Exhibit 10.1

AIA Document A111 — 1997

Standard Form of Agreement Between Owner and Contractor
Where the basis for payment is the COST OF THE WORK PLUS A FEE with a negotiated
Guaranteed Maximum Price

AGREEMENT made as of the 25th day of            August            in the year
2005
(In words, indicate day, month and year)

BETWEEN the Owner:
(Name, address and other information)

Duncan Investments, LLC
225 South Sepulveda Blvd.
Manhattan Beach, CA 90266

and the Contractor:
(Name, address and other information)

Morley Construction Company
2901 28th Street, Suite 100
Santa Monica, CA 90405

The Project is:
(Name and location)

Skechers Office Building
330 South Sepulveda Blvd.
Manhattan Beach, CA 90266

The Architect is:
(Name, address and other information)

David Forbes Hibbert AIA

1544 20th Street, Suite 103
Santa Monica, CA 90404

The Owner and Contractor agree as follows.

1

ARTICLE 1 THE CONTRACT DOCUMENTS
The Contract Documents consist of this Agreement, Conditions of the Contract
(General, Supplementary and other Conditions), Drawings, Specifications, Addenda
issued prior to execution of this Agreement, other documents listed in this
Agreement and Modifications issued after execution of this Agreement; these form
the Contract, and are as fully a part of the Contract as if attached to this
Agreement or repeated herein. The Contract represents the entire and integrated
agreement between the parties hereto and supersedes prior negotiations,
representations or agreements, either written or oral. An enumeration of the
Contract Documents, other than Modifications, appears in Article 15. If anything
in the other Contract Documents is inconsistent with this Agreement, this
Agreement shall govern.

ARTICLE 2 THE WORK OF THIS CONTRACT
The Contractor shall fully execute the Work described in the Contract Documents,
except to the extent specifically indicated in the Contract Documents to be the
responsibility of others.

ARTICLE 3 RELATIONSHIP OF THE PARTIES
The Contractor accepts the relationship of trust and confidence established by
this Agreement and covenants with the Owner to cooperate with the Architect and
exercise the Contractor’s skill and judgment in furthering the interests of the
Owner; to furnish efficient business administration and supervision; to furnish
at all times an adequate supply of workers and materials; and to perform the
Work in an expeditious and economical manner consistent with the Owner’s
interests. The Owner agrees to furnish and approve, in a timely manner,
information required by the Contractor and to make payments to the Contractor in
accordance with the requirements of the Contract Documents.

ARTICLE 4 DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION
§ 4.1 The date of commencement of the Work shall be the date of this Agreement
unless a different date is stated below or provision is made for the date to be
fixed in a notice to proceed issued by the Owner.
(Insert the date of commencement, if it differs from the date of this Agreement
or, if applicable, state that the date will be fixed in a notice to proceed.)

If, prior to commencement of the Work, the Owner requires time to file
mortgages, mechanic’s liens and other security interests, the Owner’s time
requirement shall be as follows:

§ 4.2 The Contract Time shall be measured from the date of commencement. The
Date of Commencement shall be five (5) working days after the Owner’s Notice to
Proceed.

§ 4.3 The Contractor shall achieve Substantial Completion of the entire Work not
later than 462 calendar            days from the date of commencement, or as
follows:
(Insert number of calendar days. Alternatively, a calendar date may be used when
coordinated with the date of commencement. Unless stated elsewhere in the
Contract Documents, insert any requirements for earlier Substantial Completion
of certain portions of the Work.)

As Shown on Exhibit “F”, the anticipated date of Commencement is September 1,
2005. Based on the date, the calculated date of Substantive Completion is
December 6, 2006.

     
Portion of Work
  Substantial Completion date

, subject to adjustments of this Contract Time as provided in the Contract
Documents.
(Insert provisions, if any, for liquidated damages relating to failure to
complete on time, or for bonus payments for early completion of the Work.)

§ 4.4 If Contractor achieves Substantial Completion of the Work prior to the
Scheduled Completion Date, as adjusted by Change Orders, then Contractor shall
be entitled to an early completion bonus equal to $20,000 dollars.

§ 4.5 Owner and Contractor acknowledge and agree that if Contractor fails to
achieve Substantial Completion of the Work within the Contract Time, as adjusted
by Change Order, Owner will suffer substantial damages which are both extremely
difficult and impracticable to ascertain. Therefore, Owner and Contractor agree
that in the event Contractor fails to achieve Substantial Completion within
thirty (30) days after the final Scheduled Completion Date, Contractor shall pay
to Owner as liquidated damages, not as a penalty but as a reasonable estimate of
the amount of damages Owner will suffer, $ 1,000 dollars for each day of delay
(after the expiration of said thirty (30) day grace period), until the Work is
Substantially Complete. If Contractor fails to achieve Substantial Completion
within sixty (60) days after the final scheduled completion date, Contractor
shall pay to Owner as liquidated damages $2,000 dollars for each day of delay
after the sixtieth day. Owner and Contractor acknowledge and agree that this
liquidated damages provision shall be the only remedy to Owner for damages
caused by Contractor’s failure to achieve Substantial Completion within the
Contract Time.

ARTICLE 5 BASIS FOR PAYMENT
§ 5.1 CONTRACT SUM
§ 5.1.1 The Owner shall pay the Contractor the Contract Sum in current funds for
the Contractor’s performance of the Contract. The Contract Sum is the Cost of
the Work as defined in Article 7 plus the Contractor’s Fee.

§ 5.1.2 The Contractor’s Fee shall be $ 655,096 dollars.
(State a lump sum, percentage of Cost of the Work or other provision for
determining the Contractor’s Fee, and describe the method of adjustment of the
Contractor’s Fee for changes in the Work.)

§ 5.1.3 Changes (Change Order and Construction Change Directives) that affect
the Cost of the Work shall be handled as follows:

5.1.3.1 For changes which increase the Cost of the Work, the estimated value
shall be the Cost of the work (computed in accordance with Article 7), plus an
allowance for jobsite General Conditions of eight percent (8%) and Contractor’s
Fixed Fee of three and three-quarters ( 3.75%) percent.

5.1.3.2 For changes which decrease the cost, the estimated value shall be the
direct change in the Cost of the Work (computed per Article 7), with a reduction
in the Contractor’s Fee of (3.75%) percent.

5.1.3.3 After values have been computed per 5.1.3.1 and 5.1.3.2 above, these
estimated values shall be used to establish the adjusted Guaranteed Maximum
Price.

5.1.3.4 Billings for the Cost of the Work on changes will be actual costs (per
Article 7), and will be incorporated into the billings for the Project as a
whole, not reported separately.

5.1.3.5 If the Contractor is asked by the owner to perform “tenant work,” over
and above the changes in the base building described above, then such “tenant
work” shall be handled under a separate agreement.

§ 5.1.4 After completion of the Project, and after the Guaranteed Maximum Price
has been adjusted per Article 5.1.3 above, it shall be compared to the total of
the Cost of the Work (defined in Article 7), plus the Contractor’s Fee
(Article 5.1.2). If the final Guaranteed Maximum Price exceeds the total of the
cost of the Work plus any unused monies from the line item contingency noted in
5.2.1.2 and 5.2.1.3 plus Contractor’s fee, then the difference (“Savings”) shall
be divided between the Owner and Contractor. The Owner will be credited with the
first $50,000 in Savings, thereafter the Owner will be credited with 75% of the
Savings, and will pay the Contractor 25% of the Savings as Additional Fee.

§ 5.2 GUARANTEED MAXIMUM PRICE
§ 5.2.1 The sum of the Cost of the Work and the Contractor’s Fee is guaranteed
by the Contractor not to exceed Eighteen-Million One-Hundred Twenty-Four
Thousand Three-Hundred Twenty-Two ($18,124,322 ), subject to additions and
deductions by Change Order as provided in the Contract Documents. Such maximum
sum is referred to in the Contract Documents as the Guaranteed Maximum Price.
Costs which would cause the Guaranteed Maximum Price to be exceeded shall be
paid by the Contractor without reimbursement by the Owner.
(Insert specific provisions if the Contractor is to participate in any savings.)

5.2.1.1 There is only one Guaranteed Maximum Price provided by this Contract.
Although the Contractor has furnished the Owner with the Budget Line
Item Breakdown (Exhibit “C”), the amounts of the individual line items in these
exhibits are not guaranteed. The final cost of any particular line item may be
more or less than the estimate, except for the structural concrete work which
will be performed on a Lump Sum basis, as per Paragraph 7.3.2 of this Agreement.
The Contractor does, however, guarantee that it will perform the work required
by the Contract Documents within the Guaranteed Maximum Price.

5.2.1.2 The Guaranteed Maximum Price has been determined by computing an
estimated cost, then adding a contingency factor to the estimated cost, and
increasing the figure thus obtained by the Contractor’s Fee.

5.2.1.3 The Contingency is intended for the Contractor’s use to cover
unanticipated overrun of any costs, additional cost caused by failure of any
subcontractor, and any other unforeseen events. The contingency factor is not to
be used by the Owner to cover the cost of changes to the Contract Documents
required by the Owner, Architect or governing authority, nor for any other
purpose.

§ 5.2.2 The Guaranteed Maximum Price is based on the following alternates, if
any, which are described in the Contract Documents and are hereby accepted by
the Owner:
(State the numbers or other identification of accepted alternates. If decisions
on other alternates are to be made by the Owner subsequent to the execution of
this Agreement, attach a schedule of such other alternates showing the amount
for each and the date when the amount expires.)

§ 5.2.3 Unit prices, if any, are as follows:

         
Description
  Units   Price ($ 0.00)

§ 5.2.4 Allowances, if any, are as follows
(Identify and state the amounts of any allowances, and state whether they
include labor, materials, or both.)

         
Allowance
  Amount ($ 0.00)   Included items

§ 5.2.5 Assumptions, if any, on which the Guaranteed Maximum Price is based are
as follows:

§ 5.2.6 To the extent that the Drawings and Specifications are anticipated to
require further development by the Architect, the Contractor has provided in the
Guaranteed Maximum Price for such further development consistent with the
Contract Documents and reasonably inferable therefrom. Such further development
does not include such things as changes in scope, systems, kinds and quality of
materials, finishes or equipment, all of which, if required, shall be
incorporated by Change Order.

§ 5.2.7 The Contractor represents and warrants to Owner that (i) it has
substantial experience and expertise in building projects such as the Project,
and it acknowledges that such experience and expertise were substantial and
material factors in Owner’s decisions to retain Contractor to build the Project,
and (ii) it has carefully reviewed the Contract Documents, and has determined
that they are sufficiently comprehensive and complete as to permit Contractor to
build the Project within the Project Budget and the guaranteed Maximum Price and
within the Contract time. Therefore Contractor acknowledges and agrees that
Contractor shall not seek, and Owner shall have no obligation to agree to, any
increase in the Guaranteed Maximum Price, or any extension of the Contract Time,
based upon normal coordination needs of the plans and specifications.

ARTICLE 6 CHANGES IN THE WORK
§ 6.1 Adjustments to the Guaranteed Maximum Price on account of changes in the
Work may be determined by any of the methods listed in Section 7.3.3 of AIA
Document A201-1997.

§ 6.2 In calculating adjustments to subcontracts (except those awarded with the
Owner’s prior consent on the basis of cost plus a fee), the terms “cost” and
“fee” as used in Section 7.3.3.3 of AIA Document A201-1997 and the terms “costs”
and “a reasonable allowance for overhead and profit” as used in Section 7.3.6 of
AIA Document A201-1997 shall have the meanings assigned to them in AIA Document
A201-1997 and shall not be modified by Articles 5, 7 and 8 of this Agreement.
Adjustments to subcontracts awarded with the Owner’s prior consent on the basis
of cost plus a fee shall be calculated in accordance with the terms of those
subcontracts.

§ 6.3 In calculating adjustments to the Guaranteed Maximum Price, the terms
“cost” and “costs” as used in the above-referenced provisions of AIA Document
A201-1997 shall mean the Cost of the Work as defined in Article 7 of this
Agreement and the terms “fee” and “a reasonable allowance for overhead and
profit” shall mean the Contractor’s Fee as defined in Section 5.1.2 of this
Agreement.

§ 6.4 If no specific provision is made in Section 5.1 for adjustment of the
Contractor’s Fee in the case of changes in the Work, or if the extent of such
changes is such, in the aggregate, that application of the adjustment provisions
of Section 5.1 will cause substantial inequity to the Owner or Contractor, the
Contractor’s Fee shall be equitably adjusted on the basis of the Fee established
for the original Work, and the Guaranteed Maximum Price shall be adjusted
accordingly.

ARTICLE 7 COSTS TO BE REIMBURSED
§ 7.1 COST OF THE WORK
The term Cost of the Work shall mean costs necessarily incurred by the
Contractor in the proper performance of the Work. Such costs shall be at rates
not higher than the standard paid at the place of the Project except with prior
consent of the Owner. The Cost of the Work shall include only the items set
forth in this Article 7.

§ 7.2 LABOR COSTS
§ 7.2.1 Wages of construction workers directly employed by the Contractor to
perform the construction of the Work at the site or, with the Owner’s approval,
at off-site workshops.

§ 7.2.2 Wages or salaries of the Contractor’s supervisory and administrative
personnel when stationed at the site with the Owner’s approval.
(If it is intended that the wages or salaries of certain personnel stationed at
the Contractor’s principal or other offices shall be included in the Cost of the
Work, identify in Article 14 the personnel to be included and whether for all or
only part of their time, and the rates at which their time will be charged to
the Work.)

7.2.2.1 Prorated salaries and expenses of the following personnel for that
portion of their time spent working on this Project (regardless of work place);
Project Executive, Project Manager, Project Engineer, Safety Director, Project
Accountant and General Superintendent, including automobile allowances where
applicable.

§ 7.2.3 Wages and salaries of the Contractor’s supervisory or administrative
personnel engaged, at factories, workshops or on the road, in expediting the
production or transportation of materials or equipment required for the Work,
but only for that portion of their time required for the Work.

§ 7.2.4 Costs paid or incurred by the Contractor for taxes, insurance,
contributions, assessments and benefits required by law or collective bargaining
agreements and, for personnel not covered by such agreements, customary benefits
such as sick leave, medical and health benefits, holidays, vacations and
pensions, provided such costs are based on wages and salaries included in the
Cost of the Work under Sections 7.2.1 through 7.2.3.

7.2.4.1 The Contractor has computed the cost of Workers’ Compensation and other
expenses measured by payroll for all employees, reimbursable under Article 7.2.
It is agreed that the surcharges for these items, to be applied to the base
wages for personnel described in Article 7, shall be 61.53%. It is recognized
that minor changes and variation in this figure can occur, which are difficult
or impossible to compute accurately. Therefore, the surcharges agreed on above
shall be used for the duration of the Project.

§ 7.3 SUBCONTRACT COSTS
§ 7.3.1 Payments made by the Contractor to Subcontractors in accordance with the
requirements of the subcontracts.

§ 7.3.2 Self-Performed Work – The Contractor will self-perform the structural
concrete work for a Guaranteed lump-sum amount of $4,392,146 . The Contractor
has submitted documentation supporting the Lump Sum amount to allow review by
the Owner. The Owner will notify the Contractor if additional documentation is
required.

§ 7.4 COSTS OF MATERIALS AND EQUIPMENT INCORPORATED IN THE COMPLETED
CONSTRUCTION
§ 7.4.1 Costs, including transportation and storage, of materials and equipment
incorporated or to be incorporated in the completed construction.

§ 7.4.2 Costs of materials described in the preceding Section 7.4.1 in excess of
those actually installed to allow for reasonable waste and spoilage. Unused
excess materials, if any, shall become the Owner’s property at the completion of
the Work or, at the Owner’s option, shall be sold by the Contractor. Any amounts
realized from such sales shall be credited to the Owner as a deduction from the
Cost of the Work.

§ 7.5 COSTS OF OTHER MATERIALS AND EQUIPMENT, TEMPORARY FACILITIES AND RELATED
ITEMS
§ 7.5.1 Costs, including transportation and storage, installation, maintenance,
dismantling and removal of materials, supplies, temporary facilities, machinery,
equipment, and hand tools not customarily owned by construction workers, that
are provided by the Contractor at the site and fully consumed in the performance
of the Work; and cost (less salvage value) of such items if not fully consumed,
whether sold to others or retained by the Contractor. Cost for items previously
used by the Contractor shall mean fair market value.

§ 7.5.2 Rental charges for temporary facilities, machinery, equipment, and hand
tools not customarily owned by construction workers that are provided by the
Contractor at the site, whether rented from the Contractor or others, and costs
of transportation, installation, minor repairs and replacements, dismantling and
removal thereof. Rates and quantities of equipment rented shall be subject to
the Owner’s prior approval.

  7.5.2.1   Rental rates will be the prevailing rates for similar equipment at
the location of the Project.

§ 7.5.3 Costs of removal of debris from the site.

§ 7.5.4 Costs of document reproductions, facsimile transmissions and
long-distance telephone calls, postage and parcel delivery charges, telephone
service at the site and reasonable petty cash expenses of the site office.

  7.5.4.1   Cellular phone charges and usage, and maintenance fees.

§ 7.5.5 That portion of the reasonable expenses of the Contractor’s personnel
incurred while traveling in discharge of duties connected with the Work.

§ 7.5.6 Costs of materials and equipment suitably stored off the site at a
mutually acceptable location, if approved in advance by the Owner.

§ 7.6 MISCELLANEOUS COSTS
§ 7.6.1 That portion of insurance and bond premiums that can be directly
attributed to this Contract:

§ 7.6.2 Sales, use or similar taxes imposed by a governmental authority that are
related to the Work.

7.6.2.1 Local business or gross receipts taxes or fees related to the Work.

§ 7.6.3 Fees and assessments for the building permit and for other permits,
licenses and inspections for which the Contractor is required by the Contract
Documents to pay.

§ 7.6.4 Fees of laboratories for tests required by the Contract Documents,
except those related to defective or nonconforming Work for which reimbursement
is excluded by Section 13.5.3 of AIA Document A201-1997 or other provisions of
the Contract Documents, and which do not fall within the scope of Section 7.7.3.

§ 7.6.5 Royalties and license fees paid for the use of a particular design,
process or product required by the Contract Documents; the cost of defending
suits or claims for infringement of patent rights arising from such requirement
of the Contract Documents; and payments made in accordance with legal judgments
against the Contractor resulting from such suits or claims and payments of
settlements made with the Owner’s consent. However, such costs of legal
defenses, judgments and settlements shall not be included in the calculation of
the Contractor’s Fee or subject to the Guaranteed Maximum Price. If such
royalties, fees and costs are excluded by the last sentence of Section 3.17.1 of
AIA Document A201-1997 or other provisions of the Contract Documents, then they
shall not be included in the Cost of the Work.

§ 7.6.6 Computers, Data processing supplies and rental rates for computers used
by Contractor’s personnel and related software licensing fees.

§ 7.6.7 Deposits lost for causes other than the Contractor’s negligence or
failure to fulfill a specific responsibility to the Owner as set forth in the
Contract Documents.

§ 7.6.8 Legal, mediation and arbitration costs, including attorneys’ fees, other
than those arising from disputes between the Owner and Contractor, reasonably
incurred by the Contractor in the performance of the Work and with the Owner’s
prior written approval; which approval shall not be unreasonably withheld.

§ 7.6.9 Expenses incurred in accordance with the Contractor’s standard personnel
policy for relocation and temporary living allowances of personnel required for
the Work, if approved by the Owner.

      § 7.6.10 Preconstruction services not paid for outside of this contract in
accordance with Preconstruction Agreement. The project will be charged a Lump
Sum amount of $45,000 for these costs as a final cost for all remaining
Preconstruction services.

§ 7.7 OTHER COSTS AND EMERGENCIES
§ 7.7.1 Other costs incurred in the performance of the Work if and to the extent
approved in advance in writing by the Owner.

§ 7.7.2 Costs due to emergencies incurred in taking action to prevent threatened
damage, injury or loss in case of an emergency affecting the safety of persons
and property, as provided in Section 10.6 of AIA Document A201-1997.

§ 7.7.3 Costs of repairing or correcting damaged or nonconforming Work executed
by the Contractor, Subcontractors or suppliers, provided that such damaged or
nonconforming Work was not caused by negligence or failure to fulfill a specific
responsibility of the Contractor and only to the extent that the cost of repair
or correction is not recoverable by the Contractor from insurance, sureties,
Subcontractors or suppliers.

ARTICLE 8 COSTS NOT TO BE REIMBURSED
§ 8.1 The Cost of the Work shall not include:

§ 8.1.1 Salaries and other compensation of the Contractor’s personnel stationed
at the Contractor’s principal office or offices other than the site office,
except as specifically provided in Sections 7.2.2 and 7.2.3 or as may be
provided in Article 14.

§ 8.1.2 Expenses of the Contractor’s principal office and offices other than the
site office.

§ 8.1.3 Overhead and general expenses, except as may be expressly included in
Article 7.

§ 8.1.4 The Contractor’s capital expenses, including interest on the
Contractor’s capital employed for the Work.

§ 8.1.5 Rental costs of machinery and equipment, except as specifically provided
in Section 7.5.2 and 7.6.6..

§ 8.1.6 Except as provided in Section 7.7.3 of this Agreement, costs due to the
negligence or failure to fulfill a specific responsibility of the Contractor,
Subcontractors and suppliers or anyone directly or indirectly employed by any of
them or for whose acts any of them may be liable.

§ 8.1.7 Any cost not specifically and expressly described in Article 7.

§ 8.1.8 Costs, other than costs included in Change Orders approved by the Owner,
that would cause the Guaranteed Maximum Price to be exceeded.

§ 8.1.9 The following items are not included in the Cost of the Work and shall
be paid directly by the Owner:

Architectural and engineering fees
Cost of all blueprints
Utility deposits and connection fees
Sewer. water, street, or other assessments
Plan check and general building permit and “B” permit fees
Soils Reports and cost of inspection and testing (subject to Article 13.5 of the
General Conditions).
Labor, material and performance bond premiums for the Work
Premiums for Fire Insurance, All-Risk Insurance or Builder’s Risk Insurance
All costs and damage to the Project related to an earthquake
Loan fees or financing costs related to the Owner’s financing of the Project
Sales and Leasing Costs
All utility charges after installation of permanent systems

ARTICLE 9 DISCOUNTS, REBATES AND REFUNDS
§ 9.1 Cash discounts obtained by the Contractor shall accrue to the Owner.

§ 9.2 Amounts that accrue to the Owner in accordance with the provisions of
Section 9.1 shall be credited to the Owner as a deduction from the Cost of the
Work.

ARTICLE 10 SUBCONTRACTS AND OTHER AGREEMENTS
§ 10.1 Those portions of the Work that the Contractor does not customarily
perform with the Contractor’s own personnel shall be performed under
subcontracts or by other appropriate agreements with the Contractor. The Owner
may designate specific persons or entities from whom the Contractor shall obtain
bids. The Contractor shall obtain bids from Subcontractors and from suppliers of
materials or equipment fabricated especially for the Work. . The Owner shall
then determine, with the advice of the Contractor and the Architect, which bids
will be accepted. The Contractor shall not be required to contract with anyone
to whom the Contractor has reasonable objection.

§ 10.2 If a specific bidder (1) is recommended to the Owner by the Contractor;
(2) is qualified to perform that portion of the Work; and (3) has submitted a
bid that conforms to the requirements of the Contract Documents without
reservations or exceptions, but the Owner requires that another bid be accepted,
then the Contractor may require that a Change Order be issued to adjust the
Guaranteed Maximum Price by the difference between the bid of the person or
entity recommended to the Owner by the Contractor and the amount of the
subcontract or other agreement actually signed with the person or entity
designated by the Owner.

§ 10.3 Subcontracts or other agreements shall conform to the applicable payment
provisions of this Agreement, and shall not be awarded on the basis of cost plus
a fee without the prior consent of the Owner.

ARTICLE 11 ACCOUNTING RECORDS
The Contractor shall keep full and detailed accounts and exercise such controls
as may be necessary for proper financial management under this Contract, and the
accounting and control systems shall be satisfactory to the Owner. The Owner and
the Owner’s accountants shall be afforded access to, and shall be permitted to
audit and copy, the Contractor’s records, books, correspondence, instructions,
drawings, receipts, subcontracts, purchase orders, vouchers, memoranda and other
data relating to this Contract, and the Contractor shall preserve these for a
period of three years after final payment, or for such longer period as may be
required by law.

ARTICLE 12 PAYMENTS
§ 12.1 PROGRESS PAYMENTS
§ 12.1.1 Based upon Applications for Payment submitted to the Architect and
Owner by the Contractor and Certificates for Payment issued by the Architect,
the Owner shall make progress payments on account of the Contract Sum to the
Contractor as provided below and elsewhere in the Contract Documents.

§ 12.1.2 The period covered by each Application for Payment shall be one
calendar month ending on the last day of the month, or as follows:

§ 12.1.3 Provided that an Application for Payment is received by the Architect
and Owner not later than the thirtieth (30th) day of a month, the Owner shall
make payment to the Contractor not later than the twentieth (20th ) day of the
following month. If an Application for Payment is received by the Architect and
Owner after the application date fixed above, payment shall be made by the Owner
not later than twenty ( 20 ) days after the Architect and Owner receives the
Application for Payment.

§ 12.1.4 With each Application for Payment, the Contractor shall make available
at Contractor’s office submit payrolls, petty cash accounts, receipted invoices
or invoices with check vouchers attached, and any other evidence required by the
Owner or Architect to demonstrate that cash disbursements already made by the
Contractor on account of the Cost of the Work equal or exceed (1) progress
payments already received by the Contractor; less (2) that portion of those
payments attributable to the Contractor’s Fee; plus (3) payrolls for the period
covered by the present Application for Payment.

12.1.4.1 The Contractor will provide Conditional Lien Releases, both its own and
those of subcontractors, with each Payment Request submittal and will provide
unconditional lien releases for payments received.

  12.1.4.2   Contractor shall provide Release of Lien Bonds to keep the Project
free of liens, provided Owner has paid Contractor for work covered by the
recorded lien.

§ 12.1.5 Each Application for Payment shall be based on the most recent schedule
of values, as approved by the Owner submitted by the Contractor in accordance
with the Contract Documents. The schedule of values shall allocate the entire
Guaranteed Maximum Price among the various portions of the Work, except that the
Contractor’s Fee shall be shown as a single separate item. The schedule of
values shall be prepared in such form and supported by such data to substantiate
its accuracy as the Architect may require. This schedule, unless objected to by
the Architect, shall be used as a basis for reviewing the Contractor’s
Applications for Payment.

§ 12.1.6 Applications for Payment shall show the percentage of completion of
each portion of the Work as of the end of the period covered by the Application
for Payment. The percentage of completion shall be the lesser of (1) the
percentage of that portion of the Work which has actually been completed; or
(2) the percentage obtained by dividing (a) the expense that has actually been
incurred by the Contractor on account of that portion of the Work for which the
Contractor has made or intends to make actual payment prior to the next
Application for Payment by (b) the share of the Guaranteed Maximum Price
allocated to that portion of the Work in the schedule of values.

§ 12.1.7 Subject to other provisions of the Contract Documents, the amount of
each progress payment shall be computed as follows:

  .1   take that portion of the Guaranteed Maximum Price properly allocable to
completed Work as determined by multiplying the percentage of completion of each
portion of the Work by the share of the Guaranteed Maximum Price allocated to
that portion of the Work in the schedule of values. Pending final determination
of cost to the Owner of changes in the Work, amounts not in dispute shall be
included as provided in Section 7.3.8 of AIA Document A201-1997;

  .2   add that portion of the Guaranteed Maximum Price properly allocable to
materials and equipment delivered and suitably stored at the site for subsequent
incorporation in the Work, or if approved in advance by the Owner, suitably
stored off the site at a location agreed upon in writing;

  .3   add the Contractor’s Fee. The Contractor’s Fee shall be computed upon the
Cost of the Work described in the two preceding Clauses at the rate stated in
Section 5.1.2 or, if the Contractor’s Fee is stated as a fixed sum in that
Subparagraph, shall be an amount that bears the same ratio to that fixed-sum fee
as the Cost of the Work in the two preceding Clauses bears to a reasonable
estimate of the probable Cost of the Work upon its completion;

  .4   subtract the aggregate of previous payments made by the Owner;

  .5   subtract the shortfall, if any, indicated by the Contractor in the
documentation required by Section 12.1.4 to substantiate prior Applications for
Payment, or resulting from errors subsequently discovered by the Owner’s
accountants in such documentation; and

  .6   subtract amounts, if any, for which the Architect has withheld or
nullified a Certificate for Payment as provided in Section 9.5 of AIA Document
A201-1997.

§ 12.1.8 Except with the Owner’s prior approval, payments to Subcontractors
shall be subject to retainage of not less than ten percent ( 10% ). The Owner
and the Contractor shall agree upon a mutually acceptable procedure for review
and approval of payments and retention for Subcontractors.

12.1.8.1 A retention value of ten percent (10%) will be calculated at each line
item in the billing and only the net amount of each line item will be billed and
have the Contractor’s Fee applied. Line items that contain the Contractor’s
direct costs, such as General Conditions, will not have retention withheld.
Some, may have retention paid out prior to final Project completion, and others
may have retention percentages less than ten percent (10%) as approved by the
Owner pursuant to Article 10 of this Agreement.

§ 12.1.9 In taking action on the Contractor’s Applications for Payment, the
Architect shall be entitled to rely on the accuracy and completeness of the
information furnished by the Contractor and shall not be deemed to represent
that the Architect has made a detailed examination, audit or arithmetic
verification of the documentation submitted in accordance with Section 12.1.4 or
other supporting data; that the Architect has made exhaustive or continuous
on-site inspections or that the Architect has made examinations to ascertain how
or for what purposes the Contractor has used amounts previously paid on account
of the Contract. Such examinations, audits and verifications, if required by the
Owner, will be performed by the Owner’s accountants acting in the sole interest
of the Owner.

§ 12.2 FINAL PAYMENT
§ 12.2.1 Final payment, constituting the entire unpaid balance of the Contract
Sum, shall be made by the Owner to the Contractor when:

  .1   the Contractor has fully performed the Contract except for the
Contractor’s responsibility to correct Work as provided in Section 12.2.2 of AIA
Document A201-1997, and to satisfy other requirements, if any, which extend
beyond final payment; and

  .2   a final Certificate for Payment has been issued by the Architect.

§ 12.2.2 The Owner’s final payment to the Contractor shall be made no later than
30 days after the issuance of the Certificate of Occupancy, or as follows:

12.2.2.1 If the contractor’s work is complete, but a Certificate of Occupancy is
not issued, because of administrative delay on the part of the appropriate
building authority not in Contractor’s control, or because of the work of
separate contractors at the Project site in the employ of the Owner or any other
reason beyond the control of the Contractor, then final payment will be made to
the Contractor as if there was a Certificate of Occupancy.

§ 12.2.3 The Owner’s accountants will review and report in writing on the
Contractor’s final accounting within thirty (30) days after delivery of the
final Payment Request to the Owner by the Contractor. Based upon such Cost of
the Work as the Owner’s accountants report to be substantiated by the
Contractor’s final accounting, and provided the other conditions of
Paragraph 12.2.1 have been met, the Owner will, within seven (7) days after
receipt of the written report of the Owner’s accountants, either pay the
Contractor, or notify the Contractor in writing of the Owner’s reasons for
withholding payment as provided in Subparagraph 9.5.1 of the General Conditions.
The Owner’s accountants will meet with Contractor prior to the start of said
30-day period to agree on the level of detail to be provided at the Contractor’s
main office for the accountant’s review of the Project’s Costs.

§ 12.2.4 If the Owner’s accountants report the Cost of the Work as substantiated
by the Contractor’s final accounting to be less than claimed by the Contractor,
the Contractor shall be entitled to demand arbitration of the disputed amount
without a further decision of the Architect. Such demand for arbitration shall
be made by the Contractor within 30 days after the Contractor’s receipt of a
copy of the Architect’s final Certificate for Payment; failure to demand
arbitration within this 30-day period shall result in the substantiated amount
reported by the Owner’s accountants becoming binding on the Contractor. Pending
a final resolution by arbitration, the Owner shall pay the Contractor the amount
not in dispute.

§ 12.2.5 If, subsequent to final payment and at the Owner’s request, the
Contractor incurs costs described in Article 7 and not excluded by Article 8 to
correct defective or nonconforming Work, the Owner shall reimburse the
Contractor such costs and the Contractor’s Fee applicable thereto on the same
basis as if such costs had been incurred prior to final payment, but not in
excess of the Guaranteed Maximum Price. If the Contractor has participated in
savings as provided in Section 5.2, the amount of such savings shall be
recalculated and appropriate credit given to the Owner in determining the net
amount to be paid by the Owner to the Contractor.

ARTICLE 13 TERMINATION OR SUSPENSION
§ 13.1 The Contract may be terminated by the Contractor, or by the Owner for
convenience, as provided in Article 14 of AIA Document A201-1997. However, the
amount to be paid to the Contractor under Section 14.1.3 of AIA Document
A201-1997 shall not exceed the amount the Contractor would be entitled to
receive under Section 13.2 below, except that costs for demobilization will be
considered Cost of the Work and the Contractor’s Fee shall be calculated as
noted in 13.2.2.

§ 13.2 The Contract may be terminated by the Owner for cause as provided in
Article 14 of AIA Document A201-1997. The amount, if any, to be paid to the
Contractor under Section 14.2.4 of AIA Document A201-1997 shall not cause the
Guaranteed Maximum Price to be exceeded, nor shall it exceed an amount
calculated as follows:

§ 13.2.1 Take the Cost of the Work incurred by the Contractor to the date of
termination;

§ 13.2.2 Add the Contractor’s Fee computed upon the Cost of the Work to the date
of termination at the rate stated in Section 5.1.2 or, if the Contractor’s Fee
is stated as a fixed sum in that Section, an amount that bears the same ratio to
that fixed-sum Fee as the Cost of the Work at the time of termination bears to a
reasonable estimate of the probable Cost of the Work upon its completion; and

§ 13.2.3 Subtract the aggregate of previous payments made by the Owner.

§ 13.3 To the extent that the Owner elects to take legal assignment of
subcontracts and purchase orders (including rental agreements), the Contractor
shall, as a condition of receiving the payments referred to in this Article 13,
execute and deliver all such papers and take all such steps, including the legal
assignment of such subcontracts and other contractual rights of the Contractor,
as the Owner may require for the purpose of fully vesting in the Owner the
rights and benefits of the Contractor under such subcontracts or purchase
orders.

§ 13.4 The Work may be suspended by the Owner as provided in Article 14 of AIA
Document A201-1997; in such case, the Guaranteed Maximum Price and Contract Time
shall be increased as provided in Section 14.3.2 of AIA Document A201-1997
except that the term “profit” shall be understood to mean the Contractor’s Fee
as described in Sections 5.1.2 and Section 6.4 of this Agreement.

ARTICLE 14 MISCELLANEOUS PROVISIONS
§ 14.1 Where reference is made in this Agreement to a provision AIA Document
A201-1997 or another Contract Document, the reference refers to that provision
as amended or supplemented by other provisions of the Contract Documents.

§ 14.2 Payments due and unpaid under the Contract shall bear interest from the
date payment is due at the rate stated below, or in the absence thereof, at the
legal rate prevailing from time to time at the place where the Project is
located.
(Insert rate of interest agreed upon, if any.)

Interest will be at two (2) points over the Reference Rate, as determined by
Bank of America.

(Usury laws and requirements under the Federal Truth in Lending Act, similar
state and local consumer credit laws and other regulations at the Owner’s and
Contractor’s principal places of business, the location of the Project and
elsewhere may affect the validity of this provision. Legal advice should be
obtained with respect to deletions or modifications, and also regarding
requirements such as written disclosures or waivers.)

§ 14.3 The Owner’s representative is:
(Name, address and other information.)

Peter Mow
Skechers USA, Inc.
225 South Sepulveda Blvd.
Manhattan Beach, CA 90266

§ 14.4 The Contractor’s representative is:
(Name, address and other information.)

Jeff Simonson

Morley Construction Company

2901 28th Street, Suite 100
Santa Monica, CA 90405

§ 14.5 Neither the Owner’s nor the Contractor’s representative shall be changed
without ten days’ written notice to the other party.

§ 14.6 Other provisions:

§14.6.1 Contractor’s License Notice
Contractors are required by law to be licensed and regulated by the
Contractor’s’ State License board which has jurisdiction to investigate
complaints against contractors if a complaint regarding a patent act or omission
is filed within four (4) years of the date of the alleged violation. A complaint
regarding a latent act or omission pertaining to structural defects must be
filed with then ten (10) years of the date of the alleged violation. Any
questions concerning a contractor may be referred to the Registrar, Contractors’
State License Board, P.O. Box 26000, Sacramento, California 95826. The
Contractor is a licensed Contractor under the laws of the State of California
and its License Number is 166461.

ARTICLE 15 ENUMERATION OF CONTRACT DOCUMENTS
§ 15.1 The Contract Documents, except for Modifications issued after execution
of this Agreement, are enumerated as follows:

§ 15.1.1 The Agreement is this executed 1997 edition of the Standard Form of
Agreement Between Owner and Contractor, AIA Document A111-1997.

§ 15.1.2 The General Conditions are the 1997 edition of the General Conditions
of the Contract for Construction, AIA Document A201-1997.

§ 15.1.3 The Supplementary and other Conditions of the Contract are those
contained in the Project Manual dated      , and are as follows:

         
Document
  Title   Pages

§ 15.1.4 The Specifications are those contained in the Project Manual dated as
in Section 15.1.3, and are as follows:
(Either list the Specifications here or refer to an exhibit attached to this
Agreement.)

         
Section
  Title   Pages

§ 15.1.5 The Drawings are as follows, and are dated            unless a
different date is shown below:
(Either list the Drawings here or refer to an exhibit attached to this
Agreement.)

         
Number
  Title   Date

§ 15.1.6 The Addenda, if any, are as follows:

         
Number
  Date   Pages

Portions of Addenda relating to bidding requirements are not part of the
Contract Documents unless the bidding requirements are also enumerated in this
Article 15.

§ 15.1.7 Other Documents, if any, forming part of the Contract Documents are as
follows:
(List here any additional documents, such as a list of alternates that are
intended to form part of the Contract Documents. AIA Document A201-1997 provides
that bidding requirements such as advertisement or invitation to bid,
Instructions to Bidders, sample forms and the Contractor’s bid are not part of
the Contract Documents unless enumerated in this Agreement. They should be
listed here only if intended to be part of the Contract Documents.)

Exhibit “A” – List of Documents

Exhibit “B” – Scope of Work, Qualifications and Exclusions

Exhibit “C” – Budget Line Item Breakdown

Exhibit “D” – (NOT USED)

Exhibit “E” – Insurance Requirements

Exhibit “F”- Construction Schedule

ARTICLE 16 INSURANCE AND BONDS
(List required limits of liability for insurance and bonds. AIA Document
A201-1997 gives other specific requirements for insurance and bonds.)

     
Type of insurance
  Limit of liability ($ 0.00)

This Agreement is entered into as of the day and year first written above and is
executed in at least three original copies, of which one is to be delivered to
the Contractor, one to the Architect for use in the administration of the
Contract, and the remainder to the Owner.

      /s/ Peter Mow   /s/ Charles Muttillo
OWNER (Signature)
  CONTRACTOR (Signature)
 
   
Peter Mow
Senior Vice President of
Real Estate & Construction
 
Charles Muttillo
Vice President
 
   
 
   
(Printed name and title)
  (Printed name and title)
 
   

2

EXHIBIT “A”

LIST OF DOCUMENTS

                          SKECHERS                   MORLEY                    
CONSTRUCTION COMPANY 330 S. Sepulveda Blvd., Manhattan Beach, CA 90266          
2901 28th Street, Suite 100 Santa Monica, CA 90405                     PHONE:
310-399-1600 FAX: 310-314-7347                     Date: August 24, 2005 Sheet
No.   Description   Date   Producer
ARCHITECTURAL DRAWINGS
                       
 
                       
A-1.0
  COVER SHEET
    05/31/05     DAVID FORBES HIBBERT, AIA

A-1.1
  PROJECT NOTES
    05/31/05     DAVID FORBES HIBBERT, AIA

A-1.2
  GENERAL NOTES
    05/31/05     DAVID FORBES HIBBERT, AIA

A-1.3
  ACCESSIBILITY NOTES
    05/31/05     DAVID FORBES HIBBERT, AIA

A-1.4
  ACCESSIBILITY NOTES
    05/31/05     DAVID FORBES HIBBERT, AIA

A-1.5
  ACCESSIBILITY NOTES
    05/31/05     DAVID FORBES HIBBERT, AIA

A-1.6
  ACCESSIBILITY NOTES
    05/31/05     DAVID FORBES HIBBERT, AIA

A-2.0
  SURVEY
    05/31/05     DAVID FORBES HIBBERT, AIA

A-3.1
  PARKING LEVEL P-3 PLAN
    05/31/05     DAVID FORBES HIBBERT, AIA

A-3.2
  PARKING LEVEL P-2 PLAN
    05/31/05     DAVID FORBES HIBBERT, AIA

A-3.3
  PARKING LEVEL P-1 PLAN
    05/31/05     DAVID FORBES HIBBERT, AIA

A-3.4
  GROUND FLOOR / SITE PLAN
    05/31/05     DAVID FORBES HIBBERT, AIA

A-3.5
  SECOND FLOOR PLAN
    05/31/05     DAVID FORBES HIBBERT, AIA

A-3.6
  THIRD FLOOR PLAN
    05/31/05     DAVID FORBES HIBBERT, AIA

A-3.7
  ROOF PLAN
    05/31/05     DAVID FORBES HIBBERT, AIA

A-3.8
  GROUND FLOOR REFLECTED CEILING PLAN
    05/31/05     DAVID FORBES HIBBERT, AIA

A-3.9
  SECOND FLOOR REFLECTED CEILING PLAN
    05/31/05     DAVID FORBES HIBBERT, AIA

A-3.10
  THIRD FLOOR REFLECTED CEILING PLAN
    05/31/05     DAVID FORBES HIBBERT, AIA

A-4.1
  WEST & EAST EXTERIOR ELEVATIONS
    05/31/05     DAVID FORBES HIBBERT, AIA

A-4.2
  SOUTH & NORTH EXTERIOR ELEVATIONS
    05/31/05     DAVID FORBES HIBBERT, AIA

A-4.3
  BUILDING SECTIONS
    05/31/05     DAVID FORBES HIBBERT, AIA

A-4.4
  BUILDING SECTIONS
    05/31/05     DAVID FORBES HIBBERT, AIA

A-5.1
  WALL SECTIONS
    05/31/05     DAVID FORBES HIBBERT, AIA

A-5.2
  WALL SECTIONS
    05/31/05     DAVID FORBES HIBBERT, AIA

A-5.3
  WALL SECTIONS
    05/31/05     DAVID FORBES HIBBERT, AIA

A-5.4
  WALL SECTIONS
    05/31/05     DAVID FORBES HIBBERT, AIA

A-5.5
  WALL SECTIONS
    05/31/05     DAVID FORBES HIBBERT, AIA

A-5.6
  WALL SECTIONS
    05/31/05     DAVID FORBES HIBBERT, AIA

A-5.7
  WALL SECTIONS
    05/31/05     DAVID FORBES HIBBERT, AIA

A-6.1
  SITE, GARAGE & EXTERIOR DETAILS
    05/31/05     DAVID FORBES HIBBERT, AIA

A-6.2
          not received
       
A-7.1
  ENLARGED BATHROOM PLANS & ELEVATIONS
    05/31/05     DAVID FORBES HIBBERT, AIA

A-8.1
  ENLARGED STAIR 1 PLANS, SECTIONS, & DETAILS
    05/31/05     DAVID FORBES HIBBERT, AIA

A-8.2
  ENLARGED STAIR 2 PLANS, SECTIONS, & DETAILS
    05/31/05     DAVID FORBES HIBBERT, AIA

A-8.3
  STAIR DETAILS AND NOTES
    05/31/05     DAVID FORBES HIBBERT, AIA

A-8.4
  ENLARGED ELEVATOR & ELEVATOR LOBBY PLANS
    05/31/05     DAVID FORBES HIBBERT, AIA

A-9.1
  INTERIOR DETAILS
    05/31/05     DAVID FORBES HIBBERT, AIA

A-10.1
  DOOR AND WINDOW SCHEDULES & NOTES
    05/31/05     DAVID FORBES HIBBERT, AIA

A-10.2
  FINISH SCHEDULE & NOTES
    05/31/05     DAVID FORBES HIBBERT, AIA

A-10.3
  WALL TYPES
    05/31/05     DAVID FORBES HIBBERT, AIA

CIVIL DRAWINGS
                       
 
                       
C0.01
  TITLE SHEET
    11/07/03     KPFF CONSULTING ENGINEERS

C1.01
  GRADING PLAN
    11/07/03     KPFF CONSULTING ENGINEERS

C2.01
  UTILITY PLAN
    11/07/03     KPFF CONSULTING ENGINEERS

STRUCTURAL DRAWINGS
                       
 
                       
S0.1
  GENERAL NOTES
    04/15/05     ROBERT ENGLEKIRK CONSULTING STRUCTURAL ENGINEERS, INC.

S1.1
  DETAILS, SCHEDULES AND NOTES
    04/15/05     ROBERT ENGLEKIRK CONSULTING STRUCTURAL ENGINEERS, INC.

S1.2
  DETAILS
    04/15/05     ROBERT ENGLEKIRK CONSULTING STRUCTURAL ENGINEERS, INC.

S1.3
  DETAILS
    04/15/05     ROBERT ENGLEKIRK CONSULTING STRUCTURAL ENGINEERS, INC.

S1.4
  DETAILS
    04/15/05     ROBERT ENGLEKIRK CONSULTING STRUCTURAL ENGINEERS, INC.

S1.5
  DETAILS
    04/15/05     ROBERT ENGLEKIRK CONSULTING STRUCTURAL ENGINEERS, INC.

S1.6
  DETAILS
    04/15/05     ROBERT ENGLEKIRK CONSULTING STRUCTURAL ENGINEERS, INC.

S1.7
  DETAILS
    04/15/05     ROBERT ENGLEKIRK CONSULTING STRUCTURAL ENGINEERS, INC.

S2.1
  P-3 AND FOUNDATION PLAN     04/15/05     ROBERT ENGLEKIRK CONSULTING
STRUCTURAL ENGINEERS, INC.

S2.1A
  P-3 NORTH / SOUTH (PORTION) SLAB REINFORCING PLAN     04/15/05     ROBERT
ENGLEKIRK CONSULTING STRUCTURAL ENGINEERS, INC.

S2.1B
  P-3 EAST / WEST (PORTION) SLAB REINFORCING PLAN     04/15/05     ROBERT
ENGLEKIRK CONSULTING STRUCTURAL ENGINEERS, INC.

S2.2
  P-2 FRAMING PLAN     04/15/05     ROBERT ENGLEKIRK CONSULTING STRUCTURAL
ENGINEERS, INC.

S2.2A
  P-2 NORTH / SOUTH SLAB REINFORCING PLAN     04/15/05     ROBERT ENGLEKIRK
CONSULTING STRUCTURAL ENGINEERS, INC.

S2.2B
  P-2 EAST / WEST SLAB REINFORCING PLAN     04/15/05     ROBERT ENGLEKIRK
CONSULTING STRUCTURAL ENGINEERS, INC.

S2.3
  P-1 FRAMING PLAN     04/15/05     ROBERT ENGLEKIRK CONSULTING STRUCTURAL
ENGINEERS, INC.

S2.3A
  P-1 NORTH / SOUTH SLAB REINFORCING PLAN     04/15/05     ROBERT ENGLEKIRK
CONSULTING STRUCTURAL ENGINEERS, INC.

S2.3B
  P-1 EAST / WEST SLAB REINFORCING PLAN     04/15/05     ROBERT ENGLEKIRK
CONSULTING STRUCTURAL ENGINEERS, INC.

S2.4
  GROUND FLOOR FRAMING PLAN
    04/15/05     ROBERT ENGLEKIRK CONSULTING STRUCTURAL ENGINEERS, INC.

S2.4A
  GROUND FLOOR NORTH / SOUTH SLAB REINFORCING PLAN
    04/15/05     ROBERT ENGLEKIRK CONSULTING STRUCTURAL ENGINEERS, INC.

S2.4B
  GROUND FLOOR EAST / WEST SLAB REINFORCING PLAN
    04/15/05     ROBERT ENGLEKIRK CONSULTING STRUCTURAL ENGINEERS, INC.

S2.5
  SECOND FLOOR FRAMING PLAN
    04/15/05     ROBERT ENGLEKIRK CONSULTING STRUCTURAL ENGINEERS, INC.

S2.5A
  SECOND FLOOR NORTH / SOUTH SLAB REINFORCING PLAN
    04/15/05     ROBERT ENGLEKIRK CONSULTING STRUCTURAL ENGINEERS, INC.

S2.5B
  SECOND FLOOR EAST / WEST SLAB REINFORCING PLAN
    04/15/05     ROBERT ENGLEKIRK CONSULTING STRUCTURAL ENGINEERS, INC.

S2.6
  THIRD FLOOR FRAMING PLAN
    04/15/05     ROBERT ENGLEKIRK CONSULTING STRUCTURAL ENGINEERS, INC.

S2.6A
  THIRD FLOOR NORTH / SOUTH SLAB REINFORCING PLAN
    04/15/05     ROBERT ENGLEKIRK CONSULTING STRUCTURAL ENGINEERS, INC.

S2.6B
  THIRD FLOOR EAST / WEST SLAB REINFORCING PLAN
    04/15/05     ROBERT ENGLEKIRK CONSULTING STRUCTURAL ENGINEERS, INC.

S2.7
  ROOF FRAMING PLAN
    04/15/05     ROBERT ENGLEKIRK CONSULTING STRUCTURAL ENGINEERS, INC.

S2.7A
  ROOF NORTH / SOUTH SLAB REINFORCING PLAN
    04/15/05     ROBERT ENGLEKIRK CONSULTING STRUCTURAL ENGINEERS, INC.

S2.7B
  ROOF EAST / WEST SLAB REINFORCING PLAN
    04/15/05     ROBERT ENGLEKIRK CONSULTING STRUCTURAL ENGINEERS, INC.

S3.1
  CONCRETE FOOTING SCHEDULE, DETAILS
    04/15/05     ROBERT ENGLEKIRK CONSULTING STRUCTURAL ENGINEERS, INC.

S3.2
  WEST & EAST WALL ELEVATIONS
    04/15/05     ROBERT ENGLEKIRK CONSULTING STRUCTURAL ENGINEERS, INC.

S3.3
  SOUTH & NORTH WALL ELEVATIONS
    04/15/05     ROBERT ENGLEKIRK CONSULTING STRUCTURAL ENGINEERS, INC.

S4.1
  CONCRETE COLUMN SCHEDULE, DETAILS
    04/15/05     ROBERT ENGLEKIRK CONSULTING STRUCTURAL ENGINEERS, INC.

S5.1
  CONCRETE BEAM SCHEDULE, DETAILS
    04/15/05     ROBERT ENGLEKIRK CONSULTING STRUCTURAL ENGINEERS, INC.

S6.1
  FRAME ELEVATIONS
    04/15/05     ROBERT ENGLEKIRK CONSULTING STRUCTURAL ENGINEERS, INC.

S6.2
  FRAME ELEVATIONS
    04/15/05     ROBERT ENGLEKIRK CONSULTING STRUCTURAL ENGINEERS, INC.

S6.3
  TYPICAL REINFORCEMENT DETAILS
    04/15/05     ROBERT ENGLEKIRK CONSULTING STRUCTURAL ENGINEERS, INC.

S7.1
  DETAILS
    04/15/05     ROBERT ENGLEKIRK CONSULTING STRUCTURAL ENGINEERS, INC.

S7.2
  DETAILS
    04/15/05     ROBERT ENGLEKIRK CONSULTING STRUCTURAL ENGINEERS, INC.

S7.3
  DETAILS
    04/15/05     ROBERT ENGLEKIRK CONSULTING STRUCTURAL ENGINEERS, INC.

MECHANICAL DRAWINGS
                       
 
                       
M-1.0
  LEGEND, ABBREVIATIONS AND AIR DEVICE SCHEDULE
    04/29/05     DAVID FRUCHTMAN & ASSOC., INC.

M-1.1
  HVAC SCHEDULES
    04/29/05     DAVID FRUCHTMAN & ASSOC., INC.

M-1.2
  HVAC SCHEDULES
    04/29/05     DAVID FRUCHTMAN & ASSOC., INC.

M-2.1
  GROUND FLOOR PLAN
    04/29/05     DAVID FRUCHTMAN & ASSOC., INC.

M-2.2
  SECOND FLOOR PLAN
    04/29/05     DAVID FRUCHTMAN & ASSOC., INC.

M-2.3
  THIRD FLOOR PLAN
    04/29/05     DAVID FRUCHTMAN & ASSOC., INC.

M-2.4
  SITE / ROOF PLAN
    04/29/05     DAVID FRUCHTMAN & ASSOC., INC.

M-2.5
  PARKING LEVEL P-1 PLAN
    04/29/05     DAVID FRUCHTMAN & ASSOC., INC.

M-2.6
  PARKING LEVEL P-2 PLAN
    04/29/05     DAVID FRUCHTMAN & ASSOC., INC.

M-2.7
  PARKING LEVEL P-3 PLAN
    04/29/05     DAVID FRUCHTMAN & ASSOC., INC.

M-2.8
  BELOW PARKING LEVEL P-3 PLAN
    04/29/05     DAVID FRUCHTMAN & ASSOC., INC.

M-5.0
  DETAILS 1
    04/29/05     DAVID FRUCHTMAN & ASSOC., INC.

M-5.1
  DETAILS 2
    04/29/05     DAVID FRUCHTMAN & ASSOC., INC.

M-5.2
  DETAILS 3
    04/29/05     DAVID FRUCHTMAN & ASSOC., INC.

M-6.0
  CONDENSER / HEATING WATER PIPING RISER DIAGRAM
    04/29/05     DAVID FRUCHTMAN & ASSOC., INC.

M-6.1
  CONTROL DIAGRAMS - 1
    04/29/05     DAVID FRUCHTMAN & ASSOC., INC.

M-6.2
  CONTROL DIAGRAMS - 2
    04/29/05     DAVID FRUCHTMAN & ASSOC., INC.

M-6.3
  CONTROL DIAGRAMS - 3
    04/29/05     DAVID FRUCHTMAN & ASSOC., INC.

M-6.4
  CONTROL POINTS LIST - 1
    04/29/05     DAVID FRUCHTMAN & ASSOC., INC.

M-7.0
  TITLE 24 - 1
    04/29/05     DAVID FRUCHTMAN & ASSOC., INC.

M-7.1
  TITLE 24 - 2
    04/29/05     DAVID FRUCHTMAN & ASSOC., INC.

PLUMBING DRAWINGS
                       
 
                       
P-1.0
  PLUMBING SYMBOLS, ABBREVIATIONS, SCHEDULES AND
    04/29/05     DAVID FRUCHTMAN & ASSOC., INC.

 
  SPECIFICATIONS
               
P-2.0
  PARKING LEVEL P-3 PLUMBING PLAN
    04/29/05     DAVID FRUCHTMAN & ASSOC., INC.

P-3.0
  PARKING LEVEL P-3 PLUMBING PLAN
    04/29/05     DAVID FRUCHTMAN & ASSOC., INC.

P-4.0
  PARKING LEVEL P-2 PLUMBING PLAN
    04/29/05     DAVID FRUCHTMAN & ASSOC., INC.

P-5.0
  PARKING LEVEL P-1 PLUMBING PLAN
    04/29/05     DAVID FRUCHTMAN & ASSOC., INC.

P-6.0
  GROUND FLOOR PLUMBING PLAN
    04/29/05     DAVID FRUCHTMAN & ASSOC., INC.

P-7.0
  SECOND FLOOR PLUMBING PLAN
    04/29/05     DAVID FRUCHTMAN & ASSOC., INC.

P-8.0
  THIRD FLOOR PLUMBING PLAN
    04/29/05     DAVID FRUCHTMAN & ASSOC., INC.

P-9.0
  ROOF PLUMBING PLAN
    04/29/05     DAVID FRUCHTMAN & ASSOC., INC.

P-10.0
  PLUMBING DETAILS
    04/29/05     DAVID FRUCHTMAN & ASSOC., INC.

P-11.0
  PLUMBING DETAILS
    04/29/05     DAVID FRUCHTMAN & ASSOC., INC.

P-12.0
  PLUMBING RISER DIAGRAM
    04/29/05     DAVID FRUCHTMAN & ASSOC., INC.

P-13.0
  PLUMBING RISER DIAGRAM
    04/29/05     DAVID FRUCHTMAN & ASSOC., INC.

ELECTRICAL DRAWINGS
                       
 
                       
E-1
  SITE PLAN
    05/25/05     G&W CONSULTING ELECTRICAL ENGINEERS
E-2
  ELECTRICAL SYMBOLS, NOTES & FIXTURE SCHEDULE
    05/25/05     G&W CONSULTING ELECTRICAL ENGINEERS
E-3
  GROUND FLOOR LIGHTING PLAN
    05/25/05     G&W CONSULTING ELECTRICAL ENGINEERS
E-3.1
  GROUND FLOOR POWER PLAN
    05/25/05     G&W CONSULTING ELECTRICAL ENGINEERS
E-4
  SECOND FLOOR LIGHTING & POWER PLAN
    05/25/05     G&W CONSULTING ELECTRICAL ENGINEERS
E-5
  THIRD FLOOR LIGHTING & POWER PLAN
    05/25/05     G&W CONSULTING ELECTRICAL ENGINEERS
E-6
  ROOF PLAN
    05/25/05     G&W CONSULTING ELECTRICAL ENGINEERS
E-7
  PARKING LEVEL P-1 LIGHTING & POWER PLAN
    05/25/05     G&W CONSULTING ELECTRICAL ENGINEERS
E-8
  PARKING LEVEL P-2 LIGHTING & POWER PLAN
    05/25/05     G&W CONSULTING ELECTRICAL ENGINEERS
E-9
  PARKING LEVEL P-3 LIGHTING & POWER PLAN
    05/25/05     G&W CONSULTING ELECTRICAL ENGINEERS
E-10
  SINGLE LINE RISER DIAGRAM
    05/25/05     G&W CONSULTING ELECTRICAL ENGINEERS
E-11
  DETAILS
    05/25/05     G&W CONSULTING ELECTRICAL ENGINEERS
E-11.1
  LIGHTING CONTROL WIRING DIAGRAM
    05/25/05     G&W CONSULTING ELECTRICAL ENGINEERS
E-12
  ENLARGED PLANS
    05/25/05     G&W CONSULTING ELECTRICAL ENGINEERS
E-12.1
  ENLARGED PLANS
    05/25/05     G&W CONSULTING ELECTRICAL ENGINEERS
E-13
  PANEL SCHEDULES
    05/25/05     G&W CONSULTING ELECTRICAL ENGINEERS
E-14
  PANEL SCHEDULES
    05/25/05     G&W CONSULTING ELECTRICAL ENGINEERS
E-15
  PANEL SCHEDULES
    05/25/05     G&W CONSULTING ELECTRICAL ENGINEERS
E-16
  TITLE - 24 CALCULATIONS
    05/25/05     G&W CONSULTING ELECTRICAL ENGINEERS
SHORING DRAWINGS
                       
 
                       
SH-1
  EXCAVATION AND SHORING PLAN
    08/02/05     BURNETT & YOUNG, INC.

SH-2
  GENERAL NOTES AND SCHEDULE
    08/02/05     BURNETT & YOUNG, INC.

SH-3
  TYPICAL DETAILS
    08/02/05     BURNETT & YOUNG, INC.

SH-4
  ELEVATIONS
    08/02/05     BURNETT & YOUNG, INC.

SH-5
  ELEVATIONS
    08/02/05     BURNETT & YOUNG, INC.

SH-6
  SECTIONS
    08/02/05     BURNETT & YOUNG, INC.

LANDSCAPE DRAWINGS
                       
 
                       
L-001
          not received
       
L-101
          not received
       
L-201
          not received
       
L-301
          not received
       
L-302
          not received
       
L-303
          not received
       
L-401
          not received
       
L-501
          not received
       
L-502
          not received
       
L-601
          not received
       
L-701
          not received
       
OFFSITE IMPROVEMENTS DRAWINGS
                       
 
                        (SEPULVEDA BLVD. IMPROVEMENTS — STATE OF CALIFORNIA,
DEPARTMENT OF TRANSPORTATION)
               
- — - -
  TITLE SHEET
    3/03     CALTRANS

X-1
  CROSS SECTIONS
    3/03     CALTRANS

L-1
  LAYOUT
    3/03     CALTRANS

C-1
  CONSTRUCTION DETAILS AND PROFILES
    3/03     CALTRANS

U-1
  UTILITY PLAN
    3/03     CALTRANS

E-1
  TRAFFIC SIGNAL
    05/23/03          
S-1
  SIGNING AND PAVEMENT DELINEATION
  NONE
        (KUHN DRIVE IMPROVEMENTS — CITY OF MANHATTAN BEACH, DEPARTMENT OF PUBLIC
WORKS)
               
- — - -
  TITLE SHEET
    01/14/03     CITY OF MANHATTAN BEACH

- — - -
  PLAN AND PROFILE SHEET
    01/14/03     CITY OF MANHATTAN BEACH
(LONGFELLOW DRIVE IMPROVEMENTS — CITY OF MANHATTAN BEACH, DEPARTMENT OF PUBLIC
WORKS)
               
- — - -
  TITLE SHEET
    01/14/03     CITY OF MANHATTAN BEACH

- — - -
  PLAN AND PROFILE SHEET
    01/14/03     CITY OF MANHATTAN BEACH

- — - -
  STREET LIGHTING
    01/14/03     CITY OF MANHATTAN BEACH

SOILS REPORT
                       
 
                       
 
  SOILS INVESTIGATION
    07/11/00     NORCAL ENGINEERING

 
  TEMPORARY SHORING RECOMMENDATIONS LETTER
    07/26/00     NORCAL ENGINEERING

 
  ADDENDUM NO. 1 LETTER
    07/31/00     NORCAL ENGINEERING

 
  TIEBACK ANCHOR DESIGN RECOMMENDATIONS LETTER
    07/31/00     NORCAL ENGINEERING

 
  ADDENDUM FOUNDATION DESIGN RECOMMENDATIONS LETTER
    08/14/00     NORCAL ENGINEERING

 
  UPDATED GEOTECHNICAL ENGINEERING REPORT LETTER
    02/05/01     NORCAL ENGINEERING

 
  UPDATED TEMPORARY SHORING RECOMMENDATIONS LETTER
    09/20/01     NORCAL ENGINEERING

 
  UPDATED SOILS INVESTIGATION LETTER
    09/22/03     NORCAL ENGINEERING

 
  REVIEW OF STRUCTURAL PLANS LETTER
    09/22/03     NORCAL ENGINEERING

 
  FINAL SHORING DESIGN CRITERIA LETTER
    07/01/05     NORCAL ENGINEERING

3

EXHIBIT “B”

SCOPE OF WORK, QUALIFICATIONS AND EXCLUSIONS

Qualifications August 24, 2005

The following qualifications will apply to Scope of Work and supercede
information outlined in the
Drawings:

GENERAL

  1.   Estimate is based on construction starting by September 1, 2005.

  2.   Escalation after September 1st, 2005 is excluded.

  3.   RFI #1 responses and addendum #1 issued by David Forbes Hibbert, AIA,
dated June 23, 2005 has been included.

  4.   Any acoustical analysis or acoustical engineering is excluded.

  5.   Exterior glass walls of stair shafts are not figured as 2-HR
construction.

  6.   The 2nd floor walls along floor opening to 1st floor lobby are figured as
wall Type S1.

  7.   1st floor wall between Entry Court and Office 104 is figured as wall Type
S8.

  8.   The wall between Fan Rooms 116a and 116b is figured as Type S1.

DEWATERING

  1.   An allowance for labor, equipment and material of $25,000 is included for
temporary construction dewatering resulting from rain and/or ground conditions.

DEMOLITION

  1.   Unforeseen basements, substructures, or buried objects are excluded.

SHORING

  1.   Shoring is based upon shoring drawings dated 7/30/05 and 8/2/05. Any
corrections or deviations, required by Cal Trans, City of Manhattan Beach, or
other governing agencies have been excluded.

  2.   Owner to obtain tie-back permission at all property lines.

  3.   Tie-back rod removal will consist of removal of top row of tie-backs for
the shoring along Kuhn Drive and Longfellow Drive. Removals on Kuhn Drive and
Longfellow Drive are limited to the removal of the unbonded rod only per shoring
design drawings. Any and all other tie-backs on these elevations will be
de-tensioned and left in place.

  4.   Tie-back rod removal on Sepulveda Blvd. and the north elevation will per
shoring design drawings.

  5.   Cost for lagging pressure monitoring is not included.

EARTHWORK

  1.   Sand, gravel, and vapor barrier underneath garage slab-on-grade is
excluded.

SITE UTILITIES

  1.   Removal of overhead power lines along Sepulveda and across Kuhn is
excluded. Owner to pay fee to SCE for relocation of power lines and any other
utilities located on power poles.

  2.   Re-routing of any existing underground utilities is excluded.

SITE CONCRETE

  1.   Colored concrete pavement is figured at Entry Court.

  2.   Standard grey concrete pavement is figured at the Mechanical Court.

LANDSCAPING

  1.   An allowance for labor, equipment and material of $113,055 is included
for of all planting (shrubs and trees), irrigation, planter fill, pots, site
furnishings, for both on and off site locations.

  2.   No provisions or devices for reclaimed water are included.

FOUNTAINS

  1.   No fountains or water features are included.

CAST-IN-PLACE CONCRETE

  1.   Footing elevations are assumed for the unmarked footings. Two F9 footings
on gridlines B&C are assumed to be at +176.77, F16 is at +181.99, F15 is at
185.3, F14 is at +185.1, F2 on gridline 3 is at +185.77, F2 on gridline 4 is at
+186.76

  2.   F2 on gridline 5 is at +181.86, and F1 on gridline 6 is at +181.36.

  3.   CMU walls are assumed for the elevator shaft per sheet S2.1.

  4.   Interior wall on S2.1 is calculated with an 8” thickness.

  5.   S2.3 Ramp walls are 42” high and 6” thick per drawing A10.3.

  6.   On S2.4 intake air shaft walls are assumed to be 8” thick.

  7.   Ramp walls on S2.4 are assumed to be 6” thick.

  8.   The wall on grid line B is figured from the architectural plans to extend
from gridline 5 to 9 and is assumed to be 8” thick.

  9.   Built-up Concrete slabs are designed per Details on S7.2 and S7.3. The
slab thickness is measured to be 4”.

  10.   The steps on grid F are assumed to have a rise of 6” and a width of 3’.

  11.   The wall on gridline 2 on A3.5 is assumed to have a thickness of 12”.

  12.   On S2.6 the 8” wall is assumed to extend to the edge of the window on
gridline 2 at C.2.

  13.   The ready mix prices are based on normal shrinkage of 0.05%-0.055%.

  14.   Column blockouts depth is to top of grade not top of footing.

  15.   Waterstop is not included around columns at footings.

  16.   On Gridline 5:A-B an 8” concrete wall is added per the Architectural
drawing A3.4 &A3.5.

  17.   The detail A5.6 that is referenced from A3.4 depicts a retaining wall
that is not shown on the structural drawings. This wall is included and assumed
to be 4’ high and 58’ long with a thickness of 10”.

  18.   The retaining wall on Gridline G is assumed to be 8” thick and is
referenced from A3.4.

  19.   All metal decks have a hard rock concrete fill.

  20.   The perimeter wall around the roof depicted on A4.3 is figured to be
1.5’ tall and 6” thick the            exterior face is sacked and the interior
is touched-up.

  21.   Thickening of slabs over pad footings has been excluded.

  22.   White, colored or architectural concrete has been excluded.

  23.   Sawcutting of curbs for reglets as shown on 5/A6.2 has been excluded.

  24.   Any sandblast finish and colored concrete has been excluded.

  25.   Touch-up and sacking is included at exterior exposed concrete surfaces
such as walls, columns and beams.

  26.   Sacking at interior ceilings has been excluded.

  27.   Exterior exposed cast-in-place planter walls to receive tough-up,
sacking along with patterned tie-holes.

  28.   Touch-up, sacking and patterned tie-holes is included at all exterior
exposed cast-in-place walls.

  29.   Sealing of any concrete walls or columns is not included.

  30.   Sealing of concrete floors in all parking, ramp, and drive aisle areas
of garage is excluded. Sealing of floors in utility rooms is provided per the
finish schedule.

  31.   Structural concrete work is to be performed by Morley Construction
Company for a lump sum amount of $4,392,146.00.

SHOTCRETE

  1.   Stem walls located over perimeter footings, per typical detail 3/S3-1 are
shotcrete.

  2.   Pilaster / columns located within perimeter foundation walls are
shotcrete.

  3.   Shotcrete walls are figured with a rod finish.

REINFORCING STEEL

  1.   No rebar couplers at raker pockets are included.

MASONRY

  1.   Precast cap at site retaining walls is excluded.

  2.   Garage non-bearing masonry walls are figured as 42” high masonry walls
with metal stud and drywall to the underside of the deck above.

MISCELLANEOUS METALS

  1.   An allowance for labor, equipment and material of $35,000 is included for
the stainless steel “Ridge” canopy by Cambridge Architectural Mesh at the
Sepulveda Blvd. elevation.

  2.   The stair stringers, guard rails, and hand rails to be galvanized, primed
and painted.

  3.   Site railing on the west side of the building are figured as stainless
steel. Glass is included at the shaded portion of the guardrail on west
elevation 1/A-4.1.

  4.   All other steel to be shop primed and field paint.

  5.   Column corner guards are not included.

  6.   Bicycle racks are excluded.

EXPANSION JOINT

  1.   No expansion joints are included.

COUNTER TOPS

  1.   Midrange priced granite is figured for the counter tops.

ROOFING
1. Roofing is figured with a standard 10 year warrantee.

WATERPROOFING

  1.   The unspecified waterproofing material is assumed to be as follows:

  a.   Below Grade Waterproofing – Perimeter wall and elevator pits; is Tremco /
Paraseal sheet Bentonite, and associated mastics, water stops, Tremdrain
drainage board and total drain system, termination bar and sealant.

  b.   Between Slab Waterproofing – Podium Deck and Planters; is Tremco Vulkem
201 Cold Fluid Applied waterproofing and Trem Drain 1000 drainage board.

  c.   Roof Deck Waterproofing – Roof Decks on 2nd Floor and Cooling Tower #309;
Merkote Weather Deck System.

  d.   Loading Space ramp and drive and the Entry/Exit ramp off Sepulveda –
Tremco elastomeric traffic coating.

  2.   All waterproofing products come with a standard 5-year warranty.

  3.   No traffic coating is provided for the garage entry/exit ramp on
Longfellow as there is no trench drain at this ramp.

INSULATION

  1.   Insulation at exterior soffits with floors above is excluded.

  2.   Floor insulation above garage is excluded

  3.   No safing is included at roof level.

SHEET METAL

  1.   Sawcutting for flashing is excluded.

  2.   Stainless steel exterior wall panels are figured with a brushed finish.

DOORS & FRAMES

  1.   The hollow metal frames throughout the project are figured as 16GA. The
parking level and exterior frames are figured with A60 galvanizing. Exterior
frames at Mechanical Court are figured as stainless steel. Interior frames are
figured as cold rolled steel.

  2.   The hollow metal doors throughout the project are figured as 18 GA. The
parking level, exterior, and utility room hollow metal doors are figured with
A60 galvanizing. All interior doors are figured as cold rolled steel.

  3.   The SC wood doors throughout the project are figured as plain-sliced
natural maple, “A” grade veneer, 5-ply construction. Wood doors are figured with
a standard factory prefinish.

COILING DOORS

  1.   An allowance for labor, equipment and material of $30,000 is included for
coiling grilles at parking garage entries (2 locations), loading dock entries (2
locations) and one separation door between the Ground and P1 level.

GLAZING/CURTAIN WALLS

  1.   The curtain wall framing is based on USAC 3250 series framing for 1”
glass with a section dimension of 2-1/2” x 7”. This is limited to the opening
above the parking garage drive along grid E and the main lobby – terrace area
between grids 5 and 7.

  2.   The storefront framing is based on USAC OS-2 series 2”x6” offset stacking
system 1” glass.

  3.   Non-rated narrow stile aluminum offset hung doors at door #101, 104a, and
110a. Doors will be prepped and installed with manufacturer standard hardware
where ever possible in accordance with the hardware schedule noted on sheet
A-10.1.

  4.   Door #110b is based on a NanaWall series SL45 inline commercial
bi-folding door system in lieu of the noted SL-70. The SL is a hurricane door
and is not required for the project location. Top hung mounted, outside
swinging, (4) single lite doors, one point lockable deadbolt with lever handles
on the inside and outside aluminum finish, painted finish to closely match
storefront frames.

  5.   1/2” clear tempered style P all glass entrance doors at door #103a
prepped and install with Dorma BTS80BF floor closers, standard bottom rail
locks. An allowance of $1,000 has been applied to this project for Forms and
Surface pulls specified but not clearly noted on sheet A-10.1.

  6.   Fleetwood project out windows, or equal, as noted on the drawings with
standard friction hardware.

  7.   FX1454, 1-1/2” deep, extruded aluminum louvers where noted in a
storefront frame, total of 9 locations. Louvers will have a factory painted
finish to match the storefront frames. Excludes the projected louver assembly
along grid line 2 between grids E and F.

  8.   Finish for all storefront/curtain wall frames to be 70% kynar, custom
color, non-exotic, non-XL, non metallic.

  9.   System design is based on 70 mph wind city velocity, exposure C,
deflection limit of L/175 not to exceed 3/4”. Steel reinforcement as required is
included to meet this design criteria.

  10.   Vision glass is based on using 1 inch insulated glass units consisting
of Visteon Versalux Green 2000 as follows: 1/4” Versalux Green 2000 – 1/2” clear
Argon filled space – 1/4” clear tempered as required to meet code.

  11.   Spandrel glass will be non-insulated Visteon Versalux Blue 2000 tempered
glass.

  12.   1/4” polished Misco wire glass with a UL label at door type X and W.

  13.   Compliance with title 24 has not been confirmed.

  14.   Screens have not been figured on the operable windows.

  15.   The Terrace windscreen is figured with standard pattern glass.

FINISH HARDWARE

  1.   Hinges are figured as McKinney 5 knuckle.

  2.   Interior latches and locks are figured as Schlage “D” series heavy duty
cylindrical locks with 626 dull chrome finish.

  3.   Exterior locks are figured as Schlage “L” series mortise locks with 626
dull chrome finish.

  4.   Panic devices are figured as Von Duprin 98 series.

  5.   Closers are figured as LCN 4041 series.

  6.   Miscellaneous items by Ives, Trimco, and Pemko.

  7.   Finish on exterior hinges and kickplates figured as 630 stainless steel.

PLASTER, DRYWALL, METAL FRAMING

  1.   Vertical built-out furring of metal studs and drywall are figured behind
the spandrel glass at the curtainwall.

  2.   Fireproofing of structural steel members is included.

  3.   An allowance for labor, equipment and material of $43,715 is included for
the suspended stainless steel soffit by “Hunter Douglas” at the building main
entry lobby. The suspended stainless steel soffit at the loading dock is
excluded.

  4.   Core and shell corridor and lobby walls, ceilings, shafts, etc. are not
included.

  5.   Studs in partition Type S7a are figured as 20 GA in lieu of 16 GA.

  6.   Orange peel drywall finish is provided in restrooms. All other locations
to receive level 4 finish.

  7.   No plaster work is included.

TILE

  1.   Stone base and wainscot is figured to meet the stone floor square. No
coved base is included.

FLOORING

  1.   The “Lonseal” stair tread flooring and associated base products are no
longer being manufactured, “Burke” Roleau Treads and 4” rubber base have been
provided, in lieu specified.

  2.   Sheet vinyl treads at Stair Nos. 1 and 2 are excluded.

PAINTING

  1.   Exposed ductwork, pipe, conduit, hangers, etc. are unpainted.

  2.   Anti graffiti coating is not included.

MISCELLANEOUS SPECIALTIES

  1.   Parking access control equipment (card readers, access control arms,
etc.) is excluded. Concrete curbs/islands will be provided per plans.

  2.   Window treatment is excluded.

  3.   Window washing equipment is excluded.

SIGNAGE

  1.   An allowance for labor, equipment and material of $13,000 for code
signage is included.

  2.   An allowance for labor, equipment and material of $75,000 for the
“Skechers” and the building address signage is included.

  3.   Signage in the garage and office building, other than code signage, are
excluded.

ELEVATORS

  1.   An allowance for labor, equipment and material of $20,000 is included for
the “Swirl” laminated glass manufactured by Bendheim at the backside of the
elevator cab.

  2.   The elevators are figured as 3500 lb. capacity with hydraulic rams.

  3.   The speed is 125 fpm.

  4.   The elevator price includes 3 months of maintenance.

PLUMBING

  1.   An allowance for labor, equipment and material of $16,000 is included for
of all planter drain bodies and associated piping not indicated on the drawings

  2.   Foundation drainage is figured around the perimeter of the garage only.

  3.   Pre-cast sump pit, sewer ejector pit and valve box have been provided in
lieu of cast in place concrete.

FIRE SPRINKLER

  1.   The fire sprinkler system in the office area is figured for light hazard
occupancy.

  2.   The fire sprinkler system in the parking area is figured for ordinary
hazard occupancy.

  3.   Quick response recessed type heads with white factory finish are figured
at all areas with finished ceiling.

  4.   Standard brass upright or pendant type heads are figured at all exposed
ceiling areas in the office or the garage.

  5.   Concealed heads with painted or brushed chrome covers are figured at
stainless steel soffits.

HVAC

  1.   The mechanical shaft at gridlines D & 9 on the third floor is omitted.
The shaft will end at the underside of the third floor deck.

ELECTRICAL

  1.   An allowance for labor, equipment and material of $25,000 is included for
a security system.

  2.   An allowance for labor, equipment and material of $10,000 is included for
landscape lighting.

  3.   An allowance for labor, equipment and material of $20,000 is included for
proposed Southern California Edison vault lighting, power receptacles,
grounding, fans, etc. specific to SCE requirements. (note: subject scope not
identified on electrical or HVAC plans)

  4.   Conduit only is provided, from street to main telephone room, for
telephone and cable TV. No telephone, data, or cable TV cabling or termination
is included.

  5.   Locations of devices for fire-life-safety system to be per design-build
drawings in lieu of locations shown on electrical drawings.

  6.   Bi-amplified antenna system in garage per Manhattan Beach Police
Department requirements is excluded. Costs for electrical rough-in, structural
reinforcement for mounting, etc. are also excluded.

ALTERNATES
The following items are currently in review by consultants. If approved, the
contractor will issue deductive change orders for the following values.

                          1.   Provide masonry barrier wall for garage ramp from
ground floor to P-1 level in lieu of cast-in-place concrete wall.
    ($19,650 )
2.
  Reduce roof slab thickness by two (2) inches.
    ($11,257 )         3.   Provide saw cut in lieu of diamond block-out for
column bases at slab-on-grade.($5,600)
       
4.
  Reduce shotcrete wall thickness by one and one-half (1 1/2) inches.
    ($6,250 )        
5.
  Omit sheet metal cover and insulation at walls and ceiling of fan room.
    ($18,365 )        

4

Exclusions August 24, 2005

The following items are excluded from the Scope of Work:

GENERAL

  1.   Permits, permit fees, plan check fees, B permit costs, grading permits,
Shoring permit, AQMD permit, Army Corps of Engineers permits, California
Department of Fish and Game permits, and Cal Trans permits.

  2.   Cost for Cal Trans tie-back removal bond.

  3.   Cal Trans and City of Manhattan Beach plan check corrections for shoring
(not reflected on current shoring drawings dated 7/30/2005 and 8/2/2005)

  4.   Testing and Inspections.

  5.   Soft Costs.

  6.   Traffic study fees & School fees.

  7.   Utility connection charges, assessment fees, meter fees, and fire hydrant
fees.

  8.   Fire pump and fire tank (if required).

  9.   Re-routing or relocation of overhead utility lines along Sepulveda Blvd.

  10.   Removal of hazardous or contaminated materials and asbestos.

  11.   Removal of contaminated soil or existing debris encountered during
excavation.

  12.   Drying of wet soils.

  13.   Temporary utility consumption costs following permanent meter
installation.

  14.   Owner’s or leasing trailer, offices, and equipment.

  15.   Marketing fence. (Plywood fence is included along Sepulveda Blvd., Kuhn
Drive and Longfellow Drive Property Lines).

  16.   Methane and all other gas monitoring and mitigation.

  17.   Water purification system.

  18.   FF&E items.

  19.   Trash bin or compactor equipment.

  20.   Prevailing wages.

  21.   Monitoring or relocating cost associated with the wildlife species,
biologists, archaeologists, paleontologists, etc.

  22.   Builders Risk Insurance and any requirements or provisions required by
insurer.

  23.   Payment and Performance Bonds for Subcontractor’s.

  24.   ALTA and/or certification survey.

  25.   Core and shell work at levels 2 and 3, such as, corridors, lobbies,
elevator fire/smoke doors, lighting, mechanical, doors, etc., that may be
required for certificate of occupancy.

  26.   Fire or smoke doors at elevators on office levels.

  27.   Tenant improvement of office space such as, dropped ceilings, flooring,
painting, partitions, mechanical, electrical, fire sprinklers distributions.

  28.   EIR requirements or Mitigation Measures (unknown at this time).

  29.   Conditional use permit (CUP) resolutions not incorporated on current
5/31/05 drawings.

5

EXHIBIT “C”

BUDGET LINE ITEM BREAKDOWN

                                              MORLEY
SKECHERS
                  CONSTRUCTION COMPANY 330 S. Sepulveda Blvd., Manhattan Beach,
CA 90266
               
 
                  2901 28th Street, Suite 100 Santa
 
                  Monica, CA 90405

 
                  PHONE: 310-399-1600 FAX: 310-314-7347

 
                  August 24, 2005

TRADE LINE ITEM SUMMARY
                       
ACCT
  ITEM           Amount
00002
  Street Use Permit & Flagmen
          $ 35,000
 
                       
00005
  Survey & Layout
          $ 25,000
 
                       
00070
  Dewatering
          $ 25,000
 
                       
00082
  Final Clean Up
          $ 21,150
 
                       
02100
  Demolition
          —
 
                       
02100
  Shoring
          $ 1,431,600
02203
  Earthwork
          $ 882,491
 
                       
02410
  Striping & Bumpers
          $ 8,570
 
                       
02501
  Site Utilities
          $ 86,804
 
                       
02615
  Concrete - Site
          $ 252,287
 
                       
02800
  Landscape & Irrigation
          $ 113,055
 
                       
02825
  Fountains - Allowance
          —
 
                       
02864
  Asphalt Paving
          $ 137,625
 
                       
03000
  Concrete - Structural
          $ 4,392,146
 
                       
03200
  Reinforcing Steel
          $ 1,890,465
 
                       
03361
  Shotcrete
          $ 443,232
 
                       
04000
  Masonry
          $ 242,976
 
                       
04400
  Stone
          —
 
                       
05110
  Struct Steel & Misc Iron
          $ 409,883
 
                       
05800
  Expansion Joint
          —
 
                       
06100
  Carpentry - Rough
          $ 4,000
 
                       
06200
  Carpentry - Finish
          $ 22,240
 
                       
06245
  Counter Tops
          $ 4,470
 
                       
07101
  Roofing
          $ 277,700
 
                       
07102
  Waterproofing
          $ 257,569
 
                       
07300
  Insulation
          $ 34,100
 
                       
07600
  Sheet Metal & Flashing
          $ 125,692
 
                       
07900
  Caulking & Sealants
          $ 10,500
 
                       
08111
  HM Doors & Frames
          $ 47,580
 
                       
08330
  Doors - Coiling
          $ 30,000
 
                       
08500
  Glazing
          $ 530,900
 
                       
08900
  Finish Hardware
          $ 31,210
 
                       
09010
  Drywall, Metal Frame
          $ 402,946
 
                       
09300
  Tile - Ceramic
          $ 38,633
 
                       
09601
  Carpet & Resilient
          $ 6,004
 
                       
09900
  Painting
          $ 37,510
 
                       
10001
  Misc Specialties
          $ 3,497
 
                       
10162
  Toilet Accessories & Partitions
          $ 5,647
 
                       
10440
  Signage
          $ 88,000
 
                       
14200
  Elevators
          $ 235,895
 
                       
15400
  Plumbing
          $ 633,500
 
                       
15510
  Fire Sprinklers
          $ 244,454
 
                       
15600
  HVAC
          $ 1,389,317
 
                       
16000
  Electrical
          $ 807,200
 
                       
16003
  Traffic Signal
          $ 145,250
 
                       
17010
  Watchmen
          $ 50,000
 
                       
 
  TOTAL DIRECT COSTS           $ 15,861,098
 
                       
 
  PRECONSTRUCTION
          $ 45,000
 
                       
 
  CONTINGENCY
          $ 396,527
 
                       
 
  FIELD OVERHEAD
          $ 1,028,833
 
                       
 
  LIABILITY INSURANCE @ 0.7949%
          $ 137,768
 
                       
 
  FEE
          $ 655,096
 
                       
 
  TOTAL           $ 18,124,322

6

EXHIBIT “D”

[Not used]

7

EXHIBIT “E”

MORLEY CONSTRUCTION COMPANY
INSURANCE REQUIREMENTS SUBCONTRACTORS

Morley Construction Company requires each Subcontractor, at its own expense, to
maintain all insurance required by subcontractors under the Prime Contract and,
to the extent not required by the Prime Contract, the following coverage and
limits of insurance which shall be maintained with insurers, policy forms and
deductibles satisfactory to Morley Construction Company and the Owner. If the
Subcontractor uses existing coverage to comply with these requirements and that
coverage does not meet the requirements set forth herein, Subcontractor agrees
to amend, supplement or endorse the existing coverage to do so, at no additional
cost to Morley Construction Company Coverage is to be for the duration of the
work under the subcontract. Any acceptance of insurance Certificates shall not
limit or relieve Subcontractor of the duties and responsibilities assumed under
this and the Prime Contract.

Limit requirements for A, B and C may be satisfied using any combination of
primary and Excess/Umbrella liability insurance.

  A.   Workers’ Compensation and Employer’s Liability Insurance

State Workers’ Compensation statutory coverage as required by law and shall
include the following:

  1)   The Voluntary Compensation endorsement

  2)   The All States endorsement

Employer’s Liability with limits not less than each of the following:

     
$1,000,000
$1,000,000
$1,000,000
  each accident for bodily injury
policy limit for bodily injury by disease
each employee for bodily injury by disease

  B.   Commercial General Liability Insurance

Such insurance must not contain any provision which would prohibit the reporting
of a claim and the subsequent defense and indemnity that would normally be
provided by the policy.

The Subcontractor shall carry a Commercial General Liability Policy that
provides for coverage at least as broad as ISO CGL Form No. CG 00 01 11 86.

Provide limits as required for your trade in accordance with subsection 1 or 2
below or in accordance with higher limits as specified by Owner.

Morley Construction Company reserves the right to amend the required limits of
insurance commensurate with the Subcontractor’s risk.

If the policy is in excess of a Subcontractor SIR (self-insured retention) or a
deductible, the amount of such SIR or deductible must be clearly identified on
the Certificate of Insurance. Morley Construction Company reserves the right to
reject any SIR in excess of $15,000 or any deductible in excess of $25,000, or
require that the Subcontractor provide a bond on the SIR at no additional cost
to Morley Construction Company To the extent first dollar coverage, including
defense of any claim, is not available to Morley Construction Company or any
other additional named insured because of an SIR, deductible or any form of
self-insurance, Subcontractor is obligated to assume the responsibilities of the
insurer until such time as the deductible, SIR or other condition of the insurer
assuming its defense and/or indemnity obligations has been satisfied.
Subcontractor shall be responsible to pay any deductible or SIR.

Coverage’s to include, but not limited to:

• Premises/Operations

  •   Products/Completed Operations for the duration of the project and a
minimum of three (3) years after project completion.

  •   Owners/Contractors Protective Liability

  •   Blanket Contractual

  •   Personal & Advertising Injury

  •   Broad Form Property Damage (including Completed Operations)

  •   Explosion, Collapse & Underground Damage Exclusions, (commonly known as
“XCU”) if any, are to be removed.

  1)   Specified Trades: (Defined as Excavation, Shoring, Crane related work,
Exterior Skin, Metal Decking over three (3) stories, Roofing, and Waterproofing.
Architects, Engineers, Consultants and Design/Install Subcontractors must
provide this level of coverage in addition to the Professional Liability
Insurance described in Item D below.) The Limits of Liability for Bodily Injury
and Property Damage Combined Single Limit under this section shall not be less
than that shown below:

      For subcontracts less than $100,000:
$2,000,000
$2,000,000
$2,000,000
$2,000,000
  Each Occurrence
Products/Completed Operations Aggregate
Personal and Advertising Injury
General Aggregate
 
    For subcontracts of $100,000 or more:

 
   
$5,000,000
$5,000,000
$5,000,000
$5,000,000
  Each Occurrence
Products/Completed Operations Aggregate
Personal and Advertising Injury
General Aggregate

  2)   All Other Trades: The Limits of Liability for Bodily Injury and Property
Damage Combined Single Limit under this section will be based upon total
subcontract value:

      For subcontracts less than $100,000:
$1,000,000
$1,000,000
$1,000,000
$1,000,000
  Each Occurrence
Products/Completed Operations Aggregate
Personal and Advertising Injury
General Aggregate
 
    For subcontracts $100,000 to $499,999:

 
   
$2,000,000
$2,000,000
$2,000,000
$2,000,000
  Each Occurrence
Products/Completed Operations Aggregate
Personal and Advertising Injury
General Aggregate
 
    For subcontracts $500,000 and greater:

 
   
$5,000,000
$5,000,000
$5,000,000
$5,000,000
  Each Occurrence
Products/Completed Operations Aggregate
Personal and Advertising Injury
General Aggregate

  C.   Automobile Insurance

Coverage shall be for “Any Auto”, Owned, Non-owned and Hired.
Bodily Injury Liability & Property Damage Combined Single Limit — $1,000,000

  D.   Professional Liability Insurance (Errors and Omissions)

All Architects, Engineers, Surveyors, Consultants and Subcontractors with design
responsibility shall provide a policy specific to this project, as follows:

An Architect’s and Engineer’s Professional Liability Policy with Limited
Contractual Liability Coverage and a deductible no greater than $25,000 per
claim. This insurance shall be maintained for a total of ten (10) years from the
date construction begins. Retroactive date of such policy must be on or before
the date Subcontractor and Consultant began offering professional services.
Limit of liability shall be not less than $1,000,000 Per Claim.

Retroactive Date and Deductible must be shown on the Certificate of Insurance.

  E.   Asbestos, Lead, and/or Remediation Trades

  1)   Asbestos and/or Lead Liability: If work contemplates asbestos or lead
abatement, Subcontractor shall provide such insurance coverage on an Occurrence
basis for claims arising out of abatement, removal, storage, transportation and
disposal activities with a limit of liability not less than $5,000,000 Per
Occurrence.

Certificate of Insurance shall (1) attach endorsement naming Morley Construction
Company, Owner and Other parties as required by Owner, as an Additional Named
Insured and (2) evidence Auto Pollution Liability plus Form MCS90.

Environmental Impairment Liability: If work contemplates handling or hauling
other pollutants, subcontractor will provide insurance to cover among other
things, claims arising out of all hazardous material and hazardous waste
remediation, storage, transportation, and disposal. Such insurance shall be
written on either (a) an Occurrence basis with no sunset clause, with limits of
not less than $5,000,000 Each Occurrence/$5,000,000 Aggregate or on (b) a
Claims-Made basis with a minimum 5 year Extended Reporting Period (tail) with
limits not less than $5,000,000 each Claim/$5,000,000 Aggregate. Such
Claims-Made Policy must have a Retroactive Date which coincides with or precedes
the Subcontractors start of work. Morley Construction Company reserves the right
to reject any SIR/deductible in excess of $25,000 or require that the
Subcontractor provide a bond on the SIR at no additional cost to Morley
Construction Company To the extent first dollar coverage, including defense of
any claim, is not available to Morley Construction Company or any other
additional named insured because of an SIR, deductible or any form of
self-insurance, Subcontractor is obligated to assume the responsibilities of the
insurer until such time as the deductible, SIR or other condition of the insurer
assuming its defense and/or indemnity obligations has been satisfied.
Subcontractor shall be responsible to pay any deductible or SIR.

  2)   Grading, Earthwork, and/or Shoring: If work involves, including but not
limited to, excavation, grading, hauling, or moving of dirt, even if work does
not contemplate handling or hauling of pollutants, Subcontractor shall provide
such insurance coverage on an Occurrence basis for claims arising out of
abatement, removal, storage, transportation and disposal activities with a limit
of liability not less than $1,000,000 Per Occurrence.

Certificate of Insurance shall (1) attach endorsement naming Morley Construction
Company, Owner and Other parties as required by Owner, as an Additional Named
Insured and (2) evidence Auto Pollution Liability plus Form MCS90.

Environmental Impairment Liability: If work involves, including but not limited
to, excavation, grading, hauling, or moving of dirt, even if work does not
contemplate handling or hauling of pollutants, Subcontractor will provide
insurance to cover among other things, claims arising out of all hazardous
material and hazardous waste remediation, storage, transportation, and disposal.
Such insurance shall be written on either (a) an Occurrence basis with no sunset
clause, with limits of not less than $1,000,000 Each Occurrence/$1,000,000
Aggregate or on (b) a Claims-Made basis with a minimum 5 year Extended Reporting
Period (tail) with limits not less than $1,000,000 each Claim/$1,000,000
Aggregate. Such Claims-Made Policy must have a Retroactive Date which coincides
with or precedes the Subcontractors start of work. Morley Construction Company
reserves the right to reject any SIR/deductible in excess of $25,000 or require
that the Subcontractor provide a bond on the SIR at no additional cost to Morley
Construction Company To the extent first dollar coverage, including defense of
any claim, is not available to Morley Construction Company or any other
additional named insured because of an SIR, deductible or any form of
self-insurance, Subcontractor is obligated to assume the responsibilities of the
insurer until such time as the deductible, SIR or other condition of the insurer
assuming its defense and/or indemnity obligations has been satisfied.
Subcontractor shall be responsible to pay any deductible or SIR.

Certificate of Insurance shall (1) attach endorsement naming Morley Construction
Company, Owner and Other parties as required by Owner, as an Additional Named
Insured and (2) evidence Auto Pollution Liability plus Form MCS90.

  F.   ESSENTIAL ELEMENTS

1) General Liability shall contain the following:

a) Project Specific Additional Insured Listing:

  b)   Additional Insured Endorsement: An Additional Insured Endorsement adding
as an additional insured each party noted in Section F.1.a. above, or otherwise
identified in the Prime Contract, as respects liabilities arising out of or
related to Subcontractor’s performance of “your work” under this contract, and
providing that such insurance is primary insurance as respects the interest of
the Owner and Contractor and that any other insurance maintained by the
Contractor or Owner, whether primary, excess or umbrella insurance, is excess
and not contributing insurance required hereunder. Endorsement CG 20 10 11
85-“Owners, Lessees or Contractors (Form B) must be attached to your
certificate. The parties intend that the insurance coverage required hereunder
and/or provided by the Subcontractor apply on a primary and non-contributing
basis with any other insurance policy(s) of Morley Construction Company, the
Owner and those additional insured entities as identified in the Prime Contract.
Such Primary wording shall be included on the Additional Insured Endorsement.

  2)   Modified Occurrence Liability Policies are not acceptable. Claims Made
General Liability Policies are not acceptable.

  3)   Waivers of Subrogation, if required by the Prime Contract, will have the
appropriate policies endorsed accordingly, with endorsement(s) attached to the
Certificate of Insurance.

  4)   Prior to commencement of work, a Certificate of Insurance on the standard
“ACORD” form, properly executed and signed by an authorized representative
(generally the “Broker”) on behalf of the insurer(s) evidencing the above
coverage’s and conditions, must be received by Morley Construction Company prior
to any work on the job site. Subcontractor shall maintain the required Insurance
and Additional Insured coverage required herein for a period of three (3) years
after completion of its work on the Project.

Subcontractor further agrees, upon written request by Morley Construction
Company or Owner, to furnish copies of such policies, certified by an authorized
representative of the insurer(s).

  5)   All insurance coverage provided by the Subcontractor shall be through
acceptable insurance carriers licensed in the state(s) where work is being
performed with a minimum A.M. Best Company standard of A and a financial
strength rating of X or greater.

  6)   Insurance companies are required to give thirty (30) days written notice
for cancellation of policy.

  7)   The Cancellation Section of the Certificate of Insurance must read:
“Should above described policies be canceled before the expiration date thereof,
the issuing company will mail 30 days written notice to the Certificate Holder
named to the left”.

THE WORDS “endeavor to” AND “but failure to mail such notice shall impose no
obligation or liability of any kind upon the company, its agents or
representative” MUST BE REMOVED/STRICKEN.

8

EXHIBIT “F”

CONSTRUCTION SCHEDULE

[BAR GRAPH]

9