You're going to be doing both patterns mushed in together, so you may want to keep track of where you are.
Row 5 - Work r 1 of the setup rows, and row 5 of the Lace panel pattern.
Row 7 - work r 3 of the setup and row 7 of the lace panel pattern
row 9 - R1 of the setup and row 9 of the lace panel pattern
row 11 - r3 of the setups, row 1 of lace panel pattern
Keep rotating through the patterns like that. You pretty much repeat rows 1 and 3 of the setup, substituting whichever row of the Lace panel pattern you should be on wherever it says 'work row 1 (3) of the LPP'.