Exhibit 10.7
 LIMITED LIABILITY COMPANY AGREEMENT
OF
HF LOGISTICS-SKX, LLC
 INTERESTS Article
11 STATE ACTS FEDERAL ACT Article 11 UNITED
STATES U.S. PERSON




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TABLE OF CONTENTS
 PageArticle 1 DEFINED TERMS
    
    
    1Article 2 ORGANIZATIONAL MATTERS
    
    
    8Article 3 PURPOSE
    
    
    10Article 4 CAPITAL CONTRIBUTIONS; MEMBER LOANS; CAPITAL ACCOUNTS
    
    
    10Article 5 DISTRIBUTIONS AND ALLOCATIONS
    
    
    13Article 6 LOANS
    
    
    14Article 7 MANAGEMENT AND OPERATION OF BUSINESS
    
    
    18Article 8 BUY-SELL PROVISIONS
    
    
    25Article 9 BOOKS, RECORDS, ACCOUNTING AND REPORTS
    
    
    28Article 10 TAX MATTERS
    
    
    29Article 11 TRANSFERS AND WITHDRAWALS
    
    
    32Article 12 ADMISSION OF MEMBERS
    
    
    34Article 13 DISSOLUTION AND LIQUIDATION
    
    
    34Article 14 AMENDMENT OF AGREEMENT
    
    
    37Article 15 DISPUTE RESOLUTION
    
    
    37Article 16 DEFAULTS / REMEDIES
    
    
    38Article 17 GENERAL PROVISIONS
    
    
    39
 i




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LIMITED LIABILITY COMPANY AGREEMENT
OF
HF LOGISTICS -SKX, LLC
 HF LOGISTICS-SKX, LLC Company th Effective
Date HF LOGISTICS I, LLC, a Delaware limited liability company ( HF ), SKECHERS RB, LLC, a Delaware limited liability company Skechers Members
 RECITALS
   ARTICLE 1
 DEFINED TERMS
 Certain Defined Terms
 Act et seq.
 Additional Capital Contributions Section 4.1.2
 Additional Funding Obligation Section
6.9(a)
 Additional Member
 Affiliate
 Agreement
 Assignee




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Available Cash
      Bankruptcy Action
 Breaching Member
 Business Day
 Buy-Sell Deposit Section 8.6
 Buy-Sell Notice Section 8.1
 Capital Account Exhibit A
 2




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Capital Contribution Exhibit A Article 4
 Capital Transaction
 Capital Transaction Proceeds
 Certificate
 Closing Date Exhibit F Commitment st
 Code
 Company
 Company Assets
 Company Interest
 Company Record Date
 Company Year
 Completion of the Project
 Construction Lender
 3




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Construction Loan
 Contribution Percentages
 Debt
 Default Section 4.1.5(c) Section 4.1.5(c)
 Default Amount Section
4.1.5(c)
 Default Date Section
4.1.5(c)
 Default Member Section
4.1.5(c)
 Default Notice Section
4.1.5(b)
 Deposit Date Section
8.6
 Section 15.2
 Development Budget
 Development Management Agreement Exhibit B
 Development Manager
 Distribution Percentages Section 4.1.5
 Effective Date
 Embargoed Person Section
2.5.10
 4




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Event of Default Article 4 Article 6
 Event of Dissolution Section 13.1
 HF
 Section 6.4
 HF Managing Member
 Incapacity Incapacitated
 Indemnitee
 Initial Capital Contributions Section 4.1.1
 Invoking Member Section 8.1
 IRS
 Lease
 Lease Amendment
 Lender
 Liquidating Transaction
 Liquidator Section 13.2.1
 5




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Loan
 Loss Item Section 7.6.1
 Managing Member
 Managing Members
 Master Lease Master Landlord
 Members
 Offeree Member Section 8.1
 Operating Budget Section 7.9 Exhibit D
 Permanent Lender
 Permanent Loan
 Person
 Plans and Specifications
 Prescribed Laws Section
2.5.10
 Prime Rate
 6




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Project Property
 Project Schedule
 Purchasing Member Section 8.6
 Regulations Exhibit A
 Reserves
 Securities Act
 Selling Member Section 8.6
 Skechers
 Skechers Loan Section 6.5
 Skechers Parent
 Skechers Managing Member
 Stated Amount Section
8.2
 Tax Matters Partner Section 10.2.1
 Tenant
 Unrecovered Contribution Section 5.2(a Section 5.2(a) Section 13.2.1(c))
 Other Terms Article 1
 7




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ARTICLE 2
ORGANIZATIONAL MATTERS
 Formation; Application of Act
 Formation of Company
 Application of Act
 Name
 Registered Office and Agent
 Term Article 13
 Representations of Members
    8




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Section 17.19
   Embargoed Person Section 2.5.10 Section 2.5.11 Section
2.5.12 Prescribed Laws et. seq.
   Sections 2.5.10 2.5.11
 9




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ARTICLE 3
PURPOSE
 Purpose Article 15
 Powers
 ARTICLE 4
CAPITAL CONTRIBUTIONS; MEMBER LOANS; CAPITAL ACCOUNTS
 Capital Contributions of the Members
 Initial Capital Contributions
  10




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Article 15
 Exhibit G
  Additional Capital Contributions Section 4.1.5 Article
15 Section
4.1.5(c) Section 4.1.5(d)(i)
 11




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Return of Capital Contributions Article 5 Article 13
 Liability of Members Section 4.1.1 Section 4.1.2 Section 6.8
 Default in Making Required Additional Capital Contributions
  Default Notice
 Default Default
Date Default Member Default Amount Non-Defaulting Member Article 15 Section 4.1.2
 12




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Section
4.1.2 Section 4.1.2 Section 5.2 Section 13.2
  Article 4 SECTION 4.1.5(a) SECTION 4.1.6 Section
5.2(c) Article 4
 ARTICLE 5
DISTRIBUTIONS AND ALLOCATIONS
 Distributions: General Principles Section 13.2 Section 5.2
 Distributions Section 5.2(c)
 13




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Section
4.1.2 Section 4.1.5(d)(i) Section 5.2(a) or (b) Section
13.2.1(c) Article 6
 Allocations Exhibit A
 ARTICLE 6
LOANS
 Construction Loan Section 4.1.1(b)
 14




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Permanent Loan
 Indemnification
 HF Loan HF
Loan 
 15




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Section 5.2(c)) Section 3.3(c) Exhibit A
 Skechers Loan Skechers Loan
 Pro Rata Section
5.2(c))
 Loan Documentation Notes Exhibits
C-1 and C-2
 Additional Loans
   16




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Article 15
 Section 6.8(a) or (b) Article 15
 Default in Making Required Loans
 Section 6.8 Additional Funding Obligation
  Section 4.1.5(d)(i)
 Section 4.1.5(d)(ii)
 Article 6 Section 6.10 Section 5.2(c) Article 6
 17




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Article 6
 ARTICLE 7
MANAGEMENT AND OPERATION OF BUSINESS
 Management
 Powers of the Managing Members.
  Section 7.1.4
 Section 7.1.4 Section 7.1.1(b) POA Section 7.1.1(e)
 18




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Section 7.1.1(c)
  provided however Article 9 Article 15 Section 15.3
  19




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Section 3.2 Section 3.1
         No Approval Required for Above Powers
 20




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No Obligation to Consider Tax Consequences to the Members
 Removal of Managing Members
 Article 4 Article 6
       21




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Section 7.5
 Article 15
 Certificate of Formation
 Compensation of Managing Members
 No Compensation
 Reimbursement for Expenses provided however
 Devotion of Time and Outside Activities of the Members
  22




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Outside Activities
 Contracts with Affiliates Section
7.1.1(c) Section 6.1 Article 15
 Indemnification
 General Loss Items Section 6.3 Section 7.6.1. Section
7.6.1. Section 7.6
 23




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In Advance of Final Disposition Section 7.3.2 Section 7.6
 Other Than by This Section Section 7.6
 Liability of the Managing Members
 Other Matters Concerning the Managing Members
 Reliance on Documents
 Reliance on Consultants and Advisers prima facie
 Action Through Officers and Attorneys In Fact
 Reliance by Third Parties
 24




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Operating Budgets Exhibit
D st Article 15
 ARTICLE 8 BUY-SELL
PROVISIONS
 Invoking
Member Offeree
Member Section 8.1 Buy-Sell Notice
 25




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Stated Amount
 Section 13.2.1 Section 13.2.1. Section 8.8
  provided however
 Article 8 Purchasing Member Deposit Date Buy-Sell Deposit Selling Member
 Article 8 Article 8
 Article 8
 26




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Article 8 Article 11
 Article 8
  27




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ARTICLE 9
 BOOKS, RECORDS, ACCOUNTING AND REPORTS
 Records and Accounting Exhibit
A
 Fiscal Year.
 Section 9.3Reports.
 Annual Reports.
 Quarterly Reports.
 Other Reports.
 Special Provisions Re Books and Records, Accounting and Reports. Article 9,
  28




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ARTICLE 10 TAX
MATTERS
 Preparation of Tax Returns.
 Tax Matters Partner.
 General.
 29




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Powers.
        Section 10.2.2(b), (d), (e) or (f) Article 15.
  30




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Section 7.6
 Reimbursement. Section 10.2.2(g)
 Organizational Expenses.
 Withholding. Section 10.4 Section 5. Section 13.2 Section 10.4. Section 10.4 i.e
 Tax Elections.
 31




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ARTICLE 11
 TRANSFERS AND WITHDRAWALS
 Transfer.
 Definition. Article 11
 Requirements Article 11 Article 11
 Transfer of Members Company Interest. Article 12 Article 11
 Prohibited Transfers. Section 11.1.3
  32




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Article 15
 Timing of Transfers Article 11
 Allocations and Distributions When Transfer Occurs
 Certain Prohibited Transfers
 Default
 Withdrawal Article 15
 Management
 33




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ARTICLE 12
 ADMISSION OF
MEMBERS
 Admission of Successor Members Section 11.1.3
  ARTICLE 13
 DISSOLUTION AND LIQUIDATION
 Dissolution Event of Dissolution
 Expiration of Term Section 2.4;
 Judicial Dissolution Decree
 Sale of Companys Assets
 Mutual Agreement
 Other Event
 Winding Up.
 Liquidator
 34




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Section 5.2
 Article 13
 When Immediate Sale of Company Assets Impractical. Section 13.2.1 Section 13.2.3 Section 13.2.1
 Compliance With Timing Requirements of the Regulations; Allowance for Contingent or
Unforeseen Liabilities or Obligations. Section 13.2.1(c) Section 5.2 Article 13
 35




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Deemed Distribution and Recontribution. Article 13
 Rights of Members.
 Notice of Dissolution.
 Cancellation of Certificate of Formation. Section 13.2.1
 Reasonable Time for Winding-Up. Section 13.2.3 Section 13.2
 Termination If Lease Amendment Terminates.
 36




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ARTICLE 14
 AMENDMENT OF AGREEMENT
 Amendments
 General Section 14.1.2 Section 14.1.3 Article 15
 Managing Members Power to Amend. Section 14.1.1
     Section 14.1.2
 Consent of Adversely Affected Member Required. Section 14.1.2 Article 5 Article 13 Exhibit
A Article 4 Section 2.4 Section 13.1 Section
14.1.3.
 ARTICLE 15 DISPUTE
RESOLUTION
 Mediation
 Arbitration
 37




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Determination Section 15.1
 Increased Costs.
 ARTICLE 16
DEFAULTS /REMEDIES
 Defaults. Article 4 Article 6 Article 4 Article 6
 38




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Remedies. Article 15
 Offset Rights. Article 4 Article 6 Article 8
 ARTICLE 17 GENERAL
PROVISIONS
 Addresses and Notice. e.g.
 HF:
 
  
  
  
 39




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SKECHERS:
 
  
  
  Titles and Captions
 Interpretation
 Further Action
 Binding Effect
 40




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Waiver of Partition
 Entire Agreement
 Securities Law Provisions
 Creditors
 Waiver
 Execution Counterparts
 Applicable Law
 Invalidity of Provisions
 Limitation of Member Liability
 WAIVER OF JURY TRIAL
 41




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Construction
 Attorneys Fees
 Confidentiality Section 9.1
 Sierra Club Litigation Sierra Club Litigation Exhibit H "
 Adjacent Development
 Expansion Area
 42




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Condition to Effectiveness of Agreement Exhibit I 
 (signature page follows)
 43




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HF
    
    
    
    SKECHERSHF LOGISTICS I, LLC, a Delaware limited
    
    SKECHERS RB, LLC, a Delaware limitedliability company
    
    liability companyBy:
    
    /s/ Iddo Benzeevi
    
    By:
    
    Skechers USA, Inc, a DelawareIddo Benzeevi, President and Chief
    
    
    
    corporation, its sole memberExecutive OfficerBy:
    
    /s/ David WeinbergDavid Weinberg, Chief Operating
OfficerBy:
    
    /s/ Robert GreenbergRobert Greenberg, Chief Executive
Officer
 Section 4.1.1
 SKECHERS PARENTSKECHERS USA, INC., a Delaware
corporationBy:
    
    /s/ David WeinbergDavid Weinberg, Chief Operating OfficerBy:
    
    /s/ Robert GreenbergRobert Greenberg, Chief Executive Officer




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EXHIBIT A
 CAPITAL ACCOUNTS,
ALLOCATIONS OF PROFIT AND LOSS,
AND OTHER TAX MATTERS
 ARTICLE 1
DEFINITIONS
 Section 1.1 Definitions.
 Agreement Exhibit A Exhibit A
 Agreed Value
 Agreed Value i.e.
 Book Basis
 Book Basis provided, however, Section 3.1 Section 3.5 i.e
 Book Depreciation
 Book Depreciation
  1




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Book Gain or Loss
 Book Gain or Loss
 Book/Tax Disparity Property
 Book/Tax Disparity Property
 Capital Accounts
 Capital Account Section 2.1
 Capital Transaction
 Capital Transaction
 Company Minimum Gain
 Company Minimum Gain
 Deductible Expenses
 Deductible Expenses
  2




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Economic Risk of Loss
 Economic Risk of Loss
 Gross Asset Value
 Gross Asset Value
     Gross Income
 Gross Income
 Liquidation
 Liquidation
  3




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Member Minimum Gain
 Member Minimum Gain
 Member Nonrecourse Deductions
 Member Nonrecourse Deductions
 Member Nonrecourse Debt
 Member Nonrecourse Debt
 Nonrecourse Deductions
 Nonrecourse Deductions
 Nonrecourse Liability
 Nonrecourse Liability
 Operations
 Operations
 Profits and Loss
 Profits Loss
    4




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Exhibit A
 Recourse Debt
 Regulations
 Regulations
 Related Person
 Related Person
 Revaluation Event
 Revaluation Event a de minimis a de minimis
 Tax Depreciation
 Tax Depreciation
 Tax Items
 Tax Items
 Unrealized Book Gain or Loss
 Unrealized Book Gain Or Loss i.e
  5




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ARTICLE 2
CAPITAL ACCOUNTS
 Section 2.1 Capital Accounts.
 Capital Account
 Exhibit A
 i.e. Exhibit A i.e
 Section 3.1
 Section 3.1
  Additional Provisions Regarding Capital Accounts
   6




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Section 2.2(d)
  ARTICLE 3
ALLOCATIONS OF PROFIT AND LOSS
 Allocations of Profit and Loss Section 3.1 Section 3.2 Section 3.3 Section 3.4 Section 3.5 Section 3.1
 Minimum Gain Chargeback Section
3.1(a) Section 3.1 Section 3.1(a)
  7




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Member Minimum Gain Chargeback Section 3.1(b)) Section 3.1 Section 3.1(b)
 Qualified Income Offset Section 3.1 Section 3.1(c)
 Nonrecourse Deductions
 Member Nonrecourse
 Nonrecourse Liabilities
 Code Section 754 Adjustment
  8




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Special Allocation of Amounts Required
 General Allocations Sections 3.1(a) through (h) Section
5.2
 Character of Income and Loss Section 3.1
 Limitations On Allocations Section 3.1(h)
     9




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Allocations of Income and Loss in Respect of Interests Transferred
  Allocation of Tax Items
 Section 3.3 Section 3.1
 Section
3.1 3.3(a)
     10




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Section 3.3(c)(i)
 Sections 3.1(a) through 3.1(h) Regulatory Allocations
 Revaluation Events and Capital Adjustments for Book Items
 Section 3.1 Section 3.1 Section 3.3
 Intent of Liquidating Distributions
 Exhibit A Section 5.2 Exhibit A Section 3.1(i)) Section 3.6
 Curative Allocations
 Section 3.7
  11




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ARTICLE 4
OTHER TAX MATTERS
 Consistent Treatment
   12




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EXHIBIT B
 DEVELOPMENT MANAGEMENT AGREEMENT




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DEVELOPMENT MANAGEMENT AGREEMENT
 Agreement th Effective Date HF
LOGISTICS-SKX, LLC Owner HFC HOLDINGS, LLC, a Delaware limited liability
company Development Manager
 RECITALS:
 LLC Agreement HF Member Skechers Member
  Project
   AGREEMENT:
  ARTICLE 1
 DEFINITIONS
 Section 1.1 Certain Definitions
 Added Costs Section 4.1
 Agreement




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Applicable Laws
 Approval by (or of) Owner
 Approved Plans Section 2.4
 Bid Documents Section 2.7(e)(i)
 Building
 Close-Out Section 2.11(a)
 Completion Notice Section
2.10(a)
 Completion of the Project Section 2.11(c)
 Construction Loan
 Contract Documents
 Development Approvals Section 2.7(g)
 Development Budget Section 2.3
 Development Budget Amendment Section 2.8(f)
 Development Manager
 Development Manager Fee Section 5.1
 Development Services Section 2.1
 Due Care
 Effective Date
 Entitlement Requirements Section 2.7(a)(i)
 Force Majeure Section 4.2
 2




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General Contractor
 Hard Costs
 Hazardous Materials
 Improvements
 Indemnified Parties Section 4.3
 Land
 Lease
 Lender
 LLC Agreement
 Owner
 Party
 Project
 Project Architect
 Project Construction Contract Section
2.7(e)(v)
 Project Costs
 Project Engineers
 Project Manager Section 3.2
 3




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Project Schedule Section 2.3
 Project Team Section 2.2
 Punchlist Section 2.10(c)
 Punchlist Items
 Skechers Parent
 Soft Costs
 Standard of Quality Section 2.5
 Statement of Project Costs Section 2.11(b)
 Substantial Completion
 Section 1.2 Other
Definitions
 Section 1.3 Terminology.
 ARTICLE 2
 SCOPE OF SERVICES
 Section 2.1 General ARTICLE 2 Development Services
 4




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Section 2.2 Project Team Project Team
 Section 2.3 Development Budget and Project Schedule Exhibit
A  Development Budget Project Schedule Section 4.1
 Section 2.4 Plans Approved Plans
 Section 2.5 Standard of Quality Standard of Quality
 Section 2.6 Compliance With Applicable Laws
 Section 2.7 Predevelopment Phase Section 2.1 Section 2.6
 Initial Planning
 5




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Entitlement Requirements
    Schematic Design
 Design Development
 Working Drawings
   Contractor Bidding and Selection
 Bid Documents
    6




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Project Construction Contract
   Payment of Project Architect and Project Engineers
 Development Approvals Development
Approvals
 Meetings
 Contracts with Project Architect and the Project Engineers
 Development Easements
 7




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Section 2.8 Construction Phase Section 2.1 Section 2.6 Section 2.7
 Critical Path Schedule
 Site Preparation
 Applications for Payment Requirements
 Certificate
 Construction Administration
 Meetings
 Contract Performance
 Bonds
 8




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General Contractor Identification
 Lien Claims
 Warranty Corrections
 Monitor Work
 Accidents
 Shop Drawings and Other Submittals
 9




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Utilities
 Change Orders Development Budget Amendment Project Schedule Amendment
 Construction Phase Reporting
 Technical Inspections
 Contract Enforcement
 10




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Construction Loan
 Insurance of Project Architects and Engineers
 Claims
 Preparation of Punchlist
 Shop Drawings
 Bank Accounts/Withdrawals
  11




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Section 2.9 Affiliate Contracts
 Section 2.10 Occupancy; Punchlist
   Punchlist
 12




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Section 2.11 Close-Out
 Close-Out
         Section 2.10(a)
  13




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Statement of Project Costs
 Section 2.11 Completion of the Project
     14




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ARTICLE 3
 TERM OF AGREEMENT AND PERSONNEL
 Section 3.1 Term
 Section 3.2 Personnel Project Manager
    ARTICLE 4
 DEVELOPMENT BUDGET AND LIABILITY
OF DEVELOPMENT MANAGER
 Section 4.1 Increases in Development Budget Added Costs
   15




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Section 4.6
  Section 4.2 Force Majeure
 Section 4.3 Development Managers Indemnity Indemnified Parties
 16




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Section 4.4 Owners Indemnity Manager Indemnified Parties Section 4.3
 Section 4.5 Records
 Section 4.6
Time Delays/Arbitration
 ARTICLE 5
 COMPENSATION
 Section 5.1 Development Manager Fee Development Manager Fee
 17




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Section 5.2 Third Party Consultants
 ARTICLE 6
 INSURANCE
 Section 6.1 Development Manager Insurance Section 6.1
 Section 6.1
 Section 6.1(c)
  Section 6.1(c)
    18




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Section 6.1(c)
  Section 6.1(c)
 Section 6.1
 Section 6.2 Owner Insurance Section 6.2
  Section 6.2(c)
   19




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Section 6.3 Waiver of Subrogation. Section 6.3
 ARTICLE 7
 LIMITATION AS TO SERVICES AND AUTHORITY
 Section 7.1 Limitation
   Section 7.2 Owner and Skechers Member Approvals
 20




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ARTICLE 8
 OWNER AND INDEPENDENT CONSULTANTS
 Section 8.1 Owners Inspection Rights
   ARTICLE 9
 TERMINATION
 Section 9.1 Termination by Owner
 21




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Section 9.1
 Section 9.2 Suspension and Termination by Development Manager Section 9.2 Added Costs Section 9.2
 ARTICLE 10
 MISCELLANEOUS
 Section 10.1 Protection of Persons or Property
 22




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Section 10.2 Applicable Law
 Section 10.3 Jurisdiction
 Section 10.4 Notices
 If to Owner:
    
    Highland Fairview-SKX, LLCc/o Highland Fairview Properties14225 Corporate WayMoreno Valley, California 92553Attention:      Iddo BenzeeviWith a copy to:
    
    Skechers RB, LLCc/o Skechers USA, Inc.228 Manhattan Beach BoulevardManhattan Beach, California 90266Attention:      David WeinbergChief Operating OfficerIf to Development Manager:
    
    HFC Holdings, LLCc/o Highland Fairview Properties14225 Corporate WayMoreno Valley, California 92553Attention:      Iddo BenzeeviWith Additional Copy to:
    
    James Lieb, Esq.Executive Vice PresidentTG Services, Inc.4 Stage Coach RunEast Brunswick, New Jersey 08816- and -Danette Fenstermacher3070 Bristol Street, Ste 320Costa Mesa, California 92626
  23




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Section 10.5 Extent of Agreement
 Section 10.6 Severability
 Section 10.7 Successors and Assigns
 Section 10.8 Counterparts
 Section 10.9 Third Party Beneficiaries
 Section 10.10 Effect of Waiver or Consent
 Section 10.11 Further Assurances
 Section 10.12 Attorneys Fees
 24




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Section 10.13 Independent Contractor; Licenses
 Section 10.14 Agreement Negotiation
 Section 10.15 Skechers Member Approvals
 (signature pages follow)
 25




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OWNER
    
    
    
    DEVELOPMENT MANAGERHF LOGISTICS -SKX, LLC, a Delaware limited
liability company
    
    
    
    HFC HOLDINGS, LLC, a Delaware limited liability 
companyBy:
    
    HF Logistics I, LLC, a Delaware limited
liability company, its Managing MemberByIddo Benzeevi, its Chief Executive OfficerBy:Iddo Benzeevi, President and Chief
Executive OfficerBy:
    
    Skechers RB, LLC, a Delaware limited
liability company, its Managing MemberBy:
    
    Skechers USA, Inc., a Delaware
Corporation, Its sole memberBy:David Weinberg, Chief Operating
OfficerBy:Robert Greenberg, Chief Executive
Officer
 JOINDER
  SKECHERS PARENT
    
    
    
    SKECHERS MEMBERSKECHERS USA, INC., a Delaware corporation
    
    
    
    SKECHERS RB, LLC, a Delaware limited liability
companyBy:
    
    Skechers USA, Inc, a Delaware corporation, its
sole memberBy:David Weinberg, Chief Operating OfficerBy:David Weinberg, Chief Operating OfficerBy:Robert Greenberg, Chief Executive OfficerBy:Robert Greenberg, Chief Executive Officer
 26




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EXHIBIT A
 DEVELOPMENT BUDGET AND
 PROJECT SCHEDULE
 EXHIBIT A




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Exhibit A
 Land
    
    
    
    
    
    $
    30,000,000Construction Costs
    
    
    
    
    
    
    [*]Fees, Bonds and PermitsGovernmental Fees
    
    
    [*]Construction Bonds
    
    
    [*]Impact FeesMSHCP
    
    
    [*]Kangaroo Rat
    
    
    [*]Area Drainage Fee
    
    
    [*]DIF
    
    
    [*]TUMF
    
    
    [*]Schools
    
    
    [*]EMWD
    
    
    [*]Total Fees, Bonds and Permits
    
    
    
    
    
    
    [*]Technical ConsultantsEntitlements
    
    
    [*]Engineering, Traffic and Other
    
    
    [*]Building Architectural & Structural
    
    
    [*]Landscaping
    
    
    [*]Total Technical Consultants
    
    
    
    
    
    
    [*]Other CostsLeasing Commissions
    
    
    [*]Skechers Alternative Site Rental Cost
    
    
    [*]Development Management Fee [1]
    
    
    [*]Project and Construction Management
    
    
    [*]Insurance and Taxes
    
    
    [*]Solar Facility
    
    
    [*]Financing
    
    
    [*]Contingency
    
    
    [*]Total Other Costs
    
    
    
    
    
    
    [*]Total Project Cost
    
    
    
    
    
    $
    [*]Potential ReimbursementsArea Drainage Fee Credit
    
    
    [*]DIF Credit
    
    
    [*]Solar Grants and Incentives
    
    
    [*]State Grants
    
    
    [*]Total Potential Reimbursements
    
    
    
    
    
    
    [*]Net Project Cost
    
    
    
    
    
    $
    [*]
 Note: Recent requested changes to the electrical distribution
system are not reflected in this budget
  *
    
    Confidential Portions Omitted and Filed Separately with  the
Commission.




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Exhibit A-1
 Skechers T.I. Requests
 (HIGHLAND FAIRVIEW LOGO)
    
    Date: 1/29/2010
 CSI
    
    
    Tenant Improvements - Current Plans & Requests thru 2009
    
    
    TotalGeneral Conditions00-7213
    
    
    General Conditions
    
    $
    [*]01-3100
    
    
    Project Management
    
    $
    [*]01-5126
    
    
    Temporary Lighting
    
    $
    [*]01-7423
    
    
    Final cleaning
    
    $
    [*]General Conditions  Subtotal:
    
    $
    [*]Site32-1313
    
    
    Concrete Curb & gutter  Retail
    
    $
    [*]32-1313
    
    
    Concrete Paving Drive Aisle  Retail
    
    $
    [*]32-1313
    
    
    Paved Parking Area  Retail
    
    $
    [*]32-1313
    
    
    4 Side Walk  Retail
    
    $
    [*]32-1723
    
    
    Striping  Retail
    
    $
    [*]32-1723
    
    
    ADA Signage  Retail
    
    $
    [*]32-1313
    
    
    Guard Shack Foundation
    
    $
    [*]32-1313
    
    
    7 PCC in lieu of AC Paving
    
    $
    [*]32-3213
    
    
    Concrete Screen wall  Retail
    
    $
    [*]32-3113
    
    
    8 Tube Steel Fence
    
    $
    [*]Sliding Gates & Motor Control
    
    $
    [*]Pedestrian Tube Steel gate
    
    $
    [*]33-1116
    
    
    1 Copper Water Service Guard Shack
    
    $
    [*]33-3113
    
    
    6 Sanitary Sewer Service Guard Shack
    
    $
    [*]6 Sewer Clean-Out
    
    $
    [*]33-7139
    
    
    Electrical Service Guard Shack
    
    $
    [*]Site Underground Electrical  North
    
    $
    [*]Transformer Electrical Service  North
    
    $
    [*]33-8113
    
    
    Low Voltage to Guard Shack
    
    $
    [*]Gate Conduit to Building
    
    $
    [*]09-9113
    
    
    Paint
    
    $
    [*]26-3213
    
    
    Site Electrical Generator
    
    $
    [*]12-9213
    
    
    Bike Racks, Benches, Pots, Urns, Trash
    
    $
    [*]10-7516
    
    
    Flag Poles
    
    $
    [*]32-3119
    
    
    Structural Steel (Trash Gates & Lids)
    
    $
    [*]Additional Land Cost  Retail
    
    $
    [*]Site  Subtotal:
    
    $
    [*]
  * Confidential Portions
Omitted and Filed Separately with the Commission. 1




---



##### 



EXHIBIT C-1
 HF NOTE




---



##### 



UNSECURED PROMISSORY NOTE
 $14,000,000
    
    January 30, 2010
 HF LOGISTICS-SKX, LLC, a Delaware limited
liability company HF LOGISTICS I, LLC, a
Delaware limited liability company
 Certain Definitions
     1




---



##### 



Payment of Principal and Interest
      2




---



##### 



Prepayment
 Waivers
 Events of Default
   Section 5(a)(i))
 3




---



##### 



Intentionally Omitted
 Compliance with Law
 Attorneys Fees and Costs
 4




---



##### 



Cumulative Rights
 Headings
 Governing Law
 Successors and Assigns
  OWNERHF LOGISTICS -SKX, LLC, a Delaware limited
liability companyBy:
    
    HF Logistics I, LLC, a Delaware limited
liability company, Its Managing MemberBy:Iddo Benzeevi, President and Chief
Executive OfficerBy:
    
    Skechers RB, LLC, a Delaware limited
liability company, its Managing MemberBy:
    
    Skechers USA, Inc., a Delaware
Corporation, Its sole memberBy:David Weinberg, Chief Operating
OfficerBy:Robert Greenberg, Chief Executive
Officer
  5




---



##### 



EXHIBIT C-2
 SKECHERS NOTE




---



##### 



UNSECURED PROMISSORY NOTE
 $1,000,000
    
    January 30, 2010
 HF LOGISTICS-SKX, LLC, a Delaware limited liability company SKECHERS RB, LLC, a Delaware limited liability company
 Certain Definitions
      1




---



##### 



Payment of Principal and Interest
      2




---



##### 



Prepayment
 Waivers
 Events of Default
     3




---



##### 



Intentionally Omitted
 Compliance with Law
 Attorneys Fees and Costs
 4




---



##### 



Cumulative Rights.
 Headings.
 Governing Law.
 Successors and Assigns.
  OWNER
 HF LOGISTICS -SKX, LLC, a Delaware limited
liability company
 By:
    
    HF Logistics I, LLC, a Delaware limitedliability company, its Managing Member
 By:Iddo Benzeevi, President and ChiefExecutive Officer
 By:
    
    Skechers RB, LLC, a Delaware limited liabilitycompany, its Managing Member
 By:


    Skechers USA, Inc., a DelawareCorporation, Its sole member
 By:David Weinberg, Chief OperatingOfficerBy:Robert Greenberg, Chief ExecutiveOfficer
 5




---



##### 



EXHIBIT D
 INITIAL APPROVED OPERATING BUDGET




---



##### 



Exhibit D
 1 of 5
 HF Logistics-SKX LLC Operating Budget
 (HIGHLAND FAIRVIEW LOGO)
    
    Date: 1/29/2010
 Operating Budget Estimate
 Year
    
    
    2011
    
    
    
    2012Duration in Months
    
    
    6
    
    
    
    12Physical Occupancy
    
    
    50
    %
    
    
    100
    %Rent Building
    
    $
    0.513
    
    
    $
    0.513Sq Ft Building
    
    
    1,820,457REVENUES (D-1)
    
    
    6,739,057
    
    
    
    9,275,589EXPENSESBuilding (D-1)
    
    
    [*]
    
    
    
    [*]Parcel 2:Maintenance (D-3)
    
    
    [*]
    
    
    
    [*]POA (D-4)
    
    
    [*]
    
    
    
    [*]Property Taxes (1)
    
    
    (10,000
    )
    
    
    (20,000
    )TOTAL OPERATING EXPENSES
    
    
    [*]
    
    
    
    [*]NET OPERATING INCOME
    
    
    [*]
    
    
    
    [*]DEBT SERVICE (D-1)
    
    
    (3,090,616
    )
    
    
    (6,181,233
    )CAPITAL RESERVES (D-1)
    
    
    (45,511
    )
    
    
    (91,023
    )NET
    
    $
    [*]
    
    
    $
    [*]
 
 (1)
    
    Based upon actual for 2009/2010 * Confidential Portions
Omitted and Filed Separately with the Commission.




---



##### 



Exhibit D-1
 2 of 5
 HF Logistics-SKX LLC Building Site  Operating Budget
 (HIGHLAND FAIRVIEW LOGO)
    
    Date: 1/29/2010
 Operating Budget Estimate
 Year
    
    
    
    
    
    
    2011
    
    
    
    2012Duration in Months
    
    
    
    
    
    
    6
    
    
    
    12Physical Occupancy
    
    
    
    
    
    
    50
    %
    
    
    100
    %Rent Building Site
    
    
    
    
    
    $
    0.513
    
    
    $
    0.513Sq Ft Building
    
    
    
    
    
    
    1,820,457
 REVENUES
    
    2011 $/SF/MOScheduled Base Rent
    
    $
    0.513
    
    
    $
    5,603,367
    
    
    $
    11,206,733Base Rent Abatement
    
    
    
    
    
    
    
    
    
    
    (4,202,525
    )Total Scheduled Base Rent
    
    
    
    
    
    
    5,603,367
    
    
    
    7,004,208Expense Reimbursements
    
    
    0.098
    
    
    
    1,071,416
    
    
    
    2,142,832Solar Revenue (1)
    
    
    
    
    
    
    64,274
    
    
    
    128,549EFFECTIVE GROSS REVENUE
    
    
    0.425
    
    
    
    6,739,057
    
    
    
    9,275,589OPERATING EXPENSESRepairs
    
    
    [*]
    
    
    
    [*]
    
    
    
    [*]Maintenance (D-2)
    
    
    [*]
    
    
    
    [*]
    
    
    
    [*]POA (D-4)
    
    
    [*]
    
    
    
    [*]
    
    
    
    [*]Insurance
    
    
    [*]
    
    
    
    [*]
    
    
    
    [*]Real Estate Taxes
    
    
    (0.056
    )
    
    
    (609,811
    )
    
    
    (1,219,622
    )CFD Assessment
    
    
    (0.015
    )
    
    
    (163,841
    )
    
    
    (327,682
    )TOTAL OPERATING EXPENSES
    
    
    [*]
    
    
    
    [*]
    
    
    
    [*]NET OPERATING INCOME
    
    
    [*]
    
    
    
    [*]
    
    
    
    [*]DEBT SERVICE ON LOANS (2)
    
    
    (0.283
    )
    
    
    (3,090,616
    )
    
    
    (6,181,233
    )CAPITAL RESERVES
    
    
    (0.004
    )
    
    
    (45,511
    )
    
    
    (91,023
    )NET CASH FLOW
    
    
    [*]
    
    
    $

    [*]
    
    
    $
    [*]
 (1)
    
    602kW(AC) system running 1,810 hours per year at an 11.8-cent average charge per
kilowatt-hour(2)
    
    Debt service on $55 million bank loan and $15 million of partner loans * Confidential Portions
Omitted and Filed Separately with the Commission.




---



##### 



Exhibit D-2
 3 of 5
 (HIGHLAND FAIRVIEW LOGO)
    
    Date: 1/29/2010
 Building Site - MaintenanceNo.
    
    Description
    
    Unit
    
    Quantity
    
    
    Unit Price
    
    
    Total1
    
    Detention / Water Quality Basins
    
    SF
    
    
    200,375
    
    
    $
    [*]
    
    
    $
    [*]2
    
    Landscape - Slope
    
    SF
    
    
    248,300
    
    
    $
    [*]
    
    
    $
    [*]3
    
    Landscape - Flat
    
    SF
    
    
    104,500
    
    
    $
    [*]
    
    
    $
    [*]4
    
    Utilities - Common Sewer/Cleanouts
    
    LS
    
    
    1
    
    
    $
    [*]
    
    
    $
    [*]5
    
    Sign Maintenance
    
    LS
    
    
    1
    
    
    $
    [*]
    
    
    $
    [*]6
    
    Annual Water Cost
    
    AF
    
    
    37.5
    
    
    $
    [*]
    
    
    $
    [*]7
    
    Palm Tree Maintenance
    
    LS
    
    
    1
    
    
    $
    [*]
    
    
    $
    [*]8
    
    Screen Wall Maintenance - Eucalyptus S
    
    LS
    
    
    1
    
    
    $
    [*]
    
    
    $
    [*]Subtotal:
    
    $
    [*]Contingency ([*]%):
    
    $
    [*]Total:
    
    $
    [*]Building SF:
    
    
    1,820,000Cost/SF:
    
    $
    [*]
  
 Yearly Inspection, Flushing, Camera of Sewer/CleanoutsGraffiti Repair, Bulbs/FixturesBased upon Recycled Water Use Exhibit and EMWD water ratesAssume 54 palm trees trim 2 times per year at $[*]/tree/trimmingGraffiti Repair, Periodic Painting * Confidential Portions
Omitted and Filed Separately with the Commission.




---



##### 



Exhibit D-3
 4 of 5
 (HIGHLAND FAIRVIEW LOGO)
    
    Date: 1/29/2010
 Expansion Site - MaintenanceNo.
    
    Description
    
    Unit
    
    Quantity
    
    
    Unit Price
    
    
    Total1
    
    Detention / Water Quality B
    
    SF
    
    
    89,275
    
    
    $
    [*]
    
    
    $
    [*]2
    
    Landscape - Slope
    
    SF
    
    
    46,500
    
    
    $
    [*]
    
    
    $
    [*]3
    
    Landscape - Flat
    
    SF
    
    
    834,750
    
    
    $
    [*]
    
    
    $
    [*]4
    
    Landscape - Parkway
    
    SF
    
    
    
    
    
    $
    [*]
    
    
    $
    [*]5
    
    Annual Water Cost
    
    AF
    
    
    
    
    
    $
    [*]
    
    
    $
    [*]Subtotal:
    
    $
    [*]Contingency ([*]%):
    
    $
    [*]Total:
    
    $
    [*]
  
 Assumes undeveloped condition. Unit Price assumes mowing/weed wacking 2 times per year No
irrigation in undeveloped condition * Confidential Portions
Omitted and Filed Separately with the Commission.




---



##### 



Exhibit D-4
 5 of 5
 (HIGHLAND FAIRVIEW LOGO)
    
    Date: 1/29/2010
 Property Owners Association (POA) - MaintenanceNo.
    
    Description
    
    Unit
    
    Quantity
    
    
    Unit Price
    
    
    Total1
    
    Landscape - Parkway
    
    SF
    
    
    87,000
    
    
    $
    [*]
    
    
    $
    [*]2
    
    Drainage - Spreading Facility
    
    SF
    
    
    400,750
    
    
    $
    [*]
    
    
    $
    [*]3
    
    Common Driveway - Maintenance
    
    LS
    
    
    1
    
    
    $
    [*]
    
    
    $
    [*]4
    
    Insurance
    
    annual
    
    
    
    
    
    $
    [*]
    
    
    $
    [*]Subtotal:
    
    $
    [*]Contingency ([*]%):
    
    $
    [*]Total:
    
    $
    [*]AcresAllocated to Building Site
    
    
    [*]
    
    
    
    82.6Allocated to Expansion Site
    
    
    [*]
    
    
    
    27.4[*]
    
    
    
    110Other Parcels
    
    
    [*]
    
    
    
    20Total
    
    
    [*]
    
    
    
    130
  
 Hydroseed Slopes, Trash, Graffiti, Growth ControlYearly Re-Stripe, Monthly Sweeping, Red Curb PaintGeneral Liability, Personal Property & Professional Liability Insurance * Confidential Portions
Omitted and Filed Separately with the Commission.




---



##### 



EXHIBIT E
 INTENTIONALLY OMITTED




---



##### 



EXHIBIT F
 CONSTRUCTION LOAN COMMITMENT




---



##### 



(BANK OF AMERICA LOGO)Commercial Real Estate BankingFL7-950-14-04100 SE 2nd StreetMiami, FL 33131
 
 Re:
    
    $55,000,000 Construction Loan (the Loan) to finance a portion of the cost to
construct an approximately 1,820,000 square foot industrial warehouse (the Building)
located Moreno Valley, California to be leased to Skechers USA,
Inc. (Skechers)
   Loan Amount
 Interest Rate
 BBA LIBOR Daily Floating Rate
 London Interbank Offered Rate




---



##### 



Interest
Payments: th th
 Late Charge:
 Principal Payments:
 Maturity Date:
 Maturity Date Extensions: ,
 Prepayment:
 Borrowers Entity:
 Guarantor:
 2




---



##### 



Borrowers Equity
 Collateral
  Improvements
 Personal Property
 Certificate of Deposit
 Purpose of the Loan Advance
 Commencement and Completion of Improvements
 3




---



##### 



Budget and Advance of the Loan
   Fees
 Payment
and Performance Bond:
 Prelease Requirements
 Agents Counsel
 Agents Costs
 Indemnification
 Inspections
 4




---



##### 



Voting Rights
 Termination
 Material Adverse Effect
 Clear Market
 5




---



##### 



USA Patriot Act Notice
 Confidentiality
 Dispute Resolution
  Very truly yours,
BANK OF AMERICA, N.A.By:Kim Abreu,Senior Vice President 6




---



##### 



HF LOGISTICS I, LLC, a Delaware corporationBy:Donald Elbert, Senior Vice President   
 By:Donald Elbert, Senior Vice President




---



##### 



EXHIBIT A
 LEGAL DESCRIPTION OF PROPERTY




---



##### 



EXHIBIT B  DISPUTE RESOLUTION
 Dispute Resolution
  Special Rules
   provided, however,




---



##### 



provided, however
   Reservations of Rights




---



##### 



Waiver of Trial By Jury




---



##### 



EXHIBIT G
 HF REPRESENTATIONS AND WARRANTIES




---



##### 



Environmental Condition
      2




---



##### 



3




---



##### 



EXHIBIT H
 SIERRA CLUB LITIGATION SETTLEMENT AGREEMENT




---



##### 



SETTLEMENT AGREEMENT
        Sierra Club v. City of Moreno Valley,
 1




---



##### 



2




---



##### 



i.e.,
    3




---



##### 



5.
       4




---



##### 








---



##### 



6




---



##### 



Sierra Club Environmental Law Program:
    
    85 Second StreetSan Francisco, CA 94105Aaron.Isherwood@sierraclub.org
 7




---



##### 



Sierra Club, San Gorgonio Chapter:
    
    Chapter Chair/Conservation Chair4079 Mission Inn AvenueRiverside, CA 92501-3204san.gorgonio.chapter@sierraclub.orgSierra Club, Moreno Valley Group:
    
    Ann Turner-McKibben and GeorgeHagueP.O. Box 1325Moreno Valley, CA 92556-1325morenovalleygroup@yahoo.comwith a copy to Raymond W. Johnson, Esq.:
    
    Johnson & Sedlack26785 Camino SecoTemecula, CA 92590esqaicp@wildblue.netThe City attention of the City Manager,w/ copy attention of the City Attorney:
    
    14177 Frederick StreetP.O. Box 88005Moreno Valley, CA 92552CMOffice@moval.orgCityAttorney@moval.orgHighland Fairview:
    
    14225 Corporate WayMoreno Valley, CA 92553ibenzeevi@highlandfairview.comwith a copy to Kenneth B. Bley, Esq.:
    
    Cox, Castle & Nicholson LLP2049 Century Park East, 28th Floor,Los Angeles CA 90067kbley@coxcastle.com
    8




---



##### 



9




---



##### 



January 7, 2010
    SIERRA CLUBBy:
    [ILLEGIBLE]Its: CHAPTER CHAIR, SAN GORGONIO CHAPTERJanuary 11, 2010
    THE CITY OF MORENO VALLEYBy:
    [ILLEGIBLE]Its: MAYORJanuary 7, 2010

    HIGHLAND FAIRVIEW PARTNERS I
By: HFP Realty Investment, LP, its Managing Partner
By: HFP Realty Holdings, LLC, its General PartnerBy:
    /s/ Iddo BenzeeviIts: PresidentJanuary 7, 2010
    HIGHLAND FAIRVIEW PARTNERS II 
By: New Sands Holdings, LP, its Managing Partner
By: Sand Holdings, LLC, its General PartnerBy:

    /s/ Iddo BenzeeviIts: PresidentJanuary 7, 2010
    HIGHLAND FAIRVIEW PARTNERS III 
By: HFP Realty Investment, LP, its Managing Partner
By: HFP Realty Holdings, LLC, its General PartnerBy:
    /s/ Iddo BenzeeviIts: President 10




---



##### 



January 7, 2010
    HIGHLAND FAIRVIEW PARTNERS IV 

By: Sinclair Holdings, LP, its Managing Partner
By: Sinclair Realty Holdings, LLC, its General 
       PartnerBy:
    Iddo BenzeeviIts: PresidentJanuary 7, 2010
    HF LOGISTICS I, LLCBy:
    Iddo BenzeeviIts: PresidentAPPROVED AS TO FORM:
January 11, 2010
    JOHNSON & SEDLACKBy:
    /s/ Raymond W. JohnsonRaymond W. JohnsonAttorneys for the SIERRA CLUBJanuary 11, 2010
    CITY ATTORNEY
OF THE CITY OF MORENO VALLEYBy:
    [ILLEGIBLE]Its: INTERIM CITY ATTORNEYJanuary 7, 2010
    COX CASTLE & NICHOLSON LLPBy:
    /s/ Kenneth B. BleyKenneth B. BleyAttorneys for HIGHLAND FAIRVIEW PARTNERS I;
HIGHLAND FAIRVIEW PARTNERS, II, HIGHLAND
FAIRVIEW PARTNERS, III, HIGHLAND FAIRVIEW
PARTNERS, IV and HF LOGISTICS I, LLC 11




---



##### 



EXHIBIT A




---



##### 



Exhibit B
 Highland Fairview Corporate Park TPM 35629 Parcel 1 (Skechers)
LEED Projected Certification Items
(Based upon LEED current standards)
 
    
    Alternative Transportation:
 Bicycle Storage & Changing
Rooms
The project will provide secure bicycle racks within 200 yards of the building entrances
for 5% or more of all building users and will provide shower and
changing facilities in the building for 0.5% of full-time equivalent
occupants. Low Emission and Fuel Efficient Vehicles
The project will provide preferred parking for low-emission and fuel efficient vehicles for
5% of the total vehicle parking capacity of the site.Parking Capacity
The project will meet, but not exceed the number of parking stalls required by the local
zoning requirements and will provide preferred parking for carpools and vanpools for 5% of
the total parking spaces.
 Site Development:
 Maximum Open Space
As approved by the City of Moreno Valley, the project will provide vegetated open space
within the project boundary in accordance with the local zonings open space requirement.
 
    
    Storm Water Design:
 Quality Control
Highland Fairview will implement the City approved Storm Water
Pollution Prevention Program (SWPPP).
 
    
    Heat Island Effect:
 Roof
The project will use roofing materials having a Solar Reflectance Index
(SRI) equal to or greater than 78 for a minimum of 75% of the roof
surface.
 
    
    Water Efficient Landscaping:
 The project will reduce potable water consumption for irrigation by 50% from a calculated
mid-summer baseline case.
 The above are based upon existing design criteria and availability of material and labor.
Should some of these conditions adversely change, the above items may need to be modified.
 1 of 5




---



##### 



Exhibit B
 Highland Fairview Corporate Park TPM 35629 Parcel 1 (Skechers)
LEED Projected Certification Items
(Based upon LEED current standards)
 
    
    Water Use Reduction:
 Reduce Water Usage by 30%The project will employ strategies that in aggregate use 30% less water than the water use
baseline calculated for the building (not including irrigation).
 
    
    Optimize Energy Performance:
 The project will demonstrate a percentage improvement in the proposed building performance
rating compared to the baseline building performance rating.
 
    
    On-Site Renewable Energy:
 The project will use on-site renewable energy systems (solar) to offset a portion of
building energy cost.
 
    
    Enhanced Commissioning:
 The project began the commissioning process during the design process and will execute
additional activities after systems performance verification is completed.
 
    
    Construction Waste Management:
 The project will recycle and/or salvage a minimum of 50% (by weight) of non-hazardous
construction and demolition debris.
 
    
    Recycled Content:
 The project will use materials with recycled content such that the sum of post-consumer
recycled content plus one-half of the pre-consumer content constitutes at least 10%
(cost-based) on the total value of the materials in the project.
 
    
    Regional Materials:
 The project will use building materials or products that have been extracted, harvested or
recovered, as well as manufactured, within 500 miles of the project site for a minimum of
10% (cost-based) of the total materials value.
 
 The above are based upon existing design criteria and availability of material and labor.
Should some of these conditions adversely change, the above items may need to be
modified.
 2 of 5




---



##### 



Exhibit B
 Highland Fairview Corporate Park TPM 35629 Parcel 1 (Skechers)
LEED Projected Certification Items
(Based upon LEED current standards)
 
    
    Increased Ventilation:
 The project will increase breathing zone outdoor air ventilation rates to all occupied spaces
by at least 30% above the minimum rates required by
ASHRAE Std. 62.1-2004.
 
    
    Construction IAQ Management Plan:
 The project will develop and implement an Indoor Air Quality (IAQ) Management Plan for the
construction and pre-occupancy phases of the building.
 
    
    Low Emitting Materials:
 The project will utilize only those paints and coatings that comply with Credit 4.2, 4.3 and 4.4 of
the LEED standards.
 
    
    Indoor Chemical & Pollutant Source Control:
 The project will provide entryway systems to reduce the infiltration of dirt and particulates into
the indoor environment. Separate ventilation systems will be provided for storage areas for
hazardous chemicals in order to minimize and control pollutants in the building.
 
    
    Daylight and Views:
 The project, will achieve day-lighting via skylights for building occupants in 75% of all regularly
occupied areas.
 
    
    Innovation In Design:
 The project will utilize locally-sourced concrete and interior fixtures providing a 40% water use
savings.
 
    
    LEED Accredited Professional:
 At least one principal participant of the project team is a LEED Accredited Professional (AP).
 The
above are based upon existing design criteria and availability of material and labor. Should
some of these conditions adversely change, the above items may need to be modified.
 3 of 5




---



##### 



Exhibit B
 Highland
Fairview Corporate Park TPM 35629 Parcel 1 (Skechers)
LEED Projected Certification Items
(Based upon LEED current standards)
 The
Following are Energy-Saving and Other Design Features:
 
    
    Use of More Shade Trees vs. Palm Trees to Reduce Temperature
 As shown in the City-approved Plot Plan package, palm trees used on the site will be located at the
buildings primary entry as part of the decorative entry treatment, and along the freeway, near
gates and building corners as accent elements. All other trees on the site, in the parking areas,
adjacent to the building, in the landscape areas, and along the freeway will be varieties of shade
trees.
 
    
    Waterless Urinals
 Use of these products was investigated but ultimately rejected based upon marginal performance and
excessive maintenance costs. Very low flow urinals will be used in the facility which will provide
a 30% reduction in water use over typical low-flow urinals.
 
    
    Automatic turn on and off for lavatory faucetsonly
allow 1/2 gal per minute
 These products will be installed throughout the building.
 
    
    Monitoring system that keeps track of all systems so that
response can be quick if one of the
systems does not function properly
 The Skechers building will include a building systems monitoring program which will immediately
notify maintenance personnel of any system malfunction.
 
    
    Photo Sensors for Lighting
 Motion sensors will be installed in the office areas of the building to turn off all lighting
(except security lighting) when theses areas of the building are not occupied. A network of
thousands of roof-mounted skylights will provide substantial natural light in the warehouse areas.
Sensors will be installed in the warehouse areas to automatically turn off artificial area lighting
when ambient light is adequate.
 
    
    Reduce carpet and flooring glue toxics by environmentally friendly carpet and non toxic glue.
 Low VOC carpeting, paint and adhesives will be used throughout the building. Polished concrete
flooring will replace vinyl flooring originally
 The above are based upon existing design criteria and availability of material and labor.
Should some of these conditions adversely change, the above items may need to be modified.
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Exhibit B
 Highland Fairview Corporate Park TPM 35629 Parcel 1 (Skechers)
LEED Projected Certification Items
(Based upon LEED current standards)
 planned for the warehouse restrooms, break rooms and shipping/receiving areas.
 
    
    Recycle of All Used Materials
 Recycling bins will be provided at the site for recycling during the operation of the building.
Recycling of construction waste will be required to the greatest degree practicable. Skechers
currently bundles and recycles all cardboard waste and will provide recycling bins for employee use
throughout the facility. Skechers is exploring opportunities for recycling (mulching) of damaged
wood pallets.
 
    
    75% of Construction Waste Salvaged or Recycled
 The project will salvage or recycle as much construction waste as is feasible, but in no case less
that 50% by weight of such waste. The project will utilize recycled (crushed) concrete during
construction for temporary access roads and for paving base where acceptable. The project is
directing green waste from clearing operations during construction, to a location for mulching and
will be re-used.
 
    
    Independent Venting for Toxic Places
 The storage of toxic materials, as identified by the State of California, will be in accordance
with all applicable building code requirements including the independent venting of such storage
areas.
 
    
    Thermal Controls in Various Work Spaces
 The warehouse area is not heated or cooled, utilizing a controlled air exchange system to moderate
interior temperatures. The office and commercial areas will be served by a number of HVAC zones
each with its own controls. The units are equipped with an automatic time switch with an accessible
manual override that allows operation of the system during off-hours.
 
    
    The building occupant/owner must share whole-project energy and water usage data for at least
five years with the US Green Building Council or Green Building Certification Institute.
 Highland Fairview will provide all documentation used to secure LEED certification, including any
tenant operational
documentation. Such documentation requirements will be addressed in the lease documents.
 The above are based upon existing design criteria and availability of material and labor.
Should some of these conditions adversely change, the above items may need to be modified.
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EXHIBIT I
 AMENDED AND RESTATED MASTER LEASE AGREEMENT




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AMENDED AND RESTATED  MASTER LEASE AGREEMENT
 th HF LOGISTICS I, LLC, a
Delaware limited liability company HIGHLAND FAIRVIEW PARTNERS I (formerly known as
Westcoast Properties Partners, a California general partnership), HIGHLAND FAIRVIEW PARTNERS IV,
(formerly known as Sinclair Property Partners, a Delaware general partnership), HIGHLAND FAIRVIEW
PARTNERS III (formerly known as HF Educational Partners, a Delaware general partnership), HIGHLAND FAIRVIEW PARTNERS II (formerly known as Sand Properties Partners, a California general
partnership)
 Premises:
    
    Has the meaning set forth in the Skechers Lease.Building:
    
    The Building to be constructed on the Premises pursuant to that certain
Lease Agreement dated September 25, 2007, between Tenant, as landlord,
and Skechers, USA, Inc., a Delaware corporation (Skechers), as tenant (as
amended, the Skechers Lease).Project:
    
    Rancho Belago Corporate CenterPremises:
    
    Approximately 110 acres of unimproved land situated in the City of Moreno
Valley, CA, as shown on the Site Plan attached hereto as Exhibit A.Lease Term:
    
    Beginning on the Effective Date and ending the last day of the Term of the
Skechers Lease.Commencement Date:
    
    The Commencement Date of the Skechers Lease.Monthly Base Rent:
    
    The fair market rental value of the Premises as of the Commencement
Date, to be determined by an appraiser selected by Landlord.Security Deposit:
    
    NoneExhibits:
    
    A (Site Plan)
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Granting Clause
 Acceptance of Premises
 Use
 Base Rent
 Utilities
 Taxes
 Insurance
 Landlords Repairs
 2




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Tenants Repairs
 Alterations
 Signs
 Damage and Destruction
 Condemnation
 Assignment and Subletting
 Indemnification
 Inspection and Access
 3




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Quiet Enjoyment
 Surrender
 Events of Default
    Landlords Remedies
  4




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5




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Tenants Remedies/Limitation of Liability
 Subordination
  6




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Mechanics Liens
 Environmental Requirements
 Force Majeure
 Entire Agreement
 Severability
 Miscellaneous
   7




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Subdivision
 Non-Disturbance
 Representations and Warranties
  8




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(signature page follows)
 9




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LANDLORD:
    
    
    
    TENANT:HIGHLAND FAIRVIEW PARTNERS I
    
    
    
    HF LOGISTICS I, LLC, a Delaware limited(formerly known as Westcoast Properties
    
    
    
    liability companyPartners, a California general partnership)ByBy
    
    
    
    
    
    
    Iddo Benzeevi, Chief Executive OfficerIddo Benzeevi, Chief Executive OfficerHIGHLAND FAIRVIEW PARTNERS IV,(formerly known as Sinclair Property Partners,a Delaware general partnership)ByIddo Benzeevi, Chief Executive OfficerHIGHLAND FAIRVIEW PARTNERS III(formerly known as HF Educational Partners, aDelaware general partnership)ByIddo Benzeevi, Chief Executive OfficerHIGHLAND FAIRVIEW PARTNERS II(formerly known as Sand Properties Partners, aCalifornia general partnership)ByIddo Benzeevi, Chief Executive OfficerAddress:14225 Corporate WayMoreno Valley, California 92553
 10




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EXHIBIT A
(REVISED)
SITE PLAN
 
 11