Exhibit 10.14(c)

 

THIRD AMENDMENT
TO
AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
OF
HF LOGISTICS-SKX, LLC

This Third Amendment to Amended and Restated Limited Liability Company Agreement
of HF Logistics-SKX, LLC (“Amendment”) is made and entered into this 26 day of
December, 2019 by and between HF Logistics I, LLC, a Delaware limited liability
company (the “HF Member”) and Skechers R.B., LLC, a Delaware limited liability
company (the “Skechers Member”, and together with the HF Member, the “Members”).

RECITALS

A.The Members executed that certain Amended and Restated Limited Liability
Company Agreement of HF Logistics-SKX, LLC dated April 12, 2010, but effective
as of January 30, 2010 (as amended by a First Amendment dated as of August 11,
2015 (the “First Amendment”), and a Second Amendment dated as of February 12,
2019, the “LLC Agreement”).

B.The HF Member has received a term sheet dated October 10, 2019 (as it may be
amended with the consent of both Members, the “Term Sheet”) from Bank of
America, N.A. for the refinancing of the 2015 Project Loan with a new loan in
the amount of $129,600,000.  A copy of the Term Sheet is attached hereto as
Exhibit “A” (such refinancing, if taken out by the T1 Subsidiary, is hereinafter
referred to as the “2019 Project Loan”).

C.The proceeds of the 2019 Project Loan shall be used by the T1 Subsidiary and
the Company, inter alia, to (i) repay the 2015 Project Loan in full, (ii) pay
certain closing costs associated with the 2019 Project Loan, and (iii) make a
distribution to the HF Member in the amount of the net proceeds thereof (after
paying the amounts under clauses (i) and (ii)) which is estimated to be
approximately $65,000,000 (the “2019 HF Distribution”, and the amount thereof
being the “2019 HF Distribution Amount”).

D.The Members desire to further amend the LLC Agreement to reflect the
foregoing.

NOW, THEREFORE, it is agreed as follows:

1.Both Members consent to the T1 Subsidiary taking out the 2019 Project Loan on
the terms and conditions set forth in the Term Sheet.

2.Notwithstanding anything to the contrary in the LLC Agreement, upon the
funding of the 2019 Project Loan, the 2019 HF Distribution Amount shall be
distributed from the T1 Subsidiary to the Company, and the Company will make the
2019 HF Distribution to the HF Member.  

3.Nothing in this Amendment shall be deemed to be a waiver by Skechers of any of
its rights under the LLC Agreement, except those provisions of the LLC Agreement
amended hereby.

4.Subsequent to the consummation of the refinancing of the 2015 Project Loan by
the 2019 Project Loan, all references in the LLC Agreement to the “2015 Project
Loan” shall be deemed to refer to the “2019 Project Loan”, and the 2019 Project
Loan shall also be considered to be the “Subject Permanent Loan”.

5.Capitalized terms used in this Amendment have the same meanings as are set
forth in the LLC Agreement, except as otherwise provided herein.

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6.Except as set forth in this Amendment, the LLC Agreement remains in full force
and effect as written.

IN WITNESS WHEREOF, the Members have executed this Amendment as of the date
first above written.

 

“HF”

 

 

“SKECHERS”

 

 

 

 

 

 

HF LOGISTICS I, LLC, a Delaware limited liability company

 

SKECHERS R.B., LLC, a Delaware limited liability company

 

 

 

 

 

 

By:

/s/ Iddo Benzeevi

 

By:

Skechers U.S.A., Inc., a Delaware

 

Iddo Benzeevi, President and Chief

 

 

corporation, its sole member

 

Executive Officer

 

 

 

 

 

 

 

 

By:

/s/ David Weinberg

 

 

 

 

 

David Weinberg, Chief Operating Officer

 

 

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EXHIBIT “A”

TERM SHEET

 

 

 

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CONFIDENTIAL

December 26, 2019

 

Mr. Iddo Benzeevi

14225 Corporate Way

Moreno Valley, CA 92553

Dear Iddo:

Bank of America, N.A. ("Bank of America") is pleased to provide this indicative
Summary of Terms and Conditions (this "Summary of Terms") for the proposed
financing noted below. This Summary of Terms should be used for discussion
purposes, and does not purport to summarize all of the conditions, terms,
covenants, representations, warranties and other provisions that would be
contained in definitive legal documentation for the credit facility contemplated
hereby. This Summary of Terms is an indicative summary of terms under which Bank
of America would consider providing financing and, as such, is not a commitment,
nor does it describe all of the terms on which Bank of America would agree to
provide the proposed financing. Any commitment, if issued, would be subject to
completion of due diligence, including reputational due diligence, and formal
Bank of America risk and credit approval.

 

This Summary of Terms is confidential and is delivered to you with the
understanding that neither this Summary of Terms nor any of its terms and
substance will be disclosed, directly or indirectly, to any other person except:

(a)to your employees, agents and advisors who are directly involved in the
consideration of this matter; and (b) as disclosure may be compelled in a
judicial or administrative proceeding or as otherwise required by law or the
Securities and Exchange Commission.

 

GENERAL TERMS:

 

 

 

Property:

The "Property," is a 1,820,457 square foot, warehouse property located in Moreno
Valley, CA and 100% occupied by Skechers USA.

 

 

Borrower:

HF Logistics - SKX Tl, LLC

 

 

Sponsor:

The Trump Group

 

 

Sole Bookrunner and Sole Lead

BofA Securities, Inc. or its affiliate ("BofA Securities") will act as Sole

 

 

Arranger:

Bookrunner and Sole Lead Arranger (collectively, the "Arranger"). BofA
Securities may, without notice to Borrower, assign its rights and obligations as
Arranger to any other registered broker-dealer wholly-  owned by Bank of America
Corporation  to  which  all or substantially  all of Bank of America
Corporation's or any of its subsidiaries' investment banking, commercial lending
services or related businesses may be transferred following the date hereof.

 

 

Administrative Agent:

Bank of America will act as Administrative Agent ("Administrative Agent") on
behalf of the Lenders.

 

 

Lenders:

A syndicate of financial institutions (including Bank of America, collectively,
the "Lenders") arranged by the Arranger.

 

 

Facility:

A senior, secured term loan facility (the "Facility") in an aggregate amount
(the "Facility Amount") equal to the least of

 

 

 

 

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CONFIDENTIAL

HF Logistics - SKX Tl, LLC

 

 

 

•     $129,600,000;

 

•     such amount as provides a Debt Service Coverage Ratio (the "DSCR") of 1.20
to 1.0; and

 

•     LTV requirement has been satisfied by the appraisal received and accepted
by Administrative Agent.

 

 

Interest Rate:

LIBOR Daily Floating Rate plus 175 bps per annum.

 

 

LIBOR Successor Rate:

If Administrative Agent determines , or Borrower or Required Lenders notify
Administrative Agent that: (a) adequate and reasonable means do not exist for
ascertaining LJBOR and such circumstances are unlikely to be temporary, or (b)
the administrator of LIBOR or a governmental authority having jurisdiction over
Administrative Agent has made a public statement identifying a specific date
after which LIBOR shall no longer be made available, or used for determining the
interest rate of loans, provided that, at the time of such statement, there is
no successor administrator that is satisfactory to Administrative Agent, that
will continue to provide LIBOR after such specific date, or (c) syndicated loans
are being executed or amended to incorporate or adopt a new benchmark interest
rate to replace LIBOR, then Administrative Agent and Borrower may enter into an
amendment to replace LIBOR (a "LIBOR Amendment") with (x) one or more SOFR-Based
Rates or (y) another alternate benchmark rate, giving due consideration to any
evolving or then existing convention, and, in each case, including any
mathematical or other adjustments (each an "Adjustment;" and any such proposed
rate, a

"LIBOR Successor Rate") to such benchmark giving due consideration to any
evolving or then existing convention. Any such LIBOR Amendment or Adjustment
shall become effective unless Required Lenders object to same within five (5)
Business Days (provided that Required Lenders will not be entitled to object to
any SOFR-Based Rate contained in a LIBOR Amendment). In no event shall the LIBOR
Successor Rate be less than zero.

 

 

 

"Relevant Governmental Body" means the Federal  Reserve  Board and/or the
Federal Reserve Bank of New York, or a committee officially endorsed or convened
by the Federal Reserve Board and/or the Federal Reserve Bank of New York for the
purpose of  recommending  a benchmark rate to replace LIBOR in loan agreements
similar to this Agreement.

 

 

 

"SOFR" with respect to any day means the secured overnight financing rate
published for such day by the Federal Reserve Bank of New York, as the
administrator of the benchmark (or a successor administrator) on the Federal
Reserve Bank of New York's website (or any successor  source) and, in each case,
that has been selected or recommended by the Relevant Governmental Body.

 

 

Interest Payments:

Interest will be paid on the first day of each month, in arrears.

 

 

Upfront Fee:

0.50% of the Facility Amount, payable at closing.

 

 

 

 

 

 

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CONFIDENTIAL

HF Logistics - SKX Tl, LLC

 

 

Maturity Date:

60 months from the closing date of the Facility (the "Maturity Date").

 

 

Guaranties and Indemnities:

HF Logistics - SKX T2 LLC ("Guarantor") will provide:

 

•      a guaranty with respect to non-recourse carveouts, including, without
limitation, fraud, misapplication and full springing recourse upon certain
events, including, without limitation voluntary or collusive involuntary
bankruptcy.

 

•      jointly and severally with Borrower, an environmental indemnity.

 

 

Amortization:

None.

 

 

Collateral:

Collateral for the Facility will include, without limitation, a first priority

 

(a) mortgage/deed of trust lien on Borrower's fee leasehold]interest in the
Property; (b) assignment of all leases, rents, income, licenses, permits and
contracts relating to the Property; (c) lien on all personal property relating
to the Property; (d) assignment of all interest rate hedge agreements.

 

 

Interest Rate Protection:

Borrower will obtain interest rate protection in form and with parties
acceptable to Administrative Agent for a notional amount and otherwise on terms
to be agreed to in the Facility documentation. Borrower and any person or entity
that at any time provides a guaranty of Borrower's obligations in respect of
such interest rate protection (including but not limited to any general partner
of any thereof) will be required to be an "eligible contract participant" as
such term is defined in the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as
amended from time to time, and any successor statute.

 

 

Optional Prepayment:

Borrower may prepay the Facility in whole or in part at any time without premium
or penalty. Amounts prepaid cannot be reborrowed.

 

 

Facility Covenants:

DSCR: Failure to maintain a Debt Service Coverage Ratio of at least 1.15 to 1.0
for any fiscal year will constitute an Event of Default under the Facility. Debt
Service will be defined in the Facility documentation and generally will refer
to the aggregate amount of principal and interest payments required to amortize
the Facility Amount based on a 30/-year repayment schedule and an interest rate
equal to the greater of (i) 6% and (ii) the 10-year U.S. Treasury rate plus 2.5%
per annum.

 

 

Guarantor Covenant:

Guarantor must maintain tangible net worth of no less than $6,000,000, to be
tested at closing and as of each December 31st• Guarantor will submit a
compliance certificate that demonstrates compliance with the foregoing net worth
requirement.

 

 

 

 

 

 

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CONFIDENTIAL

HF Logistics - SKX Tl, LLC

 

 

 

 

Syndication:

Bank of America will seek final, formal approval to commit up to

 

 

 

$64,800,000 of the Facility with the remaining amount subject to syndication.
Bank of America, Administrative Agent and the Arranger intend to close the
Facility and the syndication simultaneously.

 

 

Closing Conditions:

The closing of the Facility will be conditioned upon satisfaction (or valid
waiver) of the conditions precedent usual and customary for transactions of this
type, including, without limitation, the conditions set forth in Schedule 1
attached hereto.

 

 

Assignment & Participations:

Bank of America reserves the right to syndicate the Facility, subject to
customary, market-standard approval rights. No Lender will be permitted to make
assignments in respect of the Facility, except to certain specified categories
of entities pursuant to customary, market-standard provisions. Specific
provisions regarding assignment and participation will be included in the
Facility documentation.

 

 

Indemnification and Expenses:

Borrower will pay all costs incurred in connection with the proposed Facility,
including but not limited to reasonable legal fees  of Administrative Agent's
counsel, title/insurance fees, mortgage recording fees, Administrative Agent's
reasonable appraisal, engineering and insurance review fees, and costs
associated with the syndication of the Facility. Borrower and the undersigned
acknowledge that Administrative Agent may receive a benefit, including, without
limitation, a discount, credit or other accommodation, from such counsel based
on the fees such counsel may receive on account of their relationship with
Administrative Agent including, without limitation, fees paid in connection with
the Facility. Payment by Borrower of these expenses will not be contingent upon
closing of the Facility.

 

 

 

Borrower will indemnify and hold harmless Administrative Agent, the Arranger,
each Lender and their respective affiliates and their partners, directors,
officers, employees, agents and advisors from and against all losses, claims,
damages, liabilities and expenses arising out of or relating to the Facility,
any other aspect of the contemplated transactions, Borrower's use of Facility
proceeds or the commitments, including, but not limited to, reasonable
attorneys' fees (including the allocated cost of internal counsel) and
settlement costs and any claim for loan brokerage fees or similar payments.

 

 

All interest rates and other pricing terms are quoted based on the assumption
that the Facility will not be classified as HVCRE (High Volatility Commercial
Real Estate Exposure) pursuant to Basel III Regulations.  The quoted interest
rates and other pricing terms are potentially subject to change if the Facility
is anticipated to be classified as HVCRE pursuant to Basel III Regulations.

 

Any Facility, as contemplated by this Summary of Terms, will be subject to
applicable flood insurance regulations at all times during the life of such
Facility. Compliance with flood insurance regulations will be tested prior to
making, increasing, renewing or extending any such Facility.

 

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CONFIDENTIAL

HF Logistics - SKX Tl, LLC

 

The Facility documentation will contain (a) customary increased cost,
withholding tax, and capital adequacy provisions, (b) EU Bail-In provisions, (c)
Qualified Financial Contracts provisions, (d) defaulting lender provisions,(e)
customary ERISA provisions, and (f) customary provisions relating to the
divisions of limited liability companies.

Bank of America and BofA Securities (for themselves and not on behalf of any
Lender) hereby notify you that pursuant to the requirements of the USA PATRIOT
Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the
"PATRIOT Act") and recent regulations implemented by the US Treasury's Financial
Crimes Enforcement Network ("FinCEN") under 3 1 C.F .R. § 1010.230 (the
"Beneficial Ownership Regulation"), each of them and each Lender that is subject
to the Act, is required to obtain, verify and record information that identifies
you, which information includes, but is not limited to, your name and address, a
Beneficial Ownership Certification, and other information that will allow Bank
of America. BofA Securities or any Lender, as applicable, to identify you in
accordance with the PATRIOT Act and the Beneficial Ownership Regulation prior to
closing this Facility. You shall, promptly following a request by Bank of
America, BofA Securities or any Lender, provide all documentation and other
information that such party requests in order to comply with its ongoing
obligations under applicable "know your customer" and anti-money laundering
rules and regulations, including the PATRIOT Act and the Beneficial Ownership
Regulation. "Beneficial Ownership Certification" means a certification regarding
beneficial ownership required by the Beneficial Ownership Regulation.

The undersigned acknowledges and agrees that: (i) the transaction contemplated
by this Summary of Terms is an arm's length, commercial transaction between you
and Bank of America in which Bank of America is acting solely as an
Administrative Agent, as a principal and for its own interest; (ii) Bank of
America is not acting as a municipal advisor or financial advisor to you; (iii)
Bank of America has no fiduciary duty pursuant to Section 158 of the Securities
Exchange Act of 1934 to you with respect to the transaction contemplated hereby
and the discussions, undertakings and procedures leading thereto (irrespective
of whether Bank of America has provided other services or is currently providing
other services to you on other matters); (iv) the only obligations Bank of
America has to you with respect to the transaction contemplated hereby expressly
are set forth in this Summary of Terms; and (v) Bank of America is not
recommending that you take an action with respect to the transaction
contemplated by this Summary of Terms, and before taking any action with respect
to the contemplated transaction, you should discuss the information contained
herein with your own legal, accounting, tax, financial and other advisors, as
you deem appropriate. If you would like a municipal advisor in this transaction
that has legal fiduciary duties to you, you are free to engage a municipal
advisor to serve in that capacity. This Summary of Terms is provided to you
pursuant to and in reliance upon the "bank exemption" provided under the
municipal advisor rules of the Securities and Exchange Commission, Rule 15Ba1-1
et seq.

In consideration of the time and resources that Bank of America and the Arranger
will devote to consideration of the Facility as described herein, you hereby
agree that, effective upon your acceptance of this Summary of Terms and
continuing through January 31, 2020, you will not solicit any other bank,
investment bank, financial institution, person or entity to provide, structure,
arrange or syndicate any component of the Facility or any other senior financing
similar to or as a replacement of any component of the Facility.

If these items are consistent with your financing requirements, please
acknowledge below and return this letter to either signer below within ten (10)
Business Days. Bank of America will then be able to proceed with a full review
and analysis of your financing request and attempt to obtain internal approval
on the basis of the foregoing terms and conditions as quickly as possible. Of
course, the foregoing should not be construed in any way as a commitment for
financing, as any such commitment or undertaking can only be in writing after
internal loan approval has been obtained.

Any loan commitment must be written and state that it is a commitment and any
other oral or written communications will not constitute a loan commitment. Any
loan commitment will not be binding upon Bank of America or Borrower unless
executed by both parties.

 

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CONFIDENTIAL

HF Logistics - SKX Tl, LLC

 

This Summary of Terms will expire at 5:00 p.m. EST on January 6, 2020 unless
prior to that time Borrower executes this Summary of Terms and returns same to
Bank of America. Following acceptance, this Summary of Terms will expire without
notice at 5:00 p.m. EST on March 31, 2020. In no event will any expiration or
termination of this Summary of Terms relieve Borrower or any other person from
any obligation to pay fees, costs and expenses as described herein, all such
obligations expressly surviving any such expiration or te1mination.

 

We are pleased to have the opportunity to work with you in connection with this
impo11ant financing.  Please feel free to contact us to clarify any issues or
answer any questions.

 

 

Sincerely,

 

 

/s/ Tanya L. Acosta

Tanya L. Acosta

Senior Vice President

Commercial Real Estate Banking 305.468.4379

 

 

Cc:

Kim Abreu

 

Evan Sitarski

 

 

 

 

Acknowledged and Agreed:

 

 

HF Logistics – SKX T1, LLC

 

 

By:

/s/ Iddo Benzeevi

 

 

Its:

President

 

 

Date:

12/26/2019

 

 

 

 

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CONFIDENTIAL

HF Logistics - SKX Tl, LLC

 

Schedule 1

Conditions Precedent to Closing

 

Conditions to closing of the Facility will include (all of the items to be
delivered to be in form and substance satisfactory to Administrative Agent):

 

 

•

extension of Skechers lease by a minimum of five years from the current
expiration date;

 

•

receipt of all due diligence materials necessary and relevant to identifying
Borrower's identity and background information, as deemed necessary by
Administrative Agent, Arranger and Lenders, including but not limited to,
documentation and other information requested in connection with applicable
"know your customer" and anti-money-laundering rules and regulations, including
the PATRIOT Act and the Beneficial Owner Regulation;

 

•

any Borrower that qualifies as a "legal entity customer" under the Beneficial
Ownership Regulation shall deliver a Beneficial Ownership Certification in
relation to such Borrower to each Lender;

 

•

completion of all due diligence, including reputational due diligence, with
respect to Borrower, Guarantors and their respective subsidiaries and the
Property in scope and determination satisfactory to Administrative Agent, the
Arranger and the Lenders;

 

•

receipt of an appraisal for the Property;

 

•

receipt of a Phase I Environmental Site Assessment for the Property;

 

•

receipt of standard flood hazard determination forms for the Property;

 

•

review and acceptance by Administrative Agent (and any third party consultant,
if any, selected by Administrative Agent) of all insurance policies for Borrower
and the Property, including, but not limited to, such evidence of flood
insurance coverage (including contents coverage, as applicable) as
Administrative Agent and Lenders shall require;

 

•

receipt of a title insurance policy insuring Lenders' first mortgage position on
the Property, together with such co-insurance and/or reinsurance as
Administrative Agent may require, together with UCC, litigation and other
searches against Borrower, Guarantor and such other parties as Administrative
Agent shall require;

 

•

receipt of the required interest rate protection agreement and an acknowledgment
by the counterparty thereunder of the assignment thereof to Administrative
Agent;

 

•

receipt of satisfactory legal opinions, financial statements, certificates,
documents and other instruments as are customary or otherwise appropriate for
transactions of this type; and

 

•

receipt of such other documents, instruments, agreements or information as
reasonably requested by Administrative Agent.

 

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