-monetary defaults. Significant progress in curing these non-monetary defaults, which if not addressed in accordance with the SBA's Standard Operating Procedures ("SOP") put the SBA guarantee at risk, has been made during the Ninth Application Period. The Receiver ensured timely payment of loans and resolved servicing issues, including resolution of unpaid property taxes. The Receiver believes this work enhanced the value of the loan portfolios and led to higher and better offers from potential purchasers. The Receiver continues to obtain and monitor current financial statements and tax returns to ensure compliance with SBA regulations. In addition to collecting servicing income, the Receiver has aggressively pursued collection of late fees and has collected $39, in late fees since being appointed. Late fees in the amount of $ were collected during the Ninth Application Period. The aggressive collection of late fees has had the added benefit of improving loan /SD -3- Case No. CV RECEIVER'S NINTH INTERIM FEE APPLICATION

5 Case5:12-cv EJD Document1059 Filed06/11/15 Page5 of LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP collections, which preserved and increased the quality of the loan portfolios and resulted in higher bids for the loans. The Receiver also monitors insurance on the loan collateral. Finally, the SBA's SOP 5057 and 504/FMLP Guidelines require the servicer to conduct site visits either annually or in the event of a default and the Receiver is in compliance with this requirement. Management of the loan servicing operations also requires compliance with SBA and DRE regulations and oversight. The Receiver is in compliance with all regulatory filing requirements. During the Ninth Application Period, the Receiver's fees attributable to loan servicing were $56,346.50, or an average of $18, per month. These fees, which were approved in full by the Court, have been paid to the Receiver pursuant to the Court's orders approving his monthly loan servicing fee requests. The Receivership Entities collected $244, in servicing fees during the Ninth Application Period and the estate therefore realized a net increase in cash of $188, from loan servicing operations. B. Sales and Liquidation of Assets During this period, the Receiver and his counsel spent significant time marketing the loan portfolios and preparing them for sale. Ultimately, the Receiver sold the 504/FMLP loan portfolio for 110% of the retained portion of the unpaid balance and the non-sba loans for 60% of their unpaid balance. The sale was approved by the Court on January 2, 2015, and concluded shortly thereafter. During this period, the Receiver was concurrently marketing and negotiating the sale of the 7-A loans and SBLC license, which is now pending Court approval. The sale process involved extensive coordination with the SBA relative to the process and approval of potential buyers. The Receiver's agents and the broker uploaded the loan files and due diligence materials to an electronic platform that prospective purchasers are able to access. This work required extensive organization and review of files comprising over 100,000 pages and took nearly two months to complete. The Receiver believes that by fully disclosing the terms of the loans in a well-organized manner and providing an efficient mechanism for prospective purchasers to conduct due diligence and fully Case No. CV RECEIVER'S NINTH INTERIM FEE APPLICATION /SD -4-

6 Case5:12-cv EJD Document1059 Filed06/11/15 Page6 of LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP supporting bidders inquiries, the full value of the loans is being realized. Completion of the sale(s) will be a big step toward a final distribution to investors and conclusion of the receivership. Work on selling the 504/FMLP loans, the non-sba loans, the 7-A loan portfolio, and the SBA license was extensive during the Ninth Application Period. During this time, the sale of the 504/FMLP and non-sba loans was completed, the 7-A marketing and bidding process was concluded, and the SBA approval process of the 7-A buyer, an extensive and very thorough process which required the assistance of the Receiver and his staff, was underway. The fees associated with the marketing and sale work were $100,754.50, which represents approximately 53% of the fees incurred during the Ninth Application Period. Given the complexity of the process required to properly market the loans and SBLC license and coordinate the sales with the SBA, the Receiver believes his fees are fair and reasonable and directly benefitted investors. More specifically, at this time the Receiver expects all investors will have recovered at least 75% of their investments once the sales are closed, final distributions are made, and the receivership is concluded. C. Administration of the Receivership Estate The Receiver supported the discovery requests of interested parties during the Ninth Application Period. The Receiver also prepared and filed detailed quarterly accounting and status reports to the Court and interested parties. To date, 12 such reports have been prepared and filed. The Receiver believes his reports provide interested parties with a complete assessment of the status of the receivership estate and its assets. Federal and state tax returns for all Receivership Entities, both pre and post-receivership, have been filed. During the Ninth Application Period, fees for administration of the receivership estate, excluding loan servicing and the loan sales, were $32, D. Third Party Recoveries Earlier in the case, the Receiver investigated claims against California Business Bank and sought and was granted approval to bring litigation seeking damages for misrepresentations and omissions in connection with the Receivership Entities' investment of $990,000 in California /SD -5- Case No. CV RECEIVER'S NINTH INTERIM FEE APPLICATION

7 Case5:12-cv EJD Document1059 Filed06/11/15 Page7 of LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP Business Bank common stock, which promptly plummeted to less than $43,000 after the purchase. During the Ninth Application Period, the Receiver managed the litigation. E. Investor Claims and Distribution Plan The Receiver made a second distribution of $7,000,000 to approximately 350 investors on February 2, Together with the first distribution of $15,000,000 this brought all investors to over 58% recovery of their investment (including any amounts they may have received prior to the Receiver's appointment in accordance with the rising tide distribution method approved by the Court). The Receiver also maintained the website with reports and significant developments in the case for efficient investor communications. During the Ninth Application Period, the Receiver updated the website four times. Each time an informing investors of the update was sent automatically to all subscribers to the website. The Receiver and his agents responded to inquiries from numerous investors, many of whom were misled or unnecessarily alarmed by Mr. Feathers' campaign of harassing and disparaging the Receiver. Despite the constant harassing s from Mr. Feathers to the Receiver and his counsel, the Receiver has largely ignored Mr. Feathers' attacks and limited his responses to those required by the Court in connection with motions and other petitions for administrative relief. F. Summary of Total Fees for Receivership The total fees of $2,240, incurred since the inception of the case through January 31, 2015, can be broken down into the following categories of work. Activity Amount Percentage Administer Receivership Estate $399, % Accounting & Reporting 173, % Forensic Accounting 220, % Investor Relations 109, % Operated loan portfolios, loan servicing, loan workouts, REO management and disposition 988, % Sell Property/Liquidate Assets 348, % Total Fees to Date $2,240, % The total average cost to operate the Receivership Entities, administer the receivership estate, and sell assets has been approximately $70, per month over the life of the receivership and decreased to $63, per month for the Ninth Application Period. Case No. CV RECEIVER'S NINTH INTERIM FEE APPLICATION /SD -6-

8 Case5:12-cv EJD Document1059 Filed06/11/15 Page8 of LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP The Receiver has previously been paid $1,388, and therefore has an unpaid balance of $852, Exhibit A provides a detailed listing of each and every time entry comprising the Receiver's fees. In order to assist the Court, the Receiver has prepared two separate analyses. The first is a breakdown by timekeeper setting forth the amount of time spent by the Receiver and his agents at their respective hourly rate. The next is a breakdown of work by functional area, including accounting and reporting, administration, bookkeeping, financial analysis, investor relations, litigation and support, loan servicing, project management, Receiver services, receivership administration, and selling and liquidation of assets. G. Charges by Timekeeper Exhibit B provides a breakdown by timekeeper setting forth the amount of time spent by the Receiver and his agents at their respective hourly rates. The Receiver personally expended 81.3 hours (27.1 hours per month, or approximately 17% of his time) for the Ninth Application Period for a total cost of $29, In order to manage the receivership in a cost effective manner, the Receiver delegates some assignments to agents who are billed at hourly rates ranging from $60 to $195 per hour. These agents perform accounting, bookkeeping, financial analysis, business management, investor relations and claims management, debt collection, litigation support, loan servicing, management of asset disposition, paralegal, and other services required by the receivership estate. During the Ninth Application Period, the Receiver's agents expended 1,038.6 hours at an average hourly rate of $153 per hour. The Receiver expects the number of hours necessary to administer the receivership estate to decrease now that the assets are under contract for sale, the first and second distributions have been made, all year end reporting has been concluded, the tax work has been completed, and the servicing of the loan portfolios is stable. By using qualified agents at significantly lower hourly rates, the Receiver was able to achieve a weighted average hourly (blended) rate of $169 per hour for the Ninth Application Period. As set forth in his proposal to the SEC filed with the Court in its motion for a TRO, the Receiver has discounted his normal hourly rate from $400 to $375, as well as making additional discounts related to the Receiver's phone calls directly with investors, which resulted in costs Case No. CV RECEIVER'S NINTH INTERIM FEE APPLICATION /SD -7-

9 Case5:12-cv EJD Document1059 Filed06/11/15 Page9 of savings of $2, during the Ninth Application Period. In order to further conserve assets, the Receiver agreed to not bill for travel time, which normally would be billed at 50% of the timekeeper's rate, or for travel expenses. Finally, the Receiver did not charge for the cost to prepare fee applications which resulted in an additional savings of $8, The sum of the aforementioned discounts is $13, for the Ninth Application Period. Inception-to-date, the savings total $127, The Receiver believes the hourly rates charged by the Receiver are appropriate given the requirements of the receivership estate and the total fees for which the Receiver seeks approval are fair and reasonable. H. Charges by Task Exhibit C provides a monthly breakdown by tasks performed by the Receiver and his agents, including total costs for each task by month, and a pie chart of all tasks for the entire Ninth Application Period. The total hours and cost by task for the period are as follows: Task Hours Rate Amount Accounting and Reporting 39.7 $148 $5, Administration 2.3 $62 $ Investor Relations 39.2 $172 $6, Litigation & Support 0.2 $175 $35.00 Project Management 12.3 $175 $2, Receiver 32.1 $360 $11, Receivership Administration 52.4 $108 $5, Sell Liquidate Assets $202 $100, Sub-Totals $197 $132, Loan Servicing (previously invoiced) $127 $56, Total All Activities Minus Loan Servicing 1,119.9 $169 $189, II. CONCLUSION The Receiver's fees are fair and reasonable in view of the experience and skill required, work performed, circumstances encountered, and results achieved. The Receiver has worked 28 LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP /SD -8- Case No. CV RECEIVER'S NINTH INTERIM FEE APPLICATION

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11 Case5:12-cv EJD Document1059 Filed06/11/15 Page11 of 122 EXHIBIT A

12 Case5:12-cv EJD Document1059 Filed06/11/15 Page12 of 122 Thomas Seaman Company 3 Park Plaza Suite 550 Irvine, CA Invoice submitted to: Thomas Seaman, Receiver for SBC 3 Park Plaza Suite 550 Irvine, CA April 07, 2015 Invoice #11172 Professional Services Accounting & Reporting 11/12/2014 AJ Accounting & Reporting Review and mail quarterly 401k reports. Summary review. 11/14/2014 AJ Accounting & Reporting Review from Kristen with Q3 financials. 11/18/2014 AJ Accounting & Reporting Review from Tim requesting report 11/25/2014 AJ Accounting & Reporting Work on reports for SBC. 11/4/2014 KJ Accounting & Reporting Cut check. 11/11/2014 KJ Accounting & Reporting Cut checks. 11/13/2014 KJ Accounting & Reporting Cut check, fixed accounting for the reversal of the 10/31 monthly loan payment for Devon Dental, refunded money back to LLC, etc, and recorded loan payoff on 10/23, including transfers and allocation of income/principal to LLC in both the Corps and LLC books. 11/14/2014 KJ Accounting & Reporting Cut check, downloaded final, issued Q SBC LLC compiled financial statements from Wertz, sent to SBA, added backup to pub Exhibit A, Page 1 of 104

13 Case5:12-cv EJD Document1059 Filed06/11/15 Page13 of 122 Thomas Seaman, Receiver for SBC Page 2 docs file, mailed out refund checks for due diligence deposits. 11/18/2014 KJ Accounting & Reporting Cut check. 11/24/2014 KJ Accounting & Reporting Cut check. 11/3/2014 TM Accounting & Reporting 1.10 NO CHARGE Prepared narrative template for edits. 11/6/2014 TM Accounting & Reporting 2.00 NO CHARGE Checked timeslips of Receiver, and October timeslips for most other agents for fee app. 11/7/2014 TM Accounting & Reporting 0.30 NO CHARGE Prepared loan servicing spreadsheet for Tom's review. 11/12/2014 TM Accounting & Reporting 0.40 NO CHARGE Direction from Tom re upcoming fee app. Made initial reports to determine activities and timekeepers involved. Edits to spreadsheet to reflect that Loan Servicing is handled monthly and will not be requested in this fee app. 11/14/2014 TM Accounting & Reporting 1.10 NO CHARGE Updated spreadsheet to remove Loan Servicing for fee app. Edits to narrative pages for input of QuickBooks info and timeslip material. 11/17/2014 TM Accounting & Reporting 1.10 NO CHARGE Minor changes to spreadsheet. Made additional spreadsheet for Tom to check. 11/18/2014 TM Accounting & Reporting 0.30 NO CHARGE Entering QuickBooks info into fee app. 11/25/2014 TM Accounting & Reporting 0.10 NO CHARGE to Alison re reconciliation. SUBTOTAL: [ ,092.00] Administration 11/5/2014 MRF Administration Filed accounts payable and invoices re SB Capital. Exhibit A, Page 2 of 104

14 Case5:12-cv EJD Document1059 Filed06/11/15 Page14 of 122 Thomas Seaman, Receiver for SBC Page 3 11/6/2014 MRF Administration Calculated fees and cut check to reimburse Thomas Seaman Co for Fedex & Pacer fees paid on behalf of SB Capital in October. 11/21/2014 MRF Administration Filed copies of accounts payable checks sent re SB Capital. SUBTOTAL: [ ] Investor Relations 11/3/2014 AJ Investor Relations Review messages, calls with investors re case status. Confer with Tom re s from Feathers. s with investors. 11/5/2014 AJ Investor Relations Review messages and s from investors. Calls re case status. 11/6/2014 AJ Investor Relations Review messages and return call to investor. 11/7/2014 AJ Investor Relations Review messages and correspondence. Call with investor re case status. AJ Investor Relations Forward returned mail. Updated address in database and master mailing list. 11/11/2014 AJ Investor Relations Review messages and correspondence, return calls. 11/12/2014 AJ Investor Relations Review messages and correspondence, s and calls with investors. Address update, and case status, etc. 11/13/2014 AJ Investor Relations Review messages and correspondence, calls with investors and forward borrower inquires to Kristen. 11/14/2014 AJ Investor Relations Review messages, and call with investor re status of sale. 11/17/2014 AJ Investor Relations Review messages. Calls with investors re distribution. 11/24/2014 AJ Investor Relations Review messages, calls with investors. Exhibit A, Page 3 of 104

15 Case5:12-cv EJD Document1059 Filed06/11/15 Page15 of 122 Thomas Seaman, Receiver for SBC Page 4 11/25/2014 AJ Investor Relations Call with investor. 11/14/2014 TAS Investor Relations Telephone call with investor re sale status, court approval, next /hr distribution, Feathers. SUBTOTAL: [ ] Loan Servicing 11/4/2014 KJ Loan Servicing Posted loan payments, updated 1502 & other loan participant reports, correspondence with borrowers, touched base with Rafael on pending matters, entered deposits. Updated tax return/financials tracker with borrowers who had forwarded financials requested, added info to file, and printed out for review. 11/5/2014 KJ Loan Servicing Posted loan payments, updated 1502 & other loan participant reports, correspondence with borrowers, touched base with Rafael on pending matters, entered deposits. Updated tax return/financials tracker with borrowers who had forwarded financials requested, added info to file, and printed out for review. 11/6/2014 KJ Loan Servicing Posted loan payments, updated 1502 & other loan participant reports, correspondence with borrowers, touched base with Rafael on pending matters, entered deposits. Updated tax return/financials tracker with borrowers who had forwarded financials requested, added info to file, and printed out for review. 11/7/2014 KJ Loan Servicing Posted loan payments, updated 1502 & other loan participant reports, correspondence with borrowers, touched base with Rafael on pending matters, entered deposits. Updated tax return/financials tracker with borrowers who had forwarded financials requested, added info to file, and printed out for review. 11/10/2014 KJ Loan Servicing Posted loan payments, updated 1502 & other loan participant reports, correspondence with borrowers, touched base with Rafael on pending matters, entered deposits. Updated tax return/financials tracker with borrowers who had forwarded financials requested, added info to file, and printed out for review. 11/11/2014 KJ Loan Servicing Posted loan payments, updated 1502 & other loan participant reports, correspondence with borrowers, touched base with Rafael on pending matters, entered deposits. Updated tax return/financials Exhibit A, Page 4 of 104

16 Case5:12-cv EJD Document1059 Filed06/11/15 Page16 of 122 Thomas Seaman, Receiver for SBC Page 5 tracker with borrowers who had forwarded financials requested, added info to file, and printed out for review. 11/12/2014 KJ Loan Servicing Posted loan payments, updated 1502 & other loan participant reports, correspondence with borrowers, touched base with Rafael on pending matters, entered deposits. Updated tax return/financials tracker with borrowers who had forwarded financials requested, added info to file, and printed out for review. 11/13/2014 KJ Loan Servicing Posted loan payments, updated 1502 & other loan participant reports, correspondence with borrowers, touched base with Rafael on pending matters, entered deposits. Updated tax return/financials tracker with borrowers who had forwarded financials requested, added info to file, and printed out for review. Sent letter to Colson requesting refund of Nina Sanai 10/31 payment remitted to them with the Oct 1502 report. 11/14/2014 KJ Loan Servicing Posted loan payments, updated 1502 & other loan participant reports, correspondence with borrowers, touched base with Rafael on pending matters, entered deposits. Updated tax return/financials tracker with borrowers who had forwarded financials requested, added info to file, and printed out for review. 11/18/2014 KJ Loan Servicing Posted loan payments, updated 1502 & other loan participant reports, correspondence with borrowers, touched base with Rafael on pending matters, entered deposits. Updated tax return/financials tracker with borrowers who had forwarded financials requested, added info to file, and printed out for review. 11/19/2014 KJ Loan Servicing Posted loan payments, updated 1502 & other loan participant reports, correspondence with borrowers, touched base with Rafael on pending matters, entered deposits. Updated tax return/financials tracker with borrowers who had forwarded financials requested, added info to file, and printed out for review. Sent borrower statements, did payoff letter/inquiry for Airport Realty Blvd loan, and updated 3Am summary. 11/20/2014 KJ Loan Servicing Posted loan payments, updated 1502 & other loan participant reports, correspondence with borrowers, touched base with Rafael on pending matters, entered deposits. Updated tax return/financials tracker with borrowers who had forwarded financials requested, added info to file, and printed out for review. Researching overpayment by Wells Fargo SBA services in May 2013 against Exhibit A, Page 5 of 104

17 Case5:12-cv EJD Document1059 Filed06/11/15 Page17 of 122 Thomas Seaman, Receiver for SBC Page 6 backup. 11/21/2014 KJ Loan Servicing Posted loan payments, updated 1502 & other loan participant reports, correspondence with borrowers, touched base with Rafael on pending matters, entered deposits. Updated tax return/financials tracker with borrowers who had forwarded financials requested, added info to file, and printed out for review. 11/24/2014 KJ Loan Servicing Posted loan payments, updated 1502 & other loan participant reports, correspondence with borrowers, touched base with Rafael on pending matters, entered deposits. Updated tax return/financials tracker with borrowers who had forwarded financials requested, added info to file, and printed out for review. 11/25/2014 KJ Loan Servicing Posted loan payments, updated 1502 & other loan participant reports, correspondence with borrowers, touched base with Rafael on pending matters, entered deposits. Updated tax return/financials tracker with borrowers who had forwarded financials requested, added info to file, and printed out for review. 3AM summary update, correspondence with Nick at Wells Fargo SBA services. 11/26/2014 KJ Loan Servicing Posted loan payments, updated 1502 & other loan participant reports, correspondence with borrowers, touched base with Rafael on pending matters, entered deposits. Updated tax return/financials tracker with borrowers who had forwarded financials requested, added info to file, and printed out for review. 11/28/2014 KJ Loan Servicing Posted loan payments, updated 1502 & other loan participant reports, correspondence with borrowers, touched base with Rafael on pending matters, entered deposits. Updated tax return/financials tracker with borrowers who had forwarded financials requested, added info to file, and printed out for review. 11/3/2014 MRF Loan Servicing Printed and filed financial statements received that were requested from loan borrowers. Updated tracking re same. Sent follow up s to borrowers re additional statements needed. 11/4/2014 MRF Loan Servicing Sorted, printed, and filed additional financial statements received. Updated tracking spreadsheet re same. Spoke with borrowers re timeline to provide remaining financial statements and clarified statement requirements. Exhibit A, Page 6 of 104

18 Case5:12-cv EJD Document1059 Filed06/11/15 Page18 of 122 Thomas Seaman, Receiver for SBC Page 7 11/4/2014 MRF Loan Servicing Called Kallappa Rampur re NSF payment for November. MRF Loan Servicing Received borrower payments for November, deposited checks, and made accompanying accounting entries in QuickBooks. MRF Loan Servicing Performed follow-up property tax payment check re Bragato delinquencies. Confirmed that they have now initiated a payment plan with the county to bring the taxes into good standing. 11/5/2014 MRF Loan Servicing Responded to call from Rampur re timing to re-initiate November's payment. Provided him with his year to date statement re property taxes advanced. Responded re upcoming property tax payment due 12/10/14. MRF Loan Servicing Received borrower payments for November payment date, deposited checks, and made accompanying accounting entries to QuickBooks. MRF Loan Servicing Printed and filed financial statements received from loan borrowers. Followed up with borrowers re acquisition of remaining financial statements. Updated tracking re same. 11/6/2014 MRF Loan Servicing Met with Rafael to discuss servicing issues. Discussed financial statement acquisition progress, accrued late fees, and delinquent property taxes for Bragato. MRF Loan Servicing Received and filed financial statements from borrowers re annual financial reporting requirement. Updated tracking and followed up with borrowers re timeline to send additional outstanding statements. MRF Loan Servicing Discussed Meyer's Castle's request for interest only payments with Rafael and timeline for fulfillment of requirement to provide financial statements. MRF Loan Servicing Called El Leoncito re duplicate payment received for November. Exhibit A, Page 7 of 104

19 Case5:12-cv EJD Document1059 Filed06/11/15 Page19 of 122 Thomas Seaman, Receiver for SBC Page 8 11/6/2014 MRF Loan Servicing Deposited borrower payment received for November and made accompanying accounting entries to QuickBooks. 11/7/2014 MRF Loan Servicing Received financial statements requested re annual financial statement collection. Printed, filed and updated tracking re same. Followed up with borrowers re additional statements required and timeline for acquisition. MRF Loan Servicing Received borrower payments for November, deposited, and made accompanying accounting entries to QuickBooks. 11/10/2014 MRF Loan Servicing Updated Rafael re annual financial statement collection. Printed, filed, and updated tracking with additional statements received. MRF Loan Servicing Received borrower payments for November, deposited, and made accompanying accounting entries to QuickBooks. 11/11/2014 MRF Loan Servicing Received additional financial statements for loan borrowers re annual financial statement collection. Printed and filed statements received. Followed up with borrower re timeline for acquisition of remaining statements. MRF Loan Servicing Received borrower loan payments for November, deposited, and made accompanying accounting entries. 11/12/2014 MRF Loan Servicing Received financial statements from loan borrowers, printed, and filed in the applicable borrower file. Updated tracking re same. MRF Loan Servicing Received borrower payments for November, deposited checks, and made accompanying accounting entries to QuickBooks. 11/13/2014 MRF Loan Servicing Received borrower financial statements re annual financial statement collection. Printed and filed statements in the borrower's file. Updated tracking re same. MRF Loan Servicing Received borrower payments for November, deposited, and made accompanying accounting entries to QuickBooks. Exhibit A, Page 8 of 104

20 Case5:12-cv EJD Document1059 Filed06/11/15 Page20 of 122 Thomas Seaman, Receiver for SBC Page 9 11/13/2014 MRF Loan Servicing Received call from Anaheim White House re refinance of SB Capital loan. Pulled loan information for reference and sent a response letter denying the request. 11/14/2014 MRF Loan Servicing Followed up with Anaheim White House re refinance of loan and additional loan information requested. MRF Loan Servicing Received borrower late payments for November, deposited, and made accompanying accounting entries to QuickBooks. MRF Loan Servicing Corresponded with loan borrowers re additional financial statement requirements and timeline for acquisition. Printed, filed, and updated tracking for financial statements received. 11/17/2014 MRF Loan Servicing Received s/faxes of borrower financial statements. Printed and filed statements in the respective borrower files. Updated tracking re same. 11/18/2014 MRF Loan Servicing Received additional financial statements requested from borrowers re annual financial review. Printed, filed, and updated tracking re same. 11/19/2014 MRF Loan Servicing Spoke with agent from Guaranteed Rate and received request for verification of mortgage re Leticia Luna. Reviewed loan documents for information requested and completed verification request form. MRF Loan Servicing Received 504 FMLP payments, deposited, and made accompanying accounting entries to QuickBooks. MRF Loan Servicing Followed up with borrowers with outstanding financial statements due re annual financial review. Updated tracking re statements received & follow-up dates. 11/20/2014 MRF Loan Servicing Printed, organized, and updated tracking with financial statements received from borrowers re annual financial reviews. Follow up calls & s with borrowers re time needed to acquire statements and additional statement requirements. 11/21/2014 MRF Loan Servicing Reviewed financial requests and statements sent to borrowers re annual financial review. Compiled list of follow-ups and began Exhibit A, Page 9 of 104

21 Case5:12-cv EJD Document1059 Filed06/11/15 Page21 of 122 Thomas Seaman, Receiver for SBC Page 10 ing/calling borrower re additional time needed to send statements. 11/21/2014 MRF Loan Servicing Exchanged follow up s with Bruno (Anaheim White House) re refinance of SBA loan and prepayment penalty. 11/24/2014 MRF Loan Servicing Printed, filed, and updated tracking with financial statements/tax returns received re annual financial reviews. Placed calls and sent follow up s to borrowers re receipt of statements and additional statement requirements. MRF Loan Servicing Received borrower late payments for November, deposited, and made accompanying accounting entries to QuickBooks. 11/25/2014 MRF Loan Servicing Received call from Kallappa Rampur re payment of property taxes and responsibility for payment. Telephone conference with Rafael to lay out responsibilities of borrower re payment of property taxes. MRF Loan Servicing Spoke with Kristen Janulewicz re progress of financial statements for annual reviews. Discussed receipt of statements and remaining follow-ups. MRF Loan Servicing Placed phone calls and sent follow up s to borrowers re annual financial statements needed for review. Clarified and discussed time needed to acquire statements and type of statements needed. MRF Loan Servicing Received financial statements and tax returns from loan borrowers. Printed, filed, and updated tracking spreadsheet re same. 11/26/2014 MRF Loan Servicing Printed, filed, and updated tracking with the financial statements received from loan borrowers re annual financial reviews. 11/3/2014 RVG Loan Servicing Discussed & concurred with legal counsel (C. Hopkin) re: Newspaper Legal Ad (Notice of Trustee Sale) on 3 AM LLC foreclosure. RVG Loan Servicing Follow up phone call from Ms. Leticia Luna (borrower) & discussed the Demand Letter re: Existing Technical Default (Unsanctioned Exhibit A, Page 10 of 104

22 Case5:12-cv EJD Document1059 Filed06/11/15 Page22 of 122 Thomas Seaman, Receiver for SBC Page 11 Sale of Business/Assets) on the loan. 11/4/2014 RVG Loan Servicing Received & reviewed from legal counsel (C. Hopkin) re: 3 AM LLC's Affidavit of Compliance/Notification of Disposition of Collateral by virtue of a Unified Foreclosure Sale. Conferred, discussed & concurred with legal counsel (C.Hopkin) re: Same as above/confirmation of Receiver. Forwarded & ed Steve Park (SBA) & Thomas Seaman (Receiver) for their records/information re: same. 11/5/2014 RVG Loan Servicing Responded to D. McEntee's (borrower) re: Lighthouse World Solutions' Refinance/Request for Billing Statement & Payoff amount. Forwarded to Kristen J. copied Thomas Seaman (Receiver) re: same. Followed up phone call from Sergio Urquiza (borrower) & discussed at length re: Request for 3 Month Principal Moratorium Interest Only Payment & Release for Consideration (Refinance of Real Property Collateral) w/ no Monetary Consideration. 11/6/2014 RVG Loan Servicing Reviewed & forwarded the requested information to D. McEntee (borrower) re: Lighthouse World Solutions' current Monthly Billing Statement/Payoff Demand Beneficiary Statement. Followed up phone call with Sergio Urquiza (borrower) re: Payment deferment (principal moratorium) for 3 months & Refinance of real property collateral. Met with Matthew F./Kristen J. re: Servicing/Liquidation issues (Subordination, Property Taxes, F/S, Release for Consideration, Late Charges, etc.) on various loans (Meyer's Castle, Bragato, Kallapa Rampur, etc.). Met with Kristen J. & discussed/reviewed the Beneficiary Demand Payoff Statement/Pre-Payment Penalty re: Lodge at Sedona/Ferchoff refinance. 11/7/2014 RVG Loan Servicing Responded to Dr. Ferchoff's (borrower) re: Refinance/Payoff of Lodge at Sedona. Followed up phone call to S. Urquiza (borrower) re: Requirements/Pre-requisites for a Payment Deferment (Interest Only Payment)/Refinance-Payoff of loan re: Myers Castle. Followed up phone call from D. McEntee (borrower) re: Refinance/Waiver of Pre-Payment Penalty, Borrower requested Lender referral for Refinance of Lighthouse World Solutions. 11/10/2014 RVG Loan Servicing Reviewed & discussed with legal counsel (C. Hopkin) re: 3 AM LLC's updated Title Report, appointment of Receiver & Tenants (borrowers) vacating Hotel premises prior to foreclosure sale. Telephone conference with legal counsel (C. Hopkin), M. Williams (Mngn't Co./Receiver) & d. Morgan (Foreclosure Trustee) re: 3 AM LLC's Foreclosure Sale Date/Appointment of Receiver. Spoke & Exhibit A, Page 11 of 104

23 Case5:12-cv EJD Document1059 Filed06/11/15 Page23 of 122 Thomas Seaman, Receiver for SBC Page 12 updated S. Park (SBA) re: 3 AM LLC's upcoming foreclosure sale/appointment of Receiver. 11/14/2014 RVG Loan Servicing Followed up phone call from S. Urquiza (borrower) & discussion re: Request for Payment Moratorium/Refinance of Loan Collateral/Provide Financial Statements/Waiver of Pre-Payment Penalty. RVG Loan Servicing Followed up response to B. Serato (borrower) re: Anaheim White House Restaurant's refinance/pre-payment penalty waiver. RVG Loan Servicing Telephone conference with legal counsel (C. Hopkin), D. Morgan (Foreclosure trustee), M. Williams (Receiver) & discussion re: 3 AM LLC's Unified Foreclosure Sale Credit/Final Bid per SBA's instructions, sale ratification by Superior Court & take possession of property by Receiver. 11/19/2014 RVG Loan Servicing Followed up telephone conference call with legal counsel (C. Hopkin)/D. Morgan (Trustee) & discussion re 3 AM LLC's Foreclosure Sale Credit Bid, Emergency Motion to Appoint Receiver, Motion to Ratify Foreclosure Sale & provided Payoff Balance. Forwarded legal counsel's to Kristen J. (Receiver) requesting 3 AM LLC's Current Payoff Balance. Forwarded copy to Steve Park (SBA) re: Same as above. 11/20/2014 RVG Loan Servicing Replied & responded to legal counsel's (C. Hopkin) s/phone calls, copied Steve Park (SBA) & Thomas Seaman (Receiver), re: 3 AM LLC's Foreclosure Sale Credit/Final Bid. Spoke and responded to A. Hughes' /phone call re: 3 AM LLC's Purchase/Assignment of Note/Trust Deed prior to foreclosure sale. 11/21/2014 RVG Loan Servicing Received, reviewed & responded legal counsel's (C. Hopkin) s/recommendation copied Thomas Seaman (Receiver) & David Zaro (Attorney) re: 3 AM LLC's Real Property Collateral's Vesting of Ownership, Appointment of a Receiver & Creation of an LLC to avoid Lender Liability Claims. 11/25/2014 RVG Loan Servicing Reviewed & discussed with C. Hopkin (legal counsel) re: Motion For Emergency Verified Petition For Appointment of Receiver/Declaration of Rafael V. Garcia on 3 AM LLC. Exchanged several s with legal counsel (C. Hopkin) & Kristen J. re: 3 AM LLC's current/payoff balance. Exhibit A, Page 12 of 104

24 Case5:12-cv EJD Document1059 Filed06/11/15 Page24 of 122 Thomas Seaman, Receiver for SBC Page 13 11/25/2014 RVG Loan Servicing Followed up phone call from Kallapa Rampur (Borrower) re: Real Property Collateral's property taxes/forbearance agreement's terms & conditions. Followed up phone call from Aung Naing Oo (Borrower) re: Aung San, LLC/Aung Solvang LLC's refinance, pre-payment penalty waiver & referral to refinance lenders. Responded & exchanged s with Kristen J. (Receiver) & L. Bertrand (Title Officer) re: Aung San/Aung Solvang, LLC's refinance/payoff of the SBA loan. RVG Loan Servicing Met with Matthew F. (Receiver) & discussion re: SBC's Loan Portfolio's Servicing/Liquidation issues prior to transferring loan/doc files to Successful Bidder. 11/26/2014 RVG Loan Servicing Received, responded & discussed with A. Hughes (Investor) several times re: 3 AM LLC's purchase of the Note/Trust Deed prior to foreclosure sale. Responded, exchanged s & discussed with legal counsel (C. Hopkin)/Kristen J. (Receiver) re: 3 AM LLC's current/payoff balance/rafael's Declaration/Verification. 11/28/2014 RVG Loan Servicing Received & reviewed Disclosure Authorization from Alpesh Patel (Borrower) re: Disclosure of loan information to A. Hughes (Investor) on 3 AM LLC. Received several follow up phone calls from A. Hughes (Investors) re: 3 AM LLC's foreclosure sale/purchase of note with discount & request for postponement of foreclosure sale. Follow up phone call from Aung Oo (Borrower) re: Aung San, LLC/Aung Solvang's Refinance/Loan Payoff without Pre-Payment Penalty. 11/4/2014 TM Loan Servicing Received Evidence and Certs for insurance for Lillie Alexander. Updated spreadsheet. Sent request to insurer to correctly list name of lender. 11/6/2014 TM Loan Servicing Received renewed insurance declarations. Updated spreadsheet, copy and scan. Placed in doc file. TM Loan Servicing Notified of payoff of Sanai loan, removed from spreadsheet. 11/7/2014 TM Loan Servicing Investigated insurance document which came in to office. Determined it is for a loan which paid off before (Mutnick loan), now inactive. Exhibit A, Page 13 of 104

25 Case5:12-cv EJD Document1059 Filed06/11/15 Page25 of 122 Thomas Seaman, Receiver for SBC Page 14 11/7/2014 TM Loan Servicing Reviewed insurance spreadsheet to see if any expirations coming due. 11/10/2014 TM Loan Servicing Received notices of cancellation re two loans, made enquiries to agents and told will reinstate. 11/14/2014 TM Loan Servicing Received cancellation recission, filed and updated spreadsheet. TM Loan Servicing Reviewed upcoming expirations of insurance policies. 11/18/2014 TM Loan Servicing Received insurance docs and reviewed re Café Taboo. Filed. TM Loan Servicing to agent re need for reinstatement docs on Pham. 11/19/2014 TM Loan Servicing Received new evidence of insurance for Dunn. Scanned, edit to spreadsheet and filed in doc files. TM Loan Servicing Received and processed rescission of cancellation for Airport Blvd. Scanned, filed in doc files. TM Loan Servicing Received and processed rescission of cancellation for Pham. to agent re liability. Edit to spreadsheet. Scanned, filed in doc files. TM Loan Servicing Received and processed rescission of cancellation for San Carlos Ave. property. Edit to spreadsheet. Scanned, filed in doc files. 11/24/2014 TM Loan Servicing Call from Mr. Oo re potential for future loans. Took message. Informed re no monies available to lend. to Rafael re same. 11/25/2014 TM Loan Servicing Received insurance info re Edge, made scans and copies, filed in doc files, updated spreadsheet and reviewed other upcoming expirations. TM Loan Servicing to agent re liability coverage re Pham. Exhibit A, Page 14 of 104