5. Proposed Transaction

Pursuant to the Plan, Newhall Holding and Newhall Intermediary seek authority to acquire indirect control of Valencia through their controlling ownership interests in Newhall Development.

The change in indirect control of Valencia begins with the ownership and control of Newhall Development from a 50% voting control shared equally by Lennar Corporation and LNR Property Corporation authorized by D.04-01-051, and the remaining 50% voting control by MW Housing Partners III LP authorized by the 2007 Decision to 82.31% ownership by Newhall Intermediary, which in turn, is owned 85.72% by Newhall Holding. A flow chart depicting the proposed indirect ownership in Valencia is set forth in Appendix A to this decision.

This change in control reduces Lennar Corporation's ownership interest in Newhall Development from 25% to approximately 17% and eliminates the ownership interest in Newhall Development by LNR Property Corporation and MW Housing Partners III LP. There will be no change in the ownership interest of Valencia by Newhall Land and Farming, LandSource Holding, or Newhall Development.