Document:

exv10w2

Exhibit 10.2

(Confidential Portions Omitted)

 

Construction Loan Agreement

among

HF Logistics-SKX Tl, LLC, a Delaware limited liability company,

as Borrower

and

Bank of America, N.A.,

a national banking association

as Administrative Agent and as a Lender

and

Raymond James Bank FSB,

a federal savings bank, as a Lender

Dated as of April 30, 2010

Banc of America Securities LLC,

as

Sole Lead Arranger and Sole Book Manager

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	PAGE	 
	ARTICLE 1 — THE LOAN
	 	 	1	 
	 
	 	 	 	 
	1.1. General Information and Exhibits
	 	 	1	 
	1.2. Purpose
	 	 	1	 
	1.3. Commitment to Lend
	 	 	1	 
	1.4. Budget
	 	 	1	 
	1.5. Borrower’s Deposit
	 	 	2	 
	1.6. Evidence of Debt
	 	 	2	 
	1.7. Interest Rate
	 	 	2	 
	1.8. Past Due Rate
	 	 	3	 
	1.9. Prepayment
	 	 	3	 
	1.10. Consequential Loss
	 	 	3	 
	1.11. Late Charge
	 	 	4	 
	1.12. Taxes
	 	 	4	 
	1.13. Payment Schedule and Maturity Date
	 	 	5	 
	1.14. Advances and Payments
	 	 	7	 
	1.15. Administrative Agent Advances
	 	 	7	 
	1.16. Defaulting Lender
	 	 	9	 
	1.17. Several Obligations; No Liability, No Release
	 	 	10	 
	 
	 	 	 	 
	ARTICLE 2 — ADDITIONAL COVENANTS AND AGREEMENTS
	 	 	12	 
	 
	 	 	 	 
	2.1. Construction of the Improvements
	 	 	12	 
	2.2. Plans and Changes
	 	 	12	 
	2.3. Contracts
	 	 	12	 
	2.4. Assignment of Contracts and Plans
	 	 	13	 
	2.5. Storage of Materials
	 	 	13	 
	2.6. Construction Consultant
	 	 	13	 
	2.7. Inspection
	 	 	14	 
	2.8. Notice to Lenders
	 	 	14	 
	2.9. Financial Statements
	 	 	14	 
	2.10. Other Information
	 	 	14	 
	2.11. Reports and Testing
	 	 	14	 
	2.12. Advertising by Lenders
	 	 	15	 
	2.13. Appraisal
	 	 	15	 
	2.14. Payment of Withholding Taxes
	 	 	15	 
	2.15 ERISA and Prohibited Transaction Taxes
	 	 	15	 
	 
	 	 	 	 
	ARTICLE 3 — REPRESENTATIONS AND WARRANTIES
	 	 	16	 
	 
	 	 	 	 
	ARTICLE 4 — DEFAULT AND REMEDIES
	 	 	17	 
	 
	 	 	 	 
	4.1. Events of Default
	 	 	17	 
	4.2. Remedies
	 	 	18	 
	 
	 	 	 	 
	ARTICLE 5 — ADMINISTRATIVE AGENT
	 	 	19	 
	 
	 	 	 	 
	5.1. Appointment and Authorization of Administrative Agent
	 	 	19	 
	5.2. Delegation of Duties
	 	 	20	 
	5.3. Liability of Administrative Agent
	 	 	20	 
	5.4. Reliance by Administrative Agent
	 	 	21	 
	5.5. Notice of Default
	 	 	21	 
	5.6. Credit Decision; Disclosure of Information by Administrative Agent
	 	 	21	 
	5.7. Indemnification of Administrative Agent
	 	 	22	 
	5.8. Administrative Agent in Individual Capacity
	 	 	22	 

 

 

	 	 	 	 	 
	 	 	PAGE	 
	5.9.   Successor Administrative Agent
	 	 	22	 
	5.10. Releases; Acquisition and Transfers of Collateral
	 	 	23	 
	5.11. Application of Payments
	 	 	24	 
	5.12. Benefit
	 	 	24	 
	 
	 	 	 	 
	ARTICLE 6 — GENERAL TERMS AND CONDITIONS
	 	 	24	 
	 
	 	 	 	 
	6.1. Consents; Borrower’s Indemnity
	 	 	24	 
	6.2. Miscellaneous
	 	 	26	 
	6.3. Notices
	 	 	26	 
	6.4. Payments Set Aside
	 	 	27	 
	6.5. Successors and Assigns
	 	 	27	 
	6.6. Confidentiality
	 	 	29	 
	6.7. Set-off
	 	 	30	 
	6.8. Sharing of Payments
	 	 	30	 
	6.9. Amendments; Survival
	 	 	30	 
	6.10. Costs and Expenses
	 	 	32	 
	6.11. Tax Forms
	 	 	32	 
	6.12. Further Assurances
	 	 	33	 
	6.13. Inducement to Lenders
	 	 	34	 
	6.14. Forum
	 	 	34	 
	6.15. Interpretation
	 	 	34	 
	6.16. No Partnership, etc.
	 	 	34	 
	6.17. Records
	 	 	34	 
	6.18. Commercial Purpose
	 	 	34	 
	6.19. WAIVER OF JURY TRIAL
	 	 	35	 
	6.20. Service of Process
	 	 	35	 
	6.21. USA Patriot Act Notice
	 	 	35	 
	6.22. Entire Agreement
	 	 	35	 
	6.23. Dispute Resolution
	 	 	35	 

EXHIBITS:

	 	 	 	 	 

	EXHIBIT “A”

	 	—
	 	Legal Description of Land
	EXHIBIT “B”

	 	—
	 	Definitions and Financial Statements
	EXHIBIT “C”

	 	—
	 	Conditions Precedent to the Initial
Advance
	EXHIBIT “D”

	 	—
	 	Budget
	EXHIBIT “E”

	 	—
	 	Plans
	EXHIBIT “F”

	 	—
	 	Advances
	EXHIBIT “F-1”

	 	—
	 	Draw Request
	EXHIBIT “G”

	 	—
	 	Survey Requirements
	EXHIBIT “H”

	 	—
	 	Intentionally Omitted
	EXHIBIT “I”

	 	—
	 	Leasing and Tenant Matters
	EXHIBIT “J”

	 	—
	 	List of Required Bonds
	EXHIBIT “K”

	 	—
	 	Letters of Credit
	EXHIBIT “L”

	 	—
	 	Assignment and Assumption
	EXHIBIT “M”

	 	—
	 	Promissory Note
	EXHIBIT “N”

	 	—
	 	Schedule of Lenders and Other Parties

 

 

CONSTRUCTION LOAN AGREEMENT

(Syndication)

     THIS CONSTRUCTION LOAN AGREEMENT (“Agreement”) is made by and among each lender from
time to time a party hereto (individually, a “Lender” and collectively, the
“Lenders”), and Bank of America, N.A., a national banking association as Administrative
Agent and HF Logistics-SKX Tl, LLC, a Delaware limited liability company (“Borrower”), who
agree as follows:

ARTICLE 1 — THE LOAN

     1.1. General Information and Exhibits. This Agreement includes the Exhibits listed
below which are marked by an “X,” all of which Exhibits are attached hereto and made a part hereof
for all purposes. Borrower and Lenders agree that if any Exhibit to be attached to this Agreement
contains blanks, the same shall be completed correctly and in accordance with this Agreement prior
to or at the time of the execution and delivery thereof.

	 	 	 	 	 	 	 

	 X 

	 	Exhibit “A”
	 	—
	 	Legal Description of the Land
	 X 

	 	Exhibit “B”
	 	—
	 	Definitions and Financial Statements
	 X 

	 	Exhibit “C”
	 	—
	 	Conditions Precedent to the Initial
Advance
	 X 

	 	Exhibit “D”
	 	—
	 	Budget
	 X 

	 	Exhibit “E”
	 	—
	 	Plans
	 X 

	 	Exhibit “F”
	 	—
	 	Advances
	 X 

	 	Exhibit “F-1”
	 	—
	 	Draw Request
	 X 

	 	Exhibit “G”
	 	—
	 	Survey Requirements
	 

	 	Exhibit “H”
	 	—
	 	Intentionally Omitted
	 X 

	 	Exhibit “I”
	 	—
	 	Leasing and Tenant Matters
	 X 

	 	Exhibit “J”
	 	—
	 	List of Required Bonds
	 X 

	 	Exhibit “K”
	 	—
	 	Letters of Credit
	 X 

	 	Exhibit “L”
	 	—
	 	Assignment and Assumption
	 X 

	 	Exhibit “M”
	 	—
	 	Promissory Note
	 X 

	 	Exhibit “N”
	 	—
	 	Schedule of Lenders

The Exhibits contain other terms, provisions and conditions applicable to the Loan. Capitalized
terms used in this Agreement shall have the meanings assigned to them in Exhibit “B”. This
Agreement and the other Loan Documents, which must be in form, detail and substance satisfactory
to Lenders, evidence the agreements of Borrower and Lenders with respect to the Loan. Borrower
shall comply with all of the Loan Documents, but to the extent that the provisions of this
Agreement conflict or are inconsistent with the provisions in any of the other Loan Documents, the
provisions of this Agreement shall control.

     1.2.
Purpose. The proceeds of the Loan shall be used by Borrower to pay (i) the cost
of the construction of the Improvements on the Land and (ii) other fees, costs and expenses
relating to the Property if and to the extent that such costs are specifically provided for in the
Budget.

     1.3. Commitment to Lend. Borrower agrees to borrow from each Lender, and each Lender
severally agrees to make advances of its Pro Rata Share of the proceeds of the Loan to Borrower in
amounts at any one time outstanding not to exceed such Lender’s Pro Rata Share of the Loan and
(except for Administrative Agent with respect to Administrative Agent Advances), on the terms and
subject to the conditions set forth in this Agreement and Exhibit “C” and Exhibit
“F” attached to this Agreement. Lender’s commitment to lend shall expire and terminate
automatically if the Loan is prepaid in full. The Loan is not revolving. Any amount repaid may not
be reborrowed.

     1.4. Budget. The Budget is attached to this Agreement as Exhibit “D”. The
amounts listed in the Budget as the (a) “Total Costs” is the maximum cost anticipated by
Borrower for each item specified; (b) “Total Budget” is the maximum cost anticipated by
Borrower for the Project; (c) “Loan Proceeds” is the maximum amount to be advanced under
the Loan, and as used herein, such term shall mean Loan funds to be advanced by the Lenders
subject to the terms and conditions of this Agreement; and (d) “Up-Front Equity” is FIFTY
SEVEN MILLION FIVE HUNDRED SIXTY ONE THOUSAND TWO HUNDRED THIRTY SEVEN AND NO/100
DOLLARS

PAGE 1

 

($57,561,237.00), the amount which is to be paid by Borrower toward the Total Costs, and advanced
prior to the first Advance of any Loan Proceeds. Up-Front Equity Cash and Loan Proceeds shall be
advanced subject to the terms, covenants, conditions and provisions of this Agreement. Borrower
shall not amend the Budget, or otherwise reallocate Loan funds from one Budget line item to
another, without the prior written approval of Administrative Agent in its sole discretion or
except as expressly provided for herein. The Budget has been prepared by Borrower, and Borrower
represents to Administrative Agent and Lenders that to the best of Borrower’s knowledge, the Budget
includes all costs incident to the Loan and the Project through the maturity date of the Loan
(collectively, the “Aggregate Cost”) after taking into account the requirements of this
Agreement, including “hard” and “soft” costs, fees and expenses. Unless approved by Administrative
Agent in its sole discretion, no advance shall be made (a) for any cost not set forth in the
Budget, (b) from any line item in the Budget that, when added to all prior advances from that line
item, would exceed the lesser of (i) the actual cost incurred by Borrower for such line item, or
(ii) the sum shown in the Budget for such line item, (c) from any contingency line item, or (d) to
pay interest on the Loan after commencement of operations in the Improvements if and to the extent
that, subject to the provisions of Exhibit “I”, there is sufficient net operating income
from the Property to pay such interest. Advances from any line item in the Budget for purposes
other than those for which amounts are initially allocated to such line item, or changes in the
relative amounts allocated to particular line items in the Budget may only be made as
Administrative Agent in its sole discretion deems necessary or advisable.

     In the event the general contractor produces a cost savings on a particular line item under a
construction contract with such general contractor, the general contractor will deduct the savings
on that line item and increase the general contractor fee line item by twenty-five percent of the
savings. The balance of the savings will be re-allocated to interest reserve, contingency or hard
cost line items after consent of the Administrative Agent pursuant to the requirements of this
Agreement.

     1.5. Borrower’s Deposit. If at any time Administrative Agent determines that the sum
of: (i) any unadvanced portion of the Loan to which Borrower is entitled, plus (ii) the portions
of the Aggregate Cost that are to be paid by Borrower from other funds that, to Administrative
Agent’s satisfaction, are available, set aside and committed, is or will be insufficient to pay
the actual unpaid Aggregate Cost, Borrower shall, within ten (10) days after written notice from
Administrative Agent, deposit with Administrative Agent the amount of the deficiency
(“Borrower’s Deposit”) in an interest-bearing account of Administrative Agent’s selection
with interest earned thereon to be part of Borrower’s Deposit. Such Borrower’s Deposit is hereby
pledged to Administrative Agent and Lenders as additional security for the Loan, and Borrower
hereby grants and conveys to Administrative Agent for the ratable benefit of Administrative Agent
and Lenders a security interest in all funds so deposited with Administrative Agent, as additional
security for the Loan. Administrative Agent may advance all or a portion of the Borrower’s Deposit
prior to the Loan Proceeds. Upon the occurrence of any Default by Borrower, Administrative Agent
may (but shall have no obligation to) apply all or any part of Borrower’s Deposit against the
unpaid Indebtedness in such order as Administrative Agent determines. Absent the existence of any
Default or the occurrence of any event which, upon the giving of notice or the passage of time
would become a Default, Borrower’s Deposit shall be used to pay amounts of any insufficiencies in
the Aggregate Cost.

     1.6. Evidence of Debt. Amounts of the Loan made by each Lender shall be evidenced by
one or more accounts or records maintained by such Lender and by the Administrative Agent in the
ordinary course of business. The accounts or records maintained by the Administrative Agent and
each Lender shall be conclusive absent manifest error of the amount of the Loan made by the
Lenders to the Borrower and the interest and payments thereon. Any failure to so record or any
error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower
hereunder to pay any amount owing with respect to the Indebtedness. In the event of any conflict
between the accounts and records maintained by any Lender and the accounts and records of the
Administrative Agent in respect of such matters, the accounts and records of Administrative Agent
shall control in the absence of manifest error.

     1.7. Interest Rate.

          (a) The unpaid principal balance of this Loan from day to day outstanding which is not past
due, shall bear interest at a fluctuating rate of interest equal to the sum of (i) the greater of
(x) the BBA LIBOR Daily Floating Rate or (y) ONE HUNDRED AND FIFTY (150) basis points per annum
and (ii) FOUR HUNDRED AND FIFTY (450) basis points, until default (the “Applicable Rate”).
The “BBA LIBOR Daily Floating Rate” shall

PAGE 2

 

mean a fluctuating rate of interest equal to the British Bankers Association LIBOR Rate (“BBA
LIBOR”), as published by Reuters (or other commercially available source providing quotations
of BBA LIBOR as selected by Administrative Agent from time to time) as determined for each Business
Day at approximately 11:00 a.m. London time two (2) London Banking Days prior to the date in
question, for U.S. Dollar deposits (for delivery on the first day of such interest period) with a
one month term, as adjusted from time to time in Administrative Agent’s sole discretion for reserve
requirements, deposit insurance assessment rates and other regulatory costs. If such rate is not
available at such time for any reason, then the rate will be determined by such alternative method
as reasonably selected by Administrative Agent. A “London Banking Day” is a day on which
banks in London are open for business and dealing in offshore dollars. Interest shall be computed
for the actual number of days which have elapsed, on the basis of a 360-day year. Interest shall
accrue from the date that funds are actually deposited into the Borrower’s account described in
Section 1.15 below or disbursed to a third party on behalf of the Borrower or in connection
with the construction and development of the Project.

          (b) If Administrative Agent determines that no adequate basis exists for
determining the
BBA LIBOR Daily Floating Rate or that the BBA LIBOR Daily Floating Rate will not adequately and
fairly reflect the cost to Lenders of funding the Loan, or that any applicable law or regulation
or compliance therewith by any Lender prohibits or restricts or makes impossible the charging of
interest based on the BBA LIBOR Daily Floating Rate and such Lender so notifies Administrative
Agent and Borrower, then until Administrative Agent notifies Borrower that the circumstances
giving rise to such suspension no longer exist, interest shall accrue and be payable on the unpaid
principal balance of this Loan from the date Administrative Agent so notifies Borrower until the
Maturity Date of this Loan (whether by acceleration, declaration, extension or otherwise) at a
fluctuating and per annum rate of interest equal to the sum of 1.75% plus the greater of (1) the
Prime Rate of Administrative Agent; and (2) 4.25%. Each Lender agrees to designate a different
Lending Office if such designation will avoid the need for such notice and will not, in the good
faith judgment of such Lender, otherwise be materially disadvantageous to such Lender. Each time
the Prime Rate changes, the per annum rate of interest on this Loan shall change immediately and
contemporaneously with such change in the Prime Rate. If Administrative Agent (including any
subsequent Administrative Agent) ceases to exist or to establish or publish a prime rate from
which the Prime Rate is then determined, the applicable variable rate from which the Prime Rate is
determined thereafter shall be instead the prime rate reported in The Wall Street Journal
(or the average prime rate if a high and a low prime rate are therein reported), and the Prime
Rate shall change without notice with each change in such prime rate as of the date such change is
reported.

     1.8. Past Due Rate. If any amount payable by Borrower under any Loan Document is not
paid when due (without regard to any applicable grace periods), such amount shall thereafter bear
interest at a fluctuating interest rate per annum at all times equal to the Past Due Rate (as
defined herein) to the fullest extent permitted by applicable law. Accrued and unpaid interest on
past due amounts (including interest on past due interest) shall be due and payable on demand, at
a rate per annum equal to the Applicable Rate plus FOUR HUNDRED (400) basis points (the “Past
Due Rate”).

     1.9. Prepayment. Borrower may prepay the principal balance of this Loan, in full at
any time or in part from time to time, without fee, premium or penalty, provided that: (a)
Administrative Agent shall have actually received from Borrower prior written notice of (i)
Borrower’s intent to prepay, (ii) the amount of principal which will be prepaid (the “Prepaid
Principal”), and (iii) the date on which the prepayment will be made; (b) each prepayment
shall be in an amount of One Thousand and No/100 Dollars ($1,000.00) or a larger integral multiple
of One Thousand and No/100 Dollars ($1,000.00) (unless the prepayment retires the outstanding
balance of this Loan in full); and (c) each prepayment shall be in the amount of 100% of the
Prepaid Principal, plus accrued unpaid interest thereon to the date of prepayment, plus any other
sums which have become due to Administrative Agent and Lenders under the Loan Documents on or
before the date of prepayment but have not been paid. If this Loan is prepaid in full, any
commitment of Lenders for further advances shall automatically terminate.

     1.10. Consequential Loss. Within fifteen (15) days after request by any Lender (or at
the time of any prepayment), Borrower shall pay to such Lender such amount or amounts as will
compensate such Lender for any reasonable loss, cost, expense, penalty, claim or liability,
including any loss incurred in obtaining, prepaying, liquidating or employing deposits or other
funds from third parties and any loss of revenue, profit or yield, as determined by such Lender in
its judgment reasonably exercised (together, “Consequential Loss”) incurred by such Lender
with respect to any LIBOR Rate as a result of: (a) the failure of Borrower to make payments on the
date

PAGE 3

 

specified under this Agreement or in any notice from Borrower to Administrative Agent; (b) the
failure of Borrower to borrow, continue or convert into LIBOR Rate Principal on the date or in the
amount specified in a notice given by Borrower to Administrative Agent pursuant to this Agreement;
(c) the early termination of any Interest Period for any reason; or (d) the payment or prepayment
of any amount on a date other than the date such amount is required or permitted to be paid or
prepaid, whether voluntarily or by reason of acceleration, including, but not limited to,
acceleration upon any transfer or conveyance of any right, title or interest in the Property giving
Administrative Agent on behalf of Lenders the right to accelerate the maturity of the Loan as
provided in the Mortgage. The foregoing notwithstanding, the amounts of the Consequential Loss
shall never be less than zero or greater than what is permitted by applicable Law. If any
Consequential Loss will be due, the Lender shall deliver to Borrower a notice as to the amount of
the Consequential Loss, which notice shall be conclusive in the absence of manifest error. Neither
Administrative Agent nor the Lenders shall have any obligation to purchase, sell and/or match funds
in connection with the funding or maintaining of the Loan or any portion thereof. The obligations
of Borrower under this Section shall survive any termination of the Loan Documents and payment of
the Loan and shall not be waived by any delay by Administrative Agent or Lenders in seeking such
compensation.

     1.11. Late Charge. If Borrower shall fail to make any payment due hereunder or under
the terms of any Note within fifteen (15) days after the date such payment is due, Borrower shall
pay to the applicable Lender or Lenders on demand a late charge equal to four percent (4%) of such
payment. Such fifteen (15) day period shall not be construed as in any way extending the due date
of any payment. The “late charge” is imposed for the purpose of defraying the expenses of a Lender
incident to handling such defaulting payment. This charge shall be in addition to, and not in lieu
of, any other remedy Lenders may have and is in addition to any fees and charges of any agents or
attorneys which Administrative Agent or Lenders may employ upon the occurrence of a Default,
whether authorized herein or by Law.

     1.12. Taxes.

          (a) Any and all payments by Borrower to or for the account of Administrative Agent or any
Lender under any Loan Document shall be made free and clear of and without deduction for any and
all present or future taxes, duties, levies, imposts, deductions, assessments, fees, withholdings
or similar charges, and all liabilities with respect thereto, excluding, in the case of
Administrative Agent and any Lender, taxes imposed on or measured by its net income, and franchise
taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political
subdivision thereof) under the Laws of which Administrative Agent or such Lender, as the case may
be, is organized or maintains a Lending Office (all such non-excluded taxes, duties, levies,
imposts, deductions, assessments, fees, withholdings or similar charges, and liabilities being
hereinafter referred to as “Taxes”). If Borrower shall be required by any Laws to deduct
any Taxes from or in respect of any sum payable under any Loan Document to Administrative Agent or
any Lender, (i) the sum payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under this Section),
Administrative Agent and such Lender receives an amount equal to the sum it would have received
had no such deductions been made, (ii) Borrower shall make such deductions, (iii) Borrower shall
pay the full amount deducted to the relevant taxation authority or other authority in accordance
with applicable Laws, and (iv) within 30 days after the date of such payment, Borrower shall
furnish to Administrative Agent (which shall forward the same to such Lender) the original or a
certified copy of a receipt evidencing payment thereof.

          (b) In addition, Borrower agrees to pay any and all present or future stamp, court or
documentary taxes and any other excise or property taxes or charges or similar levies which arise
from any payment made under any Loan Document or from the execution, delivery, performance,
enforcement or registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as “Other Taxes”).

          (c) If Borrower shall be required by the Laws of any jurisdiction outside the United States
to deduct any Taxes or Other Taxes from or in respect of any sum payable under any Loan Document
to Administrative Agent or any Lender, Borrower shall also pay to Administrative Agent (for the
account of such Lender) or to such Lender, at the time interest is paid, such additional amount
that such Lender specifies is necessary to preserve the after-tax yield (after factoring in United
States (federal and state) taxes imposed on or measured by net income) the Lender would have
received if such deductions (including deductions applicable to additional sums payable under this
Section) had not been made.

PAGE 4

 

          (d) Borrower agrees to indemnity Administrative Agent and each Lender for the full amount of
Taxes and Other Taxes (including any Taxes or Other Taxes imposed or asserted by any jurisdiction
on amounts payable under this Section) paid by Administrative Agent and such Lender and any
liability (including penalties, interest and expenses) arising therefrom or with respect thereto,
in each case whether or not such Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Tribunal. Payment under this subsection (d) shall be made within 30 days after the
date the Lender or the Administrative Agent makes a demand therefor.

          (e) Without prejudice to the survival of any other agreement of Borrower hereunder, the
agreements and obligations of Borrower contained in this Section shall survive the termination of
the Commitments and the payment in full of all the other Indebtedness.

     1.13. Payment Schedule and Maturity Date.

          1.13.1 Accrued and unpaid interest shall be due and payable commencing on May 15, 2010 and on
the 15th day of each succeeding month thereafter until all principal and accrued interest owning on
the Loan shall have been fully paid and satisfied.

          1.13.2 Commencing on the 15th day of the first calendar month
following the first
payment of rent by Skechers pursuant to the Lease and continuing on the 15th day of each
and every calendar month thereafter until the Loan has been repaid in full, Borrower shall make
principal payments in an amount derived assuming a thirty (30) year amortization and interest at
the rate of the greater of eight percent (8%) per annum or the rate then paid on ten (10) year
Treasury Notes, plus TWO HUNDRED AND FIFTY (250) basis points; provided, that on the Maturity Date
the entire principal balance of the Loan then unpaid and all accrued interest then unpaid shall be
finally due and payable. It is acknowledged and agreed that the interest rate set forth in this
Section 1.13.2 shall not be the interest rate under the Loan (which interest rate is set forth in
Section 1.7 above), but rather shall be used solely for the determination of the amount of
each principal payment to be made pursuant to this Section 1.13.2).

          1.13.3 Administrative Agent shall grant a request by Borrower to extend the Maturity Date of
the Loan to October 30, 2012 (the “Extended Maturity
Date”), upon and subject
to the following terms and conditions:

          (a) Basic Conditions. Unless otherwise agreed by Administrative Agent with
the consent of
all Lenders in writing:

          (i) Borrower shall request the extension, if at all, by written
notice to
Administrative Agent not more than one hundred twenty (120) days, and not less than sixty
(60) days, prior to the Maturity Date.

          (ii) At the time of the request, the construction of the Improvements shall have been
completed in accordance with the requirements of the Loan Documents, an unconditional
certificate of occupancy (or local equivalent) shall have been issued for the Improvements
by the applicable governmental authority with jurisdiction over the Property, and all
conditions to the final disbursement shall have been satisfied.

          (iii) At the time of the request, and at the time of the extension, there shall not
exist any default, nor any condition or state of facts which after notice and/or lapse of
time would constitute a Default under any Loan Document.

          (iv) Current Financial Statements regarding Borrower and TG Development (dated not
earlier than thirty (30) days prior to the request for extension) and all other financial
statements and other information as may be required under the Loan Documents regarding
Borrower, TG Development and the Property, shall have been submitted promptly to
Administrative Agent, and there shall not have occurred, in the opinion of Administrative
Agent, any material adverse change in the business or financial condition of Borrower or
any Guarantor or Skechers, or in the Property or in any other state of facts submitted to
Administrative Agent in connection with the Loan Documents, from that which existed on the
date of this Agreement.

PAGE 5

 

          (v) Whether or not the extension becomes effective, Borrower shall pay all
out-of-pocket costs and expenses incurred by Administrative Agent and Lenders in connection with
the proposed extension (pre- and post-closing), including, without limitation, appraisal
fees, environmental audit and reasonable legal fees; all such costs and expenses incurred
up to the time of Lenders’ written agreement to the extension shall be due and payable
prior to Lenders’ execution of that agreement (or if the proposed extension does not become
effective, then upon demand by Administrative Agent), and any future failure to pay such
amounts shall constitute a default under the Loan Documents.

          (vi) All applicable regulatory requirements, including appraisal requirements, shall
have been satisfied with respect to the extension.

          (vii) Not later than the Maturity Date, (A) the extension shall have been consented to
and documented to Administrative Agent and Lenders’ satisfaction by Borrower, each
Guarantor, Lenders, and all other parties deemed necessary by Administrative Agent (such as
any permitted subordinate lienholders); (B) Administrative Agent shall have been provided
with an updated title report and judgment and lien searches, and appropriate title
insurance endorsements shall have been issued as required by Administrative Agent; and (C)
Borrower shall have paid to Administrative Agent for the pro rata benefit of Lenders a
non-refundable extension fee in the amount of Twenty Five Thousand and No/100 Dollars
($25,000.00).

          (viii) At the time of such extension, the Property shall have a Loan to Value Ratio
(as hereinafter defined) of not greater than fifty-eight percent (58%), which Loan to Value
Ratio shall be calculated as follows: the outstanding principal balance and accrued but
unpaid interest on the Loan as of the date of the determination of the ratio shall be
divided by the appraised “As-Is” value of the Property. The appraised “As-Is” value
of the Property shall be based upon Administrative Agent’s existing appraisal of the
Property, or, at Administrative Agent’s election (in its sole discretion), an updated
appraisal, prepared by an appraiser acceptable to Administrative Agent at Borrower’s
expense, and satisfactory to Administrative Agent in all respects, as reviewed, adjusted
and approved by Administrative Agent. In the event this Loan to Value Ratio is not met,
Borrower may satisfy this Loan to Value Ratio prior to the extension date by either (A)
making a principal curtailment on the Loan in an amount sufficient to bring this Loan to
Value Ratio into compliance and/or (B) provide additional collateral acceptable to
Administrative Agent, which shall have value (as determined by Administrative Agent) which
when added to the Property value is sufficient to satisfy this Loan to Value Ratio.

          (ix) At the time of such extension, Skechers shall have taken occupancy of the
Improvements and commenced to pay rent under the Lease

          (x) At the time of such extension, Borrower shall satisfy a Debt Service Coverage
Ratio (as hereinafter defined) as determined by Administrative Agent for the preceding
twelve (12) month period of at least 1.40 to 1.00, which Debt Service Coverage Ratio shall
be calculated by dividing the cash flow for the preceding twelve (12) month period (the
“Determination Period”) by the amount of the debt service payments in the amount
calculated assuming a thirty (30) year amortization and interest at the rate of the greater
of eight percent (8%) per annum or the rate then paid on ten (10) year Treasury Notes, plus
TWO HUNDRED AND FIFTY (250) basis points. For the purposes hereof, “cash flow”
shall be defined as net income of Borrower after provision for approved operating expenses
and state and federal income taxes, increased by the amount of depreciation, amortization
and other non-cash charges, if any. In the event that Skechers has not been in possession
of the Improvements and paying rent during the entirety of the Determination Period, then
the following shall apply: (a) cash flow for that period of time during the Determination
Period during which Skechers has been paying rent shall be annualized (e.g., if one month,
then such cash flow shall be multiplied by 12, if three months, then such cash flow shall
be multiplied by 4, etc.); and (b) any and all expenses which may not occur on a monthly
basis (e.g., payment of real estate taxes and insurance premiums) shall also be annualized.

If all of the foregoing conditions are not satisfied strictly in accordance with their terms, the
extension shall not be or become effective.

PAGE 6

 

          (b) No Changes in Loan Terms. All terms and conditions of the Loan
Documents shall
continue to apply to the extended term except that the Maturity Date shall mean the Extended
Maturity Date.

     1.14. Certain Provisions Regarding Payments. All payments made as scheduled on the
Loan shall be applied, to the extent thereof, to late charges, to accrued but unpaid interest,
unpaid principal, and any other sums due and unpaid to Administrative Agent under the Loan
Documents, in such manner and order as Administrative Agent may elect in its sole discretion. All
permitted prepayments on the Loan shall be applied, to the extent thereof, to accrued but unpaid
interest on the amount prepaid, to the remaining principal installments, and any other sums due and
unpaid to Administrative Agent under the Loan Documents, in such manner and order as Administrative
Agent may elect in its sole discretion, including but not limited to application to principal
installments in inverse order of maturity. Except to the extent that specific provisions are set
forth in this Agreement or another Loan Document with respect to application of payments, all
payments received by Administrative Agent shall be applied, to the extent thereof, to the
indebtedness secured by the Mortgage in such manner and order as Administrative Agent may elect in
its sole discretion, any instructions from Borrower or anyone else to the contrary notwithstanding.
Remittances in payment of any part of the indebtedness other than in the required amount in
immediately available U.S. funds shall not, regardless of any receipt or credit issued therefor,
constitute payment until the required amount is actually received by Administrative Agent in
immediately available U.S. funds and shall be made without offset, demand, counterclaim, deduction,
or recoupment (each of which is hereby waived) and accepted subject to the condition that any check
or draft may be handled for collection in accordance with the practice of the collecting bank or
banks. Acceptance by the Administrative Agent of any payment in an amount less than the amount then
due on any indebtedness shall be deemed an acceptance on account only, notwithstanding any notation
on or accompanying such partial payment to the contrary, and shall not in any way excuse the
existence of a Default. Payments received after 2:00 p.m. shall be deemed to be received on, and
shall be posted as of, the following Business Day. Whenever any payment under this Agreement or any
other Loan Document falls due on a day which is not a Business Day, such payment may be made on the
next succeeding Business Day.

     1.15. Advances and Payments.

          (a) Following receipt of a Draw Request, Administrative Agent shall promptly provide each
Lender with a copy of the Draw Request Form in the form of Exhibit “F-1”, the related AIA
Document G-702 and G-703, the related written certification by Borrower’s Architect and if
available the related written certification of the Construction Consultant. Administrative Agent
shall notify each Lender telephonically (with confirmation by facsimile or electronic mail), by
facsimile (with confirmation by telephone or electronic mail) or by electronic mail (with
confirmation by telephone or facsimile) not later than 1:00 p.m. Administrative Agent’s Time two
(2) Business Days prior to the advance Funding Date for LIBOR Rate Principal advances, and one (1)
Business Day prior to the advance Funding Date for all other advances, of its Pro Rata Share of
the amount Administrative Agent has determined shall be advanced in connection therewith
(“Advance Amount”). In the case of an advance of the Loan, each Lender shall make the
funds for its Pro Rata Share of the Advance Amount available to Administrative Agent not later
than 11:00 a.m. Administrative Agent’s Time on the Funding Date thereof. After Administrative
Agent’s receipt of the Advance Amount from Lenders, Administrative Agent shall make proceeds of
the Loan in an amount equal to the Advance Amount (or, if less, such portion of the Advance Amount
that shall have been paid to Administrative Agent by Lenders in accordance with the terms hereof)
available to Borrower on the applicable Funding Date by advancing such funds to Borrower in
accordance with the provisions of Exhibit “F”.

          (b) All payments by Borrower shall be made without condition or deduction for any
counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, all
payments by Borrower hereunder shall be made to Administrative Agent not later than 12:00 p.m.
(Administrative Agent’s Time) on the date specified herein. Administrative Agent shall distribute
to each Lender such funds as such Lender may be entitled to receive hereunder (i) on or before
3:00 p.m. (Administrative Agent’s Time) on the day Administrative Agent receives such funds, if
Administrative Agent has received such funds on or before 12:00 p.m. (Administrative Agent’s
Time), or (ii) on or before 12:00 p.m. (Administrative Agent’s Time) on the Business Day following
the day Administrative Agent receives such funds, if Administrative Agent receives such funds
after 12:00 p.m. (Administrative Agent’s Time). If Administrative Agent fails to timely pay any
amount to any Lender in accordance with this subsection, Administrative Agent shall pay to such
Lender interest at the Federal Funds Rate on such amount, for each day from the day such amount
was to be paid until it is paid to such Lender (any such interest paid shall not be chargeable to
Borrower).

PAGE 7

 

          (c) Except as otherwise provided herein, all payments by Borrower or any Lender shall be made
to Administrative Agent at Administrative Agent’s Office not later than the time for such type of
payment specified in this Agreement. All payments received after such time shall be deemed received
on the next succeeding Business Day. All payments shall be made in immediately available funds in
lawful money of the United States of America.

          (d) Upon satisfaction of any applicable terms and conditions set forth herein, Administrative
Agent shall promptly make any amounts received in accordance with the prior subsection available in
like funds received as follows: (i) if payable to Borrower, in accordance with Exhibit “F”,
except as otherwise specified herein, and (ii) if payable to any Lender, by wire transfer to such
Lender at the address specified in the Schedule of Lenders.

          (e) Except as otherwise provided in Exhibit “K” with respect to Borrower reimbursing
drawings under Letters of Credit, unless Borrower or any Lender has notified Administrative Agent,
prior to the date any payment is required to be made by it to Administrative Agent, that Borrower
or such Lender, as the case may be, will not make such payment, Administrative Agent may assume
that Borrower or such Lender, as the case may be, has timely made such payment and may (but shall
not be required to do so) in reliance thereon, make available a corresponding amount to the person
or entity entitled thereto. If and to the extent that such payment was not in fact made to
Administrative Agent in immediately available funds, then:

          (i) if Borrower failed to make such payment, each Lender shall forthwith on
demand repay to Administrative Agent the portion of such assumed payment that was made
available to such Lender in immediately available funds, together with interest thereon in
respect of each day from and including the date such amount was made available by
Administrative Agent to such Lender to the date such amount is repaid to Administrative
Agent in immediately available funds at the Federal Funds Rate from time to time in
effect; and

          (ii) if any Lender failed to make such payment, such Lender or, if
applicable,
Electing Lender or Lenders shall forthwith on demand pay to Administrative Agent the amount
thereof in immediately available funds, together with interest thereon for the period from
the date such amount was made available by Administrative Agent to Borrower to the date
such amount is recovered by Administrative Agent (the “Compensation Period”) at a
rate per annum equal to the interest rate applicable to such amount under the Loan. If such
Lender pays such amount to Administrative Agent, then such amount shall constitute such
Lender’s Pro Rata Share, included in the applicable Loan advance. If such Lender does not
pay such amount forthwith upon Administrative Agent’s demand therefor, Administrative Agent
may make a demand therefor upon Borrower, and the Borrower shall pay such amount to
Administrative Agent, together with interest thereon for the Compensation Period at a rate
per annum equal to the non-default rate of interest applicable to such amount under the
Loan. Nothing herein shall be deemed to relieve any Lender from its obligation to fulfill
its Commitment or to prejudice any rights which Administrative Agent or Borrower may have
against any Lender as a result of any default by such Lender hereunder.

     A notice of the Administrative Agent to any Lender or to Borrower with respect to any amount
owing under this subsection shall be conclusive, absent manifest error.

          (f) If any Lender makes available to the Administrative Agent funds for any Loan advance to
be made by such Lender as provided in the foregoing provisions of this Section, and the funds are
not advanced to Borrower or otherwise used to satisfy any Obligations of such Lender hereunder,
the Administrative Agent shall return such funds (in like funds as received from such Lender) to
such Lender, without interest.

          (g) Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan
advance in any particular place or manner or to constitute a representation by any Lender that it
has obtained or will obtain the funds for any Loan advance in any particular place or manner.

          (h) Conditions to Initial Advance of Loan Proceeds. The following are conditions
precedent to Administrative Agent and Lenders’ obligation to make the Initial Advance of Loan
Proceeds to Borrower

PAGE 8

 

hereunder and are in addition to any other conditions for advances and for the Initial Advance of
Loan Proceeds set forth in this Agreement, including, but not limited to, those contained in
Exhibit F of this Agreement:

          (i) Permits. Borrower, Administrative Agent and Lenders acknowledge
that as of the
date hereof, Borrower has not yet obtained from the applicable governmental authorities
the permits that are required for the construction of the Improvements. Borrower agrees
that Administrative Agent and Lenders shall have no obligation to make an Initial Advance
of Loan Proceeds unless and until Borrower has obtained all permits required for the
construction of the Improvements and has provided true and correct copies of such valid
building permits for the Improvements, acceptable to the Administrative Agent in its sole
discretion, together with all other consents, licenses, permits and approvals necessary
for construction of the Improvements, all in assignable form (to the extent appropriate)
and in full force and effect.

          (ii) Relocation and/or Release of Utility Easements. Borrower, Administrative
Agent and Lenders acknowledge that the Property is currently encumbered by certain utility
easements (collectively, the “Utility Easements”) in favor of each of Southern
California Edison Company (as successor to Nevada-California Electric Corporation and
California Electric Power Company) (“SCE”) and the Eastern Municipal Water District
(the “EMWD”, and collectively with SCE, the “Grantees”) as more
specifically set forth in Preliminary Report NCS-413199A issued by the Title Company.
Borrower, Administrative Agent and each Lender also acknowledge that the Improvements are
intended to be constructed over portions of the Property that are subject to the Utility
Easements and that Borrower intends either to cause the Grantees to release the Utility
Easements or to relocate them so that once constructed the Improvements will not encroach
upon those portions of the Property encumbered by the Utility Easements or violate the
terms or conditions of the Utility Easements. Borrower agrees that Administrative Agent and
Lenders shall have no obligation to make an Initial Advance of Loan Proceeds hereunder
unless and until (i) the Utility Easements have been released by the Grantees or relocated
by the Grantees in a manner approved of by Administrative Agent in its sole and absolute
discretion; (ii) executed and recorded copies of all instruments effecting such release or
relocation (as applicable) have been provided to Administrative Agent; (iii) Borrower has
provided to Administrative Agent, at no cost to Administrative Agent, (a) an updated survey
of the Property reflecting the release or relocation of the Utility Easements and (b) such
endorsements to its policy of Title Insurance, required by, and acceptable to,
Administrative Agent in its sole discretion, including, but not limited to an unmodified
Form 103.3 endorsement and an endorsement reflecting the release of the Utility Easements
or the relocation of same in the manner approved by Administrative Agent.

          (iii) Recordation of Final Map. Borrower agrees that Administrative Agent and
Lenders shall have no obligation to make the Initial Advance of Loan Proceeds unless and
until (A) the Final Map, as such term is defined in the Section 6.24 of the Mortgage, is
approved by the City and recorded in the Official Records of Riverside County, California
and a copy of such recorded Final Map is provided to Administrative Agent; and (B)
Administrative Agent and Lenders are provided with the items specifically set forth in
Section 6.24 of the Mortgage.

     1.16. Administrative Agent Advances.

          (a) Administrative Agent is authorized, from time to time, in Administrative Agent’s sole
discretion to make, authorize or determine advances of the Loan, or otherwise expend funds, on
behalf of Lenders (“Administrative Agent Advances”), (i) to pay any costs, fees and
expenses as described in Section 6.10 herein, (ii) when the applicable conditions
precedent set forth in Exhibit “C” and Exhibit “F” have been satisfied to the
extent required by Administrative Agent, and (iii) when Administrative Agent deems necessary or
desirable to preserve or protect the Loan collateral or any portion thereof (including those with
respect to property taxes, insurance premiums, completion of construction, operation, management,
improvements, maintenance, repair, sale and disposition) (A) subject to Section 5.5, after
the occurrence of a Default, and (B) subject to Section 5.10, after acquisition of all or
a portion of the Loan collateral by foreclosure or otherwise.

          (b) Administrative Agent Advances shall constitute obligatory advances of Lenders under this
Agreement, shall be repayable on demand and secured by the Loan collateral, and if unpaid by
Lenders as set forth below shall bear interest at the rate applicable to such amount under the
Loan or if no longer applicable, at the

PAGE 9

 

Base Rate. Administrative Agent shall notify each Lender in writing of each Administrative Agent
Advance. Upon receipt of notice from Administrative Agent of its making of an Administrative Agent
Advance, each Lender shall make the amount of such Lender’s Pro Rata Share of the outstanding
principal amount of the Administrative Agent Advance available to Administrative Agent, in same day
funds, to such account of Administrative Agent as Administrative Agent may designate, (i) on or
before 3:00 p.m. (Administrative Agent’s Time) on the day Administrative Agent provides Lenders
with notice of the making of such Administrative Agent Advance if Administrative Agent provides
such notice on or before 12:00 p.m. (Administrative Agent’s Time), or (ii) on or before 12:00 p.m.
on the Business Day immediately following the day Administrative Agent provides Lenders with notice
of the making of such advance if Administrative Agent provides notice after 12:00 p.m.
(Administrative Agent’s Time).

     1.17. Defaulting Lender.

          1.17.1
Notice and Cure of Lender Default; Election Period: Electing Lenders.
Administrative Agent shall notify (such notice being referred to as the “Default Notice”)
Borrower (for Loan advances) and each non-Defaulting Lender if any Lender is a Defaulting Lender.
Each non-Defaulting Lender shall have the right, but in no event or under any circumstance the
obligation, to fund such Defaulting Lender Amount, provided that within twenty (20) days
after the date of the Default Notice (the “Election Period”), such non-Defaulting Lender
or Lenders (each such Lender, an “Electing Lender”) irrevocably commit(s) by notice in
writing (an “Election Notice”) to Administrative Agent, the other Lenders and Borrower to
fund the Defaulting Lender Amount and to assume the Defaulting Lender’s obligations with respect
to the advancing of the entire undisbursed portion of the Defaulting Lender’s principal
obligations under this Agreement (such entire undisbursed portion of the Defaulting Lender’s
principal obligations under this Agreement, including its portion of the Payment Amount that is
the subject of the default, is hereinafter referred to as the “Defaulting Lender
Obligation”). If Administrative Agent receives more than one Election Notice within the
Election Period, then the commitment to fund the Defaulting Lender Amount and the Defaulting
Lender Obligation shall be apportioned pro rata among the Electing Lenders in the proportion that
the amount of each such Electing Lender’s Commitment bears to the total Commitments of all
Electing Lenders. If the Defaulting Lender fails to pay the Defaulting Lender Payment Amount
within the Election Period, the Electing Lender or Lenders, as applicable, shall be automatically
obligated to fund the Defaulting Lender Amount and Defaulting Lender Obligation (and Defaulting
Lender shall no longer be entitled to fund such Defaulting Lender Amount and Defaulting Lender
Obligation) within three (3) Business Days following the expiration of the Election Period to
reimburse Administrative Agent or make payment to Borrower, as applicable. Notwithstanding
anything to the contrary contained herein, if Administrative Agent has funded the Defaulting
Lender Amount, Administrative Agent shall be entitled to reimbursement for its portion of the
Defaulting Lender Payment Amount pursuant to Section 5.11.

          1.17.2 Removal of Rights; Indemnity. Administrative Agent shall not be obligated to
transfer to a Defaulting Lender any payments made by or on behalf of Borrower to Administrative
Agent for the Defaulting Lender’s benefit; nor shall a Defaulting Lender be entitled to the
sharing of any payments hereunder or under any Note until all Defaulting Lender Payment Amounts
are paid in full. Amounts payable to a Defaulting Lender shall be paid by Administrative Agent to
reimburse Administrative Agent and any Electing Lender pro rata for all Defaulting Lender Payment
Amounts. Solely for the purposes of voting or consenting to matters with respect to the Loan
Documents, a Defaulting Lender shall be deemed not to be a “Lender” and such Defaulting Lender’s
Commitment shall be deemed to be zero. A Defaulting Lender shall have no right to participate in
any discussions among and/or decisions by Lenders hereunder and/or under the other Loan Documents.
Further, any Defaulting Lender shall be bound by any amendment to, or waiver of, any provision of,
or any action taken or omitted to be taken by Administrative Agent and/or the non-Defaulting
Lenders under, any Loan Document which is made subsequent to the Defaulting Lender’s becoming a
Defaulting Lender. This Section shall remain effective with respect to a Defaulting Lender until
such time as the Defaulting Lender shall no longer be in default of any of its obligations under
this Agreement by curing such default by payment of all Defaulting Lender Payment Amounts (i)
within the Election Period, or (ii) after the Election Period with the consent of the
non-Defaulting Lenders. Such Defaulting Lender nonetheless shall be bound by any amendment to or
waiver of any provision of, or any action taken or omitted to be taken by Administrative Agent
and/or the non-Defaulting Lenders under any Loan Document which is made subsequent to that
Lender’s becoming a Defaulting Lender and prior to such cure or waiver. The operation of this
subsection or the subsection above alone shall not be construed to increase or otherwise affect
the Commitment of any non-Defaulting Lender, or relieve or excuse the performance by Borrower of
their duties and

PAGE 10

 

obligations hereunder or under any of the other Loan Documents. Furthermore, nothing contained in
this Section shall release or in any way limit a Defaulting Lender’s obligations as a Lender
hereunder and/or under any other of the Loan Documents. Further, a Defaulting Lender shall
indemnify and hold harmless Administrative Agent and each of the non-Defaulting Lenders from any
claim, loss, or costs incurred by Administrative Agent and/or the non-Defaulting Lenders as a
result of a Defaulting Lender’s failure to comply with the requirements of this Agreement,
including, without limitation, any and all additional losses, damages, costs and expenses
(including, without limitation, attorneys’ fees) incurred by Administrative Agent and any
non-Defaulting Lender as a result of and/or in connection with (i) a non-Defaulting Lender’s acting
as an Electing Lender, (ii) any enforcement action brought by Administrative Agent against a
Defaulting Lender, and (iii) any action brought against Administrative Agent and/or Lenders. The
indemnification provided above shall survive any termination of this Agreement.

          1.17.3 Commitment Adjustments. In connection with the adjustment of the amounts of
the Loan Commitments of the Defaulting Lender and Electing Lender(s) upon the expiration of the
Election Period as aforesaid, Borrower, Administrative Agent and Lenders shall execute such
modifications to the Loan Documents as shall, in the reasonable judgment of Administrative Agent,
be necessary or desirable in connection with the adjustment of the amounts of Commitments in
accordance with the foregoing provisions of this Section. For the purpose of voting or consenting
to matters with respect to the Loan Documents such modifications shall also reflect the removal of
voting rights of the Defaulting Lender and increase in voting rights of Electing Lenders to the
extent an Electing Lender has funded the Defaulting Lender Amount and assumed the Defaulting
Lender Obligation. In connection with such adjustments, Defaulting Lenders shall execute and
deliver an Assignment and Assumption covering that Lender’s Commitment and otherwise comply with
Section 6.5. If a Lender refuses to execute and deliver such Assignment and Assumption or
otherwise comply with Section 6.5, such Lender hereby appoints Administrative Agent to do
so on such Lender’s behalf. Administrative Agent shall distribute an amended Schedule of Lenders,
which shall thereafter be incorporated into this Agreement, to reflect such adjustments. However,
all such Defaulting Lender Amounts and Defaulting Lender Obligation funded by Administrative Agent
or Electing Lenders shall continue to be Defaulting Lender Amounts of the Defaulting Lender
pursuant to its obligations under this Agreement.

          1.17.4 No Election. In the event that no Lender elects to commit to fund the
Defaulting Lender Amount and Defaulting Lender Obligations within the Election Period,
Administrative Agent shall, upon the expiration of the Election Period, so notify Borrower and
each Lender.

     1.18.
Several Obligations; No Liability, No Release. Notwithstanding that certain of
the Loan Documents now or hereafter may have been or will be executed only by or in favor of
Administrative Agent in its capacity as such, and not by or in favor of Lenders, any and all
obligations on the part of Administrative Agent (if any) to make any advances of the Loan or
reimbursements for other Payment Amounts shall constitute the several (and not joint) obligations
of the respective Lenders on a ratable basis, according to their respective Pro Rata Shares.
Except as may be specifically provided in this Agreement, no Lender shall have any liability for
the acts of any other Lender. No Lender shall be responsible to Borrower or any other person for
any failure by any other Lender to fulfill its obligations to make advances of the Loan or
reimbursements for other Payment Amounts, nor to take any other action on its behalf hereunder or
in connection with the financing contemplated herein. The failure of any Lender to pay to
Administrative Agent its Pro Rata Share of a Payment Amount shall not relieve any other Lender of
any obligation hereunder to pay to Administrative Agent its Pro Rata Share of such Payment Amounts
as and when required herein, but no Lender shall be responsible for the failure of any other
Lender to so fund its Pro Rata Share of the Payment Amount. In furtherance of the foregoing,
Lenders shall comply with their obligation to pay Administrative Agent their Pro Rata Share of
such Payment Amounts regardless of (i) the occurrence of any Default hereunder or under any Loan
Document; (ii) any failure of consideration, absence of consideration, misrepresentation, fraud,
or any other event, failure, deficiency, breach or irregularity of any nature whatsoever in the
Loan Documents; or (iii) any bankruptcy, insolvency or other like event with regard to Borrower or
any Guarantor. The obligation of Lenders to pay to such Payment Amounts are in all regards
independent of any claims between Administrative Agent and any Lender.

     1.19. Replacement of Lenders. If any Lender is a Defaulting Lender, Borrower may,
upon notice to such Lender and the Administrative Agent, replace such Lender by causing such
Lender to assign its Commitment with the payment of any assignment fee by the replaced Lender to
one or more other lenders or Eligible Assignees

PAGE 11

 

acceptable
to Borrower, the Administrative Agent and the L/C Issuer. Borrower shall or shall cause
the replacement lender to (subject to the provisions of Section 1.14 through 1.15 providing
for payment of all Defaulting Lender Payment Amounts to Administrative Agent and/or Electing
Lenders, as applicable, prior to payment of amounts due to a Defaulting Lender), (x) pay in full
all principal, interest, fees and other amounts owing to such Lender through the date of
replacement, (y) provide appropriate assurances and indemnities (which may include letters of
credit) as such Lender may reasonably require with respect to such replaced Lender’s obligation to
fund its participation interest in any Letters of Credit then outstanding and (z) provide a release
of such Lender from its obligations under the Loan Documents. Any Lender being replaced shall
execute and deliver an Assignment and Assumption covering that Lender’s Commitment and otherwise
comply with Section 6.5. If a Lender being replaced refuses to execute and deliver such
Assignment and Assumption or otherwise comply with Section 6.5, such Lender hereby appoints
Administrative Agent to do so on such Lender’s behalf. Administrative Agent shall distribute an
amended Schedule of Lenders, which shall thereafter be incorporated into this Agreement, to reflect
adjustments to Lenders and their Commitments.

ARTICLE 2 — ADDITIONAL COVENANTS AND AGREEMENTS

     2.1. Construction of the Improvements. Borrower shall commence construction of the
Improvements on or before the Construction Commencement Date, and shall prosecute the construction
of the Improvements with diligence and continuity, in a good and workmanlike manner, and in
accordance with sound building and engineering practices, all applicable Laws and governmental
requirements, the Plans and the Loan Documents. Borrower shall not permit cessation of work for a
period in excess of ten (10) consecutive days, except for Excusable Delays. Borrower shall
complete construction of the Improvements free and clear of all liens (except liens created by the
Loan Documents), and shall obtain a certificate of occupancy and all other permits, licenses and
approvals from all applicable governmental authorities required for the occupancy, use and
operation of the Improvements, in each case satisfactory to Administrative Agent, on or before the
Completion Date. Borrower shall promptly after receiving knowledge of same, correct (a) any
material defect in the Improvements, (b) any material departure from the Plans, Law or
governmental requirements, or (c) any encroachment by any Improvements or structure on any
building setback line, easement, property line or restricted area.

     2.2. Plans and Changes. No construction shall be undertaken on the Land except as
shown in the Plans. Borrower assumes full responsibility for the compliance of the Plans and the
Property with all Laws, governmental requirements and sound building and engineering practices. No
plans or specifications, or any changes thereto, shall be included as part of the Plans until
approved by Administrative Agent, Construction Consultant, all applicable governmental
authorities, and all other parties required under the Loan Documents. Without Administrative
Agent’s prior written consent, Borrower shall not change or modify the Plans, agree to any change
order, or allow any extras to any contractor or any subcontractor, except that Borrower may make
Permitted Changes without such consent if: (a) Borrower notifies Administrative Agent in writing
of the change or extra with appropriate supporting documentation and information; (b) Borrower
obtains the approval of the applicable contractor, Borrower’s architect and all sureties; (c) the
structural integrity, quality and standard of workmanship of the Improvements is not impaired by
such change or extra; (d) no substantial change in architectural appearance is effected by such
change or extra; (e) no default in any obligation to any person or violation of any Law or
governmental requirement would result from such change or extra; (f) Borrower complies with
Section 1.5 of this Agreement to cover any excess cost resulting from the change or extra;
and (g) completion of the Improvements by the Completion Date will not be affected. Administrative
Agent shall not be obligated to review a proposed change unless it has received all documents
necessary to review such change, including the change order, cost estimates, plans and
specifications, and evidence that all required approvals other than that of Administrative Agent
have been obtained.

     2.3. Contracts. Without Administrative Agent’s prior written approval as to parties,
terms, and all other matters, Borrower shall not (a) enter into any Material Contract for the
performance of any work or the supplying of any labor, materials or services for the design or
construction of the Improvements, (b) enter into any management, leasing, maintenance or other
contract pertaining to the Property not described in clause (a) that is not unconditionally
terminable by Borrower or any successor owner without penalty or payment on not more than thirty
(30) days notice to the other party thereunder, or (c) modify, amend, or terminate any such
contracts. Administrative Agent hereby approves of the Development Management Services Agreement
dated January 30, 2010 entered into by HF Logistics-SKX, LLC, a Delaware limited liability company
and HFC Holdings, LLC, a Delaware limited liability company [as assigned by HF Logistics-SKX, LLC
to Borrower?]. All such contracts shall

PAGE 12

 

provide that all rights and liens of the applicable contractor, architect, engineer, supplier,
surveyor or other party and any right to remove removable Improvements are subordinate to Lender’s
rights and liens, shall require all subcontracts and purchase orders to contain a provision
subordinating the subcontractors’ and mechanics’ and materialmen’s liens and any right to remove
removable Improvements to Lender’s rights and liens, and shall provide that no change order shall
be effective without the prior written consent of Administrative Agent, except for change orders
which implement Permitted Changes. Borrower shall not default under any contract, Borrower shall
not permit any contract to terminate by reason of any failure of Borrower to perform thereunder,
and Borrower shall promptly notify Administrative Agent of any default thereunder. Borrower will
deliver to Administrative Agent, upon request of Administrative Agent, the names and addresses of
all persons or entities with whom each contractor has contracted for the construction of the
Improvements or for the furnishing of labor or materials therefor.

     2.4. Assignment of Contracts and Plans. As additional security for the Obligations,
Borrower hereby transfers and assigns to Administrative Agent for the ratable benefit of
Administrative Agent and Lenders and grants a security interest in all of Borrower’s right, title
and interest, but not its liability, in, under, and to all construction, architectural and design
contracts, and the Plans, and agrees that all of the same are covered by the security agreement
provisions of the Mortgage. Borrower agrees to deliver to Administrative Agent from time to time
upon Administrative Agent’s request such consents to the foregoing assignment from parties
contracting with Borrower as Administrative Agent may require. Neither this assignment nor any
action by Administrative Agent or Lenders shall constitute an assumption by Administrative Agent or
Lenders of any obligation under any such contract or with respect to the Plans, Borrower hereby
agrees to perform all of its obligations under any such contract, and Borrower shall continue to be
liable for all obligations of Borrower with respect thereto. Administrative Agent shall have the
right at any time (but shall have no obligation) to take in its name or in the name of Borrower
such action as Administrative Agent may determine to be necessary to cure any default under any
such contract or with respect to the Plans or to protect the rights of Borrower, Administrative
Agent or Lenders with respect thereto. Borrower irrevocably constitutes and appoints Administrative
Agent as Borrower’s attorney-in-fact, which power of attorney is coupled with an interest and
irrevocable, after a Default by Borrower under this Agreement to enforce in Borrower’s name or in
Administrative Agent’s and Lender’s name all rights of Borrower under any such contract or with
respect to the Plans. Administrative Agent shall incur no liability if any action so taken by it or
on its behalf shall prove to be inadequate or invalid. Borrower indemnifies and holds
Administrative Agent and Lenders harmless against and from any loss, cost, liability or expense
(including, but not limited to, consultants’ fees and expenses and attorneys’ fees and expenses)
incurred in connection with Borrower’s failure to perform such contracts or any action taken by
Administrative Agent or Lenders. Administrative Agent may use the Plans for any purpose relating to
the Improvements. Borrower represents and warrants to Administrative Agent and Lenders that the
copy of any contract furnished or to be furnished to Administrative Agent is and shall be a true
and complete copy thereof, that the copies of the Plans delivered to Administrative Agent are and
shall be true and complete copies of the Plans, that there have been no modifications thereof which
are not fully set forth in the copies delivered, and that Borrower’s interest therein is not
subject to any claim, setoff, or encumbrance.

     2.5. Storage of Materials. Borrower shall cause all materials supplied for or
intended to be utilized in the construction of the Improvements, but not yet affixed to or
incorporated into the Improvements or the Land, to be stored on the Land or at such other site as
Administrative Agent may approve, in each case with adequate safeguards to prevent loss, theft,
damage or commingling with materials for other projects. Borrower shall not purchase or order
materials for delivery more than sixty (60) days prior to the scheduled incorporation of such
materials into the Improvements without the prior approval of Administrative Agent, which will not
be unreasonably withheld (and in that regard, Administrative Agent shall give due consideration to
expected “lead times” for any such orders and potential cost savings resulting from early ordering
of materials).

     2.6. Construction Consultant. Administrative Agent may retain the services of a
Construction Consultant, whose duties may include, among others, reviewing the Plans and any
proposed changes to the Plans, performing construction cost analyses, observing work in place and
reviewing Draw Requests. The duties of Construction Consultant run solely to Administrative Agent
for the ratable benefit of Lenders, and Construction Consultant shall have no obligations or
responsibilities whatsoever to Borrower, Borrower’s architect, engineer, contractor or any of
their agents or employees. Unless prohibited by applicable Law, all fees, costs, and expenses of
Construction Consultant shall be paid by Borrower. Borrower shall cooperate with Construction
Consultant and will furnish to Construction Consultant such information and other material as
Construction Consultant considers necessary or useful in performing its duties.

PAGE 13

 

     2.7. Inspection. Administrative Agent and its agents, including Construction
Consultant, may enter upon the Property to inspect the Property, the Project and any materials at
any reasonable time, upon reasonable advance notice, unless Administrative Agent deems such
inspection is of an emergency nature, in which event Borrower shall provide Administrative Agent
with immediate access to the Property. Borrower will furnish to Administrative Agent and its
agents, including Construction Consultant, for inspection and copying, all Plans, shop drawings,
specifications, books and records, and other documents and information that Administrative Agent
may request from time to time.

     2.8. Notice to Lenders. Borrower shall promptly within five (5) days after Borrower
receives knowledge of the occurrence of any of the following events, notify each Lender in writing
thereof, specifying in each case the action Borrower has taken or will take with respect thereto:
(a) any violation of any Law or governmental requirement; (b) any litigation, arbitration or
governmental investigation or proceeding instituted or threatened against Borrower or any
Guarantor or the Property, and any material development therein; (c) any actual or threatened
condemnation of any portion of the Property, any negotiations with respect to any such taking, or
any loss of or substantial damage to the Property; (d) any labor controversy pending or threatened
against Borrower or any contractor, and any material development in any labor controversy; (e) any
notice received by Borrower with respect to the cancellation, alteration or non-renewal of any
insurance coverage maintained with respect to the Property; (f) any failure by Borrower or any
contractor, subcontractor or supplier to perform any material obligation under any construction
contract, any event or condition which would permit termination of a construction contract or
suspension of work thereunder, or any notice given by Borrower or any contractor with respect to
any of the foregoing; (g) any lien filed against the Property or any stop notice served on
Borrower in connection with construction of the Improvements; or (h) any required permit, license,
certificate or approval with respect to the Property lapses or ceases to be in full force and
effect.

     2.9. Financial Statements. Borrower shall deliver to Administrative Agent with
sufficient copies for each Lender the Financial Statements and other statements and information at
the times and for the periods described in (a) Exhibit “B” and (b) any other Loan
Document, and Borrower shall deliver to Administrative Agent with sufficient copies for each
Lender from time to time such additional financial statements and information as Administrative
Agent may at any time request. Borrower will make all of its books, records and accounts available
to Administrative Agent and its representatives at the Property upon request and will permit them
to review and copy the same. Borrower shall promptly notify Administrative Agent of any event or
condition that could reasonably be expected to have a Material Adverse Effect in the financial
condition of Borrower and, if known by Borrower, any Guarantor, or in the construction progress of
the Improvements. Administrative Agent shall provide a copy of such Financial Statements to each
Lender upon receipt.

     2.10. Other Information. Borrower shall furnish to Administrative Agent from time to
time upon Administrative Agent’s request to the extent in Borrower’s possession or under
Borrower’s control (i) copies of any or all subcontracts entered into by contractors or
subcontractors and the names and addresses of all persons or entities with whom Borrower or any
contractor has contracted for the construction of the Improvements or the furnishing of labor or
materials in connection therewith; (ii) copies of any or all contracts, bills of sale, statements,
receipts or other documents under which Borrower claims title to any materials, fixtures or
articles of personal property incorporated or to be incorporated into the Improvements or subject
to the lien of the Mortgage; (iii) a list of all unpaid bills for labor and materials with respect
to construction of the Improvements and copies of all invoices therefor; (iv) budgets of Borrower
and revisions thereof showing the estimated costs and expenses to be incurred in connection with
the completion of construction of the Improvements; (v) current or updated detailed Project
schedules or construction schedules; and (vi) such other information relating to Borrower,
Guarantors, the Improvements, the Property, or any indemnitor or other person or party connected
with Borrower, the Loan, the construction of the Improvements or any security for the Loan.

     2.11. Reports and Testing. Borrower shall (a) promptly deliver to Administrative
Agent copies of all reports, studies, inspections and tests made on the Land, the Improvements or
any materials to be incorporated into the Improvements; and (b) make such additional tests on the
Land, the Improvements or any materials to be incorporated into the Improvements as Administrative
Agent reasonably requires. Borrower shall immediately notify Administrative Agent of any report,
study, inspection or test that indicates any adverse condition relating to the Land, the
Improvements or any such materials.

PAGE 14

 

     2.12. Advertising by Lenders. At Administrative Agent’s request and at Borrower’s
expense, Borrower shall erect and maintain on the Property one or more advertising signs approved
by Administrative Agent indicating that the construction financing for the Property has been
provided by Lenders.

     2.13. Appraisal. Administrative Agent may obtain from time to time, an appraisal of
all or any part of the Property prepared in accordance with written instructions from
Administrative Agent by a third-party appraiser engaged directly by Administrative Agent. Each such
appraiser and appraisal shall be satisfactory to Administrative Agent (including satisfaction of
applicable regulatory requirements). The cost of any such appraisal shall be borne by Borrower if
such appraisal is the first appraisal in any calendar year and in all events if Administrative
Agent obtains such appraisal after the occurrence of a Default, and such cost is due and payable by
Borrower on demand and shall be secured by the Loan Documents. Administrative Agent shall provide a
copy of such Appraisal to each Lender upon receipt, and to Borrower subject to Borrower’s payment
for such Appraisal and delivery to Administrative Agent of a release and indemnity as to the
matters stated therein on Administrative Agent’s standard form
document.

     2.14. Payment of Withholding Taxes. Borrower shall not use, or knowingly permit any
contractor or subcontractor to use, any portion of the proceeds of any Loan advance to pay the
wages of employees unless a portion of the proceeds or other funds are also used to make timely
payment to or deposit with (a) the United States of all amounts of tax required to be deducted and
withheld with respect to such wages under the Code, and (b) any state and/or local Tribunal or
agency having jurisdiction of all amounts of tax required to be deducted and withheld with respect
to such wages under any applicable state and/or local Laws.

     2.15 ERISA and Prohibited Transaction Taxes. As of the date hereof and throughout the
term of this Loan Agreement, (a) Borrower is not and will not be (i) an “employee benefit plan,”
as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”): or (ii) a “plan” within the meaning of Section 4975(e) of the Internal Revenue
Code of 1986, as amended from time to time (the “Code”); (b) the assets of Borrower do not and
will not constitute “plan assets” within the meaning of the United States Department of Labor
Regulations set forth in 29 C.F.R. §2510.3-101; (c) Borrower is not and will not be a
“governmental plan” within the meaning of Section 3(32) of ERISA; (d) transactions by or with
Borrower are not and will not be subject to state statutes applicable to Borrower regulating
investments of fiduciaries with respect to governmental plans; and (e) Borrower shall not engage
in any transaction which would cause any obligation, or action taken or to be taken, hereunder (or
the exercise by Administrative Agent of any of Lender’s rights under this Agreement, any Note or
the other Loan Documents) to be a non-exempt (under a statutory or administrative class exemption)
prohibited transaction under ERISA or Section 4975 of the Code. Borrower further agrees to deliver
to Administrative Agent such certifications or other evidence of compliance with the provisions of
this Section 2.15 as Administrative Agent may from time to time request.

     2.16 Certificate of Deposit. As additional security for the Obligations and a
condition for the closing of the Loan, pursuant to the terms and provisions of a separate
assignment agreement, Borrower has transferred and assigned to Administrative Agent for the
ratable benefit of Administrative Agent and Lenders and grants a security interest in all of
Borrower’s right, title and interest, in and to a certificate of deposit (the “Certificate of
Deposit”) in the amount of FIVE MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS
($5,500,000.00) issued by Administrative Agent in the name of Borrower.

     2.17 TG Development Net Worth Requirement. Until all of the Obligations are paid in
full, Borrower shall cause TG Development to maintain a minimum book net worth, as determined by
the generally accepted accounting principles, of ONE HUNDRED AND FIFTY MILLION AND NO/100 DOLLARS
($150,000,000.00). It is acknowledged that a component of TG Development’s book net worth is
derived from its indirect ownership, through one or more subsidiaries, of certain unsold
residential condominium inventory (the “Condominium Inventory”). In connection with its
testing of TG Development’s book net worth, Administrative Agent, in its sole discretion, shall
have the right to obtain updated appraisals of the Condominium Inventory prepared by appraisers
selected by Administrative Agent (at Borrower’s expense with respect to one such appraisal each
year, or for all such appraisals if a Default should occur). Further Borrower covenants and agrees
that TG Development shall not (a) incur contingent liability in an aggregate amount exceeding
TWENTY FIVE MILLION AND NO/100 DOLLARS ($25,000,000.00) other than the Loan without the prior
written consent of Lender which consent Lender may withhold in its sole and absolute discretion;
provided, however, that any guaranties of liabilities of subsidiaries of

PAGE 15

 

TG Development which are taken into account when computing the book net worth (by reductions to
book net worth in amounts equal to the amount of such guarantied liabilities), as provided above,
shall be permitted and shall be excluded from the aforesaid limit on contingent liabilities;
provided further that there shall be no restriction on contingent liability incurred by TG
Development in connection with any loan made for the acquisition or development of income
producing commercial real estate; and (b) transfer any of its assets without the prior written
consent of Lender in its sole and absolute discretion, except (i) in the ordinary course of
business for fair value; or (ii) to any unrelated third party for fair and reasonably equivalent
value; or (iii) to an entity that is wholly owned (directly or indirectly) by TG Development.

ARTICLE 3 — REPRESENTATIONS AND WARRANTIES

     To induce Lenders to make the Loan, Borrower hereby represents and warrants to Administrative
Agent and Lenders that except as otherwise disclosed to Administrative Agent in writing (a)
Borrower has complied with any and all Laws and regulations concerning its organization, existence
and the transaction of its business, and has the right and power to own the Property and to develop
the Improvements as contemplated in this Agreement and the other Loan Documents; (b) Borrower is
authorized to execute, deliver and perform all of its obligations under the Loan Documents; (c) the
Loan Documents are valid and binding obligations of Borrower; (d) Borrower is not in violation of
any Law, regulation or ordinance, or any order of any court or Tribunal, and no provision of the
Loan Documents violates any applicable Law, any covenants or restrictions affecting the Property,
any order of any court or Tribunal or any contract or agreement binding on Borrower or the
Property; (e) to the extent required by applicable Law, Borrower and Guarantors have filed all
necessary tax returns and reports and have paid all taxes and governmental charges thereby shown to
be owing; (f) the Plans are complete in all material respects, contain all necessary detail and are
adequate for construction of the Improvements, are satisfactory to Borrower, have been approved by
all applicable governmental authorities, have been accepted by each contractor which has entered
into a contract relating to construction of the Improvements, and comply with the Loan Documents
and all applicable Laws, restrictive covenants, and governmental requirements, rules, and
regulations; (g) the Land is not included under any unity of title or similar covenant with other
lands not encumbered by the Mortgage, and constitutes a separate tax lot or lots with a separate
tax assessment or assessments for the Land and Improvements, independent of those for any other
lands or improvements; (h) the Land and Improvements comply with all Laws and governmental
requirements, including all subdivision and platting requirements, without reliance on any
adjoining or neighboring property; (i) the Plans do, and the Improvements when constructed will,
comply with all legal requirements regarding access and facilities for handicapped or disabled
persons; (j) Borrower has not directly or indirectly conveyed, assigned or otherwise disposed of or
transferred (or agreed to do so) any development rights, air rights or other similar rights,
privileges or attributes with respect to the Property, including those arising under any zoning or
land use ordinance or other Law or governmental requirement; (k) in Borrower’s reasonable opinion,
the construction schedule for the Project is realistic and the Completion Date is a reasonable
estimate of the time required to complete the Project; (1) the Financial Statements delivered to
Administrative Agent are true, correct, and complete in all material respects, and there has been
no event or condition that could reasonably be expected to have a Material Adverse Effect on
Borrower’s or any of the Guarantors’ financial condition from the financial condition of Borrower
or Guarantors (as the case may be) indicated in such Financial Statements; (m) all utility services
necessary for the development of the Land and the construction of the Improvements and the
operation thereof for their intended purpose are available at the boundaries of the Land, including
electric and natural gas facilities, telephone service, water supply, storm and sanitary sewer
facilities; (n) except as otherwise provided for in the Loan Documents, the Borrower has made no
contract or arrangement of any kind the performance of which by the other party thereto would give
rise to a lien on the Property; (o) the current and anticipated use of the Property complies with
all applicable zoning ordinances, regulations and restrictive covenants affecting the Land without
the existence of any variance, non-complying use, nonconforming use or other special exception, all
use restrictions of any Tribunal having jurisdiction have been satisfied, and no violation of any
Law or regulation exists with respect thereto; (p) attached hereto as Exhibit “J” is a list
of all bonds required in connection with completion of the Improvements, and to the best of
Borrower’s knowledge, no other bonds or other security are currently required or will be required
prior to completion of the Improvements; and (q) prior to the recordation of the Mortgage, except
as disclosed to Administrative Agent in writing, no work of any kind (including destruction or
removal of any existing improvements, site work, clearing, grading, grubbing, draining or fencing
of the Land) has been or will be commenced or performed on the Land, no equipment or material has
been or will be delivered to or placed upon the Land for any purpose whatsoever, and no contract
(or memorandum or affidavit thereof) for the supplying of labor, materials, or services for the
design or construction of the Improvements, or the surveying of the Land or Improvements, nor any
affidavit or notice of commencement of construction of the Improvements, has been or

PAGE 16

 

will be executed or recorded, which could cause a mechanic’s or materialman’s lien or similar lien
to achieve priority over the Mortgage or the rights of Administrative Agent and Lenders thereunder.

ARTICLE 4 — DEFAULT AND REMEDIES

     4.1 Events of Default. The occurrence of any one of the following shall be a
default under this
Agreement (“Default”): (a) any of the Indebtedness is not paid when due, whether on the
scheduled due date or upon acceleration, maturity or otherwise; (b) any covenant or agreement in
this Agreement (other than covenants to pay the Indebtedness and other Defaults expressly listed in
this Section with a different notice and cure period) is not fully and timely performed, observed
or kept or any representation or warranty given by the Borrower was untrue when given and is not
corrected within thirty (30) days after written notice thereof is given to the Borrower by the
Administrative Agent or within sixty (60) days if such matter cannot reasonably be cured within
thirty (30) days, so long as a cure is being diligently and continuously pursued; (c) the
occurrence of a Default under any other Loan Document (taking into account any applicable notice
and cure period set forth in such Loan Document); (d) the execution and/or filing of any affidavit
of commencement stating construction on the Land actually commenced prior to the date on which the
Mortgage was duly filed for record and any mechanics liens or other title defect resulting from the
filing of any affidavit of commencement which is a lien senior in priority to the Mortgage is not
cleared to the Administrative Agent’s satisfaction within twenty (20) days after written notice
thereof is given to the Borrower by the Administrative Agent; (e) construction of the Improvements
ceases for more than ten (10) consecutive days except for Excusable Delays; (f) the construction of
the Improvements, or any materials for which an advance has been requested, fails to comply with
the Plans, the Loan Documents, any Laws or governmental requirements, or any applicable restrictive
covenants and such noncompliance is not cured within a period of thirty (30) days after written
notice thereof from Administrative Agent to Borrower or within sixty (60) days if such matter
cannot reasonably be cured within thirty (30) days so long as a cure is being diligently and
continuously pursued; (g) Borrower fails to satisfy any condition precedent to the obligation of
Lenders to make an advance within thirty (30) days after written notice thereof is given to the
Borrower by the Administrative Agent or within sixty (60) days if such matter cannot reasonably be
cured within thirty (30) days so long as a cure is being diligently and continuously pursued; (h)
construction of the Improvements is abandoned, Administrative Agent reasonably determines that
construction of the Improvements in accordance with this Agreement will not be completed on or
before the Completion Date, or Borrower fails to substantially complete construction of the
Improvements and obtain all applicable permits, licenses, certificates and approvals including, but
not limited to, a final and unconditional certificate of occupancy (or local equivalent) from the
applicable governmental authority in accordance with this Agreement on or before the Completion
Date; (i) any required permit, license, certificate or approval with respect to the Property lapses
or ceases to be in full force and effect and is not replaced or renewed within thirty (30) days
after such lapse or within sixty (60) days if such matter cannot reasonably be cured within thirty
(30) days so long as a cure is being diligently and continuously pursued; (j) a Borrower’s Deposit
is not made with Administrative Agent within ten (10) days after Administrative Agent’s request
therefor in accordance with Section 1.5; (k) construction is enjoined or Borrower,
Administrative Agent or any Lender is enjoined or prohibited from performing any of its respective
obligations under any of the Loan Documents and such injunction is not released or lifted within
ten (10) days of its imposition; (I) the owner of the Property enters into any lease of part or all
of the Property which does not comply with the Loan Documents and such matter is not remedied
within thirty (30) days after written notice thereof is given to the Borrower by the Administrative
Agent or within sixty (60) days if such matter cannot reasonably be cured within thirty (30) days
so long as cure is being diligently and continuously pursued; (m) a lien for the performance of
work or the supply of materials which is established against the Property, or any stop notice
served on Borrower, the general contractor, Administrative Agent or a Lender, remains unsatisfied
or unbonded for a period of twenty (20) days after the date of filing or service; (n) the
occurrence of any condition or situation which, in the sole determination of Administrative Agent,
constitutes a danger to or impairment of the Property or the lien of the Mortgage, if such
condition or situation is not remedied within fifteen (15) days after written notice to the
Borrower thereof; (o) the entry of a final and non-appealable judgment against Borrower or any
Guarantor of more than One Hundred Thousand Dollars ($100,000.00) which is not paid in full or
bonded within fifteen (15) days or the issuance of any attachment, sequestration, or similar writ
levied upon any of its property which is not discharged within a period of fifteen (15) days; (p)
Administrative Agent determines that an event or condition that could reasonably be expected to
have a Material Adverse Effect has occurred in the financial condition of Borrower or any Guarantor
or in the condition of the Property and such matter is not remedied within thirty (30) days after
written notice thereof is given to the Borrower by the Administrative Agent or within sixty (60)
days if such matter cannot reasonably be cured within thirty (30) days so long as a cure is being
diligently and continuously pursued; (q) the Property is no

PAGE 17

 

longer leased to Skechers under terms and conditions of the Lease; (r) the dissolution or
insolvency of Borrower or any Guarantor and such matter is not remedied within thirty (30) days
after written notice thereof is given to the Borrower by the Administrative Agent or within sixty
(60) days if such matter cannot reasonably be cured within thirty (30) days so long as a cure is
being diligently and continuously pursued; (s) a default occurs under any other Loan Document which
is not cured within any applicable notice and cure period provided therein; (t) TG Development
fails to comply with the net worth requirement set forth in Section 2.17 of this Agreement
and such matter is not remedied within thirty (30) days after written notice thereof is given to
the Borrower by the Administrative Agent or within sixty (60) days if such matter cannot reasonably
be cured within thirty (30) days so long as a cure is being diligently and continuously pursued;
(u) the failure of Borrower to have satisfied the conditions set forth in Section 1.15(h)
of this Agreement within one hundred eighty (180) days from the date hereof; and (v) the transfer
by Borrower, any Guarantor, or any Affiliate of Borrower or any Guarantor of any property or asset
to TGD Holdings, LLC, a Delaware limited liability company.

     4.2 Remedies. Upon a Default, Administrative Agent may with the consent of, and shall
at the direction of the Required Lenders, without notice, exercise any and all rights and remedies
afforded by this Agreement, the other Loan Documents, Law, equity or otherwise, including (a)
declaring any and all Indebtedness immediately due and payable; (b) reducing any claim to
judgment; or (c) obtaining appointment of a receiver (to which Borrower hereby consents) and/or
judicial or nonjudicial foreclosure under the Mortgage;
provided, however, that upon a
Default, Administrative Agent at its election may (but shall not be obligated to) without the
consent of and shall at the direction of the Required Lenders, without notice, do any one or more
of the following: (a) terminate Lenders’ Commitment to lend and any obligation to disburse any
Borrower’s Deposit hereunder; (b) in its own name on behalf of the Lenders or in the name of
Borrower, enter into possession of the Property, perform all work necessary to complete
construction of the Improvements substantially in accordance with the Plans (as modified as deemed
necessary by Administrative Agent), the Loan Documents, and all applicable Laws, governmental
requirements and restrictive covenants, and continue to employ Borrower’s architect, engineer and
any contractor pursuant to the applicable contracts or otherwise; or (c) set-off and apply, to the
extent thereof and to the maximum extent permitted by Law, any and all deposits, funds, or assets
at any time held and any and all other indebtedness at any time owing by Administrative Agent or
any Lender to or for the credit or account of Borrower against any Indebtedness. Further, L/C
Issuer may, with the approval of Administrative Agent on behalf of the Required Lenders, demand
immediate payment by Borrower of an amount equal to the aggregate amount of all outstanding
Letters of Credit to be held in a deposit account with Administrative Agent to secure amounts due
from Borrower under Letters of Credit and when no Letters of Credit exist, the Loan.

     Borrower hereby appoints Administrative Agent as Borrower’s attorney-in-fact, which power of
attorney is irrevocable and coupled with an interest, with full power of substitution if
Administrative Agent so elects, to do any of the following in Borrower’s name upon the occurrence
of a Default: (i) use such sums as are necessary, including any proceeds of the Loan and any
Borrower’s Deposit, make such changes or corrections in the Plans, and employ such architects,
engineers, and contractors as may be required, or as Lenders may otherwise consider desirable, for
the purpose of completing construction of the Improvements substantially in accordance with the
Plans (as modified as deemed necessary by Administrative Agent), the Loan Documents, and all
applicable Laws, governmental requirements and restrictive covenants; (ii) execute all
applications and certificates in the name of Borrower which may be required for completion of
construction of the Improvements; (iii) endorse the name of Borrower on any checks or drafts
representing proceeds of any insurance policies, or other checks or instruments payable to
Borrower with respect to the Property; (iv) do every act with respect to the construction of the
Improvements that Borrower may do; (v) prosecute or defend any action or proceeding incident to
the Property, (vi) pay, settle, or compromise all bills and claims so as to clear title to the
Property; and (vii) take over and use all or any part of the labor, materials, supplies and
equipment contracted for, owned by, or under the control of Borrower, whether or not previously
incorporated into the Improvements. Any amounts expended by Administrative Agent itself or on
behalf of Lenders to construct or complete the Improvements or in connection with the exercise of
its remedies herein shall be deemed to have been advanced to Borrower hereunder as a demand
obligation owing by Borrower to Administrative Agent or Lenders as applicable and shall constitute
a portion of the Indebtedness, regardless of whether such amounts exceed any limits for
Indebtedness otherwise set forth herein. Neither Administrative Agent nor Lenders shall have any
liability to Borrower for the sufficiency or adequacy of any such actions taken by Administrative
Agent.

     No delay or omission of Administrative Agent or Lenders to exercise any right, power or
remedy accruing upon the happening of a Default shall impair any such right, power or remedy or
shall be construed to be a waiver of

PAGE 18

 

any such Default or any acquiescence therein. No delay or omission on the part of Administrative
Agent or Lenders to exercise any option for acceleration of the maturity of the Indebtedness, or
for foreclosure of the Mortgage following any Default as aforesaid, or any other option granted to
Administrative Agent and Lenders hereunder in any one or more instances, or the acceptances by
Administrative Agent or Lenders of any partial payment on account of the Indebtedness, shall
constitute a waiver of any such Default, and each such option shall remain continuously in full
force and effect. No remedy herein conferred upon or reserved to Administrative Agent and/or
Lenders is intended to be exclusive of any other remedies provided for in any Note or any of the
other Loan Documents, and each and every such remedy shall be cumulative, and shall be in addition
to every other remedy given hereunder, or under any Note or any of the other Loan Documents, or now
or hereafter existing at Law or in equity or by statute. Every right, power and remedy given to
Administrative Agent and Lenders by this Agreement, any Note or any of the other Loan Documents
shall be concurrent, and may be pursued separately, successively or together against Borrower, or
the Property or any part thereof, or any personal property granted as security under the Loan
Documents, and every right, power and remedy given by this Agreement, any Note or any of the other
Loan Documents may be exercised from time to time as often as may be deemed expedient by the
Required Lenders.

     Regardless of how a Lender may treat payments received from the exercise of remedies under
the Loan Documents for the purpose of its own accounting, for the purpose of computing the
Indebtedness, payments shall be applied as elected by Lenders. No application of payments will
cure any Event of Default, or prevent acceleration, or continued acceleration, of amounts payable
under the Loan Documents, or prevent the exercise, or continued exercise, of rights or remedies of
Administrative Agent and Lenders hereunder or thereunder or at Law or in equity.

ARTICLE 5 — ADMINISTRATIVE AGENT

     5.1. Appointment and Authorization of Administrative Agent.

          (a) Each
Lender hereby irrevocably (subject to Section 5.9) appoints, designates and
authorizes Administrative Agent to take such action on its behalf under the provisions of this
Agreement and each other Loan Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Loan Document, together with
such powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Loan Document, Administrative Agent shall not have any
duties or responsibilities, except those expressly set forth herein, nor shall Administrative
Agent have or be deemed to have any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against Administrative Agent. Without
limiting the generality of the foregoing sentence, the use of the term “agent” herein and in the
other Loan Documents with reference to Administrative Agent is not intended to connote any
fiduciary or other implied (or express) obligations arising under agency doctrine of any
applicable Law. Instead, such term is used merely as a matter of market custom, and is intended to
create or reflect only an administrative relationship between independent contracting parties.

          (b) L/C Issuer shall act on behalf of Lenders with respect to any Letters of Credit issued by
it and the documents associated therewith, and that L/C Issuer shall have all of the benefits and
immunities (i) provided to Administrative Agent in this Article with respect to any acts taken or
omissions suffered by L/C Issuer in connection with Letters of Credit issued by it or proposed to
be issued by it and the applications and agreements for letters of credit pertaining to such
Letters of Credit as fully as if the term “Administrative Agent” as used in this Article and in
the definition of “Agent — Related Person” included L/C Issuer with respect to such acts or
omissions, and (ii) as additionally provided in this Agreement with respect to L/C Issuer.

          (c) No individual Lender or group of Lenders or L/C Issuer shall have any right to amend or
waive, or consent to the departure of any party from any provision of any Loan Document, or secure
or enforce the obligations of Borrower or any other party pursuant to the Loan Documents, or
otherwise. All such rights, on behalf of Administrative Agent, L/C Issuer, or any Lender or
Lenders, shall be held and exercised solely by and at the option of Administrative Agent for the
pro rata benefit of the Lenders. Such rights, however, are subject to the rights of L/C Issuer,
Lender or Lenders, as expressly set forth in this Agreement, to approve matters or direct
Administrative Agent to take or refrain from taking action as set forth in this Agreement. Except
as expressly otherwise provided in this Agreement or the other Loan Documents, Administrative
Agent shall have and may use its sole discretion with respect to exercising or refraining from
exercising any discretionary rights, or taking or

PAGE 19

 

refraining from taking any actions which Administrative Agent is expressly entitled to exercise or
take under this Agreement and the other Loan Documents, including, without limitation, (i) the
determination if and to what extent matters or items subject to Administrative Agent’s
satisfaction are acceptable or otherwise within its discretion, (ii) the making of Administrative
Agent Advances, and (iii) the exercise of remedies pursuant to,
but subject to, Article 4 or pursuant to any other Loan Document, if applicable, and any action so taken or not taken shall
be deemed consented to by Lenders.

          (d) In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial proceeding relative to
Borrower or any Guarantor, no individual Lender or group of Lenders or L/C Issuer shall have the
right, and the Administrative Agent (irrespective of whether the principal of the Loan or any L/C
Obligation shall then be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall
be exclusively entitled and empowered on behalf of itself, L/C Issuer, and the Lenders, by
intervention in such proceeding or otherwise:

          (i) to file and prove a claim for the whole amount of the principal and
interest
owing and unpaid in respect of the Loan, any L/C Obligations and all other Obligations that
are owing and unpaid and to file such other documents as may be necessary or advisable in
order to have the claims of the Lenders and the Administrative Agent (including any claim
for the reasonable compensation, expenses, disbursements and advances of the Lenders and
the Administrative Agent and their respective agents and counsel and all other amounts due
the Lenders and the Administrative Agent under Section 6.10 and Exhibit “K”
allowed in such judicial proceeding; and

          (ii) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Lender to make such payments to
Administrative Agent and, in the event that Administrative Agent shall consent to the making of
such payments directly to Lenders, to pay to Administrative Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of Administrative Agent and its agents and
counsel, and any other amounts due Administrative Agent under Section 6.10.

Nothing contained herein shall be deemed to authorize Administrative Agent to authorize or consent
to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment
or composition affecting the Obligations or the rights of the Lenders except as approved by
Required Lenders or to authorize Administrative Agent to vote in respect of the claims of Lenders
except as approved by Required Lenders in any such proceeding.

     5.2. Delegation of Duties. Administrative Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and
shall be entitled to advice of counsel and other consultant experts concerning all matters
pertaining to such duties. Administrative Agent shall not be responsible for the negligence or
misconduct of any agent or attorney-in-fact that it selects with reasonable care.

     5.3.
Liability of Administrative Agent. No Agent-Related Persons shall (i) be liable
for any action taken or omitted to be taken by any of them under or in connection with this
Agreement or any other Loan Document or the transactions contemplated hereby (except for its own
gross negligence or willful misconduct), or (ii) be responsible in any manner to any of Lenders
for any recital, statement, representation or warranty made by Borrower or any subsidiary or
Affiliate of Borrower, or any officer thereof, contained herein or in any other Loan Document, or
in any certificate, report, statement or other document referred to or provided for in, or
received by Administrative Agent under or in connection with, this Agreement or any other Loan
Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of Borrower or any other party to any
Loan Document to perform its obligations hereunder or thereunder. No Agent-Related Person shall be
under any obligation to any Lender to ascertain or to inquire as to the observance or performance
of any of the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of Borrower, Guarantors, or any of their
Affiliates.

PAGE 20

 

     5.4. Reliance by Administrative Agent. Administrative Agent shall be entitled to rely,
and shall be fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message, statement or other
document or conversation believed by it to be genuine and correct and to have been signed, sent or
made by the proper person or persons, and upon advice and statements of legal counsel (including
counsel to any party to the Loan Documents), independent accountants and other experts selected by
Administrative Agent. Administrative Agent shall be fully justified in failing or refusing to take
any action under this Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of the Required Lenders or all Lenders if required hereunder as it deems
appropriate and, if it so requests, it shall first be indemnified to its satisfaction by Lenders
against any and all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance
with a request or consent of the Required Lenders or such greater number of Lenders as may be
expressly required hereby in any instance, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders. In the absence of written instructions from
the Required Lenders or such greater number of Lenders, as expressly required hereunder,
Administrative Agent may take or not take any action, at its discretion, unless this Agreement
specifically requires the consent of the Required Lenders or such greater number of Lenders.

     5.5. Notice of Default. Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default, unless Administrative Agent shall have received written
notice from a Lender or Borrower referring to this Agreement, describing such Default that
Administrative Agent determines will have a Material Adverse Effect. Administrative Agent will
notify Lenders of its receipt of any such notice. Administrative Agent shall take such action with
respect to such Default as may be requested by the Required Lenders in accordance
with Article 4; provided, however, that unless and until Administrative Agent has received any such
request, Administrative Agent may (but shall not be obligated to) take such action, or refrain
from taking such action, with respect to such Default as it shall deem advisable or in the best
interest of Lenders.

     5.6.
Credit Decision; Disclosure of Information by Administrative Agent.

          (a) Each Lender acknowledges that none of Agent-Related Persons has made any representation
or warranty to it, and that no act by Administrative Agent hereafter taken, including any consent
to and acceptance of any assignment or review of the affairs of Borrower and Guarantors, shall be
deemed to constitute any representation or warranty by any Agent-Related Person to any Lenders as
to any matter, including whether Agent-Related Persons have disclosed material information in
their possession. Each Lender represents to Administrative Agent that it has, independently and
without reliance upon any Agent-Related Person and based on such documents and information as it
has deemed appropriate, made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of Borrower and
Guarantors, and all applicable bank or other regulatory Laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and to extend credit
to Borrower and Guarantors hereunder. Each Lender also represents that it will, independently and
without reliance upon any Agent-Related Person and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis, appraisals and
decisions in taking or not taking action under this Agreement and the other Loan Documents, and to
make such investigations as it deems necessary to inform itself as to the business, prospects,
operations, property, financial and other condition and creditworthiness of Borrower and
Guarantors.

          (b) Administrative Agent upon its receipt shall provide each Lender such notices, reports and
other documents expressly required to be furnished to Lenders by Administrative Agent herein. To
the extent not already available to a Lender, Administrative Agent shall also provide the Lender
and/or make available for the Lender’s inspection during reasonable business hours and at the
Lender’s expense, upon the Lender’s written request therefor: (i) copies of the Loan Documents;
(ii) such information as is then in Administrative Agent’s possession in respect of the current
status of principal and interest payments and accruals in respect of the Loan; (iii) copies of all
current financial statements in respect of Borrower, any Guarantor or other person liable for
payment or performance by Borrower of any obligations under the Loan Documents, then in
Administrative Agent’s possession with respect to the Loan; and (iv) other current factual
information then in Administrative Agent’s possession with respect to the Loan and bearing on the
continuing creditworthiness of Borrower or any Guarantor, or any of their respective Affiliates;
provided that nothing contained in this Section shall impose any liability upon
Administrative Agent for its failure to provide a Lender any of such Loan Documents, information,
or financial statements, unless such failure constitutes willful misconduct or gross

PAGE 21

 

negligence on Administrative Agent’s part; and provided further that Administrative Agent
shall not be obligated to provide any Lender with any information in violation of Law or any
contractual restrictions on the disclosure thereof (provided such contractual restrictions shall
not apply to distributing to a Lender factual and financial information expressly required to be
provided herein). Except as set forth above, Administrative Agent shall not have any duty or
responsibility to provide any Lenders with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or creditworthiness of Borrower or
any Guarantor or any of their respective Affiliates which may come into the possession of any of
Agent-Related Persons.

     5.7. Indemnification of Administrative Agent. Whether or not the transactions
contemplated hereby are consummated, Lenders shall indemnify upon demand each Agent-Related Person
(to the extent not reimbursed by or on behalf of Borrower and without limiting the obligation of
Borrower to do so), pro rata, and hold harmless each Agent-Related Person from and against any and
all Indemnified Liabilities incurred by it; provided, however, that no Lender shall be
liable for the payment to any Agent-Related Person of any portion of such Indemnified Liabilities
to the extent determined in a final, non-appealable judgment by a court of competent jurisdiction
to have resulted from such Agent-Related Person’s own gross negligence or willful misconduct;
provided, however, that no action taken in accordance with the directions of the Required
Lenders shall be deemed to constitute gross negligence or willful misconduct for purposes of this
Section. Without limitation of the foregoing, to the extent that Administrative Agent is not
reimbursed by or on behalf of Borrower, each Lender shall reimburse Administrative Agent upon
demand for its ratable share of any costs or out-of-pocket expenses (including attorney fees)
incurred by Administrative Agent as described in Section 6.10. The undertaking in this
Section shall survive the payment of all Indebtedness hereunder and the resignation or replacement
of Administrative Agent.

     5.8. Administrative Agent in Individual Capacity. Administrative Agent, in its
individual capacity, and its Affiliates may make loans to, issue letters of credit for the account
of, accept deposits from, acquire equity interests in and generally engage in any kind of banking,
trust, financial advisory, underwriting or other business with any party to the Loan Documents and
their respective Affiliates as though Administrative Agent were not Administrative Agent hereunder
and without notice to or consent of Lenders. Lenders acknowledge that Bank of America, N.A. is the
L/C Issuer and Borrower and Bank of America, N.A. or its Affiliate have entered or may enter into
Swap Transactions. A portion of the Loan may be funded to honor Borrower’s payment obligations
under the terms of such Swap Transactions, and Lenders shall have no right to share in any portion
of such payments. Lenders acknowledge that, pursuant to such activities, Bank of America, N.A. or
its Affiliates may receive information regarding any party to the Loan Documents, or their
respective Affiliates (including information that may be subject to confidentiality obligations in
favor of such parties or such parties’ Affiliates) and acknowledge that Administrative Agent shall
be under no obligation to provide such information to them. With respect to its Pro Rata Share of
the Loan, Bank of America, N.A. shall have the same rights and powers under this Agreement as any
other Lenders and may exercise such rights and powers as though it were not Administrative Agent,
or party to Swap Transactions, and the terms “Lender” and “Lenders” include Bank of America, N.A.
in its individual capacity.

     5.9. Successor Administrative Agent. Administrative Agent may, and at the request of
the Required Lenders as a result of Administrative Agent’s gross negligence or willful misconduct
in performing its duties under this Agreement shall, resign as Administrative Agent upon 30 days’
notice to Lenders, and any such resignation by Administrative Agent shall also constitute its
resignation as L/C Issuer. If Administrative Agent resigns under this Agreement, the Required
Lenders shall appoint from among Lenders a successor administrative agent for Lenders, which
successor administrative agent shall be consented to by the Borrower at all times other than
during the existence of a Default (which consent of the Borrower shall not be unreasonably
withheld or delayed). If no successor administrative agent is appointed prior to the effective
date of the resignation of Administrative Agent, Administrative Agent may appoint, after
consulting with Lenders and Borrower, a successor administrative agent from among Lenders. Upon
the acceptance of its appointment as successor administrative agent hereunder, such successor
administrative agent shall succeed to all the rights, powers and duties of the retiring
Administrative Agent and L/C Issuer and the respective terms “Administrative Agent” and “L/C
Issuer” shall mean such successor administrative agent and L/C Issuer, and the retiring
Administrative Agent’s appointment, powers and duties as Administrative Agent shall be terminated
and the retiring L/C Issuer’s rights, powers and duties as such shall be terminated, without any
other or further act or deed on the part of such retiring L/C Issuer or any other Lender, other
than the obligation of the successor L/C Issuer to issue letters of credit in substitution for the
Letters of Credit, if any, outstanding at the time of such succession or to make other
arrangements satisfactory to the retiring L/C Issuer to effectively assume the obligations of the
retiring L/C Issuer with respect to such Letter of Credit. After any

PAGE 22

 

retiring Administrative Agent’s resignation hereunder as Administrative Agent, the provisions
of this Article and other applicable Sections of this Agreement shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Administrative Agent and L/C Issuer
under this Agreement. If no successor administrative agent has accepted appointment as
Administrative Agent and L/C Issuer by the date which is 30 days following a retiring
Administrative Agent’s notice of resignation, the retiring Administrative Agent’s resignation shall
nevertheless thereupon become effective and Lenders shall perform all of the duties of
Administrative Agent and L/C Issuer hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above. Notwithstanding the foregoing, however, Bank of
America, N.A. may not be removed as Administrative Agent at the request of the Required Lenders
unless Bank of America shall also simultaneously be replaced and fully released as “L/C Issuer”
hereunder pursuant to documentation in form and substance reasonably satisfactory to Bank of
America, N.A.

     5.10. Releases; Acquisition and Transfers of Collateral.

          (a) Lenders hereby irrevocably authorize Administrative Agent to transfer or release any lien
on, or after foreclosure or other acquisition of title by Administrative Agent on behalf of
Lenders to transfer or sell, any Loan collateral (i) upon the termination of the Commitments and
payment and satisfaction in full of all Indebtedness, (ii) constituting a release, transfer or
sale of a lien or Loan collateral if Borrower will certify to Administrative Agent that the
release, transfer or sale is permitted under this Agreement or the other Loan Documents (and
Administrative Agent may rely conclusively on any such certificate, without further inquiry); or
(iii) after foreclosure or other acquisition of title (1) for a purchase price of at least 90% of
the value indicated in the most recent appraisal of the collateral obtained by Administrative
Agent made in accordance with regulations governing Administrative Agent, less any reduction
indicated in the appraisal estimated by experts in such areas; or (2) if approved by the Required
Lenders.

          (b) If all or any portion of the Loan collateral is acquired by foreclosure or by deed in
lieu of foreclosure, Administrative Agent shall take title to the collateral in its name or by an
Affiliate of Administrative Agent, but for the benefit of all Lenders in their Pro Rata Shares on
the date of the foreclosure sale or recordation of the deed in lieu of foreclosure (the
“Acquisition Date”). Administrative Agent and all Lenders hereby expressly waive and relinquish
any right of partition with respect to any collateral so acquired. After any collateral is
acquired, Administrative Agent shall appoint and retain one or more persons (individually and
collectively, “Property Manager”) experienced in the management, leasing, sale and/or
dispositions of similar properties.

After consulting with the Property Manager, Administrative Agent shall prepare a written plan for
completion of construction (if required), operation, management, improvement, maintenance, repair,
sale and disposition of the Loan collateral and a budget for the aforesaid, which may include a
reasonable management fee payable to Administrative Agent (the “Business Plan”).
Administrative Agent will deliver the Business Plan not later than the sixtieth (60th) day after
the Acquisition Date to each Lender with a written request for approval of the Business Plan. If
the Business Plan is approved by the Required Lenders, Administrative Agent and the Property
Manager shall adhere to the Business Plan until a different Business Plan is approved by the
Required Lenders. Administrative Agent may propose an amendment to the Business Plan as it deems
appropriate, which shall also be subject to Required Lender approval. If the Business Plan (as may
be amended) proposed by Administrative Agent is not approved by the Required Lenders, (or if sixty
(60) days have elapsed following the Acquisition Date without a Business Plan being proposed by
Administrative Agent), any Lender may propose an alternative Business Plan, which Administrative
Agent shall submit to all Lenders for their approval. If an alternative Business Plan is approved
by the Required Lenders, Administrative Agent may appoint one of the approving Lenders to
implement the alternative Business Plan. Notwithstanding any other provision of this Agreement,
unless in violation of an approved Business Plan or otherwise in an emergency situation,
Administrative Agent shall, subject to subsection (a) of this Section, have the right but not the
obligation to take any action in connection with the Loan collateral (including those with respect
to property taxes, insurance premiums, completion of construction, operation, management,
improvement, maintenance, repair, sale and disposition), or any portion thereof.

          (c) Upon request by Administrative Agent or Borrower at any time, Lenders will confirm in
writing Administrative Agent’s authority to sell, transfer or release any such liens of particular
types or items of Loan collateral pursuant to this Section; provided, however, that (i)
Administrative Agent shall not be required to execute any document necessary to evidence such
release, transfer or sale on terms that, in Administrative Agent’s

PAGE 23

 

 

opinion, would expose Administrative Agent to liability or create any obligation or entail any
consequence other than the transfer, release or sale without recourse, representation or warranty,
and (ii) such transfer, release or sale shall not in any manner discharge, affect or impair the
obligations of Borrower other than those expressly being released.

          (d) If only two (2) Lenders (other than the L/C Issuer) exist at the time Administrative
Agent receives a purchase offer for Loan collateral for which one of the Lenders does not consent
within ten (10) Business Days after notification from Administrative Agent, the consenting Lender
may offer (“Purchase Offer”) to purchase all of non-consenting Lender’s right, title and
interest in the collateral for a purchase price equal to non-consenting Lender’s Pro Rata Share of
the net proceeds anticipated from such sale of such collateral (as reasonably determined by
Administrative Agent, including the undiscounted face principal amount of any purchase money
obligation not payable at closing) (“Net Proceeds”). Within ten (10) Business Days
thereafter the non-consenting Lender shall be deemed to have accepted such Purchase Offer unless
the non-consenting Lender notifies Administrative Agent that it elects to purchase all of the
consenting Lender’s right, title and interest in the collateral for a purchase price payable by
the non-consenting Lender in an amount equal to the consenting Lender’s Pro Rata Share of the Net
Proceeds. Any amount payable hereunder by a Lender shall be due on the earlier to occur of the
closing of the sale of the collateral or 90 days after the Purchase Offer, regardless of whether
the collateral has been sold.

     5.11. Application of Payments. Except as otherwise provided below with respect to
Defaulting Lenders, aggregate principal and interest payments, payments for Indemnified
Liabilities, and/or foreclosure or sale of the collateral, and net operating income from the
collateral during any period it is owned by Administrative Agent on behalf of the Lenders
(“Payments”) shall be apportioned pro rata among Lenders and payments of any fees (other
than fees designated for Administrative Agent’s separate account) shall, as applicable, be
apportioned pro rata among Lenders. Notwithstanding anything to the contrary in this Agreement,
all Payments due and payable to Defaulting Lenders shall be due and payable to and be apportioned
pro rata among Administrative Agent and Electing Lenders. Such apportionment shall be in the
proportion that the Defaulting Lender Payment Amounts paid by them bears to the total Defaulting
Lender Payment Amounts of such Defaulting Lender. Such apportionment shall be made until the
Administrative Agent and Lenders have been paid in full for the Defaulting Lender Payment Amounts.
All pro rata Payments shall be remitted to Administrative Agent and all such payments not
constituting payment of specific fees, and all proceeds of the Loan collateral received by
Administrative Agent, shall be applied first, to pay any fees, indemnities, costs,
expenses (including those in Section 5.7) and reimbursements then due to Administrative
Agent from Borrower; second, to pay any fees, costs, expenses and reimbursements then due
to Lenders from Borrower; third, to pay pro rata interest and late charges due in respect
of the Indebtedness and Administrative Agent Advances; fourth, to pay or prepay pro rata
principal of, and to secure any outstanding Letters of Credit for, the Indebtedness and
Administrative Agent Advances; fifth, to pay any indebtedness of Borrower under Swap
Transactions; and last, to Borrower, if required by law, or Lenders in Pro Rata Share
percentages equal to their percentages at the termination of the Aggregate Commitments.

     Notwithstanding the above, subject to Section 3 of Exhibit “K”, amounts used
to Cash Collateralize the aggregate undrawn amount of Letters of Credit above shall be applied to
satisfy drawings under such Letters of Credit as they occur. If any amount remains on deposit as
Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining
amount shall be applied to the other Indebtedness, if any, in the order set forth above.

     5.12. Benefit. The terms and conditions of this Article are inserted for the sole
benefit of Administrative Agent and Lenders; the same may be waived in whole or in part, with or
without terms or conditions, without prejudicing Administrative Agent’s or Lenders’ rights to later
assert them in whole or in part.

ARTICLE 6 — GENERAL TERMS AND CONDITIONS

     6.1. Consents; Borrower’s Indemnity. Except where otherwise expressly provided in the
Loan Documents, in any instance where the approval, consent or the exercise of Administrative
Agent’s or Lenders’ judgment or discretion (or sole discretion) is required, the granting or
denial of such approval or consent and the exercise of such judgment shall be (a) within the sole
discretion of Administrative Agent or Lenders; (b) deemed to have been given only by a specific
writing intended for the purpose given and executed by Administrative Agent or Lenders; and (c)
free from any limitation or requirement of reasonableness. Notwithstanding any approvals or

PAGE 24

 

 

consents by Administrative Agent or Lenders, neither Administrative Agent nor any Lender has any
obligation or responsibility whatsoever for the adequacy, form or content of the Plans, the Budget,
any appraisal, any contract, any change order, any lease, or any other matter incident to the
Property or the construction of the Improvements. Administrative Agent’s or Lenders’ acceptance of
an assignment of the Plans for the benefit of Administrative Agent and Lenders shall not constitute
approval of the Plans. Any inspection, appraisal or audit of the Property or the books and records
of Borrower, or the procuring of documents and financial and other information, by or on behalf of
Administrative Agent shall be for Administrative Agent’s and Lenders’ protection only, and shall
not constitute an assumption of responsibility to Borrower or anyone else with regard to the
condition, value, construction, maintenance or operation of the Property, or relieve Borrower of
any of Borrower’s obligations. Borrower has selected all surveyors, architects, engineers,
contractors, materialmen and all other persons or entities furnishing services or materials to the
Project. Neither Administrative Agent nor any Lender has any duty to supervise or to inspect the
Property or the construction of the Improvements nor any duty of care to Borrower or any other
person to protect against, or inform Borrower or any other person of the existence of, negligent,
faulty, inadequate or defective design or construction of the Improvements. Neither Administrative
Agent nor any Lender shall be liable or responsible for, and Borrower shall indemnify each
Agent-Related Person and each Lender and their respective Affiliates, directors, officers, agents,
attorneys and employees (collectively, the “Indemnitees”) from and against: (a) any claim,
action, loss or cost (including reasonable attorney’s fees and costs) arising from or relating to
(i) any defect in the Property or the Improvements, (ii) the performance or default of Borrower,
Borrower’s surveyors, architects, engineers, contractors, the Construction Consultant, or any other
person, (iii) any failure to construct, complete, protect or insure the Improvements, (iv) the
payment of costs of labor, materials, or services supplied for the construction of the
Improvements, (v) in connection with the protection and preservation of the Loan collateral
(including those with respect to property taxes, insurance premiums, completion of construction,
operation, management, improvements, maintenance, repair, sale and disposition), or (vi) the
performance of any obligation of Borrower whatsoever; (b) any and all liabilities, obligations,
losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses and
disbursements (including reasonable attorney fees and costs) of any kind or nature whatsoever which
may at any time be imposed on, incurred by or asserted against any such Indemnitee in any way
relating to or arising out of or in connection with (i) the execution, delivery, enforcement,
performance or administration of any Loan Document or any other agreement, letter or instrument
delivered in connection with the transactions contemplated thereby or the consummation of the
transactions contemplated thereby, (ii) any Commitment or Loan or Letter of Credit or the use or
proposed use of the proceeds therefrom (including any refusal by the L/C Issuer to honor a demand
for payment under a Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), or (iii) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory (including any investigation of, preparation for, or defense of
any pending or threatened claim, investigation, litigation or proceeding) and regardless of whether
any Indemnitee is a party thereto; (c) any and all claims, demands, actions or causes of action
arising out of or relating to the use of Information (as defined in Section 6.6) or other
materials obtained through internet, Intralinks or other similar information transmission systems
in connection with this Agreement; and (d) any and all liabilities, losses, costs or expenses
(including attorney fees and costs) that any Indemnitee suffers or incurs as a result of the
assertion of any foregoing claim, demand, action, cause of action or proceeding, or as a result of
the preparation of any defense in connection with any foregoing claim, demand, action, cause of
action or proceeding, in all cases, whether or not an Indemnitee is a party to such claim, demand,
action, cause of action or proceeding and whether it is defeated, successful or withdrawn, (all the
foregoing, collectively, the “Indemnified Liabilities”); provided, however, that
such indemnity shall not, as to any Indemnitee, be available to the extent that such liabilities,
obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs,
expenses or disbursements are determined by a court of competent jurisdiction by final and
non-appealable judgment to have resulted from the gross negligence or willful misconduct of such
Indemnitee. Further, Borrower shall not be obligated to indemnify any of the Indemnitees from
matters which relate solely to disputes or disagreements among Lenders and/or Administrative Agent,
or any default by any of the Lenders and/or Administrative Agent of any of their respective
obligations under this Agreement to Borrower or to each other. Nothing, including any advance or
acceptance of any document or instrument, shall be construed as a representation or warranty,
express or implied, to any party by Administrative Agent or Lenders. Inspection shall not
constitute an acknowledgment or representation by Administrative Agent, any Lender or the
Construction Consultant that there has been or will be compliance with the Plans, the Loan
Documents, or applicable Laws, governmental requirements and restrictive covenants, or that the
construction is free from defective materials or workmanship. Inspection, whether or not followed
by notice of Default, shall not constitute a waiver of any Default then existing, or a waiver of
Administrative Agent’s and Lenders’ right thereafter to insist that the Improvements be

PAGE 25

 

 

constructed in accordance with the Plans, the Loan Documents, and all applicable Laws, governmental
requirements and restrictive covenants. Administrative Agent’s failure to inspect shall not
constitute a waiver of any of Administrative Agent’s or Lenders’ rights under the Loan Documents or
at Law or in equity.

     6.2. Miscellaneous. This Agreement may be executed in several counterparts, all of
which are identical, and all of which counterparts together shall constitute one and the same
instrument. The Loan Documents are for the sole benefit of Administrative Agent, Lenders and
Borrower and are not for the benefit of any third party. A determination that any provision of
this Agreement is unenforceable or invalid shall not affect the enforceability or validity of any
other provision and the determination that the application of any provision of this Agreement to
any person or circumstance is illegal or unenforceable shall not affect the enforceability or
validity of such provision as it may apply to other persons, entities or circumstances. Time shall
be of the essence with respect to Borrower’s obligations under the Loan Documents. This Agreement,
and its validity, enforcement and interpretation, shall be governed by Florida law (without regard
to any conflict of Laws principles) and applicable United States federal Law.

     6.3. Notices.

          6.3.1 Modes of Delivery; Changes. Except as otherwise provided herein, all notices,
demands, requests, and other communications required or which any party desires to give under this
Agreement or any other Loan Document shall be in writing. Unless otherwise specifically provided
in such other Loan Document, all such notices and other communications shall be deemed
sufficiently given or furnished if (a) delivered by personal delivery; (b) by courier; (c) by
registered or certified United States mail, postage prepaid; (d) by overnight delivery by a
nationally recognized overnight delivery service; (e) by facsimile addressed to the party to whom
directed with, subject to Subsection 6.3.2 below, a confirmatory original delivered by one
of the methods set forth in (a) through (d); or (f) by electronic mail addressed to Borrower, at
the addresses set forth at the end of this Agreement or to Administrative Agent, the L/C Issuer or
Lenders at the addresses specified for notices on the Schedule of Lenders (unless changed by
similar notice in writing given by the particular party whose address is to be changed) with a
confirmatory original delivered by one of the methods set forth in (a) through (d). Any such
notice or communication shall be deemed to have been given and received either at the time of
personal delivery or, in the case of courier or mail, as of the date of first attempted delivery
at the address and in the manner provided herein, or, in the case of facsimile or e-mail, upon
receipt; provided, however, that service of a notice required by any applicable statute
shall be considered complete when the requirements of that statute are met. Notwithstanding the
foregoing, no notice of change of address shall be effective except upon actual receipt. This
Section shall not be construed in any way to affect or impair any waiver of notice or demand
provided in any Loan Document or to require giving of notice or demand to or upon any person in
any situation or for any reason.

          6.3.2 Effectiveness of Facsimile Documents and Signatures. Loan Documents may be
transmitted and/or signed by facsimile. The effectiveness of any such documents and signatures
shall, subject to applicable Law, have the same force and effect as manually-signed originals and
shall be binding on all parties to the Loan Documents. The Administrative Agent may also require
that any such documents and signatures be confirmed by a manually-signed original thereof;
provided, however, that the failure to request or deliver the same shall not limit the
effectiveness of any facsimile document or signature.

          6.3.3 Intentionally Omitted.

          6.3.4 Reliance by Administrative Agent and Lenders. Administrative Agent and Lenders
shall be entitled to rely and act upon any notices (including telephonic Loan advance notices)
purportedly given by or on behalf of Borrower even if (i) such notices were not made in a manner
specified herein, were incomplete or were not preceded or followed by any other form of notice
specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any
confirmation thereof. Borrower shall indemnify each Agent-Related Person and each Lender from all
losses, costs, expenses and liabilities resulting from the reliance by such person on each notice
purportedly given by or on behalf of Borrower. All telephonic notices to and other communications
with Administrative Agent may be recorded by Administrative Agent, and each of the parties hereto
hereby consents to such recording. If a Lender does not notify or inform Administrative Agent of
whether or not it consents to, or approves of or agrees to any matter of any nature whatsoever
with respect to which its consent, approval or agreement is required under the express provisions
of this Agreement or with respect to which its consent, approval or agreement is otherwise

PAGE 26

 

 

requested by Administrative Agent, in connection with the Loan or any matter pertaining to the
Loan, within ten (10) Business Days (or such longer period as may be specified by Administrative
Agent) after such consent, approval or agreement is requested by Administrative Agent, Lender shall
be deemed to have given its consent, approval or agreement, as the case may be, with respect to the
matter in question.

     6.4. Payments Set Aside. To the extent that any payment by or on behalf of Borrower
is made to Administrative Agent or any Lender, or the Administrative Agent or any Lender exercises
its right of set-off, and such payment or the proceeds of such set-off or any part thereof is
subsequently invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by Administrative Agent or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Law, to a depository (including Administrative Agent, any
Lender or its or their Affiliates) for returned items or insufficient collected funds, or
otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such set-off had not occurred, and (b) each Lender severally agrees
to pay to Administrative Agent upon demand its applicable share of any amount so recovered from or
repaid by Administrative Agent, plus interest thereon from the date of such demand to the date
such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in
effect.

     6.5. Successors and Assigns.

          (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns permitted hereby, except that Borrower
may not assign or otherwise transfer any of its rights or obligations hereunder without the prior
written consent of each Lender, and no Lender may assign or otherwise transfer any of its rights
or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of
subsection (b) of this Section, (ii) by way of participation in accordance with the provisions of
subsection (d) of this Section, or (iii) by way of pledge or assignment of a security interest
subject to the restrictions of subsection (f) of this Section (and any other attempted assignment
or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any person (other than the parties hereto, their
respective successors and assigns permitted hereby and, to the extent expressly contemplated
hereby, the Indemnitees) any legal or equitable right, remedy or claim under or by reason of this
Agreement.

          (b) Any Lender may assign to one or more Eligible Assignees all or a portion of its rights
and obligations under this Agreement (including all or a portion of its Commitment and Pro Rata
Share of the Loan (including for purposes of this subsection (b), participations in L/C
Obligations) at the time owing to it); provided that:

          (i) except in the case of an assignment of the entire remaining amount of
the assigning Lender’s Commitment and Pro Rata Share of the Loan at the time owing to it or in
the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund as
defined in subsection (h) of this Section with respect to a Lender, the aggregate amount of
the Commitment (which for this purpose includes its Pro Rata Share of the Loan outstanding)
subject to each such assignment, determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent, shall not be less
than $10,000,000 unless each of the Administrative Agent and, so long as no Default has
occurred and is continuing, the Borrower otherwise consents (each such consent not to be
unreasonably withheld or delayed);

          (ii) each partial assignment shall be made as an assignment of a proportionate part of
all the assigning Lender’s rights and obligations under this Agreement with respect to its
Pro Rata Share of the Loan and the Commitment assigned;

          (iii) any assignment of a Commitment must be approved by Administrative Agent, and
L/C Issuer unless the person that is the proposed assignee is itself a Lender (whether or
not the proposed assignee would otherwise qualify as an Eligible Assignee); and

PAGE 27

 

 

          (iv) the parties to each assignment shall execute and deliver to Administrative Agent an
Assignment and Assumption, together with a processing and recordation fee of $3,500 plus the cost
of any applicable endorsement to the Title Insurance or new Title Insurance.

Subject to acceptance and recording thereof by Administrative Agent pursuant to subsection (c) of this Section, from and
after the effective date specified in each Assignment and Assumption, the assignee thereunder shall
be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption,
have the rights and obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be
released from its obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of this
Agreement with respect to Borrower’s obligations surviving termination of this Agreement). Upon
request, Administrative Agent shall prepare and Borrower shall execute and deliver a Note
(“Replacement Note”) to the assignee Lender. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this subsection shall be
treated for purposes of this Agreement as a sale by such Lender of a participation in such rights
and obligations in accordance with subsection (d) of this Section.

          (c) Administrative Agent, acting solely for this purpose as an agent of Borrower, shall
forward the Assignment and Assumption, and the Replacement Note to the Title Company for issuance
of an applicable endorsement to the Title Insurance or new Title Insurance, and shall maintain at
Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amount of each Lender’s Pro Rata Share of the Loan owing to, each Lender pursuant to
the terms hereof from time to time (the “Register”). The entries in the Register shall be
conclusive, and Borrower, Administrative Agent and Lenders may treat each person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be available for
inspection by Borrower and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.

          (d) Any Lender may, without the consent of, but with prior notice to Administrative Agent,
sell participations to one or more banks or other entities (a “Participant”) in all or a
portion of such Lender’s rights and/or obligations under this Agreement (including all or a
portion of its Commitment and/or its Pro Rata Share of the Loan (including such Lender’s
participations in L/C Obligations) owing to it); provided that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations, (iii) Borrower,
Administrative Agent and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this Agreement, and (iv)
except to the extent consented to by Administrative Agent in its sole discretion with respect to
each participation, any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to enforce this Agreement
and to approve any amendment, modification or waiver of any provision of this Agreement.

          (e) A Participant shall not be entitled to receive any greater payment under Sections
1.7, 1.8 or 1.9 than the applicable Lender would have been entitled to receive with respect to
the participation sold to such Participant.

          (f) Any Lender may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement (including under its Note, if any) to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank;
provided that no such pledge or assignment shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.

          (g) If the consent of Borrower to an assignment or to an assignee is required hereunder
(including a consent to an assignment which does not meet the minimum assignment threshold
specified in clause (i) of the provision to the first sentence of subsection (b) above), Borrower
shall be deemed to have given its consent five Business Days after the date notice thereof has
been delivered by the assigning Lender (through Administrative Agent) unless such consent is
expressly refused by Borrower prior to such fifth Business Day.

PAGE 28

 

 

          (h) As used herein, the following terms have the following meanings:

     “Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an
Approved Fund; and (d) any other person (other than a natural person) approved by the
Administrative Agent, and, unless a Default has occurred and is continuing, the Borrower
(each such approval not to be unreasonably withheld or delayed).

     “Fund” means any person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial real estate
loans and similar extensions of credit in the ordinary course of its business.

     “Approved Fund” means any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

          (i) Notwithstanding anything to the contrary contained herein, if at any time Bank of America,
N.A. assigns all of its Commitment and interest in the Loan pursuant to subsection (b) above, Bank
of America, N.A. may, upon 30 days’ notice to the Borrower and the Lenders, resign as L/C Issuer.
In the event of any such resignation as L/C Issuer, the Borrower shall be entitled to appoint from
among the Lenders a successor L/C Issuer hereunder; provided, however, that no failure by
the Borrower to appoint any such successor shall affect the resignation of Bank of America, N.A. as
L/C Issuer. If Bank of America, N.A. resigns as L/C Issuer it shall retain all the rights and
obligations of the L/C Issuer hereunder with respect to all Letters of Credit outstanding as of the
effective date of its resignation as L/C Issuer and all L/C Obligations with respect thereto
(including the right to require the Lenders to make an advance of Base Rate Principal or fund risk
participations for L/C Borrowings pursuant to Exhibit “K”).

          (j) Borrower shall not be responsible for any costs or expenses incurred by Administrative
Agent or any of the Lenders in connection with or as a result of any assignment or transfer of a
Lender’s rights and obligations under this Agreement (or any part thereof), or in connection with
the sale of participations by any Lender.

     6.6. Confidentiality. Each of the Administrative Agent and the Lenders agrees to
maintain the confidentiality of the Information (as defined below), except that Information may be
disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the persons to whom such
disclosure is made will be informed of the confidential nature of such Information and instructed
to keep such Information confidential); (b) to the extent requested by any regulatory authority;
(c) to the extent required by applicable Laws or regulations or by any subpoena or similar legal
process; (d) to any other party to this Agreement; (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder; (f) subject to an agreement containing provisions substantially the same as
those of this Section, to (i) any assignee of or participant in, or any prospective assignee of or
participant in, any of its rights or obligations under this Agreement or (ii) any direct or
indirect contractual counterparty or prospective counterparty (or such contractual counterparty’s
or prospective counterparty’s professional advisor) to any Swap Transaction or credit derivative
transaction relating to obligations of the Borrower and Guarantors; (g) with the consent of the
Borrower; (h) to the extent such Information (i) becomes publicly available other than as a result
of a breach of this Section or (ii) becomes available to the Administrative Agent or any Lender on
a nonconfidential basis from a source other than the Borrower. For the purposes of this Section,
“Information” means all information received from the Borrower or any Guarantor relating
to the Borrower or any of the Guarantors or their business, other than any such information that
is available to the Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by the Borrower or any Guarantor; provided that in the case of information
received from the Borrower or any Guarantor after the date hereof, such information is clearly
identified in writing at the time of delivery as confidential (provided that any financial
statements received from Borrower or any Guarantor shall be deemed confidential regardless of
whether so identified). Any person required to maintain the confidentiality of Information as
provided in this Section shall be considered to have complied with its obligation to do so if such
person has exercised the same degree of care to maintain the confidentiality of such Information
as such person would accord to its own confidential information. The Administrative Agent and the
Lenders may disclose the existence of this Agreement and information about this

PAGE 29

 

 

Agreement to market data collectors, similar service providers to the lending industry, and service
providers to the Administrative Agent and the Lenders in connection with the administration and
management of this Agreement, the Loan and Loan Documents.

     6.7. Set-off. In addition to any rights and remedies of Administrative Agent and
Lenders provided by Law, upon the occurrence and during the continuance of any Event of Default,
Administrative Agent and each Lender is authorized at any time and from time to time, without prior
notice to Borrower or any other party to the Loan Documents, any such notice being waived by
Borrower (on its own behalf and on behalf of each party to the Loan Documents to the fullest extent
permitted by Law), to set-off and apply any and all deposits, general or special, time or demand,
provisional or final, any time owing by Administrative Agent or such Lender hereunder or under any
other Loan Document to or for the credit or the account of such parties to the Loan Documents
against any and all Indebtedness, irrespective of whether or not the Administrative Agent or such
Lender shall have made demand under this Agreement or any other Loan Document and although such
Indebtedness may be contingent or unmatured or denominated in a currency different from that of the
applicable depositor indebtedness. Each Lender hereby acknowledges that the exercise by any Lender
of offset, set-off, Banker’s lien, or similar rights against any deposit account or other property
or asset of Borrower whether or not located in California or another state with certain laws
restricting Lenders from pursuing multiple collection methods, could result under such laws in
significant impairment of the ability of all Lenders to recover any further amounts in respect of
the Loan. Therefore, each Lender agrees not to charge or offset any amount owed to it by Borrower
against any of the accounts, property or assets of Borrower or any of its Affiliates held by such
Lender, without the prior written approval of Administrative Agent and the Required Lenders.
Notwithstanding the foregoing, neither Administrative Agent nor any Lender nor any assignee or
Affiliate thereof (each a “Lender Party”) shall proceed directly, by right of set-off, banker’s
lien, counterclaim or otherwise, against any assets of Borrower or any Guarantor (including any
general or special, time or demand, provision or other deposits or other indebtedness owing by such
Lender Party to or for the credit or the account of Borrower or any Guarantor) for purposes of
applying such assets against the Indebtedness, without the prior written consent of all Lenders.

     6.8. Sharing of Payments. If, other than as expressly provided elsewhere herein, any
Lender shall obtain on account of the portions of the Loan advanced by it, or the participations
in L/C Obligations held by it, any payment (whether voluntary, involuntary, through the exercise
of any right of set-off, or otherwise) in excess of its ratable share (or other share contemplated
hereunder) thereof, such Lender shall immediately (a) notify the Administrative Agent of such
fact, and (b) purchase from the other Lenders such participations in the portions of the Loan made
by them and/or such subparticipations in the participations in the L/C Obligations held by them,
as the case may be, as shall be necessary to cause such purchasing Lender to share the excess
payment in respect of such portions of the Loan or such participations, as the case may be, pro
rata with each of them; provided, however, that if all or any portion of such excess
payment is thereafter recovered from the purchasing Lender, such purchase shall to that extent be
rescinded and each other Lender shall repay to the purchasing Lender the purchase price paid
therefor, together with an amount equal to such paying Lender’s ratable share (according to the
proportion of (i) the amount of such paying Lender’s required repayment to (ii) the total amount
so recovered from the purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered without further interest thereon.
The Borrower agrees that any Lender so purchasing a participation from another Lender may, to the
fullest extent permitted by Law, exercise all its rights of payment (including the right of
set-off), but subject to Section 6.7 with respect to such participation as fully as if
such Lender were the direct creditor of the Borrower in the amount of such participation. The
Administrative Agent will keep records (which shall be conclusive and binding in the absence of
manifest error) of participations purchased under this Section and will in each case notify the
Lenders following any such purchases or repayments. Each Lender that purchases a participation
pursuant to this Section shall from and after such purchase have the right to give all notices,
requests, demands, directions and other communications under this Agreement with respect to the
portion of the Obligations purchased to the same extent as though the purchasing Lender were the
original owner of the Obligations purchased.

     6.9. Amendments; Survival. Administrative Agent and Lenders shall be entitled to
amend (whether pursuant to a separate intercreditor agreement or otherwise) any of the terms,
conditions or agreements set forth in Article 5 or as to any other matter in the Loan
Documents respecting payments to Administrative Agent or Lenders or the required number of the
Lenders to approve or disapprove any matter or to take or refrain from taking any action, without
the consent of Borrower or any other person or the execution by Borrower or any other person of
any such amendment or intercreditor agreement provided that such matter does not affect Borrower’s
rights or

PAGE 30

 

 

obligations. Subject to the foregoing, Administrative Agent may amend or waive any provision of
this Agreement or any other Loan Document, or consent to any departure by any party to the Loan
Documents therefrom which amendment, waiver or consent is intended to be within Administrative
Agent’s discretion or determination, or otherwise in Administrative Agent’s reasonable
determination shall not have a Material Adverse Effect; provided, however, that otherwise
no such amendment, waiver or consent shall be effective unless in writing, signed by the Required
Lenders and Borrower or the applicable party to the Loan Documents, as the case may be, and
acknowledged by Administrative Agent, and each such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; and provided further
that no such amendment, waiver or consent shall:

          (a) extend or increase the Commitment of any Lender (or reinstate any Commitment terminated
pursuant to Section 4.2), without the written consent of such Lender (it being understood
that a waiver of a Default shall not constitute an extension or increase in any Lender’s
Commitment);

          (b) postpone any date fixed by this Agreement or any other Loan Document for any payment of
principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under
any other Loan Document, without the written consent of each Lender directly affected thereby;

          (c) reduce the principal of, or the rate of interest specified herein on, any portion of the
Loan, or L/C Borrower, or any fees or other amounts payable hereunder or under any other Loan
Document, without the written consent of each Lender directly affected thereby; provided,
however, that the Administrative Agent may waive any obligation of the Borrower to pay
interest at the Past Due Rate and/or late charges for periods of up to thirty days, and only the
consent of the Required Lenders shall be necessary to waive any obligation of the Borrower to pay
interest at the Past Due Rate or late charges thereafter, or to amend the definition of “Past Due
Rate” or “late charges”;

          (d) change the percentage of the combined Commitments or of the aggregate unpaid principal
amount of the Loan and L/C Obligations which is required for the Lenders or any of them to take
any action hereunder, without the written consent of each Lender;

          (e) change the definition of “Pro Rata Share” or “Required Lender” or any other provision
hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify
any rights hereunder or make any determination or grant any consent hereunder, without the written
consent of each Lender;

          (f) amend this Section, or Section 6.8, without the written consent of each
Lender;

          (g) release the liability of Borrower or any existing Guarantor without the written consent
of each Lender;

          (h) permit the sale, transfer, pledge, mortgage or assignment of any Loan collateral or any
direct or indirect interest in Borrower, except as expressly permitted under the Loan Documents,
without the written consent of each Lender; or

          (i) transfer or release any lien on, or after foreclosure or other acquisition of title by
Administrative Agent on behalf of the Lenders transfer or sell, any Loan collateral except as
permitted in Section 5.10, without the written consent of each Lender,

and provided further that (i) no amendment, waiver or consent shall, unless in writing and
signed by the L/C Issuer in addition to the Lenders required above affect the rights or duties of
the L/C Issuer under this Agreement or any Letter of Credit Application relating to any Letter of
Credit issued or to be issued by it; and (ii) no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Lenders required above, affect
the rights or duties of the Administrative Agent under this Agreement or any other Loan Document.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to
approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of
such Lender may not be increased without the consent of such Lender.

PAGE 31

 

 

This Agreement shall continue in full force and effect until the Indebtedness is paid in full and
all of Administrative Agent’s and Lenders’ obligations under this Agreement are terminated; and all
representations and warranties and all provisions herein for indemnity of the Indemnitees,
Administrative Agent and Lenders (and any other provisions herein specified to survive) shall
survive payment in full, satisfaction or discharge of the Indebtedness, the resignation or removal
of Administrative Agent or replacement of any Lender, and any release or termination of this
Agreement or of any other Loan Documents.

     6.10. Costs and Expenses. Without limiting any Loan Document and to the extent not
prohibited by applicable Laws, Borrower shall pay when due, shall reimburse to Administrative
Agent for the benefit of itself and Lenders on demand and shall indemnify Administrative Agent and
Lenders from, all out-of-pocket fees, costs, and expenses paid or incurred by Administrative Agent
in connection with the negotiation, preparation and execution of this Agreement and the other Loan
Documents (and any amendments, approvals, consents, waivers and releases requested, required,
proposed or done from time to time), or in connection with the disbursement, administration or
collection of the Loan or the enforcement of the obligations of Borrower or the exercise of any
right or remedy of Administrative Agent, including (a) all fees and expenses of Administrative
Agent’s counsel; (b) fees and charges of each Construction Consultant, inspector and engineer; (c)
appraisal, re-appraisal and survey costs; (d) title insurance charges and premiums; (e) title
search or examination costs, including abstracts, abstractors’ certificates and uniform commercial
code searches; (f) judgment and tax lien searches for Borrower and each Guarantor; (g) escrow
fees; (h) fees and costs of environmental investigations, site assessments and remediations; (i)
recordation taxes, documentary taxes, transfer taxes and mortgage taxes; (j) filing and recording
fees; and (k) loan brokerage fees. Borrower shall pay all costs and expenses incurred by
Administrative Agent, including reasonable attorneys’ fees, if the obligations or any part thereof
are sought to be collected by or through an attorney at law, whether or not involving probate,
appellate, administrative or bankruptcy proceedings. Borrower shall pay all costs and expenses of
complying with the Loan Documents, whether or not such costs and expenses are included in the
Budget. Borrower’s obligations under this Section shall survive the delivery of the Loan
Documents, the making of advances, the payment in full of the Indebtedness, the release or
reconveyance of any of the Loan Documents, the foreclosure of the Mortgage or conveyance in lieu
of foreclosure, any bankruptcy or other debtor relief proceeding, and any other event whatsoever.

     6.11. Tax Forms.

          (a) (i) Each Lender, and each holder of a participation interest herein, that is not a “United
States person” (a “Foreign Lender”) within the meaning of Section 7701(a)(30) of the Code
shall deliver to Administrative Agent, prior to receipt of any payment subject to withholding (or
upon accepting an assignment or receiving a participation interest herein), two duly signed
completed copies of either Form W-8BEN or any successor thereto (relating to such Foreign Lender
and entitling it to a complete exemption from withholding on all payments to be made to such
Foreign Lender by Borrower pursuant to this Agreement) or Form W-8ECI or any successor thereto
(relating to all payments to be made to such Foreign Lender by Borrower pursuant to this Agreement)
of the United States Internal Revenue Service or such other evidence satisfactory to Borrower and
Administrative Agent that such Foreign Lender is entitled to an exemption from or reduction of,
United States withholding tax, including any exemption pursuant to Section 881(c) of the Code.
Thereafter and from time to time, each such Foreign Lender shall (A) promptly submit to
Administrative Agent such additional duly completed and signed copies of one of such forms (or such
successor forms as shall be adopted from time to time by the relevant United States taxing
authorities) as may then be available under then current United States Laws and regulations to
avoid, or such evidence as is satisfactory to Borrower and Administrative Agent of any available
exemption from or reduction of, United States withholding taxes in respect of all payments to be
made to such Foreign Lender by Borrower pursuant to the Loan Documents, (B) promptly notify
Administrative Agent of any change in circumstances which would modify or render invalid any
claimed exemption or reduction, and (C) take such steps as shall not be materially disadvantageous
to it, in the reasonable judgment of such Lenders, and as may be reasonably necessary (including
the re-designation of its Lending Office, if any) to avoid any requirement of applicable Laws that
Borrower make any deduction or withholding for taxes from amounts payable to such Foreign Lender.

          (ii) Each Foreign Lender, to the extent it does not act or ceases to act for its own
account with respect to any portion of any sums paid or payable to such Lender under any of
the Loan Documents (for example, in the case of a typical participation by such Lender),
shall deliver to the Administrative Agent on the date when such Foreign Lender ceases to
act for its own account with respect

PAGE 32

 

 

to any portion of any such sums paid or payable, and at such other times as may be
necessary in the determination of the Administrative Agent (in the reasonable exercise of
its discretion), (A) two duly signed completed copies of the forms or statements required
to be provided by such Lender as set forth above, to establish the portion of any such sums
paid or payable with respect to which such Lender acts for its own account that is not
subject to U.S. withholding tax, and (B) two duly signed completed copies of United States
Internal Revenue Service Form W-8IMY (or any successor thereto), together with any
information such Lender chooses to transmit with such form, and any other certificate or
statement of exemption required under the Code, to establish that such Lender is not acting
for its own account with respect to a portion of any such sums payable to such Lender.

          (iii) The Borrower shall not be required to pay any additional amount to any Foreign
Lender under Section 1.11 or pay or reimburse Administrative Agent or any of the
Lenders, (A) with respect to any Taxes required to be deducted or withheld on the basis of
the information, certificates or statements of exemption such Lender transmits with an
United States Internal Revenue Service Form W-8IMY pursuant to this subsection (a) of this
Section, or (B) if such Lender shall have failed to satisfy the foregoing provisions of
this subsection (a); provided that if such Lender shall have satisfied the
requirement of this subsection (a) on the date such Lender became a Lender or ceased to act
for its own account with respect to any payment under any of the Loan Documents, nothing in
this subsection (a) shall relieve the Borrower of its obligation to pay any amounts
pursuant to Section 1.11 in the event that, as a result of any change in any
applicable law, treaty or governmental rule, regulation or order, or any change in the
interpretation, administration or application thereof, such Lender is no longer properly
entitled to deliver forms, certificates or other evidence at a subsequent date establishing
the fact that such Lender or other person for the account of which such Lender receives any
sums payable under any of the Loan Documents is not subject to withholding or is subject to
withholding at a reduced rate.

          (iv) The Administrative Agent may, without reduction, withhold any Taxes required to
be deducted and withheld from any payment under any of the Loan Documents with respect to
which the Borrower is not required to pay additional amounts under this subsection (a).

          (b) Upon the request of Administrative Agent, each Lender that is a “United States person”
within the meaning of Section 7701(a)(30) of the Code shall deliver to Administrative Agent two
duly signed completed copies of United States Internal Revenue Service Form W-9. If such Lender
fails to deliver such forms, then Administrative Agent may withhold from any interest payment to
such Lender an amount equivalent to the applicable back-up withholding tax imposed by the Code,
without reduction.

          (c) If any Tribunal asserts that Administrative Agent did not properly withhold or backup
withhold, as the case may be, any tax or other amount from payments made to or for the account of
any Lender, such Lender shall indemnify Administrative Agent therefor, including all penalties and
interest and costs and expenses (including attorney fees) of Administrative Agent. The obligation
of Lenders under this subsection shall survive the removal or replacement of a Lender, the payment
of all Indebtedness and the resignation or replacement of Administrative Agent.

     6.12. Further Assurances. Borrower will, upon Administrative Agent’s request, (a)
promptly correct any defect, error or omission in any Loan Document; (b) execute, acknowledge,
deliver, procure, record or file such further instruments and do such further acts as
Administrative Agent deems necessary, desirable or proper to carry out the purposes of the Loan
Documents and to identify and subject to the liens and security interest of the Loan Documents any
property intended to be covered thereby, including any renewals, additions, substitutions,
replacements, or appurtenances to the Property; (c) execute, acknowledge, deliver, procure, file
or record any document or instrument Administrative Agent deems necessary, desirable, or proper to
protect the liens or the security interest under the Loan Documents against the rights or
interests of third persons; and (d) provide such certificates, documents, reports, information,
affidavits and other instruments and do such further acts deemed necessary, desirable or proper by
Administrative Agent to comply with the requirements of any agency having jurisdiction over
Administrative Agent. In addition, at any time, and from time to time, upon request by
Administrative Agent or any Lender, Borrower will, at Borrower’s expense, provide any and all
further instruments, certificates and other documents as may, in the opinion of Administrative
Agent or such Lender, be necessary or

PAGE 33

 

 

desirable in order to verify the Borrower’s identity and background in a manner satisfactory to
Administrative Agent or such Lender.

     6.13. Inducement to Lenders. The representations and warranties contained in this
Agreement and the other Loan Documents (a) are made to induce Lenders to make the Loan and extend
any other credit to or for the account of the Borrower pursuant hereto, and Administrative Agent
and Lenders are relying thereon, and will continue to rely thereon, and (b) shall survive any
bankruptcy proceedings involving Borrower, any Guarantor or the Property, foreclosure, or
conveyance in lieu of foreclosure.

     6.14. Forum. Each party to this Agreement hereby irrevocably submits generally and
unconditionally for itself and in respect of its property to the jurisdiction of any state court,
or any United States federal court, sitting in the State specified in Section 6.2 of this
Agreement and to the jurisdiction of any state court or any United States federal court, sitting in
the state in which any of the Property is located, over any suit, action or proceeding arising out
of or relating to this Agreement or the Indebtedness. Each party to this Agreement hereby
irrevocably waives, to the fullest extent permitted by Law, any objection that they may now or
hereafter have to the laying of venue in any such court and any claim that any such court is an
inconvenient forum. Each party to this Agreement hereby agrees and consents that, in addition to
any methods of service of process provided for under applicable Law, all service of process in any
such suit, action or proceeding in any state court, or any United States federal court, sitting in
the state specified in Section 6.2 may be made by certified or registered mail, return
receipt requested, directed to such party at its address for notice stated in the Loan Documents,
or at a subsequent address of which Administrative Agent received actual notice from such party in
accordance with the Loan Documents, and service so made shall be complete on the date of delivery
as shown on the return receipt. Nothing herein shall affect the right of Administrative Agent to
serve process in any manner permitted by Law or limit the right of Administrative Agent to bring
proceedings against any party in any other court or jurisdiction.

     6.15. Interpretation. References to “Dollars,” “$,” “money,”
“payments” or other similar financial or monetary terms are references to lawful money of
the United States of America. References to Articles, Sections, and Exhibits are, unless specified
otherwise, references to articles, sections and exhibits of this Agreement. Words of any gender
shall include each other gender. Words in the singular shall include the plural and words in the
plural shall include the singular. References to Borrower or Guarantor shall mean, each person
comprising same, jointly and severally. References to “persons” shall include both natural
persons and any legal entities, including public or governmental bodies, agencies or
instrumentalities. The words “include” and “including” shall be interpreted as if
followed by the words “without limitation”. Captions and headings in the Loan Documents
are for convenience only and shall not affect the construction of the Loan Documents.

     6.16. No Partnership, etc. The relationship between Lenders (including Administrative
Agent) and Borrower is solely that of lender and borrower. Neither Administrative Agent nor any
Lender has any fiduciary or other special relationship with or duty to Borrower and none is
created by the Loan Documents. Nothing contained in the Loan Documents, and no action taken or
omitted pursuant to the Loan Documents, is intended or shall be construed to create any
partnership, joint venture, association, or special relationship between Borrower and
Administrative Agent or any Lender or in any way make Administrative Agent or any Lender a
co-principal with Borrower with reference to the Project, the Property or otherwise. In no event
shall Administrative Agent’s or Lenders’ rights and interests under the Loan Documents be
construed to give Administrative Agent or any Lender the right to control, or be deemed to
indicate that Administrative Agent or any Lender is in control of, the business, properties,
management or operations of Borrower.

     6.17. Records. The unpaid amount of the Loan and the amount of any other credit
extended by Administrative Agent or Lenders to or for the account of Borrower set forth on the
books and records of Administrative Agent shall be presumptive evidence of the amount thereof
owing and unpaid, but failure to record any such amount on Administrative Agent’s books and
records shall not limit or affect the obligations of Borrower under the Loan Documents to make
payments on the Loan when due.

     6.18. Commercial Purpose. Borrower warrants that the Loan is being made solely to
acquire or carry on a business or commercial enterprise, and/or Borrower is a business or
commercial organization. Borrower further warrants that all of the proceeds of this Loan shall be
used for commercial purposes and stipulates that the Loan

PAGE 34

 

 

shall be construed for all purposes as a commercial loan, and is made for other than personal,
family, household or agricultural purposes.

     6.19. WAIVER OF JURY TRIAL. EACH PARTY TO THIS AGREEMENT WAIVES TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO WHICH THEY MAY BE A PARTY, ARISING OUT OF, IN CONNECTION WITH OR IN ANY
WAY PERTAINING TO, ANY NOTE, THE LOAN AGREEMENT, THE MORTGAGE OR ANY OF THE OTHER LOAN DOCUMENTS.
IT IS AGREED AND UNDERSTOOD THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS
AGAINST ALL PARTIES TO SUCH ACTION OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT
PARTIES TO ANY NOTE. THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY EACH PARTY TO
THIS AGREEMENT, AND THEY HEREBY REPRESENT THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN
MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY
ITS EFFECT. EACH PARTY FURTHER REPRESENTS AND WARRANTS THAT IT HAS BEEN REPRESENTED IN THE
EXECUTION OF THE LOAN DOCUMENTS AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, OR
HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE
WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.

     6.20. Service of Process. Borrower hereby consents to process being served in any
suit, action, or proceeding instituted in connection with this Loan by (a) the mailing of a copy
thereof by certified mail, postage prepaid, return receipt requested, to Borrower and (b) serving
a copy thereof upon the agent designated and appointed by Borrower as Borrower’s agent for service
of process. Borrower irrevocably agrees that such service shall be deemed to be service of process
upon Borrower in any such suit, action, or proceeding. Nothing in any Note shall affect the right
of Administrative Agent to serve process in any manner otherwise permitted by Law and nothing in
any Note will limit the right of Administrative Agent on behalf of the Lenders otherwise to bring
proceedings against Borrower in the courts of any jurisdiction or jurisdictions.

     6.21. USA Patriot Act Notice. Each Lender and the Administrative Agent (for itself and
not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of the
USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is
required to obtain, verify and record information that identifies the Borrower, which information
includes the name and address of the Borrower and other information that will allow such Lender or
the Administrative Agent, as applicable, to identify the Borrower in accordance with the Act.

     6.22. Entire Agreement. The Loan Documents constitute the entire understanding and
agreement between Borrower, Administrative Agent and Lenders with respect to the transactions
arising in connection with the Loan, and supersede all prior written or oral understandings and
agreements between Borrower, Administrative Agent and Lenders with respect to the matters
addressed in the Loan Documents. In particular, and without limitation, the terms of any
commitment letter, letter of intent or quote letter by Administrative Agent or any Lender to make
the Loan are merged into the Loan Documents. Neither Administrative Agent nor any Lender has made
any commitments to extend the term of the Loan past its stated maturity date or to provide
Borrower with financing except as set forth in the Loan Documents. Except as incorporated in
writing into the Loan Documents, there are not, and were not, and no persons are or were
authorized by Administrative Agent or any Lender to make, any representations, understandings,
stipulations, agreements or promises, oral or written, with respect to the matters addressed in
the Loan Documents.

     6.23. Dispute Resolution.

          (a) Arbitration. Except to the extent expressly provided below, any Dispute
shall, upon the
request of any party, be determined by binding arbitration in accordance with the Federal
Arbitration Act, Title 9, United States Code (or if not applicable, the applicable state law), the
then-current rules for arbitration of financial services disputes of AAA and the “Special Rules”
set forth below. In the event of any inconsistency, the Special Rules shall control. The filing of
a court action is not intended to constitute a waiver of the right of Borrower, Administrative
Agent or any Lender, including the suing party, thereafter to require submittal of the Dispute to

PAGE 35

 

 

arbitration. Except to the extent expressly provided below, any party to this Agreement may bring
an action, including a summary or expedited proceeding, to compel arbitration of any Dispute in
any court having jurisdiction over such action. For the purposes of this Dispute Resolution
Section only, the terms “party” and “parties” shall include any parent corporation, subsidiary or
affiliate of Administrative Agent involved in the servicing, management or administration of any
obligation described in or evidenced by this Agreement, together with the officers, employees,
successors and assigns of each of the foregoing.

          (b) Special Rules.

          (i) The arbitration shall be conducted in any U.S. state where real or
tangible
personal property collateral is located, or if there is no such collateral, in the city and
county where Administrative Agent is located pursuant to its address for notice purposes in
this Agreement.

          (ii) The arbitration shall be administered by AAA, who will appoint an
arbitrator. If
AAA is unwilling or unable to administer or legally precluded from administering the
arbitration, or if AAA is unwilling or unable to enforce or legally precluded from enforcing
any and all provisions of this Dispute Resolution Section, then any party to this Agreement
may substitute, without the necessity of the agreement or consent of the other party or
parties, another arbitration organization that has similar procedures to AAA but that will
observe and enforce any and all provisions of this Dispute Resolution Section. All Disputes
shall be determined by one arbitrator; however, if the amount in controversy in a Dispute
exceeds Five Million Dollars ($5,000,000), upon the request of any party, the Dispute shall
be decided by three arbitrators (for purposes of this Agreement, referred to collectively as
the “arbitrator”).

          (iii) All arbitration hearings will be commenced within ninety (90) days of the demand
for arbitration and completed within ninety (90) days from the date of commencement;
provided, however, that upon a showing of good cause, the arbitrator shall be
permitted to extend the commencement of such hearing for up to an additional sixty (60)
days.

          (iv) The judgment and the award, if any, of the arbitrator shall be issued within
thirty (30) days of the close of the hearing. The arbitrator shall provide a concise
written statement setting forth the reasons for the judgment and for the award, if any. The
arbitration award, if any, may be submitted to any court having jurisdiction to be
confirmed and enforced, and such confirmation and enforcement shall not be subject to
arbitration.

          (v) The arbitrator will give effect to statutes of limitations and any
waivers thereof
in determining the disposition of any Dispute and may dismiss one or more claims in the
arbitration on the basis that such claim or claims is or are barred. For purposes of the
application of the statute of limitations, the service on AAA under applicable AAA rules of
a notice of Dispute is the equivalent of the filing of a lawsuit.

          (vi) Any dispute concerning this Dispute Resolution Section, including any such
dispute as to the validity or enforceability hereof or whether a Dispute is arbitrable,
shall be determined by the arbitrator; provided, however, that the arbitrator shall
not be permitted to vary the express provisions of these Special Rules or the Reservations
of Rights in subsection (c) below.

          (vii) The arbitrator shall have the power to award legal fees and costs pursuant to
the terms of this Agreement.

          (viii) The arbitration will take place on an individual basis without reference to,
resort to, or consideration of any form of class or class action.

          (ix) No arbitration arising out of or relating to this Agreement shall include, by
consolidation, joinder or in any other manner, an additional person or entity not a party
to this Agreement, except by written consent containing a specific reference to this
Agreement signed by the undersigned and

PAGE 36

 

 

any other person or entity sought to be joined. Consent to arbitration involving an
additional person or entity shall not constitute consent to arbitration of any claim,
dispute or other matter in question not described in the written consent or with a person or
entity not named or described therein. The foregoing agreement to arbitrate and other
agreements to arbitrate with an additional person or entity duly consented to by the parties
to this Agreement shall be specifically enforceable in accordance with applicable law in any
court having jurisdiction thereof.

          (c) Reservations of Rights. Nothing in this Agreement shall be deemed to (i) limit the
applicability of any otherwise applicable statutes of limitation and any waivers contained in this
Agreement, or (ii) apply to or limit the right of Administrative Agent or any Lender (A) to
exercise self help remedies such as (but not limited to) setoff, or (B) to foreclose judicially or
nonjudicially against any real or personal property collateral, or to exercise judicial or
nonjudicial power of sale rights, (C) to obtain from a court provisional or ancillary remedies such
as (but not limited to) injunctive relief, writ of possession, prejudgment attachment, or the
appointment of a receiver, or (D) to pursue rights against a party to this Agreement in a
third-party proceeding in any action brought against Administrative Agent or any Lender in a state,
federal or international court, tribunal or hearing body (including actions in specialty courts,
such as bankruptcy and patent courts). Subject to the terms of this Agreement, Administrative Agent
and any Lender may exercise the rights set forth in clauses (A) through (D), inclusive, before,
during or after the pendency of any arbitration proceeding brought pursuant to this Agreement.
Neither the exercise of self help remedies nor the institution or maintenance of an action for
foreclosure or provisional or ancillary remedies shall constitute a waiver of the right of any
party, including the claimant in any such action, to arbitrate the merits of the Dispute
occasioning resort to such remedies. No provision in the Loan Documents regarding submission to
jurisdiction and/or venue in any court is intended or shall be construed to be in derogation of the
provisions in any Loan Document for arbitration of any Dispute.

          (d) Conflicting Provisions for Dispute Resolution. If there is any conflict between
the terms, conditions and provisions of this Section and those of any other provision or agreement
for arbitration or dispute resolution, the terms, conditions and provisions of this Section shall
prevail as to any Dispute arising out of or relating to (i) this Agreement, (ii) any other Loan
Document, (iii) any related agreements or instruments, or (iv) the transaction contemplated herein
or therein (including any claim based on or arising from an alleged personal injury or business
tort). In any other situation, if the resolution of a given Dispute is specifically governed by
another provision or agreement for arbitration or dispute resolution, the other provision or
agreement shall prevail with respect to said Dispute.

          (e) Jury Trial Waiver in Arbitration. By agreeing to this Section, the parties
irrevocably and voluntarily waive any right they may have to a trial by jury in respect of any
Dispute.

          (f) The procedure described above will not apply if (1) the Claim, at the time of the
proposed submission to arbitration, arises from or relates to an obligation to Administrative
Agent and/or Lenders secured by real property; and (2) Administrative Agent and each Lender in
their sole and absolute discretion have not consented to submission of the Claim to arbitration.

          (g) To the extent any Claims are not arbitrated, to the extent permitted by law the Claims
shall be resolved in court by a judge without a jury, except any Claims which are brought in a
California state court may, at the election of Administrative Agent and each Lender, be determined
by judicial reference as described below.

          (h) Any Claim which is not arbitrated and which is brought in California state court
may, at
the joint election of Administrative Agent and each Lender, be resolved by general reference to a
referee (or a panel of referees) as provided in California Code of Civil Procedure (“CCP”) Section
638. The referee (or presiding referee of the panel) shall be a retired Judge or Justice. The
referee (or panel of referees) shall be selected by mutual written agreement of the parties. If
the parties do not agree, the referee shall be selected by the Presiding Judge of eth Court (or
his or her representative) as provided in CCP Section 638 and the following related sections. The
referee shall determine all issues in accordance with California rules of evidence and civil
procedure and other applicable laws, rules and regulations. The referee shall be empowered to
enter equitable as well as legal relief, provide all temporary or provisional remedies, enter
equitable orders that will be binding on the parties and rule on any motion which would be
authorized in a trial, including motions for summary judgment or summary

PAGE 37

 

 

adjudication. The aware that results from the decisions of the referee(s) will be entered as a
judgment in the court that appointed the referee, in accordance with the provisions of CCP Sections
644(a) and 645. The parties reserve the right to seek appellate review of any judgment or order,
including orders pertaining to class certification, to the same extent permitted in a court of law.

THE WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.

[The balance of this page is intentionally left blank]

PAGE 38

 

 

     IN WITNESS WHEREOF, THIS CONSTRUCTION LOAN AGREEMENT is EXECUTED and DELIVERED UNDER SEAL
as of the date first appearing above.

	 	 	 	 	 	 	 	 	 

	WITNESS/ATTEST:	 	 	 	HF LOGISTICS-SKX T1, LLC,
	 	 	 	 	a Delaware limited liability company
	 
	 	 	 	 	 	 	 	 
	/s/ Mary S. Fredenburg	 	 	 	By: HF Logistics-SKX, LLC, a Delaware
	 
	 	 	 	 	 	 	 	 
	Name: Mary S. Fredenburg	 	 	 	limited liability company, its sole member
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By: HF Logistics I, LLC, a Delaware
limited liability company, its managing
member
	Borrower’s Address for Notices:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	HF Logistics-SKX T1, LLC

	 	 	 	 	 	By:
	 	/s/ Iddo Benzeevi
	 

	 	 	 	 	 	 	 	 
	c/o Highland Fairview Properties

	 	 	 	 	 	 	 	Iddo Benzeevi, President and
	14225 Corporate Way

	 	 	 	 	 	 	 	Chief Executive Officer
	Moreno Valley CA 92553
	 	 	 	 	 	 	 	 
	Telephone: (951) 867-5301
	 	 	 	 	 	 	 	 
	Facsimile: (951) 867-5302
	 	 	 	 	 	 	 	 
	Electronic Mail: [ILLEGIBLE].com
	 	 	 	 	 	 	 	 
	FEIN: 27-1865350
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	With a copy to:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	TG Services, Inc.
	 	 	 	 	 	 	 	 
	Stage Coach Run
	 	 	 	 	 	 	 	 
	East Brunswick, NJ 08816
	 	 	 	 	 	 	 	 
	Attn: James Licb, EVP
	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 

	 	 	 	 	BANK OF AMERICA, N.A.,
	 	 	 	 	a national banking association, individually as
	WITNESS/ATTEST:	 	 	 	Administrative Agent, L/C Issuer, and a Lender
	 
	 	 	 	 	 	 
	/s/ Xavier Arcentales

	 	 	 	By: 	 	/s/ [ILLEGIBLE]
	 

	 	 	 	 	 	 
	Name: Xavier Arcentales

	 	 	 	Name: 	 	[ILLEGIBLE] 
	 

	 	 	 	Title: 	 	Senior Vice President 
	 
	 	 	 	 	 	 
	 	 	 	 	RAYMOND JAMES BANK, FSB.
	WITNESS/ATTEST:	 	 	 	as a Lender
	 
	 	 	 	 	 	 
	/s/ [ILLEGIBLE]

	 	 	 	By:	 	/s/ Jennifer Ehrhart 
	 

	 	 	 	 	 	 
	Name: [ILLEGIBLE]

	 	 	 	Name: 	 	Jennifer Ehrhart  
	 

	 	 	 	Title: 	 	Senior Vice President 

PAGE 39

 

 

EXHIBIT “A” 

LEGAL DESCRIPTION OF LAND

Real property in the City of Moreno Valley, County of Riverside, State of California, described as
follows:

PARCEL 1:

THAT CERTAIN PARCEL SHOWN AND DESCRIBED AS “PROPOSED PARCEL C” BEING SET FORTH, DESCRIBED AND
CREATED BY THAT CERTAIN LOT LINE ADJUSTMENT NO. 1005 / AND CERTIFICATE OF COMPLIANCE RECORDED MARCH
29, 2010 AS DOCUMENT NO. 2010-0140636 OF OFFICIAL RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF
RIVERSIDE COUNTY, CALIFORNIA, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

THOSE PORTIONS OF LOTS 2 AND 7, IN BLOCK 34 OF MAP NO. 1 OF BEAR VALLEY AND ALESSANDRO DEVELOPMENT
COMPANY, IN THE CITY OF MORENO VALLEY, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP
ON FILE IN BOOK 11 OF MAPS, PAGE 10, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAN
BERNARDINO COUNTY, CALIFORNIA, TOGETHER WITH THAT PORTION OF FIR AVENUE, VACATED BY RESOLUTION OF
THE BOARD OF SUPERVISORS OF RIVERSIDE COUNTY RECORDED MARCH 27, 1962 AS FILE NO. 27882 OF OFFICIAL
RECORDS OF RIVERSIDE COUNTY, CALIFORNIA, LYING BETWEEN REDLANDS BOULEVARD AND SINCLAIR STREET, AS
SAID STREETS ARE SHOWN ON THE MAP OF SAID TRACT, DESCRIBED AS FOLLOWS:

COMMENCING AT THE SOUTHWESTERLY CORNER OF SAID LOT 7, BEING ALSO THE CENTERLINE OF FIR AVENUE
(VACATED); THENCE ALONG THE SOUTHERLY LINE OF SAID LOT 7 AND THE CENTERLINE OF FIR AVENUE
(VACATED) SOUTH 89 DEGREES 33"11' EAST 288.98 FEET TO THE TRUE POINT OF BEGINNING; THENCE NORTH
1280.03 FEET TO THE NORTHERLY LINE OF SAID LOT 2, BEING ALSO THE SOUTHERLY LINE OF GREVILLEA
AVENUE (80 FEET WIDE) AS SHOWN ON SAID MAP NO. 1 OF BEAR VALLEY AND ALESSANDRO DEVELOPMENT COMPANY
(NOW THE SOUTHERLY LINE OF STATE HIGHWAY 60); THENCE ALONG THE NORTHERLY LINE OF SAID LOT 2 AND
THE SOUTHERLY LINE OF GREVILLEA AVENUE SOUTH 89 DEGREES 33"13' EAST 381.32 FEET TO THE
NORTHEASTERLY CORNER OF SAID LOT 2; THENCE ALONG THE EASTERLY LINES OF SAID LOT 2 AND SAID LOT 7
SOUTH 00 DEGREES 27"17' WEST 1280.00 FEET TO SAID SOUTHERLY LINE OF LOT 7 AND SAID CENTERLINE OF
FIR AVENUE (VACATED); THENCE ALONG SAID SOUTHERLY LINE OF LOT 7 AND SAID CENTERLINE OF FIR AVENUE
(VACATED) NORTH 89 DEGREES 33"11' WEST 371.16 FEET TO THE TRUE POINT OF BEGINNING.

CONTAINING AN AREA OF 11.056 ACRES, MORE OR LESS.

PARCEL 2:

THAT CERTAIN PARCEL SHOWN AND DESCRIBED AS “PROPOSED PARCEL A” BEING SET FORTH, DESCRIBED AND
CREATED BY THAT CERTAIN LOT LINE ADJUSTMENT NO. 1004 / AND CERTIFICATE OF COMPLIANCE RECORDED
MARCH 29, 2010 AS DOCUMENT NO. 2010-0140637 OF OFFICIAL RECORDS, IN THE OFFICE OF THE COUNTY
RECORDER OF RIVERSIDE COUNTY, CALIFORNIA, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

THOSE PORTIONS OF LOTS 1, 2 AND 8 IN BLOCK 33 OF BEAR VALLEY AND ALESSANDRO DEVELOPMENT COMPANY,
IN THE CITY OF MORENO VALLEY, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN
BOOK 11 OF MAPS, PAGE 10, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAN BERNARDINO COUNTY,
CALIFORNIA, DESCRIBED AS FOLLOWS:

EXHIBIT A, PAGE 1

 

 

BEGINNING AT THE SOUTHWESTERLY CORNER OF SAID LOT 8; THENCE ALONG THE SOUTHERLY LINE OF SAID
LOT 8, BEING ALSO THE NORTHERLY LINE OF FIR AVENUE (80 FEET WIDE)
SOUTH 89 DEGREES 33"11' EAST
130.38 FEET; THENCE LEAVING SAID SOUTHERLY LINE OF LOT 8 AND SAID NORTHERLY LINE OF FIR AVENUE,
NORTH 854.59 FEET TO A POINT ON A NON-TANGENT CURVE CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF
497.00 FEET, A RADIAL LINE OF SAID CURVE FROM SAID POINT BEARS NORTH
15 DEGREES 41'23" EAST; THENCE
ALONG SAID CURVE NORTHWESTERLY 103.15 FEET THROUGH A CENTRAL ANGLE OF 11 DEGREES 53'28"; THENCE
TANGENT FROM SAID CURVE NORTH 62 DEGREES 25'09" WEST 49.57 FEET; THENCE NORTH 56 DEGREES 42'31"
WEST 120.60 FEET; THENCE NORTH 62 DEGREES 25'09" WEST 222.69 FEET TO THE BEGINNING OF A TANGENT
CURVE CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 800.00 FEET; THENCE ALONG SAID CURVE
NORTHWESTERLY 310.88 FEET THROUGH A CENTRAL ANGLE OF 22 DEGREES 15'55"; THENCE TANGENT FROM SAID
CURVE NORTH 84 DEGREES 41'04" WEST 47.33 FEET TO THE WESTERLY LINE OF SAID LOT 2; THENCE ALONG THE
WESTERLY AND SOUTHERLY LINES OF SAID LOT 2, AND THE WESTERLY LINE OF LOT 8 THE FOLLOWING COURSES:
SOUTH 00 DEGREES 27'24" WEST 550.52 FEET; THENCE SOUTH 89 DEGREES 33'12" EAST 660.21 FEET; THENCE
SOUTH 00 DEGREES 27'19" WEST 620.01 FEET TO THE POINT OF BEGINNING.

CONTAINING AN AREA OF 9.396 ACRES, MORE OR LESS.

PARCEL A:

LOTS 1 AND 8 OF BLOCK 34, MAP NO. 1, OF BEAR VALLEY AND ALESSANDRO DEVELOPMENT COMPANY, IN THE
CITY OF MORENO VALLEY, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 11,
PAGE 10 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAN BERNARDINO COUNTY.

TOGETHER WITH THAT PORTION OF FIR AVENUE, VACATED BY RESOLUTION OF THE BOARD OF SUPERVISORS OF
RIVERSIDE COUNTY RECORDED MARCH 27, 1962 AS FILE NO. 27882 OF OFFICIAL RECORDS OF RIVERSIDE
COUNTY, CALIFORNIA, LYING BETWEEN REDLANDS BOULEVARD, AND SINCLAIR STREET AS SAID STREETS ARE
SHOWN ON THE MAP OF SAID TRACT.

ALSO TOGETHER WITH THAT PORTION OF SINCLAIR STREET ADJACENT ON THE EAST, AS REJECTED FOR
DEDICATION BY THE CITY OF MORENO VALLEY PURSUANT TO THE TERMS AND PROVISIONS OF A DOCUMENT
RECORDED MARCH 31, 2010 AS DOCUMENT NO. 2010-0144493 OF OFFICIAL RECORDS, IN THE OFFICE OF THE
COUNTY RECORDER OF RIVERSIDE COUNTY, CALIFORNIA.

PARCEL B:

PARCELS 1 AND 2 OF PARCEL MAP 12975, IN THE CITY OF MORENO VALLEY, COUNTY OF RIVERSIDE, STATE OF
CALIFORNIA, AS PER MAP RECORDED IN BOOK 72, PAGE 47 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY
RECORDER OF RIVERSIDE COUNTY.

ALSO TOGETHER WITH THAT PORTION OF SINCLAIR STREET ADJACENT ON THE WEST, AS REJECTED FOR
DEDICATION BY THE CITY OF MORENO VALLEY PURSUANT TO THE TERMS AND PROVISIONS OF A DOCUMENT
RECORDED MARCH 31, 2010 AS DOCUMENT NO. 2010-0144493 OF OFFICIAL RECORDS, IN THE OFFICE OF THE
COUNTY RECORDER OF RIVERSIDE COUNTY, CALIFORNIA.

PARCEL C:

LOT 4 IN BLOCK 33 OF MAP NO. 1 OF THE LANDS OF THE BEAR VALLEY AND ALESSANDRO DEVELOPMENT COMPANY,
IN THE CITY OF MORENO VALLEY, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN
BOOK 11, PAGE 10 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAN BERNARDINO COUNTY,
CALIFORNIA.

PAGE 2

 

 

EXCEPTING THEREFROM THAT PORTION DESCRIBED AS FOLLOWS:

BEGINNING AT THE NORTHWEST CORNER OF SAID LOT 4;

THENCE EASTERLY ON THE NORTHERLY LINE OF SAID LOT 257.00 FEET;

THENCE AT RIGHT ANGLES SOUTHERLY 398.00 FEET;

THENCE AT RIGHT ANGLES WESTERLY 257.00 FEET, TO THE WESTERLY LINE OF SAID LOT;

THENCE NORTHERLY, ON THE WESTERLY LINE OF SAID LOT, 398.00 FEET, TO THE POINT OF BEGINNING.

ALSO TOGETHER WITH THAT PORTION OF SINCLAIR STREET ADJACENT ON THE WEST, AS REJECTED FOR DEDICATION
BY THE CITY OF MORENO VALLEY PURSUANT TO THE TERMS AND PROVISIONS OF A DOCUMENT RECORDED MARCH 31,
2010 AS DOCUMENT NO. 2010-0144493 OF OFFICIAL RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF
RIVERSIDE COUNTY, CALIFORNIA.

PARCEL D:

ALL THAT CERTAIN REAL PROPERTY SITUATED IN THE COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, DESCRIBED
AS FOLLOWS:

LOTS 3 AND 6 OF BLOCK 33 OF MAP NO. 1 OF BEAR VALLEY AND ALESSANDRO DEVELOPMENT COMPANY, IN THE
CITY OF MORENO VALLEY, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 11,
PAGE(S) 10, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAN BERNARDINO COUNTY.

PARCEL E:

LOT 7 IN BLOCK 33, OF MAP NO. 1 OF BEAR VALLEY AND ALESSANDRO DEVELOPMENT COMPANY, IN THE COUNTY OF
RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 11, PAGE 10 OF MAPS, IN THE OFFICE
OF THE COUNTY RECORDER OF SAN BERNARDINO COUNTY, CALIFORNIA.

PARCEL F:

ALL THAT CERTAIN REAL PROPERTY SITUATED IN THE COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, DESCRIBED
AS FOLLOWS:

LOT 5 OF BLOCK 33 OF MAP NO. 1 OF BEAR VALLEY AND ALESSANDRO DEVELOPMENT CO., IN THE CITY OF
MORENO VALLEY, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 11, PAGE 10
OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAN BERNARDINO COUNTY.

ALSO TOGETHER WITH THAT PORTION OF SINCLAIR STREET ADJACENT ON THE WEST, AS REJECTED FOR
DEDICATION BY THE CITY OF MORENO VALLEY PURSUANT TO THE TERMS AND PROVISIONS OF A DOCUMENT
RECORDED MARCH 31, 2010 AS DOCUMENT NO. 2010-0144493 OF OFFICIAL RECORDS, IN THE OFFICE OF THE
COUNTY RECORDER OF RIVERSIDE COUNTY, CALIFORNIA.

PARCEL G:

ALL THAT CERTAIN REAL PROPERTY SITUATED IN THE COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, DESCRIBED
AS FOLLOWS:

PAGE 3

 

 

THE NORTHERLY 160.00 FEET OF THE WESTERLY 120.00 FEET OF LOT 4 IN BLOCK 33, AS PER MAP NO. 1 OF
BEAR VALLEY AND ALESSANDRO DEVELOPMENT COMPANY, IN THE CITY OF MORENO VALLEY, COUNTY OF RIVERSIDE,
STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 11, PAGE 10 OF MAPS, IN THE OFFICE OF THE COUNTY
RECORDER OF SAN BERNARDINO COUNTY.

SAID NORTHERLY 160.00 FEET BEING MEASURED FROM THE SOUTHERLY LINE OF GREVILLEA AVENUE AS SHOWN ON
SAID MAP AND THE WESTERLY 120.00 FEET BEING MEASURED FROM THE EAST LINE OF SINCLAIR STREET AS SHOWN
ON SAID MAP.

ALSO TOGETHER WITH THAT PORTION OF SINCLAIR STREET ADJACENT ON THE WEST, AS REJECTED FOR DEDICATION
BY THE CITY OF MORENO VALLEY PURSUANT TO THE TERMS AND PROVISIONS OF A DOCUMENT RECORDED MARCH 31,
2010 AS DOCUMENT NO. 2010-0144493 OF OFFICIAL RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF
RIVERSIDE COUNTY, CALIFORNIA.

PARCEL AA:

TEMPORARY CONSTRUCTION EASEMENTS FOR GRADING PURPOSES, TOGETHER WITH THE RIGHT TO ENTER ON, ACROSS,
AND WITHIN THE REAL PROPERTY AS SHOWN THEREIN, FOR THE PURPOSE OF CONSTRUCTING THE PLANNED
IMPROVEMENTS AND ASSOCIATED SLOPE AND DRAINAGE AREA GRADING ADJACENT TO AND SOUTH OF EUCALYPTUS
AVENUE AS SHOWN ON ROUGH GRADING PLANS FOR CITY PROJECT NO. PA07-0090, ON FILE WITH THE CITY OF
MORENO VALLEY, AS IRREVOCABLY OFFERED TO HF LOGISTICS-SKX T1, LLC, BY THOSE CERTAIN TEMPORARY
CONSTRUCTION EASEMENTS RECORDED MARCH 26, 2010 AS DOCUMENT NO.’S 2010-0138030, 2010-0138031 AND
2010-0138032, ALL OF OFFICIAL RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF RIVERSIDE COUNTY,
CALIFORNIA.

PAGE 4

 

 

EXHIBIT “B”

DEFINITIONS AND FINANCIAL STATEMENTS

	1.	 	DEFINITIONS: As used in this Agreement and the attached exhibits, the following terms
shall have the
following meanings:

     “AAA” means the American Arbitration Association, or any successor thereof.

     “Adjusted LIBOR Rate” means the quotient obtained by dividing (i) the applicable
London Interbank Offered Rate by (ii) 1.00 minus the LIBOR Reserve Percentage, where,

     “London Interbank Offered Rate” means, with respect to any applicable Interest
Period, the rate per annum equal to the British Bankers’ Association LIBOR Rate (“BBA
LIBOR”), as published by Reuters (or other commercially available source providing
quotations of BBA LIBOR as selected by Administrative Agent from time to time) at
approximately 11:00 a.m. London time two (2) London Banking Days before the commencement of
the Interest Period, for deposits in U.S. Dollars (for delivery on the first day of such
Interest Period) with a term equivalent to such Interest Period. If such rate is not
available at such time for any reason, then the rate for that Interest Period will be
determined by such alternate method as reasonably selected by Administrative Agent; and

     “LIBOR Reserve Percentage” means, with respect to any applicable Interest
Period, for any day that percentage (expressed as a decimal) which is in effect on such day,
as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including basic, supplemental, emergency,
special and marginal reserves) generally applicable to financial institutions regulated by
the Federal Reserve Board whether or not applicable to any Lender, in respect of
“Eurocurrency liabilities” (or in respect of any other category of liabilities which
includes deposits by reference to which the interest rate on LIBOR Rate Principal is
determined), whether or not any Lender has any Eurocurrency liabilities. The LIBOR Rate
shall be adjusted automatically as of the effective date of each change in the LIBOR Reserve
Percentage.

     “Administrative Agent” means Bank of America, N.A., in its capacity as administrative
agent under any of the Loan Documents, or any successor administrative agent.

     “Administrative Agent Advances” has the meaning set forth in Section 1.16 of
this Agreement.

     “Administrative Agent’s Office” means Administrative Agent’s address and, as
appropriate, account as set forth on the Schedule of Lenders, or such other address or account as
Administrative Agent hereafter may from time to time notify Borrower and Lenders.

     “Administrative Agent’s Time” means the time of day observed in the city where
Administrative Agent’s Office is located.

     “Advance Termination Date” means that date which is thirty (30) days prior to the
Maturity Date (or Extended Maturity Date, if applicable).

     “Affiliate” means any person directly or indirectly through one or more
intermediaries controlling, controlled by, or under direct or indirect common control with, such
person. A person shall be deemed to be “controlled by” any other person if such other person
possesses, directly or indirectly, power (a) to vote 10% or more of the securities (on a fully
diluted basis) having ordinary voting power for the election of directors or managing general
partners or the equivalent; or (b) to direct or cause the direction of the management and policies
of such person whether by contract or otherwise.

     “Agent-Related Persons” means Administrative Agent, together with its Affiliates
(including Arranger), and the officers, directors, employees, agents and attorneys-in-fact of such
persons and Affiliates.

EXHIBIT B, PAGE 1

 

 

     “Aggregate Commitments” means the Commitments of all the Lenders.

     “Aggregate Cost” has the meaning set forth in Section 1.4 of this Agreement.

     “Agreement” has the meaning set forth in the introductory paragraph of this
Agreement, and includes all exhibits attached hereto and referenced in Section 1.1.

     “Appraised Value” means Ninety Five Million and No/100 Dollars ($95,000,000.00).

     “Arranger” means Banc of America Securities LLC, in its capacity as sole lead arranger
and sole book manager.

     “Assignment and Assumption” means an Assignment and Assumption substantially in the
form of Exhibit “L”.

     “Base Rate” means, on any day, a simple rate per annum equal to the sum of the Prime
Rate for that day plus the Base Rate Margin. Without notice to Borrower or anyone else, the Base
Rate shall automatically fluctuate upward and downward as and in the amount by which the Prime
Rate fluctuates.

     “Base Rate Margin” means two and three quarters percent (2.75%) per annum.

     “Base Rate Principal” means, at any time, the Principal Debt minus the portion, if
any, of such Principal Debt which is LIBOR Rate Principal and Letters of Credit which have not
been drawn.

     “Borrower” has the meaning set forth in the introductory paragraph of this
Agreement.

     “Borrower’s Deposit” has the meaning set forth in Section 1.5 of this
Agreement.

     “Budget” means the budget and cost itemization for the Project attached as
Exhibit “D”.

     “Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact closed in, the state
where Administrative Agent’s Office is located.

     “Cash Collateralize” has the meaning set forth in Section 7 of Exhibit
“K”.

     “City” means the City of Moreno Valley, California.

     “Closing Checklist” means that certain Closing Requirements and Checklist setting
forth the conditions for closing the Loan and recording the Mortgage.

     “Code” has the meaning set forth in Section 2.15 of this Agreement.

     “Commitment” means, as to each Lender, its obligation to advance (a) its Pro Rata
Share of the Loan and (b) purchase participations in L/C Obligations in an aggregate principal
amount not exceeding the amount set forth opposite such Lender’s name on the Schedule of Lenders
at any one time outstanding, as such amount may be adjusted from time to time in accordance with
this Agreement.

     “Completion Date” means the earlier of (a) the date of completion of tenant
improvements pursuant to the terms and provisions of the Lease or (b) twenty (20) months after the
date of this Agreement.

     “Construction Commencement Date” means thirty (30) days after the date of this
Agreement.

     “Construction Consultant” means the construction consultant, if any, engaged by
Administrative Agent with respect to the Project.

EXHIBIT B, PAGE 2

 

 

     “Debtor Relief Laws” means the Bankruptcy Code of the United States of America, and
all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws
of the United States or other applicable jurisdictions from time to time in effect and affecting
the rights of creditors generally.

     “Default” has the meaning set forth in Section 4.1 of this Agreement.

     “Defaulting Lender” means a Lender that fails to pay its Pro Rata Share of a Payment
Amount within five (5) Business Days after notice from Administrative Agent, until such Lender
cures such failure as permitted in this Agreement.

     “Defaulting Lender Amount” means the Defaulting Lender’s Pro Rata Share of a
Payment Amount.

     “Defaulting Lender Payment Amounts” means a Defaulting Lender Amount plus interest
from the date such Defaulting Lender Amount was funded by Administrative Agent and/or an Electing
Lender, as applicable, to the date such amount is repaid to Administrative Agent and/or such
Electing Lender, as applicable, at the rate per annum applicable to such Defaulting Lender Amount
under the Loan or otherwise at the Base Rate.

     “Deferred Up-Front Equity Cash” means that portion of the Up-Front Equity consisting
of the sum of NINE HUNDRED FORTY ONE THOUSAND TWO HUNDRED THIRTY SEVEN AND NO/100 DOLLARS
($941,237.00) in cash which shall be deposited into the Up-Front Equity Account in accordance with
the terms and conditions of this Agreement.

     “Dispute” means any controversy, claim or dispute between or among the parties to
this Agreement, including any such controversy, claim or dispute arising out of or relating to (a)
this Agreement, (b) any other Loan Document, (c) any related agreements or instruments, or (d) the
transaction contemplated herein or therein (including any claim based on or arising from an
alleged personal injury or business tort).

     “Draw Request” has the meaning set forth in Section 1 of Exhibit
“F”.

     “Eligible Assignee” has the meaning set forth in Section 6.5 of this
Agreement.

     “Environmental Agreement” means the Environmental Indemnification and Release
Agreement of even date herewith by and among Borrower, Guarantors and Administrative Agent for the
benefit of Lenders.

     “Excusable Delay” means a delay, not to exceed a total of sixty (60) days, caused by
unusually adverse weather conditions which have not been taken into account in the construction
schedule, fire, earthquake or other acts of God, strikes, lockouts, acts of public enemy, riots or
insurrections or any other unforeseen circumstances or events beyond the control of Borrower
(except financial circumstances or events or matters which may be resolved by the payment of
money), and as to which Borrower notifies Administrative Agent in writing within ten (10) days
after such occurrence; provided, however, no Excusable Delay shall extend the Completion
Date or suspend or abate any obligation of Borrower or any Guarantor or any other person to pay
any money.

     “Federal Funds Rate” means, for any day, the rate per annum equal to the weighted
average of the rates on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank on
the Business Day next succeeding such day; provided that (a) if such day is not a Business
Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next
preceding Business Day as so published on the next succeeding Business Day, and (b) if no such
rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day
shall be the average rate (rounded upwards to the next higher 1/100 of 1%) charged to Bank of
America on such day on such transactions as determined by Administrative Agent.

     “Financial Statements” means (i) for each reporting party other than an individual, a
balance sheet, income statement, a reconciliation of changes in equity and liquidity verification,
annual statements of cash flow and amounts and sources of contingent liabilities, and unless
Administrative Agent otherwise consents, consolidated and consolidating statements if the
reporting party is a holding company or a parent of a subsidiary entity; and (ii) for each

EXHIBIT B, PAGE 3

 

 

reporting party who is an individual, a balance sheet, statements of amount and sources of
contingent liabilities, sources and uses of cash and liquidity verification and, unless
Administrative Agent otherwise consents, Financial Statements for each entity owned or jointly
owned by the reporting party. For purposes of this definition and any covenant requiring the
delivery of Financial Statements, each party for whom Financial Statements are required is a
“reporting party” and a specified period to which the required Financial Statements relate
is a “reporting period”.

     “Funding Date” means the date on which an advance of Loan Proceeds, Up-Front Equity
Cash or Borrower’s Deposit shall occur.

     “Guarantors” means collectively TG Development, Trans LP Holdings, LLC, a Delaware
limited liability company, Boca Ocean Holdings, LLC, a Delaware limited liability company, T/CAL
Holdings, LLC, a Delaware limited liability company, and Island Boulevard Holdings, LLC, a Delaware
limited liability company, jointly and severally (and each of the foregoing is referred to herein
as a “Guarantor”).

     “Improvements” means all on-site and off-site improvements to the Land for industrial
warehouse, office and retail use, to be constructed on the Land and expected to be Leadership in
Energy and Environmental Design certified, together with all fixtures, tenant improvements, and
appurtenances now or later to be located on the Land and/or in such improvements.

     “Indebtedness” means any and all indebtedness to Administrative Agent, or Lenders
evidenced, governed or secured by, or arising under, any of the Loan Documents, including the
Loan.

     “Indemnified Liabilities” has the meaning set forth in Section 6.1.

     “Initial Advance” means the first advance of Up-Front Equity Cash in an amount
requested by Borrower and approved by Administrative Agent in accordance with the terms and
conditions of this Agreement.

     “Initial Advance of Loan Proceeds” means the first advance of any of the Loan
Proceeds which shall be made in accordance with the terms and conditions of this Agreement.

     “Initial Up-Front Equity Cash” means that portion of the Up-Front Equity consisting
of the sum of TWENTY FOUR MILLION FIVE HUNDRED THOUSAND DOLLARS ($24,500,000.00) in cash which
shall be deposited on the date hereof into the Up-Front Equity Account pursuant to the terms and
conditions of this Agreement.

     “L/C Borrowing” means an extension of credit resulting from a drawing under any Letter
of Credit which has not been reimbursed on the date when made or refinanced as a Loan advance.

     “L/C Credit Extension” means, with respect to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the renewal or increase of the amount thereof.

     “L/C Issuer” means Bank of America, N.A. in its capacity as issuer of Letters of
Credit hereunder or any successor issuer of Letter of Credit hereunder.

     “L/C Obligations” means, as at any date of determination, the aggregate undrawn face
amount of all outstanding Letters of Credit plus the aggregate of all L/C Borrowings.

     “Land” means the real property described in Exhibit “A”.

     “Laws” means all constitutions, treaties, statutes, laws, ordinances, regulations,
rules, orders, writs, injunctions, or decrees of the United States of America, any state or
commonwealth, any municipality, any foreign country, any territory or possession, or any Tribunal.

     “Lease” means, collectively, that certain Lease Agreement dated September 24, 2007 by
and between HF Logistics I, LLC, a Delaware limited liability company (the “Original
Landlord”), as landlord, and Skechers, as tenant, for the lease of the Improvements to be
constructed by Borrower in accordance with the terms and provisions of this Agreement, as modified
by that certain Amendment to Lease Agreement dated December 18, 2009 by and between

EXHIBIT B, PAGE 4

 

 

Original Landlord and Skechers, as assigned to Borrower pursuant to that certain Assignment of
Lease (Skechers Lease) dated April 12, 2010 executed by and between Original Landlord and Borrower,
and as further modified by that certain Second Amendment to Lease Agreement dated April 12, 2010
executed by and between Borrower and Skechers.

     “Lender” means each lender from time to time party to this Agreement and L/C Issuer.

     “Lending Office” means, as to any Lender, the office or offices of such Lender
described as such on the Schedule of Lenders, or such other office or offices as such
Lender may from time to time notify Borrower and Administrative Agent.

     “Letter of Credit” means any letter of credit issued hereunder.

     “Letter of Credit Application” means an application and agreement for the issuance or
amendment of a letter of credit in the form from time to time in use by the L/C Issuer.

     “Letter of Credit Expiration Date” means the day that is seven days prior to the
Maturity Date (or, if such day is not a Business Day, the next preceding Business Day).

     “Letter of Credit Sublimit” means an amount equal to NINETEEN MILLION DOLLARS
($19,000,000.00). The Letter of Credit Sublimit is a part of, and not in addition to, the
combined Commitments.

     “LIBOR Business Day” means a Business Day which is also a London Banking Day.

     “LIBOR Margin” means four and one half percent (4.5%) per annum.

     “LIBOR Rate” means for any applicable Interest Period for any LIBOR Rate Principal, a
simple rate per annum equal to the sum of the LIBOR Margin plus the Adjusted LIBOR Rate.

     “LIBOR Rate Principal” means any portion of the Principal Debt which bears interest
at an applicable LIBOR Rate at the time in question.

     “Loan” means the loan and Letters of Credit by Lenders to Borrower, in the amount of
lesser of (i) $55,000,000.00; (ii) 58% of the Appraised Value; (iii) the payment of 55% of the
costs incident to the Project as specified in the Budget; (iv) 1.40 times the coverage ratio using
stress tests of 8% rate, 30-year amortization and first year NOI as per the approved appraisal. In
the event the aggregate amount of the actual costs incident to the Project are less than the
aggregate amount specified in the Budget, the maximum amount described above shall be reduced by
the difference between the aggregate amount specified in the Budget and the aggregate amount of
such actual costs.

     “Loan Documents” means this Agreement (including all exhibits), the Mortgage, any
Note, the Environmental Agreement, any guaranty, financing statements, the Budget, each Draw
Request, any and all documents, instruments or agreements executed and delivered to evidence,
secure or in connection with all Letters of Credit, and such other documents evidencing, securing
or pertaining to the Loan as shall, from time to time, be executed and/or delivered by Borrower,
each of the Guarantors, or any other party to Administrative Agent or any Lender pursuant to this
Agreement, as they may be amended, modified, restated, replaced and supplemented from time to
time.

     “London Banking Day” means a day on which dealings in dollar deposits are conducted
by and between banks in the London interbank eurodollar market.

     “Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the Project, or the operations, business, properties, liabilities (actual or
contingent), condition (financial or otherwise) of the Borrower or the Borrower and its
Subsidiaries taken as a whole; (b) a material impairment of the ability of any party to the Loan
Documents to perform its obligations under any Loan Document to which it is a party; or (c) a
material adverse effect upon the legality, validity, binding effect or enforceability against any
party to the Loan Documents of any Loan Document to which it is a party.

EXHIBIT B, PAGE 5

 

 

     “Material Contract” means any contract for the performance of any work or the
supplying of any labor, materials or services which exceeds FIVE HUNDRED THOUSAND DOLLARS
($500,000.00) in total price.

     “Maturity Date” means twenty four (24) months from the date of this Agreement, as it
may be earlier terminated or extended in accordance with the terms hereof.

     “Mortgage” means the Construction Deed of Trust, Assignment of Rents and Security
Agreement and Fixture Filing dated of even date herewith, from Borrower to Administrative Agent,
securing repayment of the Indebtedness and Borrower’s performance of its other obligations to
Administrative Agent and Lenders under the Loan Documents, as amended, modified, supplemented,
restated and replaced from time to time.

     “Notes” means the Promissory Notes each dated of even date herewith executed by
Borrower and payable to the order of each Lender in the amount of each Lender’s Commitment and
collectively in the maximum principal amount of the Loan, substantially in the form of Exhibit
“M” as amended, modified, replaced, restated, extended or renewed from time to time.

     “Obligations” means all liabilities, obligations, covenants and duties of, any party
to a Loan Document arising under or otherwise with respect to any Loan Document, whether direct or
indirect (including those acquired by assumption), absolute or contingent, due or to become due,
now existing or hereafter arising and including interest and fees that accrue after the
commencement by or against any party to a Loan Document or any Affiliate thereof of any proceeding
under any Debtor Relief Laws naming such person as the debtor in such proceeding, regardless of
whether such interest and fees are allowed claims in such proceedings.

     “Payment Amount” means an advance of the Loan, an unreimbursed Administrative Agent
Advance, an unreimbursed Indemnified Liability, a reimbursement to L/C Issuer for an unreimbursed
drawing under a Letter of Credit or any other amount that a Lender is required to fund under this
Agreement.

     “Permitted Changes” means changes to the Plans or Improvements, including so-called
“field changes”, provided that the cost of any single change or extra does not exceed
FIFTY THOUSAND DOLLARS ($50,000.00) and the aggregate amount of all such changes and extras
(whether positive or negative) does not exceed FIVE HUNDRED THOUSAND DOLLARS ($500,000.00).

     “Plans” means the plans and specifications listed in Exhibit “E” and all
modifications thereof and additions thereto that are included as part of the Plans as the same
shall be approved by Administrative Agent in the exercise of its sole discretion in accordance with
the terms of this Agreement.

     “Potential Default” means any condition or event which with the giving of notice or
lapse of time or both would, unless cured or waived, become a Default.

     “Prime Rate” means, on any day, the rate of interest per annum then most recently
established by Administrative Agent as its “prime rate,” it being understood and agreed that such
rate is set by Administrative Agent as a general reference rate of interest, taking into account
such factors as Administrative Agent may deem appropriate, that it is not necessarily the lowest or
best rate actually charged to any customer or a favored rate, that it may not correspond with
future increases or decreases in interest rates charged by other lenders or market rates in
general, and that Administrative Agent may make various business or other loans at rates of
interest having no relationship to such rate. If Administrative Agent (including any subsequent
Administrative Agent) ceases to exist or to establish or publish a prime rate from which the Prime
Rate is then determined, the applicable variable rate from which the Prime Rate is determined
thereafter shall be instead the prime rate reported in The Wall Street Journal (or the
average prime rate if a high and a low prime rate are therein reported), and the Prime Rate shall
change without notice with each change in such prime rate as of the date such change is reported.

     “Principal Debt” means the aggregate unpaid principal balance of this Loan at the
time in question.

     “Pro Rata Share” means, with respect to each Lender at any time, a fraction expressed
as a percentage, the numerator of which is the amount of the Commitment of such Lender at such
time and the denominator of which is the amount of the Aggregate Commitments at such time or, if
the Aggregate Commitments have been terminated, a

EXHIBIT B, PAGE 6

 

 

fraction (expressed as a percentage, carried out to the ninth decimal place), the numerator of
which is the total outstanding amount of all Indebtedness held by such Lender at such time (taking
into account funded participations in L/C Obligations) and the denominator of which is the total
outstanding amount of all Indebtedness at such time. The initial Pro Rata Share of each Lender
named on the signature pages hereto is set forth opposite the name of that Lender on the
Schedule of Lenders.

     “Project” means the acquisition of the Land, the construction of the Improvements,
and if applicable, the leasing and operation of the Improvements.

     “Property” means the Land, the Improvements and all other property constituting the
“Mortgaged Property,” as described in the Mortgage, or subject to a right, lien or security
interest to secure the Loan pursuant to any other Loan Document.

     “Required Lenders” means as of any date of determination at least two Lenders having
at least 66-2/3% of the Aggregate Commitments or, if the Aggregate Commitments have been
terminated, at least two Lenders holding in the aggregate at least 66-2/3% of the total outstanding
amount of all Indebtedness (taking into account funded participations in L/C Obligations);
provided that the Commitment of, and the portion of the total outstanding amount of all
Indebtedness (taking into account funded participations in L/C Obligations) held by, any Defaulting
Lender shall be excluded for purposes of making a determination of Required Lenders.

     “Schedule of Lenders” means the schedule of Lenders party to this Agreement as set
forth on Exhibit “N”, as it may be modified from time to time in accordance with this
Agreement.

     “Skechers” means Skechers U.S.A., Inc., a Delaware corporation.

     “Stored Materials Advance Limit” means THREE MILLION DOLLARS ($3,000,000.00).

     “Subsidiary” means a corporation, partnership, joint venture, limited liability
company or other business entity of which a majority of the shares of securities or other
interests having ordinary voting power for the election of directors or other governing body
(other than securities or interests having such power only by reason of the happening of a
contingency) are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries.

     “Survey” means a survey prepared in accordance with Exhibit “G” or as
otherwise approved by Administrative Agent in its sole discretion.

     “Swap Contract” has the meaning set forth in the Mortgage.

     “Swap Transaction” has the meaning set forth in the Mortgage.

     “Taxes” has the meaning set forth in Section 1.11 of this Agreement.

     “TG Development” means TG Development Corp., a Delaware corporation.

     “Title Company” means First American Title Insurance Company.

     “Title Insurance” means the loan policy or policies of title insurance issued to
Administrative Agent for the benefit of Lenders by the Title Company, in an amount equal to the
maximum principal amount of the Loan, insuring the validity and priority of the Mortgage
encumbering the Land and Improvements for the benefit of Administrative Agent and Lenders.

     “Tribunal” means any state, commonwealth, federal, foreign, territorial or other
court or governmental department, commission, board, bureau, district, authority, agency, central
bank, or instrumentality, or any arbitration authority.

EXHIBIT B, PAGE 7

 

 

     “Up-Front Equity Account” means that certain deposit account number 1499708217 in
the name of Borrower established with Administrative Agent and under the control of Administrative
Agent into which the Up-Front Equity Cash has been deposited and which will be utilized by Borrower
to fund the Total Costs through the advance procedures set forth in Exhibit “F”.

     “Up-Front Equity Cash” means collectively, the Initial Up-Front Equity Cash and the
Deferred Up-Front Equity Cash.

2. FINANCIAL STATEMENTS:

     Borrower shall provide or cause to be provided to Administrative Agent with a copy for each
Lender all of the following:

(a) Financial Statements of Borrower (i) for each fiscal year as soon as reasonably
practicable and in any event within ninety (90) days after the close of each fiscal year.
Financial Statements of Borrower shall be certified by the manager (or managing member as
applicable) of the Borrower.

(b) Financial Statements of TG Development certified by the chief financial officer of TG
Development (i) for each fiscal year as soon as reasonably practicable and in any event
within ninety (90) days after the close of each fiscal year; (ii) for each calendar quarter
as soon as reasonably practicable and in any event within forty-five (45) days after the end
of each calendar quarter; provided that annual statements of cash flow and amounts and
sources of contingent liabilities shall only be provided annually.

(c) Financial Statements of TG Development which are consolidated and consolidating and
which include each of the other Guarantors certified by the chief financial officer of TG
Development (i) for each fiscal year as soon as reasonably practicable and in any event
within ninety (90) days after the close of each fiscal year; and (iv) for each calendar
quarter as soon as reasonably practicable and in any event within forty-five (45) days
after the end of each calendar quarter; provided that annual statements of cash flow and
amounts and sources of contingent liabilities shall only be provided annually.

(d) Prior to commencement of operations of the Improvements, a capital and operating budget
for the Property for its first fiscal year (or portion thereof) of operations; and after
commencement of operations in the Improvements: (i) prior to the beginning of each fiscal
year of Borrower, a capital and operating budget for the Property; and (ii) for each month
(and for the fiscal year through the end of that month) (A) a statement of all income and
expenses in connection with the Property, and (B) if requested by Administrative Agent, a
current leasing status report (including tenants’ names, occupied tenant space, lease
terms, rents, vacant space and proposed rents), including in each case a comparison to the
budget, as soon as reasonably practicable but in any event within fifteen (15) days after
the end of each such month, certified in writing as true and correct by a representative of
Borrower satisfactory to Administrative Agent. Items provided under this paragraph shall be
in form and detail satisfactory to Administrative Agent.

(e) Copies of filed federal and state income tax returns of Borrower and TG Development for
each taxable year, within twenty (20) days after filing but in any event not later than one
hundred twenty (120) days after the close of each such taxable year. Notwithstanding the
foregoing, in the event Borrower or TG Development timely files for an extension for the
filing of a federal or state income tax return and provides Administrative Agent with a
copy of the extension filing within five (5) days of filing same, a copy of the return
shall be provided to Administrative Agent five (5) days after the filing of such return but
in any event not later than the expiration of the applicable extension period.

(f) From time to time promptly after Administrative Agent’s request, such additional
information, reports and statements respecting the Property and the Improvements, or the
business operations and financial condition of each reporting party, as Administrative
Agent may reasonably request.

All Financial Statements shall be in form and detail satisfactory to Administrative Agent and shall
contain or be attached to the signed and dated written certification as required above in form
specified by Administrative Agent to

EXHIBIT B, PAGE 8

 

 

certify that the Financial Statements are furnished to Administrative Agent in connection with
the extension of credit by Lenders and constitute a true and correct statement of the reporting
party’s financial position.

EXHIBIT B, PAGE 9

 

 

EXHIBIT “C”

CONDITIONS PRECEDENT TO THE INITIAL ADVANCE

     As conditions precedent to the Initial Advance, if and to the extent required by
Administrative Agent, Administrative Agent shall have received and approved the following:

     1. Fees and Expenses. Any and all required commitment and other fees, and evidence
satisfactory to Administrative Agent that Borrower has paid all other fees, costs and expenses
(including the fees and costs of Administrative Agent’s counsel) then required to be paid pursuant
to this Agreement and all other Loan Documents, including, without limitation, all fees, costs and
expenses that Borrower is required to pay pursuant to any loan application or commitment.

     2. Financial Statements. The Financial Statements of Borrower and TG Development or
any other party required by any loan application or commitment or otherwise required by
Administrative Agent.

     3. Appraisal. A market value appraisal of the Property made within one hundred eighty
(180) days prior to the date of this Agreement, which appraises the Property on a “completed value”
basis at not less than the Appraised Value. The appraiser and appraisal must be satisfactory to
Administrative Agent (including satisfaction of applicable regulatory requirements) and the
appraiser must be engaged directly by Administrative Agent.

     4. Draw Schedule and Budget. Borrower’s proposed cash flow, draw schedule, and
construction schedule for the Project, and Administrative Agent shall be satisfied, in its sole
discretion, that the Improvements may be completed in accordance with the construction schedule
and for costs not exceeding those set forth in the Budget.

     5. Authorization. Evidence Administrative Agent requires of the existence, good
standing, authority and capacity of Borrower, Guarantors, and their respective constituent
partners, members, managers and owners (however remote) to execute, deliver and perform their
respective obligations to Administrative Agent and Lenders under the Loan Documents, including:

     (a) For each partnership (including a joint venture or limited partnership): (i) a true and
complete copy of an executed partnership agreement or limited partnership agreement, and all
amendments thereto; (ii) for each limited partnership, a copy of the certificate of limited
partnership and all amendments thereto accompanied by a certificate issued by the appropriate
governmental official of the jurisdiction of formation that the copy is true and complete, and
evidence Administrative Agent requires of registration or qualification to do business in the
state where Borrower’s principal place of business is located and the state where the Project is
located, and (iii) a partnership affidavit certifying who will be authorized to execute or attest
any of the Loan Documents, and a true and complete copy of the partnership resolutions approving
the Loan Documents and authorizing the transactions contemplated in this Agreement and the other
Loan Documents.

     (b) For each corporation: (i) a true and complete copy of its articles of incorporation and
by-laws, and all amendments thereto, a certificate of incumbency of all of its officers who are
authorized to execute or attest to any of the Loan Documents, and a true and complete copy of
resolutions approving the Loan Documents and authorizing the transactions contemplated in this
Agreement and the other Loan Documents; and (ii) certificates of existence, good standing and
qualification to do business issued by the appropriate governmental officials in the state of its
formation and, if different, the state in which the Project is located.

     (c) For each limited liability company or limited liability partnership: (i) a true and
complete copy of the articles of organization and operating agreement, and all amendments thereto,
a certificate of incumbency of all of its members who are authorized to execute or attest to any
of the Loan Documents, and a true and complete copy of resolutions approving the Loan Documents
and authorizing the transactions contemplated in this Agreement and the other Loan Documents; and
(ii) certificates of existence, good standing and qualification to do business issued by
appropriate governmental officials in the state of its formation and, if different, the state in
which the Property is located.

EXHIBIT C, PAGE 1

 

 

     (d) For each entity or organization that is not a corporation, partnership, limited
partnership, joint venture, limited liability company or limited liability partnership, a copy of
each document creating it or governing the existence, operation, power or authority of it or its
representatives.

     (e) All certificates, resolutions, and consents required by Administrative Agent applicable
to the foregoing.

     6. Loan Documents. From Borrower, Guarantors and each other person required by
Administrative Agent, duly executed, acknowledged and/or sworn to as required, and delivered to
Administrative Agent (with a copy for each Lender) all Loan Documents then required by
Administrative Agent, dated the date of this Agreement, each in form and content satisfactory to
Administrative Agent, and evidence Administrative Agent requires that the Mortgage has been
recorded in the official records of the city or county in which the Property is located and UCC-1
financing statements have been filed in all filing offices that Administrative Agent may require.

     7. Opinions. The written opinion of counsel satisfactory to Administrative Agent for
the Borrower, Guarantors, and any other persons or entities addressed to Administrative Agent for
the benefit of Lenders, dated the date of this Agreement.

     8. Survey; No Special Flood Hazard. (a) two (2) prints of an original survey (with a
copy for each Lender) of the Land and improvements thereon dated not more than sixty (60) days
prior to the date of this Agreement (or dated such earlier date, if any, as is satisfactory to the
Title Company, but in any event not more than one hundred eighty (180) days prior to the date of
this Agreement) satisfactory to Administrative Agent and the Title Company and otherwise, to the
extent required by Administrative Agent, complying with Exhibit “G”, and (b) a flood
insurance policy (with a copy for each Lender) in an amount equal to the lesser of the maximum
Loan amount or the maximum amount of flood insurance available under the Flood Disaster Protection
Act of 1973, as amended, and otherwise in compliance with the requirements of the Loan Documents,
or evidence satisfactory to Administrative Agent that none of the Land is located in a flood
hazard area.

     9. Title Insurance. An ALTA title insurance policy (or a title insurance commitment
marked through the Loan closing date with all Schedule B-1 requirements and standard exceptions
deleted), issued by the Title Company (which shall be approved by the Administrative Agent) in the
maximum amount of the Loan plus any other amount secured by the Mortgage, insuring that the
Mortgage constitutes a valid lien covering the Land and all Improvements thereon, having the
priority required by Administrative Agent and subject only to those exceptions and encumbrances
(regardless of rank or priority) Administrative Agent approves, in a form acceptable to
Administrative Agent, and with all “standard” exceptions which can be deleted, including the
exception for matters which a current survey would show, deleted to the fullest extent authorized
under applicable title insurance rules, and Borrower shall satisfy all requirements therefor
permitted; containing no exception for standby fees or real estate taxes or assessments other than
those for the year in which the closing occurs to the extent the same are not then due and payable
and endorsed “not yet due and payable” and no exception for subsequent assessments for prior years
(other than any lien of supplemental taxes assessed pursuant to California Revenue and Taxation
Code Section 75, et sq.); providing full coverage against mechanics’ and materialmens’ liens to the
extent authorized under applicable title insurance rules, and Borrower shall satisfy all
requirements therefor; insuring that no restrictive covenants shown in the Title Insurance have
been violated, and that no violation of the restrictions will result in a reversion or forfeiture
of title; insuring all appurtenant easements; insuring that fee simple indefeasible or marketable
(as coverage is available) fee simple title to the Land and Improvements is vested in Borrower;
containing such affirmative coverage and endorsements as Administrative Agent may require and are
available under applicable title insurance rules, and Borrower shall satisfy all requirements
therefor; insuring any easements, leasehold estates or other matters appurtenant to or benefiting
the Land and/or the Improvements as part of the insured estate; insuring the right of access to the
Land to the extent authorized under applicable title insurance rules, and Borrower shall satisfy
all requirements therefor; and containing provisions acceptable to Administrative Agent regarding
advances and/or readvances of Loan funds after closing. Borrower and Borrower’s counsel shall not
have any interest, direct or indirect, in the Title Company (or its agent) or any portion of the
premium paid for the Title Insurance.

     10. Plans. Two (2) true and correct copies of all existing Plans (including the site
plan), together with evidence satisfactory to Administrative Agent that all applicable
governmental authorities, Borrower, Borrower’s architect, engineer, and contractors and
Construction Consultant have approved the same.

EXHIBIT C, PAGE 2

 

 

     11. Contracts. If requested by Administrative Agent (a) a list containing the
names and addresses of all existing material contractors, architects, engineers, and other
suppliers of services and materials for the Project under any Material Contract, their respective
contract amounts, and a copy of their contracts; and (b) duly executed, acknowledged and delivered
originals from each contractor, architect, engineer, subcontractor, or supplier of services or
materials as may be required by Administrative Agent under any Material Contract, of (i) consents
or other agreements satisfactory to Administrative Agent and (ii) agreements satisfactory to
Administrative Agent subordinating all rights, liens, claims and charges they may have or acquire
against Borrower or the Property to the rights, liens and security interests of Lenders.

     12. Insurance Policies. The insurance policies initially required by Administrative
Agent, pursuant to the Loan Documents, together with evidence satisfactory to Administrative Agent
that all premiums therefor have been paid for a period of not less than one (1) year from the date
of this Agreement and that the policies are in full force and effect.

     13. Leases. If Exhibit “I” is attached hereto, (i) true and correct copies of
all leases and subleases, and guarantees thereof; (ii) estoppel certificates and subordination
non-disturbance and attornment agreements, dated within thirty (30) days prior to this Agreement in
form and content satisfactory to Administrative Agent, from the tenants and subtenants as
Administrative Agent requires; (iii) evidence satisfactory to Administrative Agent of Borrower’s
compliance with the leases; and (iv) evidence satisfactory to Administrative Agent of the tenants’
approval of all matters requiring their approval.

     14. Environmental Compliance/Report. Evidence satisfactory to Administrative Agent
that no portion of the Land is “wetlands” under any applicable Law and that the Land does not
contain and is not within or near any area designated as a hazardous waste site by any Tribunal,
that neither the Property nor any adjoining property contains or has ever contained any substance
classified as hazardous or toxic (or otherwise regulated, such as, without limitation, asbestos,
radon and/or petroleum products) under any Law or governmental requirement pertaining to health or
the environment, and that neither the Property nor any use or activity thereon violates or is or
could be subject to any response, remediation, clean-up or other obligation under any Law or
governmental requirement pertaining to health or the environment including without limitation, a
written report of an environmental assessment of the Property, made within twelve (12) months
prior to the date of this Agreement, by an engineering firm, and of a scope and in form and
content satisfactory to Administrative Agent, complying with Administrative Agent’s established
guidelines, showing that there is no evidence of any such substance which has been generated,
treated, stored, released or disposed of in the Property, and such additional evidence as may be
required by Administrative Agent. All reports, drafts of reports, and recommendations, whether
written or oral, from such engineering firm shall be made available and communicated to
Administrative Agent.

     15. Soil Reports. A soil composition and test boring report and a foundation report
satisfactory to Administrative Agent regarding the Land, made within three (3) years prior to the
date of this Agreement, by a licensed professional engineer satisfactory to Lenders.

     16. Access, Utilities, and Laws. (a) evidence satisfactory to Administrative Agent
that the Property abuts and has fully adequate direct and free access to one or more public
streets, dedicated to public use, fully installed and accepted by the appropriate Tribunal, that
all fees, costs and expenses of the installation and acceptance thereof have been paid in full,
and that there are no restrictions on the use and enjoyment of such streets which would adversely
affect the Project; (b) letters from the applicable utility companies or governmental authorities
confirming that all utilities necessary for the Improvements are available at the Land in
sufficient capacity, together with evidence satisfactory to Administrative Agent of paid impact
fees, utility reservation deposits, and connection fees required to assure the availability of
such services; (c) evidence satisfactory to Administrative Agent that all applicable zoning
ordinances, restrictive covenants and governmental requirements affecting the Property permit the
use for which the Property is intended and have been or will be complied with without the
existence of any variance, non-complying use, nonconforming use or other special exception; (d)
evidence satisfactory to Administrative Agent that the Land and Improvements comply and will
comply with all Laws and governmental requirements regarding subdivision and platting and would so
comply if the Land and the Improvements thereon were conveyed as a separate parcel; (e) evidence
satisfactory to Administrative Agent of compliance by Borrower and the Property, and the proposed
construction, use and occupancy of the Improvements, with such other applicable Laws and
governmental requirements

EXHIBIT C, PAGE 3

 

 

as Administrative Agent may request, including all Laws and governmental requirements
regarding access and facilities for handicapped or disabled persons including, without limitation
and to the extent applicable; any other applicable state of California requirements; The Federal
Architectural Barriers Act (42 U.S.C. § 4151 et seq.); The Fair Housing Amendments Act of 1988 (42
U.S.C. § 3601 et seq.); The Americans With Disabilities Act of 1990 (42 U.S.C. § 12101 et seq.);
The Rehabilitation Act of 1973 (29 U.S.C. § 794) and any other state or local requirements; and
(f) written evidence satisfactory to Administrative Agent that construction of the Improvements on
the Land is permissible under all federal, state and local statutes, regulations and rulings
protecting tidal and non-tidal wetlands and other environmentally protected areas.

     17. Priority. (a) evidence satisfactory to Administrative Agent that prior to and as
of the time the Mortgage was filed for record (i) no activity or circumstance was visible on or
near the Land which would constitute inception of a mechanic’s or materialman’s lien against the
Property; (ii) no contract, or memorandum thereof, for construction, design, surveying, or any
other service relating to the Project has been filed for record in the county where the Property
is located; and (iii) no mechanic’s or materialman’s lien claim or notice, lis pendens, judgment,
or other claim or encumbrance against the Property has been filed for record in the county where
the Property is located or in any other public record which by Law provides notice of claims or
encumbrances regarding the Property; (b) a certificate or certificates of a reporting service
acceptable to Administrative Agent, reflecting the results of searches made not earlier than ten
(10) days prior to the date of this Agreement, (i) of the central and local Uniform Commercial
Code records, showing no filings against any of the collateral for the Loan or against Borrower
otherwise except as consented to by Administrative Agent; and (ii) if required by Administrative
Agent, of the appropriate judgment and tax lien records, showing no outstanding judgment or tax
lien against Borrower or any Guarantor.

     18. Bonds. (a) a performance bond for the general contractor in amount, form and
content satisfactory to Administrative Agent and (b) a payment bond for the general contractor, in
form and content satisfactory to Administrative Agent, and if required by Administrative Agent duly
recorded before any construction is commenced. Each bond shall be issued by a corporate surety
acceptable to Administrative Agent and authorized and admitted to do business and to execute bonds
in the state where the Project is located and contain a dual obligee rider with power of attorney
in favor of Administrative Agent in form and content satisfactory to Administrative Agent.

     19. Taxes and Impact Fees. Evidence satisfactory to Administrative Agent (a) of the
identity of all taxing authorities and utility districts (or similar authorities) having
jurisdiction over the Property or any portion thereof; (b) that to the extent they have been
assessed, all taxes, impact fees, water and sewer connection charges and any other similar charges
have been paid, including copies of receipts or statements marked “paid” by the appropriate
authority; and (c) that the Land is a separate tax lot or lots with separate assessment or
assessments of the Land and Improvements, independent of any other land or improvements and that
the Land is a separate legally subdivided parcel.

     20. Intentionally Omitted.

     21. Other Documents. Such other documents and certificates as Administrative Agent
may reasonably request from Borrower, any Guarantor, and any other person or entity, in form and
content satisfactory to Administrative Agent.

     22. Intentionally Omitted.

     23. Intentionally Omitted.

     24. Up-Front Equity. Evidence satisfactory to Administrative Agent that all
components of the Up-Front Equity has been fully paid and funded except for the Deferred Up-Front
Equity Cash (it being acknowledged and agreed to that prior to first Advance of Loan Proceeds, the
Deferred Up-Front Equity Cash shall be deposited by Borrower into the Up-Front Equity Account).

     25. Borrower Identification Due Diligence. Administrative Agent and each Lender shall
have received all due diligence materials they deem necessary with respect to verifying the
Borrower’s identity and background information in a manner satisfactory to each of them.

EXHIBIT C, PAGE 4

 

 

EXHIBIT “D”

BUDGET

EXHIBIT D, PAGE 1

 

 

EXHIBIT “D”

BUDGET — HF Logistics-SKX T1, LLC

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	$ Per Sq. Ft.	 	% of	 	$ Per Sq. Ft.	 	 	 	 
	LINE ITEMS	 	of Land Area	 	Total Costs	 	of Bldg Area	 	$ Per Unit	 	Total Costs
	LAND
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Land Acquisition (Cost)
	 	 	5.00	 	 	 	14.4	%	 	 	9.40	 	 	 	0	 	 	 	17,120,000.00	 
	 
	 	 	 	 	 	 	0.0	%	 	 	—	 	 	 	0	 	 	 	 	 
	 
	 	 	 	 	 	 	0.0	%	 	 	—	 	 	 	0	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	SUB-TOTAL LAND
	 	 	5.00	 	 	 	14.4	%	 	 	9.40	 	 	 	—	 	 	 	17,120,000.00	 
	 
	HARD COSTS
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	GC Contract (Prime Contract)
	 	 	 	 	 	 	[*]	%	 	 	[*]	 	 	 	0	 	 	 	[*]	 
	GC Contract (Eucalyptus St. Costs)
	 	 	 	 	 	 	[*]	%	 	 	[*]	 	 	 	0	 	 	 	[*]	 
	Pre-Purchased Items (paid by Borrower equity)
	 	 	 	 	 	 	1.2	%	 	 	0.78	 	 	 	0	 	 	 	1,413,114.00	 
	Borrower’s General Conditions
	 	 	 	 	 	 	0.2	%	 	 	0.13	 	 	 	0	 	 	 	233,000.00	 
	Previous Site Prep (already paid by Borrower)
	 	 	 	 	 	 	0.4	%	 	 	0.24	 	 	 	0	 	 	 	429,149.00	 
	 
	 	 	 	 	 	 	0.0	%	 	 	—	 	 	 	0	 	 	 	 	 
	 
	 	 	 	 	 	 	0.0	%	 	 	—	 	 	 	0	 	 	 	 	 
	 
	 	 	 	 	 	 	0.0	%	 	 	—	 	 	 	0	 	 	 	 	 
	 
	 	 	 	 	 	 	0.0	%	 	 	—	 	 	 	0	 	 	 	 	 
	 
	 	 	 	 	 	 	0.0	%	 	 	—	 	 	 	0	 	 	 	 	 
	 
	 	 	 	 	 	 	0.0	%	 	 	—	 	 	 	0	 	 	 	 	 
	 
	 	 	 	 	 	 	0.0	%	 	 	—	 	 	 	0	 	 	 	 	 
	 
	 	 	 	 	 	 	0.0	%	 	 	—	 	 	 	0	 	 	 	 	 
	 
	 	 	 	 	 	 	0.0	%	 	 	—	 	 	 	 0	 	 	 	 	 
	Hard Costs Contingency
	 	 	[*]	%	 	 	[*]	%	 	 	[*]	 	 	 	0	 	 	 	[*]	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	SUB-TOTAL HARD COSTS
	 	 	 	 	 	 	[*]	%	 	 	[*]	 	 	 	—	 	 	 	[*]	 
	 
	SOFT COSTS
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Architectural, Engineering and Other Consultants
	 	 	 	 	 	 	[*]	%	 	 	[*]	 	 	 	0	 	 	 	[*]	 
	Government Fees
	 	 	 	 	 	 	2.6	%	 	 	1.68	 	 	 	0	 	 	 	3,058,000.00	 
	Construction Sureties
	 	 	 	 	 	 	0.3	%	 	 	0.19	 	 	 	0	 	 	 	337,000.00	 
	Impact Fees
	 	 	 	 	 	 	[*]	%	 	 	[*]	 	 	 	0	 	 	 	[*]	 
	Insurance and Taxes
	 	 	 	 	 	 	1.0	%	 	 	0.65	 	 	 	0	 	 	 	1,184,000.00	 
	Leasing Commissions
	 	 	 	 	 	 	1.9	%	 	 	1.24	 	 	 	0	 	 	 	2,250,000.00	 
	Skecher’s Alternative Site Rental
	 	 	 	 	 	 	0.8	%	 	 	0.55	 	 	 	0	 	 	 	1,000,000.00	 
	Entitlements
	 	 	 	 	 	 	2.1	%	 	 	1.39	 	 	 	0	 	 	 	2,537,000.00	 
	Development Management Fee
	 	 	 	 	 	 	0.6	%	 	 	0.42	 	 	 	0	 	 	 	761,924.00	 
	Project and Construction Management
	 	 	 	 	 	 	2.4	%	 	 	1.56	 	 	 	0	 	 	 	2,843,000.00	 
	Solar Facility
	 	 	 	 	 	 	[*]	%	 	 	[*]	 	 	 	0	 	 	 	[*]	 
	Closing/legal Costs
	 	 	 	 	 	 	0.2	%	 	 	0.12	 	 	 	0	 	 	 	227,052.00	 
	Site Grading and Other Cash Sureties
	 	 	 	 	 	 	1.3	%	 	 	0.84	 	 	 	0	 	 	 	1,535,076.00	 
	Additional Cash Collateral (CD)
	 	 	 	 	 	 	4.6	%	 	 	3.02	 	 	 	0	 	 	 	5,500,000.00	 
	 
	 	 	 	 	 	 	0.0	%	 	 	—	 	 	 	0	 	 	 	 	 
	 
	 	 	 	 	 	 	0.0	%	 	 	—	 	 	 	0	 	 	 	 	 
	 
	 	 	 	 	 	 	0.0	%	 	 	—	 	 	 	0	 	 	 	 	 
	 
	 	 	 	 	 	 	0.0	%	 	 	—	 	 	 	0	 	 	 	 	 
	 
	 	 	 	 	 	 	0.0	%	 	 	—	 	 	 	0	 	 	 	 	 
	 
	 	 	 	 	 	 	0.0	%	 	 	—	 	 	 	0	 	 	 	 	 
	 
	 	 	 	 	 	 	0.0	%	 	 	—	 	 	 	0	 	 	 	 	 
	 
	 	 	 	 	 	 	0.0	%	 	 	—	 	 	 	0	 	 	 	 	 
	 
	 	 	 	 	 	 	0.0	%	 	 	—	 	 	 	0	 	 	 	 	 
	 
	 	 	 	 	 	 	0.0	%	 	 	—	 	 	 	0	 	 	 	 	 
	 
	 	 	 	 	 	 	0.0	%	 	 	—	 	 	 	0	 	 	 	 	 
	Fees
	 	 	 	 	 	 	0.6	%	 	 	0.41	 	 	 	0	 	 	 	737,500.00	 
	Developer’s Fee
	 	 	 	 	 	 	0.0	%	 	 	—	 	 	 	0	 	 	 	 	 
	Interest Reserve
	 	 	 	 	 	 	1.7	%	 	 	1.10	 	 	 	0	 	 	 	2,000,000.00	 
	Operating Deficit
	 	 	 	 	 	 	0.0	%	 	 	—	 	 	 	0	 	 	 	 	 
	Soft Cost Contingency
	 	 	0.0	%	 	 	0.0	%	 	 	—	 	 	 	0	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	SUB-TOTAL SOFT COSTS
	 	 	 	 	 	 	[*]	%	 	 	[*]	 	 	 	0	 	 	 	[*]	 
	 
	TOTAL BUDGET
	 	 	 	 	 	 	[*]	%	 	 	[*]	 	 	 	0	 	 	 	[*]	 
	 
	EQUITY / OTHER SOURCES OF FUNDS
	 	TIMING	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Upfront Equity
	 	Upfront	 	 	[*]	%	 	 	[*]	 	 	 	0	 	 	 	[*]	 
	Upfront Equity (contribution from HF Logistics SKX
T2)
	 	Upfront	 	 	0.1	%	 	 	0.08	 	 	 	0	 	 	 	150,000.00	 
	Additional Cash Collateral (CD)
	 	Not Equity	 	 	4.6	%	 	 	3.02	 	 	 	0	 	 	 	5,500,000.00	 
	Deferred Equity (Covered by Grant subject to Exhibit F
	 	Deferred	 	 	0.8	%	 	 	0.55	 	 	 	0	 	 	 	1,000,000.00	 
	Section 2.(f) of the Loan Agreement)
	 	 	 	 	 	 	0.0	%	 	 	—	 	 	 	0	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	SUB-TOTAL EQUITY/OTHER SOURCES OF FUNDS
	 	 	 	 	 	 	[*]	%	 	 	[*]	 	 	 	0	 	 	 	[*]	 
	 
	LOAN PROCEEDS
	 	 	 	 	 	 	46.1	%	 	 	30.21	 	 	 	0	 	 	 	55,000,000.00	 
	 

 

			
	*	 	Confidential Portions Omitted and Filed Separately with the Commission.

 

 

EXHIBIT “E”

PLANS

EXHIBIT E, PAGE 1

 

 

Contract#: MH00-121-226

Project: Hhighland Fairview Corporate Park

Trade: General Contractor

EXHIBIT “E”

DRAWING LOG

SKECHERS DISTRIBUTION CENTER

29800 Eucalyptus Avenue, Rancho Belago, California 92555

	 	 	 	 	 	 	 

	ARCHITECTURAL

	A0.1

	 	Highland Fairview Corporate Park Title Sheet — ASI #2
	 	11/11/2008
	 	Delta 2
	A0.2

	 	Highland Fairview Corporate Park General Sheet
	 	5/21/2008	 	 
	A0.3.1

	 	Disability Access Notes
	 	5/21/2008	 	 
	A0.3.2

	 	Disability Access Notes
	 	5/21/2008	 	 
	A0.3.3

	 	Disability Access Notes
	 	5/21/2008	 	 
	A1.1

	 	Overall Site Plan
	 	5/21/2008	 	 
	A1.2

	 	Enlarged Site Plan
	 	5/21/2008	 	 
	A1.3

	 	Enlarged Site Plan
	 	5/21/2008	 	 
	A1.4

	 	Enlarged Site Plan
	 	12/4/2008
	 	Delta 4
	A1.5

	 	Enlarged Site Plan
	 	12/4/2008
	 	Delta 5
	A1.6

	 	Enlarged Site Plan
	 	12/4/2008
	 	Delta 6
	A1.7

	 	Pump House Plans
	 	5/21/2008	 	 
	A1.8

	 	Enlarged Site Plan
	 	12/4/2008
	 	Delta 4
	A2.1

	 	Overall Floor Plan
	 	5/21/2008	 	 
	A2.2

	 	Enlarged Floor Plan — ASI #4
	 	1/28/2009
	 	Delta 6
	A2.3

	 	Enlarged Mezzanine Plan — ASI #2
	 	11/11/2008
	 	Delta 2
	A2.4

	 	Enlarged Floor Plan
	 	5/21/2008	 	 
	A2.5

	 	Enlarged Floor Plan
	 	5/21/2008	 	 
	A2.6

	 	Enlarged Floor Plan
	 	5/21/2008	 	 
	A2.7

	 	Enlarged Floor Plan — ASI #2
	 	11/11/2008
	 	Delta 3
	A2.8

	 	Enlarged Restroom Plan
	 	5/21/2008	 	 
	A2.9

	 	Enlarged Restroom Plan — ASI #4
	 	1/28/2009
	 	Delta 6
	A2.10

	 	Enlarged Stair Plan
	 	5/21/2008	 	 
	A2.11

	 	Reflected Ceiling Plan — ASI #4
	 	1/28/2009
	 	Delta 6
	A2.12

	 	Reflected Ceiling Plan — ASI #2
	 	11/11/2008
	 	Delta 2
	A2.13

	 	Reflected Ceiling Plan — ASI #4
	 	1/28/2009
	 	Delta 6
	A2.14

	 	Floor Plan — ASI #2
	 	11/11/2008
	 	Delta 2
	A2.15

	 	Enlarged Floor Plan
	 	5/21/2008	 	 
	A2.16

	 	Enlarged Roof Plan
	 	5/21/2008	 	 
	A3.1

	 	Elevations
	 	5/21/2008	 	 
	A3.2

	 	Elevations
	 	5/21/2008	 	 
	A3.3

	 	Elevations
	 	5/21/2008	 	 
	A3.4

	 	Elevations
	 	5/21/2008	 	 
	A3.5

	 	Elevations — ASI #2
	 	11/11/2008
	 	Delta 2
	A4.1

	 	Wall Section
	 	5/21/2008	 	 
	A4.2

	 	Wall Section — ASI #2
	 	11/11/2008
	 	Delta 2
	A4.3

	 	Wall Section
	 	5/21/2008	 	 
	A4.4

	 	Wall Section
	 	5/21/2008	 	 
	A4.5

	 	Wall Section
	 	5/21/2008	 	 

 

 

Contract# MH00-121-226

Project: Hhighland Fairview Corporate Park

Trade: General Contractor

	 	 	 	 	 	 	 

	ARCHITECTURAL CONTINUATION

	A4.6

	 	Wall Section
	 	5/21/2008	 	 
	A4.7

	 	Wall Section
	 	5/21/2008	 	 
	A5.1

	 	Room Finish Schedule — ASI #2
	 	11/11/2008
	 	Delta 3
	A5.1A

	 	Door Hardware Schedule
	 	5/21/2008	 	 
	A5.2

	 	Door Schedule
	 	11/11/2008
	 	Delta 2
	A5.3

	 	Room Finish Legend — ASI #2
	 	11/11/2008
	 	Delta 2
	A5.4

	 	First Floor Office Finish Plan — ASI #2
	 	11/11/2008
	 	Delta 2
	A5.5

	 	Mezzanine Finish Plan — ASI #2
	 	11/11/2008
	 	Delta 2
	A5.6

	 	Finish Plan @ Warehouse
	 	5/21/2008	 	 
	A6.1

	 	Interior Elevations — ASI #2
	 	11/11/2008
	 	Delta 2
	A6.2

	 	Interior Elevations — ASI #3
	 	11/11/2008
	 	Delta 3
	A6.3

	 	Interior Elevations — ASI #4
	 	11/11/2008
	 	Delta 4
	A6.4

	 	Interior Elevations
	 	5/21/2008	 	 
	A6.5

	 	Interior Elevations
	 	5/21/2008	 	 
	A6.6

	 	Interior Elevations — ASI #2
	 	11/11/2008
	 	Delta 2
	A6.7

	 	Not Used	 	 	 	 
	A6.8

	 	Interior Elevations
	 	5/21/2008	 	 
	A6.9

	 	Interior Elevations
	 	5/21/2008	 	 
	A6.10

	 	Interior Elevations
	 	5/21/2008	 	 
	AD.1

	 	Details
	 	5/21/2008	 	 
	AD.1A

	 	Site Details for ADA Access
	 	12/4/2009
	 	Delta 4
	AD.2

	 	Details
	 	5/21/2008	 	 
	AD.3

	 	Details — ASI #1
	 	9/15/2008
	 	Delta 1
	AD.3A

	 	Details — ASI #3
	 	12/30/2008
	 	Delta 5
	AD.4

	 	Details
	 	5/21/2008	 	 
	AD.5

	 	Details
	 	5/21/2008	 	 
	AD.6

	 	Details
	 	5/21/2008	 	 
	AD.7

	 	Details
	 	5/21/2008	 	 
	AD.8

	 	Details
	 	5/21/2008	 	 
	AD.9

	 	Details
	 	5/21/2008	 	 
	AD.10

	 	Details — ASI #2
	 	11/11/2008
	 	Delta 2
	AD.11

	 	Details — ASI #2
	 	11/11/2008
	 	Delta 2
	EGRESS PLAN

	T01

	 	Title Layout Egress Plan West Section
	 	12/10/2008
	 	Rev. 05
	T02

	 	Title Layout Egress Plan Center Section Mezzanine Level
	 	12/10/2008
	 	Rev. 05
	T03

	 	Title Layout Egress Plan Center Section Floor Level
	 	12/10/2008
	 	Rev. 05
	T04

	 	Title Layout Egress Plan East Section
	 	12/10/2008
	 	Rev. 05
	 

	 	Floor Level Restrooms / Mezzanine Level Restrooms
	 	12/10/2008	 	 
	STRUCTURAL

	S1

	 	Foundation Plan — ASI #4
	 	1/28/2009
	 	(Delta 6)
	S2

	 	Foundation Plan — ASI #4
	 	1/28/2009
	 	(Delta 6)
	S3

	 	Foundation Plan — ASI #4
	 	1/28/2009
	 	(Delta 6)
	S4

	 	Partial Enlarged Foundation Plan — ASI #4
	 	1/28/2009
	 	(Delta 6)
	S5

	 	Partial Enlarged Foundation Plan
	 	7/25/2008	 	 
	S6

	 	Partial Enlarged Foundation Plan
	 	7/25/2008	 	 

 

 

Contract#: MH00-121-226

Project: Hhighland Fairview Corporate Park

Trade: General Contractor

	 	 	 	 	 	 	 

	STRUCTURAL CONTINUATION

	S7

	 	Partial Enlarged Foundation Plan — ASI #2
	 	11/11/2008
	 	Delta 2
	S8

	 	Mezzanine Floor Framing Plan — ASI #2
	 	11/11/2008
	 	Delta 3
	S9

	 	Partial Roof Framing Plan — ASI #4
	 	1/28/2009
	 	Delta 6
	S10

	 	Partial Roof Framing Plan — ASI #4
	 	1/28/2009
	 	Delta 6
	S11

	 	Partial Roof Framing Plan — ASI #4
	 	1/28/2009
	 	Delta 6
	S12

	 	Roof Information
	 	7/25/2008	 	 
	S13

	 	Partial Enlarged Roof Framing Plan — ASI #4
	 	1/28/2009
	 	Delta 6
	S14

	 	Partial Enlarged Roof Framing Plan — ASI #1
	 	9/15/2008
	 	Delta 1
	S15

	 	Partial Enlarged Roof Framing Plan — ASI #4
	 	1/28/2009
	 	Delta 6
	S15A

	 	Curtain Wall Framing Plan
	 	7/25/2008	 	 
	S16

	 	Partial Enlarged Roof Framing Plan — ASI #2
	 	11/11/2008
	 	Delta 2
	S17

	 	Panel Elevation — ASI #1
	 	9/15/2008
	 	Delta 1
	S18

	 	Panel Elevation — ASI #1
	 	9/16/2008
	 	Delta 1
	S19

	 	Panel Elevation — ASI #1
	 	9/17/2008
	 	Delta 1
	S20

	 	Panel Elevation — ASI #2
	 	11/11/2008
	 	Delta 3
	S21

	 	Panel Elevation — ASI #1
	 	9/15/2008
	 	Delta 1
	S22

	 	Panel Elevation — ASI #1
	 	9/15/2008
	 	Delta 1
	S23

	 	Panel Elevation — ASI #1
	 	9/15/2008
	 	Delta 1
	S24

	 	Panel Elevation — ASI #1
	 	9/15/2008
	 	Delta 1
	S25

	 	Panel Elevation — ASI #1
	 	9/15/2008
	 	Delta 1
	S26

	 	Panel Elevation — ASI #1
	 	9/15/2008
	 	Delta 1
	S27

	 	Panel Elevation — ASI #2
	 	11/11/2008
	 	Delta 2
	S28

	 	Panel Elevation — ASI #2
	 	11/11/2008
	 	Delta 2
	S29

	 	Panel Elevation — ASI #1
	 	9/15/2008
	 	Delta 1
	S30

	 	Panel Elevation — ASI #1
	 	9/15/2008
	 	Delta 1
	S31

	 	Panel Elevation — ASI #1
	 	9/15/2008
	 	Delta 1
	S32

	 	Panel Elevation — ASI #1
	 	9/15/2008
	 	Delta 1
	S33

	 	Panel Elevation — ASI #1
	 	9/15/2008
	 	Delta 1
	S34

	 	Panel Elevation — ASI #1
	 	9/15/2008
	 	Delta 1
	S35

	 	Panel Elevation — ASI #1
	 	9/15/2008
	 	Delta 1
	S36

	 	Panel Elevation — ASI #1
	 	9/15/2008
	 	Delta 1
	S37

	 	Panel Elevation — ASI #1
	 	9/15/2008
	 	Delta 1
	S38

	 	Panel Elevation — ASI #1
	 	9/15/2008
	 	Delta 1
	S39

	 	Panel Elevation
	 	7/25/2008	 	 
	S40

	 	Panel Elevation — ASI #2
	 	11/11/2008
	 	Delta 2
	S41

	 	Panel Elevation — ASI #2
	 	11/11/2008
	 	Delta 2
	SD1

	 	General Notes
	 	7/25/2008	 	 
	SD1A

	 	Special Inspections
	 	7/25/2008	 	 
	SD2

	 	Construction Details — ASI #2
	 	11/11/2008
	 	Delta 2
	SD3

	 	Construction Details
	 	7/25/2008	 	 
	SD4

	 	Construction Details
	 	7/25/2008	 	 
	SD5

	 	Construction Details — ASI #1
	 	9/15/2008
	 	Delta 1
	SD6

	 	Construction Details
	 	7/25/2008	 	 
	SD7

	 	Construction Details — ASI #2
	 	11/11/2008
	 	Detail 2
	SD8

	 	Construction Details — ASI #4
	 	1/28/2009
	 	Detail 6

 

 

Contract#: MH00-121-226

Project: Hhighland Fairview Corporate Park

Trade: General Contractor

	 	 	 	 	 	 	 

	STRUCTURAL CONTINUATION

	SD9

	 	Construction Details
	 	7/25/2008	 	 
	SD10

	 	Construction Details — ASI #1
	 	9/15/2008
	 	Delta 1
	SD11

	 	Construction Details — ASI #1
	 	9/15/2008
	 	Delta 1
	SD12

	 	Construction Details — ASI #2
	 	11/11/2008
	 	Detail 2
	SD13

	 	Construction Details — ASI #2
	 	11/11/2008
	 	Detail 2
	SD14

	 	Construction Details — ASI #2
	 	11/11/2008
	 	Detail 2
	SD15

	 	Construction Details — ASI #1
	 	9/15/2008
	 	Delta 1
	SD16

	 	Construction Details — ASI #1
	 	9/15/2008
	 	Delta 1
	SD17

	 	Construction Details — ASI #2
	 	11/11/2008
	 	Detail 2
	SD18

	 	Construction Details — ASI #2
	 	11/11/2008
	 	Detail 2
	SD19

	 	Construction Details
	 	7/25/2008	 	 
	SD20

	 	Construction Details — ASI #1
	 	9/15/2008
	 	Delta 1
	SD21

	 	Construction Details
	 	7/25/2008	 	 
	SD22

	 	Construction Details — ASI #1
	 	9/15/2008
	 	Delta 1
	SD23

	 	Construction Details — ASI #2
	 	11/11/2008
	 	Delta 2
	SD24

	 	Construction Details — ASI #3
	 	12/30/2008
	 	Delta 5
	SPH1

	 	Construction Details
	 	7/25/2008	 	 
	SPH2

	 	Construction Details
	 	7/25/2008	 	 
	SPH3

	 	General Notes
	 	7/25/2008	 	 
	MECHANICAL

	M-0.0

	 	Title Sheet
	 	11/14/2008	 	 
	M-0.1

	 	Title 24
	 	11/14/2008	 	 
	M-1

	 	Schedules & Notes
	 	11/14/2008
	 	Delta 2
	M-1.1

	 	Schedules — ASI #4
	 	1/21/2009
	 	Delta 6
	M-2

	 	Partial Roof Plan
	 	11/14/2008
	 	Delta 2
	M-3

	 	Partial Roof Plan
	 	11/14/2008
	 	Delta 2
	M-4

	 	Partial Floor Plan — ASI #4
	 	1/21/2009
	 	Delta 6
	M-5

	 	Mezzanine Floor Plan — ASI #2
	 	11/13/2008
	 	Delta 3
	M-6

	 	Partial Floor Plan — ASI #4
	 	1/21/2009
	 	Delta 6
	M-7

	 	Partial Roof Plan
	 	11/14/2008
	 	Delta 2
	M-8

	 	Partial Roof Plan — ASI #4
	 	1/21/2009
	 	Delta 6
	M-9

	 	Details
	 	11/14/2008
	 	Delta 2
	M-10

	 	Controls — ASI #4
	 	1/21/2009
	 	Delta 6
	PLUMBING

	P-1

	 	Specifications & Calculations — ASI #4
	 	1/28/2009
	 	Delta 6
	P-2

	 	Overall Site Plan ASI #4
	 	1/28/2009
	 	Delta 6
	P-2.1

	 	Partial Site Plan — ASI #4
	 	1/28/2009
	 	Delta 6
	P-2.2

	 	Partial Site Plan — ASI #4
	 	1/28/2009
	 	Delta 6
	P-3

	 	Partial Floor, Roof Plan — ASI #4
	 	1/28/2009
	 	Delta 6
	P-4

	 	Partial Floor, Roof Plan — ASI #4
	 	1/28/2009
	 	Delta 6
	P-5

	 	Partial Floor, Roof Plan
	 	11/14/2008
	 	Delta 2
	P-6

	 	Restroom Details ASI #4
	 	1/28/2009
	 	Delta 6
	P-7

	 	Restroom Details
	 	11/11/2008
	 	Delta 2
	P-8

	 	Restroom Details
	 	11/11/2008
	 	Delta 2
	P-9

	 	Restroom Details
	 	11/11/2008
	 	Delta 2

 

 

Contract#: MH00-121-226

Project: Hhighland Fairview Corporate Park

Trade: General Contractor

	 	 	 	 	 	 	 

	PLUMBING CONTINUATION

	P-10

	 	Restroom Details
	 	11/11/2008
	 	Delta 2
	P-11

	 	Restroom Details
	 	11/11/2008
	 	Delta 2
	P-12

	 	Restroom Details
	 	11/11/2008
	 	Delta 2
	P-13

	 	Restroom Details
	 	11/11/2008
	 	Delta 2
	P-14

	 	Restroom Details
	 	11/11/2008
	 	Delta 2
	P-15

	 	Waste & Vent Isometrics
	 	11/11/2008
	 	Delta 2
	P-16

	 	Hot & Cold Water Isometrics
	 	11/11/2008
	 	Delta 2
	P-17

	 	Plumbing Details — ASI #4
	 	1/28/2009
	 	Delta 6
	ELECTRICAL

	EO.1

	 	Specifications, Symbols & Abbreviations
	 	11/14/2008	 	 
	EO.2

	 	Outdoor Title 24 — ASI #4
	 	1/28/2009
	 	Delta 6
	EO.3

	 	Indoor Title 24 — ASI #4
	 	1/28/2009
	 	Delta 6
	E1.1A

	 	Partial Site Electrical Plan — ASI #4
	 	1/28/2009
	 	Delta 6
	E1.1B

	 	Partial Site Electrical Plan — ASI #4
	 	1/28/2009
	 	Delta 6
	E1.2A

	 	Partial Site Lighting Plan
	 	11/14/2008	 	 
	E1.2B

	 	Partial Site Lighting Plan
	 	11/14/2008	 	 
	E1.2C

	 	Partial Site Photometric Plan
	 	11/14/2008	 	 
	E1.2D

	 	Partial Site Photometric Plan
	 	11/14/2008	 	 
	E2.1

	 	Single Line Diagram — ASI #2
	 	11/11/2008
	 	Delta 2
	E2.2

	 	Single Line Diagram — ASI #4
	 	1/28/2009
	 	Delta 6
	E2.3

	 	Single Line Diagram — ASI #4
	 	1/28/2009
	 	Delta 6
	E2.4

	 	Single Line Diagram — ASI #2
	 	11/11/2008
	 	Delta 2
	E2.5

	 	Single Line Diagram — ASI #4
	 	1/28/2009
	 	Delta 6
	E2.6

	 	Single Line Diagram — ASI #2
	 	11/11/2008
	 	Delta 2
	E2.7

	 	Single Line Diagram — ASI #4
	 	1/28/2009
	 	Delta 6
	E3.1

	 	Warehouse Electrical Plan — ASI #4
	 	1/28/2009
	 	Delta 6
	E3.2

	 	Warehouse Underground Conduit Plan
	 	11/14/2008	 	 
	E3.3

	 	Partial Warehouse Lighting Plan — ASI #2
	 	11/11/2008
	 	Delta 2
	E3.4

	 	Partial Warehouse Lighting Plan — ASI #2
	 	11/11/2008
	 	Delta 2
	E3.5

	 	Partial Warehouse Lighting Plan — ASI #2
	 	11/11/2008
	 	Delta 2
	E3.6

	 	Partial Warehouse Lighting Plan — ASI #2
	 	11/11/2008
	 	Delta 2
	E3.7

	 	Partial Warehouse Lighting Plan — ASI #2
	 	11/11/2008
	 	Delta 2
	E3.8

	 	Partial Warehouse Lighting Plan — ASI #2
	 	11/11/2008
	 	Delta 2
	E4

	 	Warehouse Electrical Roof Plan
	 	11/14/2008	 	 
	E5.1

	 	Enlarged Main Office Ground Floor Lighting Plan — ASI #4
	 	1/28/2009
	 	Delta 6
	E5.2

	 	Enlarged Main Office Second Floor Lighting Plan — ASI #2
	 	11/11/2008
	 	Delta 2
	E5.3

	 	Enlarged Warehouse Office Lighting Plan — ASI #4
	 	1/28/2009
	 	Delta 6
	E6.1

	 	Enlarged Main Office Ground Floor Plan — ASI #2
	 	11/11/2008
	 	Delta 2
	E6.2

	 	Enlarged Main Office Second Floor Plan — ASI #2
	 	11/11/2008
	 	Delta 2
	E6.3

	 	Enlarged Main Office Roof Plan — ASI #2
	 	11/11/2008
	 	Delta 2
	E6.4

	 	Enlarged Warehouse Office Power Plan — ASI #4
	 	1/28/2009
	 	Delta 6
	E6.5

	 	Enlarged Dock Door Power Plans — ASI #2
	 	11/11/2008
	 	Delta 2
	E7

	 	Details — ASI #2
	 	11/11/2008
	 	Delta 2
	E8.1

	 	Wiring Diagram — ASI #2
	 	11/11/2008
	 	Delta 2
	E8.2

	 	Wiring Diagram & Fixture Schedule — ASI #2
	 	11/11/2008
	 	Delta 2

 

 

Contract#: MH00-121-226

Project: Hhighland Fairview Corporate Park

Trade: General Contractor

	 	 	 	 	 	 	 

	ELECTRICAL CONTINUED

	E8.3

	 	Wiring Diagrams — ASI #2
	 	11/11/2008
	 	Delta 2
	E8.4

	 	Wiring Diagrams — ASI #2
	 	11/11/2008
	 	Delta 2
	E9

	 	Schedules — ASI #4
	 	1/28/2009
	 	Delta 6
	E10

	 	Schedules — ASI #4
	 	1/28/2009
	 	Delta 6
	E11

	 	Schedules — ASI #4
	 	1/28/2009
	 	Delta 6
	E12

	 	Schedules — ASI #4
	 	1/28/2009
	 	Delta 6
	E13

	 	Schedules — ASI #4
	 	1/28/2009
	 	Delta 6
	E14

	 	Schedules — ASI #4
	 	1/28/2009
	 	Delta 6
	EFP1

	 	Fire Pump House Plan
	 	11/14/2008	 	 
	FIRE PROTECTION PARCEL 1 / SKECHERS

	HFCP

	 	Cover Page	 	 	 	 
	FP 1

	 	Underground Fire Master Plan
	 	7/29/2008	 	 
	FP 2

	 	Enlarged Underground Fire Piping Part I
	 	7/29/2008	 	 
	FP 3

	 	Enlarged Underground Fire Piping Part II
	 	7/29/2008	 	 
	FP 4

	 	Underground Fire Notes / Details
	 	7/29/2008	 	 
	FP 5

	 	Diesel Fire Pump Plans & Details
	 	7/29/2008	 	 
	FP 6

	 	Overhead Master Plan Area “A” (reference only)
	 	7/29/2008	 	 
	FP 7

	 	Overhead Master Plan Area “B” (reference only)
	 	7/29/2008	 	 
	FP 8

	 	Overhead Master Plan Area “C” (reference only)
	 	7/29/2008	 	 
	FP 9

	 	System 1 — 4 Overhead Piping Plan
	 	2/12/2009	 	 
	FP 10

	 	System 5 — 9 Overhead Piping Plan
	 	2/12/2009	 	 
	FP 11

	 	System 10 — 14 Overhead Piping Plan
	 	2/12/2009	 	 
	FP 12

	 	System 15 — 19 Overhead Piping Plan
	 	2/12/2009	 	 
	FP 13

	 	System 20 — 24 Overhead Piping Plan
	 	2/12/2009	 	 
	FP 14

	 	System 25 — 29 Overhead Piping Plan
	 	2/12/2009	 	 
	FP 15

	 	System 30 — 34 Overhead Piping Plan
	 	2/12/2009	 	 
	FP 16

	 	System 35 — 39 Overhead Piping Plan
	 	2/12/2009	 	 
	FP 17

	 	System 40 — 44 Overhead Piping Plan
	 	2/12/2009	 	 
	FP 18

	 	System 45 — 48 Overhead Piping Plan
	 	2/12/2009	 	 
	FP 19

	 	Building Section & Maximum Storage Heights
	 	2/12/2009	 	 
	FP 20

	 	Overhead Sprinkler Layout Notes
	 	2/12/2009	 	 
	FP 21

	 	1st Floor Room Coverage Plan
	 	2/12/2009	 	 
	FP 22

	 	Mezzanine Piping Plan & Details
	 	2/12/2009	 	 
	FP 23

	 	2 Second Floor Room Coverage Plan
	 	2/12/2009	 	 
	FP 24

	 	2 Second Floor Piping Enlarged
	 	2/12/2009	 	 
	FP 25

	 	Warehouse Office Room Coverage Plans & Piping Enlargements
	 	2/12/2009	 	 
	SR 60 CONSTRUCTION STAGING PLAN

	SC 1

	 	Stage Construction
	 	4/9/2010	 	 
	TH 01

	 	Traffic Handling / Construction area Sign Plan
	 	4/9/2010	 	 
	TH 02

	 	Traffic Handling / Construction area Sign Plan
	 	4/9/2010	 	 
	TH 03

	 	Traffic Handling / Construction area Sign Plan
	 	4/9/2010	 	 

 

 

Contract#: MH00-121-226

Project: Hhighland Fairview Corporate Park

Trade: General Contractor

	 	 	 	 	 	 	 

	REDLANDS BLVD. TRAFFIC CONTROL PLAN

	TCP 1

	 	Traffic Control Plan — Title Sheet
	 	2/18/2009	 	 
	TCP 2

	 	Traffic Control Plan — Phase I & II
	 	2/18/2009	 	 
	TCP 3

	 	Traffic Control Plan — Phase I
	 	2/18/2009	 	 
	TCP 4

	 	Traffic Control Plan — Phase II
	 	2/18/2009	 	 
	TCP 5

	 	Traffic Control Plan — Phase I
	 	2/18/2009	 	 
	TCP 6

	 	Traffic Control Plan — Phase II
	 	2/18/2009	 	 
	ROUGH GRADING

	RGP 1

	 	Rough Grading Plan — Title Sheet
	 	4/9/2010	 	 
	RGP 2

	 	Rough Grading Plan — Detail Sheet
	 	4/9/2010	 	 
	RGP 3

	 	Rough Grading Plan — Detail Sheet
	 	4/9/2010	 	 
	RGP 4

	 	Rough Grading Plan — Detail Sheet
	 	4/9/2010	 	 
	RGP 5

	 	Rough Grading Plan — Storm Drain Profiles
	 	4/9/2010	 	 
	RGP 6

	 	Rough Grading Plan
	 	4/9/2010	 	 
	RGP 7

	 	Rough Grading Plan
	 	4/9/2010	 	 
	RGP 8

	 	Rough Grading Plan
	 	4/9/2010	 	 
	RGP 9

	 	Rough Grading Plan
	 	4/9/2010	 	 
	RGP 10

	 	Rough Grading Plan
	 	4/9/2010	 	 
	RGP 11

	 	Rough Grading Plan
	 	4/9/2010	 	 
	RGP 12

	 	Rough Grading Plan
	 	4/9/2010	 	 
	RGP 13

	 	Rough Grading Plan
	 	4/9/2010	 	 
	RGP 14

	 	Rough Grading Plan
	 	4/9/2010	 	 
	RGP 15

	 	Rough Grading Plan — Erosion Control
	 	4/9/2010	 	 
	RGP 16

	 	Rough Grading Plan — Erosion Control
	 	4/9/2010	 	 
	RGP 17

	 	Rough Grading Plan — Noise Reduction Compliance Plan
	 	4/9/2010	 	 
	RGP 18

	 	Rough Grading Plan — Conditions of Approval
	 	4/9/2010	 	 
	RGP 19

	 	Rough Grading Plan — Conditions of Approval
	 	4/9/2010	 	 
	PRECISE GRADING

	PG 1

	 	Precise Grading — Title Sheet
	 	4/12/2010	 	 
	PG 2

	 	Precise Grading — Detail Sheet
	 	4/12/2010	 	 
	PG 3

	 	Precise Grading — Detail Sheet
	 	4/12/2010	 	 
	PG 4

	 	Precise Grading Plan
	 	4/12/2010	 	 
	PG 5

	 	Precise Grading Plan
	 	4/12/2010	 	 
	PG 6

	 	Precise Grading Plan
	 	4/12/2010	 	 
	PG 7

	 	Precise Grading Plan
	 	4/12/2010	 	 
	PG 8

	 	Precise Grading Plan
	 	4/12/2010	 	 
	PG 9

	 	Precise Grading Plan
	 	4/12/2010	 	 
	PG 10

	 	Precise Grading Plan
	 	4/12/2010	 	 
	PG 11

	 	Precise Grading Plan
	 	4/12/2010	 	 
	PG 12

	 	Precise Grading Plan
	 	4/12/2010	 	 
	PG 13

	 	Precise Grading Plan
	 	4/12/2010	 	 
	PG 14

	 	Precise Grading Plan
	 	4/12/2010	 	 
	PG 15

	 	Precise Grading Plan
	 	4/12/2010	 	 
	PG 16

	 	Precise Grading Plan
	 	4/12/2010	 	 
	PG 17

	 	Erosion Control Plan
	 	4/12/2010	 	 
	PG 18

	 	Erosion Control Plan
	 	4/12/2010	 	 

 

 

Contract#: MH00-121-226

Project: Hhighland Fairview Corporate Park

Trade: General Contractor

	 	 	 	 	 	 	 

	PRECISE GRADING CONTINUED

	PG 19

	 	Erosion Control Plan
	 	4/12/2010	 	 
	PG 20

	 	Erosion Control Plan
	 	4/12/2010	 	 
	PG 21

	 	Erosion Control Plan
	 	4/12/2010	 	 
	PG 22

	 	Erosion Control Plan
	 	4/12/2010	 	 
	PG 23

	 	Conditions of Approval
	 	4/12/2010	 	 
	PG 24

	 	Conditions of Approval
	 	4/12/2010	 	 
	ENCROACHMENT PERMIT PLAN ROUGH GRADING

	EPP 1

	 	Encroachment Permit Plan — Title Sheet
	 	4/9/2010	 	 
	EPP 2

	 	Encroachment Permit Plan — Rough Grading Sheet
	 	4/9/2010	 	 
	EPP 3

	 	Encroachment Permit Plan — Rough Grading Sheet
	 	4/9/2010	 	 
	EPP 4

	 	Encroachment Permit Plan — Rough Grading Sheet
	 	4/9/2010	 	 
	EPP 5

	 	Encroachment Permit Plan — Rough Grading Sheet
	 	4/9/2010	 	 
	ROUGH GRADING —  REDLANDS SEWER

	RGP 1

	 	Rough grading Plan — Redlands Sewer — Title Sheet
	 	4/9/2010	 	 
	RGP 2

	 	Rough grading Plan — Redlands Sewer — Drainage
	 	4/9/2010	 	 
	RGP 3

	 	Rough grading Plan — Redlands Sewer — Drainage
	 	4/9/2010	 	 
	RGP 4

	 	Rough grading Plan — Redlands Sewer — Drainage
	 	4/9/2010	 	 
	RGP 5

	 	Rough grading Plan — Redlands Sewer — Erosion Control
	 	4/9/2010	 	 
	RGP 6

	 	Rough grading Plan — Redlands Sewer — Condtions of Aproval
	 	4/9/2010	 	 
	RGP 7

	 	Rough grading Plan — Redlands Sewer — Condtions of Aproval
	 	4/9/2010	 	 
	RGP 8

	 	Rough grading Plan — Redlands Sewer — Condtions of Aproval
	 	4/9/2010	 	 
	RGP 9

	 	Rough grading Plan — Redlands Sewer — Condtions of Aproval
	 	4/9/2010	 	 
	RGP 10

	 	Rough grading Plan — Redlands Sewer — Condtions of Aproval
	 	4/9/2010	 	 
	RGP 11

	 	Rough grading Plan — Redlands Sewer — Condtions of Aproval
	 	4/9/2010	 	 
	RGP 12

	 	Rough grading Plan — Redlands Sewer — Condtions of Aproval
	 	4/9/2010	 	 
	RGP 13

	 	Rough grading Plan — Redlands Sewer — Condtions of Aproval
	 	4/9/2010	 	 
	CALTRANS EROSION CONTROL PLAN

	EC 5

	 	EROSION CONTROL WPCD
	 	2/18/2009	 	 
	TEMPORARY STORM DRAIN SYSTEM PHASE 1

	TDD 1

	 	Phase 1 Temporary Drainage Ditch
	 	2/18/2009	 	 
	GRADING CROSS SECTIONS

	GCS 1

	 	Grading Cross Sections
	 	2/18/2009	 	 
	GCS 2

	 	Grading Cross Sections
	 	2/18/2009	 	 
	SITE FIRE ACCESS PLAN

	FPS 1

	 	Site Fire Access Plan (During Construction)
	 	7/29/2008	 	 
	FPS 2

	 	Site Fire Access Plan (Job Completion)
	 	7/29/2008	 	 
	PARCEL 1 WALL & FENCE — TILT-UP WALL

	LCS-0

	 	HFCP — Parcel 1 — Wall & Fence — Cover Sheet
	 	3/30/2010	 	 
	LR-01

	 	HFCP —  Parcel 1 — Wall & Fence — Reference Plan
	 	3/30/2010	 	 
	LW-01

	 	HFCP — Parcel 1 — Wall & Fence — Plan
	 	3/30/2010	 	 
	LW-02

	 	HFCP — Parcel 1 — Wall & Fence — Plan
	 	3/30/2010	 	 
	LW-03

	 	HFCP — Parcel 1 — Wall & Fence — Plan
	 	3/30/2010	 	 
	LW-04

	 	HFCP — Parcel 1 — Wall & Fence — Plan
	 	3/30/2010	 	 
	LW-05

	 	HFCP — Parcel 1 — Wall & Fence — Plan
	 	3/30/2010	 	 
	LW-06

	 	HFCP — Parcel 1 — Wall & Fence — Plan
	 	3/30/2010	 	 
	LW-07

	 	HFCP — Parcel 1 — Wall & Fence — Plan
	 	3/30/2010	 	 

 

 

Contract#: MH00-121-226

Project: Hhighland Fairview Corporate Park

Trade: General Contractor

	 	 	 	 	 	 	 

	PARCEL 1 WALL & FENCE — TILT-UP WALL CONTINUED

	LW-08

	 	HFCP — Parcel 1 — Wall & Fence — Plan
	 	3/30/2010	 	 
	LW-09

	 	HFCP — Parcel 1 — Wall & Fence — Plan
	 	3/30/2010	 	 
	LW-10

	 	HFCP — Parcel 1 — Wall & Fence — Plan
	 	3/30/2010	 	 
	LW-11

	 	HFCP — Parcel 1 — Wall & Fence — Plan
	 	3/30/2010	 	 
	LW-12

	 	HFCP — Parcel 1 — Wall & Fence — Plan
	 	3/30/2010	 	 
	LWD-01

	 	HFCP — Parcel 1 — Wall & Fence — Construction Notes
	 	3/30/2010	 	 
	LWD-02

	 	HFCP — Parcel 1 — Wall & Fence — Tilt-Up Wall Elevations
	 	3/30/2010	 	 
	LWD-03

	 	HFCP — Parcel 1 — Wall & Fence — Tilt-Up Wall Elevations
	 	3/30/2010	 	 
	LWD-04

	 	HFCP — Parcel 1 — Wall & Fence — Tilt-Up Wall Elevations
	 	3/30/2010	 	 
	LWD-05

	 	HFCP — Parcel 1 — Wall & Fence — Tilt-Up Wall Elevations
	 	3/30/2010	 	 
	LWD-06

	 	HFCP — Parcel 1 — Wall & Fence — Tilt-Up Wall Elevations
	 	3/30/2010	 	 
	LWD-07

	 	HFCP — Parcel 1 — Wall & Fence — Tilt-Up Wall Elevations
	 	3/30/2010	 	 
	LWD-08

	 	HFCP — Parcel 1 — Wall & Fence — Tilt-Up Wall Elevations
	 	3/30/2010	 	 
	LWD-09

	 	HFCP — Parcel 1 — Wall & Fence — Tilt-Up Wall Elevations
	 	3/30/2010	 	 
	LWD-10

	 	HFCP — Parcel 1 — Wall & Fence — Tilt-Up Wall Elevations
	 	3/30/2010	 	 
	LWD-11

	 	HFCP — Parcel 1 — Wall & Fence — Tilt-Up Wall Elevations
	 	3/30/2010	 	 
	LWD-12

	 	HFCP — Parcel 1 — Wall & Fence — Tilt-Up Wall Elevations
	 	3/30/2010	 	 
	LWD-13

	 	HFCP — Parcel 1 — Wall & Fence — Construction Details
	 	2/18/2009	 	 
	LWD-14

	 	HFCP — Parcel 1 — Wall & Fence — Construction Details
	 	3/30/2010	 	 
	LWD-15

	 	HFCP — Parcel 1 — Wall & Fence — Construction Details
	 	3/30/2010	 	 
	LWD-16

	 	HFCP — Parcel 1 — Wall & Fence — Construction Details
	 	3/30/2010	 	 
	LWD-17

	 	HFCP — Parcel 1 — Wall & Fence — Construction Details
	 	3/30/2010	 	 
	LWD-18

	 	HFCP — Parcel 1 — Wall & Fence — Construction Details
	 	3/30/2010	 	 
	LWD-19

	 	HFCP — Parcel 1 — Wall & Fence — Construction Details
	 	3/30/2010	 	 
	LWD-20

	 	HFCP — Parcel 1 — Wall & Fence — Construction Details
	 	3/30/2010	 	 
	LWN-01

	 	HFCP — Parcel 1 — Wall & Fence — Construction Specifications
	 	3/30/2010	 	 
	LINE “F” STORM DRAIN SYSTEM

	SHT 1

	 	Moreno MDP Line — F — Title Sheet
	 	4/9/2010	 	 
	SHT 2

	 	Moreno MDP Line — F — Notes & Details
	 	4/9/2010	 	 
	SHT 3

	 	Moreno MDP Line — F — Station 95+20 to 97+00
	 	4/9/2010	 	 
	SHT 4

	 	Moreno MDP Line — F — Station 97+-00 to 103+00
	 	4/9/2010	 	 
	SHT 5

	 	Moreno MDP Line — F — Station 103+00 to 110+00
	 	4/9/2010	 	 
	SHT 6

	 	Moreno MDP Line — F — Station 110+00 to 118+05
	 	4/9/2010	 	 
	SHT 7

	 	Moreno MDP Line — F — Station 118+05 to 122+56.73
	 	4/9/2010	 	 
	SHT 8

	 	Moreno MDP Line — F — Station 122+56.73 to 124+42.37
	 	4/9/2010	 	 
	SHT 9

	 	Moreno MDP Line — F — Lat F-2 10+00 to 11+49.18
	 	4/9/2010	 	 
	SHT 10

	 	Moreno MDP Line — F — Lat F-2-A 10+00 to 11+41.56
	 	4/9/2010	 	 
	SHT 11

	 	Moreno MDP Line — F — Lat D-5 10+00 to 11+52.91
	 	4/9/2010	 	 
	SHT 12

	 	Moreno MDP Line — F — Lat D-6 10+00 to 14+68.98
	 	4/9/2010	 	 
	SHT 13

	 	Moreno MDP Line — F — Lat F-8 0+25.13 to 8+00
	 	4/9/2010	 	 
	SHT 14

	 	Moreno MDP Line — F — Lat F-8 8+00 to 16+00
	 	4/9/2010	 	 
	SHT 15

	 	Moreno MDP Line — F — Lat F-8 16+00 to 24+00
	 	4/9/2010	 	 
	SHT 16

	 	Moreno MDP Line — F — Lat F-8 24+00 to 31+50
	 	4/9/2010	 	 

 

 

Contract#: MH00-121-226

Project: Hhighland Fairview Corporate Park

Trade: General Contractor

	 	 	 	 	 	 	 

	LINE “F” STORM DRAIN SYSTEM CONTINUED

	SHT 17

	 	Moreno MDP Line — F — Lat F-8 10+00 to 12+00.25
	 	4/9/2010	 	 
	SHT 18

	 	Moreno MDP Line — F — Lat F-9 11+02.55 to 18+00
	 	4/9/2010	 	 
	SHT 19

	 	Moreno MDP Line — F — Lat F-9 18+00 to 25+65.60
	 	4/9/2010	 	 
	SHT 20

	 	Moreno MDP Line — F — Profiles
	 	4/9/2010	 	 
	SHT 21

	 	Moreno MDP Line — F — Profiles
	 	4/9/2010	 	 
	SHT 22

	 	Moreno MDP Line — F — Profiles
	 	4/9/2010	 	 
	SHT 23

	 	Moreno MDP Line — F — Outlet, Access Raod & Basin
	 	4/9/2010	 	 
	SHT 24

	 	Moreno MDP Line — F — General Notes & typ Details
	 	4/9/2010	 	 
	SHT 25

	 	Moreno MDP Line — F — Typ Details
	 	4/9/2010	 	 
	SHT 26

	 	Moreno MDP Line — F — Lateral & Sections
	 	4/9/2010	 	 
	SHT 27

	 	Moreno MDP Line —F — Lateral
	 	4/9/2010	 	 
	SHT 28

	 	Moreno MDP Line — F Access Opening Sections & typ Details
	 	4/9/2010	 	 
	SHT 29

	 	Moreno MDP Line — F — typ Sections & Details
	 	4/9/2010	 	 
	REDLANDS SANITARY SEWER

	SWP 1

	 	Redlands Blvd Sanitary Sewer Plan — Title Sheet
	 	4/9/2010	 	 
	SWP 2

	 	Redlands Blvd Sanitary Sewer Plan — Index & Legends
	 	4/9/2010	 	 
	SWP 3

	 	Redlands Blvd Sanitary Sewer Plan & Profile
	 	4/9/2010	 	 
	SWP 4

	 	Redlands Blvd Sanitary Sewer Plan & Profile
	 	4/9/2010	 	 
	SWP 5

	 	Redlands Blvd Sanitary Sewer Plan & Profile
	 	4/9/2010	 	 
	SWP 6

	 	Redlands Blvd Sanitary Sewer Plan & Profile
	 	4/9/2010	 	 
	SWP 7

	 	Redlands Blvd Sanitary Sewer Plan & Profile
	 	4/9/2010	 	 
	SWP 8

	 	Redlands Blvd Sanitary Sewer Plan & Profile
	 	4/9/2010	 	 
	EUCALYPTUS SANITARY SEWER PLAN

	SSIP 1

	 	Eucalyptus Avenue — Sanitary Sewer Plan — Title Sheet
	 	4/9/2010	 	 
	SSIP 2

	 	Eucalyptus Avenue — Sanitary Sewer Plan — Index & Legend
	 	4/9/2010	 	 
	SSIP 3

	 	Eucalyptus Avenue — Sanitary Sewer Plan — Plan Profile
	 	4/9/2010	 	 
	SSIP 4

	 	Eucalyptus Avenue — Sanitary Sewer Plan — Plan Profile
	 	4/9/2010	 	 
	SSIP 5

	 	Eucalyptus Avenue — Sanitary Sewer Plan — Plan Profile
	 	4/9/2010	 	 
	SSIP 6

	 	Eucalyptus Avenue — Sanitary Sewer Plan — Plan Profile
	 	4/9/2010	 	 
	SSIP 7

	 	Eucalyptus Avenue — Sanitary Sewer Plan — Plan Profile
	 	4/9/2010	 	 
	LOGISTIC BUILDING SEWER AND WATER

	SSIP 1

	 	Logistics Bldg Sewer & Water Plan — Title Sheet
	 	4/9/2010	 	 
	SSIP 2

	 	Logistics Bldg Sewer & Water Plan — Notes & Quantities
	 	4/9/2010	 	 
	SSIP 3

	 	Logistics Bldg Sewer & Water Plan
	 	4/9/2010	 	 
	SSIP 4

	 	Logistics Bldg Sewer & Water Plan
	 	4/9/2010	 	 
	SSIP 5

	 	Logistics Bldg Sewer & Water Plan
	 	4/9/2010	 	 
	SSIP 6

	 	Logistics Bldg Sewer & Water Plan
	 	4/9/2010	 	 
	SSIP 7

	 	Logistics Bldg Sewer & Water Plan
	 	4/9/2010	 	 
	SSIP 8

	 	Logistics Bldg Sewer & Water Plan
	 	4/9/2010	 	 
	EUCALPTUS RECYCLED WATER IMPROVEMENT PLAN

	RWIP 1

	 	Title Sheet
	 	4/9/2010	 	 
	RWIP 2

	 	Plan
	 	4/9/2010	 	 
	RWIP 3

	 	Plan & Profile
	 	4/9/2010	 	 
	RWIP 4

	 	Plan & Profile
	 	4/9/2010	 	 
	RWIP 5

	 	Plan & Profile
	 	4/9/2010	 	 
	RWIP 6

	 	Plan & Profile
	 	4/9/2010	 	 
	RWIP 7

	 	Plan & Profile
	 	4/9/2010	 	 

 

 

Contract#: MH00-121-226

Project: Hhighland Fairview Corporate Park

Trade: General Contractor

	 	 	 	 	 	 	 

	EUCALYPTUS WATER IMPROVEMENT PLAN

	DW 1

	 	Title Sheet
	 	4/9/2010	 	 
	DW 2

	 	Index Map & Legend
	 	4/9/2010	 	 
	DW 3

	 	Plan Profile
	 	4/9/2010	 	 
	DW 4

	 	Plan Profile
	 	4/9/2010	 	 
	DW 5

	 	Plan Profile
	 	4/9/2010	 	 
	DW 6

	 	Plan Profile
	 	4/9/2010	 	 
	DW 7

	 	Plan Profile
	 	4/9/2010	 	 
	DW 8

	 	Line ‘A’ thru ‘D’ profile
	 	4/9/2010	 	 
	Off-Site (Sinclair) DOMESTIC WATER IMPROVEMENT PLAN

	DWIP 1

	 	Domestic Water Plans — title Sheet
	 	4/9/2010	 	 
	DWIP 2

	 	Domestic Water Plans — Index Map & Legends
	 	4/9/2010	 	 
	DWIP 3

	 	Domestic Water Plans & Profile
	 	4/9/2010	 	 
	DWIP 4

	 	Domestic Water Plans & Profile
	 	4/9/2010	 	 
	DWIP 5

	 	Domestic Water Plans & Profile
	 	4/9/2010	 	 
	DWIP 6

	 	Domestic Water Plans & Profile
	 	4/9/2010	 	 
	DWIP 7

	 	Domestic Water Plans & Profile
	 	4/9/2010	 	 
	DWIP 8

	 	Domestic Water Plans & Profile
	 	4/9/2010	 	 
	DWIP 9

	 	Domestic Water Plans & Profile
	 	4/9/2010	 	 
	DWIP 10

	 	Domestic Water Plans & Profile
	 	4/9/2010	 	 
	REDLANDS WATER IMPROVEMENT PLAN

	DWIP 1

	 	Title Sheet
	 	4/9/2010	 	 
	DWIP 2

	 	Index Map
	 	4/9/2010	 	 
	DWIP 3

	 	Plan & Profile
	 	4/9/2010	 	 
	DWIP 4

	 	Plan & Profile
	 	4/9/2010	 	 
	EUCALYPTUS ELECTRICAL DISTRIBUTION PLAN

	SHT 1

	 	Eucalyptus Avenue Utility Design — BUTSKO
	 	3/4/2010	 	 
	SHT 2

	 	Eucalyptus Avenue Utility Design — BUTSKO
	 	3/4/2010	 	 
	SHT 3

	 	Eucalyptus Avenue Utility Design — BUTSKO
	 	3/4/2010	 	 
	SHT 4

	 	Eucalyptus Avenue Utility Design — BUTSKO
	 	3/4/2010	 	 
	REDLANDS ELECTRICAL DISTRIBUTION PLAN

	SHT 1

	 	Electrical Distribution Plan — BUTSKO
	 	3/4/2010	 	 
	SHT 2

	 	Electrical Distribution Plan — BUTSKO
	 	3/4/2010	 	 
	SHT 3

	 	Electrical Distribution Plan — BUTSKO
	 	3/4/2010	 	 
	SHT 4

	 	Electrical Distribution Plan — BUTSKO
	 	3/4/2010	 	 
	SHT 5

	 	Electrical Distribution Plan — BUTSKO
	 	3/4/2010	 	 
	SKECHERS ONSITE ELECTRIC

	SWP 1

	 	TPM 35629 Onsite Utilities — Butsko
	 	3/4/2010	 	 
	SWP 2

	 	TPM 35629 Onsite Utilities — Butsko
	 	3/4/2010	 	 
	SWP 3

	 	TPM 35629 Onsite Utilities — Butsko
	 	3/4/2010	 	 
	SWP 4

	 	TPM 35629 Onsite Utilities — Butsko
	 	3/4/2010	 	 
	EUCALYPTUS STREET IMPROVEMENT PLAN

	STIP 1

	 	Eucalyptus Avenue Street Improvement Plan — Title Sheet
	 	4/9/2010	 	 
	STIP 2

	 	Eucalyptus Avenue Street Improvement Plan — Notes & Index Map
	 	4/9/2010	 	 
	STIP 3

	 	Eucalyptus Avenue Street Improvement Plan — Details & Sections
	 	4/9/2010	 	 
	STIP 4

	 	Eucalyptus Avenue Street Improvement Plan
	 	4/9/2010	 	 
	STIP 5

	 	Eucalyptus Avenue Street Improvement Plan
	 	4/9/2010	 	 

 

 

Contract#: MH00-121-226

Project: Hhighland Fairview Corporate Park

Trade: General Contractor

	 	 	 	 	 	 	 

	EUCALYPTUS STREET IMPROVEMENT PLAN CONTINUED

	STIP 6

	 	Eucalyptus Avenue Street Improvement Plan
	 	4/9/2010
	 	 
	STIP 7

	 	Eucalyptus Avenue Street Improvement Plan
	 	4/9/2010	 	 
	STIP 8

	 	Eucalyptus Avenue Street Improvement Plan
	 	4/9/2010	 	 
	STIP 9

	 	Eucalyptus Avenue Street Improvement Plan
	 	4/9/2010	 	 
	STIP 10

	 	Eucalyptus Avenue Street Improvement Plan
	 	4/9/2010	 	 
	STIP 11

	 	Eucalyptus Avenue — Signing & Striping Title Sheet
	 	4/9/2010	 	 
	STIP 12

	 	Eucalyptus Avenue — Signing & Striping Title Sheet
	 	4/9/2010	 	 
	STIP 13

	 	Eucalyptus Avenue — Conditions of Approval
	 	4/9/2010	 	 
	STIP 14

	 	Eucalyptus Avenue — Conditions of Approval
	 	4/9/2010	 	 
	SCE EXHIBIT - JACK & BORE SCE CONDUIT

	SCE-J&B

	 	Jack & Bore Exhibit — SE Conduit Under SR60
	 	8/25/2009	 	 
	SCE-Pole

	 	Cross Section B-B (SCE Pole No. 4001945E)
	 	8/25/2009	 	 
	SCE-Pole

	 	Cross Section A-A (SCE Pole No. 214347/T2964
	 	8/25/2009	 	 
	MEDIAN EXHIBIT

	E-1

	 	Exhibit — Sections Eucalyptus Street Median
	 	7/22/2009	 	 
	TOLERANCE EXHIBIT

	TE

	 	Tolerance Exhibit
	 	2/18/2009	 	 
	THEODORE STREET
IMPROVEMENT PLAN (THEODORE RAMP IMPROVEMENT PLANS)

	STIP 1

	 	Theodore Street — Title Sheet
	 	4/9/2010	 	 
	STIP 2

	 	Theodore Street — Notes & Index Map Typical Sections
	 	4/9/2010	 	 
	STIP 3

	 	Theodore Street — Improvement Plans
	 	4/9/2010	 	 
	STIP 4

	 	Theodore Street — Construction Details
	 	4/9/2010	 	 
	STIP 5

	 	Theodore Street — Construction Details
	 	4/9/2010	 	 
	STIP 6

	 	Theodore Street — Grading-Drainage-Utility Plan
	 	4/9/2010	 	 
	STIP 7

	 	Theodore Street — W.P.C.P
	 	4/9/2010	 	 
	STIP 8

	 	Theodore Street — Signing and Striping Plan
	 	4/9/2010	 	 
	STIP 9

	 	Theodore Street — Traffic Handling Details
	 	4/9/2010	 	 
	STIP 10

	 	Theodore Street — Traffic Handling
	 	4/9/2010	 	 
	STIP 11

	 	Theodore Street — Traffic Handling
	 	4/9/2010	 	 
	STIP 12

	 	Theodore Street — Traffic Handling
	 	4/9/2010	 	 
	STIP 13

	 	Theodore Street — Detour Plan
	 	4/9/2010	 	 
	TRAFFIC SIGNAL INTERCONNECT

	421

	 	Traffic Signal Interconnect Detail
	 	1/1/2008	 	 
	EVTSI

	 	Emergency Vehicle & Traffic Signal Interconnect
	 	10/22/2009	 	 
	THEODORE STREET IMPROVEMENT PLAN

	STIP 1

	 	Theodore Street Phase 1 — Title Sheet
	 	4/9/2010	 	 
	STIP 2

	 	Theodore Street Phase 1 — Construction Notes
	 	4/9/2010	 	 
	STIP 3

	 	Theodore Street Phase 1 Typical Street Sections
	 	4/9/2010	 	 
	STIP 4

	 	Theodore Street Phase 1 — Plan & Profile
	 	4/9/2010	 	 
	STIP 5

	 	Theodore Street Phase 1 Plan & Profile
	 	4/9/2010	 	 
	STIP 6

	 	Theodore Street Phase 1 Signing and Striping
	 	4/9/2010	 	 
	STIP 7

	 	Theodore Street Phase 1 Conditions of Approval
	 	4/9/2010	 	 
	STIP 8

	 	Theodore Street Phase 1 — Conditions of Approval
	 	4/9/2010	 	 
	STIP 9

	 	Theodore Street Phase 1 — Conditions of Approval
	 	4/9/2010	 	 
	EUCALYPTUS STREET LANDSCAPE & IRRIGATION

	SHT 1

	 	Eucalyptus Street — Cover Sheet
	 	2/18/2009	 	 
	SHT 2

	 	Eucalyptus Street — Construction Plan
	 	2/18/2009	 	 

 

 

Contract#: MH00-121-226

Project: Hhighland Fairview Corporate Park

Trade: General Contractor

	 	 	 	 	 	 	 

	EUCALYPTUS STREET LANDSCAPE & IRRIGATION CONTINUED

	SHT 3

	 	Eucalyptus Street — Construction Plan
	 	2/18/2009	 	 
	SHT 4

	 	Eucalyptus Street — Construction Plan
	 	2/18/2009	 	 
	SHT 5

	 	Eucalyptus Street — Construction Plan
	 	2/18/2009	 	 
	SHT 6

	 	Eucalyptus Street — Construction Plan
	 	2/18/2009	 	 
	SHT 7

	 	Eucalyptus Street — Construction Plan
	 	2/18/2009	 	 
	SHT 8

	 	Eucalyptus Street — Construction Details
	 	2/18/2009	 	 
	SHT 9

	 	Eucalyptus Street — Construction Details
	 	2/18/2009	 	 
	SHT 10

	 	Eucalyptus Street — Construction Details
	 	2/18/2009	 	 
	SHT 11

	 	Eucalyptus Street — Construction Specifications
	 	2/18/2009	 	 
	SHT 12

	 	Eucalyptus Street — Irrigation Plan
	 	2/18/2009	 	 
	SHT 13

	 	Eucalyptus Street — Irrigation Plan
	 	2/18/2009	 	 
	SHT 14

	 	Eucalyptus Street — Irrigation Plan
	 	2/18/2009	 	 
	SHT 15

	 	Eucalyptus Street — Irrigation Plan
	 	2/18/2009	 	 
	SHT 16

	 	Eucalyptus Street — Irrigation Plan
	 	2/18/2009	 	 
	SHT 17

	 	Eucalyptus Street — Irrigation Plan
	 	2/18/2009	 	 
	SHT 18

	 	Eucalyptus Street — Irrigation Details
	 	2/18/2009	 	 
	SHT 19

	 	Eucalyptus Street — Irrigation Details
	 	2/18/2009	 	 
	SHT 20

	 	Eucalyptus Street — Irrigation Notes
	 	2/18/2009	 	 
	SHT 21

	 	Eucalyptus Street — Irrigation Specifications
	 	2/18/2009	 	 
	SHT 22

	 	Eucalyptus Street — Irrigation Specifications
	 	2/18/2009	 	 
	SHT 23

	 	Eucalyptus Street — Planting Plan
	 	2/18/2009	 	 
	SHT 24

	 	Eucalyptus Street — Planting Plan
	 	2/18/2009	 	 
	SHT 25

	 	Eucalyptus Street — Planting Plan
	 	2/18/2009	 	 
	SHT 26

	 	Eucalyptus Street — Planting Plan
	 	2/18/2009	 	 
	SHT 27

	 	Eucalyptus Street — Planting Plan
	 	2/18/2009	 	 
	SHT 28

	 	Eucalyptus Street — Planting Plan
	 	2/18/2009	 	 
	SHT 29

	 	Eucalyptus Street — Planting Details
	 	2/18/2009	 	 
	SHT 30

	 	Eucalyptus Street — Planting Details
	 	2/18/2009	 	 
	SHT 31

	 	Eucalyptus Street — Planting Specifications
	 	2/18/2009	 	 
	SHT 32

	 	Eucalyptus Street — Planting Specifications
	 	2/18/2009	 	 
	HFCP ASSOCIATION LANDSCAPE & IRRIGATION

	LCS-0

	 	HFCP Association — Cover Sheet
	 	3/22/2010	 	 
	LI-01

	 	HFCP Association — Irrigation Plan
	 	3/22/2010	 	 
	LI-02

	 	HFCP Association — Irrigation Plan
	 	3/22/2010	 	 
	LI-03

	 	HFCP Association — Irrigation Plan
	 	3/22/2010	 	 
	LI-04

	 	HFCP Association — Irrigation Plan
	 	3/22/2010	 	 
	LI-05

	 	HFCP Association — Irrigation Plan
	 	3/22/2010	 	 
	LI-06

	 	HFCP Association — Irrigation Plan
	 	3/22/2010	 	 
	LI-07

	 	HFCP Association — Irrigation Plan
	 	3/22/2010	 	 
	LI-08

	 	HFCP Association — Irrigation Plan
	 	3/22/2010	 	 
	LI-09

	 	HFCP Association — Irrigation Plan
	 	3/22/2010	 	 
	LI-10

	 	HFCP Association — Irrigation Plan
	 	3/22/2010	 	 
	LI-11

	 	HFCP Association — Irrigation Plan
	 	3/22/2010	 	 
	LI-12

	 	HFCP Association — Irrigation Plan
	 	3/22/2010	 	 

 

 

Contract#: MH00-121-226

Project: Hhighland Fairview Corporate Park

Trade: General Contractor

	 	 	 	 	 	 	 

	HFCP ASSOCIATION LANDSCAPE & IRRIGATION CONTINUED

	LI-13

	 	HFCP Association — Irrigation Plan
	 	3/22/2010	 	 
	LI-14

	 	HFCP Association — Irrigation Plan
	 	3/22/2010	 	 
	LI-15

	 	HFCP Association — Irrigation Plan
	 	3/22/2010	 	 
	LI-16

	 	HFCP Association — Irrigation Plan
	 	3/22/2010	 	 
	LI-17

	 	HFCP Association — Irrigation Plan
	 	3/22/2010	 	 
	LID-1

	 	HFCP Association — Irrigation Details
	 	3/22/2010	 	 
	LID-2

	 	HFCP Association — Irrigation Details
	 	3/22/2010	 	 
	LIN-1

	 	HFCP Association — Irrigation Notes
	 	3/22/2010	 	 
	LIN-2

	 	HFCP Association — Irrigation Specifications
	 	3/22/2010	 	 
	LIN-3

	 	HFCP Association — Irrigation Specifications
	 	3/22/2010	 	 
	LP-01

	 	HFCP Association — Construction and Planting Plan
	 	3/22/2010	 	 
	LP-02

	 	HFCP Association — Construction and Planting Plan
	 	3/22/2010	 	 
	LP-03

	 	HFCP Association — Construction and Planting Plan
	 	3/22/2010	 	 
	LP-04

	 	HFCP Association — Construction and Planting Plan
	 	3/22/2010	 	 
	LP-05

	 	HFCP Association — Construction and Planting Plan
	 	3/22/2010	 	 
	LP-06

	 	HFCP Association - Construction and Planting Plan
	 	3/22/2010	 	 
	LP-07

	 	HFCP Association — Construction and Planting Plan
	 	3/22/2010	 	 
	LP-08

	 	HFCP Association — Construction and Planting Plan
	 	3/22/2010	 	 
	LP-09

	 	HFCP Association — Construction and Planting Plan
	 	3/22/2010	 	 
	LP-10

	 	HFCP Association — Construction and Planting Plan
	 	3/22/2010	 	 
	LP-11

	 	HFCP Association — Construction and Planting Plan
	 	3/22/2010	 	 
	LP-12

	 	HFCP Association — Construction and Planting Plan
	 	3/22/2010	 	 
	LP-13

	 	HFCP Association — Construction and Planting Plan
	 	3/22/2010	 	 
	LP-14

	 	HFCP Association — Construction and Planting Plan
	 	3/22/2010	 	 
	LP-15

	 	HFCP Association — Construction and Planting Plan
	 	3/22/2010	 	 
	LP-16

	 	HFCP Association — Construction and Planting Plan
	 	3/22/2010	 	 
	LP-17

	 	HFCP Association — Construction and Planting Plan
	 	3/22/2010	 	 
	LPD-01

	 	HFCP Association — Planting Details
	 	3/22/2010	 	 
	LPD-02

	 	HFCP Association — Planting Details
	 	3/22/2010	 	 
	LCD-01

	 	HFCP Association — Construction Specification
	 	3/22/2010	 	 
	LCD-02

	 	HFCP Association — Construction Details
	 	3/22/2010	 	 
	PARCEL 1 LANDSCAPE & IRRIGATION

	LCS-0

	 	HFCP — Parcel 1 — Cover Sheet
	 	2/18/2009	 	 
	LC-O1

	 	HFCP — Parcel 1 — Construction Plan
	 	2/18/2009	 	 
	LC-O2

	 	HFCP — Parcel 1 — Construction Plan
	 	2/18/2009	 	 
	LC-O3

	 	HFCP — Parcel 1 — Construction Plan
	 	2/18/2009	 	 
	LC-O4

	 	HFCP — Parcel 1 — Construction Plan
	 	2/18/2009	 	 
	LC-O5

	 	HFCP — Parcel 1 — Construction Plan
	 	2/18/2009	 	 
	LC-O6

	 	HFCP — Parcel 1 — Construction Plan
	 	2/18/2009	 	 
	LC-O7

	 	HFCP — Parcel 1 — Construction Plan
	 	2/18/2009	 	 
	LC-O8

	 	HFCP — Parcel 1 — Construction Plan
	 	2/18/2009	 	 
	LC-O9

	 	HFCP — Parcel 1 — Construction Plan
	 	2/18/2009	 	 
	LC-O10

	 	HFCP — Parcel 1 — Construction Plan
	 	2/18/2009	 	 
	LC-O11

	 	HFCP — Parcel 1 — Construction Plan Enlargements
	 	2/18/2009	 	 

 

 

Contract#: MH00-121-226

Project: Hhighland Fairview Corporate Park

Trade: General Contractor

	 	 	 	 	 	 	 

	PARCEL 1 LANDSCAPE & IRRIGATION CONTINUATION

	LCD-01

	 	HFCP — Parcel 1 — Construction Notes
	 	2/18/2009	 	 
	LCD-02

	 	HFCP — Parcel 1 — Construction Details
	 	2/18/2009	 	 
	LCD-03

	 	HFCP — Parcel 1 — Construction Details
	 	2/18/2009	 	 
	LCD-04

	 	HFCP — Parcel 1 — Construction Details
	 	2/18/2009	 	 
	LCD-05

	 	HFCP — Parcel 1 — Construction Details
	 	2/18/2009	 	 
	LCD-06

	 	HFCP — Parcel 1 — Construction Details
	 	2/18/2009	 	 
	LCN-01

	 	HFCP — Parcel 1 — Construction Specifications
	 	2/18/2009	 	 
	LI-01

	 	HFCP — Parcel 1 — Irrigation Plan
	 	2/18/2009	 	 
	LI-02

	 	HFCP — Parcel 1 — Irrigation Plan
	 	2/18/2009	 	 
	LI-03

	 	HFCP — Parcel 1 — Irrigation Plan
	 	2/18/2009	 	 
	LI-04

	 	HFCP — Parcel 1 — Irrigation Plan
	 	2/18/2009	 	 
	LI-05

	 	HFCP — Parcel 1 — Irrigation Plan
	 	2/18/2009	 	 
	LI-06

	 	HFCP — Parcel 1 — Irrigation Plan
	 	2/18/2009	 	 
	LI-07

	 	HFCP — Parcel 1 — Irrigation Plan
	 	2/18/2009	 	 
	LI-08

	 	HFCP — Parcel 1 — Irrigation Plan
	 	2/18/2009	 	 
	LI-09

	 	HFCP — Parcel 1 — Irrigation Plan
	 	2/18/2009	 	 
	LI-10

	 	HFCP — Parcel 1 — Irrigation Plan
	 	2/18/2009	 	 
	LID-1

	 	HFCP — Parcel 1 — Irrigation Details
	 	2/18/2009	 	 
	LID-2

	 	HFCP — Parcel 1 — Irrigation Details
	 	2/18/2009	 	 
	LIN-01

	 	HFCP — Parcel 1 — Irrigation Notes
	 	2/18/2009	 	 
	LIN-02

	 	HFCP — Parcel 1 — Irrigation Notes
	 	2/18/2009	 	 
	LIN-03

	 	HFCP — Parcel 1 — Irrigation Notes
	 	2/18/2009	 	 
	LP-01

	 	HFCP — Parcel 1 — Planting Plan
	 	2/18/2009	 	 
	LP-02

	 	HFCP — Parcel 1 — Planting Plan
	 	2/18/2009	 	 
	LP-03

	 	HFCP — Parcel 1 — Planting Plan
	 	2/18/2009	 	 
	LP-04

	 	HFCP — Parcel 1 — Planting Plan
	 	2/18/2009	 	 
	LP-05

	 	HFCP — Parcel 1 — Planting Plan
	 	2/18/2009	 	 
	LP-06

	 	HFCP — Parcel 1 — Planting Plan
	 	2/18/2009	 	 
	LP-07

	 	HFCP — Parcel 1 — Planting Plan
	 	2/18/2009	 	 
	LP-08

	 	HFCP — Parcel 1 — Planting Plan
	 	2/18/2009	 	 
	LP-09

	 	HFCP — Parcel 1 — Planting Plan
	 	2/18/2009	 	 
	LP-10

	 	HFCP — Parcel 1 — Planting Plan
	 	2/18/2009	 	 
	LPD-01

	 	HFCP — Parcel 1 — Planting Details
	 	2/18/2009	 	 
	LPD-02

	 	HFCP — Parcel 1 — Planting Details
	 	2/18/2009	 	 
	LPN-01

	 	HFCP — Parcel 1 — Planting Notes
	 	2/18/2009	 	 
	WEI WEST WAREHOUSE EQUIPMENT, INC.

	SA00

	 	Structure Layout VAS Platform Overall Plan View
	 	12/10/2008
	 	Rev. 05
	SA01

	 	Structure Layout VAS Platform Enlarged Foundation Plan
	 	12/10/2008
	 	Rev. 05
	SA02

	 	Structure Layout
	 	12/10/2008
	 	Rev. 05
	SA03

	 	Structure Layout VAS Platform Enlarged Foundation Plan
	 	12/10/2008
	 	Rev. 05
	SA04

	 	Structure Layout VAS Platform Enlarged Foundation Plan
	 	12/10/2008
	 	Rev. 05
	SA05

	 	Structure Layout VAS Platform Enlarged Foundation Plan
	 	12/10/2008
	 	Rev. 05
	SA06

	 	Structure Layout VAS Platform Enlarged Foundation Plan
	 	12/10/2008
	 	Rev. 05
	SA07

	 	Structure Layout VAS Platform Enlarged Foundation Plan
	 	12/10/2008
	 	Rev. 05

 

 

Contract#: MH00-121-226

Project: Hhighland Fairview Corporate Park

Trade: General Contractor

	 	 	 	 	 	 	 

	WEI WEST WAREHOUSE EQUIPMENT, INC. CONTINUED

	SA08

	 	Structure Layout VAS Platform Enlarged Foundation Plan
	 	12/10/2008
	 	Rev. 05
	SA09

	 	Structure Layout VAS Platform Footing Details
	 	12/10/2008
	 	Rev. 05
	SB00

	 	Structure Layout Shipping Platform Overall Plan View
	 	12/10/2008
	 	Rev. 05
	SB01

	 	Structure Layout Shipping Platform Overall Enlarged Foundation Plan
	 	12/10/2008
	 	Rev. 05
	SB02

	 	Structure Layout Shipping Platform Overall Enlarged Foundation Plan
	 	12/10/2008
	 	Rev. 05
	SB03

	 	Structure Layout Shipping Platform Footing Detail
	 	12/10/2008
	 	Rev. 05
	SG01

	 	Structure Layout Extendable Conveyor Foundation Plans
	 	12/10/2008
	 	Rev. 05
	SG02

	 	Structure Layout Extendable Conveyor Foundation Plans
	 	12/10/2008
	 	Rev. 05
	SG03

	 	Structure Layout Extendable Footings Foundation Plans
	 	12/10/2008
	 	Rev. 05
	SG04

	 	Structure Layout Extendable Footings Foundation Plans
	 	12/10/2008
	 	Rev. 05
	SG05

	 	Structure Layout Extendable Footings Foundation Plans
	 	12/10/2008
	 	Rev. 05
	SG06

	 	Structure Layout Extendable Tracks Footing Cross Sections
	 	12/10/2008
	 	Rev. 05
	HIGHLAND FAIRVIEW CORPORATE PARK PROJECT MANUAL

	Div 00

	 	Procurement and Contracting requirements
	 	7/24/2008	 	 
	Div 01

	 	General requirements
	 	7/24/2008	 	 
	Div 02

	 	Sitrework
	 	7/24/2008	 	 
	Div 03

	 	Concrete
	 	7/24/2008	 	 
	Div 04

	 	Masonry
	 	7/24/2008	 	 
	Div 05

	 	Metals
	 	7/24/2008	 	 
	Div 06

	 	Wood and Plastics
	 	7/24/2008	 	 
	Div 07

	 	Thermal and Moisture Control
	 	7/24/2008	 	 
	Div 08

	 	Doors and Windows
	 	7/24/2008	 	 
	Div 09

	 	Finishes
	 	7/24/2008	 	 
	Div 10

	 	Specialties
	 	7/24/2008	 	 
	Div 11

	 	Equipment
	 	7/24/2008	 	 
	Div 12

	 	Furnishings
	 	7/24/2008	 	 
	Div 13

	 	Special Construction
	 	7/24/2008	 	 
	Div 14

	 	Conveyor Systems
	 	7/24/2008	 	 
	Div 15

	 	Mechanical
	 	7/24/2008	 	 
	Div 16

	 	Electrical
	 	7/24/2008	 	 
	PRELIMINARY GEOTECHNICAL REPORT LEIGHTON & ASSOC.

	1.0

	 	Introduction
	 	6/15/2007	 	 
	2.0

	 	Geotechnical Investigation & Lab
	 	6/15/2007	 	 
	3.0

	 	Summary
	 	6/15/2007	 	 
	4.0

	 	Faulting & Seismicity
	 	6/15/2007	 	 
	5.0

	 	Conclusions
	 	6/15/2007	 	 
	6.0

	 	Preliminary Recommendations
	 	6/15/2007	 	 
	7.0

	 	Geotechnical Review
	 	6/15/2007	 	 
	8.0

	 	Limitations
	 	6/15/2007	 	 
	map

	 	Geotechnical Map / Boring Log
	 	6/15/2007	 	 
	UPDATED PRELIMINARY GEOTECHNICAL REPORT LEIGHTON & ASSOC.

	1.0

	 	Introduction
	 	4/30/2008	 	 
	2.0

	 	Geotechnical Investigation & Lab
	 	4/30/2008	 	 
	3.0

	 	Summary
	 	4/30/2008	 	 
	4.0

	 	Faulting & Seismicity
	 	4/30/2008	 	 

 

 

Contract#: MH00-121-226

Project: Hhighland Fairview Corporate Park

Trade: General Contractor

	 	 	 	 	 	 	 

	UPDATED PRELIMINARY GEOTECHNICAL REPORT LEIGHTON & ASSOC. CONTINUED

	5.0

	 	Conclusions
	 	4/30/2008	 	 
	6.0

	 	Preliminary Recommendations
	 	4/30/2008	 	 
	7.0

	 	Geotechnical Review	 	4/30/2008	 	 
	8.0

	 	Limitations
	 	4/30/2008	 	 
	map

	 	Geotechnical Map / Boring Log
	 	4/30/2008	 	 
	OTHER SOILS REPORTS

	 

	 	Update Seismic Design Parameters
	 	11/30/2007	 	 
	 

	 	Preliminary Geotechnical Evaluation, SR-60 Widening
	 	7/30/2008	 	 
	 

	 	Clarifications to Soils, Highland Fairview Corporate Park
	 	8/15/2008	 	 
	 

	 	response to City of M.V. Review Comments & Map
	 	11/5/2008	 	 
	 

	 	geotechnical Recommendations for Temporary Fire Access Road
	 	1/5/2009	 	 
	 

	 	Clarifications #2 to Soils Report, Highland Fairview Corporate Park
	 	1/14/2009	 	 
	 

	 	Response to City of M.V. Review Comments, Public Works Depart.
	 	1/16/2009	 	 
	 

	 	Geotechnical Review of Improvements & rough Grade for Sanitary Sewer
	 	1/21/2009	 	 
	 

	 	Clarifications #3 to Soils report, Highland Fairview Corporate Park
	 	1/29/2009	 	 
	 

	 	Rough Grading Anticipated Keyway Locations
	 	1/29/2009	 	 
	 

	 	recommended Sup drain Locations
	 	2/6/2009	 	 
	 

	 	Infiltration Characteristics of onsite soils
	 	6/23/2008	 	 
	 

	 	Supplemental Remedial Grading Rec. Skechers VAS Platform
	 	2/6/2009	 	 
	STRUCTURAL CALCULATIONS

	 

	 	Structural Calculations by David Kramer
	 	2/2/2009	 	 
	TITLE 24 REPORT

	 

	 	title 24 Report by Alan Poydock — Thermalair, Inc.
	 	1/30/2009	 	 
	CIVIL MISC EXHIBITS & REPORTS

	 

	 	Drainage Bypass for Redlands Sewer Work Area
	 	2/18/2009	 	 
	 

	 	Grading Balance Area
	 	2/18/2009	 	 
	 

	 	Highland SWPPP
	 	2/18/2009	 	 
	 

	 	Set Back for Restricted Hours of Work
	 	2/18/2009	 	 
	 

	 	Existing Stockpile Locations
	 	2/18/2009	 	 
	 

	 	Mitigation Monitoring Program by Michael Brandman Assoc.
	 	12/23/2008	 	 
	 

	 	Septic Exhibit
	 	1/7/2009	 	 

 

 

Contract#: MH00-121-226

Project: Hhighland Fairview Corporate Park

Trade: General Contractor

EXHIBIT “E”

DRAWING LOG -EUCALYPTUS STREET

SKECHERS DISTRIBUTION CENTER

29800 Eucalyptus Avenue, Rancho Belago, California 92555

	 	 	 	 	 	 	 

	ARCHITECTURAL

	A0.1

	 	Highland Fairview Corporate Park Title Sheet — ASI #2
	 	11/11/2008
	 	Delta 2
	A0.2

	 	Highland Fairview Corporate Park General Sheet
	 	5/21/2008	 	 
	A0.3.1

	 	Disability Access Notes
	 	5/21/2008	 	 
	A0.3.2

	 	Disability Access Notes
	 	5/21/2008	 	 
	A0.3.3

	 	Disability Access Notes
	 	5/21/2008	 	 
	A1.1

	 	Overall Site Plan
	 	5/21/2008	 	 
	AD.1

	 	Details
	 	5/21/2008	 	 
	AD.1A

	 	Site Details for ADA Access
	 	12/4/2009
	 	Delta 4
	AD.2

	 	Details
	 	5/21/2008	 	 
	AD.3

	 	Details — ASI #1
	 	9/15/2008
	 	Delta 1
	AD.3A

	 	Details — ASI #3
	 	12/30/2008
	 	(Delta 5)
	AD.4

	 	Details
	 	5/21/2008	 	 
	AD.5

	 	Details
	 	5/21/2008	 	 
	AD.6

	 	Details
	 	5/21/2008	 	 
	AD.7

	 	Details
	 	5/21/2008	 	 
	AD.8

	 	Details
	 	5/21/2008	 	 
	AD.9

	 	Details
	 	5/21/2008	 	 
	AD.10

	 	Details — ASI #2
	 	11/11/2008
	 	Delta 2
	AD.11

	 	Details — ASI #2
	 	11/11/2008
	 	Delta 2
	FIRE PROTECTION PARCEL 1 / SKECHERS

	HFCP

	 	Cover Page	 	 	 	 
	FP 1

	 	Underground Fire Master Plan
	 	7/29/2008	 	 
	FP 2

	 	Enlarged Underground Fire Piping Part I
	 	7/29/2008	 	 
	FP 3

	 	Enlarged Underground Fire Piping Part II
	 	7/29/2008	 	 
	FP 4

	 	Underground Fire Notes / Details
	 	7/29/2008	 	 
	CONSTRUCTION STAGING PLAN

	SC 1

	 	Stage Construction
	 	1/9/2009	 	 
	SC 2

	 	Traffic Handling / Construction area Sign Plan
	 	1/9/2009	 	 
	SC 3

	 	Traffic Handling / Construction area Sign Plan
	 	1/9/2009	 	 
	SC 4

	 	Traffic Handling / Construction area Sign Plan
	 	1/9/2009	 	 
	TRAFFIC CONTROL PLAN

	TCP 1

	 	Traffic Control Plan — Title Sheet
	 	2/18/2009	 	 
	TCP 2

	 	Traffic Control Plan — Phase I & II
	 	2/18/2009	 	 
	TCP 3

	 	Traffic Control Plan — Phase I
	 	2/18/2009	 	 
	TCP 4

	 	Traffic Control Plan — Phase II
	 	2/18/2009	 	 
	TCP 5

	 	Traffic Control Plan — Phase I
	 	2/18/2009	 	 
	TCP 6

	 	Traffic Control Plan — Phase II
	 	2/18/2009	 	 

 

 

Contract#: MH00-121-226

Project: Hhighland Fairview Corporate Park

Trade: General Contractor

	 	 	 	 	 	 	 

	PRECISE GRADING

	PG 1

	 	Precise Grading — Title Sheet
	 	2/18/2009	 	 
	PG 2

	 	Precise Grading — Detail Sheet
	 	2/18/2009	 	 
	PG 3

	 	Precise Grading Plan
	 	2/18/2009	 	 
	PG 4

	 	Precise Grading Plan
	 	2/18/2009	 	 
	PG 5

	 	Precise Grading Plan
	 	2/18/2009	 	 
	PG 6

	 	Precise Grading Plan
	 	2/18/2009	 	 
	PG 7

	 	Precise Grading Plan
	 	2/18/2009	 	 
	PG 8

	 	Precise Grading Plan
	 	2/18/2009	 	 
	PG 9

	 	Precise Grading Plan
	 	2/18/2009	 	 
	PG 10

	 	Precise Grading Plan
	 	2/18/2009	 	 
	PG 11

	 	Precise Grading Plan
	 	2/18/2009	 	 
	PG 12

	 	Precise Grading Plan
	 	2/18/2009	 	 
	PG 13

	 	Precise Grading Plan
	 	2/18/2009	 	 
	PG 14

	 	Precise Grading Plan
	 	2/18/2009	 	 
	PG 15

	 	Precise Grading Plan
	 	2/18/2009	 	 
	LINE “F” STORM DRAIN SYSTEM

	SHT 1

	 	Moreno MDP Line — F — Title Sheet
	 	1/9/2009	 	 
	SHT 2

	 	Moreno MDP Line — F — Notes & Details
	 	1/9/2009	 	 
	SHT 3

	 	Moreno MDP Line — F — Station
	 	1/9/2009	 	 
	SHT 4

	 	Moreno MDP Line — F — Station
	 	1/9/2009	 	 
	SHT 5

	 	Moreno MDP Line — F — Station
	 	1/9/2009	 	 
	SHT 6

	 	Moreno MDP Line — F — Station
	 	1/9/2009	 	 
	SHT 7

	 	Moreno MDP Line — F — Station
	 	1/9/2009	 	 
	SHT 8

	 	Moreno MDP Line — F — Station
	 	1/9/2009	 	 
	SHT 9

	 	Moreno MDP Line — F — Lat F-2
	 	1/9/2009	 	 
	SHT 10

	 	Moreno MDP Line — F — Lat F-2-A
	 	1/9/2009	 	 
	SHT 11

	 	Moreno MDP Line — F — Lat D-5
	 	1/9/2009	 	 
	SHT 12

	 	Moreno MDP Line — F — Lat D-6
	 	1/9/2009	 	 
	SHT 13

	 	Moreno MDP Line — F — Lat F-8
	 	1/9/2009	 	 
	SHT 14

	 	Moreno MDP Line — F — Lat F-8
	 	1/9/2009	 	 
	SHT 15

	 	Moreno MDP Line — F — Lat F-8
	 	1/9/2009	 	 
	SHT 16

	 	Moreno MDP Line — F — Lat F-8
	 	1/9/2009	 	 
	SHT 17

	 	Moreno MDP Line — F — Lat F-8
	 	1/9/2009	 	 
	SHT 18

	 	Moreno MDP Line — F — Lat F-9
	 	1/9/2009	 	 
	SHT 19

	 	Moreno MDP Line — F — Lat F-9
	 	1/9/2009	 	 
	SHT 20

	 	Moreno MDP Line — F — Profiles
	 	1/9/2009	 	 
	SHT 21

	 	Moreno MDP Line — F — Profiles
	 	1/9/2009	 	 
	SHT 22

	 	Moreno MDP Line — F — Profiles
	 	1/9/2009	 	 
	SHT 23

	 	Moreno MDP Line — F — Gen Notes & Details
	 	1/9/2009	 	 
	SHT 24

	 	Moreno MDP Line — F — Details
	 	1/9/2009	 	 
	SHT 25

	 	Moreno MDP Line — F — Lateral Plan Sections
	 	1/9/2009	 	 
	SHT 26

	 	Moreno MDP Line — F — Lateral
	 	1/9/2009	 	 
	SHT 27

	 	Moreno MDP Line — F — Sections
	 	1/9/2009	 	 
	SHT 28

	 	Moreno MDP Line — F — Access Openings & Details
	 	1/9/2009	 	 
	 

	 	new spec and area of 6,00 psi concrete	 	 	 	 

 

 

Contract#: MH00-121-226

Project: Hhighland Fairview Corporate Park

Trade: General Contractor

	 	 	 	 	 	 	 

	EUCALYPTUS SANITARY SEWER PLAN

	SSIP 1

	 	Eucalyptus Avenue — Sanitary Sewer Plan — Title Sheet
	 	1/9/2009	 	 
	SSIP 2

	 	Eucalyptus Avenue — Sanitary Sewer Plan — Index & Legend
	 	1/9/2009	 	 
	SSIP 3

	 	Eucalyptus Avenue — Sanitary Sewer Plan — Plan Profile
	 	1/9/2009	 	 
	SSIP 4

	 	Eucalyptus Avenue — Sanitary Sewer Plan — Plan Profile
	 	1/9/2009	 	 
	SSIP 5

	 	Eucalyptus Avenue — Sanitary Sewer Plan — Plan Profile
	 	1/9/2009	 	 
	SSIP 6

	 	Eucalyptus Avenue — Sanitary Sewer Plan — Plan Profile
	 	1/9/2009	 	 
	SSIP 7

	 	Eucalyptus Avenue — Sanitary Sewer Plan — Plan Profile
	 	1/9/2009	 	 
	RECYCLED WATER IMPROVEMENT PLAN

	RWIP 1

	 	EUCALYPTUS
	 	2/20/2009	 	 
	RWIP 2

	 	EUCALYPTUS
	 	2/20/2009	 	 
	RWIP 3

	 	EUCALYPTUS
	 	2/20/2009	 	 
	RWIP 4

	 	EUCALYPTUS
	 	2/20/2009	 	 
	RWIP 5

	 	EUCALYPTUS
	 	2/20/2009	 	 
	RWIP 6

	 	EUCALYPTUS
	 	2/20/2009	 	 
	WATER IMPROVEMENT PLAN

	RWIP 7

	 	EUCALYPTUS
	 	2/20/2009	 	 
	WIP 1

	 	EUCALYPTUS
	 	2/20/2009	 	 
	WIP 2

	 	EUCALYPTUS
	 	2/20/2009	 	 
	WIP 3

	 	EUCALYPTUS
	 	2/20/2009	 	 
	WIP 4

	 	EUCALYPTUS
	 	2/20/2009	 	 
	WIP 5

	 	EUCALYPTUS
	 	2/20/2009	 	 
	WIP 6

	 	EUCALYPTUS
	 	2/20/2009	 	 
	WIP 7

	 	EUCALYPTUS
	 	2/20/2009	 	 
	EUCALYPTUS SITE UTILITIES

	SHT 1

	 	Eucalyptus Avenue Utility Design — BUTSKO
	 	1/9/2009	 	 
	SHT 2

	 	Eucalyptus Avenue Utility Design — BUTSKO
	 	1/9/2009	 	 
	SHT 3

	 	Eucalyptus Avenue Utility Design — BUTSKO
	 	1/9/2009	 	 
	SHT 4

	 	Eucalyptus Avenue Utility Design — BUTSKO
	 	1/9/2009	 	 
	SHT 5

	 	Eucalyptus Avenue Utility Design — BUTSKO
	 	1/9/2009	 	 
	SHT 1

	 	Eucalyptus Avenue Temporary Transformer — BUTSKO
	 	1/9/2009	 	 
	ELECTRICAL DISTRIBUTION PLAN

	SHT 1

	 	Electrical Distribution Plan
	 	2/18/2009	 	 
	SHT 2

	 	Electrical Distribution Plan
	 	2/18/2009	 	 
	SHT 3

	 	Electrical Distribution Plan
	 	2/18/2009	 	 
	SHT 4

	 	Electrical Distribution Plan
	 	2/18/2009	 	 
	FIRE PROTECTION SITE

	FP 1 UG

	 	Underground Fire Master Plan
	 	11/12/2008	 	 
	FP 2 UG

	 	Enlarged Underground Fire Piping Part I
	 	3/3/2009	 	 
	FP 3 UG

	 	Enlarged Underground Fire Piping Part II
	 	3/3/2009	 	 
	FP 1

	 	Site Fire Access Plan (During Construction)
	 	3/3/2009	 	 
	FP 2

	 	Site Fire Access Plan (Job Completion)
	 	3/3/2009	 	 
	EUCALYPTUS STREET IMPROVEMENT PLAN

	STIP 1

	 	Eucalyptus Avenue Street Improvement Plan — Title Sheet
	 	1/9/2009	 	 
	STIP 2

	 	Eucalyptus Avenue Street Improvement Plan — Notes & Index Map
	 	1/9/2009	 	 
	STIP 3

	 	Eucalyptus Avenue Street Improvement Plan — Details & Sections
	 	1/9/2009	 	 

 

 

Contract#: MH00-121-226

Project: Hhighland Fairview Corporate Park

Trade: General Contractor

	 	 	 	 	 	 	 

	EUCALYPTUS STREET IMPROVEMENT PLAN CONTINUATION

	STIP 4

	 	Eucalyptus Avenue Street Improvement Plan — Phase 1
	 	1/9/2009	 	 
	STIP 5

	 	Eucalyptus Avenue Street Improvement Plan — Phase 2
	 	1/9/2009	 	 
	STIP 6

	 	Eucalyptus Avenue Street Improvement Plan — Phase 3
	 	1/9/2009	 	 
	STIP 7

	 	Eucalyptus Avenue Street Improvement Plan — Phase 4
	 	1/9/2009	 	 
	STIP 8

	 	Eucalyptus Avenue Street Improvement Plan — Phase 5
	 	1/9/2009	 	 
	STIP 9

	 	Eucalyptus Avenue Street Improvement Plan — Phase 6
	 	1/9/2009	 	 
	STIP 10

	 	Eucalyptus Avenue Street Improvement Plan — Phase 7
	 	1/9/2009	 	 
	STIP 11

	 	Eucalyptus Avenue — Signing & Striping Title Sheet
	 	1/9/2009	 	 
	STIP 12

	 	Eucalyptus Avenue — Signing & Striping
	 	1/9/2009	 	 
	STIP 13

	 	Eucalyptus Avenue — Signing & Striping
	 	1/9/2009	 	 
	PAVING SECTION

	PS

	 	PAVING SECTION EXHIBIT
	 	2/18/2009	 	 
	MEDIAN EXHIBIT

	E-1

	 	Exhibit — Sections Eucalyptus Street Median
	 	7/22/2009	 	 
	110

	 	Emergency Vehicle Median Access
	 	1/1/2005	 	 
	TOLERANCE EXHIBIT

	TE

	 	Tolerance Exhibit
	 	2/18/2009	 	 
	THEODORE STREET IMPROVEMENT PLAN

	TSE

	 	Theodore Street Exhibit
	 	2/18/2009	 	 
	TRAFFIC SIGNAL INTERCONNECT

	421

	 	Traffic Signal Interconnect Detail	 	1/1/2008	 	 
	EVTSI

	 	Emergency Vehicle & Traffic Signal Interconnect
	 	10/22/2009	 	 
	THEODORE STREET IMPROVEMENT PLAN

	 

	 	Theodore Street / HWY 60 Ramp Widening Exhibit	 	 	 	 
	EUCALYPTUS STREET LANDSCAPE & IRRIGATION

	SHT 1

	 	Eucalyptus Street — Cover Sheet
	 	2/18/2009	 	 
	SHT 2

	 	Eucalyptus Street — Construction Plan
	 	2/18/2009	 	 
	SHT 3

	 	Eucalyptus Street — Construction Plan
	 	2/18/2009	 	 
	SHT 4

	 	Eucalyptus Street — Construction Plan
	 	2/18/2009	 	 
	SHT 5

	 	Eucalyptus Street — Construction Plan
	 	2/18/2009	 	 
	SHT 6

	 	Eucalyptus Street — Construction Plan
	 	2/18/2009	 	 
	SHT 7

	 	Eucalyptus Street — Construction Plan
	 	2/18/2009	 	 
	SHT 8

	 	Eucalyptus Street — Construction Details
	 	2/18/2009	 	 
	SHT 9

	 	Eucalyptus Street — Construction Details
	 	2/18/2009	 	 
	SHT 10

	 	Eucalyptus Street — Construction Details
	 	2/18/2009	 	 
	SHT 11

	 	Eucalyptus Street — Construction Specifications
	 	2/18/2009	 	 
	SHT 12

	 	Eucalyptus Street — Irrigation Plan
	 	2/18/2009	 	 
	SHT 13

	 	Eucalyptus Street — Irrigation Plan
	 	2/18/2009	 	 
	SHT 14

	 	Eucalyptus Street — Irrigation Plan
	 	2/18/2009	 	 
	SHT 15

	 	Eucalyptus Street — Irrigation Plan
	 	2/18/2009	 	 
	SHT 16

	 	Eucalyptus Street — Irrigation Plan
	 	2/18/2009	 	 
	SHT 17

	 	Eucalyptus Street — Irrigation Plan
	 	2/18/2009	 	 
	SHT 18

	 	Eucalyptus Street — Irrigation Details
	 	2/18/2009	 	 
	SHT 19

	 	Eucalyptus Street — Irrigation Details
	 	2/18/2009	 	 
	SHT 20

	 	Eucalyptus Street — Irrigation Notes
	 	2/18/2009	 	 
	SHT 21

	 	Eucalyptus Street — Irrigation Specifications
	 	2/18/2009	 	 

 

 

Contract#: MH00-121-226

Project: Hhighland Fairview Corporate Park

Trade: General Contractor

	 	 	 	 	 	 	 

	EUCALYPTUS STREET LANDSCAPE & IRRIGATION CONTINUATION

	SHT 22

	 	Eucalyptus Street — Irrigation Specifications
	 	2/18/2009	 	 
	SHT 23

	 	Eucalyptus Street — Planting Plan
	 	2/18/2009	 	 
	SHT 24

	 	Eucalyptus Street — Planting Plan
	 	2/18/2009	 	 
	SHT 25

	 	Eucalyptus Street — Planting Plan
	 	2/18/2009	 	 
	SHT 26

	 	Eucalyptus Street — Planting Plan
	 	2/18/2009	 	 
	SHT 27

	 	Eucalyptus Street — Planting Plan
	 	2/18/2009	 	 
	SHT 28

	 	Eucalyptus Street — Planting Plan
	 	2/18/2009	 	 
	SHT 29

	 	Eucalyptus Street — Planting Details
	 	2/18/2009	 	 
	SHT 30

	 	Eucalyptus Street — Planting Details
	 	2/18/2009	 	 
	SHT 31

	 	Eucalyptus Street — Planting Specifications
	 	2/18/2009	 	 
	SHT 32

	 	Eucalyptus Street — Planting Specifications
	 	2/18/2009	 	 
	HIGHLAND FAIRVIEW CORPORATE PARK — PROJECT MANUAL

	Div 00

	 	Procurement and Contracting requirements
	 	7/24/2008	 	 
	Div 01

	 	General requirements
	 	7/24/2008	 	 
	Div 02

	 	Sitrework
	 	7/24/2008	 	 
	Div 03

	 	Concrete
	 	7/24/2008	 	 
	Div 04

	 	Masonry
	 	7/24/2008	 	 
	Div 05

	 	Metals
	 	7/24/2008	 	 
	Div 06

	 	Wood and Plastics
	 	7/24/2008	 	 
	Div 07

	 	Thermal and Moisture Control
	 	7/24/2008	 	 
	Div 08

	 	Doors and Windows
	 	7/24/2008	 	 
	Div 09

	 	Finishes
	 	7/24/2008	 	 
	Div 10

	 	Specialties
	 	7/24/2008	 	 
	Div 11

	 	Equipment
	 	7/24/2008	 	 
	Div 12

	 	Furnishings
	 	7/24/2008	 	 
	Div 13

	 	Special Construction
	 	7/24/2008	 	 
	Div 14

	 	Conveyor Systems
	 	7/24/2008	 	 
	Div 15

	 	Mechanical
	 	7/24/2008	 	 
	Div 16

	 	Electrical
	 	7/24/2008	 	 
	PRELIMINARY GEOTECHNICAL REPORT LEIGHTON & ASSOC.

	1.0

	 	Introduction
	 	6/15/2007	 	 
	2.0

	 	Geotechnical Investigation & Lab
	 	6/15/2007	 	 
	3.0

	 	Summary
	 	6/15/2007	 	 
	4.0

	 	Faulting & Seismicity
	 	6/15/2007	 	 
	5.0

	 	Conclusions
	 	6/15/2007	 	 
	6.0

	 	Preliminary Recommendations
	 	6/15/2007	 	 
	7.0

	 	Geotechnical Review
	 	6/15/2007	 	 
	8.0

	 	Limitations
	 	6/15/2007	 	 
	map

	 	Geotechnical Map / Boring Log
	 	6/15/2007	 	 
	1.0

	 	Introduction
	 	4/30/2008	 	 
	2.0

	 	Geotechnical Investigation & Lab
	 	4/30/2008	 	 
	3.0

	 	Summary
	 	4/30/2008	 	 
	4.0

	 	Faulting & Seismicity
	 	4/30/2008	 	 
	5.0

	 	Conclusions
	 	4/30/2008	 	 
	6.0

	 	Preliminary Recommendations
	 	4/30/2008	 	 

 

 

Contract#: MH00-121-226

Project: Hhighland Fairview Corporate Park

Trade: General Contractor

	 	 	 	 	 	 	 

	PRELIMINARY GEOTECHNICAL REPORT LEIGHTON & ASSOC. CONTINUATION

	7.0

	 	Geotechnical Review
	 	4/30/2008	 	 
	8.0

	 	Limitations
	 	4/30/2008	 	 
	map

	 	Geotechnical Map / Boring Log
	 	4/30/2008	 	 
	 

	 	Update Seismic Design Parameters
	 	11/30/2007	 	 
	 

	 	Update Geotechnical Report
	 	4/30/2008	 	 
	 

	 	Preliminary Geotechnical Evaluation, SR-60 Widening
	 	7/30/2008	 	 
	 

	 	Clarifications to Soils, Highland Fairview Corporate Park
	 	8/15/2008	 	 
	 

	 	response to City of M.V. Review Comments & Map
	 	11/5/2008	 	 
	 

	 	geotechnical Recommendations for Temporary Fire Access Road
	 	1/5/2009	 	 
	 

	 	Clarifications #2 to Soils Report, Highland Fairview Corporate Park
	 	1/14/2009	 	 
	 

	 	Response to City of M.V. Review Comments, Public Works Depart.
	 	1/16/2009	 	 
	 

	 	Geotechnical Review of Improvements & rough Grade for Sanitary Sewer
	 	1/21/2009	 	 
	 

	 	Clarifications #3 to Soils report, Highland Fairview Corporate Park
	 	1/29/2009	 	 
	 

	 	Rough Grading Anticipated Keyway Locations
	 	1/29/2009	 	 
	 

	 	recommended Sub drain Locations
	 	2/6/2009	 	 
	CIVIL MISC EXHIBITS & REPORTS

	 

	 	Drainage Bypass for Redlands Sewer Work Area
	 	2/18/2009	 	 
	 

	 	Grading Balance Area
	 	2/18/2009	 	 
	 

	 	Highland SWPPP
	 	2/18/2009	 	 
	 

	 	Offsite Rubble Disposal
	 	2/18/2009	 	 
	 

	 	Set Back for Restricted Hours of Work
	 	2/18/2009	 	 
	 

	 	Supplemental SWPPP
	 	2/18/2009	 	 
	 

	 	Water Pick-Up
	 	2/18/2009	 	 
	 

	 	Mitigation Monitoring Program by Michael Brandman Assoc.
	 	12/23/2008	 	 

 

 

EXHIBIT “E”

PROJECT MANUALS & REPORT

SKECHERS DISTRIBUTION WAREHOUSE

29800 Eucalyptus Avenue, Moreno Valley, California 92555

	 	 	 	 	 	 	 

	GEOTECHNICAL
	 	 
	6/15/2007

	 	Preliminary Geotechnical Report
	 	Section 1.0 — Introduction	 	 
	 

	 	Leighton and Associates, Inc.
	 	Section 2.0 — Geotechnical Investigation & Lab	 	 
	 

	 	 	 	Section 3.0 — Summary	 	 
	 

	 	 	 	Section 4.0 — Faulting & Seismicity	 	 
	 

	 	 	 	Section 5.0 — Conclusions	 	 
	 

	 	 	 	Section 6.0 — Preliminary Recommendations	 	 
	 

	 	 	 	Section 7.0 — Geotechnical review	 	 
	 

	 	 	 	Section 8.0 — Limitations	 	 
	 

	 	 	 	Geotechnical Map / Boring Log	 	 
	 
	 	 	 	 	 	 
	4/30/2008

	 	Update Geotechnical report
	 	Section 1.0 — Introduction	 	 
	 

	 	Leighton and Associates, Inc.
	 	Section 2.0 — Geotechnical Investigation & Lab	 	 
	 

	 	 	 	Section 3.0 — Summary	 	 
	 

	 	 	 	Section 4.0 — Faulting & Seismicity	 	 
	 

	 	 	 	Section 5.0 — Conclusions	 	 
	 

	 	 	 	Section 6.0 — Preliminary Recommendations	 	 
	 

	 	 	 	Section 7.0 — Geotechnical review	 	 
	 

	 	 	 	Section 8.0 — Limitations	 	 
	 

	 	 	 	Geotechnical Map / Boring Log	 	 
	 
	 	 	 	 	 	 
	11/30/2007	 	Update Seismic Design Parameters
	4/30/2008	 	Update Geotechnical Report
	7/30/2008	 	Preliminary Geotechnical Evaluation, SR-60 Widening between Theodore & Redlands Blvd.
	8/15/2008	 	Clarifications to Soils Report, Highland Fairview Corporate Park
	11/5/2008	 	Response to City of Moreno Valley Review Comments & Map
	1/5/2009	 	Geotechnical recommendations for Temporary “All-Weather” Fire Access
	1/14/2009	 	Clarifications #2 to Soils Report, Highland Fairview Corporate Park
	1/16/2009	 	Response to City of Moreno Valley Review Comments, Public Works Department
	1/21/2009	 	Geotechnical review of Improvement & rough Grading Plans for Sanitary Sewer — Redlands Blvd.
	1/29/2009	 	Clarifications #3 to Soils Report, Highland Fairview Corporate Park
	1/29/2009	 	Rough Grading Anticipated Keyway Locations
	2/6/2009	 	Recommended Subdrain Locations
	 
	 	 	 	 	 	 
	PROJECT MANUAL
	 	 
	7/24/2008

	 	Highland Corporate Park
	 	Project Requirements & Specifications	 	 
	 

	 	HPA, Inc. Architects
	 	Division 00 — Procurement & Contracting	 	 
	 

	 	 	 	Division 01 — General Requirements	 	 
	 

	 	 	 	Division 02 — Sitework	 	 
	 

	 	 	 	Division 03 — Concrete	 	 
	 

	 	 	 	Division 04 — Masonry	 	 
	 

	 	 	 	Division 05 — Metals	 	 
	 

	 	 	 	Division 06 — Wood & Plastics	 	 
	 

	 	 	 	Division 07 — Thermal & Moisture Control	 	 
	 

	 	 	 	Division 08 — Doors & Windows	 	 
	 

	 	 	 	Division 09 — Finishes	 	 
	 

	 	 	 	Division 10 — Specialties	 	 
	 

	 	 	 	Division 11 — Equipment	 	 
	 

	 	 	 	Division 12 — Furnishings	 	 
	 

	 	 	 	Division 13 — Special Construction	 	 
	 

	 	 	 	Division 14 — Conveying Systems	 	 
	 

	 	 	 	Division 15 — Design build	 	 
	 

	 	 	 	Division 16 — Design Build	 	 
	 
	STRUCTURAL CALCULATIONS
	 	 
	2/2/2009

	 	Structural Clculations by David Robert Kramer	 	 	 	 
	 
	TITLE 24 REPORT
	 	 
	1/30/2009

	 	title 24 Report by Alan Poydock — termalair, Inc.	 	 	 	 
	 
	CIVIL MISC. EXHIBITS & REPORTS
	 	 
	2/18/2009

	 	Drainage Bypass for Redlands Sewer Work Area	 	 	 	 
	 

	 	Grading Balance Area	 	 	 	 
	 

	 	Highland SWPPP	 	 	 	 
	 

	 	Offsite Rubble Disposal	 	 	 	 
	 

	 	Set Back for Restricted Hours of Work	 	 	 	 
	 

	 	Existing Stockpile Locations	 	 	 	 
	 

	 	Supplemental SWPPP	 	 	 	 
	 

	 	Water Pick-Up	 	 	 	 
	12/23/2008	 	Mitigation Monitoring Program by Michael Brandman Associates
	1/7/2009

	 	Septic Exhibit	 	 	 	 
	 

	 	Final Fire Access Plan	 	 	 	 
	 

	 	Temporary Fire Access Plan	 	 	 	 

 

 

EXHIBIT “F”

ADVANCES

     1. Draw Request. A “Draw Request” means a properly completed and executed
written application by Borrower to Administrative Agent in the form
of Exhibit “F-1” (or in
another form satisfactory to Administrative Agent) setting forth the amount of Up-Front Equity Cash
and/or Loan Proceeds desired, together with the related AIA Document G-702 and G-703 and such
schedules, affidavits, releases, waivers, statements, invoices, bills, and other documents,
certificates and information satisfactory to Administrative Agent. At least ten (10) Business Days
before the requested date of each advance made under the Budget from the Up-Front Equity Cash or
the Loan, Borrower shall deliver a Draw Request to Administrative Agent. Borrower shall be entitled
to an advance only in an amount approved by Administrative Agent in accordance with the terms of
this Agreement and the Loan Documents. Except as expressly set forth below in this Section
1, Lenders shall not be required to make advances more frequently than once each calendar
month. Lenders shall, only upon the satisfaction, as determined by Administrative Agent in its sole
discretion, of all applicable conditions of this Agreement and the Loan Documents, be required to
make the requested advance to Borrower on a Funding Date which is a Business Day within ten (10)
Business Days after such satisfaction. Each Draw Request, and Borrower’s acceptance of any advance,
shall be deemed to ratify and confirm, as of the date of the Draw Request and the advance,
respectively, that, except as specified in the Draw Request, (a) all representations and warranties
in the Loan Documents remain true and correct, and all covenants and agreements in the Loan
Documents remain satisfied, (b) there is no uncured Default or Event of Default existing under the
Loan Documents, (c) all conditions to the advance, whether or not evidence thereof is required by
Administrative Agent, are satisfied, (d) the AIA Document G-702 and G-703 forms executed by each
contractor and approved by Borrower’s architect, together with all schedules, affidavits, releases,
waivers, statements, invoices, bills, and other documents, certificates and information submitted
for the Draw Request are complete and correct, and in all respects what they purport and appear to
be for the amount and period applicable to the Draw Request, (e) all advances previously made to
Borrower were disbursed, and the proceeds of the advance requested in the Draw Request will
immediately be disbursed, for payments of the costs and expenses specified in the Budget for which
the advances were made, and for no other purpose, (f) after the advance, all obligations for work
and other costs heretofore incurred by Borrower in connection with the Project and which are due
and payable will be fully paid and satisfied and (g) any unadvanced portion of the Loan to which
Borrower is entitled, plus the portions of the Aggregate Cost that are to be paid by Borrower from
other funds that, to Administrative Agent’s satisfaction, are available, set aside and committed,
is or will be sufficient to pay the actual unpaid Aggregate Cost. Notwithstanding anything to the
contrary contained in the foregoing: (1) in the event that during any calendar month in which
Borrower has already requested and received an advance, Borrower submits to Administrative Agent a
Draw Request for an additional advance (each an “Additional Monthly Advance”) and such
Additional Monthly Advance is solely for the payment of costs and expenses associated with the
construction of the roof of the Improvements, Lenders shall make such Additional Monthly Advance
provided that (i) Administrative Agent, in its sole and absolute discretion, has approved of such
Additional Monthly Advance; and (ii) Borrower has satisfied all conditions in this Agreement for
the making of an advance with respect to such Additional Monthly Advance; and (2) Lenders shall be
required to make one Additional Monthly Advance within thirty (30) days of the making of the
Initial Advance (it being acknowledged that the making of the Initial Advance shall occur on the
date hereof) provided that Borrower has satisfied all conditions in this Agreement for the making
of such Additional Monthly Advance.

     2. Advances. Borrower shall disburse all advances made to Borrower, for payments of
the costs and expenses specified in the Budget for which the advances were made, and for no other
purpose. Following receipt and approval of a Draw Request, all supporting documentation and
information required by Administrative Agent, and receipt and approval of a written report from
Construction Consultant satisfactory to Administrative Agent, Administrative Agent will determine
the amount of the advance Lenders shall make in accordance with this Agreement, the Loan
Documents, the Budget, and if and to the extent required by the Administrative Agent, to
Administrative Agent’s satisfaction, the following standards:

     a. An
initial advance in the amount of the Initial Advance in accordance with the Budget.

     b. For construction work other than tenant improvement work, advances on the basis of ninety
percent (90%) of the costs shown on the application for payment from the contractor reviewed and
approved by Administrative Agent of the work or material in place on the Improvements that comply
with the terms of the Loan Documents, minus

EXHIBIT F, PAGE 1

 

 

all previous advances and all amounts required to be paid by Borrower, as described in the
Budget. Following the completion of fifty percent (50%) of the Improvements as determined by the
Construction Consultant, the ninety percent (90%) limitation set forth above shall be increased to
ninety five percent (95%). Notwithstanding the foregoing, at the sole and absolute discretion of
Administrative Agent, advances relating to certain line items in the Budget may be made without
any retainage withheld or early release of retainage.

     c. For tenant improvement work, advances on the basis of one hundred percent (100%) of the
costs shown for each lease in the application for payment from the contractor reviewed and
approved by Administrative Agent for the work or material in place that complies with the terms of
the Loan Documents, provided that if required by Administrative Agent (i) an application
for payment may be submitted only after all applicable tenant improvements have been completed,
(ii) the amount of the requested advance does not exceed the per square foot allowance provided in
the Budget, (iii) all provisions of the Loan Documents, including, without limitation,
Sections 3, 4, and 5 of this Exhibit “F”, have been satisfied, (iv) the term of
the applicable lease has commenced, (v) Administrative Agent has received from the applicable
tenant a tenant estoppel certificate, and a subordination and attornment agreement in the
respective forms attached as exhibits to the Closing Checklist, or otherwise in form and content
satisfactory to Administrative Agent, (vi) Administrative Agent has received two (2) sets of
as-built plans for the applicable tenant improvements, and (vii) Administrative Agent has received
evidence of satisfaction of all applicable legal requirements, including but not limited to
applicable certificates of occupancy and evidence that the plans comply with all legal
requirements regarding access and facilities for handicapped or disabled persons.

     d. No advances for building materials or furnishings that are not yet incorporated into the
Improvements (“stored materials”) unless (i) Borrower has good title to the stored materials and
the stored materials are components in a form ready for incorporation into the Improvements and
will be so incorporated within a period of one hundred twenty (120) days, (ii) the stored
materials are in Borrower’s possession and satisfactorily stored on the Land or such materials are
satisfactorily stored at such other site as Administrative Agent may approve, (iii) the stored
materials are protected and insured against theft and damage in a manner and amount satisfactory
to Administrative Agent, (iv) the stored materials have been paid for in full or will be paid for
with the funds to be advanced and all lien rights and claims of the supplier have been released or
will be released upon payment with the advanced funds, and (v) Administrative Agent for the
benefit of Lenders has or will have upon payment with the advanced funds a perfected, first
priority security interest in the stored materials. Notwithstanding the foregoing, the aggregate
amount of advances for stored materials that have not yet been incorporated into the Improvements
shall not exceed the Stored Materials Advance Limit. Any Draw Request which includes an advance
for the cost of stored materials shall be accompanied by copies of invoices for such stored
materials in form and content satisfactory to Administrative Agent. All advances for the cost of
stored materials shall be on the basis of ninety percent (90%) of the invoiced amount.

     e. Intentionally Omitted.

     f. Borrower has advised Administrative Agent and Lenders that the City has been awarded grant
money in the amount of ONE MILLION DOLLARS ($1,000,000.00) (the “Grant Money”) from the
State of California under the State of California’s Proposition 1B State Local Partnership
Competitive Grant Program which Grant is for the “Eucalyptus Street Improvements Project”. Borrower
has advised Administrative Agent and Lenders that the construction of Phase 1 of Eucalyptus Street,
which shall replace the right of way of Fir Avenue currently abutting the Property to the south,
(the “Street Project”) is a requirement imposed by the City in connection with the
construction of the Improvements and that the Grant shall ultimately be available to the Borrower
(via disbursement from the City to the Borrower) for reimbursement of costs incurred by the
Borrower in constructing Phase 1 of Eucalyptus Street. Advances for the construction of the future
Eucalyptus Street (each such advance a “Street Project Advance”) shall be made in
accordance with the following procedures:

	 	(1)	 	In the event Borrower submits a Draw Request to Administrative
Agent containing a Street Project Advance at any time from the date hereof
until that date which is six (6) months from the date hereof (such period
being referred to herein as the “Initial Six Months”), Borrower shall,
within five (5) business days of receiving such Street Project Advance, (A)
pay such Street Project Advance to Borrower’s contractor; (B) submit a request
to the City for a portion of the Grant Money in an amount equal to the amount
of the Street Project Advance contained in its Draw Request and paid to
Borrower’s contractor; and (C) provide Administrative Agent

EXHIBIT F, PAGE 2

 

 

	 	 	 	with written evidence acceptable to Administrative Agent of its satisfaction of
the requirements set forth in (A) and (B) above;
	 
	 	(2)	 	Following Borrower’s receipt from the City of a portion of the
Grant Money in response to its request for same (a “Grant Advance”),
Borrower shall provide written notice of its receipt of such Grant Advance to
Administrative Agent and confirm, with evidence acceptable to Administrative
Agent, the amount of such Grant Advance;
	 
	 	(3)	 	In its first Draw Request following the receipt of a Grant
Advance, Borrower shall include a line item for the amount of such Grant
Advance which amount shall be subtracted from (i) the total amount of such
Draw Request; and (ii) the line item in the Budget used for Street Project
Advances. For illustration purposes only, if Borrower submits a Draw Request
for $1,000,000 of Loan Proceeds which contains a Street Project Advance of
$250,000, Borrower shall simultaneously submit a request for Grant Money in
the amount of $250,000 to the City and provide Administrative Agent with
copies of such request for Grant Money together with its Draw Request for
$1,000,000 of Loan Proceeds. Should Borrower receive Grant Money from the City
in response to its request for same, Borrower shall provide Administrative
Agent with written notice of same together with evidence thereof and in its
next following Draw Request, Borrower will include the amount of such Grant
Advance as an amount to be subtracted from the total amount of Loan Proceeds
requested in such following Draw Request and from the line item in the Budget
used for Street Project Advances.
	 
	 	(4)	 	In the event that Borrower does not receive the entire amount
of Grant Money during the Initial Six Months, within two (2) business days of
the expiration of the Initial Six Months, Borrower shall deposit into the
Upfront Equity Account an amount equal to ONE MILLION DOLLARS ($1,000,000.00)
less the total sum of all Grant Advances which have been received by Borrower
and deducted from subsequent Draw Requests pursuant to the procedure set forth
in subsection (3) above.
	 
	 	(5)	 	Notwithstanding anything to the contrary contained in this
Agreement, One Million Dollars ($1,000,000.00) of Loan Proceeds will be held
back and remain undisbursed within the line item in the Budget used for Street
Project Advances until the earlier to occur of (i) the disbursement to Borrower
of all of the Grant Money and confirmation by Administrative Agent that an
amount equal to all of the Grant Money (i.e., $1,000,000) has been deducted
from Draw Requests in the manner described above in this Section f; and
(ii) the expiration of the Initial Six Months but only provided that Borrower
has complied with the requirements of subsection (4) above.
	 
	 	(6)	 	During the Initial Six Months, Borrower shall not request an
advance of Grant Money from the City (or any other governmental authority)
without first having submitted to Administrative Agent a Draw Request
containing a Street Project Advance in the same amount as the amount of Grant
Money requested as set forth in subsection (1) above. At any time following
the expiration of the Initial Six Months, and provided that Borrower has
complied with the requirements of subsection (4) above, Borrower may submit
requests to the City (or any other governmental authority) for Grant Money and
if received apply such funds in whatever manner Borrower elects.

     g. Advances of “Hard Cost Contingency” (or any other similarly described item in the Budget)
shall be made available to Borrower as construction progresses but only (i) for hard costs; (ii) in
proportion to the percentage of completion of the Improvements at the time of advance as determined
by the Construction Consultant; and (iii) if shown as expended with all supporting documentation
and information and as shown in the report of the Construction Consultant submitted in connection
with such advance.

     h. Administrative Agent shall make periodic advances of soft costs, each in the amount
requested in the applicable Draw Request, without retainage provided that such request shall be
supported by a payables listing in

EXHIBIT F, PAGE 3

 

 

form and content satisfactory to Administrative Agent and for any soft cost greater than or equal
to Twenty Five Thousand and No/100 Dollars ($25,000.00), such request shall also be supported by
an invoice and other back up materials in form and content satisfactory the Administrative Agent.

     i. Advances of “Development Management Fee” (as set forth in the Budget) shall be made
available to Borrower as construction progresses provided however that in no event shall the ratio
of funded Development Management Fee to the total budgeted Development Management Fee expressed as
a percentage exceed by more than ten (10) percentage points the ratio of funded hard costs to the
total budgeted hard costs expressed as a percentage. By way of example only, if a Draw Request that
includes a request for a portion of the Development Management Fee is made and at such time fifty
percent (50%) of total hard costs have been funded, Borrower shall only be entitled to an Advance
for Development Management Fee in an amount that, when added to the Advances of Development
Management Fee already funded, does not exceed sixty percent (60%) of the total budgeted
Development Management Fee.

     j. Borrower has advised Administrative Agent and the Lenders that in connection with site
grading to be performed on the Property, the City has required that Borrower place with the City
cash security in the amount of ONE MILLION FIVE HUNDRED THIRTY FIVE THOUSAND SEVENTY SIX AND NO/100
DOLLARS ($1,535,076.00) to secure Borrower’s obligation to complete such site grading. Accordingly,
the Budget contains a line item entitled “Site Grading and Other Cash Sureties” in that amount. In
the event that the City returns to the Borrower the Site Grading and Other Cash Sureties or any
portion thereof (such amount returned the “Returned Amount”), Borrower shall, within two
(2) business days of receipt thereof, deposit the Returned Amount into the Up-Front Equity Account
Once such funds are received into the Up-Front Equity Account, the Budget shall be amended by
reallocating the line items for each of “Site Grading and Other Cash Sureties” (decrease) and
“Development Management Fee” (increase) by an amount equal to the Returned Amount.

     3. Conditions to the Initial Advance. As conditions precedent to the Initial Advance
hereunder, if and to the extent required by Administrative Agent, to Administrative Agent’s
satisfaction, Borrower must have satisfied the conditions required under this Agreement, including
all of those conditions set forth in Exhibit “C” and Section 4 below.

     4. Conditions to All Advances. As conditions precedent to each advance made pursuant
to a Draw Request, in addition to all other requirements contained in this Agreement, if and to
the extent required by Administrative Agent:

     a. the Advance Termination Date shall not have passed; and

     b. Administrative Agent shall have received and approved the following:

     i. Evidence satisfactory to Administrative Agent of the continued satisfaction of all
conditions to the Initial Advance (except to the extent that any of such conditions were waived in
writing by Administrative Agent).

     ii. A Draw Request.

     iii. Evidence satisfactory to Administrative Agent that no Default or any event which, with
the giving of notice or the lapse of time, or both, could become a Default, exists.

     iv. Evidence satisfactory to Administrative Agent that the representations and warranties
made in the Loan Documents must be true and correct on and as of the date of each advance and no
event shall have occurred or condition or circumstance shall exist which, if known to Borrower,
would render any such representation or warranty incorrect or misleading.

     v. Each subcontract or other contract for labor, materials, services and/or other work
included in a Draw Request duly executed and delivered by all parties thereto and effective, and
to the extent required under this Agreement, a true and complete copy of a fully executed copy of
each such subcontract or other

EXHIBIT F, PAGE 4

 

 

contract as Administrative Agent may have requested, together with performance and payment bonds
securing such contracts and subcontracts, to the extent required by Administrative Agent, in form
and substance satisfactory to Administrative Agent.

     vi. Evidence satisfactory to Administrative Agent that no mechanic’s or materialmen’s lien or
other encumbrance has been filed and remains in effect against the Property, including releases or
waivers of mechanics’ liens and receipted bills showing payment of all amounts due to all parties
who have furnished materials or services or performed labor of any kind in connection with the
Property.

     vii. Evidence satisfactory to Administrative Agent that the Title Insurance has been endorsed
and brought to date in a manner satisfactory to Administrative Agent to increase the coverage by
the amount of each advance through the date of each such advance with no additional title change
or exception not approved by Administrative Agent.

     viii. Certification by Construction Consultant, and if required by Administrative Agent by
Borrower’s architect, that to the best of such party’s knowledge, information, and belief,
construction is in accordance with the Plans, the quality of the work for which the advance is
requested is in accordance with the applicable contract, the amount of the advance requested
represents work in place based on on-site observations and the data comprising the Draw Request,
the work has progressed in accordance with the construction contract and schedule, and the
applicable contractor is entitled to payment of the amount certified.

     ix. (1) a foundation survey made immediately after, but in no event later than ten (10) days
after, the laying of the foundation of each building or structure of the Improvements satisfactory
to Administrative Agent and to the extent required by Administrative Agent complying with
Exhibit “G”, (2) a certificate of Borrower’s architect stating that based on personal
inspection the foundations have been completed in accordance with the Plans and are satisfactory
in all respects, and (3) a bearing capacity test report with respect to the excavated footings and
foundations, reviewed and approved by the Construction Consultant and Borrower’s architect.

     x. Within ten (10) days after the pouring of concrete for any Improvements, a report
satisfactory to Construction Consultant of the results of concrete tests made at the time the
concrete is poured.

     xi. Within ten (10) days after the compaction of any soil for construction, a report
satisfactory to Construction Consultant of the results of soil tests.

     xii. Evidence satisfactory to Administrative Agent that as of the date of making such
advance, no event shall have occurred, nor shall any condition exist, that could have a Material
Adverse Effect on the enforceability of the Loan Documents, a Material Adverse Effect to the
financial condition of Borrower or any Guarantor, impair the ability of Borrower or any Guarantor
to fulfill its material obligations under the Loan Documents, or otherwise have a Material Adverse
Effect whatsoever on the Property.

     xiii. Intentionally Omitted.

     xiv. Evidence satisfactory to Administrative Agent that the Improvements shall not have been
damaged in any material respect and not repaired (or in the process of being repaired) and shall
not be the subject of any pending or threatened condemnation or adverse zoning proceeding.

     xv. Evidence satisfactory to Administrative Agent that Borrower has paid all amounts then
required to be paid by Borrower under the Budget.

     xvi. The Borrower’s Deposit if required by Section 1.5 of this Agreement.

     xvii. With respect to any advance to pay a contractor, original applications for payments in
form approved by Administrative Agent, containing a breakdown by trade and/or other categories
acceptable to

EXHIBIT F, PAGE 5

 

 

Administrative Agent, executed and certified by each contractor and Borrower’s architect,
accompanied by invoices, and approved by Construction Consultant.

     xviii. Copies of California statutory form lien waivers and advances executed by each
contractor and each appropriate subcontractor, supplier and materialman, including, without
limitation, from all parties sending statutory notices to contractors, notices to owners, or
notices of nonpayment. Each Draw Request shall be accompanied by (a) California statutory
form conditional lien waivers and releases for all contractors, subcontractors, suppliers
and materialman rendering services or providing materials which are the subject of such Draw
Request, and (b) California statutory form of final and unconditional lien waivers and
releases from all contractors, subcontractors, suppliers and materialmen who were paid from
the immediately preceding Draw Request with respect to the services or materials covered
thereby.

     xix. Such other information, documents and supplemental legal opinions as may be
required by Administrative Agent.

     5. Final Advance for Improvements. If and to the extent required by the
Administrative Agent, to Administrative Agent’s satisfaction, the final advance for the
Improvements (including retainage) shall not be made until thirty (30) days after the later of (i)
the date on which the Improvements have been “completed,” as evidenced by the issuance of a final
and unconditional certificate of occupancy (or the local equivalent thereof), and (ii) if required
by Administrative Agent, the date on which a notice of completion has been recorded. In the case of
each such Draw Request, if and to the extent required by Administrative Agent, Administrative Agent
shall have received the following as additional conditions precedent to the requested advance:

     a. Certificates from Borrower’s architect, engineer, contractor and, if required by
Administrative Agent, from the Construction Consultant, certifying that the Improvements
(including any off-site improvements) have been completed in accordance with, and as completed
comply with, the Plans and all Laws and governmental requirements; and Administrative Agent shall
have received two (2) sets of detailed “as built” Plans approved in writing by Borrower,
Borrower’s architect, and each contractor.

     b. Final affidavits (in a form approved by Administrative Agent) from Borrower’s architect,
engineer, and each contractor certifying that each of them and their subcontractors, laborers, and
materialmen has been paid in full for all labor and materials for construction of the
Improvements; and California statutory form unconditional final lien releases or waivers by
Borrower’s architect, engineer, contractor, and all subcontractors, materialmen, and other
parties who have supplied labor, materials, or services for the construction of the Improvements,
or who otherwise might be entitled to claim a contractual, statutory or constitutional lien
against the Property.

     c. The Title Insurance shall be endorsed to remove any exception for mechanics’ or
materialmen’s liens or pending disbursements, with no additional title change or exception
objectionable to Administrative Agent, and with such other endorsements required by Administrative
Agent.

     d. Evidence satisfactory to Administrative Agent that all Laws and governmental requirements
have been satisfied, including receipt by Borrower of all necessary governmental licenses,
certificates and permits (including certificates of occupancy) with respect to the completion,
use, occupancy and operation of the Improvements, together with evidence satisfactory to
Administrative Agent that all such licenses, certificates, and permits are in full force and
effect and have not been revoked, canceled or modified.

     e. Three (3) copies of a final as-built survey satisfactory to Administrative Agent and to
the extent required by Administrative Agent complying with Exhibit “G”.

     f. Intentionally Omitted.

     g. If applicable, an estoppel certificate and a subordination agreement, in the form approved
by Administrative Agent, from Skechers, and written confirmation by Skechers that Skechers has
approved the completed
Improvements.

EXHIBIT F, PAGE 6

 

 

     6. Direct Advances. Borrower hereby irrevocably authorizes Administrative Agent on
behalf of Lenders (but Administrative Agent shall have no obligation unless otherwise noted) to (i)
advance Loan funds directly to Lenders to pay interest due on the Loan, and (ii) advance and
directly apply the proceeds of any advance to the satisfaction of any of Borrower’s obligations
under any of the Loan Documents, even though Borrower did not include that amount in a Draw Request
and/or no Default exists. Each such direct advance (except for application of a Borrower’s Deposit)
shall be added to the outstanding principal balance of the Loan and shall be secured by the Loan
Documents. Notwithstanding the foregoing, unless Borrower pays such interest from other resources,
and provided further that no Default exists nor has any event occurred which with the passing of
time or giving of notice would become a Default, Administrative Agent may advance Loan funds
pursuant to this Section for interest payments as and when due to the extent of any interest
reserve created for such purposes. Nothing contained in this Agreement shall be construed to permit
Borrower to defer payment of interest on the Loan beyond the date(s) due. The allocation of Loan
funds in the Budget for interest shall not affect Borrower’s absolute obligation to pay the same in
accordance with the Loan Documents. Administrative Agent may hold, use, disburse and apply the Loan
and the Borrower’s Deposit for payment of any obligation of Borrower under the Loan Documents.
Borrower hereby assigns and pledges the Loan Proceeds and any Borrower’s Deposit to Administrative
Agent for itself and for the benefit of Lenders for such purposes. Administrative Agent on behalf
of Lenders may advance and incur such expenses as Administrative Agent deems necessary for the
completion of the Improvements and to preserve the Property, and any other security for the Loan,
and such expenses, even though in excess of the amount of the Loan, shall be secured by the Loan
Documents and shall be payable to Administrative Agent on behalf of Lenders on demand.
Administrative Agent on behalf of Lenders may disburse any portion of any advance at any time, and
from time to time, to persons other than Borrower for the purposes specified in this Section and
the amount of advances to which Borrower shall thereafter be entitled shall be correspondingly
reduced.

     7. Conditions and Waivers. All conditions precedent to the obligation of Lenders to
make any advance are imposed hereby solely for the benefit of Administrative Agent and Lenders,
and no other party may require satisfaction of any such condition precedent or be entitled to
assume that Lenders will refuse to make any advance in the absence of strict compliance with such
conditions precedent. Administrative Agent shall have the right to approve and verify the periodic
progress of, costs incurred by Borrower for, and the estimated costs remaining to be incurred for
the construction of the Improvements, after consultation with the Construction Consultant. No
advance shall constitute an approval or acceptance by Administrative Agent of any construction
work, or a waiver of any condition precedent to any further advance, or preclude Administrative
Agent from thereafter declaring the failure of Borrower to satisfy such condition precedent to be
a Default. No waiver by Administrative Agent of any condition precedent or obligation shall
preclude Administrative Agent from requiring such condition or obligation to be met prior to
making any other advance or from thereafter declaring the failure to satisfy such condition or
obligation to be a Default.

     8. Funding. Borrower shall establish and maintain a special account with
Administrative Agent into which advances funded directly to Borrower (but no other funds except as
provided herein), and excluding direct disbursements made to or by Administrative Agent on behalf
of Lenders pursuant to this Agreement, shall be deposited by Borrower, and against which checks
shall be drawn only for the payment of costs specified in the Budget, but which special account
shall not be used for any other purpose. Borrower hereby irrevocably authorizes Administrative
Agent to deposit each advance requested by Borrower to the credit of Borrower in that account, by
wire transfer or other deposit. Advances may also be made, in addition to other methods
contemplated herein, at Administrative Agent’s option, by direct or joint check payment to any or
all persons entitled to payment for work or services performed or material furnished in connection
with the Project or the Loan (but such direct payments or joint check payment shall only be used
with borrower’s consent unless a Default has occurred), or by having the proceeds thereof made
available to the Title Company (or its agent) for disbursement. Neither Administrative Agent nor
any Lender shall not be required to, and has no responsibility to, supervise the proper
application or distribution of funds to third parties. Provided no Default exists, Administrative
Agent shall also cause interest earned on the Certificate of Deposit (as such term is defined in
Section 2.16 of this Agreement) to be credited from time to time to the special account
established by Borrower pursuant to this Section 8.

     9. Up-Front Equity Account. Borrower, Administrative Agent and Lenders acknowledge
that (i) Borrower has established the Up-Front Equity Account with, and under the control of,
Administrative Agent; (ii) has deposited the Initial Up-Front Equity Cash into same for the
purposes of funding the Total Costs; and (iii) shall, prior to the Initial Advance of Loan
Proceeds, deposit the Deferred Up-Front Equity Cash into same for the purposes of funding the
Total Costs. No advances of Loan Proceeds, including the Initial Advance of Loan Proceeds, shall
be made unless

EXHIBIT F, PAGE 7

 

 

and until the Up-Front Equity Cash has been advanced from the Up-Front Equity Account towards Total
Costs and at any time funds exist in the Up-Front Equity Account, such funds shall be utilized for
advances prior to the advancing of any Loan Proceeds. All advances of Up-Front Equity Cash from the
Up-Front Equity Account shall be made pursuant to Draw Requests submitted by Borrower pursuant to
this Agreement and this Exhibit “F” and shall be subject to all of the terms and conditions
of this Agreement and this Exhibit “F”. Pursuant to a Collateral Assignment and Pledge of
Account of even date herewith, Borrower has pledged and granted a security interest in the Up-Front
Equity Account to Administrative Agent and Lenders to secure Borrower’s obligations to
Administrative Agent and Lenders under the Loan Documents.

     10. Reallocation of Hard Cost Contingency. Upon written notice to Administrative
Agent, Borrower shall be entitled to reallocate the sum of FIVE HUNDRED THOUSAND AND NO/100
DOLLARS ($500,000.00) from the “Hard Cost Contingency” line item in the Budget to the “Development
Management Fee” line item in the Budget one time during the term of the Loan provided that
Borrower has satisfied of all of the following conditions: (a) no Default exists at the time of
Borrower’s request for such reallocation, nor has any event occurred which upon the giving of
notice or passage of time would become a Default; (b) the Project is at least ninety percent (90%)
complete as certified in writing by the Construction Consultant; (c) at the time of Borrower’s
request for such reallocation, the Borrower is in strict compliance with Section 1.5 of
this Agreement; (d) all Letters of Credit issued hereunder have either been cancelled and returned
to Administrative Agent or Cash Collateralized as required under this Agreement; and (e) all Grant
Money has either been paid to Borrower or Borrower has made the deposit of funds into the Up-Front
Equity Account as required in Section 2.f of this Exhibit “F”.

EXHIBIT F, PAGE 8

 

 

EXHIBIT “F-1”

DRAW REQUEST

[BORROWER’S LETTERHEAD]

DRAW
REQUEST NO.                   

TO: BANK OF AMERICA, N.A. (“Administrative Agent”)

	 	 	 	 	 	 	 	 	 	 	 

	LOAN NO.

	 	 	 	 	 	DATE	 	 	 	 
	 	 	 	 	 	 	 	 	 
	PROJECT
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	LOCATION
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	BORROWER
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	FOR PERIOD ENDING	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

In accordance with the Construction Loan Agreement in the amount of $                     dated                     ,
among Borrower, Administrative Agent and the Lenders as defined therein, Borrower requests that $                    
be advanced from Loan Proceeds [, $                     be advanced from Borrower’s Deposit and $                     be advanced from
Up-Front Equity Cash]. The proceeds should be credited to the account of                                                              Account No.
                    , at                                         .

	 	 	 	 	 

	1. CURRENT DRAW REQUEST FOR HARD COSTS
	 	$	                    	 
	2. CURRENT DRAW REQUEST FOR SOFT COSTS
	 	$	                    	 
	3. TOTAL DRAW REQUEST
	 	$	                    	 

AUTHORIZED SIGNER:

	 	 	 	 	 	 	 

	 

	 	 	 	Dated:	 	 
	 

	 	 	 	 	 	 

EXHIBIT F-1, PAGE 1

 

 

EXHIBIT “G”

SURVEY REQUIREMENTS

     1. Requirements. The Survey shall be made in accordance with, and meet the
requirements of, the certification below by a registered professional engineer or registered
professional land surveyor. The description shall be a single metes and bounds perimeter
description of the entire Land, and a separate metes and bounds description of the perimeter of
each constituent tract or parcel out of the Land. The total acreage and square footage of the Land
and each constituent tract or parcel of the Land shall be certified. If the Land has been recorded
on a map or plat as part of an abstract or subdivision, all survey lines must be shown, and all lot
and block lines (with distances and bearings) and numbers, must be shown. The date of any revisions
subsequent to the initial survey prepared pursuant to these requirements must also be shown.

     2. Certification. The certification for the property description and the map or plat
shall be addressed to Administrative Agent for the Lenders, Borrower and the Title Company, signed
by the surveyor (a registered professional land surveyor or registered professional engineer),
bearing current date, registration number, and seal, and shall be in the following form or its
substantial equivalent:

This is to certify to Bank of America, N.A., as Administrative Agent for certain Lenders, HF
Logistics-SKX T1, LLC, as Borrower and,                     , as the Title Company that this map or plat and the
survey on which it is based were made in accordance with the “Minimum Standard Detail
Requirements for ALTA/ACSM Land Title Surveys” jointly established and adopted by ALTA and
NSPS in 2005, and include optional items 1, 2, 4 (in square feet or acres), 6, 8, 10, 11(b),
16, 17, 18, and if buildings are located on the land, optional items 7(a), 7(b)(1), 7(b)(2)
and 9 of Table A thereof. Pursuant to the Accuracy Standards as adopted by ALTA and NSPS and
in effect on the date of this certification, the undersigned further certifies that in my
professional opinion, as a land surveyor registered in the State of California, the maximum
Relative Positional Accuracy resulting from the measurements made on the survey does not
exceed the Allowable Relative Positional Accuracy for Measurements Controlling Land
Boundaries on ALTA/ACSM Land Title Surveys (0.07 feet or 20 mm + 50 ppm). The undersigned
additionally certifies that (a) this survey was made on the ground under my supervision; (b)
I have received and examined a copy of the Title Insurance Commitment No.                      issued by the
Title Company as well as a copy of each instrument listed therein, and the subject land and
each tract or parcel thereof described in this survey is the same land as described in the
Title Commitment; (c) if the subject land consists of two or more tracts or parcels having
common boundaries, those tracts and parcels are contiguous along the common boundaries; (d)
the subject land and each tract or parcel thereof has a tax map designation separate and
distinct from that of any other land and the subject land and each tract or parcel thereof
is a separate, legally subdivided parcel; (e) this survey correctly shows all matters of
record, (and to the extent they can be located, their location and dimensions) of which I
have been advised affecting the subject land according to the legal description in such
matters (with instrument, book, and page number indicated); (f) except as shown on this
survey, no part of the subject land is located in a 100-year Flood Plain or in an identified
“flood prone area,” as defined pursuant to the Flood Disaster Protection Act of
1973, as amended, as reflected by Flood Insurance Rate Map Panel # dated                     , which such map
panel covers the area in which the Property is situated and this survey correctly indicates
the zone designation of any area as being in the 100-year Flood Plain or “flood prone
area”; (g) to the best of my knowledge, this survey shows the relation of and distance
of all substantial, visible buildings, sidewalks and other improvements to easements and
setback lines; and (h) to the best of my knowledge, except as shown on this survey, neither
the subject land nor any tract or parcel thereof serves any adjoining land for drainage,
utilities, or ingress or egress.

EXHIBIT G, PAGE 1

 

 

EXHIBIT “H”

INTENTIONALLY OMITTED

EXHIBIT H, PAGE 1

 

 

EXHIBIT “I”

LEASING AND TENANT MATTERS

     Borrower and Lenders agree as follows:

     1. Approved Leases. Borrower shall not enter into any tenant lease of space in the
Improvements unless satisfactory to or deemed satisfactory to Administrative Agent prior to
execution. Borrower’s standard form of tenant lease, and any revisions thereto, must have the prior
written approval of Administrative Agent Any tenant lease shall be “deemed” satisfactory to
Administrative Agent that (a) is on the standard form lease approved by Administrative Agent, with
no deviations except as satisfactory to Administrative Agent; (b) is entered into in the ordinary
course of business with a bona fide unrelated third party tenant, and Borrower, acting in good
faith and exercising due diligence, has determined that the tenant is financially capable of
performing its obligations under the lease; (c) is received by Administrative Agent (together with
each guarantee thereof (if any) and financial information regarding the tenant and each guarantor
(if any) received by Borrower) within fifteen (15) days after execution; (d) reflects an
arms-length transaction at then current market rate for comparable space; (e) contains no right to
purchase the Property, or any present or future interest therein; (f) does not require Borrower to
provide funds for tenant improvements in excess of the per square foot allowance provided in the
Budget; (g) does not cover in excess of twenty-five percent (25%) of the aggregate net rentable
area of the Improvements; and (h) is expressly subordinate to the Mortgage. Borrower shall provide
to Administrative Agent a correct and complete copy of each tenant lease, including any exhibits,
and each guarantee thereof (if any), prior to execution unless the lease in question is
satisfactory to Administrative Agent under the foregoing requirements. Borrower shall, throughout
the term of this Agreement, pay all reasonable costs incurred by Administrative Agent in connection
with Administrative Agent’s review and approval of tenant leases and each guarantee thereof (if
any), including reasonable attorneys’ fees and costs.

     2. Effect of Lease Approval. No approval of any lease by Administrative Agent shall
be for any purpose other than to protect Lenders’ security, and to preserve Lenders’ rights under
the Loan Documents. No approval by Administrative Agent shall result in a waiver of any default of
Borrower. In no event shall any approval by Administrative Agent of a lease be a representation of
any kind, with regard to the lease or its adequacy or enforceability, or the financial capacity of
any tenant or guarantor.

     3. Representations Concerning Leases. Borrower represents and warrants to
Administrative Agent and Lenders that Borrower has delivered to Administrative Agent a true and
correct copy of all tenant leases and each guarantee thereof (if any), affecting any part of the
Improvements, together with an accurate and complete rent roll for the Project, and no such lease
or guarantee contains any option to purchase all or any portion of the Property or any interest
therein or contains any right of first refusal relating to any sale of the Property or any portion
thereof or interest therein.

     4. Delivery of Leasing Information and Documents. Borrower shall promptly (a) deliver
to Administrative Agent such monthly rent rolls, leasing schedules and reports, operating
statements, financial statements for tenants other than residential tenants with a lease term for
less than one year and other information regarding tenants and prospective tenants or other
leasing information as Administrative Agent from time to time may request, and (b) obtain and
deliver to Administrative Agent such estoppel certificates and subordination and attornment
agreements executed by such tenants (and guarantors, if any) in the respective forms attached as
exhibits to the Closing Checklist, or otherwise in such forms as Administrative Agent from time to
time may require.

     5. Income from the Property. Borrower shall first apply all income from leases, and
all other income derived from the Property, to pay costs and expenses associated with the
ownership, maintenance, development, operating, and marketing of the Land and Improvements,
including all amounts then required to be paid under the Loan Documents, before using or applying
such income for any other purpose.

     6. Compliance and Default. As additional conditions to Lenders’ obligations under
this Agreement, all tenants having the right to do so must approve all Plans and all changes
thereto, the construction of the Improvements, and all other aspects of the Project requiring
tenants’ approval. A default by Borrower under or any failure by Borrower to satisfy any of the
conditions of a lease shall constitute a Default under this Agreement. Borrower shall promptly
notify Administrative Agent in writing of any failure by any party to perform any material
obligation under

EXHIBIT I, PAGE 1

 

 

any lease, any event or condition which would permit a tenant to terminate or cancel a lease,
or any notice given by a tenant with respect to the foregoing, specifying in each case the action
Borrower has taken or will take with respect thereto.

     7. Skechers Lease. Notwithstanding anything to the contrary contained herein,
Administrative Agent and Borrower hereby acknowledge that the Lease with Skechers previously
delivered to Administrative Agent by Borrower is acceptable to Administrative Agent and Borrower
shall comply with the requirements of this Exhibit “I” with respect to the Lease. Further,
Borrower shall not modify any terms or provisions of the Lease without prior written consent of
Administrative Agent, which consent shall be in Administrative Agent’s sole discretion.

EXHIBIT I, PAGE 2

 

 

EXHIBIT “J”

LIST OF REQUIRED BONDS

	 	(a)	 	Performance Bond for the general contractor in amount, form and content satisfactory to
Administrative Agent; and
	 
	 	(b)	 	Payment Bond for the general contractor, in form and content satisfactory to Administrative
Agent.

Each bond shall be issued by a corporate surety acceptable to Administrative Agent and authorized
and admitted to do business and to execute bonds in the state where the Project is located and
contain a dual obligee rider with power of attorney in favor of Administrative Agent in form and
content satisfactory to Administrative Agent.

EXHIBIT J, PAGE 1

 

 

EXHIBIT “K”

LETTERS OF CREDIT

     1. The Letter of Credit Commitment.

     (i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in
reliance upon the agreements of the other Lenders set forth in this Exhibit “K”, (1) from time to time on any
Business Day during the period from the date of this Agreement until the Letter of Credit
Expiration Date, to issue Letters of Credit for the account of the Borrower, and to amend or renew
Letters of Credit previously issued by it, in accordance with Section 2 below, and (2) to
honor drafts under the Letters of Credit; and (B) the Lenders severally agree to participate in
Letters of Credit issued for the account of the Borrower; provided that the L/C Issuer
shall not be obligated to make any L/C Credit Extension with respect to any Letter of Credit, and
no Lender shall be obligated to participate in, any Letter of Credit if as of the date of such L/C
Credit Extension, (x) the outstanding amount of all L/C Obligations and all Loan advances would
exceed the combined Commitments, or (y) the outstanding amount of the L/C Obligations would exceed
the Letter of Credit Sublimit. Within the foregoing limits, and subject to the terms and conditions
hereof, the Borrower’s ability to obtain Letters of Credit shall be fully revolving, and
accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace
Letters of Credit that have expired or that have been drawn upon and reimbursed.

     (ii) The L/C Issuer shall be under no obligation to issue any Letter of Credit if:

     (A) any order, judgment or decree of any Tribunal or arbitrator shall by its terms
purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law
applicable to the L/C Issuer or any request or directive (whether or not having the force of
Law) from any Tribunal with jurisdiction over the L/C Issuer shall prohibit, or request that
the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of
Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of
Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not
otherwise compensated hereunder) not in effect on the date of this Agreement, or shall
impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not applicable
on the date of this Agreement and which the L/C Issuer in good faith deems material to it;

     (B) the expiry date of such requested Letter of Credit would occur more than twelve
months after the date of issuance or last renewal, unless the Required Lenders have
approved such expiry date;

     (C) the expiry date of such requested Letter of Credit would occur after the Letter of
Credit Expiration Date, unless all the Lenders have approved such expiry date;

     (D) the issuance of such Letter of Credit would violate one or more policies of the
L/C Issuer; or

     (E) such Letter of Credit is in an initial amount less than $25,000, or is to be used
for a purpose other than the development of the Improvements or denominated in a currency
other than Dollars.

     (iii) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the
L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended
form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the
proposed amendment to such Letter of Credit.

     2. Procedures for Issuance and Amendment of Letters of Credit.

     (i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request
of the
Borrower delivered to the L/C Issuer (with a copy to the Administrative Agent) in the form of a
Letter of Credit Application, appropriately completed and signed by Borrower. Such Letter of
Credit Application must be received by the L/C Issuer and the Administrative Agent not later than
11:00 a.m., Administrative Agent’s Time, at least two Business Days (or such later date and time
as the L/C Issuer may agree in a particular instance in its sole discretion)

EXHIBIT K, PAGE 1

 

 

prior to the proposed issuance date or date of amendment, as the case may be. In the case of
a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall
specify in form and detail satisfactory to the L/C Issuer: (A) the proposed issuance date of the
requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry
date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be
presented by such beneficiary in case of any drawing thereunder; (F) the full text of any
certificate to be presented by such beneficiary in case of any drawing thereunder; and (G) such
other matters as the L/C Issuer may require. In the case of a request for an amendment of any
outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail
satisfactory to the L/C Issuer (A) the Letter of Credit to be amended; (B) the proposed date of
amendment thereof (which shall be a Business Day); (C) the nature of the proposed amendment; and
(D) such other matters as the L/C Issuer may require.

     (ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer will confirm
with the Administrative Agent (by telephone or in writing) that the Administrative Agent has
received a copy of such Letter of Credit Application from the Borrower and, if not, the L/C Issuer
will provide the Administrative Agent with a copy thereof. Upon receipt by the L/C Issuer of
confirmation from the Administrative Agent that the requested issuance or amendment is permitted in
accordance with the terms hereof, then, subject to the terms and conditions hereof, the L/C Issuer
shall, on the requested date, issue a Letter of Credit for the account of the Borrower or enter
into the applicable amendment, as the case may be, in each case in accordance with the L/C Issuer’s
usual and customary business practices. Immediately upon the issuance of each Letter of Credit,
each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from
the L/C Issuer a participation in such Letter of Credit in an amount equal to the product of such
Lender’s Pro Rata Share times the amount of such Letter of Credit.

     (iv) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of
Credit to an advising bank with respect thereto or to the beneficiary thereof, the L/C Issuer will
also deliver to the Borrower and the Administrative Agent a true and complete copy of such Letter
of Credit or amendment.

     3. Drawings and Reimbursements; Funding of Participations.

     (i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing
under such
Letter of Credit, the L/C Issuer shall notify the Borrower and the Administrative Agent thereof.
Not later than 11:00 a.m., Administrative Agent’s Time, on the date of any payment by the L/C
Issuer under a Letter of Credit (each such date, an “Honor Date”), the Borrower shall
reimburse the L/C Issuer through the Administrative Agent in an amount equal to the amount of such
drawing. If the Borrower fails to so reimburse the L/C Issuer by such time, the Administrative
Agent shall promptly notify each Lender of the Honor Date, the amount of the unreimbursed drawing
(the “Unreimbursed Amount”), and the amount of such Lender’s Pro Rata Share thereof. In
such event, the Borrower shall be deemed to have requested an advance of Base Rate Principal to be
disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, subject to the amount
of the unutilized portion of the combined Commitments and the conditions set forth in Exhibit
“F” (other than the delivery of a Draw Request). Any notice given by the L/C Issuer or the
Administrative Agent pursuant to this subsection may be given by telephone if immediately
confirmed in writing; provided that the lack of such an immediate confirmation shall not
affect the conclusiveness or binding effect of such notice.

     (ii) Each Lender (including the Lender acting as L/C Issuer) shall upon any notice pursuant
to the subsection above make funds available to the Administrative Agent for the account of the
L/C Issuer at the Administrative Agent’s Office in an amount equal to its Pro Rata Share of the
Unreimbursed Amount not later than 1:00 p.m., Administrative Agent’s Time, on the Business Day
specified in such notice by the Administrative Agent, whereupon, subject to the provisions of the
subsection below, each Lender that so makes funds available shall be deemed to have made an
advance of Base Rate Principal to the Borrower in such amount. The Administrative Agent shall
remit the funds so received to the L/C Issuer.

     (iii) With respect to any Unreimbursed Amount that is not fully refinanced by an advance of
Base Rate Principal because the conditions set forth in Exhibit “F” cannot be satisfied or
for any other reason, the Borrower shall be deemed to have incurred from the L/C Issuer an L/C
Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing
shall be due and payable on demand (together with interest) and shall bear interest at the Past
Due Rate. In such event, each Lender’s payment to the Administrative Agent for the

EXHIBIT K, PAGE 2

 

 

account of the L/C Issuer pursuant to the subsection above shall be deemed payment in respect
of its participation in such L/C Borrowing and shall constitute a participation in such L/C
Borrowing from such Lender in satisfaction of its participation obligation under this Section.

     (iv) Until each Lender funds its Loan advance or participation in an L/C Borrowing pursuant
to this Section to reimburse the L/C Issuer for any amount drawn under any Letter of Credit,
interest in respect of such Lender’s Pro Rata Share of such amount shall be solely for the account
of the L/C Issuer.

     (v) Each Lender’s obligation to make a Loan advance or participation in such L/C Borrowing
to
reimburse the L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this
Section, shall be absolute and unconditional and shall not be affected by any circumstance,
including (A) any set-off, counterclaim, recoupment, defense or other right which such Lender may
have against the L/C Issuer, the Borrower or any other person for any reason whatsoever; (B) the
occurrence or continuance of a Default or event of Default, or (C) any other occurrence, event or
condition, whether or not similar to any of the foregoing; provided, however, that each
Lender’s obligation to make a Loan advance pursuant to this Section is subject to the conditions
set forth in Section 4 of Exhibit “F” being satisfactory to Administrative Agent.
No such reimbursement shall relieve or otherwise impair the obligation of the Borrower to
reimburse the L/C Issuer for the amount of any payment made by the L/C Issuer under any Letter of
Credit, together with interest as provided herein.

     (vi) If any Lender fails to make available to the Administrative Agent for the account of the
L/C Issuer any amount required to be paid by such Lender pursuant to the foregoing provisions of
this Section by the time specified in subsection (ii), the L/C Issuer shall be entitled to recover
from such Lender (acting through the Administrative Agent), on demand, such amount with interest
thereon for the period from the date such payment is required to the date on which such payment is
immediately available to the L/C Issuer at a rate per annum equal to the Federal Funds Rate from
time to time in effect. A certificate of the L/C Issuer submitted to any Lender (through the
Administrative Agent) with respect to any amounts owing under this clause (vi) shall be conclusive
absent manifest error.

     4. Repayment of Participations.

     (i) At any time after the L/C Issuer has made a payment under any Letter of Credit and has
received
from any Lender such Lender’s participation in a L/C Borrowing in respect of such payment in
accordance with Exhibit “K”, Section 3, if the Administrative Agent receives for the
account of the L/C Issuer any payment in respect of the related Unreimbursed Amount or interest
thereon (whether directly from the Borrower or otherwise, including proceeds of Cash Collateral
applied thereto by the Administrative Agent), the Administrative Agent will distribute to such
Lender its Pro Rata Share (appropriately adjusted, in the case of interest payments, to reflect
the period of time Lender’s participation payment was outstanding) thereof in the same funds as
those received by the Administrative Agent.

     (ii) If any payment received by the Administrative Agent for the account of the L/C Issuer
pursuant to Exhibit “K”, Section 3(i) is required to be returned, under any of the
circumstances described in Section 6.4 (including pursuant to any settlement entered into
by the L/C Issuer in its discretion) each Lender shall pay to the Administrative Agent for the
account of the L/C Issuer its Pro Rata Share thereof on demand of the Administrative Agent, plus
interest thereon from the date of such demand to the date such amount is returned by such Lender,
at a rate per annum equal to the Federal Funds Rate from time to time in effect.

     5. Obligations Absolute. The obligation of the Borrower to reimburse the L/C Issuer
for each drawing under each Letter of Credit and to repay each L/C Borrowing, shall be absolute,
unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including the following:

     (i) any lack of validity or enforceability of such Letter of Credit, this Agreement, or any
other
agreement or instrument relating thereto;

     (ii) the existence of any claim, counterclaim, set-off, defense or other right that the
Borrower may have at any time against any beneficiary or any transferee of such Letter of Credit
(or any person for whom any such

EXHIBIT K, PAGE 3

 

 

beneficiary or any such transferee may be acting), the L/C Issuer or any other person,
whether in connection with this Agreement, the transactions contemplated hereby or by such Letter
of Credit or any agreement or instrument relating thereto, or any unrelated transaction;

     (iii) any draft, demand, certificate or other document presented under such Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise
of any document required in order to make a drawing under such Letter of Credit;

     (iv) any payment by the L/C Issuer under such Letter of Credit against presentation of a
draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any
payment made by the L/C Issuer under such Letter of Credit to any person purporting to be a
trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any transferee of such
Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief
Law; or

     (v) any other circumstance or happening whatsoever, whether or not similar to any of the
foregoing, including any other circumstance that might otherwise constitute a defense available
to, or a discharge of, the Borrower.

     The Borrower shall promptly examine a copy of each Letter of Credit and each amendment
thereto that is delivered to it and, in the event of any claim of noncompliance with the
Borrower’s instructions or other irregularity, the Borrower will immediately notify the L/C
Issuer. The Borrower shall be conclusively deemed to have waived any such claim against the L/C
Issuer and its correspondents unless such notice is given as aforesaid.

     6. Role of L/C Issuer. Each Lender and the Borrower agree that, in paying any drawing
under a Letter of Credit, the L/C Issuer shall not have any responsibility to obtain any document
(other than any sight draft, certificates and documents expressly required by the Letter of Credit)
or to ascertain or inquire as to the validity or accuracy of any such document or the authority of
the person executing or delivering any such document. None of the L/C Issuer, any Agent-Related
Person nor any of the respective correspondents, participants or assignees of the L/C Issuer shall
be liable to any Lender for (i) any action taken or omitted in connection herewith at the request
or with the approval of the Lenders or the Required Lenders, as applicable; (ii) any action taken
or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any document or instrument related to any Letter of
Credit or Letter of Credit Application. The Borrower hereby assumes all risks of the acts or
omissions of any beneficiary or transferee with respect to its use of any Letter of Credit;
provided, however, that this assumption is not intended to, and shall not, preclude the
Borrower’s pursuing such rights and remedies as it may have against the beneficiary or transferee
at Law or under any other agreement. None of the L/C Issuer, any Agent-Related Person, nor any of
the respective correspondents, participants or assignees of the L/C Issuer, shall be liable or
responsible for any of the matters described in clauses (i) through (v) of the above Section;
provided, however, that anything in such clauses to the contrary notwithstanding, the
Borrower may have a claim against the L/C Issuer, and the L/C Issuer may be liable to the Borrower,
to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary,
damages suffered by the Borrower which the Borrower proves were caused by the L/C Issuer’s willful
misconduct or gross negligence or the L/C Issuer’s willful failure to pay under any Letter of
Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly
complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation
of the foregoing, the L/C Issuer may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or information to the
contrary, and the L/C Issuer shall not be responsible for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.

     7. Cash Collateral. Upon the request of the Administrative Agent, (i) if the L/C
Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing
has resulted in an L/C Borrowing, or (ii) if, as of the Letter of Credit Expiration Date, any
Letter of Credit may for any reason remain outstanding and partially or wholly undrawn, the
Borrower shall immediately Cash Collateralize the then outstanding amount of all L/C Obligations
(in an amount equal to such outstanding amount determined as of the date of such L/C Borrowing

EXHIBIT K, PAGE 4

 

 

or the Letter of Credit Expiration Date, as the case may be). For the purposes hereof
“Cash Collateralize” means to pledge and deposit with or deliver to the Administrative
Agent, for the benefit of the L/C Issuer and the Lenders, as collateral for the L/C Obligations,
cash or deposit account balances pursuant to documentation in form and substance satisfactory to
the Administrative Agent and the L/C Issuer (which documents are hereby consented to by the
Lenders). Derivatives of such term shall have corresponding meaning. The Borrower hereby grants
the Administrative Agent, for the benefit of the L/C Issuer and the Lenders, a security interest
in all such cash and deposit account balances and all proceeds of the foregoing. Cash collateral
shall be maintained in blocked, non-interest bearing deposit accounts at Bank of America.

     8. Applicability of ISP98 and UCP. Unless otherwise expressly agreed by the L/C Issuer
and the Borrower when a Letter of Credit is issued, (i) the rules of the “International Standby
Practices 1998” published by the Institute of International Banking Law & Practice (or such later
version thereof as may be in effect at the time of issuance) shall apply to each standby Letter of
Credit, and (ii) the rules of the Uniform Customs and Practice for Documentary Credits, as most
recently published by the International Chamber of Commerce (the “ICC”) at the time of issuance
(including the ICC decision published by the Commission on Banking Technique and Practice on April
6, 1998 regarding the European single currency (euro)) shall apply to each commercial Letter of
Credit.

     9. Letter of Credit Fees. The Borrower shall pay to the Administrative Agent for the
account of each Lender in accordance with its Pro Rata Share a Letter of Credit fee for each
Letter of Credit equal to: (a) one percent (1%) per annum of the stated amount of the Letter of
Credit and times the daily maximum amount available to be drawn under such Letter of
Credit (whether or not such maximum amount is then in effect under such Letter of Credit) for any
Letter of Credit in an amount greater than TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000); and (b)
two percent (2%) per annum per annum of the stated amount of the
Letter of Credit and times the daily maximum amount available to be drawn under such Letter of Credit (whether or not
such maximum amount is then in effect under such Letter of Credit) for any Letter of Credit in an
amount of TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000) or less. Such fee for each Letter of
Credit shall be due and payable on the date the Letter of Credit Application is delivered to the
L/C Issuer and on the same date of each successive year thereafter until the Letter of Credit
Expiration Date.

     10. Other Fees. The Borrower shall also pay directly to the L/C Issuer for its own
account the customary issuance, presentation, amendment and other processing fees, and other
standard costs and charges, of the L/C Issuer relating to letters of credit as from time to time
in effect. Such customary fees and standard costs and charges are due and payable on demand and
are nonrefundable.

     11. Conflict with Letter of Credit Application. In the event of any conflict between
the terms hereof and the terms of any Letter of Credit Application, the terms hereof shall
control.

     12. Limitation on Aggregate Obligation. At no time may the outstanding stated amount
of the Letters of Credit and advanced Loan Proceeds (the “Aggregate Obligation”) exceed
$55,000,000; provided, however, that Borrower may request an advance of Loan Proceeds that causes
the Aggregate Obligation to exceed $55,000,000 if no later than sixty (60) days prior to such
request, the Borrower Cash Collateralizes, as provided in Paragraph 7 above, in an amount equal to
the amount the Aggregate Obligation exceeds $55,000,000.

EXHIBIT K, PAGE 5

 

 

EXHIBIT “L”

ASSIGNMENT AND ASSUMPTION

     This Assignment and Assumption (this “Assignment”) is dated as of the Effective Date
set forth below and is entered into by and between                     
(the “Assignor”) and                      (the
“Assignee”). Capitalized terms used but not defined herein shall have the meanings given
to them in the Construction Loan Agreement identified below (the “Loan Agreement”),
receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and
Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by
reference and made a part of this Assignment as if set forth herein in full.

     For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the
Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to
and in accordance with the Standard Terms and Conditions and the Loan Agreement, as of the
Effective Date inserted by the Administrative Agent as contemplated below, (i) all of the
Assignor’s rights and obligations as a Lender under the Loan Agreement and any other documents or
instruments delivered pursuant thereto to the extent related to the amount and percentage interest
identified below of all of such outstanding rights and obligations of the Assignor under the
respective facilities identified below (including, without limitation Guarantees), and (ii) to the
extent permitted to be assigned under applicable Law, all claims, suits, causes of action and any
other right of the Assignor (in its capacity as a Lender) against any person, whether known or
unknown, arising under or in connection with the Loan Agreement, any other documents or instruments
delivered pursuant thereto or in any way based on or related to any of the foregoing, including,
but not limited to contract claims, tort claims, malpractice claims, statutory claims and all other
claims at Law or in equity, related to the rights and obligations sold and assigned pursuant to
clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii)
above being referred to herein collectively as the “Assigned Interest”). Such sale and
assignment is without recourse to the Assignor and, except as expressly provided in this
Assignment, without representation or warranty by the Assignor.

	 	 	 	 	 	 	 

	1.

	 	Assignor:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	2.

	 	Assignee:
	 	 	[, an Affiliate/Approved
	 

	 	 	 	 	 	 
	 

	 	 	 	Fund of                                         ]	 	 
	 
	 	 	 	 	 	 
	3.

	 	Borrower(s):	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	4.

	 	Administrative Agent:
	 	 	,	as the administrative
	 

	 	 	 	 	 	 
	 

	 	 	 	agent under the Loan Agreement	 	 
	 
	 	 	 	 	 	 
	5.	 	Loan Agreement:	 	The Construction Loan Agreement, dated as of                     , among
                                        , the Lenders parties thereto, [and] Bank of
America, N.A., as Administrative Agent[, and the other agents parties thereto]
	 
	 	 	 	 	 	 
	6.

	 	Assigned Interest:	 	 	 	 

	 	 	 	 	 
	Aggregate	 	 	 	 
	Amount of	 	Amount of	 	Percentage
	Commitment/Loans	 	Commitment/Loans	 	Assigned of
	for all Lenders	 	Assigned	 	Commitment/Loans
	$                    
	 	$                    
	 	                    %

Effective Date:                     , 20    [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE
DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment are hereby agreed to:

EXHIBIT L, PAGE 1

 

 

	 	 	 	 	 	 	 	 	 

	 	 	ASSIGNOR:
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	ASSIGNEE:
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

EXHIBIT L, PAGE 2

 

 

[Consented to and] Accepted:

BANK OF AMERICA, N.A.,

as Administrative Agent

	 	 	 	 	 	 	 

	By:
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	[Consented to:]
	 
	 	 	 	 	 	 
	 	 	 
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

EXHIBIT L, PAGE 3

 

 

ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

     1. Representations and Warranties.

     1.1. Assignor. The Assignor (a) represents and warrants that (i) it is the legal and
beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any
lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken
all action necessary, to execute and deliver this Assignment and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements,
warranties or representations made in or in connection with the Loan Agreement or any other Loan
Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Loan Documents, or any collateral thereunder, (iii) the financial condition of the Borrower,
any of its Subsidiaries or Affiliates or any other person obligated in respect of any Loan Document
or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any
other person of any of their respective obligations under any Loan
Document.

     1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full power
and authority, and has taken all action necessary, to execute and deliver this Assignment and to
consummate the transactions contemplated hereby and to become a Lender under the Loan Agreement,
(ii) it meets all requirements of an Eligible Assignee under the Loan Agreement (subject to receipt
of such consents as may be required under the Loan Agreement), (iii) from and after the Effective
Date, it shall be bound by the provisions of the Loan Agreement as a Lender thereunder and, to the
extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has
received a copy of the Loan Agreement, together with copies of the most recent financial statements
delivered pursuant to Section thereof, as applicable, and such other documents and
information as it has deemed appropriate to make its own credit analysis and decision independently
and without reliance on the Administrative Agent or any other Lender to enter into this Assignment
and to purchase the Assigned Interest on the basis of which it has made such analysis and decision,
and (v) if it is a Foreign Lender, attached hereto is any documentation required to be delivered by
it pursuant to the terms of the Loan Agreement, duly completed and executed by the Assignee; and
(b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the
Assignor or any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, and (ii) it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be performed by it as a
Lender.

     1.3 Assignee’s Address for Notices, etc. Attached hereto as Schedule 1
is all contact information, address, account and other administrative information relating
to the Assignee.

     2. Payments. From and after the Effective Date, the Administrative Agent shall make
all payments in respect of the Assigned Interest (including payments of principal, interest, fees
and other amounts) to the Assignee whether such amounts have accrued prior to or on or after the
Effective Date. The Assignor and the Assignee shall make all appropriate adjustments in payments by
the Administrative Agent for periods prior to the Effective Date or with respect to the making of
this Assignment directly between themselves.

     3. General Provisions. This Assignment shall be binding upon, and inure to the benefit
of, the parties hereto and their respective successors and assigns. This Assignment may be
executed in any number of counterparts, which together shall constitute one instrument. Delivery
of an executed counterpart of a signature page of this Assignment by telecopy shall be effective as
delivery of a manually executed counterpart of this Assignment. This Assignment shall be governed
by, and construed in accordance with, the Law of the State of Florida.

EXHIBIT L, PAGE 4

 

SCHEDULE 1 TO ASSIGNMENT AND ASSUMPTION

ADMINISTRATIVE DETAILS

(Assignee to list names of credit contacts, addresses, phone and facsimile numbers, electronic mail addresses and

account and payment information)

	 	 	 	 	 	 	 	 	 

	(a)	 	LIBOR Lending Office:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Assignee name:	 	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Address:	 	 	 	 	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Attention:	 	 	 	 	 	 
	 	 	 	 	 	 
	 

	 	Telephone: (_)	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Facsimile: (_)	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	Electronic Mail:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(b)	 	Domestic Lending Office:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Assignee name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Attention:	 	 	 	 	 	 
	 	 	 	 	 	 
	 

	 	Telephone: (_)	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Facsimile: (_)	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	Electronic Mail:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(c)	 	Notice Address:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Assignee name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Attention:	 	 	 	 	 	 
	 	 	 	 	 	 
	 

	 	Telephone: (_)	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Facsimile: (_)	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	Electronic Mail:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(d)	 	Payment Instructions:	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Account No.	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Attention:	 	 	 	 	 	 
	 	 	 	 	 	 
	 

	 	Reference:	 	 	 	 	 	 
	 	 	 	 	 	 

EXHIBIT L,
PAGE 5

 

EXHIBIT “M”

FORM OF NOTE

PROMISSORY NOTE

	 	 	 	 	 

	 
	 	 	 	 
	$                    

	 	 
	 	April ___, 2010

     FOR VALUE RECEIVED, HF LOGISTICS-SKX T1, LLC, a Delaware limited liability company
(“Borrower”) hereby promises to pay to the order of
                                  , without offset, in immediately
available funds in lawful money of the United States of America, at the Lender’s office as
defined in the Loan Agreement (as such term is defined herein), the
principal sum of
                                   DOLLARS 

($                    )
(or the unpaid balance of all principal advanced against this Note, if that amount is less),
together with interest on the unpaid principal balance of this Note from day to day outstanding
as hereinafter provided.

     1. Note; Interest; Payment Schedule and Maturity Date. This Note is one of the Notes
referred to in that certain Construction Loan Agreement of even date herewith (the “Loan
Agreement”) among the Borrower, Bank of America, N.A., as Administrative Agent for itself as
a lender and for the others lenders that are from time to time a party to the Loan Agreement
(collectively, the “Lenders”), and the Lenders, and it is entitled to the benefits
thereof and subject to prepayment in whole or part as provided therein. The entire principal
balance of this Note then unpaid shall be due and payable at the times as set forth in the Loan
Agreement. Accrued unpaid interest shall be due and payable at the times and at the interest rate
as set forth in the Loan Agreement until all principal and accrued interest owing on this Note
shall have been fully paid and satisfied. Any amount not paid when due and payable hereunder
shall, to the extent permitted by applicable Law, bear interest and if applicable a late charge
as set forth in the Loan Agreement.

     2. Security; Loan Documents. The security for this Note includes a Construction
Deed of Trust, Assignments of Rents and Leases, Security Agreement and Fixture Filing of even
date herewith from Borrower to PRLAP, Inc., as Trustee for the benefit of Bank of America, N.A.,
a national banking association, as beneficiary in its capacity as administrative agent for the
Lenders (which, as it may have been or may be amended, restated, modified or supplemented from
time to time, is herein called the “Mortgage”), covering certain property in Moreno
Valley, County of Riverside, California described therein (the “Property”). This Note,
the Mortgage, the Loan Agreement and all other documents now or hereafter securing, guaranteeing
or executed in connection with the loan evidenced by this Note (the “Loan”), are, as the
same have been or may be amended, restated, modified or supplemented from time to time, herein
sometimes called individually a “Loan Document” and
together the “Loan Documents.”

     3. Defaults.

          (a) It shall be an event of default (“Event of Default”) under this Note and each of
the other Loan Documents if (i) any principal, interest or other amount of money due under this
Note is not paid in full when due, regardless of how such amount may have become due; or (ii)
there shall occur a Default under the Loan Agreement (as such term “Default” is defined in
the Loan Agreement) subject to any applicable notice and cure period contained therein. Upon the
occurrence of an Event of Default, Lender shall have the rights to declare the unpaid principal
balance and accrued but unpaid interest on this Note, and all other amounts due hereunder and
under the other Loan Documents, at once due and payable (and upon such declaration, the same shall
be at once due and payable), to foreclose any liens and security interests securing payment hereof
and to exercise any of its other rights, powers and remedies under this Note, under any other Loan
Document, or at law or in equity.

          (b) All of the rights, remedies, powers and privileges (together, “Rights”) of Lender
and Administrative Agent provided for in this Note and in any other Loan Document are cumulative
of each other and of any and all other Rights at law or in equity. The resort to any Right shall
not prevent the concurrent or subsequent employment of any other appropriate Right. No single or
partial exercise of any Right shall exhaust it, or preclude any other or further exercise thereof,
and every Right may be exercised at any time and from time to time. No failure by

EXHIBIT M, PAGE 1

 

Lender to exercise, nor delay in exercising any Right, including but not limited to the right to
accelerate the maturity of this Note, shall be construed as a waiver of any Event of Default or as
a waiver of any Right. Without limiting the generality of the foregoing provisions, the acceptance
by Lender from time to time of any payment under this Note which is past due or which is less than
the payment in full of all amounts due and payable at the time of such payment, shall not (i)
constitute a waiver of or impair or extinguish the right of Lender to accelerate the maturity of
this Note or to exercise any other Right at the time or at any subsequent time, or nullify any
prior exercise of any such Right, or (ii) constitute a waiver of the requirement of punctual
payment and performance or a novation in any respect.

          (c) If any holder of this Note retains an attorney in connection with any Event of Default or
at maturity or to collect, enforce or defend this Note or any other Loan Document in any lawsuit
or in any probate, reorganization, bankruptcy, arbitration or other proceeding, or if Borrower
sues any holder in connection with this Note or any other Loan Document and does not prevail, then
Borrower agrees to pay to each such holder, in addition to principal, interest and any other sums
owing to Lender hereunder and under the other Loan Documents, all costs and expenses incurred by
such holder in trying to collect this Note or in any such suit or proceeding, including, without
limitation, reasonable attorneys’ fees and expenses, investigation costs and all court costs,
whether or not suit is filed hereon, whether before or after the Maturity Date, or whether in
connection with bankruptcy, insolvency or appeal, or whether collection is made against Borrower
or any guarantor or endorser or any other person primarily or secondarily liable hereunder. Any
judgment on this Note shall bear interest at the highest rate allowed by applicable law.

     4. Commercial Purpose. Borrower warrants that the Loan is being made solely to finance
a portion of the cost to acquire or carry on a business or commercial enterprise, and/or Borrower
is a business or commercial organization. Borrower further warrants that all of the proceeds of
this Note shall be used for commercial purposes and stipulates that the Loan shall be construed for
all purposes as a commercial loan, and is made for other than personal, family, household or
agricultural purposes.

     5. Service of Process. Borrower hereby consents to process being served in any suit,
action, or proceeding instituted in connection with this Note by (a) the mailing of a copy thereof
by certified mail, postage prepaid, return receipt requested, to Borrower and (b) serving a copy
thereof upon the registered agent designated and appointed by Borrower as Borrower’s agent for
service of process. Borrower irrevocably agrees that such service
shall be deemed to be service of process upon Borrower in any such suit, action, or proceeding. Nothing in this Note shall affect
the right of Lender to serve process in any manner otherwise permitted by law and nothing in this
Note will limit the right of Lender otherwise to bring proceedings against Borrower in the courts
of any jurisdiction or jurisdictions

     6. Heirs, Successors and Assigns. The terms of this Note and of the other Loan
Documents shall bind and inure to the benefit of the heirs, devisees, representatives, successors
and assigns of the parties. The foregoing sentence shall not be construed to permit Borrower to
assign the Loan except as otherwise permitted under the Loan Documents. As further provided in the
Loan Agreement, Lender may, at any time, sell, transfer, or assign this Note, the Mortgage and the
other Loan Documents, and any or all servicing rights with respect thereto, or grant participations
therein or issue mortgage pass-through certificates or other securities evidencing a beneficial
interest in a rated or unrated public offering or private placement.

     7. General Provisions. Time is of the essence with respect to Borrower’s obligations
under this Note. If more than one person or entity executes this Note as Borrower, all of said
parties shall be jointly and severally liable for payment of the indebtedness evidenced hereby.
Borrower and all sureties, endorsers, guarantors and any other party now or hereafter liable for
the payment of this Note in whole or in part, hereby severally (a) waive demand, presentment for
payment, notice of dishonor and of nonpayment, protest, notice of protest, notice of intent to
accelerate, notice of acceleration and all other notices (except any notices which are specifically
required by this Note or any other Loan Document), filing of suit and diligence in collecting this
Note or enforcing any of the security herefor; (b) agree to any substitution, subordination,
exchange or release of any such security or the release of any party primarily or secondarily
liable hereon; (c) agree that Lender shall not be required first to institute suit or exhaust its
remedies hereon against Borrower or others liable or to become liable hereon or to perfect or
enforce its rights against them or any security herefor; (d) consent to any extensions or
postponements of time of payment of this Note for any period or periods of time and to any partial
payments, before or after maturity, and to any other indulgences with respect hereto, without
notice thereof to any of them; and (e) submit (and waive all rights to object) to non-exclusive
personal jurisdiction of any state or federal court sitting in the State of Florida, and venue in
the city or county in which payment is to be made as specified in the first paragraph on Page 1 of
this Note, for the enforcement of any and all

EXHIBIT M, PAGE 2

 

obligations under this Note and the Loan Documents; (f) waive the benefit of all homestead and
similar exemptions as to this Note; (g) agree that their liability under this Note shall not be
affected or impaired by any determination that any security interest or lien taken by Lender to
secure this Note is invalid or unperfected; and (h) hereby subordinate any and all rights against
Borrower and any of the security for the payment of this Note, whether by subrogation, agreement or
otherwise, until this Note is paid in full. A determination that any provision of this Note is
unenforceable or invalid shall not affect the enforceability or validity of any other provision and
the determination that the application of any provision of this Note to any person or circumstance
is illegal or unenforceable shall not affect the enforceability or validity of such provision as it
may apply to other persons or circumstances. This Note may not be amended except in a writing
specifically intended for such purpose and executed by the party against whom enforcement of the
amendment is sought. Lender is hereby authorized to disseminate any information it now has or
hereafter obtains pertaining to the Loan, including, without limitation, any security for this Note
and credit or other information on Borrower, any of its principals and any guarantor of this Note,
to any actual or prospective assignee or participant with respect to the Loan, to any of Lender’s
affiliates, including, without limitation, Banc of America Securities LLC, to any regulatory body
having jurisdiction over Lender, and to any other parties as necessary or appropriate in Lender’s
reasonable judgment, as further provided in the Loan Agreement. The term “Business Day” shall mean
a day on which Lender is open for the conduct of substantially all of its banking business at its
office in the city in which this Note is payable (excluding Saturdays and Sundays). Captions and
headings in this Note are for convenience only and shall be disregarded in construing it. THIS
NOTE, AND ITS VALIDITY, ENFORCEMENT AND INTERPRETATION, SHALL BE GOVERNED BY FLORIDA LAW (WITHOUT
REGARD TO ANY CONFLICT OF LAWS PRINCIPLES) AND APPLICABLE UNITED STATES FEDERAL LAW.

     8. No Usury. It is expressly stipulated and agreed to be the intent of Borrower and
Lender at all times to comply with applicable state law or applicable United States federal law (to
the extent that it permits Lender to contract for, charge, take, reserve, or receive a greater
amount of interest than under state law) and that this Section shall control every other covenant
and agreement in this Note and the other Loan Documents. If applicable state or federal law should
at any time be judicially interpreted so as to render usurious any amount called for under this
Note or under any of the other Loan Documents, or contracted for, charged, taken, reserved, or
received with respect to the Loan, or if Lender’s exercise of the option to accelerate the Maturity
Date, or if any prepayment by Borrower results in Borrower having paid any interest in excess of
that permitted by applicable law, then it is Lender’s express intent that all excess amounts
theretofore collected by Lender shall be credited on the principal balance of this Note and all
other indebtedness and the provisions of this Note and the other Loan Documents shall immediately
be deemed reformed and the amounts thereafter collectible hereunder and thereunder reduced, without
the necessity of the execution of any new documents, so as to comply with the applicable law, but
so as to permit the recovery of the fullest amount otherwise called for hereunder or thereunder.
All sums paid or agreed to be paid to Lender for the use, forbearance, or detention of the Loan
shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread
throughout the full stated term of the Loan until payment in full so that the rate or amount of
interest on account of the Loan does not exceed the maximum lawful rate from time to time in effect
and applicable to the Loan (the “Maximum Rate”) for so long as the Loan is outstanding. The Lender
may, in determining the Maximum Rate, take advantage of: (i) the rate of interest permitted by
Florida Statutes, Chapter 658, by reason of both Section 687.12 Florida Statutes (“Interest rates;
parity among licensed lenders or creditors”) and 12 United States Code, Sections 85 and 86, and
(ii) any other law, rule, or regulation in effect from time to time, available to Lender which
exempts Lender from any limit upon the rate of interest it may charge or grants to Lender the right
to charge a higher rate of interest than that allowed by Florida Statutes, Chapter 687.

     9. Notices. Any notice, request, or demand to or upon Borrower or Lender shall be
deemed to have been properly given or made when delivered in
accordance with the Loan Agreement.

     10. Dispute Resolution.

          (a) Arbitration. Except to the extent expressly provided below, any Dispute (as
defined below) shall, upon the request of either party, be determined by binding arbitration in
accordance with the Federal Arbitration Act, Title 9, United States Code (or if not applicable,
the applicable state law), the then-current rules for arbitration of financial services disputes
of the American Arbitration Association, or any successor thereof (“AAA”) and the
“Special Rules” set forth below. “Dispute” means any controversy, claim or dispute
between or among the parties to this Note, including any controversy, claim or dispute arising out
of or relating to (a) this Note, (b) any other Loan Documents, (c) any related agreements or
instruments, or (d) the transaction contemplated herein or

EXHIBIT M, PAGE 3

 

therein (including any claim based on or arising from an alleged personal injury or business tort).
In the event of any inconsistency, the Special Rules shall control. The filing of a court action is
not intended to constitute a waiver of the right of Borrower or Lender, including the suing party,
thereafter to require submittal of the Dispute to arbitration. Any party to this Note may bring an
action, including a summary or expedited proceeding, to compel arbitration of any Dispute in any
court having jurisdiction over such action. For the purposes of this Dispute Resolution Section
only, the terms “party” and “parties” shall include any parent corporation, subsidiary or affiliate
of Lender involved in the servicing, management or administration of any obligation described in or
evidenced by this Note, together with the officers, employees, successors and assigns of each of
the foregoing.

          (b) Special Rules.

               (i) The arbitration shall be conducted in any U.S. state where real or tangible personal property
collateral is located, or if there is no such collateral, in the City and County where Lender is
located pursuant to its address for notice purposes in this Note.

               (ii) The arbitration shall be administered by AAA, who will appoint an arbitrator. If AAA is
unwilling or unable to administer or legally precluded from administering the arbitration, or if
AAA is unwilling or unable to enforce or legally precluded from enforcing any and all provisions of
this Dispute Resolution Section, then any party to this Note may substitute another arbitration
organization that has similar procedures to AAA and that will observe and enforce any and all
provisions of this Dispute Resolution Section. All Disputes shall be determined by one arbitrator;
however, if the amount in controversy in a Dispute exceeds Five Million Dollars ($5,000,000), upon
the request of any party, the Dispute shall be decided by three arbitrators (for purposes of this
Note, referred to collectively as the “arbitrator”).

               (iii) All arbitration hearings will be commenced within ninety (90) days of the demand for
arbitration and completed within ninety (90) days from the date of commencement; provided, however,
that upon a showing of good cause, the arbitrator shall be permitted to extend the commencement of
such hearing for up to an additional sixty (60) days.

               (iv) The judgment and the award, if any, of the arbitrator shall be issued within thirty
(30) days of the close of the hearing. The arbitrator shall provide a concise written statement
setting forth the reasons for the judgment and for the award, if any. The arbitration award, if
any, may be submitted to any court having jurisdiction to be confirmed and enforced, and such
confirmation and enforcement shall not be subject to arbitration.

               (v) The arbitrator will give effect to statutes of limitations and any waivers thereof in
determining the disposition of any Dispute and may dismiss one or more claims in the arbitration on
the basis that such claim or claims is or are barred. For purposes of the application of the
statute of limitations, the service on AAA under applicable AAA rules of a notice of Dispute is the
equivalent of the filing of a lawsuit.

               (vi) Any dispute concerning this arbitration provision, including any such dispute as to
the validity or enforceability of this provision, or whether a Dispute is arbitrable, shall be
determined by the arbitrator; provided, however, that the arbitrator shall not be permitted to vary
the express provisions of these Special Rules or the Reservations of Rights in subsection (c)
below.

               (vii) The arbitrator shall have the power to award legal fees and costs pursuant to the
terms of this Note.

               (viii) The arbitration will take place on an individual basis without reference to,
resort to, or consideration of any form of class or class action.

          (c) Reservations of Rights. Nothing in this Note shall be deemed to (i) limit the
applicability of any otherwise applicable statutes of limitation and any waivers contained in this
Note, or (ii) apply to or limit the right of Lender (A) to exercise self help remedies such as (but
not limited to) setoff, or (B) to foreclose judicially or nonjudicially against any real or
personal property collateral, or to exercise judicial or nonjudicial power of sale

EXHIBIT M, PAGE 4

 

rights, (C) to obtain from a court provisional or ancillary remedies such as (but not limited to)
injunctive relief, writ of possession, prejudgment attachment, or the appointment of a receiver, or
(D) to pursue rights against a party to this Note in a third-party proceeding in any action brought
against Lender in a state, federal or international court, tribunal or hearing body (including
actions in specialty courts, such as bankruptcy and patent courts). Lender may exercise the rights
set forth in clauses (A) through (D), inclusive, before, during or after the pendency of any
arbitration proceeding brought pursuant to this Note. Neither the exercise of self help remedies
nor the institution or maintenance of an action for foreclosure or provisional or ancillary
remedies shall constitute a waiver of the right of any party, including the claimant in any such
action, to arbitrate the merits of the Dispute occasioning resort to such remedies. No provision in
the Loan Documents regarding submission to jurisdiction and/or venue in any court is intended or
shall be construed to be in derogation of the provisions in any Loan Document for arbitration of
any Dispute.

          (d) Conflicting Provisions for Dispute Resolution. If there is any conflict between
the terms, conditions and provisions of this Section and those of any other provision or agreement
for arbitration or dispute resolution, the terms, conditions and provisions of this Section shall
prevail as to any Dispute arising out of or relating to (i) this Note, (ii) any other Loan
Document, (iii) any related agreements or instruments, or (iv) the transaction contemplated herein
or therein (including any claim based on or arising from an alleged personal injury or business
tort). In any other situation, if the resolution of a given Dispute is specifically governed by
another provision or agreement for arbitration or dispute resolution, the other provision or
agreement shall prevail with respect to said Dispute.

          (e) Jury Trial Waiver in Arbitration. By agreeing to this Section, the parties
irrevocably and voluntarily waive any right they may have to a trial by jury in respect of any
Dispute.

     11. WAIVER OF JURY TRIAL. WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’
AGREEMENT TO ARBITRATE ANY “DISPUTE” (FOR PURPOSES OF THIS SECTION, AS DEFINED ABOVE) AS SET FORTH
IN THIS NOTE, TO THE EXTENT ANY “DISPUTE” IS NOT SUBMITTED TO ARBITRATION OR IS DEEMED BY THE
ARBITRATOR OR BY ANY COURT WITH JURISDICTION TO BE NOT ARBITRABLE OR NOT REQUIRED TO BE
ARBITRATED, BORROWER AND LENDER WAIVE TRIAL BY JURY IN RESPECT OF ANY SUCH “DISPUTE” AND ANY
ACTION ON SUCH “DISPUTE.” THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY BORROWER AND
LENDER, AND BORROWER AND LENDER HEREBY REPRESENT THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE
BEEN MADE BY ANY PERSON OR ENTITY TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY
OR NULLIFY ITS EFFECT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO THE
LOAN DOCUMENTS. BORROWER AND LENDER ARE EACH HEREBY AUTHORIZED TO FILE A COPY OF THIS SECTION IN
ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER OF JURY TRIAL. BORROWER FURTHER REPRESENTS
AND WARRANTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS NOTE AND IN THE MAKING OF THIS
WAIVER BY INDEPENDENT LEGAL COUNSEL, OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT
LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS
WAIVER WITH COUNSEL.

     THE LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

     THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.

[THE BALANCE OF THIS PAGE IS LEFT INTENTIONALLY BLANK]

EXHIBIT M, PAGE 5

 

     IN WITNESS WHEREOF, Borrower has duly made and executed this Note under seal as of the date
first above written.

	 	 	 	 

	 

	 	BORROWER:	 
	 
	 	 
	 

	 	HF LOGISTICS-SKX T1, LLC,

a Delaware limited liability company
	 
	 	 
	 

	 	By: HF Logistics-SKX, LLC, a Delaware limited

liability company, its sole member
	 
	 	 
	 

	 	By: HF Logistics I, LLC, a Delaware limited

liability company, its managing member

	 	 	 	 	 
	 	 	[FORM OF NOTE]	 
	 	 	 
	 	By:  	
 	 
	 	 	Iddo Benzeevi, President and  	 
	 	 	Chief Executive Officer 	 
	 

EXHIBIT M, PAGE 6

 

EXHIBIT “N”

SCHEDULE OF LENDERS AND OTHER PARTIES

BANK OF AMERICA, N.A., as Administrative Agent:

Notices:

Bank of America, N.A.

One Alhambra Plaza, Penthouse

Coral Gables, Florida 33134

			
	Attn:	 	Commercial Loan Administration

Telephone: (305) 468-4347

Facsimile: (305) 468-4364

Electronic Mail: althea.v.lyn-sue@baml.com

Payment Instructions:

Bank of America, N.A.

Atlanta, Georgia

ABA No.: 0260-0959-3

Account No.: GL 1366211723000

Attention: Nicole Rice

Reference: HF Logistics-SKX T1

BANK OF AMERICA, N.A., as Lender:

	 	 	 

	Domestic and LIBOR Lending Office:

	 	Commitment Amount: $27,500,000.00
	 
	 	 
	 

	 	Pro Rata Share: 50%

Bank of America, N.A.

One Alhambra Plaza, Penthouse

Coral Gables, Florida 33134

			
	Attn:	 	Commercial Loan Administration

Telephone: (305) 468-4347

Facsimile: (305) 468-4364

Electronic Mail:
althea.v.lyn-sue@baml.com

Notices:

Bank of America, N.A.

One Alhambra Plaza, Penthouse

Coral Gables, Florida 33134

			
	Attn:	 	Commercial Loan Administration

Telephone: (305) 468-4347

Facsimile: (305) 468-4364

Electronic Mail: althea.v.lyn-sue@baml.com

EXHIBIT N, PAGE 1

 

Payment Instructions:

Bank of America, N.A.

Atlanta, Georgia

ABA No.: 0260-0959-3

Account No.: GL 1366211723000

Attention: Nicole Rice

Reference: HF Logistics-SKX T1

RAYMOND JAMES BANK, FSB

	 	 	 

	Domestic and LIBOR Lending Office:

	 	Commitment Amount: $27,500,000.00
	 
	 	 
	 

	 	Pro Rata Share: 50%

Raymond James Bank, FSB

Loan Ops/CML

710 Carillon Parkway

St. Petersburg, Florida 33176

			
	Attn:	 	       
         
        
         
         
        
        
        
        
        
              

        
        
       
         
         
          
          
           
       
           
       

Telephone:         
          
        
      
        
        
        
         
          
  

Facsimile: (866) 597-4002

Electronic Mail: mary.farrell@raymondjames.com

Notices:

Raymond James Bank, FSB

Loan Ops/CML

710 Carillon Parkway

St. Petersburg, Florida 33176

			
	Attn:	 	       
         
        
         
         
        
        
        
        
        
              

        
        
       
         
         
          
          
           
       
           
       

Telephone:         
          
        
        
        
        
      
          
          
  

Facsimile: (866) 597-4002

Electronic Mail: mary.farrell@raymondjames.com

Payment Instructions:

Federal Home Loan Bank of Atlanta

ABA No.: 0610-0876-6

Account No.: 3574100 Raymond James Bank

Attention: Loan Ops/CML

Reference: HF Logistics-SKX T1, LLC

EXHIBIT N, PAGE 2exv10w3

Exhibit 10.3

(Confidential Portions Omitted)

AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT

OF

HF LOGISTICS-SKX, LLC

THE LIMITED LIABILITY COMPANY INTERESTS IN HF LOGISTICS-SKX, LLC (THE “INTERESTS”) ARE
SUBJECT TO THE RESTRICTIONS ON TRANSFER AND OTHER TERMS AND CONDITIONS SET FORTH IN ARTICLE
11 AND MAY NOT BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY
TIME EXCEPT IN COMPLIANCE WITH THE TERMS AND CONDITIONS THEREOF. THEREFORE, PURCHASERS OF THE
INTERESTS WILL BE REQUIRED TO BEAR THE RISK OF THEIR INVESTMENTS FOR AN INDEFINITE PERIOD OF TIME.
THE INTERESTS HAVE NOT BEEN REGISTERED (i) UNDER ANY SECURITIES LAWS OF THE SEVERAL STATES (THE
“STATE ACTS”), OR (ii) UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
“FEDERAL ACT”), IN RELIANCE UPON EXEMPTIONS PROVIDED THEREIN, AND NEITHER THE INTERESTS NOR
ANY PART THEREOF MAY BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED, OR TRANSFERRED AT
ANY TIME EXCEPT IN COMPLIANCE WITH THE TERMS AND CONDITIONS OF ARTICLE 11 AND (1) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER ANY APPLICABLE STATE ACTS OR IN A TRANSACTION WHICH IS
EXEMPT FROM REGISTRATION UNDER SUCH STATE ACTS OR WHICH IS OTHERWISE IN COMPLIANCE WITH SUCH STATE
ACTS, AND (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE FEDERAL ACT OR IN A
TRANSACTION WHICH IS EXEMPT FROM REGISTRATION UNDER THE FEDERAL ACT OR WHICH IS OTHERWISE IN
COMPLIANCE WITH THE FEDERAL ACT. IN ADDITION, ANY INTERESTS ACQUIRED BY NON-U.S. PERSONS MAY NOT,
DIRECTLY OR INDIRECTLY, BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED, OR TRANSFERRED
IN THE UNITED STATES OR TO OR FOR THE ACCOUNT OF A U.S. PERSON EXCEPT IN COMPLIANCE WITH THIS
AGREEMENT AND THE FEDERAL ACT AND ALL APPLICABLE STATE ACTS. AS USED HEREIN, “UNITED
STATES” MEANS THE UNITED STATES OF AMERICA, ITS TERRITORIES AND POSSESSIONS, AND ALL AREAS
SUBJECT TO ITS JURISDICTION, AND A “U.S. PERSON” MEANS A CITIZEN OR RESIDENT OF THE UNITED
STATES (INCLUDING THE ESTATE OF ANY SUCH PERSON), A CORPORATION, COMPANY, OR OTHER PERSON CREATED
OR ORGANIZED UNDER THE LAWS OF THE UNITED STATES OR ANY POLITICAL SUBDIVISION THEREOF OR THEREIN,
AND AN ESTATE OR TRUST THE INCOME OF WHICH IS SUBJECT TO UNITED STATES FEDERAL INCOME TAXATION
REGARDLESS OF ITS SOURCE.

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	Article 1 DEFINED TERMS
	 	 	1	 
	Article 2 ORGANIZATIONAL MATTERS
	 	 	9	 
	Article 3 PURPOSE
	 	 	11	 
	Article 4 CAPITAL CONTRIBUTIONS; MEMBER LOANS; CAPITAL ACCOUNTS
	 	 	11	 
	Article 5 DISTRIBUTIONS AND ALLOCATIONS
	 	 	15	 
	Article 6 LOANS
	 	 	15	 
	Article 7 MANAGEMENT AND OPERATION OF BUSINESS
	 	 	19	 
	Article 8 BUY-SELL PROVISIONS
	 	 	28	 
	Article 9 BOOKS, RECORDS, ACCOUNTING AND REPORTS
	 	 	30	 
	Article 10 TAX MATTERS
	 	 	31	 
	Article 11 TRANSFERS AND WITHDRAWALS
	 	 	34	 
	Article 12 ADMISSION OF MEMBERS
	 	 	36	 
	Article 13 DISSOLUTION AND LIQUIDATION
	 	 	36	 
	Article 14 AMENDMENT OF AGREEMENT
	 	 	39	 
	Article 15 DISPUTE RESOLUTION
	 	 	40	 
	Article 16 DEFAULTS / REMEDIES
	 	 	40	 
	Article 17 GENERAL PROVISIONS
	 	 	41	 
	Article 18 OVERRIDING PROVISIONS RE SUBSIDIARIES
	 	 	46	 

i

 

AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT

OF

HF LOGISTICS -SKX, LLC

     THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF HF LOGISTICS-SKX, LLC (the
“Company”), is entered into and effective as of the 12th day of April, 2010 but
is effective as of January 30, 2010 (the “Effective Date”) by and between HF LOGISTICS I,
LLC, a Delaware limited liability company (“HF”), and SKECHERS R.B., LLC, a Delaware
limited liability company (“Skechers”, and together with HF, the “Members”). This
Agreement amends and restates, and supersedes in its entirety, the Limited Liability Company
Agreement of HF Logistics-SKX, LLC dated January 30, 2010.

RECITALS

     WHEREAS, the Members, being all of the Members of the Company, desire to form the Company as a
limited liability company under the Act for the purposes set forth herein.

     NOW, THEREFORE, in consideration of the premises, the mutual promises and agreements herein
made, and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Members, intending to be legally bound, have agreed and do hereby agree as
follows:

ARTICLE 1

DEFINED TERMS

     Section 1.1 Certain Defined Terms. Unless otherwise clearly indicated to the
contrary, the following terms shall have the following meanings:

          1.1.1 “Act” means Sections 18-101 et seq. of the Delaware Corporation Laws Ann.,
commonly known as the Delaware Limited Liability Company Act, as it may be amended from time to
time, and any successor to such statute.

          1.1.2 “Additional Capital Contributions” means the total of all Capital Contributions
made to the Company by the Members in accordance with Section 4.1.2.

          1.1.3 “Additional Funding Obligation” has the meaning set forth in Section
6.9(a).

          1.1.4 Intentionally deleted.

          1.1.5 “Affiliate” means with respect to any Person, (a) any Person directly or
indirectly controlling, controlled by or under common control with such Person, or (b) any Person
owning or controlling fifty-one percent (51%) or more of the outstanding voting interests of such
Person, or (c) any Person of which such Person owns or controls fifty-one percent (51%) or more of
the voting interests.

          1.1.6 “Agreement” means this Amended and Restated Limited Liability Company Agreement
of HF Logistics-SKX, LLC, as it may be amended, supplemented or restated from time to time.

          1.1.7 “Assignee” means a Person to whom any Company Interest has been transferred in a
manner permitted under this Agreement, but who has not been admitted to the Company as a Member.

 

 

          1.1.8 “Available Cash” means, with respect to any period for which such calculation is
being made:

                    (a) all cash revenues and funds received by the Company from whatever source, including
Capital Transaction Proceeds (except with respect to Liquidating Transactions), plus the amount of
any reduction in existing Reserves of the Company;

                    (b) less the sum of the following:

                         (i) all required interest or principal payments, escrow account payments and any other
payments made during such period by the Company on account of the Debt of the Company, if any;

                         (ii) all cash expenditures (including capital expenditures) made by the Company during such
period;

                         (iii) all payments made by the Company during such period to any Reserve account (including
the amount of any increase in any existing Reserves of the Company).

          1.1.9 “Bankruptcy Action” means (a) the filing of any voluntary or involuntary
bankruptcy (and in the case of an involuntary bankruptcy, such proceeding shall not have been
dismissed within ninety (90) days), insolvency or reorganization case or proceeding, instituting
any proceeding under any applicable insolvency law or otherwise seeking any relief under any laws
relating to the relief from debts or the protection of debtors generally by or against any Person,
(b) the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any
similar official for any Person or a substantial portion of its properties, (c) making any
assignment for the benefit of creditors by any Person, (d) any Person being adjudged a bankrupt or
insolvent, or having entered against it an order of relief in any bankruptcy or insolvency
proceeding, (e) any Person filing a petition or answer seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any statute, law or
regulation, (f) any Person filing an answer or other pleading admitting or failing to contest the
material allegations of a petition filed against it in any proceeding of the foregoing nature, (g)
the filing of any proceeding with respect to any Person seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any statute, law or
regulation, which has not been dismissed within one hundred twenty (120) days after the
commencement thereof, or (h) the appointment of a trustee, receiver, assignee, sequestrator,
custodian or liquidator with respect to any Person which has not been vacated or stayed within
ninety (90) days after the appointment or such appointment is not vacated within ninety (90) days
after the expiration of any such stay.

          1.1.10 “Breaching Member” shall mean any Member who has committed an Event of Default.

          1.1.11 “Business Day” means any day except a Saturday, Sunday or other day on which
commercial banks in Riverside, California, are authorized or required by law to close.

          1.1.12 “Buy-Sell Deposit” has the meaning set forth in Section 8.6.

          1.1.13 “Buy-Sell Notice” has the meaning set forth in Section 8.1.

          1.1.14 “Capital Account” means the Capital Account maintained for a Member pursuant to
Exhibit “A” attached hereto.

2

 

          1.1.15 “Capital Contribution” means, with respect to any Member, any cash, cash
equivalents or the Agreed Value (as defined in Exhibit “A”) of property which such Member
contributes or is deemed to contribute to the Company pursuant to Article 4. Such amounts
shall be treated as contributions to the Company pursuant to Section 721(a) of the Code.

          1.1.16 “Capital Transaction” means a voluntary or involuntary sale, exchange or other
disposition (other than a Liquidating Transaction) or a financing or refinancing by the Company of
the Project or any portion thereof.

          1.1.17 “Capital Transaction Proceeds” means the net cash proceeds of a Capital
Transaction, after deducting all expenses incurred in connection therewith and after application of
any proceeds toward the payment of any Debt of the Company secured by, or otherwise reasonably
allocable to, the Project.

          1.1.18 “Certificate” means the Certificate of Formation of the Company filed in the
office of the Secretary of State of the State of Delaware, as amended from time to time.

          1.1.19 “Closing Date” means the date after HF and the Construction Lender have
executed the commitment which is attached hereto as Exhibit “F” (the “Commitment”),
upon which the Construction Lender gives notice to HF that it has procured a participant for the
Construction Loan, as described in the Commitment (which participant may be HF or an Affiliate of
HF). HF shall execute and deliver the Commitment to the Construction Lender on the first
(1st) Business Day after the Effective Date and shall use diligent efforts to obtain the
execution of the Commitment by the Construction Lender as soon thereafter as possible.

          1.1.20 “Code” means the Internal Revenue Code of 1986, as amended. Any reference
herein to a specific Section or Sections of the Code shall be deemed to include a reference to any
corresponding provision of future law.

          1.1.21 “Company” has the meaning set forth in the preamble.

          1.1.22 “Company Assets” means (a) the membership interests in the Subsidiaries (which
includes the indirect ownership of the Property and the Project), and (b) all other assets of the
Company.

          1.1.23 “Company Interest” means the ownership interest in the Company held by a
Member, which includes any and all benefits to which the holder of such a Company Interest may be
entitled as provided in this Agreement (including any voting rights and rights to receive
distributions of Available Cash), together with all obligations of such Member to comply with the
terms and provisions of this Agreement.

          1.1.24 “Company Record Date” means the record dates established by the Managing
Members for the distribution of Available Cash, or if they fail to agree as to any record date,
such term means the last day of the current month.

          1.1.25 “Company Year” means the fiscal year of the Company.

          1.1.26 “Completion of the Project” has the meaning set forth in the Development
Management Agreement.

3

 

          1.1.27 “Construction Lender” means Bank of America in its capacity as a lender and
also as administrative agent for other lenders who are participants in the Construction Loan, or
any other lender under the Construction Loan.

          1.1.28 “Construction Loan” means the construction loan from the Construction Lender to
be taken out by the T1 Subsidiary in the amount of approximately Fifty Five Million Dollars
($55,000,000) to finance the development of the Development Parcel in accordance with the Lease.

          1.1.29 “Construction Loan Documents” means any and all documents
which evidence the Construction Loan, including a construction loan agreement, promissory notes,
deeds of trust, assignments of leases and rents, security agreements, financing statements, pledge
agreements and environmental indemnity agreements.

          1.1.30 “Contribution Percentages” means the ratio at which the Members are required to
make certain Additional Capital Contributions, which is fifty percent (50%) for HF and fifty
percent (50%) for Skechers.

          1.1.31 “Debt” means, as to any Person as of any date of determination, (a) all
indebtedness of such Person for money borrowed or for the deferred purchase price of property or
services; (b) all amounts owed by such Person to banks or other Persons in respect of reimbursement
obligations under letters of credit, surety bonds and other similar instruments guaranteeing
payment or other performance of obligations by such Person; (c) all indebtedness for money borrowed
or for the deferred purchase price of property or services secured by any lien on any property
owned by such Person, to the extent attributable to such Person’s interest in such property, even
though such Person has not assumed or become liable for the payment thereof; and (d) lease
obligations of such Person which, in accordance with generally accepted accounting principles,
should be capitalized.

          1.1.32 “Default” has the meaning set forth in Section 4.1.5(c). For
clarification, the use of the word “default” (uncapitalized) in this Agreement shall mean any
default other than a Default which is defined in Section 4.1.5(c).

          1.1.33
“Default Amount” has the meaning set forth in
Section 4.1.5(c).

          1.1.34 “Default Date” has the meaning set forth in Section 4.1.5(c).

          1.1.35 “Default Member” has the meaning set forth in Section 4.1.5(c).

          1.1.36 “Default Notice” has the meaning set forth in Section 4.1.5(b).

          1.1.37 “Deposit Date” has the meaning set forth in Section 8.6.

          1.1.38 “Determination” has the meaning set forth in Section 15.2.

          1.1.39 “Development Budget” has the meaning set forth in the Development Management
Agreement.

          1.1.40 “Development Management Agreement” means that certain Development Management
Agreement effective as of January 30, 2010 between the Company and HFC Holdings, LLC, a Delaware
limited liability company (which is an Affiliate of HF), as amended by an Amendment to Development
Management Agreement effective as of the same date, a copy of which is attached hereto as
Exhibit “B” (the interest of the Company therein has been or will be assigned to the T1
Subsidiary).

4

 

          1.1.41 “Development Manager” has the meaning set forth in the Development Management
Agreement.

          1.1.42 “Development Parcel” means that certain real property which will, after
recordation of the final Parcel Map, be identified as Parcel 1 of Parcel Map No. 35629, and
consisting of approximately 82.59 acres of land, which real property comprises a portion of the
Property and is the “Premises” under the Lease. Notwithstanding the foregoing, it is understood
and agreed that prior to the date that the final parcel map records, the Development Parcel shall
be established by lot line adjustments and therefore may not contain exactly the amount of acreage
or be in exactly the same configuration as it will be in after the final parcel map records.

          1.1.43 “Distribution Percentages” means the ratio at which the Members are entitled to
receive distributions of Available Cash, which is fifty percent (50%) for HF and fifty percent
(50%) for Skechers, subject to adjustment as set forth in Section 4.1.5.

          1.1.44 “Effective Date” has the meaning set forth in the preamble.

          1.1.45 “Embargoed Person” has the meaning set forth in Section 2.5.10.

          1.1.46 “Event of Default” shall mean a default by a Member (which includes a default
by a Member in its capacity as Managing Member) in the performance of its obligations under this
Agreement which is not cured within any applicable cure period set forth herein, but excluding a
default under Article 4 or Article 6 with respect to required Additional Capital
Contributions or required loans.

          1.1.47 “Event of Dissolution” has the meaning set forth in Section 13.1.

          1.1.48 “Expansion Parcel” means that certain real property which will, after
recordation of the final, Parcel Map, be identified as Parcel 2 of Parcel Map 35629, and consisting
of approximately 22.37 acres, which real property comprises a portion of the Property and is the
“Expansion Area” under the Lease. Notwithstanding the foregoing, it is understood and agreed that
prior to the date that the final parcel map records, the Expansion Parcel shall be established by
lot line adjustments and therefore may not contain exactly the amount of acreage or be in exactly
the same configuration as it will be in after the final parcel map records.

          1.1.49 “HF” has the meaning set forth in the preamble.

          1.1.50 “HF Loan” has the meaning set forth in Section 6.4.

          1.1.51 “HF Managing Member” means HF acting in its capacity as a Managing Member of
the Company.

          1.1.52 “Incapacity” or “Incapacitated” means (a) as to any individual Member,
death, total physical disability or entry by a court of competent jurisdiction adjudicating him
incompetent to manage his Person or his estate; (b) as to any corporation which is a Member, the
filing of a certificate of dissolution, or its equivalent, for the corporation or the revocation of
its charter; (c) as to any partnership or limited liability company (or partnership) which is a
Member, the dissolution and commencement of winding up of the partnership or the limited liability
company (or partnership); (d) as to any estate which is a Member, the distribution by the fiduciary
of the estate’s entire interest in the Company; or (e) as to any trustee of a trust which is a
Member, the termination of the trust (but not the substitution of a new trustee).

5

 

          1.1.53 “Indemnitee” means (a) any Person made a party to a proceeding brought by an
unaffiliated third party by reason of such Person’s status as (i) a Member, or (ii) a director,
officer, member, manager, partner, trustee, or shareholder of the Company, or a Member or an
Affiliate of a Member, or (b) such other Persons acting in good faith on behalf of the Company as
determined by the Managing Members in their reasonable judgment.

          1.1.54 “Initial Capital Contributions” means the total of all Capital Contributions
made to the Company by the Members in accordance with Section 4.1.1.

          1.1.55 “Invoking Member” has the meaning set forth in Section 8.1.

          1.1.56 “IRS” means the United States Internal Revenue Service.

          1.1.57 “Lease” means that certain lease dated September 25, 2007 between HF, as
landlord, and Skechers Parent, as tenant, as amended by the Lease Amendment and the Second Lease
Amendment, and any subsequent amendments.

          1.1.58 “Lease Amendment” means that certain Amendment to Lease dated December 18,
2009, between HF, as landlord, and Skechers Parent, as tenant.

          1.1.59 “Lender” means the Construction Lender or the Permanent Lender, as the case may
be, or their respective successors-in-interest.

          1.1.60 “Liquidating Transaction” means any transaction or series of related
transactions which results in the sale or other disposition of all or substantially all of the
Company Assets.

          1.1.61 “Liquidator” has the meaning set forth in Section 13.2.1.

          1.1.62 “Loan” means either the Construction Loan or the Permanent Loan, as the case
may be.

          1.1.63 “Loss Item” has the meaning set forth in Section 7.6.1.

          1.1.64 “Managing Member” means either HF or Skechers, as the case may be, acting in
the capacity as a Managing Member of the Company.

          1.1.65 “Managing Members” means both HF and Skechers, each acting in the capacity as a
Managing Member of the Company.

          1.1.66 “Master Lease” That certain Amended and Restated Master Lease Agreement dated
effective as of September 25, 2007 between HF, as tenant, and Highland Partners I (formerly known
as Westcoast Properties Partners, a California general partnership), Highland Fairview Partners IV
(formerly known as Sinclair Property Partners, a California general partnership), Highland Fairview
Partners III (formerly known as HF Educational Partners, a Delaware general partnership) and
Highland Fairview Partners II (formerly known as Sand Properties Partners, a California general
partnership) (collectively, “Master Landlord”) as landlord (the interest therein of HF has
been or will be assigned by HF in part to the T1 Subsidiary and in part to the T2 Subsidiary,
unless the Master Lease has been terminated by the parties thereto).

          1.1.67 “Members” has the meaning set forth in the preamble.

6

 

          1.1.68 “Offeree Member” has the meaning set forth in Section 8.1.

          1.1.69 “Operating Budget” means a reasonably detailed budget of the estimated revenues
and expenditures (including capital expenditures) of the Company, and a reasonably detailed
business plan, which shall be prepared by the Skechers Managing Member and approved by the HF
Managing Member in accordance with Section 7.9, as amended from time to time (with the
approval of both Managing Members). The initial Operating Budget, which has been approved by the
Managing Members, is attached as Exhibit “D”.

          1.1.70 “Permanent Lender” means the lender under the Permanent Loan.

          1.1.71 “Permanent Loan” means a loan or loans taken out by the T1 Subsidiary to pay
off the Construction Loan, or any replacements or refinancings thereof.

          1.1.72 “Person” means an individual, corporation, partnership, limited liability
company (or partnership), trust, unincorporated organization, association or other entity.

          1.1.73 “Plans and Specifications” means the Approved Plans (as defined in the
Development Management Agreement), which have been transmitted by HF to Skechers (by “You Send It”)
on January 29, 2010.

          1.1.74 “Prescribed Laws” has the meaning set forth in Section 2.5.10.

          1.1.75 “Prime Rate” means the highest prime rate reported in the Money Rates column or
section of The Wall Street Journal from time to time, as having been the rate in effect for
corporate loans at large United States of America money center commercial banks (whether or not
such rate has actually been charged by any such bank). If The Wall Street Journal ceases
publication of the Prime Rate, the “Prime Rate” shall mean the prime rate (or base rate) announced
by Wells Fargo Bank, National Association, from its Los Angeles, California office (whether or not
such rate has actually been charged by such bank). If such bank discontinues the practice of
announcing the Prime Rate, the “Prime Rate” shall mean the highest rate charged by such bank on
short-term, unsecured loans to its most creditworthy large corporate borrowers.

          1.1.76 “Project” means the development of approximately 1,820,457 square feet of
buildings and other improvements in accordance with the Lease and the Plans and Specifications on
the Development Parcel. Pursuant to the Lease, the Project may be expanded to include the
development of another approximately 500,000 square feet of buildings on the Expansion Parcel (if
certain expansion rights are exercised by Skechers Parent as tenant under the Lease).

          1.1.77 “Project Schedule” has the meaning set forth in the Development Management
Agreement.

          1.1.78 “Property” means the Development Parcel and the Expansion Parcel, which
together constitute approximately 104.96 acres located in the City of Moreno Valley (Rancho Belago)
California at the northwest corner of Theodore Street and Eucalyptus Avenue.

          1.1.79 “Purchasing Member” has the meaning set forth in Section 8.6.

          1.1.80 “Regulations” has the meaning set forth in Exhibit “A”.

7

 

          1.1.81 “Reserves” means cash set aside into a segregated account (or maintained in a
non-segregated Company account but specifically “earmarked” as a reserve) as reserves for the
Company’s operations or obligations under the Lease (such as, but not limited to, roof replacement
and repair and replacement of structural aspects of the building under the Lease, but excluding
amounts anticipated to be required as capital for the potential expansion of the Project, as
described in the Lease), as reasonably determined by the Managing Members, or as set forth in an
Operating Budget. Reserves shall include any amounts required to be set aside as reserves under
the Loans or under any other agreements executed by the Company or a Subsidiary which call for
reserves of this nature.

          1.1.82 “Second Lease Amendment” means that certain Second Amendment to Lease in the
form of Exhibit “I” attached hereto, to be executed by HF, as landlord, and Skechers
Parent, as tenant.

          1.1.83 “Securities Act” means the Securities Act of 1933, as amended.

          1.1.84 “Selling Member” has the meaning set forth in Section 8.6.

          1.1.85 “Skechers” has the meaning set forth in the preamble.

          1.1.86 “Skechers Loan” has the meaning set forth in Section 6.5.

          1.1.87 “Skechers Parent” means Skechers U.S.A., Inc., a Delaware corporation.

          1.1.88 “Skechers Managing Member” means Skechers, acting in its capacity as a Managing
Member of the Company.

          1.1.89 “Stated Amount” has the meaning set forth in Section 8.2.

          1.1.90 “Subsidiary’s Assets” means, as applicable, (a) the Development Parcel, (b) the
Expansion Parcel, (c) the Subsidiary’s rights under the Master Lease, (d) the Subsidiary’s rights
under the Lease, and (e) all other assets of the Subsidiary.

          1.1.91 “Subsidiaries” means the T1 Subsidiary and the T2 Subsidiary.

          1.1.92 “T1 Subsidiary” means HF Logistics SKX-T1, LLC, a Delaware limited liability
company, which shall be wholly owned by the Company.

          1.1.93 “T2 Subsidiary” means HF Logistics SKX-T2, LLC, a Delaware limited liability
company, which shall be wholly owned by the Company.

          1.1.94 “Tax Matters Partner” has the meaning set forth in Section 10.2.1.

          1.1.95 “Tenant” means the Skechers Parent, or its permitted assignee as the tenant
under the Lease.

          1.1.96 “Unrecovered Contribution” with respect to each Member means the aggregate
Capital Contributions made by such Member to the Company, reduced by all amounts of cash
distributed to such Member pursuant to Section 5.2(a) (or made under Section 5.2(a)
pursuant to Section 13.2.1(c)).

          Section 1.2 Other Terms. All capitalized terms used in this Agreement which are not
defined in this Article 1 shall have the meanings set forth elsewhere in this Agreement.

8

 

ARTICLE 2

ORGANIZATIONAL MATTERS

     Section 2.1 Formation; Application of Act.

          2.1.1 Formation of Company. The Company has been formed by the filing of the
Certificate with the Delaware Secretary of State. The Members hereby agree to become Members and
to operate the Company as a limited liability company under and pursuant to the provisions of the
Act, and in accordance with the provisions of this Agreement.

          2.1.2 Application of Act. The Company is a limited liability company pursuant to the
provisions of the Act and upon the terms and conditions set forth in this Agreement. Except as
expressly provided herein to the contrary, the rights and obligations of the Members and the
administration and operation of the Company shall be governed by the Act.

     Section 2.2 Name. The name of the Company is HF Logistics-SKX, LLC. The Company’s
business may be conducted under the foregoing name, or under any other name or names deemed
advisable by the Managing Members. The words “Limited Liability Company,” “L.L.C.”, “LLC” or
similar words or letters shall be included in the Company’s name where necessary for the purposes
of complying with the laws of any jurisdiction that so requires.

     Section 2.3 Registered Office and Agent; Principal Office. The address of the
registered office of the Company in the State of Delaware shall be established by the Managing
Members. The registered agent for service of process on the Company in the State of Delaware at
such registered office is Corporation Service Company. The principal office of the Company is c/o
Highland Fairview Properties, 14225 Corporate Way, Moreno Valley, California 92553, or such other
place as the Managing Members may from time to time determine.

     Section 2.4 Term. The term of the Company commenced on the date that the Certificate
was filed with the Delaware Secretary of State, and shall continue for a period of fifty (50) years
thereafter, unless it is dissolved sooner pursuant to the provisions of Article 13, or as
otherwise provided under the Act.

     Section 2.5 Representations of Members. Each Member represents as follows:

          2.5.1 Such Member will acquire its Company Interest for its own account and not with a view to
or for sale in connection with any public distribution thereof within the meaning of the Securities
Act.

          2.5.2 Such Member has sufficient knowledge and experience in financial and business matters to
enable it to evaluate the merits and risks of investment in its Company Interest. Such Member has
the ability to bear the economic risk of acquiring its Company Interest.

          2.5.3 Such Member has been supplied with, or had access to, information to which a reasonable
investor would attach significance in making investment decisions, including, without limitation,
any Company information with respect to the Company’s financial condition, business and prospects,
and any other information such Member has requested, to answer all of its inquiries about the
Company, and to enable it to make its decision to acquire its Company Interest.

9

 

          2.5.4 Such Member is aware that the Company Interests are not registered under the Securities
Act or any state securities laws and cannot be resold or transferred without registration
thereunder or exemption therefrom.

          2.5.5 Such Member is an “accredited investor” as such term is defined in Regulation D
promulgated under the Securities Act.

          2.5.6 There are no consents or approvals of governmental authorities or other Persons that are
required for the execution and delivery of this Agreement by such Member; the execution of this
Agreement by such Member shall not constitute a default under any material contract or agreement to
which such Member is bound; and no agreement or obligation exists that affects such Member that has
the effect of restricting the ability of such Member to perform its obligations under this
Agreement.

          2.5.7 Except for the Sierra Club Litigation (as defined in Section 17.19) there is no
litigation, action or proceeding pending or, to the best knowledge of such Member threatened, to
which such Member is party that, if adversely determined, could have a material adverse effect on,
or enjoin, restrict or otherwise prevent, the consummation of any of the transactions contemplated
by this Agreement or the ability of such Member to perform its obligations under this Agreement.

          2.5.8 This Agreement has been duly authorized by all requisite action (corporate, partnership,
limited liability company, or otherwise), and has been duly executed and delivered by such Member.

          2.5.9 Such Member has the power and authority to enter into this Agreement and consummate the
transactions herein provided.

          2.5.10 None of the funds or other assets of such Member shall constitute property of, or shall
be beneficially owned, directly or indirectly, by any Person subject to trade restrictions under
the Prescribed Laws (each such Person, an “Embargoed Person”) with the result that the
transactions contemplated by the terms of this Agreement would be in violation of the Prescribed
Laws. For purposes of this Section 2.5.10 and Section 2.5.11 and
Section 2.5.12, the term “Prescribed Laws” shall mean, collectively, (a) the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism
Act of 2001 (Public Law 107 56) (The USA PATRIOT Act), (b) Executive Order No. 13224 on Terrorist
Financing, effective September 24, 2001, and relating to Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism, (c) the
International Emergency Economic Power Act, 50 U.S.C. § 1701 et. seq. and (d) all other legal
requirements relating to money laundering or terrorism.

          2.5.11 No Embargoed Person shall have any interest of any nature whatsoever in such Member,
with the result that the transactions contemplated by the terms of this Agreement is or would be in
violation of the Prescribed Laws.

          2.5.12 None of the funds of such Member shall be derived from any unlawful activity with the
result that the transactions contemplated by the terms of this Agreement is or would be in
violation of the Prescribed Laws.

          2.5.13 As long as Skechers Parent is a publicly traded company, the restrictions in
Sections 2.5.10 and 2.5.11 shall not apply to any Persons who are shareholders of
Skechers Parent who purchase such shares in the public marketplace or from other shareholders.

10

 

ARTICLE 3

PURPOSE

     Section 3.1 Purpose. The purpose and nature of the business to be conducted by the
Company is (a) to own all the membership interests in the Subsidiaries, (b) to acquire the
Development Parcel through the T1 Subsidiary, to cause the T1 Subsidiary to develop the Project on
the Development Parcel, and to operate manage, lease, mortgage, encumber, sell and otherwise deal
with the Development Parcel, the Project and other T1 Subsidiary assets for the production of
income and profit, (c) to acquire the Expansion Parcel through the T2 Subsidiary and, as
applicable, cause the T2 Subsidiary to develop the portion of the Project to be developed on the
Expansion Parcel, and to operate manage, lease, mortgage, encumber, sell and otherwise deal with
the Expansion Parcel, the Project and other T2 Subsidiary assets for the production of income and
profit, and (d) to conduct any activities that may be lawfully conducted by a limited liability
company organized pursuant to the Act in furtherance of the foregoing. The purpose of the Company
shall not be changed unless both Members consent (any dispute in this regard shall not be subject
to the expedited arbitration provisions in Article 15).

     Section 3.2 Powers. The Company is empowered to do any and all acts and things
necessary, appropriate, proper, advisable, incidental to or convenient for the furtherance and
accomplishment of the purposes described herein and for the protection and benefit of the Company.

ARTICLE 4

CAPITAL CONTRIBUTIONS; MEMBER LOANS; CAPITAL ACCOUNTS

     Section 4.1 Capital Contributions of the Members.

          4.1.1 Initial Capital Contributions. The Members shall make Initial Capital
Contributions to the Company as follows:

               (a) On the Closing Date, Skechers shall make an Initial Capital Contribution to the Company in
the amount of Thirty Million Dollars ($30,000,000), which shall be contributed in cash. The
obligation to fund such Initial Capital Contribution shall be guaranteed by Skechers Parent. Such
Initial Capital Contribution shall be made to an escrow account established by and under the
control of the Construction Lender pursuant to an escrow agreement in the form attached hereto as
Exhibit “K”. Skechers may, if it so desires, but at its own expense, engage an independent
compliance auditor to monitor the distribution of funds from such account, and HF shall provide
information to Skechers’ compliance auditor (prior to any disbursement from such account in form
and content reasonably requested by such compliance auditor) which reflects the amount of any draws
to be made from such account, the purposes of such draws and shall provide copies of any draw
requests and backup documentation provided by all contractors who are being paid from such draw.
If HF fails to provide such information to Skechers’ compliance auditor within a reasonable time
after demand is made, then Skechers may request such information directly from the Construction
Lender (and Skechers may deliver a copy of this provision to the Construction Lender to evidence
its right to obtain such information). HF shall not improperly authorize any draws from the
account which holds such funds. If Skechers’ compliance auditor establishes that HF improperly
authorized any draws from the account which holds such funds, then the reasonable expense of the
compliance auditor shall be reimbursed by HF to Skechers. If there is a dispute regarding draws
from such account, the matter shall be submitted to expedited arbitration in accordance with
Article 15. In the event Skechers is not entitled to a return of its Thirty Million
Dollars ($30,000,000) Initial Capital Contribution and such Initial Capital Contribution is made
available to the T1 Subsidiary pursuant to the escrow agreement (Exhibit “K”), such
contribution shall be deemed to have been contributed to the Company and then subsequently
contributed by the Company to the T1 Subsidiary.

11

 

               (b) On the Closing Date, HF shall convey, as its Initial Capital Contribution (but having an
Agreed Value of zero (0)), all of HF’s interest in the Property (being its interest as tenant under
the Master Lease and its interest as landlord under the Lease) to the T1 Subsidiary or the T2
Subsidiary, as appropriate, free and clear of all monetary liens and encumbrances (other than a
lien of current property taxes and current POA assessments, if any), but subject to all other
matters then of record, including CC&Rs. At or prior to the date of funding the Construction Loan,
HF will cause the Master Landlord to execute grant deeds that transfer title to the Development
Parcel to the T1 Subsidiary and the Expansion Parcel to the T2 Subsidiary, free and clear of all
monetary liens and encumbrances (other than a lien of current property taxes and current POA
assessments, if any), but subject to all other matters then of record, including CC&Rs.
Concurrently therewith, the Master Lease shall be terminated. Such conveyance will also constitute
the Initial Capital Contribution of HF, and upon conveyance of fee title to the Property, HF will
receive a Capital Account credit in the amount of Thirty Million Dollars ($30,000,000). HF shall
be deemed to have made representations to the Company, the Subsidiaries and Skechers as set forth
on attached as Exhibit “G” attached hereto. Any documentary transfer tax payable with
respect to the conveyance of HF’s and Master Landlord’s interest in the Property to the
Subsidiaries shall be paid by HF (but the amount thereof, up to Thirty-Three Thousand Dollars
($33,000), shall become part of the HF Loan) and concurrently with the closing of the Construction
Loan, owner’s title insurance policies (ALTA 2006 form with customary endorsements) shall be
purchased, at HF’s expense (up to policy amounts aggregating $30,000,000 with the additional
expense being borne by the appropriate Subsidiary, and only to the extent of any cost incurred
which is in addition to the cost of any lender’s title policy which is issued currently with the
closing of the Construction Loan) insuring the T1 Subsidiary’s fee title ownership of the
Development Parcel and the T2 Subsidiary’s fee title ownership of the Expansion Parcel (the policy
limits of such policies to be reasonably determined by the Members, not to be collectively less
than Thirty Million Dollars ($30,000,000)). After Completion of the Project, the Managing Members
may elect to increase the amount of such insurance up to the then insurable fair market value of
the Property and all improvements thereon. HF will cause the Master Landlord to convey fee title
to the Property to the Subsidiaries at the time specified above.

               (c) Skechers and HF shall each fund fifty percent (50%) of any commitment fees or expenses
required to be funded upon execution of the Commitment. Any repayment or reimbursement of such
fees or expenses shall be refunded fifty percent (50%) to Skechers and fifty percent (50%) to HF.
Such payments shall be considered Capital Contributions of such Members, but not applicable towards
the Initial Capital Contributions.

          4.1.2 Additional Capital Contributions. If either Managing Member determines in the
exercise of its reasonable business judgment that Additional Capital Contributions are necessary
for the operation of the business of the Company or a Subsidiary, or to enable the Company or a
Subsidiary to perform its obligations under the Lease (other than the Company’s or Subsidiary’s
obligations under the Lease to pay or reimburse Skechers for the costs of storage of Skechers’
property), which cannot be funded from Available Cash or obtained through financing (or which are
impractical to be obtained through financing), such Managing Member may (but shall not be required
to) give notice to the other Managing Member, including the amount required and the purposes
therefor. Such Additional Capital Contributions shall be contributed by the Members according to
their respective Contribution Percentages within ten (10) days after receipt of such notice calling
for such Additional Capital Contributions (which amounts shall then be immediately contributed by
the Company to the appropriate Subsidiary). Failure by a Member to make its required Additional
Capital Contribution shall give the other Member the rights and remedies specified in
Section 4.1.5. If a Member who receives a call for an Additional Capital Contribution
disputes the reasonableness of such Additional Capital Contribution, it shall give notice to the
Member who made such call within such ten (10) day period, and if the Members cannot resolve the
dispute within ten (10) Business Days thereafter, the dispute shall be submitted to expedited
arbitration as set forth in Article 15. During the pendency of such arbitration, even
though the Member who failed to

12

 

make the Additional Capital Contribution shall not be deemed to be a Default Member under
Section 4.1.5(c), the other Member may elect to loan to the Company the amount which the
other Member failed to contribute in accordance with the provisions of Section 4.1.5(d)(i)
(which amounts shall then be immediately contributed by the Company to the appropriate
Subsidiary). Provided, however, that if it is determined through arbitration that such Additional
Capital Contribution (or part thereof) was not reasonable, then the loan (to the extent of any
amount which was not determined to be reasonable) shall not bear interest.

          4.1.3 Return of Capital Contributions. Except as otherwise expressly provided herein,
the Capital Contributions of the Members will be returned to the Members only in the manner and to
the extent provided in Article 5 and Article 13, and neither Member may withdraw
from the Company or otherwise have any right to demand or receive the return of its Capital
Contributions to the Company. Under circumstances requiring a return of any Capital Contributions,
neither Member shall have the right to receive property other than cash, unless expressly otherwise
provided in this Agreement. Except as otherwise provided in this Agreement, no Member shall be
entitled to interest on any Capital Contribution or Capital Account notwithstanding any
disproportion therein as between the Members. Neither the Members nor the Company nor any
Subsidiary shall be personally liable for the return of any portion of the Capital Contributions of
the Members, and the return of such Capital Contributions shall be made solely from the Company
Assets to the extent, and in the priority, set forth in this Agreement.

          4.1.4 Liability of Members. Except for the obligation to make Capital Contributions
(including the Initial Capital Contributions under Section 4.1.1 and any required any
Additional Capital Contributions under Section 4.1.2), the obligation of the Members to
make certain loans under Section 6.8, and any amounts which a Member may be obligated to
repay to the Company under applicable law, no Member shall be required to make any Capital
Contributions to the Company or to make any loans to the Company. Except for the foregoing, no
Member shall have any personal liability to contribute money to, or in respect of, the liabilities
or the obligations of the Company or any Subsidiary to third parties, nor shall any Member be
personally liable for any obligations of the Company or any Subsidiary to third parties (unless
otherwise provided in any Loan documents or other documents executed by the Members, such as
personal guarantees).

          4.1.5 Default in Making Required Additional Capital Contributions.

               (a) If either Member fails to make its Initial Capital Contributions to the Company, in
addition to all other rights and remedies of the other Member, the other Member who made its
Initial Capital Contribution may by notice to the Member who fails to make its Initial Capital
Contribution elect to declare this Agreement null and void, and in such event any Initial Capital
Contributions or other transfers or assignments of property made to the Company by the Member who
sent such notice shall be immediately returned, and the Company and each Subsidiary shall be wound
up and dissolved.

               (b) If either Member fails to make a required Additional Capital Contribution, the other
Member may send a notice (the “Default Notice”) to such Member who failed to make the
required Additional Capital Contribution, notifying such Member of its failure to make such
Additional Capital Contribution, the amount of such Additional Capital Contribution, and demanding
that such Additional Capital Contribution be made immediately.

               (c) If a Member who receives a Default Notice fails to make a required Additional Capital
Contribution within five (5) Business Days after receiving the Default Notice (the failure to make
such Additional Capital Contribution is referred to as a “Default” and the date that is
five (5) Business Days after the receipt of the Default Notice is referred to as the “Default
Date”), then such

13

 

Member shall be in default (a “Default Member” and the amount that the Default Member
has failed to contribute is referred to as the “Default Amount”). The Member other than
the Default Member is referred to herein as the “Non-Defaulting Member.” Neither Member
shall be deemed to be a Default Member during the pendency of any expedited arbitration under
Article 15 to determine whether a request for an Additional Capital Contribution is
reasonable under Section 4.1.2. If as a result of such arbitration, it is determined that
the request for an Additional Capital Contribution was reasonable, then the Member who failed to
make such Additional Capital Contribution shall, within five (5) Business Days thereafter, make any
such Additional Capital Contribution which was not made (and which was determined to be
reasonable), and failing to do so, such Member shall be a Default Member.

               (d) If a Default Member fails to make such Additional Capital Contribution on or before the
Default Date, the Non-Defaulting Member may, in its sole and absolute discretion, as its sole
remedy, take either of the following courses of action:

                    (i) The Non-Defaulting Member can withdraw any Additional Capital Contribution made by it in
connection with the capital call which resulted in the Default (and to that end, the Company shall
immediately withdraw such amount from the appropriate Subsidiary to the extent that it had already
been contributed to such Subsidiary); in such event, the Non-Defaulting Member shall have the right
to make a loan to the Company in the amount of the Additional Capital Contribution required of such
Non-Defaulting Member and the Default Member under Section 4.1.2 (which loan will then be
immediately contributed by the Company to the appropriate Subsidiary), which loan shall bear
interest (except as provided in Section 4.1.2) at the lesser of the Prime Rate plus ten
percent (10%) per annum, or the maximum amount allowable by law, which loan shall be repayable upon
demand. Such loan will have priority over any distributions to be made to the Members pursuant to
Section 5.2 or Section 13.2 and over the repayment of any loan payable to the
Default Member (or its Affiliate); or

                    (ii) The Non-Defaulting Member may make an Additional Capital Contribution to the Company in
the amount of the Default Amount (which shall then be immediately contributed by the Company to the
appropriate Subsidiary), and then, effective as of the date on which Non-Defaulting Member makes
such Additional Capital Contribution to the Company, and the Distribution Percentages of the
Members shall automatically be adjusted to reflect the new ratio of the Capital Contributions of
the respective Members to the total of all Capital Contributions of both Members.

          4.1.6 EACH MEMBER ACKNOWLEDGES AND AGREES THAT IT FULLY UNDERSTANDS THAT ITS INTEREST IN
DISTRIBUTIONS AND CAPITAL MAY BE SUBSTANTIALLY DILUTED FOR FAILING TO MAKE REQUIRED ADDITIONAL
CAPITAL CONTRIBUTIONS UNDER THIS ARTICLE 4. EACH MEMBER FURTHER ACKNOWLEDGES AND AGREES
THAT EXCEPT AS SET FORTH IN SECTION 4.1.5(a) THIS SECTION 4.1.6, AND IN SECTION
5.2(C), THE REMEDIES ABOVE ARE THE SOLE AND EXCLUSIVE REMEDIES AVAILABLE TO THE NON-DEFAULTING
MEMBER AS A RESULT OF SUCH DEFAULT. NOTWITHSTANDING THE FOREGOING, IF A DEFAULT BY SKECHERS UNDER
ARTICLE 4 RESULTS IN THE INABILITY OF THE COMPANY TO PERFORM ITS OBLIGATIONS UNDER THE
LEASE THEN THE TENANT UNDER THE LEASE SHALL NOT BE ENTITLED TO DECLARE THE COMPANY OR A SUBSIDIARY
TO BE IN DEFAULT UNDER THE LEASE AS A RESULT THEREOF. ADDITIONALLY, IF A DEFAULT BY EITHER MEMBER
UNDER ARTICLE 4 RESULTS IN THE INABILITY OF THE COMPANY OR SUBSIDIARY TO PERFORM ITS
OBLIGATIONS UNDER THE LEASE THEN, IN ADDITION TO ANY RIGHTS AND REMEDIES THAT THE NON-DEFAULTING
MEMBER MAY HAVE AGAINST THE DEFAULT MEMBER HEREUNDER, THE DEFAULT MEMBER SHALL BE SOLELY
RESPONSIBLE FOR ALL CLAIMS OF TENANT UNDER THE LEASE AS A RESULT THEREOF.

14

 

ARTICLE 5

DISTRIBUTIONS AND ALLOCATIONS

     Section 5.1 Distributions: General Principles. Except as provided in Section
13.2, Available Cash shall be distributed to the Members monthly in accordance with the
provisions of Section 5.2.

     Section 5.2 Distributions. Except as provided in Section 5.2(c) below,
distributions of Available Cash shall be made to the Members in the following order of priority:

               (a) First, to the Members pari passu in proportion to their respective Unrecovered
Contributions, and

               (b) Thereafter, to the Members pari passu in proportion to their respective Distribution
Percentages.

               (c) Notwithstanding the foregoing priorities, the following special distribution rules shall
apply:

                    (i) If a Member fails to make an Additional Capital Contribution under Section
4.1.2, and the Non-Defaulting Member elects to make an Additional Capital Contribution under
Section 4.1.5(d)(i), then the amount of such Additional Capital Contribution shall accrue a
preferred return at the rate of the interest rate then being paid on the HF Loan and the Skechers
Loan plus five percent (5%) per annum, and the total amount of such Additional Capital Contribution
plus such preferred return shall become a priority distribution to be made before any other
distributions to the Members under Section 5.2(a) or (b) or pursuant to Section
13.2.1(c), and before any repayment of any loan payable to the Defaulting Member under
Article 6.

     Section 5.3 Allocations. Profits and losses of the Company (and all related items of
income, gain, loss, deduction and credit) (which shall include such items of the Subsidiaries, as
the Subsidiaries shall be disregarded entities for tax purposes) shall be allocated between the
Members in the manner provided in Exhibit “A”.

ARTICLE 6

LOANS

     Section 6.1 Construction Loan. The Company shall cause the T1 Subsidiary to take out
a Construction Loan or Construction Loans to finance the development of the Project on the
Development Parcel. The Construction Loan shall not close unless and until fee title to the
Property has been conveyed by the Master Landlord to the Subsidiaries in accordance with
Section 4.1.1(b). The Lender of the Construction Loan(s) shall be selected by the HF
Managing Member. Any guarantees (completion, payment or otherwise) required by the Lender of the
Construction Loan(s) shall be provided by HF (or an Affiliate of HF). HF shall cause an HF
Affiliate acceptable to the Construction Lender to provide such guarantees. If a Construction Loan
(or Construction Loans) sufficient to fund the entire cost of developing the Project on the
Development Parcel (considering the Initial Capital Contribution to be made by Skechers) cannot be
obtained, HF may, at its option, loan its own funds (or funds of its Affiliates) to the T1
Subsidiary in lieu of the Construction Loan, and in the latter case such loan will be part of the
HF Loan (provided, however, the interest rate on the portion of the HF Loan comprising the in-lieu
construction loan shall be the rate which is then being charged by institutional construction
lenders in the marketplace for construction loans of this amount and nature). HF shall take the
lead in procuring the Construction Loan, and Skechers shall cooperate with HF in connection
therewith. Skechers shall have the right to review and comment on the terms and conditions of the
Construction Loan(s), and the

15

 

Construction Loan documentation, but the decisions of HF in this regard shall control and will
be final and conclusive (provided that HF shall act in good faith and consistent with its fiduciary
duties hereunder) and the HF Managing Member, acting alone, is authorized and empowered to execute
and deliver on behalf of the Company, as the sole member of the T1 Subsidiary, all Construction
Loan Documents, and the Construction Lender may rely on the signature of the HF Managing Member as
binding the Company and the T1 Subsidiary regardless of any possible claims by Skechers that HF did
not act in good faith or consistent with its fiduciary obligations hereunder. Notwithstanding the
foregoing, Skechers Parent shall not be required to materially amend or modify the Lease in
connection with obtaining the Construction Loan (except for any reasonable and customary
modifications which may be required under a subordination, non-disturbance and attornment
agreement). Skechers shall be given reasonable advance notice of any regularly scheduled meetings
with the prospective Construction Lender at which material issues regarding the Construction Loan
are expected to be discussed and shall have the right to attend all such meetings (whether
conducted in person or by telephone or electronic meeting). Skechers shall also have the right to
communicate directly with the Construction Lender to discuss the status of the Construction Loan,
but will not negotiate any of its terms or conditions without the express prior approval of the HF
Managing Member.

     Section 6.2 Permanent Loan. The Company shall cause the T1 Subsidiary to take out a
Permanent Loan as soon as practical after the Completion of the Project being developed on the
Development Parcel, although nothing herein shall prohibit HF from seeking such Permanent Loan at
an earlier time. HF (or its Affiliate) will be required to execute any “bad boy” nonrecourse
carve-out guarantees reasonably required by the Lender of the Permanent Loan, but shall not
otherwise be required to guarantee the Permanent Loan. HF shall cause an HF Affiliate acceptable
to the Permanent Lender to provide such guarantees. HF shall take the lead in procuring the
Permanent Loan, and Skechers shall cooperate with HF in connection therewith (including using
commercially reasonable efforts, at Company expense, to obtain a credit rating from a recognized
credit rating agency as may be required by the Permanent Lender. Skechers shall have the right to
review and comment on the terms and conditions of the Permanent Loan (including a possible
participating equity interest in the Company or any Subsidiary afforded to the Permanent Lender),
and the Permanent Loan documentation, but the decisions of HF in this regard shall control and will
be final and conclusive (provided that HF shall act in good faith and consistent with its fiduciary
duties hereunder). Notwithstanding the foregoing, Skechers Parent shall not be required to
materially amend or modify the Lease in connection with obtaining the Permanent Loan (except for
any reasonable and customary modifications which may be required under a subordination,
non-disturbance and attornment agreement) or otherwise. Skechers shall be given reasonable advance
notice of any regularly scheduled meetings with the prospective Permanent Lender at which material
issues regarding the Permanent Loan are expected to be discussed and shall have the right to attend
all such meetings (whether conducted in person or by telephone or electronic meeting). Skechers
shall also have the right to communicate directly with the Permanent Lender to discuss the status
of the Permanent Loan, but will not negotiate any of its terms or conditions without the express
prior approval of the HF Managing Member. If HF gives notice to Skechers that it has identified a
proposed Permanent Lender who has agreed to make a Permanent Loan which HF desires to accept (which
notice shall set forth the basic terms and conditions thereof), Skechers shall have the right to
become the Permanent Lender on the same terms and conditions. Skechers must give notice of its
intention to become the Permanent Lender within five (5) Business Days after receipt of such notice
from HF. If Skechers does not so elect, then HF may proceed with the proposed Permanent Lender,
but if the terms and conditions of the Permanent Loan change (to the detriment of the Company or
any Subsidiary) in any material respect, Skechers shall be entitled to a new notice and right to
elect to become the Permanent Lender on the changed terms and conditions. If any non-refundable
deposit (for costs or otherwise) was made to a potential Permanent Lender by the Company or a
Subsidiary, if Skechers elects to become the Permanent Lender, its fees shall be reduced by the
amount of such deposit which is not refunded. If Skechers elects to become the Permanent Lender
and for any reason breaches its commitment to fund such Permanent Loan, it shall be

16

 

responsible for all resulting damages to the Company or a Subsidiary and to any HF Affiliate
which guaranteed the Construction Loan.

     Section 6.3 Indemnification. The Company and the Subsidiaries shall indemnify HF (or
its Affiliates) from any liability which may be incurred in connection with its guarantee of the
Construction Loan or in connection with a “bad boy” nonrecourse carve-out guarantee of the
Permanent Loan, but excluding liability resulting from a default by the Development Manager under
the Development Management Agreement, the occurrence of an Event of Default by HF under this
Agreement, or the gross negligence or willful misconduct HF or its Affiliates. However, to the
extent that liability under the “bad boy” nonrecourse carve-out guarantee results from the acts or
omissions of Skechers or the occurrence of an Event of Default by Skechers under this Agreement, or
a default by Skechers Parent under the Lease, then such indemnification shall be afforded primarily
by Skechers and only secondarily by the Company.

     Section 6.4 HF Loan. Concurrently with the contribution of the Initial Capital
Contributions as described above, HF will (and will cause its Affiliates to) transfer and assign to
the Company all of its right, title and interest in all personal property and contracts relating to
the development of the Project, and all plans, specifications, architectural drawings and
renderings, surveys and other collateral material relating to the ownership and development of the
Property, which shall then be immediately contributed by the Company to the T1 Subsidiary. In
consideration of such transfer and assignment, HF will be deemed to have extended a loan to the
Company in the amount of Fourteen Million Dollars ($14,000,000) (the “HF Loan”). The HF
Loan will bear interest at the rate of six percent (6%) per annum, with interest and principal
payable monthly from the first Available Cash (prior to any distributions of Available Cash to the
Members), with any unpaid balance of interest and principle payable upon the earlier to occur of
the refinancing or sale of the Project, or the liquidation of the Company (again, before any
distributions of Available Cash to the Members except as provided in Section 5.2(c)). The
HF Loan is to be treated as a partial sale of the Property as provided in Section 3.3(c) of
Exhibit “A”.

     Section 6.5 Skechers Loan. Concurrently with the contribution of the Initial Capital
Contributions as described above, Skechers will be deemed to have made a loan to the Company in the
amount of One Million Dollars ($1,000,000) (the “Skechers Loan”) in consideration of
Skechers funding certain costs and expenses of alternate site rental pending completion of the
Project which the landlord under the Lease had previously agreed to fund. The foregoing relief
from the landlord’s obligation under the Lease is deemed to be a Company Asset, which shall then be
immediately contributed by the Company to the T1 Subsidiary. The Skechers Loan shall be payable at
the same times and manner, and shall bear the same rate of interest as the HF Loan.

     Section 6.6 Pro Rata. As long as there are amounts outstanding under both the HF Loan
and the Skechers Loan, payments on such loans will be made on a pro rata basis (according to the
total unpaid principal balances of each of such loans, except as provided in Section
5.2(c)).

     Section 6.7 Loan Documentation. To evidence the HF Loan and the Skechers Loan, the
Company shall execute unsecured promissory notes (“Notes”) in the forms attached as
Exhibits “C-1” and “C-2”, respectively. The Notes will be amended if the HF Loan or the
Skechers Loan is increased as provided herein.

     Section 6.8 Additional Loans.

               (a) If the HF Managing Member determines in the exercise of its reasonable business judgment
that additional capital is needed as a result of construction cost overruns relative to the
construction of the Project on the Development Parcel (which specifically excludes increased
construction costs due to change orders requested by Skechers and approved by the landlord under
the Lease, or

17

 

resulting from the acts or omissions of Skechers under the Lease), which cannot be funded from
Available Cash or obtained through financing (or which are impractical to be obtained through
financing), such capital shall be loaned to the Company by HF (or its Affiliate), and such amounts
shall be considered an increase in the HF Loan (which amounts shall then be immediately contributed
by the Company to the T1 Subsidiary); provided, however, that cost overruns resulting from an Event
of Default by HF under this Agreement or a default by the Development Manager under the Development
Management Agreement, or which involves the gross negligence, fraud or willful misconduct of HF (or
its Affiliate) shall not be considered an increase in the HF Loan. If additional capital is needed
to perform the Company’s or Subsidiary’s obligation under the Lease to pay or reimburse Skechers
for the costs of storage of Skechers’ property, such capital shall be funded by HF (or its
Affiliate), at its own expense, and such amount shall not be considered income of the Company or
any Subsidiary, or a loan or a Capital Contribution to the Company or any Subsidiary, or an
increase in the HF Loan or an increase in HF’s Capital Account.

               (b) If the HF Managing Member determines in the exercise of its reasonable business judgment
that additional capital is needed as a result of increased construction costs due to change orders
requested by Skechers and approved by the landlord under the Lease, or resulting from the acts or
omissions of Skechers under the Lease, then such capital shall be loaned to the Company by Skechers
(or its Affiliate) (which amounts shall then be immediately contributed by the Company to the T1
Subsidiary); and shall be considered an increase in the Skechers Loan, but such increase shall not
exceed One Million Dollars ($1,000,000), and any excess shall be paid by Skechers as its own
expense, and such amount shall not be considered income of the Company or any Subsidiary, or a loan
or a Capital Contribution to the Company or any Subsidiary, or part of the Skechers Loan, or an
Additional Capital Contribution by Skechers. Provided, however, that any increased construction
costs resulting from acts or omissions of Skechers (or its Affiliate) which constitute an Event of
Default by Skechers under this Agreement or a default by Skechers Parent under the Lease, or which
involves gross negligence, fraud or willful misconduct of Skechers or Skechers Parent (or their
Affiliates) shall not be considered an increase in the Skechers Loan; and provided, further that to
the extent that the Skechers Loan is increased as a result of the foregoing, the Base Rent under
the Lease shall be increased proportionately by the ratio that the increase in the Skechers Loan
bears to the total Project Costs (as such term is defined in the Development Management Agreement).
The HF Managing Member shall not unreasonably withhold its consent to any change order requested
by Skechers Parent if Skechers funds the entire cost of such change order (including any resulting
increases in the Project Costs). If there is a dispute as to whether the refusal of the HF
Managing Member to give its consent to any change order proposed by Skechers is reasonable, the
matter shall be submitted to expedited arbitration in accordance with Article 15.

               (c) If there is any dispute regarding the reasonableness of the determination by the HF
Managing Member that additional capital is required under Section 6.8(a) or (b), such
dispute shall be submitted to expedited arbitration as set forth in Article 15. During the
pendency of such arbitration, even though the Member who has failed to make any additional loan to
the Company shall not be deemed to be in default under this Agreement, the other Member may elect
to loan to the Company the amount which the other Member failed to loan, and if it is determined
through arbitration that the required additional loan was not reasonable, then the amount loaned by
the other Member (to the extent of any amount which was not determined to be reasonable) shall not
bear interest.

     Section 6.9 Default in Making Required Loans.

               (a) If either Member fails to make any required loan pursuant to Section 6.8 (an
“Additional Funding Obligation”), the other Member may send a notice to such Member who
failed to make the required Additional Funding Obligation, notifying such Member of its failure to
make such

18

 

Additional Funding Obligation, the amount to be funded and demanding that such Additional
Funding Obligation be made immediately.

               (b) If the Member who receives such notice fails to make the required Additional Funding
Obligation within five (5) Business Days after the receipt of such notice, then the other Member
shall have the following rights:

                    (i) Such Member may loan the required funds to the Company (which funds shall then be
immediately contributed by Company to the T1 Subsidiary), which amount so loaned shall bear
interest and be payable in the same manner as the loan described in Section 4.1.5(d)(i); or

                    (ii) Such Member may make an Additional Capital Contribution to the Company in the amount of
the required Additional Funding Obligation (which amounts shall then be immediately contributed by
the Company to the T1 Subsidiary), in which event the Distribution Percentages shall be adjusted in
the manner set forth in Section 4.1.5(d)(ii).

     Section 6.10 EACH MEMBER ACKNOWLEDGES AND AGREES THAT IT FULLY UNDERSTANDS THAT ITS INTEREST
IN DISTRIBUTIONS AND CAPITAL MAY BE SUBSTANTIALLY DILUTED FOR FAILING TO MAKE A REQUIRED ADDITIONAL
FUNDING OBLIGATION UNDER THIS ARTICLE 6. EACH MEMBER FURTHER ACKNOWLEDGES AND AGREES THAT
EXCEPT AS SET FORTH IN THIS SECTION 6.10 AND IN SECTION 5.2(C), THE REMEDIES ABOVE
ARE THE SOLE AND EXCLUSIVE REMEDIES AVAILABLE TO THE NON-DEFAULTING MEMBER AS A RESULT OF SUCH
DEFAULT. NOTWITHSTANDING THE FOREGOING, IF A DEFAULT BY SKECHERS UNDER ARTICLE 6 RESULTS
IN THE INABILITY OF THE COMPANY TO PERFORM ITS OBLIGATIONS UNDER THE LEASE THEN THE TENANT UNDER
THE LEASE SHALL NOT BE ENTITLED TO DECLARE THE COMPANY TO BE IN DEFAULT UNDER THE LEASE AS A RESULT
THEREOF. ADDITIONALLY, IF A DEFAULT BY EITHER MEMBER UNDER ARTICLE 6 RESULTS IN THE
INABILITY OF THE COMPANY TO PERFORM ITS OBLIGATIONS UNDER THE LEASE THEN, IN ADDITION TO ANY RIGHTS
AND REMEDIES THAT THE NON-DEFAULTING MEMBER MAY HAVE AGAINST THE DEFAULTING MEMBER HEREUNDER, THE
DEFAULTING MEMBER SHALL BE SOLELY RESPONSIBLE FOR ALL CLAIMS OF TENANT UNDER THE LEASE AS A RESULT
THEREOF.

ARTICLE 7

MANAGEMENT AND OPERATION OF BUSINESS

     Section 7.1 Management.

          7.1.1 Powers of the Managing Members.

               (a) Subject to the limitations set forth herein, all management powers over the business and
affairs of the Company are exclusively vested in the Managing Members, and no Member other than the
Managing Members shall have any right to participate in or exercise control or management power
over the business and affairs of the Company.

               (b) Unless and until it is removed as a Managing Member pursuant to Section 7.1.4, the
Skechers Managing Member shall have exclusive management, responsibility and control over the
operations of the Building after completion of construction and Skechers taking possession of the
premises described in the Lease (subject to the obligations of the tenant under the

19

 

Lease). In addition to the foregoing, the Skechers Managing Member shall have exclusive
management responsibility and control over the Company’s or a Subsidiary’s rights to pursue
remedies for any default by the Development Manager under the Development Management Agreement, for
any default by any HF Affiliate under any agreement between the Company or a Subsidiary and such HF
Affiliate, any default by HF under this Agreement, any negotiations with the POA which involve any
wrongdoing or alleged wrongdoing by HF or any HF Affiliate, and to enforce the Company’s or a
Subsidiary’s rights as tenant under the Master Lease.

               (c) Unless and until it is removed as Managing Member pursuant to Section 7.1.4 the HF
Managing Member shall have the exclusive management, responsibility and control over, (i) any
consents, approvals or decisions to be made by the landlord under the Lease, including decisions
regarding the development of the Expansion Parcel if the Tenant fails to exercise its option to
expand under the Lease (provided the foregoing shall be subject to Section 17.21 and
Skechers shall be afforded the first option to participate with HF in any other development of the
Expansion Parcel, on terms prepared by the HF Managing Member), (ii) financing of the Project,
including procuring and negotiating the Loans and determining the terms and conditions thereof (to
the extent not inconsistent with the other provisions of this Agreement), (iii) pledges or
encumbrances of Company Assets or assets of any Subsidiary, (iv) all matters pertaining to the
entitlements affecting the Property (including, but not limited to, zoning issues, CFD formation,
mapping and subdivision), including interactions and negotiations with governmental entities, (v)
except as set forth in Section 7.1.1(b), all matters pertaining to the Property Owners
Association (“POA”) for the Corporate Park in which the Project is located (provided,
however, HF Managing Member may not take any action in connection with the POA without Skechers
Managing Member’s approval that will materially reduce or eliminate any of Skechers Parent’s rights
as tenant under the Lease, or that will materially increase Tenant’s costs and expenses thereunder,
other than the obligation to pay reasonable POA assessments), and (vi) subject to Section
7.1.1(e), all matters relating to the development (but not the sale) of the Project and the
development of the Expansion Parcel if Skechers Parent exercises its expansion rights under the
Lease, including, but not limited to, engagement of attorneys, architects, engineers, contractors,
a development manager (which shall be an Affiliate of HF and which shall enter into a development
management agreement with respect to the Expansion Parcel on substantially the same terms and
conditions as are set forth in the Development Management Agreement) and other professionals,
preparation of construction drawings, and all aspects of construction (subject to the rights of
Skechers Parent as tenant under the Lease and the provisions of the Development Management
Agreement). Notwithstanding the exclusive rights granted to HF Managing Member hereunder, the
Skechers Managing Member shall have the right to approve any insurance company recovery, award or
settlement, any condemnation award and any settlement of any lawsuit or threatened lawsuit with
respect to the Property or the Project, which consent will not be unreasonably withheld. Further,
subject to any provisions in the Lease, the Construction Loan documents and the Permanent Loan
Documents, any insurance proceeds received by the Company or a Subsidiary as a result of damage or
destruction to any improvements within the Project shall be used to reconstruct such improvements,
to the extent legally permissible, and provided that the Lease continues in force and effect. HF
Managing Member shall keep Skechers reasonably informed about negotiations involving the
construction contract (including the selection of the general contractor) and shall promptly upon
request provide Skechers with copies of drafts of the proposed construction contract during the
course of its negotiation. HF Managing Member will consider any comments offered by Skechers with
respect to the foregoing, but ultimately the decisions of HF Managing Member regarding the
selection of the general contractor and the terms and conditions of the construction contract shall
control, subject to any express provisions in this Agreement or the Development Management
Agreement. Notwithstanding item (i) of this Section 7.1.1(c), nothing herein shall be
interpreted as a waiver of, or prohibition on, the right of Skechers Parent, as tenant under the
Lease, to contest the withholding of any requested landlord consent or approval under the Lease.

20

 

               (d) To the extent that the management and control of the Company is within the scope of the
exclusive authority of either the HF Managing Member or the Skechers Managing Member, such Managing
Member may act on behalf of the Company or a Subsidiary (and may bind the Company or such
Subsidiary) alone and without the consent, approval, ratification or signature of the other
Managing Member. To that end, it is expressly agreed that the signature of the HF Managing Member
alone on the Construction Loan Documents shall bind the Company, as the sole member of the T1
Subsidiary.

               (e) Any issues relating to the management and control of the Company which are not within the
scope of the exclusive authority of either the HF Managing Member or the Skechers Managing Member
shall be matters which require the joint consent, approval or ratification (and joint signature, as
applicable) of both Managing Members, which consent shall not be withheld unreasonably or delayed;
provided, however, that the Members acknowledge that the Skechers Managing Member
may cause the Company and each Subsidiary to adopt such internal controls as are reasonably
necessary, upon advice of Skechers Parent’s counsel, to comply with the Skechers Parent’s
obligations under SEC Rule 404. The Members acknowledge, without limitation, that (i) a sale of
the Project or the Property, (ii) an amendment of the Development Management Agreement, and (iii)
modifications of either the Development Budget or the Project Schedule requiring Company’s or a
Subsidiary’s consent under the Development Management Agreement shall require the mutual consent of
the Managing Members. Additionally, the engagement of attorneys and accountants by the Company or
either Subsidiary, other than with respect to the development of the Project, shall be mutually
agreed to by the Managing Members. In connection with the foregoing, HF Managing Member
acknowledges that Skechers Parent is a publicly traded company and Skechers may need to require
that particular accountants be used by the Company or either Subsidiary. As such, HF Managing
Member agrees to use KPMG or such other accountants as Skechers Parent may use as the Company’s or
a Subsidiary’s accountants in accordance with Article 9. If there is a dispute regarding
the reasonableness of the withholding of consent, approval or ratification of any matter which
requires the joint consent, approval or ratification of both Managing Members, unless otherwise
provided herein, the matter shall be submitted to expedited arbitration in accordance with
Article 15. Except as set forth in Section 15.3, the Determination of the
arbitrator shall be limited to whether or not the Managing Member acted reasonably, and the other
Managing Member shall not be entitled to seek or obtain any monetary damages as a result of the
unreasonable withholding of consent, approval or ratification.

               (f) In addition to the powers now or hereafter granted to a manager of a limited liability
company under the Act or under any other provision of this Agreement, the Managing Members, to the
extent of either their exclusive scope of authority or joint authority as the case may be, shall
have full power and authority to do all things deemed necessary or desirable by them to conduct the
business of the Company and the Subsidiaries, to exercise all powers set forth in Section
3.2 and to effect the purposes set forth in Section 3.1, including, without limitation:

                    (i) the making of any expenditures, the assumption or guarantee of, or other contracting for,
indebtedness and other liabilities, the issuance of evidences of indebtedness (including the
securing of same by mortgage, deed of trust or other lien or encumbrance on the Company Assets) and
the incurring of any obligations of the Company;

                    (ii) the making of regulatory and other filings, or rendering of periodic or other reports to
governmental or other agencies having jurisdiction over the business of the Company and/or the
Company Assets;

                    (iii) the acquisition, disposition and leasing of the Project and other Company Assets;

21

 

                    (iv) the negotiation, execution, performance and administration of (including the exercise of
any rights or remedies under) any contracts (including contracts with Affiliates of the Members);

                    (v) the opening and closing of Company bank accounts (which bank accounts shall be in the name
of the Company but on which representatives of both Managing Members shall be signatories, subject
to the limitations set forth in the Development Management Agreement with respect to bank accounts
into which Construction Loan draws will be funded prior to Completion of the Project), the
investment of Company funds in securities, certificates of deposit and other instruments, and the
distribution of Available Cash;

                    (vi) the engagement and dismissal of agents, outside attorneys, accountants, engineers,
appraisers, consultants, contractors and other professionals for the Company and the determination
of their compensation and other terms of any such engagement or dismissal;

                    (vii) the control of any matters affecting the legal rights and obligations of the Company,
including the conduct of litigation and the incurring of legal expenses and the settlement of
claims and litigation;

                    (viii) obtaining and maintaining casualty, liability and other insurance on the Company
Assets, including the Project and the Members;

                    (ix) the execution, acknowledgment and delivery of any and all documents and instruments to
effect any or all of the foregoing, and

                    (x) taking any of the foregoing actions with respect to either Subsidiary or either
Subsidiary’s Assets.

          7.1.2 No Approval Required for Above Powers. The applicable Managing Member (or the
Managing Members, jointly, as the case may be) is authorized to execute, deliver and perform the
above-mentioned documents and transactions on behalf of the Company or either Subsidiary without
any further act, approval or vote of the Members. Notwithstanding the foregoing, if a Managing
Member is authorized to act alone to the extent practical, it shall give at least five (5) Business
Days prior notice ( which shall be reduced to two (2) Business Days prior notice until Completion
of the Project) to the other Managing Member of any actions it intends to take on behalf of the
Company or either Subsidiary which might have a material impact on the business, Company Assets, a
Subsidiary’s Assets, or obligations of the Company or either Subsidiary. In any event, the Members
will cooperate in all reasonable respects with the Managing Members to facilitate the exercise of
the powers of management and control by the Managing Members.

          7.1.3 No Obligation to Consider Tax Consequences to the Members. In exercising
authority under this Agreement, the Managing Members may, but shall be under no obligation to, take
into account the tax consequences to the Members of any action taken by the Managing Members, and
neither the Company or either Subsidiary nor any Managing Member acting in good faith shall have
any liability to either Member under any circumstances as a result of an income tax liability
incurred by such Member as a result of an action (or inaction) by the Managing Members pursuant to
their authority under this Agreement.

          7.1.4 Removal of Managing Members. A Managing Member may be removed by the other
Managing Member (or by the other Member, if there is only one Managing Member), as follows:

22

 

               (a) If such Managing Member materially defaults under this Agreement (except for a default
under Article 4 or Article 6, which are governed by provisions in those Articles),
subject to notice from the other Managing Member and ten (10) Business Days to cure such default;
provided, however, that in the case of any default which can be cured but not within such ten (10)
Business Day period, such Managing Member fails to begin reasonable steps to cure such breach
within such ten (10) Business Day Period, or does not thereafter diligently prosecute such cure to
completion or in any event if such default is not cured within sixty (60) days following the date
of notice thereof from the other Managing Member; or

               (b) If such Managing Member (or any of its controlling Persons) is convicted of any criminal
act involving the Company Assets, a Subsidiary’s Assets, or business of the Company or either
Subsidiary, or is found by a court of competent jurisdiction to have breached its fiduciary duty
under this Agreement, or to have committed fraud involving the Company Assets, a Subsidiary’s
Assets, or business of the Company or either Subsidiary, or to have been grossly negligent in
performing its duties under this Agreement; or

               (c) If such Managing Member becomes Incapacitated or commits or suffers a Bankruptcy Action;
or

               (d) In the case of the Skechers Managing Member, if the Skechers Parent commits a material
default under the Lease and such default is not cured within any applicable time period set forth
therein; or

               (e) In the case of the HF Managing Member, if the Development Manager commits a material
default under the Development Management Agreement and such default is not cured within any
applicable time period set forth therein; or

               (f) In the case of either Managing Member, if the Company or a Subsidiary defaults under the
Lease by reason of any act or omission of such Managing Member and such default is not cured within
any applicable time period set forth therein; or

If a Managing Member is so removed, the other Managing Member shall serve as the sole Managing
Member (and shall thereafter have the management authority and attendant management obligations of
replaced Managing Member in addition to the management authority and attendant management
obligations which it previously had). For clarification, if the HF Managing Member is removed, the
Skechers Managing Member shall have the right to enforce the Company’s and Subsidiaries’ rights
under the Development Management Agreement, and if the Development Management Agreement is
terminated, the Skechers Managing Member may enter into a new development management agreement on
behalf of the Company or a Subsidiary and may engage a new Development Manager, subject to the
provisions of Section 7.5. The removed Managing Member shall retain all of the rights and
obligations hereunder as a Member, other than those which pertain to its management authority as a
Managing Member, but such Managing Member shall remain liable to the Company or a Subsidiary and
the other Member for any damages resulting from the acts (or omissions) which resulted in its
removal.

     Notwithstanding the foregoing, if the Managing Member whose removal is being sought gives
notice of its objection to such removal within five (5) Business Days after receiving notice of any
attempted removal, then the matter shall be submitted to expedited arbitration in accordance with
Article 15. If a Determination is made in the arbitration proceeding that the grounds for
removal have been satisfied, then prior to the actual removal of such Managing Member, such
Managing Member shall have an additional ten (10) Business Days to effectuate a cure of the default
(if the default is of a nature that it can be cured).

23

 

     Notwithstanding anything herein to the contrary, if the Lender declares a default under the
Construction Loan Documents, other than due to the acts or omissions of Skechers or Skechers
Parent, and refuses to continue to fund the Construction Loan, unless the HF Managing Member
provides alternative funding at no additional cost or expense to Skechers or the Company within
thirty (30) days of the expiration of the applicable notice and cure period set forth in the
Construction Loan Documents, the Skechers Managing Member (and not the HF Managing Member) shall
have exclusive management rights with respect to the development of the Project (but not the
Expansion Parcel), to the same extent that the HF Managing Member previously had such exclusive
management rights pursuant to Section 7.1.1(c)(vi). In addition, if the Lender declares a
default under the Construction Loan Documents as a result of any act or omission other than one
caused by Skechers or Skechers Parent, and the Skechers Managing Member is reasonably dissatisfied
with the progress of any attempt to cure such default by the HF Managing Member, then the Skechers
Managing Member, in its sole discretion, may seek to effectuate the cure itself, without waiving
any rights or remedies which it might have against HF or the HF Managing Member as a result of such
default. Any Lender may rely on the foregoing as the Members’ authorization to accept a cure by
Skechers Managing Member on behalf of the Company.

     Section 7.2 Certificate of Formation. The Managing Members shall file any required
amendments to and restatements of the Certificate, and shall do all the things to maintain the
Company and each Subsidiary as a limited liability company under the laws of the State of Delaware,
the State of California and each other jurisdiction in which the Company or either Subsidiary may
elect to do business or own property. The Managing Members shall use all reasonable efforts to
cause to be filed such other certificates or documents as may be reasonable and necessary or
appropriate for the formation, continuation, qualification and operation of a limited liability
company in the State of Delaware, the State of California, and any other jurisdiction in which the
Company or either Subsidiary may elect to do business or own property.

     Section 7.3 Compensation of Managing Members.

          7.3.1 No Compensation. The Managing Members shall not be compensated for rendering
services as Managing Members of the Company. The foregoing is not intended to prohibit the payment
to the Members, or their Affiliates, of fees under any agreement entered into by the Company or a
Subsidiary and any such Member or its Affiliate pursuant to this Agreement (including the
Development Management Agreement).

          7.3.2 Reimbursement for Expenses. The Company shall be responsible for and shall pay
all expenses relating to the Company’s ownership of the Company Asset or the ownership of each of
the Subsidiary’s Assets , and the operation of, or for the benefit of, the Company, and the
Managing Members shall be reimbursed on a monthly basis, for all reasonable and customary
out-of-pocket expenses actually incurred by the Managing Members on behalf of the Company or any
Subsidiary directly relating to the ownership of the Company Assets or the ownership of each of the
Subsidiary’s Assets and the operation of, or for the benefit of, the Company or any Subsidiary;
provided, however, that the Company shall not reimburse the legal fees and costs of
a Member in any arbitration or court proceeding that is solely between the Company or any
Subsidiary, on one hand, and either Member or its Affiliates, on the other hand, or between Members
and their Affiliates, until the conclusion of such arbitration or court proceeding (at which time,
legal fees and costs shall be awarded to the prevailing party). Further, it is understood that
neither Member or its Affiliates shall be entitled to any property management fees for management
of the Project (but the foregoing does not prohibit the payment of a fee to the Development Manger
under the Development Management Agreement).

24

 

     Section 7.4 Devotion of Time and Outside Activities of the Members.

               (a) Nothing herein contained shall prevent or prohibit the Members or any Affiliates of the
Members from entering into, engaging in or conducting any other activity or performing for a fee
any service, including engaging in any business dealing with real property of any type or location;
owning, managing, leasing or disposing of any real property of any type or location; acting as a
director, officer or employee of any corporation, as a trustee of any trust, as a general partner
of any partnership, or as an administrative official of any other business entity; or receiving
compensation for services to, or participating in profits derived from, the investments of any such
business, property, corporation, trust, partnership or other entity, regardless of whether such
activities are competitive with the Company or any Subsidiary(collectively, the
“Outside Activities”), and nothing herein shall require any Member or any Affiliates
thereof to offer any interest in such Outside Activities to the Company or any Subsidiary
or to any other Member.

     Section 7.5 Contracts with Affiliates. Neither Managing Member nor any of its
Affiliates shall (a) sell, transfer or convey any property to, or purchase any property from, the
Company or any Subsidiary, directly or indirectly, or (b) enter into any agreement (or
amendment thereto) for the provision of services to the Company or any Subsidiary, or
pursuant to other transactions or agreements unless the terms thereof are fair and reasonable, such
terms and are no less favorable to the Company or such Subsidiary than those that would be obtained
from an unaffiliated third party, and such Managing Member provides the other Member with at least
ten (10) Business Days prior written notice of its intent to enter into such arrangement, together
with the material terms thereof, and such Managing Member does not receive a written notice of
objection from the other Member regarding the reasonableness of such arrangement. Notwithstanding
the foregoing, the Members acknowledge that Company has entered into the Development Management
Agreement with an Affiliate of HF, which Development Management Agreement will be assigned by
Company to the T1 Subsidiary. If the Expansion Parcel is developed for the tenant under the Lease,
then the Company shall cause the T2 Subsidiary to enter into the development management agreement
described in Section 7.1.1(c) with respect to developing the Expansion Parcel. Further,
except as set forth in Section 6.1, no Affiliate of a Member may become either the
Construction Lender or the Permanent Lender unless both Managing Members agree (and if there is a
dispute in this regard, the matter shall not be subject to the expedited arbitration provisions in
Article 15).

     Section 7.6 Indemnification.

          7.6.1 General. The Company shall indemnify, to the full extent allowed by the Act,
each Indemnitee from and against any and all losses, claims, damages, liabilities, joint or
several, expenses (including reasonable legal fees and expenses), judgments, fines, settlements,
and other amounts (collectively, “Loss Items”) arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative brought by an
unaffiliated third party, that relate to the operations of the Company or any Subsidiary as set
forth in this Agreement in which such Indemnitee may be involved, or is threatened to be involved,
as a party or otherwise (but excluding indemnification for any Loan guarantees, which are
separately addressed in Section 6.3), except to the extent it is established in a final
court proceeding that the Loss Item is proximately caused by: (a) the act or omission of such
Indemnitee that was material to the matter giving rise to the proceeding and either was committed
in bad faith or was the result of active and deliberate dishonesty, fraud, willful misconduct or
gross negligence or such Indemnitee’s uncured breach of this Agreement, the Development Management
Agreement, or the Lease; (b) such Indemnitee actually receiving an improper personal benefit in
money, property or services; or (c) in the case of any criminal proceeding, such Indemnitee having
reasonable cause to believe that the act or omission was unlawful. The termination of any
proceeding by judgment, order or settlement does not create a presumption that such Indemnitee did
not meet the requisite standard of

25

 

conduct set forth in this Section 7.6.1. The termination of any proceeding by
conviction or upon a plea of nolo contendere or its equivalent, or an entry of an order of
probation prior to judgment, creates a rebuttable presumption that such Indemnitee acted in a
manner contrary to that specified in this Section 7.6.1. Any indemnification pursuant to
this Section 7.6 shall be made only out of the Company Assets. Notwithstanding anything in
this Agreement to the contrary, no Indemnitee who is an individual shall be denied indemnification
or shall have any personal liability to the Company or its Members or any Subsidiary with respect
to any Loss Item, except to the extent such Loss Item is proximately caused by such Indemnitee’s
actual active and deliberate dishonesty, or fraud.

          7.6.2 In Advance of Final Disposition. Except as provided in Section 7.3.2,
reasonable expenses incurred by an Indemnitee who is a party to a proceeding may be paid or
reimbursed by the Company in advance of the final disposition of the proceeding upon receipt by the
Company of (a) a written affirmation by the Indemnitee of the Indemnitee’s good faith belief that
the standard of conduct necessary for indemnification by the Company as authorized in this
Section 7.6 has been met and (b) a written undertaking by or on behalf of the Indemnitee to
repay the amount if it shall ultimately be determined that the standard of conduct has not been
met.

          7.6.3 Other Than by This Section. The indemnification provided by this Section
7.6 shall be in addition to any other rights to which an Indemnitee may be entitled under any
agreement with the Company or any Subsidiary, or under any other provision of this Agreement.

          7.6.4 Liability of the Managing Members. Notwithstanding anything to the contrary set
forth in this Agreement, the Managing Members shall not be liable to the Company or any Subsidiary
or any Members for losses sustained or liabilities incurred as a result of errors in judgment, or
as a result of any act or omission by such Managing Member, except for losses sustained or
liabilities incurred in whole or in part by such Managing Member’s bad faith, fraud, willful
misconduct, gross negligence, acting beyond the scope of such Managing Members’ authority or
commission of any Event of Default under this Agreement (subject to limitations on remedies set
forth elsewhere in this Agreement). Neither Managing Member shall be liable to the Company or any
Subsidiary or to any Member for any losses sustained or liabilities incurred as a result of the
acts or omissions of the other Managing Member.

     Section 7.7 Other Matters Concerning the Managing Members.

          7.7.1 Reliance on Documents. The Managing Members may rely and shall be protected in
acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, bond, debenture, or other paper or document reasonably
believed by them to be genuine and to have been signed or presented by the proper party or parties.

          7.7.2 Reliance on Consultants and Advisers. The Managing Members may consult with
legal counsel, accountants, appraisers, management consultants, investment bankers and other
consultants and advisers selected by them, and any act taken or omitted to be taken in reliance
upon and in accordance with the opinion of such Persons as to matters which the Managing Members
reasonably believe to be within such Person’s professional or expert competence shall be prima
facie evidence that such act was done or omitted in good faith.

          7.7.3 Action Through Officers and Attorneys In Fact. The Managing Members shall have
the right, in respect of any of their powers or obligations hereunder, to act through any of their
duly authorized officers (or partners or managers, as applicable) and their duly appointed
attorneys-in-fact. Each such Person, to the extent provided by the Managing Members in the power
of attorney or other authorizing instrument, shall have full power and authority to do and perform
all and every act and duty which is permitted or required to be done by the Managing Members
hereunder.

26

 

     Section 7.8 Reliance by Third Parties. Any Person dealing with the Company shall be
entitled to assume that the Managing Members have full power and authority to encumber, sell or
otherwise use in any manner any and all Company Assets and to enter into any contracts on behalf of
the Company, and such Person shall be entitled to deal with the Managing Members, or either of
them, as if they were the Company’s sole party in interest, both legally and beneficially. In no
event shall any Person dealing with the Managing Members or their representatives be obligated to
ascertain that the terms of this Agreement have been complied with or to inquire into the necessity
or expedience of any act or action of the Managing Members or their representatives. Each and
every certificate, document or other instrument executed on behalf of the Company by the Managing
Members or their representatives shall be conclusive evidence in favor of any and every Person
relying thereon or claiming thereunder that (a) at the time of the execution and delivery of such
certificate, document or instrument, this Agreement was in full force and effect, (b) the Person
executing and delivering such certificate, document or instrument was duly authorized and empowered
to do so for and on behalf of the Company and (c) such certificate, document or instrument was duly
executed and delivered in accordance with the terms and provisions of this Agreement and is binding
upon the Company. Nothing herein is intended to afford either Managing Member greater power or
authority than is otherwise granted under this Agreement, or to exculpate either Managing Member
from any liability for acting beyond the scope of such Managing Member’s authority as set forth
herein.

     Section 7.9 Operating Budgets. The initial Operating Budget for 2010 is attached as
Exhibit “D” which has been approved by both Managing Members. No later than the first
(1st) day of the last quarter of each Company Year, the Skechers Managing Member shall
submit a proposed Operating Budget (which shall include capital expenditures which are the
landlord’s obligation under the Lease, and a business plan) for the next ensuing Company Year for
approval by the HF Managing Member. Proposed amendments to any Approved Operating Budget may be
submitted by the Skechers Managing Member to the HF Managing Member at any time. Such proposed
Operating Budget (or any proposed amendment thereto) shall not be deemed to be effective until such
time as it has been approved by the HF Managing Member. The HF Managing Member shall respond in
writing to each such proposed Operating Budget (or any proposed amendment thereto) within thirty
(30) days after receipt thereof. In such response, the HF Managing Member shall specify in detail
its disapproval of any item or items therein or its disapproval of the whole, and any proposed
modifications requested by the HF Managing Member or recommended changes therein. Within fifteen
(15) days after receipt by the Skechers Member of the HF Managing Member’s disapproval of any
proposed Operating Budget (or any proposed amendment thereto), the Skechers Managing Member may
re-submit to the HF Managing Member a revised Operating Budget (or amendment) for its approval.
The HF Managing Member shall not unreasonably withhold or delay approval of any Operating Budget or
amendment (with the issue of reasonableness being determined by expedited arbitration under
Article 15). In the event that any Company Year shall commence without an Operating Budget
approved by both the Skechers Managing Member and the HF Managing Member pursuant to the terms of
this Section, the Managing Members shall be entitled to make expenditures for items specified in
the Operating Budget for the most recent Company Year which has been approved by both Managing
Members, and for the actual amount of the utility cost, property taxes, insurance premiums or
special assessments incurred by the Company or a Subsidiary in the current Company Year and any
other non-discretionary items (including Debt service and stated increases in Company obligations
or Subsidiary obligations under contracts for the year), and for any expenditures on the Project
which, in the Managing Members’ reasonable good faith judgment, is necessary to prevent imminent
damage to the Project and/or injury to Persons. The Operating Budget shall not include the budget
for development of the Project (although the Members acknowledge that a development budget has been
approved and a copy is attached as an exhibit to the Development Management Agreement).

27

 

ARTICLE 8

BUY-SELL PROVISIONS

     Section 8.1 At any time commencing on a date which is one (1) year after the “Substantial
Completion” of the Project (as defined in the Lease), or the date that a Notice of Completion is
recorded, whichever occurs earlier, either Member (such Member hereinafter referred to as
“Invoking Member”) may deliver to the other Member (such other Member hereinafter referred
to as the “Offeree Member”), written notice that the Invoking Member is invoking the
provisions of this Section 8.1 (the “Buy-Sell Notice”).

     Section 8.2 The Buy-Sell Notice shall set forth the gross price (the “Stated Amount”)
at which the Invoking Member would be willing to purchase all of the Company Assets from the
Company.

     Section 8.3 The Buy-Sell Notice shall constitute an offer by the Invoking Member to purchase
the entire Company Interest of the Offeree Member for a price equal to the amount of cash which
would be distributable to such Offeree Member pursuant to Section 13.2.1 if the Project and
all other Company Assets were sold to a third party pursuant to a bona-fide, arm’s length
transaction at the Stated Amount and had the Company then (a) paid in full all of its Debt,
including the repayment of the Loans and any loans payable to the Members (and made all
apportionments customarily made in the closing of real estate transactions in the jurisdictions in
which the Project is located, and all other customary closing costs, including, but not limited to
title insurance premiums, survey costs, a reasonable and customary real estate commission and
transfer taxes normally payable by a seller of real estate), (b) not established any Reserves and
(c) distributed the net proceeds of the sale, and all other cash of the Company to the Members in
accordance with the provisions of Section 13.2.1. Such calculations shall be made as of
the date of closing set forth in Section 8.8. Provided, however, that the Stated Amount
may not be less than an amount which would result in the distribution to the Selling Member of at
least the Selling Member’s Unrecovered Contribution and the repayment of any loans owed by the
Company to the Selling Member as of the date of closing. The Buy-Sell Notice shall also constitute
an offer by the Invoking Member to sell its entire Company Interest to the Offeree Member for a
price equal to the amount of cash which would be distributable to the Invoking Member in the manner
described above if it were the Selling Member.

     Section 8.4 Upon receipt of the Buy-Sell Notice, the Offeree Member may, at its option, either
elect to purchase the entire Company Interest of the Invoking Member at the price described above,
or to sell its entire Company Interest to the Invoking Member at the price described above.

     Section 8.5 The Offeree Member shall give notice of its election under Section 8.4 to
the Invoking Member within sixty (60) days after such Offeree Member’s receipt of the Buy-Sell
Notice; provided, however, that in the event the Offeree Member shall fail to give
the Invoking Member notice of its election within such sixty (60) day period, such Offeree Member
shall be conclusively deemed to have elected to sell its entire Company Interest to the Invoking
Member.

     Section 8.6 The Member, which under this Article 8 is to purchase the Company Interest
of the other Member (the “Purchasing Member”) shall, within ten (10) days after the
determination is made as to who the Purchasing Member will be (the “Deposit Date”), deliver
to an escrow holder which is a national title insurance company selected by the Purchasing Member
cash in the amount of five percent (5%) of the purchase price (the “Buy-Sell Deposit”)
which Buy-Sell Deposit will be applied against the purchase price for the Company Interest of the
Selling Member whose Company Interest is being purchased (the “Selling Member”).

28

 

     Section 8.7 Notwithstanding anything to the contrary contained in this Agreement, in no event
may a Default Member, or a Member that is Incapacitated, or a Member that is subject to a
Bankruptcy Event, or a Member that is a Breaching Member, be an Invoking Member under or otherwise
initiate the procedures of this Article 8, and if a Member suffers any of the foregoing
after it has initiated the procedures under this Article 8 as the Invoking Member, then at
the option of the Offeree Member, the buy-sell process may be immediately terminated (provided that
the closing of the purchase and sale of the Company Interest has not consummated).

     Section 8.8 The closing of a sale and purchase pursuant to this Article 8 shall be
consummated through escrow on a date which is six (6) months after the Deposit Date (or sooner at
the election of the Purchasing Member), or such other date and manner as the Members shall agree
upon. At such closing, the Purchasing Member shall pay the entire purchase price for the Company
Interest of the Selling Member, in cash in immediately available funds, and the Selling Member
shall execute all documents that may be necessary or desirable, in the reasonable opinion of
counsel for the Purchasing Member (including customary representations and warranties regarding the
Company Interest of the Selling Member, but not regarding the Project, the other Company Assets or
the Company), to effect the sale of the Company Interest of the Selling Member to the Purchasing
Member free and clear of all liens and encumbrances. In the event the Selling Member or the
Purchasing Member shall fail or refuse to execute any instruments required to consummate the
closing, the other Member is hereby granted an irrevocable power of attorney, which shall be
binding on the Member refusing to execute such documents as to all third Persons, to execute and
deliver on behalf of the Member refusing to execute such documents all such required documents.
The aforesaid power, being coupled with an interest, is irrevocable by death, dissolution or
otherwise.

     Section 8.9 In the event the Selling Member then has any outstanding Debt to the Company or
any Subsidiary, all proceeds of the purchase price due the Selling Member shall be paid to the
Company until all such Debt shall have been paid and discharged in full. In the event that such
proceeds are not sufficient to discharge such Debt, the Selling Member shall repay all such unpaid
Debt at the closing. In the event that any loans are then outstanding from the Company or any
Subsidiary to the Selling Member, then all of such loans shall concurrently be repaid by the
Company at the closing. In the event the Selling Member or any Affiliate of the Selling Member
shall have guaranteed any Loan, then either (a) the Loan which is the subject of such guaranty
shall be paid in full by the Company at the time of closing or (b) the Selling Member and any such
Affiliate of the Selling Member shall be unconditionally released by the obligee for any liability
on account thereof. If the Selling Member is a Breaching Member, the Company shall reserve any
rights to pursue the Selling Member for damages after the closing, to the extent otherwise
allowable under this Agreement.

     Section 8.10 The Selling Member and the Purchasing Member shall each pay their own expenses in
connection with such purchase and sale of a Company Interest.

     Section 8.11 From and after the giving of a Buy-Sell Notice, and until either the consummation
of the sale of the Company Interest in accordance with this Article 8, or termination of
the buy-sell process as provided herein, neither Member shall exercise any transfer rights under
Article 11.

     Section 8.12 In the event the Purchasing Member defaults in its obligation to purchase the
Company Interest of the Selling Member, then Selling Member as its sole and exclusive remedy shall
be entitled to retain the Buy-Sell Deposit as full liquidated damages for such default of the
Purchasing Member, in which event the buy-sell transaction shall be terminated and the Purchasing
Member shall have no further rights to initiate the buy-sell provisions (as an Invoking Member)
under this Article 8. The Selling Member, at its election and in lieu of the remedy set
forth above, may elect within sixty (60) days of such default to dissolve and liquidate the Company
and the Subsidiaries. The Members hereby

29

 

acknowledge and agree that it is impossible to more precisely estimate the damages to be
suffered by the Selling Member upon the Purchasing Member’s default, and the Members expressly
acknowledge and agree that the Buy-Sell Deposit which may be retained by the Selling Member is a
reasonable and fair estimate of such damages and is intended not as a penalty, but as full
liquidated damages for such default of the Purchasing Member.

     Section 8.13 In the event that the Selling Member defaults in its obligation to sell its
Company Interest to the Purchasing Member, the Purchasing Member shall be entitled to pursue any
and all remedies available at law or in equity, including specific performance.

ARTICLE 9

BOOKS, RECORDS, ACCOUNTING AND REPORTS

     Section 9.1 Records and Accounting. The HF Managing Member shall keep appropriate books and records with respect to the
Company’s business, all of which shall be and remain the property of the Company. Any records
maintained by or on behalf of the Company or a Subsidiary in the regular course of its business may
be kept on, or be in the form of, magnetic tape, photographs, micrographics or any other
information storage device; provided, that the records so maintained are convertible into clearly
legible written form within a reasonable period of time. The books of the Company and each
Subsidiary shall be maintained for financial purposes on an accrual basis in accordance with
generally accepted accounting principles (except that Capital Accounts shall be maintained in
accordance with Exhibit ”A”) and for tax reporting purposes on the accrual basis. The
Members may, upon reasonable notice to the HF Managing Member and during normal business hours and
at its own expense, examine the books and records of the Company and each Subsidiary, which will be
maintained at the principal office of the HF Managing Member.

     Section 9.2 Fiscal Year. The fiscal year of the Company and each Subsidiary shall be the calendar year, unless the
Managing Members decide otherwise.

     Section 9.3 Reports.

          9.3.1 Annual Reports. Within ten (10) days after the end of each Company Year, the HF Managing Member shall
prepare or cause to be prepared and delivered to the Members an annual report, as of the close of
the Company Year, containing financial statements of the Company and each Subsidiary for such
Company Year, presented in accordance with generally accepted accounting principles.

          9.3.2 Quarterly Reports. As soon as practicable, but not later than ten (10) days after the end of each calendar
quarter, the HF Managing Member shall prepare or cause to be prepared and delivered to the Members
a report as of the last day of the calendar quarter (except the last calendar quarter of each
year), containing unaudited financial statements of the Company and each Subsidiary, and such other
information as may be required by applicable law or regulation, or as the HF Managing Member
reasonably determines to be appropriate.

          9.3.3 Other Reports. Each Managing Member shall promptly give notice to the other Managing Member of the
occurrence of any of the following: receipt by such Managing Member of actual knowledge of any
material (that is, seeking damages in excess of $250,000 or seeking injunctive relief of any
nature) threatened or pending litigation against the Company, any Subsidiary, the Property or the
Project; the occurrence of any felony indictment or conviction of any Person in senior management
at such Managing Member; receipt by such Managing Member of any offer to purchase all or any part
of the

30

 

Property or the project; and receipt of written notice from any governmental authority which
alleges any material adverse claim against the Company, any Subsidiary, the Property or the
Project.

     Section 9.4 Special Provisions Re Books and Records, Accounting and Reports.
Notwithstanding the provisions of this Article 9, for so long as Skechers Parent is a
publicly traded company and the operations of the Company are required to be consolidated with the
operations of Skechers parent for reporting purposes, the following provisions shall apply:

               (b) The Company and each Subsidiary will use KMPG (or another certified public accounting
company designated by Skechers) as its auditor and preparer of its tax returns, as long as its fees
for such work are competitive in the marketplace (if they exceed competitive fees, any excess shall
be paid by Skechers);

               (c) KMPG will undertake annual audits of the Company and each Subsidiary, at Company expense;

               (d) All of the quarterly and annual reports and all Company tax returns must be in forms
reasonably acceptable to the Skechers Managing Member as a result of consultation with KPMG and its
legal counsel (it is expected that both GAAP and cash basis records will be required for the
determination of distributions to Members), with appropriate and reasonable certifications by the
HF Managing Member;

               (e) Reasonable internal controls may be required to satisfy the obligations of Skechers Parent
under the Federal Act and specifically SEC Rule 404; provided that if the cost of implementing such
internal controls is more than nominal, it shall be borne by Skechers;

               (f) The Skechers Managing Member shall have unrestricted right to speak with (and to give
directions, to the extent that it is the sole Managing Member or otherwise in connection with any
matter where Skechers Managing Member has the authority to take such action without the consent of
the HF Managing Member) to the Company’s accountants, attorneys and other professional advisors,
and those of the Subsidiaries and shall have the right to receive copies of documents in their
possession which relate to the Company, any Subsidiary or its operations (and HF shall not be
entitled to invoke attorney-client privilege as a basis to deny Skechers Managing Member access to
any such Persons or documents); and

               (g) Skechers Managing Member shall upon the advice of its legal counsel, have the right to
disclose in Skechers Parent’s public reports and to Skechers Parent board of directors any
information regarding the Company, any Subsidiary, the Property, the Project, the Lease, the
Development Management Agreement, the Development Manager or the HF Managing Member notwithstanding
the confidentiality provisions of this Agreement.

ARTICLE 10

TAX MATTERS

     Section 10.1 Preparation of Tax Returns. The Tax Matters Partner shall arrange for the preparation and timely filing of all returns
of Company and Subsidiary income, gains, deductions, losses and other items required of the Company
for federal and state income tax purposes and shall use all reasonable efforts to furnish, within
ninety (90) days after the close of each taxable year, the tax information reasonably required by
the Members for federal and state income tax reporting purposes. If the Tax Matters Partner fails
to file the Company’s tax returns on or before any applicable deadlines

31

 

(including extensions), the other Managing Member may prepare and file the Company’s tax
returns as it determines.

     Section 10.2 Tax Matters Partner.

          10.2.1 General. The HF Managing Member shall be the “Tax Matters Partner” of the Company for federal income
tax purposes, and shall be referred to herein as the “Tax Matters Partner,” but such designation
shall not be construed or used as evidence to support any claim that the Company is a partnership,
rather than a limited liability company. Upon the HF Managing Member becoming a Breaching Member
or becoming Incapacitated or suffering a Bankruptcy Action, the Skechers Managing Member shall
automatically become the Tax Matters Partner. Pursuant to Section 6223(c) of the Code, upon
receipt of notice from the IRS of the beginning of an administrative proceeding with respect to the
Company, or any Subsidiary, the Tax Matters Partner shall furnish the IRS with the name, address
and capital and profits interest of each of the Members. The Tax Matters Partner shall keep the
Members reasonably informed of any action that it takes in such capacity which has a material
impact on the other Members, the Company or any Subsidiary.

          10.2.2 Powers. The Tax Matters Partner is authorized, but not required:

               (a) to enter into any settlement with the IRS with respect to any administrative or judicial
proceedings for the adjustment of Company or Subsidiary items required to be taken into account by
a Member for income tax purposes (such administrative proceedings being referred to as a “tax
audit” and such judicial proceedings being referred to as “judicial review”), and in the settlement
agreement the Tax Matters Partner may expressly state that such agreement shall bind all Members,
except that such settlement agreement shall not bind any Member (i) who (within the time prescribed
pursuant to the Code and Regulations) files a statement with the IRS providing that the Tax Matters
Partner shall not have the authority to enter into a settlement agreement on behalf of such Member
or (ii) who is a “notice partner” (as defined in Section 6231 of the Code) or a member of a “notice
partner” (as defined in Section 6231 of the Code), and, to the extent provided by law, the Tax
Matters Partner shall cause any Member to be designated a notice partner;

               (b) in the event that a notice of a final administrative adjustment at the Company or
Subsidiary level of any item required to be taken into account by a Member for tax purposes (a
“final adjustment”) is mailed or otherwise given to the Tax Matters Partner, to seek judicial
review of such final adjustment, including the filing of a petition for readjustment with the Tax
Court, or the filing of a complaint for refund with the District Court of the United States for the
district in which the Company’s principal place of business is located or the United States Court
of Federal Claims;

               (c) to intervene in any action brought by any other Member for judicial review of a final
adjustment;

               (d) to file a request for an administrative adjustment with the IRS at any time and, if any
part of such request is not allowed by the IRS, to file an appropriate pleading (petition,
complaint or other document) for judicial review with respect to such request;

               (e) to enter into an agreement with the IRS to extend the period for assessing any tax which
is attributable to any item required to be taken into account by a Member for tax purposes, or an
item affected by such item;

32

 

               (f) to take any other action on behalf of the Members, a Subsidiary or the Company in
connection with any tax audit or judicial review proceeding to the extent permitted by applicable
law or regulations; and

               (g) Subject to any restrictions contained elsewhere in this Agreement, to engage attorneys,
accountants and other professionals to advise it and to file any required income tax returns and
other documents associated with its rights and authority as the Tax Matters Partner.

               (h) Notwithstanding the foregoing, the Tax Matters Partner shall not take any action under
Section 10.2.2(b), (d), (e) or (f) unless it has given the other Member at least ten (10)
Business Days prior notice of its intent to take such action and the other Member has not given
notice of its objection within five (5) Business Days after receipt of such notice. If notice of
objection is timely given and the parties cannot otherwise resolve the dispute, either Member may
submit the matter to expedited arbitration under Article 15.

The taking of any action and the incurring of any expense by the Tax Matters Partner in connection
with any such proceeding, except to the extent required by law, is a matter in the reasonable
discretion of the Tax Matters Partner, and the provisions relating to indemnification of the HF
Managing Member set forth in Section 7.6 of this Agreement shall be fully applicable to the
Tax Matters Partner in its capacity as such.

          10.2.3 Reimbursement. The Tax Matters Partner shall receive no compensation for its services. All reasonable
third-party costs and expenses incurred by the Tax Matters Partner in performing its duties as such
(including reasonable legal and accounting fees) shall be borne by the Company. The costs of any
professionals engaged by the Tax Matters Partner pursuant to Section 10.2.2(g) shall be
paid or reimbursed by the Company.

     Section 10.3 Organizational Expenses. The Company shall elect to deduct expenses, if any, incurred by it in organizing the
Company, or its Subsidiaries either immediately or ratably over a one hundred eighty (180) month
period (or such other period) as permitted by and provided for in Section 709 of the Code.

     Section 10.4 Withholding. The Members hereby authorize the Company to withhold from or pay on behalf of or with
respect to the Members any amount of federal, state, local, or foreign taxes that the Tax Matters
Partner reasonably determines that the Company is required to withhold or pay with respect to any
amount distributable or allocable to the Members pursuant to this Agreement, including any taxes
required to be withheld or paid by the Company pursuant to Section 1441, 1442, 1445, or 1446 of the
Code. The Tax Matters Partner shall give prompt notice to the Members with respect to which
withholding is effected in accordance with this Section 10.4 and shall provide each such
Member with a written explanation of the basis for their determination so to withhold or pay. Any
amount paid on behalf of or with respect to a Member shall constitute a loan by the Company to such
Member which loan shall be repaid by such Member within fifteen (15) days after notice from the Tax
Matters Partner that such payment must be made unless (a) the Company withholds such payment from a
distribution which would otherwise be made to such Member in accordance with Section 5.2 or
Section 13.2 or (b) the Tax Matters Partner determines, in its sole and absolute
discretion, that such payment may be satisfied out of the Available Cash of the Company which
would, but for such payment, be distributed to such Member. Any amounts withheld pursuant to the
foregoing clauses (a) or (b) shall be treated as having been distributed to such Member and shall
be promptly paid, solely out of funds of the Company, by the Tax Matters Partner to the appropriate
taxing authority. Each Member hereby unconditionally and irrevocably grants to the Company a
security interest in such Member’s Company Interest to secure the Member’s obligation to pay to the
Company any amounts required to be paid pursuant to this Section 10.4. In the event that a

33

 

Member fails to pay any amounts owed to the Company pursuant to this Section 10.4 when
due, the Tax Matters Partner may, in its sole and absolute discretion, elect to make the payment to
the Company on behalf of such defaulting Member, and in such event shall be deemed to have loaned
such amount to such defaulting Member and shall succeed to all rights and remedies of the Company
as against such defaulting Member (including, without limitation, the right to receive
distributions which would otherwise be made to the Member until such loan, with interest, has been
paid in full). Any amounts payable by a Member hereunder shall bear interest at a per annum rate
of interest equal to the Prime Rate, plus five percent (5%) (but not higher than the maximum lawful
rate) from the date such amount is due (i.e., fifteen (15) days after demand) until such amount is
paid in full. The Members shall take such actions as the Company or the Tax Matters Partner shall
request in order to perfect or enforce the security interest created hereunder.

     Section 10.5 Tax Elections. Except as otherwise provided herein, the Tax Matters Partner shall, in its reasonable
discretion, determine whether to make any available election pursuant to the Code; provided,
however, that the Tax Matters Partner shall make the election under Section 754 of the Code in
accordance with applicable Regulations thereunder and shall do so at the request of either Member
who transfers its Company Interest. The Tax Matters Partner shall have the right, after the first
taxable Company Year, to seek to revoke any election (other than the election under Section 754 of
the Code, which revocation requires the consent of both Members) upon the HF Tax Matters Partner’s
determination in its reasonable discretion that such revocation is in the best interests of the
Company.

ARTICLE 11

TRANSFERS AND WITHDRAWALS

     Section 11.1 Transfer.

          11.1.1 Definition. The term “transfer” (including the term “transferred”), when used in this Article
11 with respect to a Company Interest, shall be deemed to refer to a transaction by which a
Member transfers its Company Interest, or any part thereof, to another Person and includes a sale,
assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange or any other disposition
by law or otherwise of the Company Interest, any part thereof.

          11.1.2 Requirements. No Company Interest shall be transferred, in whole or in part, except in accordance with
the terms and conditions set forth in this Article 11. Any transfer or purported transfer
of a Company Interest not made in accordance with this Article 11 shall be null and void.

          11.1.3 Transfer of Member’s Company Interest. The HF Managing Member may not transfer any portion of its Company Interest without
Skechers’ consent until the Completion of the Project pursuant to the Plans and Specifications.
Neither Member may transfer its Company Interest (other than any transfer to an Affiliate, which
shall require the consent of the other Member, which consent may not be unreasonably withheld or
delayed), in whole or in part, to any Person, without first offering such Company Interest (or part
thereof) to the other Member on the same terms and conditions. If a Member desires to transfer its
Company Interest, or any part thereof (whether or not it has received an offer to purchase same) ,
it shall send notice to the other Member stating the extent of the Company Interest which it
intends to transfer, the terms and conditions of the proposed transfer, including the purchase
price therefor, and the identity of the proposed transferee. Upon request of the receiving Member,
additional information regarding the proposed transfer and financial and other information
concerning the transferee will be promptly provided. Within twenty (20) days after receipt of the
notice of intended transfer, the receiving Member may, by notice to the Member proposing to
transfer, elect to purchase the entire Company Interest proposed to be transferred at the same
purchase price and on the same terms and conditions as set forth in the notice, but the closing
shall not occur sooner than six (6) months after the date of such notice to the Member proposing to
transfer. If the Member receiving the notice of proposed

34

 

transfer fails to elect to purchase the Company Interest as set forth above within such twenty
(20) day time period, the Member proposing the transfer may proceed to transfer the Company
Interest, but only on the terms and conditions and to the proposed transferee set forth in the
notice, and provided that such proposed transfer is consummated within sixty (60) days thereafter
(if there is any change in the foregoing or the transfer is not consummated within such sixty (60)
day period, then a new notice of intent to transfer is required). If the transfer is consummated,
the transferring Member shall promptly give notice to the other Member. The transferee shall be an
Assignee and shall not become a Member of the Company until the provisions of Article 12
have been complied with. Any transfer or purported transfer of a Member’s Company Interest not
made in accordance with this Article 11 shall be null and void.

     Section 11.2 Prohibited Transfers. Notwithstanding anything herein to the contrary, a Member may deny any proposed transfer of
the other Member’s Company Interest to any Person which is owned and controlled directly or
indirectly, by any Person described below (and the Member who denies such transfer need not elect
to purchase the Company Interest of such other Member pursuant to Section 11.1.3 to prevent
such transfer):

               (a) A business competitor of the non-transferring Member or any Affiliate thereof; or

               (b) A Person which does not have the financial strength to fulfill its obligations under this
Agreement; or

               (c) A Person who is an Embargoed Person or who has been convicted of a felony or any
violations of State Acts, the Federal Act, or any other securities laws;

               (d) A Person who has been engaged in any pending or previous litigation or arbitration in
opposition to the non-transferring Member or any Affiliate thereof; or

               (e) A Person who has a reputation in the real estate community as being “litigious” as a
result of the filing of multiple “strike suits”. The Member seeking to prohibit a transfer on the
grounds set forth in this clause (e) shall have the burden of proof, and if there is a dispute
regarding this matter, it shall be submitted to expedited arbitration under Article 15.

          11.2.1 Timing of Transfers. Transfers pursuant to this Article 11 may only be made on the first day of a
calendar month, unless the Managing Members otherwise agree.

          11.2.2 Allocations and Distributions When Transfer Occurs. If any Company Interest is transferred during any quarterly segment of the Company’s fiscal
year, income and loss of the Company and all other items attributable to such interest for such
fiscal year shall be divided and allocated between the transferor Member and the transferee Member
by taking into account their varying interests during the fiscal year in accordance with Section
706(d) of the Code, using the interim closing of the books method. Solely for purposes of making
such allocations, each of such items for the calendar month in which the transfer or redemption
occurs shall be allocated to the Person who is a Member as of midnight on the last day of said
month. All distributions of Available Cash with respect to which the Company Record Date is before
the date of such transfer or redemption shall be made to the transferor Member, and all
distributions of Available Cash thereafter shall be made to the transferee Member.

          11.2.3 Certain Prohibited Transfers. Notwithstanding anything herein to the contrary, no transfer by a Member of its Company
Interest may be made to any Person if legal counsel for the Company or the other Member renders
written advice to the effect that it believes that there is a significant risk that (a), such
transfer would be effected or would be deemed to be effected through an

35

 

“established securities market” or a “secondary market” (or the substantial equivalent
thereof) within the meaning of Section 7704 of the Code and the Regulations thereunder, or (b) such
transfer would violate any Securities Laws.

          11.2.4 Default. Notwithstanding anything herein to the contrary, no transfer of any Company Interest shall
be permitted if such transfer would create a default under any Loan, or any material agreement to
which the Company or any Subsidiary is a party.

          11.2.5 Withdrawal. Except in connection with a permitted Transfer, no Member may withdraw from the Company
without the consent of both Managing Members (and any dispute in this regard shall not be subject
to the expedited arbitration provisions in Article 15).

          11.2.6 Management. If a Member transfers its Company Interest, the transferee will (upon admission to the
Company as a Member) be entitled to appoint a Managing Member to the same extent as the
transferring Member.

ARTICLE 12

ADMISSION OF MEMBERS

     Section 12.1 Admission of Successor Members. A successor to a Member’s Company Interest that is transferred pursuant to Section
11.1.3 shall be entitled to admission to the Company as a Member on the terms and conditions
set forth herein. The business of the Company and each Subsidiary shall be carried on after such
transfer without dissolution. In each case, the admission to the Company is conditioned upon the
successor Member executing and delivering to the Company an acceptance of all of the terms and
conditions of this Agreement and such other documents or instruments as may be required by the
remaining Managing Member(s) to effect the admission. Upon admission of the successor Member to
the entire Company Interest of the transferring Member, the transferring Member shall be released
from all further liability under this Agreement.

     Section 12.2 Amendment of Agreement and Certificate. Upon the admission to the Company of any successor Member, the Managing Members shall take
all steps necessary and appropriate under the Act to amend the records of the Company and, if
necessary, to prepare as soon as practical an amendment of this Agreement and, if required by law,
shall prepare and file an amendment to the Certificate.

ARTICLE 13

DISSOLUTION AND LIQUIDATION

     Section 13.1 Dissolution. The Company shall dissolve, and its affairs shall be wound up, upon the first to occur of
any of the following (each an “Event of Dissolution”):

          13.1.1 Expiration of Term. The expiration of its term as provided in Section 2.4;

          13.1.2 Judicial Dissolution Decree. Entry of a decree of judicial dissolution of the Company pursuant to the provisions of
Section 18-802 of the Act;

          13.1.3 Sale of Company’s Assets. The sale, exchange or other disposition of all or substantially all of the Company Assets,
unless such sale or other disposition involves the deferred payment of the consideration for such
sale or disposition, in which latter event the Company shall dissolve on the last day of the
calendar month during which the balance of such deferred payment is received by the Company;

36

 

          13.1.4 Mutual Agreement. The agreement of both Managing Members (and any dispute in this regard shall not be subject
to the expedited arbitration provisions in Article 15); or

          13.1.5 Other Event. Any other event permitting the dissolution or liquidation of the Company under this
Agreement.

     Section 13.2 Winding Up.

          13.2.1 General. Upon the occurrence of an Event of Dissolution, the Company shall continue solely for the
purposes of winding up its affairs in an orderly manner, liquidating its assets, and satisfying the
claims of its creditors and the Members. No Member shall take any action that is inconsistent
with, or not necessary to or appropriate for, the winding up of the Company’s business and affairs.
A Person appointed by the Managing Members (excluding any Managing Member which is a Breaching
Member) which may be one (1) or both Managing Members who is not a Breaching Member (the
“Liquidator”), shall be responsible for overseeing the winding up and dissolution of the
Company and shall take full account of the Company’s liabilities and property and the Company
Assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and
the proceeds therefrom shall be applied and distributed in the following order:

               (a) First, to the payment and discharge of all of the Company’s Debt to creditors other than
the Members;

               (b) Second, to the payment and discharge of all of the Company’s Debt to the Members, first
with respect to any such Debt which has priority under any other provision of this Agreement, and
thereafter pro rata in accordance with amounts owed to each such Member; and

               (c) Finally the balance, if any, shall be distributed to the Members in the order and priority
set forth in Section 5.2.

No Member shall receive any additional compensation for any services performed as Liquidator
pursuant to this Article 13, but any Liquidator which is not otherwise a Member or an
Affiliate of a Member shall be entitled to receive reasonable compensation for rendering such
services.

          13.2.2 When Immediate Sale of Company Assets Impractical. Notwithstanding the provisions of Section 13.2.1 which require liquidation of the
Company Assets, but subject to the order of priorities set forth therein, if prior to or upon
dissolution of the Company the Liquidator determines that an immediate sale of part or all of the
Company Assets would be impractical or would cause undue loss to the Members, the Liquidator may,
in its sole and absolute discretion, defer for a reasonable time (consistent with the provisions of
Section 13.2.3 below) the liquidation of any Company Assets except those necessary to
satisfy current liabilities of the Company (including to those Members who are also creditors) or,
with the consent of both Members, distribute to the Members, in lieu of cash, as tenants in common,
either directly or in trust, and in accordance with the provisions of Section 13.2.1,
undivided interests in the Company Assets as the Liquidator deems not suitable for liquidation.
Any such distributions in kind shall be made only if, in the good faith judgment of the Liquidator,
such distributions in kind are in the best interest of the Members, and shall be subject to such
conditions relating to the disposition and management of such properties as the Liquidator deems
reasonable and equitable and to any agreements governing the operation of such properties at such
time. Any property distributed in kind shall be valued at fair market value by the Liquidator
using such reasonable method of valuation as it may adopt (for purposes of adjusting Capital
Accounts) and treated as though the property were sold for such value and the cash proceeds were
distributed.

37

 

          13.2.3 Compliance With Timing Requirements of the Regulations; Allowance for Contingent or
Unforeseen Liabilities or Obligations. Notwithstanding anything to the contrary in this Agreement, in the event the Company is
“liquidated” within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g) and with respect to
such liquidation there is an Event of Dissolution, distributions under Section 13.2.1(c) to
the Members who have positive Capital Account balances shall be made in compliance with the
requirements in Regulations Section 1.704-1(b)(2)(ii)(b)(2) but all distributions shall still be
made in the order of priority set forth in Section 5.2. In the discretion of the
Liquidator, a pro rata portion of the distributions that would otherwise be made to the Members
pursuant to this Article 13 may be: (a) distributed to a liquidating trust established for
the benefit of the Members for the purposes of liquidating the Company Assets, collecting amounts
owed to the Company, and paying any contingent or unforeseen liabilities or obligations of the
Company or of the Liquidator arising out of or in connection with the Company (the assets of any
such trust shall be distributed to the Members from time to time, in the reasonable discretion of
the Liquidator, in the same proportions as the amount distributed to such trust by the Company
would otherwise have been distributed to the Members pursuant to this Agreement); or (b) withheld
to provide a reasonable Reserve for Company liabilities (contingent or otherwise) and to reflect
the unrealized portion of any installment obligations owed to the Company; provided, that such
withheld amounts shall be distributed to the Members as soon as practicable.

          13.2.4 Deemed Distribution and Recontribution. Notwithstanding any other provision of this Article 13, in the event the Company is
liquidated within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g) but no Event of
Dissolution has occurred, the Company’s property shall not be liquidated, the Company’s liabilities
shall not be paid or discharged, and the Company’s affairs shall not be wound up. Instead, the
Company shall be deemed to have transferred all of the Company Assets and liabilities to a
successor entity (having the same federal income tax characteristics as the Company) in exchange
for an interest in the successor entity and, immediately thereafter, the Company will be treated as
distributing its interest in the successor entity to the Members in liquidation of the Company.

          13.2.5 Rights of Members. Except as specifically provided in this Agreement, each Member shall look solely to the
Company Assets for the return of its Capital Contribution and repayment of any loans owned to it by
the Company or a Subsidiary to the extent provided in this Agreement and shall have no right or
power to demand or receive property other than cash from the Company or a Subsidiary to the extent
provided in this Agreement. Except as specifically provided in this Agreement, no Member shall
have priority over any other Member as to the return of its Capital Contributions, distributions or
allocations. No Member has any ownership interest in any Company Assets and the Company Interest
of the Members shall be personal property for all purposes.

          13.2.6 Notice of Dissolution. In the event an Event of Dissolution occurs, the Liquidator shall, within ten (10) days
thereafter, provide written notice thereof to each of the Members and to all other Persons with
whom the Company or any Subsidiary regularly conducts business and shall publish notice thereof in
a newspaper of general circulation in each place in which the Company or any Subsidiary regularly
conducts business.

          13.2.7 Cancellation of Certificate of Formation. When all liabilities and obligations of the Company and each Subsidiary have been paid or
discharged, or adequate provision has been made therefor, and all of the remaining Company Assets
have been distributed to the Members according to their respective rights and interests as provided
in Section 13.2.1, the Company shall be terminated and a Certificate of Cancellation shall
be executed on behalf of the Company by the Members (or such other Person or Persons as the Act may
require or permit) and shall be filed with the Office of the Secretary of State of the States of
Delaware and California, and the Liquidator or such other Person or Persons shall take such other
actions, and shall execute, acknowledge and file any and all other instruments, as may be necessary
or appropriate to reflect the dissolution and termination of the Company and each Subsidiary.

38

 

          13.2.8 Reasonable Time for Winding-Up. Subject to Section 13.2.3, a reasonable time shall be allowed for the orderly
winding-up of the business and affairs of the Company and each Subsidiary and the liquidation of
its assets pursuant to this Section 13.2, in order to minimize any losses otherwise
attendant upon such winding-up, and the provisions of this Agreement shall remain in effect between
the Members during the period of liquidation.

     Section 13.3 Termination If Lease Amendment Terminates. If the Lease Amendment terminates as a result of the provision therein, then this Agreement
shall be deemed automatically terminated, and any Capital Contributions shall be promptly returned
to the Members who made same (and if necessary to accomplish this, Capital Contributions made by
the Company to the Subsidiary shall be repaid), the HF Note and the Skechers Note shall be
automatically cancelled as a result of the return of the Capital Contributions, and neither Member
shall have any further rights or obligations hereunder, provided, however, that in such event
nothing shall prevent any party to the Lease from bringing legal action on account of any breach of
the Lease.

ARTICLE 14

AMENDMENT OF AGREEMENT

     Section 14.1 Amendments.

          14.1.1 General. Amendments to this Agreement may be proposed by either Member. Except as provided in
Section 14.1.2 or Section 14.1.3, a proposed amendment shall be adopted and be
effective as an amendment hereto only if it is approved by both Members. Any dispute between the
Members regarding any proposed amendment shall not be subject to the expedited arbitration
provisions in Article 15.

          14.1.2 Managing Member’s Power to Amend. Notwithstanding Section 14.1.1, either Managing Member shall have the power to
amend this Agreement as may be required to facilitate or implement any of the following purposes:

               (a) to reflect the admission, substitution, termination, or withdrawal of Members in
accordance with this Agreement; or

               (b) to satisfy any order, directive, opinion, ruling or regulation of a federal or state
agency or contained in federal or state law applicable to the Company or any Subsidiary and
required to be complied with; or

               (c) to conform to any “single-purpose entity” requirements of a Lender; or

               (d) to correct any non-substantive, typographical errors in this Agreement.

The Member proposing the amendment will provide at least ten (10) days’ prior written notice to the
other Member when any action under this Section 14.1.2 is taken.

          14.1.3 Consent of Adversely Affected Member Required. Notwithstanding Section 14.1.2 hereof, this Agreement shall not be amended without
the consent of any Member adversely affected if such amendment would (a) modify the limited
liability of such Member, (b) alter rights of such Member to receive distributions pursuant to
Article 5 or Article 13, the allocations specified in Exhibit “A”, or the
Capital Contribution obligations set forth in Article 4, (c) cause the termination of the
Company prior to the time set forth in Section 2.4 or Section 13.1, (d) amend
Article 18, or (d) amend this

39

 

Section 14.1.3. Further, no amendment may alter the restrictions on the Managing
Members’ authority set forth herein without the consent of both Members.

ARTICLE 15

DISPUTE RESOLUTION

     Section 15.1 Mediation. In the event of any dispute between the Members under this Agreement, prior to (and as a
condition which must be satisfied before) either Member institutes litigation (but not
arbitration), the Members agree to submit the dispute to nonbinding mediation with JAMS or another
mutually acceptable mediator. Such Mediation shall be completed no later than ninety (90) days
after it is requested by either Member by notice to the other. Notwithstanding the foregoing, if
appropriate, either Member may seek a provisional remedy (such as, but not limited to, injunctive
relief) prior to commencing or completing such mediation.

     Section 15.2 Arbitration. Should a dispute arise between the Members for which “expedited arbitration” is
expressly called for under this Agreement, the parties shall submit such dispute to final and
binding arbitration to be administered in accordance with the Streamlined Arbitration Rules and
Procedures of JAMS (Judicial Arbitration and Mediation Service). No other dispute shall be
submitted to arbitration unless the Members mutually agree otherwise. Unless the parties mutually
agree otherwise, the arbitration shall take place at a JAMS Resolution Center in Los Angeles
County, California, the arbitration shall be conducted by one arbitrator (who must be disinterested
and independent of the Members), and the arbitrator shall award attorneys’ fees and the costs of
arbitration (JAMS fees and the fees of the arbitrator) to the prevailing party. The decision of
the arbitrator (the “Determination”) shall be binding and conclusive on the parties, except to the
extent that appeals are permitted under California Code of Civil Procedure §1286.2. After the
Determination, subject to any cure rights set forth in this Agreement, the prevailing party under
the Determination may enforce its rights under this Agreement notwithstanding the filing or
pendency of any appeal, but such party shall be responsible for any damages caused as a result of
the taking of such action if the Determination is eventually set aside on appeal and either the
court renders a decision on the merits in favor of the appealing party, or the appealing party is
eventually the prevailing party in any subsequent arbitration proceeding. The arbitration award
may be enforced in accordance with California Code of Civil Procedure §1285, et seq. or the Federal
Arbitration Act (9 U.S.C. §1, et seq.). To the extent that matters of law are to be considered by
the arbitrator, Delaware law shall apply (but the procedural aspects of the arbitration, as
described above, shall be in accordance with California law). The parties need not submit any
matter for which expedited arbitration is called for to Mediation under Section 15.1.
Nothing herein shall prohibit a party from seeking a provisional remedy from a court of competent
jurisdiction (e.g., a temporary restraining order or preliminary injunctive relief) pending the
results of any mediation or arbitration.

     Section 15.3 Increased Costs. If, as a result of the institution of any arbitration between the Members, there
is any increase in the cost to complete the construction of the Project, then any such increased
cost shall be funded by the Member who is not the prevailing party in such arbitration (with no
increase in such Member’s Capital Account, Capital Contributions, or in either the HF Loan or the
Skechers Loan, as the case may be). The amount of any such increase in cost shall be determined by
the arbitrator, and either Member may raise such issue in the arbitration regardless of who
initiated the arbitration or the nature of the dispute which caused the arbitration.

ARTICLE 16

DEFAULTS / REMEDIES

     Section 16.1 Defaults. Except as otherwise expressly provided in this Agreement, if either Member defaults in the
performance of its obligations under this Agreement, the other Member shall

40

 

provide notice of such default and the allegedly defaulting Member shall have a period of
fifteen (15) days to cure the default (but if the nature of the default is such that it cannot
reasonably be cured within such fifteen (15) day period, then the allegedly defaulting Member shall
have an additional reasonable amount of time, not to exceed another sixty (60) days, to cure the
default if it commences the cure within the fifteen (15) day period and diligently pursues same to
completion. Provided, however, that if the default cannot be cured, then no cure period shall be
required. Provided, further, that this provision shall not apply to a default in making required
Capital Contributions or loans under Article 4 or Article 6, as the provisions of
Article 4 or Article 6 control under those circumstances. Any material breach by a
Member of any of its material representations or warranties under this Agreement shall be a default
(but subject to notice and cure as provided herein, to the extent applicable). With respect to any
representation, warranty or covenant of HF or any HF Affiliate to convey HF’s interest in the
Property (as tenant under the Master Lease) to the Company free and clear of monetary liens and
encumbrances, if such representation, warranty or covenant is untrue on the Effective Date, HF
shall nevertheless have the right to cure such default up until the date that HF is obligated to
convey fee title to the Property to the Company. In addition to other possible defaults under this
Agreement, the following shall constitute defaults hereunder:

               (a) If the HF Affiliate who has executed the assignment of contracts to the Company
pursuant to Section 6.4 fails to honor its indemnification obligations thereunder, it shall be a
default by HF hereunder; or

               (b) If HF fails to transfer prepaid rent and operating expenses which it received from
Skechers Parent under the Lease to the Company by the time provided in the Assignment of Lease
(Exhibit “M”), it shall be a default by HF hereunder; or

               (c) If Skechers Parent fails to pay the base rent differential to the Company by the time
required under the Second Lease Amendment (Exhibit “I”), it shall be a default by Skechers
hereunder.

     Section 16.2 Remedies. Except as provided in this Agreement to the contrary, upon a default by any Member which is
not cured as provided herein (or which cannot be cured) the non-defaulting Member shall have all
rights and remedies at law and equity, as well as all rights and remedies afforded under this
Agreement. If there is a dispute regarding whether or not a Member is in default, the matter shall
be submitted to expedited arbitration in accordance with Article 15.

     Section 16.3 Offset Rights. If any final judgment of a court of competent jurisdiction (or arbitration award, if
arbitration is called for under this Agreement) is rendered against a Member, the other Member
shall have the right to offset the amount thereof against any amounts thereafter due to be
distributed to or otherwise payable to such Member, including distributions of Available Cash, the
Member loans described in Article 4 or Article 6, or any proceeds due to such
Member under the Buy-Sell provisions in Article 8.

ARTICLE 17

GENERAL PROVISIONS

     Section 17.1 Addresses and Notice. All notices to be given under this Agreement shall be in writing, and may be either
delivered personally, by certified mail return receipt requested, or by a nationally recognized
overnight courier providing proof of delivery (e.g., United Parcel Service or Federal Express)
directed to the parties at their respective addresses set forth below. Notices to the Company shall
be delivered at its principal place of business.

41

 

HF:

HF Logistics I, LLC

c/o Highland Fairview Properties

14225 Corporate Way

Moreno Valley, California 92553

Attention: Iddo Benzeevi

With Copy To:

Baker & Hostetler LLP

12100 Wilshire Boulevard, 15th Floor

Los Angeles, California 90025-7120

Attention: Bruce R. Greene, Esq.

With Additional Copy To:

Danette Fenstermacher

3070 Bristol Street, Ste 320

Costa Mesa, California 92626

 – and –

James Lieb, Esq.

Executive Vice President

TG Services, Inc.

4 Stage Coach Run

East Brunswick, New Jersey 08816

SKECHERS:

Skechers U.S.A., Inc.

228 Manhattan Beach Boulevard

Manhattan Beach, California 90266

Attention: David Weinberg, COO

With Copy To:

Greenberg Traurig, LLP

2450 Colorado Avenue

Suite 400 East

Santa Monica, California 90404

Attention: Eric Rowen, Esq. and Sanford Presant, Esq.

With Additional Copy to:

Philip Paccione, Esq.

Skechers U.S.A., Inc.

228 Manhattan Beach Boulevard

Manhattan Beach, California 90266

42

 

Notices given personally shall be deemed received upon delivery. Notices sent by overnight courier
shall be deemed given upon delivery to the courier service. Mailed notices shall be deemed given
on the date of mailing by certified mail. The time to respond to any notice shall begin to run on
the date of delivery at the proper address (or refusal of delivery during normal business hours).
Any Member hereto may designate a different address to which notices shall thereafter be directed
by notice to the other Member given in the manner hereinabove set forth.

     Section 17.2 Titles and Captions. All article or section titles or captions in this Agreement are for convenience only and
shall not be deemed part of this Agreement and in no way define, limit, extend or describe the
scope or intent of any provisions hereof. Except as specifically provided otherwise, references to
“Articles” and “Section” are to Articles and Sections of this Agreement. All schedules and
exhibits annexed or attached hereto are expressly incorporated into and made a part of this
Agreement.

     Section 17.3 Interpretation. Whenever the context may require, any pronoun used in this Agreement shall include the
corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and
verbs shall include the plural and vice versa. The terms “include” and “including” shall be
construed as if followed by the phrase “without limitation”.

     Section 17.4 Further Action. The parties shall execute and deliver all documents, provide all information and take or
refrain from taking action as may be necessary or appropriate to achieve the purposes of this
Agreement.

     Section 17.5 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and
their heirs, executors, administrators, successors, legal representatives and assigns, subject to
the restrictions on transfer set forth herein. No Member may assign its rights under this
Agreement or delegate its obligations under this Agreement, except as expressly permitted
hereunder.

     Section 17.6 Waiver of Partition. The Members hereby agree that the real property of the Company and each Subsidiary is not
and will not be suitable for partition. Accordingly, each of the Members hereby irrevocably waives
any and all rights (if any) that it may have to maintain any action for partition of any of the
Company Assets or any of the Subsidiary’s Assets or to maintain an action to compel a judicial
dissolution except to compel a liquidation or dissolution of the Company or a Subsidiary as
expressly provided in this Agreement.

     Section 17.7 Entire Agreement. This Agreement and the other agreements referenced herein constitute the entire agreement
among the parties with respect to the matters contained herein; they supersede any prior letters of
intent, agreements or understandings among them with respect to the matters contained herein and
the Agreement may not be modified or amended in any manner other than pursuant to Article
14.

     Section 17.8 Securities Law Provisions. The Company Interests have not been registered under the federal or state securities laws
of any state and, therefore, may not be resold unless appropriate federal and state securities
laws, as well as the provisions of Article 11, have been complied with.

     Section 17.9 Creditors. None of the provisions of this Agreement shall be for the benefit of, or shall be
enforceable by, any third party creditor of the Company, any Subsidiary, or any Person who is not a
Member.

     Section 17.10 Waiver. No failure by any party to insist upon the strict performance of any covenant, duty,
agreement or condition of this Agreement or to exercise any right or remedy consequent

43

 

upon a breach thereof shall constitute waiver of any such breach or any other covenant, duty,
agreement or condition.

     Section 17.11 Execution Counterparts. This Agreement may be executed in counterparts, all of which together shall constitute one
agreement binding on all the parties hereto, notwithstanding that all such parties are not
signatories to the original or the same counterpart.

     Section 17.12 Applicable Law. This Agreement shall be construed in accordance with and governed by the laws of the State
of Delaware, without regard to the principles of conflicts of law. The parties both agree to
submit to the jurisdiction of any state or federal court in the State of California, and further
agree that venue in any legal action shall be in the County of Los Angeles.

     Section 17.13 Invalidity of Provisions. If any provision of this Agreement is or becomes invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions contained herein
shall not be affected thereby.

     Section 17.14 Limitation of Member Liability. Any obligation or liability whatsoever of the Members which may arise at any time under
this Agreement shall be satisfied, if at all, out of the Members’ assets only, except as expressly
provided in this Agreement. No such obligation or liability shall be personally binding upon, nor
shall resort for the enforcement thereof be had to, the property of any of the Members’
shareholders, partners, members, trustees, officers, employees or agents, regardless of whether
such obligation or liability is in the nature of contract, tort or otherwise, except as expressly
provided in this Agreement. NEITHER THE COMPANY NOR ANY SUBSIDIARY NOR ANY MEMBER SHALL BE
RESPONSIBLE OR LIABLE TO ANY MEMBER, OR ANY OF THEIR RESPECTIVE AFFILIATES, FOR ANY PUNITIVE,
EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF THE BREACH OF THIS
AGREEMENT.

     Section 17.15 WAIVER OF JURY TRIAL. BECAUSE DISPUTES IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND
ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE MEMBERS WISH APPLICABLE STATE AND
FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE MEMBERS DESIRE THAT THEIR DISPUTES BE
RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS; THEREFORE, TO ACHIEVE THE BEST COMBINATION OF
THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION (WITHOUT SUBMITTING TO ARBITRATION), TO THE
FULLEST EXTENT ALLOWABLE BY LAW, THE MEMBERS WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT
OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS AGREEMENT.

     Section 17.16 Construction. This Agreement shall be deemed to have been drafted jointly by both Members and the
provisions of this Agreement shall not be construed against either Member as a result of any claim
that such Member (or its legal counsel) drafted same.

     Section 17.17 Attorneys’ Fees. Should any Member be required to bring legal action or arbitration to enforce its rights
under this Agreement, the prevailing party in such legal action or arbitration shall be entitled to
recover from the losing party its reasonable attorneys’ fees and costs in addition to any other
relief to which it is entitled. Such recovery of attorneys’ fees shall include any attorneys’ fees
incurred in connection with any bankruptcy or reorganization proceeding (including stay litigation)
and any attorneys’ fees incurred on appeal. The parties further agree that any attorneys’ fees
incurred in enforcing any judgment are recoverable as a separate item, and that this provision is
intended

44

 

to be severable from the other provisions of this Agreement, shall survive the judgment, and
is not to be deemed merged into the judgment.

     Section 17.18 Confidentiality. Subject to the provisions in Section 9.1, the terms and conditions of this
Agreement, including its existence, shall be confidential information and shall not be disclosed by
either Member to any Person without the prior consent of the other Member, except that a Member may
disclose the terms and conditions of this Agreement to such party’s Affiliates, attorneys and other
advisers, and any Lender, provided that such Persons are advised of the confidentiality
restrictions contained herein, and except that any other disclosure may be made if required by law
(including any required SEC filings or disclosures). If either Member determines that it is
required by law to disclose information regarding this Agreement, such Member shall, within a
reasonable time before making any such disclosure, consult with the other Member regarding such
disclosure and seek confidential treatment for such portions of the disclosure as may be reasonably
requested by the other Member.

     Section 17.19 Sierra Club Litigation. HF Managing Member has negotiated a settlement of certain pending litigation with the
Sierra Club entitled Sierra Club, a California not-for-profit corporation v. City of Moreno Valley,
Riverside County, California Superior Court Case No. RIC519566 (the “Sierra Club
Litigation”). A copy of the settlement agreement is attached hereto as Exhibit “H”.
Skechers agrees that it will cause Skechers Parent, as the tenant under the Lease, to abide by the
terms and conditions of such settlement agreement.

     Section 17.20 Adjacent Development. HF represents to Skechers that HF or its Affiliates own certain property which is situated
adjacent to and in the proximity of the Project, which is under development or which will be
developed during the term of this Agreement and the Lease. Skechers acknowledges that it has no
interest in any such property or the developments thereon, and that there will be a certain amount
of noise, construction dust and debris and inconvenience associated with such development.

     Section 17.21 Expansion Parcel.

               (a) If the tenant under the Lease does not exercise its expansion rights and does not
participate in the development of the Expansion Parcel with HF, then HF shall have the right to
either purchase the Expansion Parcel from the T2 Subsidiary (if the Expansion Parcel has not been
previously subdivided, all costs required to subdivide the Expansion Parcel to satisfy the
California Subdivision Map Act or any other conveyance requirements shall be the sole cost of HF,
and Skechers shall have the right to approve all such subdivision documents, such approval not to
be unreasonably withheld or delayed) at its then fair market value, or to enter into a ground lease
of the Expansion Parcel at its then fair market rent (which ground lease shall be for a term of not
less then twenty (20) years and upon commercially reasonable market terms and conditions). If the
parties cannot agree on fair market value or fair market rent, as the case may be, then such
amounts will be determined by an appraisal process as follows: Within fifteen (15) days after one
party notifies the other that there is no mutual agreement with respect to the determination of
fair market value or fair market rent, as the case may be, each party shall appoint an independent
appraiser which has at least ten (10) years experience in appraisals of industrial real estate in
the Riverside County, California area and who is a member of the Master Appraisers Institute. Each
such appraiser shall submit his or her opinion as to the fair market value or fair market rent, as
the case may be, within thirty (30) days after appointment. If only one party appoints an
appraiser, then his or her opinion as to fair market value or fair market rent, as the case may be,
shall be conclusive and binding on both parties. If the opinions of the two appraisers are within
ten percent (10%) of each other, then the average of the two appraisals will be conclusive and
binding on the parties as to fair market value and fair market rent, as the case may be. If the
opinions differ by more than ten percent (10%), then the two appraisers shall appoint a third,
independent appraiser (with the same

45

 

qualifications as above) who shall submit his or her opinion as to the fair market value or
fair market rent, as the case may be, within thirty (30) days thereafter, and such opinion shall be
conclusive and binding on the parties. If the two (2) appraisers cannot mutually agree upon a
third appraiser, then the third appraiser will be selected by an arbitrator (from a list of three
proposed appraisers to be submitted by each of the two appraisers) under the expedited arbitration
provisions of Article 15. Each party shall pay for the appraiser appointed by such party,
and if a third appraiser is appointed, the cost shall be borne equally by the parties.

               (b) If the tenant under the Lease does exercise its expansion rights, then upon the amendment
to the Lease as set forth therein, provided that there is no impediment to obtaining new financing
and provided further that the Company receives approval of the Construction Lender (or, if
applicable, the Permanent Lender), fee title to the Expansion Parcel shall be conveyed by the T2
Subsidiary to the T1 Subsidiary (and all other Subsidiary’s Assets of the T2 Subsidiary shall be
transferred to the T1 Subsidiary, which shall assume all liabilities of the T2 Subsidiary, and
thereafter the Expansion Parcel shall be owned, operated and managed pursuant to the terms and
conditions of the limited liability company agreement of the T1 Subsidiary). Upon consummation of
such transfers, the T2 Subsidiary shall be dissolved and liquidated, and its certificate of
formation shall be canceled.

     Section 17.22 Condition of Effectiveness of Agreement. The effectiveness of this
Agreement is conditioned upon the execution of the Second Lease Amendment concurrently with the
execution of this Agreement.

ARTICLE 18

OVERRIDING PROVISIONS RE SUBSIDIARIES

     It is understood and agreed that title to the Property will be held by the Subsidiaries.
Specifically, the T1 Subsidiary will hold title to the Development Parcel and related entitlements
(including the portion of the Project to be constructed thereon pursuant to the Lease), and the T2
Subsidiary will hold title to the Expansion Parcel, and any related entitlements (including any
improvements which may be constructed thereon pursuant to the Lease). Accordingly, notwithstanding
anything to the contrary in this Agreement, for the purposes of interpreting and implementing the
provisions of this Agreement, the following shall apply:

               (a) The contribution to the Company of HF’s interest in the Master Lease and Lease and certain
other property, and the subsequent contribution of the Property to the Subsidiaries, shall be
effectuated by a direct assignment of the Master Lease and Lease to the T1 Subsidiary in the form
of Exhibits “L” and “M”, respectively, and a subsequent conveyance by grant deed of
(x) the Development Parcel directly to the T1 Subsidiary and (y) the Expansion Parcel to the T2
Subsidiary.

               (b) To the extent permitted by law and any contractual obligations of the Subsidiaries, the
Company shall cause each Subsidiary to distribute to the Company all of such Subsidiary’s cash,
except as otherwise agreed by the Members and any available Cash of the Company shall include such
distributions of cash from the Subsidiaries to the Company.

               (c) The Managing Members shall not cause the Company to permit a Subsidiary to take any action
that would not be permitted to be taken by the Company under this Agreement without first obtaining
the required approvals of the other Managing Member or Members under this Agreement that would be
required if such action were to be being taken directly by the Company.

46

 

               (d) The Company shall not permit any Subsidiary to have any members other than the Company.

               (e) If either Member or Managing Member takes any actions (or omits to take any actions) which
results in a material default by the Company, as the sole member of either or both of the
Subsidiaries, under any of such Subsidiaries’ material obligations to third parties (including, but
not limited to, the obligations of the T1 Subsidiary as ground lessee under the Master Lease or
landlord under the Lease), then such Member or Managing Member shall likewise be deemed to be in
default under this Agreement.

               (f) If the Company is dissolved pursuant to Article 13, then the Subsidiaries shall
also be dissolved concurrently (unless all of the non-defaulting Members agree not to dissolve one
or the other of the Subsidiaries).

               (g) Unless otherwise expressly provided to the contrary in the limited liability company
agreements of the Subsidiaries, all other provisions of this Agreement (including, but not limited
to, the dispute resolution provisions) shall be deemed to be applicable to the limited liability
company agreements of the Subsidiaries (and hence shall apply to the Company as the sole Member of
the Subsidiaries), to the fullest extent possible without materially changing the fundamental
economics of the business arrangement between the Members.

               (h) To the extent that the Members are required to or elect to make Capital Contributions or
loans to the Company, which are then to be contributed to the appropriate Subsidiary, for
convenience such Capital Contributions or loans may be made directly to the appropriate Subsidiary.
Such amounts shall for all purposes be deemed to have been paid or contributed to the Company and
then paid or contributed to the appropriate Subsidiary by the Company.

(signature page follows)

47

 

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

	 	 	 	 	 	 	 	 	 	 	 	 	 

	“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 corporation,	 	 
	 

	 	 

Iddo Benzeevi,
President and Chief Executive Officer
	 	 	 	 	 	its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	By:
	 	/s/ David Weinberg
 

David Weinberg, Chief Operating Officer

	 	 

     By its signature hereon, Skechers Parent guarantees to HF, the Company and the Subsidiaries
its obligation to fund the Thirty Million Dollar ($30,000,000) Initial Capital Contribution of
Skechers as set forth in Section 4.1.1, subject to any conditions to such funding set forth
in the Agreement for the benefit of Skechers.

	 	 	 	 	 
	 	“SKECHERS PARENT”

SKECHERS U.S.A., INC., a Delaware corporation

 	 
	 	By:  	/s/ David Weinberg
 	 
	 	 	David Weinberg, Chief Operating Officer 	 
	 	 	 	 
	 

 

 

EXHIBIT “A”

CAPITAL ACCOUNTS,

ALLOCATIONS OF PROFIT AND LOSS,

AND OTHER TAX MATTERS

ARTICLE 1

DEFINITIONS

     Section 1.1 Definitions.

     All capitalized terms used herein shall have the meanings assigned to them in the Agreement.
Notwithstanding the foregoing, the following definitions shall be applicable to the following terms
as used in this Exhibit “A” and such definitions shall prevail in the event of a conflict
with the definitions in the Agreement. Referring to Sections “hereof” shall mean Sections of this
Exhibit “A”.

          (a) Agreed Value.

          “Agreed Value” of any property contributed to the capital of the Company shall mean
the fair market value of such property at the time of contribution (as agreed to in writing by the
Members without regard to Section 7701(g) of the Code (i.e., determined without regard to the
amount of Nonrecourse Liabilities to which such property is subject)).

          (b) Book Basis.

          The initial “Book Basis” of any Company property shall be equal to the Company’s
initial adjusted tax basis in such property; provided, however, that the initial “Book Basis” of
any Company property contributed to the capital of the Company shall be equal to the Agreed Value
of such property. Effective immediately after giving effect to the allocations of profit and loss,
as computed for book purposes, for each fiscal year under Section 3.1 hereof, the Book
Basis of each Company property shall be adjusted downward by the amount of Book Depreciation
allowable to the Company for such fiscal year with respect to such property. In addition, but
subject in all events to the provisions of Section 3.5 hereof, effective immediately prior
to any Revaluation Event, the Book Basis of each Company property shall be further adjusted upward
or downward, as necessary, so that it will be equal to the fair market value of such property at
the time of such Revaluation Event (as agreed to in writing by the Members taking Section 7701(g)
of the Code into account (i.e., such value shall not be agreed to be less than the amount of
Nonrecourse Liabilities to which such property is subject)).

          (c) Book Depreciation.

          The amount of “Book Depreciation” allowable to the Company for any fiscal year with
respect to any Company property shall be equal to the product of (i) the amount of Tax Depreciation
allowable to the Company for such year with respect to such property, multiplied by (ii) a
fraction, the numerator of which is the property’s Book Basis as of the beginning of such year (or
the date of acquisition if the property is acquired during such year) and the denominator of which
is the property’s adjusted tax basis as of the beginning of such year (or the date of acquisition
if the property is acquired during such year). If the denominator of the fraction described in
clause (ii) above is equal to zero, the amount of “Book Depreciation” allowable to the Company for
any fiscal year with respect to the

Exhibit “A”

1

 

Company property in question shall be determined under any reasonable method selected by the
Tax Matters Partner.

          (d) Book Gain or Loss.

          “Book Gain or Loss” realized by the Company in connection with the disposition of any
Company property shall mean the excess (or deficit) of (i) the amount realized by the Company in
connection with such disposition (as determined under Section 1001 of the Code) over (ii) the Book
Basis of such property at the time of the disposition.

          (e) Book/Tax Disparity Property.

          “Book/Tax Disparity Property” shall mean any Company property that has a Book Basis
which is different from its adjusted tax basis to the Company. Thus, any property that is
contributed to the capital of the Company by a Member shall be a Book/Tax Disparity Property if its
Agreed Value is not equal to the Company’s initial tax basis in the property. In addition, once the
Book Basis of a Company property is adjusted in connection with a Revaluation Event to an amount
other than its adjusted tax basis to the Company, the property shall thereafter be a “Book/Tax
Disparity Property”.

          (f) Capital Accounts.

          “Capital Account” shall have the meaning assigned to such term in Section 2.1
hereof.

          (g) Capital Transaction.

          “Capital Transaction” means any of the following: (i) a sale, exchange, transfer,
assignment or other disposition of all or a portion of any Company Asset (but not including sales
in the ordinary course of business of inventory, operating equipment or furniture, fixtures, and
equipment); (ii) any financing or refinancing of, or with respect to, any Company Asset except for
equipment leases or purchase money financing for movables; (iii) any condemnation or transfer in
lieu of condemnation of all or a portion of any Company Asset; (iv) any collection in respect of
property, hazard, or casualty insurance (but not business interruption insurance) or any damage
award; or (v) any other transaction the proceeds of which, in accordance with generally accepted
accounting principles, are considered to be capital in nature.

          (h) Company Minimum Gain.

          “Company Minimum Gain” shall mean the amount of “partnership minimum gain” that is
computed in accordance with the principles of Section 1.704-2(d)(1) of the Regulations. A Member’s
share of such Company Minimum Gain shall be calculated in accordance with the provisions of Section
1.704-2(g) of the Regulations.

          (i) Deductible Expenses.

          “Deductible Expenses” for any fiscal year (or portion thereof) shall mean all items,
as calculated for book purposes, which are allowable as deductions to the Company for such period
under federal income tax accounting principles (including Book Depreciation but excluding any
expense or deduction attributable to a Capital Transaction).

Exhibit “A”

2

 

          (j) Economic Risk of Loss.

          “Economic Risk of Loss” borne by any Member for any Company liability shall mean the
aggregate amount of economic risk of loss that such Member and all Related Persons to such Member
are treated as bearing with respect to such liability pursuant to Section 1.752-2 of the
Regulations.

          (k) Gross Asset Value.

          “Gross Asset Value” means, with respect to any asset, the asset’s adjusted basis for
U.S. federal income tax purposes except as follows:

               (i) the initial Gross Asset Value of any asset contributed by a Member to the Company will be
the gross Fair Market Value of the asset;

               (ii) the Gross Asset Value of all Company Assets will be adjusted to equal their respective
gross fair market values as of the following times: (a) the occurrence of a Revaluation Event; (b)
the liquidation of the Company within the meaning of Section 1.704- 1(b)(2)(ii)(g) of the
Regulations; and (c) upon any other event on which it is necessary or appropriate in order to
comply with the Regulations under Code Section 704(b);

               (iii) the Gross Asset Value of any Company Asset distributed to any Member will be adjusted to
equal the gross fair market value of the asset on the date of distribution; and

               (iv) the Gross Asset Value of Company Assets will be increased (or decreased) to reflect any
adjustments to the adjusted basis of these assets pursuant to Code Section 734(b) or Code Section
743(b), but only to the extent that such adjustments are taken into account in determining the
Capital Accounts pursuant to Section 1.704-1(b)(2)(iv)(m) of the Regulations.

          (l) Gross Income.

          “Gross Income” for any fiscal year (or portion thereof) shall mean the gross income
derived by the Company from all sources (other than from capital contributions and loans to the
Company and other than from Capital Transactions) during such period, as calculated for book
purposes in accordance with federal income tax accounting principles.

          (m) Liquidation.

          “Liquidation” of a Member’s Company Interest shall mean and be deemed to occur upon
the earlier of (i) the date upon which the Company is terminated under Section 708(b)(1) of the
Code, (ii) the date upon which the Company ceases to be a going concern (even though it may
continue in existence for the limited purpose of winding up its affairs, paying its debts and
distributing any remaining Company properties to the Members) or (iii) the date upon which there is
a liquidation of the Member’s Company Interest (but the Company is not terminated) under Section
1.761-1(d) of the Regulations. “Liquidation” of the Company shall mean and be deemed to occur upon
the earlier of (x) the date upon which the Company is terminated under Section 708(b)(1) of the
Code or (y) the date upon which the Company ceases to be a going concern (even though it may
continue in existence for the limited purpose of winding up its affairs, paying its debts and
distributing any remaining Company properties to the Members).

Exhibit “A”

3

 

          (n) Member Minimum Gain.

          “Member Minimum Gain” shall mean “partner nonrecourse debt minimum gain,” as defined
in Section 1.704-2(i)(2) of the Regulations and determined in accordance with Sections
1.704-2(i)(3) and 1.704-2(k) of the Regulations.

          (o) Member Nonrecourse Deductions.

          “Member Nonrecourse Deductions” shall mean “partner nonrecourse deductions,” as
defined in Section 1.704-2(i) of the Regulations.

          (p) Member Nonrecourse Debt.

          “Member Nonrecourse Debt” shall mean “partner nonrecourse debt,” as defined in Section
1.704-2(b)(4) of the Regulations.

          (q) Nonrecourse Deductions.

          “Nonrecourse Deductions” shall mean any and all items of Book Depreciation and other
Deductible Expenses that are treated as “nonrecourse deductions” under Section 1.704-2(c) of the
Regulations.

          (r) Nonrecourse Liability.

          “Nonrecourse Liability” shall mean any Company liability (or portion thereof) treated
as a nonrecourse liability under Section 1.704-2(b)(3) of the Regulations. Subject to the foregoing
sentence, Nonrecourse Liability shall mean any Company liability (or portion thereof) for which no
Member bears the Economic Risk of Loss.

          (s) Operations.

          “Operations” shall mean all revenue producing activities of the Company other than
activities constituting or relating to Capital Transactions.

          (t) Profits and Loss.

          “Profits” and “Loss” mean, for each Tax Period, an amount equal to the
Company’s taxable income or loss for such Tax Period, determined in accordance with Code Section
703(a) (for this purpose, all items of income, gain, loss, or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with
the following adjustments (without duplication):

               (i) Any income of the Company that is exempt from United States federal income tax and not
otherwise taken into account in computing Profits or Losses pursuant to this definition of
“Profits” and “Losses” shall be added to such taxable income or loss;

               (ii) Any expenditures of the Company described in Code Section 705(a)(2)(B) or treated as Code
Section 705(a)(2)(B) expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not
otherwise taken into account in computing Profits or Losses pursuant to this definition of
“Profits” and “Losses,” shall be subtracted from such taxable income or loss; and

Exhibit “A”

4

 

               (iii) Any items of income, loss or deduction specially allocated under Article 3 of this
Exhibit “A” shall not be taken into account in computing “Profits” or “Loss.”

          (u) Recourse Debt.

          “Recourse Debt” shall mean any Company liability (or portion thereof) that is not a
Nonrecourse Liability.

          (v) Regulations.

          “Regulations” shall mean the regulations promulgated by the United States Department
of the Treasury pursuant to and in respect of provisions of the Code. All references herein to
sections of the Regulations shall include any corresponding provision or provisions of succeeding,
similar, substitute proposed or final Regulations.

          (w) Related Person.

          “Related Person” shall mean, as to any Member, any person who is related to such
Member (within the meaning of Section 1.752-4(b) of the Regulations).

          (x) Revaluation Event.

          “Revaluation Event” shall mean any of the following occurrences: (i) the contribution
of money or other property (other than a de minimis amount) by a new or existing Member to the
capital of the Company as consideration for the issuance of an additional interest in the Company;
(ii) the distribution of money or other property (other than a de minimis amount) by the Company to
a retiring or continuing Member as consideration for an interest in the Company or (iii) any other
event permitting a revaluation of Capital Accounts under the Regulations. Notwithstanding the
foregoing, an event described in the preceding sentence shall not constitute a Revaluation Event if
both Members reasonably determine that it is not necessary to adjust the Book Basis of the
Company’s Property or the Members’ Capital Accounts in connection with the occurrence of any such
event.

          (y) Tax Depreciation.

          “Tax Depreciation” for any fiscal year shall mean the amount of depreciation, cost
recovery or other amortization deductions allowable to the Company for federal income tax purposes
for such year.

          (z) Tax Items.

          “Tax Items” shall mean, with respect to any property, all items of profit and loss
(including Tax Depreciation) recognized by or allowable to the Company with respect to such
property, as computed for federal income tax purposes.

          (aa) Unrealized Book Gain or Loss.

          “Unrealized Book Gain Or Loss” with respect to any Company property shall mean the
excess (or deficit) of (i) the fair market value of such property (as agreed to in writing by the
Members taking Section 7701(g) of the Code into account (i.e., such value shall not be agreed to be
less than the

Exhibit “A”

5

 

amount of Nonrecourse Liabilities to which such property is subject)), over (ii) the Book
Basis of such property.

ARTICLE 2

CAPITAL ACCOUNTS

     Section 2.1 Capital Accounts.

     A separate “Capital Account” (herein so called) shall be maintained for each Member
for the full term of the Agreement in accordance with the capital accounting rules of Section
1.704-1(b)(2)(iv) of the Regulations. Pursuant to the basic rules of Section 1.704-1(b)(2)(iv) of
the Regulations, the balance of each Member’s Capital Account shall be:

          (a) Increased by the amount of money contributed by such Member (or such Member’s predecessor
in interest) to the capital of the Company pursuant to ARTICLE 4 of the Agreement and this
Exhibit “A” and decreased by the amount of money distributed to such Member (or such
Member’s predecessor in interest) pursuant to ARTICLE 5 or ARTICLE 13 of the Agreement;

          (b) Increased by the fair market value of the Property (determined without regard to Section
7701(g) of the Code) (i.e., determined without regard to the amount of Nonrecourse Liabilities to
which such property is subject)) contributed by such Member (or such Member’s predecessor in
interest) to the capital of the Company pursuant to ARTICLE 4 or ARTICLE 13 of the Agreement and
this Exhibit “A” (net of all liabilities secured by such property that the Company is
considered to assume or take subject to under Section 752 of the Code) and decreased by the fair
market value of the Property (determined without regard to Section 7701(g) of the Code (i.e.,
determined without regard to the amount of Nonrecourse Liabilities to which such property is
subject)) distributed to such Member (or such Member’s predecessor in interest) by the Company
pursuant to ARTICLE 5 of the Agreement (net of all liabilities secured by such property that such
Member is considered to assume or take subject to under Section 752 of the Code);

          (c) Increased by the amount of each item of Company Profit (and other items of income or gain)
allocated to such Member (or such Member’s predecessor in interest) pursuant to Section 3.1
hereof;

          (d) Decreased by the amount of each item of Company Loss (and other items of loss or
deduction) allocated to such Member (or such Member’s predecessor in interest) pursuant to
Section 3.1 hereof; and

          (e) Otherwise adjusted in accordance with the other capital account maintenance rules of
Section 1.704-1(b)(2)(iv) of the Regulations including, without limitation, the capital account
maintenance rules for the treatment of liabilities as set forth in Section 1.704-1(b)(2)(iv)(c) of
the Regulations (provided that there shall be no double counting of items taken into account in the
definition of “Profit” or “Loss.”

     Section 2.2 Additional Provisions Regarding Capital Accounts.

          (a) If a Member pays any Company indebtedness, such payment shall be treated as a contribution
by that Member to the capital of the Company, and the Capital Account of such Member shall be
increased by the amount so paid by such Member.

Exhibit “A”

6

 

          (b) Except as otherwise provided herein, no Member may contribute capital to, or withdraw
capital from, the Company. To the extent any monies which any Member is entitled to receive
pursuant to the Agreement would constitute a return of capital, each of the Members consents to the
withdrawal of such capital.

          (c) A loan by a Member to the Company shall not be considered a contribution of money to the
capital of the Company, and the balance of such Member’s Capital Account shall not be increased by
the amount so loaned. No repayment of principal or interest on any such loan, reimbursement made
to a Member with respect to advances or other payments made by such Member on behalf of the Company
or payments of fees to a Member or Related Person to such Member which are made by the Company
shall be considered a return of capital, or any other form of distribution, or in any manner affect
the balance of such Member’s Capital Account. No Member or Related Person to such Member shall
make a loan to the Company unless such loan is authorized pursuant to the provisions of the
Agreement.

          (d) No Member with a deficit balance in its Capital Account shall have any obligation to the
Company, any other Member or any other Person to restore said deficit balance. In addition, no
venturer or partner in any Member shall have any liability to the Company or any other Member for
any deficit balance in such venturer’s or partner’s capital account in the Member in which it is a
partner or venturer. Furthermore, a deficit Capital Account balance of a Member (or a capital
account of a partner or venturer in a Member) shall not be deemed to be a liability of such Member
(or of such venturer or partner in such Member) or a Company Asset or property. The provisions of
this Section 2.2(d) shall not affect any Member’s obligation to make capital contributions
to the Company that are required to be made by such Member pursuant to the Agreement.

          (e) Except as otherwise provided herein or in the Agreement, no interest will be paid on any
capital contributed to the Company or the balance in any Member’s Capital Account.

ARTICLE 3

ALLOCATIONS OF PROFIT AND LOSS

     Section 3.1 Allocations of Profit and Loss. Subject to the provisions of Section
3.1, Section 3.2, Section 3.3, Section 3.4, and Section 3.5,
hereof, all items of Profit and Loss realized by the Company during each fiscal year shall be
allocated among the Members (after giving effect to all adjustments attributable to all
contributions and distributions of money and property effected during such year) in the manner
prescribed in this Section 3.1.

          (a) Minimum Gain Chargeback. Pursuant to Section 1.704-2(f) of the Regulations
(relating to minimum gain chargebacks) and notwithstanding any other provision of the Agreement, if
there is a net decrease in Company Minimum Gain for such year (or if there was a net decrease in
Company Minimum Gain for a prior fiscal year and the Company did not have sufficient amounts of
Gross Income and Book Gain during prior years to allocate among the Members under this Section
3.1(a), then items of Company Gross Income and Book Gain shall be allocated, before any other
allocation is made pursuant to the succeeding provisions of this Section 3.1 for such year,
to each Member in an amount equal to such Member’s share of the net decrease in such Company
Minimum Gain (as determined under Section 1.704-2(g)(2) of the Regulations), subject to any
exceptions to such requirement contained in the Regulations. Such items shall consist of (i) Book
Gain from the disposition of property subject to a Nonrecourse Liability, and (ii) if necessary, a
pro rata portion of other items of Gross Income and Book Gain. This Section 3.1(a) is
intended to comply with the minimum gain

Exhibit “A”

7

 

chargeback requirement in Section 1.704-2(f) of the Regulations and shall be interpreted
consistently therewith.

          (b) Member Minimum Gain Chargeback. Pursuant to Section 1.704-2(i)(4) of the
Regulations (relating to chargebacks of partner nonrecourse debt minimum gain) and not withstanding
any other provisions of this Agreement, if there is a net decrease in Member Minimum Gain for such
year (or if there was a net decrease in Member Minimum Gain for a prior fiscal year and the Company
did not have sufficient amounts of Gross Income and Book Gain during prior years to allocate among
the Partners under this Section 3.1(b)), then items of Company Gross Income and Book Gain
shall be allocated, before any other allocation is made pursuant to the succeeding provisions of
this Section 3.1 for such year, to each Member in an amount equal to such Member’s share of
the net decrease in such Member Minimum Gain (as determined pursuant to Section 1.704-2(i)(4) of
the Regulations), subject to any exceptions to such requirement contained in the Regulations. Such
items shall consist of (i) Book Gain from the disposition of property subject to a Member
Nonrecourse Debt, and (ii) if necessary, a pro rata portion of other items of Gross Income and Book
Gain not allocated pursuant to Section 3.1(a) above. This Section 3.1(b) is
intended to comply with the partner nonrecourse debt minimum gain chargeback requirement in Section
1.704-2(i)(4) of the Regulations and shall be interpreted consistently therewith.

          (c) Qualified Income Offset. Any Member who unexpectedly receives an adjustment,
allocation or distribution described in Regulation Sections 1.704-I (b)(2)(ii)(d)(4), (5) or (6) of
the Regulations that causes a deficit balance in its Capital Account (in excess of any amounts
which such Member is obligated to restore to the Company, if any, or any deemed deficit restoration
obligation pursuant to Regulation Sections 1.704-2(g)(1) and (i)(5) of the Regulations), shall be
allocated items of Gross Income and Book Gain before any other allocation is made pursuant to the
succeeding provisions of this Section 3.1 for such year in an amount and a manner
sufficient to eliminate, to the extent required by the Treasury Regulations, such deficit balance
as quickly as possible. This Section 3.1(c) is intended to comply with the alternate test
for economic effect set forth in Section 1.704-1(b)(2)(ii)(d) of the Regulations and shall be
interpreted and applied in a manner consistent therewith.

          (d) Nonrecourse Deductions. All Nonrecourse Deductions shall be allocated among the
Members, pro rata in accordance with their respective Contribution Percentages and in a manner
consistent with Section 1.704-2(e) of the Regulations.

          (e) Member Nonrecourse Deductions. All Member Nonrecourse Deductions attributable to
Member Nonrecourse Debt shall be allocated among the Members bearing the Economic Risk of Loss for
such debt consistent with Section 1.704-2(i)(1) of the Regulations.

          (f) Nonrecourse Liabilities. For purposes of Section 752 of the Code, all Nonrecourse
Liabilities of the Company shall be shared among the Members in the ratio of their Contribution
Percentages.

          (g) Code Section 754 Adjustment. To the extent an adjustment to the adjusted tax
basis of any Company property, pursuant to Code Sections 734(b) or 743(b) is required, pursuant to
Section 1.704-1(b)(2)(iv)(m)(2) or 1.704-1(b)(2)(iv)(m)(4) of the Regulations, to be taken into
account in determining Capital Accounts as a result of a distribution to a Member in complete
liquidation of its interest in the Company, the amount of such adjustment to Capital Accounts shall
be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the
adjustment decreases such basis) and such gain or loss shall be specifically allocated to the
Members in accordance with their interests in the Company (in the event Section
1.704-1(b)(2)(iv)(m)(2) of the Regulations applies) or to the Members to

Exhibit “A”

8

 

whom such distribution was made (in the event Section 1.704-1(b)(2)(iv)(m)(4) of the
Regulations applies).

     (h) Special Allocation of Amounts Required. In the event and to the extent that any
amount paid by the Company to a Member or to a person related to a Member is treated as having been
received in a partner capacity for federal income tax purposes, there shall be specially allocated
to such Member, before any allocation is made pursuant to Section 3.1(i) hereof, an amount
of Gross Income equal to such amount that is so treated.

     (i) General Allocations. After giving effect to the special allocations in
Sections 3.1(a) through (h) above, all items of Profit and Loss realized by the Company
shall be allocated among the Members in such a manner that would cause their respective Capital
Account balances (determined prior to taking into account distributions actually made within the
fiscal year), to the greatest extent possible, to be equal to (i) the amount that would be
distributed to each Member, if (a) the Company were to sell all of its assets for their Gross Asset
Values, (b) all Company liabilities were satisfied (limited with respect to each nonrecourse
liability to the Gross Asset Values of the assets securing such liability), and (c) the Company
were to distribute the sale proceeds and other assets of the Company pursuant to Section
5.2 of the Agreement, plus (ii) the amount of cash and other property that was distributed to
the Member within such fiscal year, minus (iii) such Member’s share of Company Minimum Gain or
Member Nonrecourse Debt Minimum Gain, computed immediately prior to the hypothetical sale of
assets.

     (j) Character of Income and Loss. For purposes of determining the nature (as ordinary
or capital) of any Company profit allocated among the Members for federal income tax purposes
pursuant to this Section 3.1, the portion of such profit required to be recognized as
ordinary income pursuant to Sections 1245 and/or 1250 of the Code shall be deemed to be allocated
among the Members in the same proportion that they were allocated and claimed the Book Depreciation
deductions, or basis reductions, directly or indirectly giving rise to such treatment under
Sections 1245 and/or 1250 of the Code or in any other manner required by temporary or final
Regulations.

     (k) Limitations On Allocations. Notwithstanding the provisions of Section
3.1(h) above:

          (i) No Loss or items of loss or deduction shall be allocated to any Member that has a deficit
Capital Account balance exceeding its actual or deemed obligation to restore the same or would have
a deficit Capital Account balance exceeding its actual or deemed obligation to restore the same as
a result of any such allocation while any other Member has a positive Capital Account balance, it
being the intention of the Members that such loss shall be allocated in those circumstances solely
to the Member(s) with positive Capital Account balances;

          (ii) In the event no Member has a positive Capital Account balance, Loss shall be allocated
between the Members pro rata based on their respective Contribution Percentages; and

          
(iii)Any Loss from a Liquidating Transaction, as well as any Profit or Loss for the fiscal
year in which the Liquidating Transaction takes place, shall be allocated among the Members in such a
manner as to cause their respective positive Capital Account balances, immediately following such allocations, to be equal, to the
maximum extent possible, to the distributions each would receive under ARTICLE 5 of the Agreement upon the distribution of the available liquidation proceeds.

Exhibit “A”

9

 

     Section 3.2 Allocations of Income and Loss in Respect of Interests Transferred.

     If any Company Interest is transferred, or is increased or decreased by reason of the
admission of a new Member or otherwise, during any fiscal year, each item of Profit and Loss for
such year shall be divided and allocated among the Members in question by taking account of their
varying interests in the Company during such year (on a daily, monthly or other basis, an interim
closing of the books method or any other permissible method under Section 706 of the Code and the
Regulations thereunder) as determined by the Managing Members.

     Section 3.3 Allocation of Tax Items.

          (a) Except as otherwise provided in the succeeding provisions of this Section 3.3,
each Tax Item shall be allocated among the Members in the same manner as each correlative item of
Profit or Loss, is allocated pursuant to the provisions of Section 3.1 hereof.

          (b) The Members hereby acknowledge that all Tax Items in respect of Book/Tax Disparity
Property are required to be allocated among the Members in the same manner as under Section 704(c)
of the Code (as specified in Sections 1.704-1(b)(2)(iv)(f) and 1.704-1(b)(2)(iv)(g) of the
Regulations) and that the principles of Section 704(c) of the Code require that such Tax Items must
be shared among the Members so as to take account of the variation between the adjusted tax basis
and Book Basis of each such Book/Tax Disparity Property. Thus, notwithstanding anything in
Section 3.1 or 3.3(a) hereof to the contrary, the Members’ distributive shares of
Tax Items in respect of each Book/Tax Disparity Property shall be separately determined and
allocated among the Members in accordance with the principles of Section 704(c) of the Code. The
method for making all Section 704(c) allocations of the Company with respect to the Initial Capital
Contribution shall be mutually agreed upon by the Managing Members, and if the Managing Members
cannot mutually agree, then the “traditional method” shall be used. HF agrees to provide Skechers
with its adjusted tax basis in the Property (as of the Closing Date) within sixty (60) days after
the Closing Date.

          (c) The Members agree that the contribution by HF of all property relating to the Project
(including fee title to the Property and all of right, title and interest in all personal property
and all plans, specifications, architectural drawings and renderings, surveys and other collateral
material relating to the ownership and development of the Property) to the Company pursuant to
Section 4.1.1(b) of the Agreement and the HF Loan made pursuant to Section 6.4 of the Agreement
will be treated by the Company and HF on their respective tax returns as follows under the
Regulations under Code Section 707:

          (i) Pursuant to Section 1.707-4(d) of the Regulations, the first payments of principal
made under the HF Note are to be treated for all purposes as payments made to HF to
reimburse HF for capital expenditures incurred by HF with respect to all property relating
to the Project during the two (2) year period preceding the transfer by HF to the Company of
such property, subject to the limitation contained in such Regulation that such
pre-formation expenditures shall not exceed twenty percent (20%) of the fair market value of
such property at the time of contribution (the “20% Limitation”) unless the fair market
value of such property does not exceed one hundred twenty percent (120%) of the adjusted
basis of such property at the time of contribution (in which case such 20% Limitation shall
not apply);

Exhibit “A”

10

 

          (ii) The remainder of the principal payments made under the HF Note shall be treated as
payments made with respect to a sale to the Company by HF of a proportionate amount of all
property relating to the Project on the date of the contribution of such property to the
Company (with the portion of such property that is deemed to have been sold by HF to the
Company being determined under the Regulations under Section 707 of the Code); and

          (iii) As required by Regulations Sections 1.707-3(c)(2) and 1.707-8, the Company shall
disclose to the IRS the Company’s treatment of the HF Note payments as pre-formation
expenses to the extent described in Section 3.3(c)(i) above.

     Section 3.4 The allocations set forth in Sections 3.1(a) through 3.1(h) hereof (the
“Regulatory Allocations”) are intended to comply with the requirements of Sections
1.704-1(b) and 1.704-2 of the Regulations and, in all events, shall be interpreted and applied
consistently therewith.

     Section 3.5 Revaluation Events and Capital Adjustments for Book Items.

     Pursuant to the capital account maintenance rules of Section 1.704-1(b)(2)(iv) of the
Regulations, effective immediately prior to any Revaluation Event, the Capital Account balance of
each Member shall be adjusted to reflect the manner in which items of Profit or Loss, equal to the
Unrealized Book Gain or Loss then existing with respect to each asset owned (to the extent not
previously reflected in the Members’ Capital Accounts) by the Company would be allocated among the
Members pursuant to Section 3.1 hereof if there were a taxable disposition of such property
immediately prior to such Revaluation Event for its fair market value (as determined by the
Managing Member taking Section 7701(g) of the Code into account). In all events with respect to
all items of Company Profit and Loss, the balances of the Members’ Capital Accounts shall be
adjusted solely for allocations of such items, as computed for book purposes, under Section
3.1 hereof and shall not be adjusted for allocations of correlative Tax Items under Section
3.3 hereof.

     Section 3.6 Intent of Liquidating Distributions.

     The parties intend that the allocation provisions of this Exhibit “A” shall produce
final Section 704 Capital Account balances of the Member being equal to the distributions required
pursuant to Section 5.2 of the Agreement. To the extent that the allocations required in
this Exhibit “A” would fail to produce such Capital Account balances (determined at the
close of each taxable year as provided in Section 3.1(i)), (a) such allocations provisions
shall be amended by the Managing Members if and to the extent necessary to produce such result and
(b) items of Company income, gain, loss, or deduction for prior open taxable years shall be
reallocated among the Members to the extent it is not possible to achieve such result with
allocations of Company income, gain, loss or deduction for the current taxable year and future
taxable years. This Section 3.6 shall control notwithstanding any reallocation or
adjustment of taxable income, taxable loss, or items thereof by the Internal Revenue Service or any
other taxing authority.

     Section 3.7 Curative Allocations.

     The Regulatory Allocations are intended to comply with certain requirements of the
Regulations. It is the intent of the Members that, to the extent possible, all Regulatory
Allocations shall be offset either with other Regulatory Allocations or with special allocations of
other items of Company income, gain, loss or deduction pursuant to this Section 3.7.
Therefore, notwithstanding any other provision of this Agreement (other than the Regulatory
Allocations), the Managers shall make such offsetting allocations

Exhibit “A”

11

 

of Company income, gain, loss or
deduction in whatever manner it determines appropriate so that, after
such offsetting allocations are made, each Member’s Capital Account balance is, to the extent
possible, equal to the Capital Account balance such Member would have had if the Regulatory
Allocations were not part of this Agreement.

ARTICLE 4

OTHER TAX MATTERS

     Section 4.1 Consistent Treatment.

     The Members shall take positions with respect to Tax Items that are consistent with the
positions taken by the Company with respect to the same Tax Items in all U.S. federal, state,
local, or foreign tax returns, all notices to government bodies, and in any audit or other
proceedings with respect to taxes.

Exhibit “A”

12

 

EXHIBIT “B”

DEVELOPMENT MANAGEMENT AGREEMENT

Exhibit “B”

 

 

DEVELOPMENT MANAGEMENT AGREEMENT

     THIS DEVELOPMENT MANAGEMENT AGREEMENT (this “Agreement”) is made and entered into
effective as of the 30th day of January, 2010 (the “Effective Date”), by and between HF
LOGISTICS-SKX, LLC (hereinafter, “Owner”); and HFC HOLDINGS, LLC, a Delaware limited liability
company (“Development Manager”).

RECITALS:

     A. Owner is a Delaware limited liability company formed pursuant to that certain Limited
Liability Company Agreement (as amended from time to time, the “LLC Agreement”) dated of even date
herewith between HF Logistics I, LLC, a Delaware limited liability company (“HF Member”), and Skechers RB, LLC, a Delaware limited liability company (“Skechers Member”).

     B. Section 7.5 of the LLC Agreement provides that the Owner shall enter into this Agreement.

     C. The Owner has caused the Project Architect to prepare the Approved Plans for the
Improvements (the construction of the Improvements on the Land in accordance with the Approved
Plans is herein called the “Project”).

     D. The Owner has approved the Development Budget for the
Project.

     E. Owner and Development Manager intend that the Development Manager perform or cause to be
performed the Development Services and receive the Development Manager Fee, in accordance with this
Agreement.

AGREEMENT:

     NOW, THEREFORE, in consideration of the foregoing (all of which is incorporated in this
Agreement by this reference) and other good and valuable consideration, receipt and sufficiency of
which are hereby acknowledged, Owner and Development Manager hereby agree as follows:

ARTICLE 1

DEFINITIONS

     Section 1.1 Certain Definitions. As used in this Agreement, the following terms have the following meanings:

     “Added Costs” has the meaning given to that term in Section 4.1.

     “Agreement” has the meaning given to that term in the introductory paragraph.

 

 

     “Applicable Laws” means all applicable statutes, ordinances, rules, regulations, codes and
interpretations by all federal, state and local governmental authorities having jurisdiction over
the Project.

     “Approval by (or of) Owner” means to be approved in writing by Owner.

     “Approved Plans” has the meaning given to that term in Section 2.4.

     “Bid Documents” has the meaning given to that term in Section 2.7(e)(i).

     “Building” means the building which constitutes part of the Improvements.

     “Close-Out” has the meaning given to that term in Section 2.11(a).

     “Completion Notice” means a notice from Development Manager (or the General Contractor) to the
Owner that Substantial Completion has occurred for the Improvements, as described in Section
2.10(a).

     “Completion of the Project” has the meaning given to that term in Section 2.11(c).

     “Construction Loan” means the loan to be made to Owner by Lender, the proceeds of which shall
be used to construct the Project.

     “Contract Documents” means the Approved Plans, the Project Construction Contract, and other
documents governing the performance obligations of the General Contractor.

     “Development Approvals” has the meaning given to that term in Section 2.7(g).

     “Development Budget” has the meaning given to that term in Section 2.3.

     “Development Budget Amendment” has the meaning given to that term in Section 2.8(f).

     “Development Manager” has the meaning given that term in the introductory paragraph.

     “Development Manager Fee” has the meaning given to that term in Section 5.1.

     “Development Services” has the meaning given to that term in Section 2.1.

     “Due Care” means to
act in good faith, within the scope of one’s authority, with the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent real estate professional
experienced in such matters would use in the conduct of the development of an industrial/warehouse
building of the type and quality envisioned in the Approved Plans.

     “Effective Date” has the meaning given to that term in the introductory paragraph.

     “Entitlement Requirements” has the meaning given to that term in Section 2.7(a)(i).

     “Force Majeure” has the meaning given to that term in Section 4.2.

2

 

     “General Contractor” means the general contractor selected by the Development Manager and
engaged by Owner to construct the Project.

     “Hard Costs” means those Project Costs so designated in the Development Budget.

     “Hazardous Materials” means any hazardous, toxic or dangerous waste, substance or material,
pollutant or contaminant, as defined for purposes of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C. Section 9601 et seq.), as amended, or the
Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), as amended, or any other
federal, state or local law, ordinance, rule or regulation applicable to the Land or the Project,
or any substance which is toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic, or otherwise hazardous, or any substance which contains gasoline, diesel
fuel or other petroleum hydrocarbons, polychlorinated biphenyls (PCBs), or radon gas, urea
formaldehyde, asbestos or lead.

     “Improvements” means an approximately 1,820,000 rentable square foot Building and other
improvements to be constructed by Owner on the Land in accordance with the Lease and the Approved
Plans.

     “Indemnified Parties” has the meaning given to that term in Section 4.3.

     “Land” means the tract of land which is the subject of the Lease and upon which the Project
will be constructed.

     “Lease” means that certain Lease dated September 25, 2007 between HF Member, as landlord, and
Skechers Parent, as tenant, as amended.

     “Lender” means the lender which extends the Construction Loan to Owner, or any future holder
of the note and other documents which evidence the Construction Loan.

     “LLC Agreement” has the meaning given that term in the Recitals.

     “Owner” has the meaning given to that term in the introductory paragraph.

     “Party” means either Owner or Development Manager.

     “Project” has the meaning given that term in the Recitals.

     “Project Architect” means HPA Architects.

     “Project Construction Contract” has the meaning given to that term in Section
2.7(e)(v).

     “Project Costs” means all costs of construction of the Project (Hard Costs and Soft Costs) as
reflected in the Development Budget.

     “Project Engineers” means the mechanical, structural and electrical engineers’ engaged in
connection with the Project.

     “Project Manager” has the meaning given to that term in Section 3.2.

3

 

     “Project Schedule” has the meaning given to that term in Section 2.3.

     “Project Team” has the meaning given to that term in Section 2.2.

     “Punchlist” has the meaning given to that term in Section 2.10(c).

     “Punchlist Items” means any items necessary to complete the Improvements in compliance with
Applicable Laws, the Approved Plans and the other requirements of this Agreement after receipt of
the Completion Notice (it being understood that the nature of the Punchlist Items is such that they
will, not materially interfere with the use, occupancy or enjoyment of the Building by Skechers
Parent as tenant under the Lease).

     “Skechers Parent” means Skechers USA, Inc., a Delaware corporation.

     “Soft Costs” means those Project Costs so designated in the Development Budget.

     “Standard of Quality” has the meaning given to that term in Section 2.5.

     “Statement of Project Costs” has the meaning given to that term in Section 2.11(b).

     “Substantial Completion” has the meaning set forth in the Lease.

      Section 1.2 Other
Definitions. Other terms defined in this Agreement have the meanings so given them. Capitalized
terms used but not defined herein shall have the same meaning herein as in the LLC Agreement.

     Section 1.3 Terminology. Unless the context of this Agreement clearly requires otherwise, (a)
pronouns, wherever used herein, and of whatever gender, shall include natural persons and
corporations, partnerships, limited liability companies and entities of every kind and character,
(b) the singular shall include the plural wherever and as often as may be appropriate, (c) the word
“includes” or “including” shall mean “including without limitation”, and (d) the words “hereof”,
“herein”, “hereunder”, and similar terms in this Agreement shall refer to this Agreement as a whole
and not any particular section or article in which such words appear. The section, article, and
other headings in this Agreement are for reference purposes and shall not control or affect the
construction of this Agreement or the interpretation hereof in any respect. Article, section,
subsection, and exhibit references are to this Agreement unless otherwise specified. All exhibits
attached to this Agreement constitute a part of this Agreement and are incorporated herein.

ARTICLE 2

SCOPE OF SERVICES

     Section 2.1 General. Development Manager shall perform, using Due Care, the services
described in this ARTICLE 2 (the “Development Services”) required for the development of
the Project. Development Manager will coordinate with the Owner with respect to the matters for
which the Owner is involved in accordance with this Agreement and Development Manager will
coordinate with the Skechers Member with respect to matters for

4

 

which the Skechers Member is involved in accordance with this Agreement. It is understood that any
decisions, approvals, consents or other rights or obligations of the Owner under this Agreement
shall be subject to the provisions of the LLC Agreement which allocate the authority to make such
decisions, approvals, consents or to exercise such rights or obligations between the Skechers
Member and the HF Member, and nothing in this Agreement is intended to modify or amend such
provisions of the LLC Agreement.

     Section 2.2 Project Team. Development Manager shall coordinate and provide leadership for the
development, design and construction team (the “Project Team”) for the Project. The Project Team
shall consist of Development Manager, Owner, the Project Architect, the Project Engineers and the
General Contractor, and others engaged by Owner to work on the development, design or construction
of the Project.

     Section 2.3 Development Budget and Project Schedule. Attached hereto marked Exhibit
“A” is a development budget (as amended, the “Development Budget” and which includes
any Added Costs) and a project schedule (as amended, the “Project Schedule”) for the
Project. Development Manager shall revise the Development Budget and the Project Schedule
from time to time, but except as set forth in Section 4.1, no amendment or
modification of the Development Budget or the Project Schedule shall be effective until
Approved by Owner and approved by Skechers Member. Notwithstanding anything herein to the
contrary, the Development Manager shall not be responsible if Completion of the Project
does not occur by the date set forth in the Project Schedule, except as a result of the
gross negligence or the willful misconduct of Development Manager.

     Section 2.4 Plans. Development Manager has coordinated the preparation of the plans and
specifications for the Project which have been approved by both the tenant under the Lease, and
Owner (the “Approved Plans”). The Approved Plans may not be amended or modified in any material
respect without the approval of Owner and the approval of the tenant under the Lease.

     Section 2.5 Standard of Quality. Development Manager has prepared and Owner has approved
detailed general and specific standards for the overall development of the Project, as set forth in
the Approved Plans and covering site use, selection of materials, building systems, landscaping,
parking and other features related to development of the Project (the “Standard of Quality”).

     Section 2.6 Compliance With Applicable Laws. Development Manager shall have the Project
Architect (or other appropriate professional) confirm that the Approved Plans for the Project
satisfy the Standard of Quality, and are in substantial compliance in all material respects with
the requirements of the Construction Loan and all Applicable Laws.

     Section 2.7 Predevelopment Phase. Subject to the general provisions of Section 2.1
through Section 2.6 above, Development Manager shall perform the following predevelopment
phase services, to the extent that it has not already done so:

          (a) Initial Planning. Development Manager shall:

5

 

               (i) Ascertain the significant subdivision, zoning, building code and other governmental
compliance issues for the Project (collectively, the “Entitlement Requirements”);

               (ii) Provide to Owner soils reports, environmental reports and other reports and studies in
Development Manager’s possession in connection with the Project;

               (iii) Obtain preliminary site plans, surveys, topographical surveys and schematic designs and
elevations for the Project; and

               (iv) Coordinate preparation and submission of materials, plans and information as necessary
under the Entitlement Requirements, and coordinate the Project development requirements of
governmental agencies.

          (b) Schematic Design. Development Manager shall coordinate the Project Architect’s
preparation of schematic design drawings for the Project and assist in evaluating design
alternatives in light of Owner’s construction, timing, function and marketing goals and objectives.

          (c) Design Development. Development Manager shall review all plans and specifications
prepared by the Project Architect and evaluate such plans and specifications in light of the
approved design concept for the Project, Owner’s cost and time constraints and Owner’s objectives.

          (d) Working Drawings. Development Manager shall:

               (i) Coordinate the preparation by the Project Architect of the construction drawings; and

               (ii) Make recommendations regarding alternative design and construction solutions whenever
design details appear to adversely affect construction feasibility, the Development Budget or the
Project Schedule or to deviate from the Approved Plans.

          (e) Contractor Bidding and Selection. Development Manager shall:

               (i) Coordinate the preparation of the “Bid Documents,” which shall consist of, among other
things, the Approved Plans, construction drawings (to the extent completed), proposed form of
Project Construction Contract and instructions to bidders.

               (ii) Make recommendations for prequalification criteria for bidders, including any need for
performance bonding of any bidder if selected as a contractor, and develop a bid list for
prospective contractors and subcontractors.

               (iii) Develop competitive bidding procedures and requirements.

               (iv) If appropriate, conduct prebid conferences to familiarize bidders with the Bid Documents and any special or unique systems,
materials, methods or requirements.

6

 

               (v) Prior to commencement of construction of any Improvements, including any site work, the
General Contractor and the Owner will enter into a guarantied maximum cost construction contract
for the Project (the “Project Construction Contract”). Development Manager shall assist Owner in
negotiating the Project Construction Contract and advise Owner as to holdbacks or retentions on
contractor payments and other contract provisions to be incorporated in the Project Construction
Contract so that Development Manager can properly manage the General Contractor’s performance.

               (vi) Provide recommendations regarding the General Contractor’s proposed temporary Project
facilities, equipment, materials and services during construction and the assignment of
responsibilities relating to same.

               (vii) Conduct pre-award conferences with the successful bidders, prepare and negotiate the
Project Construction Contract on terms and conditions acceptable to Owner (for approval and
execution by Owner) and advise Owner regarding subcontractors and major suppliers for the Project.

          (f) Payment of Project Architect and Project Engineers. Development Manager shall
review and advise Owner with regard to all requests for payment from the Project Architect, the
Project Engineers and any other consultants having contracts with Owner or Development Manager for
the Project.

          (g) Development Approvals. Development Manager shall assist Owner, the General
Contractor, the Project Architect and the Project Engineers with any governmental authorities
having jurisdiction over the Project and shall process and obtain all governmental and third party
approvals required in connection with the Project, including all approvals, permits, and
authorizations necessary for development, construction, use or occupancy of the Project, the
subdivision of the land, construction, use and occupancy of the Project, establishment of
communities facilities districts, establishment of a property owner’s association and related
documentation, and all necessary public improvement agreements, easements, dedications or other
similar agreements required in connection with the Project (collectively, the “Development
Approvals”).

          (h) Meetings. Development Manager shall meet with a representative of Owner on a
regular basis, to update Owner on the status of the Project and apprise Owner of major events and
issues anticipated by Development Manager with respect to the Project.

          (i) Contracts with Project Architect and the Project Engineers. Development Manager
shall negotiate on Owner’s behalf (for approval and execution by Owner) and advise Owner with
respect to service contracts, including, but not limited to, contracts with the Project Team and
other consultants, if any, as are necessary or appropriate in order to construct the Project.

          (j) Development Easements. Upon Development Manager’s request, Owner shall enter into
and grant such development easements, rights of way and other similar encumbrances affecting title
to the Project to the extent reasonably required for or in connection with the orderly development
of the Project.

7

 

     Section 2.8 Construction Phase. The “Construction Phase” shall commence at the time
designated in the Project Schedule. Subject to the general provisions of Section 2.1
through Section 2.6 above, and in addition to services described under Section 2.7,
which (to the extent applicable) continue throughout the term of this Agreement, Development
Manager shall perform the following construction phase services, to the extent that it has not
already done so:

          (a) Critical Path Schedule. Development Manager shall direct the General Contractor
(and others, where appropriate) to prepare and update a critical path schedule for completion of
the Project. In the event of delays impacting the critical path schedule, Development Manager
shall make recommendations for corrective action by the General Contractor.

          (b) Site Preparation. Development Manager shall monitor site work for the Project, as
well as any environmental remediation to be performed upon the Land.

          (c) Applications for Payment Requirements. Development Manager shall (i) prepare
procedures for the review and, subject to the provisions in subparagraph (o), processing of
applications for payment received from the General Contractor, (ii) assure that permitted holdbacks
or retentions are maintained upon payments to the General Contractor, (iii) confirm that
applications for payment are complete and correct and accompanied by all required documents, (iv)
obtain the Project Architect’s certification of each application for payment and (v) make
recommendations to Owner concerning payment of applications for payment and other Project Costs.
Development Manager shall prepare and coordinate orderly procedures, consistent with the
requirements of the Construction Loan, for payment of all Project Costs.

          (d) Certificate. Whenever certificates of the Project Architect or the Project
Engineers are required in accordance with the Construction Loan Agreement, Development Manager
shall coordinate delivery of such certificates to assure that necessary certificates are received.

          (e) Construction Administration. Development Manager will provide overall coordination
of development of the Project, including the following:

               (i) Meetings. Schedule and conduct (not less than once per month) job-site meetings
to discuss construction procedures, progress and scheduling with General Contractor and the Project
Architect. Development Manager shall prepare or direct the General Contractor or Project Architect
to prepare minutes of construction meetings and distribute such meeting minutes to the Project
Team.

               (ii) Contract Performance. Monitor the performance, assure maintenance of applicable
holdbacks and assist in the enforcement (short of instituting any legal proceeding) of the
obligations of the General Contractor under the terms of the Project Construction Contract.

               (iii) Bonds. If required under the terms of the Construction Loan, prior to the
General Contractor performing Work (as defined in the Project Construction Contract), Development
Manager shall obtain from the General Contractor both a General Contractor’s payment bond and a
performance bond in the full value of the Project Construction Contract

8

 

issued by a corporate surety or sureties reasonably satisfactory to Owner or the Lender, as
applicable, naming Owner or the Lender, as applicable, as a beneficiary.

               (iv) General Contractor Identification. Make timely recommendations to Owner for the
employment or dismissal of the General Contractor and all attorneys, architects, engineers,
consultants and other professionals and personnel as are necessary or appropriate to construct and
complete the Project.

               (v) Lien Claims. Obtain from the General Contractor the negotiation of settlements
with all material mechanics, materialmen and subcontractors, and if any mechanic’s, materialman’s
or similar lien and/or stop notices are filed with respect to the Project, take such action (short
of instituting legal proceedings) which is within the power of Development Manager, or cause the
General Contractor to take such lawful action, as is appropriate to contest or settle and discharge
such lien or liens and/or stop notices and to remove the same by bonding or otherwise within thirty
(30) days after receiving notice of the filing thereof.

               (vi) Warranty Corrections. Cause to be enforced (short of instituting any legal
proceeding) all warranties and guaranties of the General Contractor or materialmen with a view to
correcting any known or identified defects in the construction of the Project or in the
installation or operation of any equipment or fixtures therein, at the expense of the General
Contractor or materialmen and cause inspections of the completed Project to be made by the Project
Architect with a view to discovering any such defects.

               (vii) Monitor Work. Monitor the performance of work by the Project Team concerning
matters relating to the Project. If the Development Manager determines that any members of the
Project Team are not in compliance with the terms and conditions of their respective agreements or
contracts with Owner, Development Manager shall notify Owner of such noncompliance and the nature
thereof and of Development Manager’s recommendations with respect thereto. Any legal action to be
taken with respect to such noncompliance shall be entirely at the discretion of and under the
direction of Owner. In connection with monitoring the work, Development Manager shall not cause or
knowingly permit any Hazardous Materials to be brought upon, kept or used in or about the Land or
Project except to the extent such Hazardous Materials: (A) are necessary for the construction of
the Project, (B) are required by the Approved Plans, and (C) are used, stored and disposed of in
compliance with all Applicable Laws.

               (viii) Accidents. Notify Owner of any material accidents or damage or injury claims
arising from work on the Project promptly after Development Manager has actual knowledge of such
events.

               (ix) Shop Drawings and Other Submittals. Coordinate the Project Architect’s review
and approval of shop drawings, product data and other submittals by the General Contractor.
Coordinate the delivery by the General Contractor to Owner of the guaranties, warranties, releases,
affidavits, bonds, manuals, insurance certificates and other items required by the Project
Construction Contract.

9

 

               (x) Utilities. Coordinate the obtaining and installation of all utilities and similar
services required for the Project.

          (f) Change Orders. Development Manager shall coordinate the negotiation and
processing of all change orders to the Project Construction Contract for Approval by Owner. Copies
of all change orders will be promptly provided to Skechers Member. The Development Budget and/or
Project Schedule, as applicable, will be revised to reflect Added Costs, if any, resulting from
change orders which are Approved by Owner. Development Manager shall process and administer change
orders. Owner and agrees to reasonably and timely consider and act upon change orders and resulting
changes in the Development Budget (each, a “Development Budget Amendment”) and the Project Schedule
(each, a “Project Schedule Amendment”). Notwithstanding the foregoing, Owner need not give approval
of any change order unless (i) the change is permitted under the Construction Loan, and conforms to
the Standard of Quality, and (ii) the aggregate estimated total costs of the Project following such
change order, Development Budget Amendment do not exceed (and, prior to Completion of the Project,
are not reasonably estimated to exceed) the amount available to pay such costs under the
Development Budget immediately prior to such Development Budget Amendment therefor (as a result of
available funds in the contingency line item or realized cost savings in another line item in the
Development Budget), or alternatively either the HF Member or the Skechers Member agrees to fund
such excess costs (as required under the LLC Agreement). Subject to approval of the Lender,
Development Manager may allocate any contingency line item (Hard Cost or Soft Cost) in the
Development Budget and realized cost savings to other line items within the Development Budget.

          (g) Construction Phase Reporting. Development Manager shall furnish to Owner and
Skechers Member reports, not less frequently than monthly, containing (i) a status of construction;
(ii) a comparison of the Development Budget (which shall be presented in such a fashion that it
shows the original Development Budget and all changes thereto, including Added Costs, if any) on a
major line item basis to construction costs by trade incurred through the date of the report and a
comparison of the Project Schedule to the work actually completed through the date of the report;
(iii) a summary of change orders made during the month covered by the report; (iv) any revision to
the Project Schedule and/or Development Budget made during the month covered by the report; (v) an
estimate of the costs to be incurred in completing the Project and (or) any other information
reasonably requested by Owner or Skechers Member. Reports will be provided on a timely basis
consistent with any Construction Loan requirements.

          (h) Technical Inspections. In instances where technical inspection and testing unless
are being provided by the Project Architect or other third party (which shall be a Project Cost
paid by Owner), Development Manager shall assist the Project Architect or other third parties and
the General Contractor in coordinating such technical inspection and testing. All technical
inspection reports will be in a format approved by and will be reviewed by Development Manager.

          (i) Contract Enforcement. When appropriate, Development Manager shall advise and make
recommendations with respect to the exercise of Project Construction Contract prerogatives such as
accelerating the work when scheduled goals are in jeopardy or requiring that work found to be
defective be repaired or replaced.

10

 

          (j) Construction Loan. Development Manager shall (i) act as Owner’s agent in
administering Owner’s responsibilities and assuring compliance by Owner with the terms and
provisions of the Construction Loan documents, and (ii) subject to Owner’s cooperation with
Development Manager, coordinate the timely delivery of all necessary documents and information to
obtain monthly advances of proceeds of the Construction Loan to pay Project Costs in accordance
with the Construction Loan documents, including the General Contractor’s approved monthly
applications for payment, interest on the Construction Loan, fees and other Project Costs reflected
in the Development Budget.

          (k) Insurance of Project Architects and Engineers. Development Manager shall confirm
that the Project Architect, the General Contractor and all Project Engineers obtain all insurance
policies required under their respective contracts, and shall obtain appropriate certificates of
insurance from each as required.

          (l) Claims. Development Manager shall keep track of delays in progress of the work and
perform a preliminary evaluation of the contents of all claims (including claims for increases in
the guarantied maximum cost under the Project Construction Contract or extensions of time), obtain
the factual information concerning the claim, review the time/cost impact of the alleged claim and
make recommendations as to Owner’s position to the General Contractor or applicable subcontractor.
Development Manager shall also coordinate the submission of all insurance claims (whether by the
General Contractor, Development Manager, Owner or others) and shall process all paperwork relating
to such claims.

          (m) Preparation of Punchlist. Development Manager shall assist the General Contractor,
the Project Architect and the Project Engineers in scheduling inspections (which shall include
Skechers Parent, as tenant under the Lease) to determine the date of Substantial Completion (or
Substantial Completion of phases, if the Improvements are completed in phases), and the preparation
of the Punchlist. Development Manager shall assist the Project Architect in reviewing the Punchlist
Items and interface with the Project Architect, the General Contractor, and Skechers Parent, as
tenant under the Lease, in coordinating completion of all Punchlist Items. Development Manager
shall monitor the General Contractor’s completion of all Punchlist Items.

          (n) Shop Drawings. Development Manager shall monitor the Project Architect’s review
of shop drawings, product data, sample and submittals, and will use reasonable efforts to cause the
Project Architect to respond in a timely fashion so as not to cause delay in construction of the
Project.

          (o) Bank Accounts/Withdrawals.

               (i) Owner shall establish a bank account into which shall be deposited sufficient funds to
timely pay Project Costs as they are incurred (including deposits of proceeds of the Construction
Loan advanced by the Lender). Designated representatives of the Development Manager shall be the
signatories on such bank account, and withdrawals from such bank account (which includes checks,
wire transfers or other withdrawals) may be made upon the signature of any one of such designated
representatives. Designated representatives of Skechers Member shall also be signatories on such
bank account, but shall not exercise any right

11

 

to withdraw funds from such bank account unless and until the HF Member has been removed as a
Managing Member under the LLC Agreement. Notwithstanding the foregoing, Development Manager
covenants that it shall diligently and prudently coordinate and administer expenditures from the
bank account in accordance with the Development Budget and that all expenditures from the bank
account shall be made in strict conformance with the Development Budget in all respects (including
the nature, amount and timing of each such expenditure).

               (ii) From time to time, but not more frequently than once each month (except under unusual
circumstances) Developer Manager shall submit to Skechers Member a detailed schedule of all
withdrawals which Development Manager has approved for the payment of Project Costs, together with
reasonable back-up documentation such as invoices or statements for labor and/or material for which
payment will be made.

     Section 2.9 Affiliate Contracts. Without the express prior written consent of Owner,
Development Manager shall not enter into any contract with an affiliate of Development Manager or
HF Member in connection with the Project, except to the extent permitted under the LLC Agreement.

     Section 2.10 Occupancy; Punchlist.

          (a) Upon Substantial Completion of the Project, the Development Manager shall certify to the
Owner (or cause the General Contractor to certify to the Owner) in AIA form G-704 or substantial
equivalent: (i) that, to its knowledge, the Substantial Completion of the Project has been
achieved, in conformity with the requirements of the Project Construction Contract, and in
compliance in all material respects with Applicable Laws, all Development Approvals, the Standard
of Quality and the Construction Loan documents, free of liens or outstanding claims for payment for
labor (excepting only liens or claims of liens relating to matters that may be the subject of
legitimate disputes between the Developer and the General Contractor or subcontractors performing
work on the Project, provided the same have been bonded off or insured over to the reasonable
satisfaction of the Owner and the Lender by Development Manager), services, materials or supplies,
subject only to completion of the Punchlist Items; and (ii) that, to its knowledge, the total cost
to complete any remaining Punchlist Items on the Punchlist is reflected on the Statement of Project
Costs.

          (b) Upon Substantial Completion of the Project, Development Manager shall apply for, or have
the General Contractor apply for, and obtain all required occupancy permit(s) for the Improvements
which are required to be obtained by Owner pursuant to the Lease.

          (c) Within five (5) business days following the Owner’s receipt of the Completion Notice with
respect to the Improvements (or portions thereof, if completed in phases), Development Manager and
the Owner (and, if requested by Owner, the Project Architect and such other consultants as Owner
shall desire), together with representatives of Skechers Parent, as tenant under the Lease, will
conduct a walk-through inspection of the Improvements confirming that such Improvements have
achieved Substantial Completion in accordance with the requirements of this Agreement, the Lease
and the Contract Documents, and to jointly prepare a list (the “Punchlist”) of the Punchlist Items
needing correction or completion. Development Manager shall cause to be completed the Punchlist
Items for the

12

 

Improvements within forty-five (45) days following delivery of the Completion Notice for the
Improvements, subject to delay for items which due to season or the nature of the item are not
practical to complete and which do not interfere in any material respect with the use or enjoyment
of the Building by the tenant under the Lease.

     Section 2.11 Close-Out.

          (a) Upon Substantial Completion of the Project, Development Manager shall give notice to Owner
and Skechers Member. Within thirty (30) days following delivery of such notice (or, with respect to
items that cannot reasonably be expected to be completed within such thirty (30) day period, as
soon thereafter as Development Manager can, with the exercise of due diligence, complete such
items), Development Manager shall complete the following (herein sometimes referred to as
"Close-Out” of the Project), (i) deliver to Owner and Skechers Member a Statement of Project Costs
prepared by Development Manager and certified as true and correct to its knowledge by Development
Manager; (ii) prepare or cause to be prepared and delivered to the Owner all certificates and
documents that Owner and/or Development Manager are required to deliver to the Lender in accordance
with the Construction Loan documents; (iii) prepare or cause to be prepared and delivered to Owner
such other documents and information as Development Manager may be obligated to deliver to Owner in
connection with the Substantial Completion of the Project; (iv) monitor the compliance of the
Project Architect, the Project Engineers, and the General Contractor, as appropriate, with the
provisions of their respective contracts with the Owner relating to the Close-Out of the Project;
and (v) without limiting the foregoing, ensure that each of the following shall have been completed
and delivered to Owner:

               (i) As built drawings and specifications.

               (ii) Change orders.

               (iii) Reports including, but not limited to, soils reports, concrete reports, equipment
testing and balancing reports, termite reports, etc.

               (iv) Operation maintenance manuals for all equipment.

               (v) Certifications and test results required in accordance with Applicable Laws.

               (vi) Warranties or guaranties, including but not limited to the roof warranties, HVAC
warranties, plumbing warranties, etc.

               (vii) Keys for all locks.

               (viii) Progress photos taken at least monthly throughout the Project.

               (ix) Completion Notices as described in Section 2.10(a) above.

               (x) All necessary governmental and municipal permits or approvals (including certificates of
occupancy) for the Improvements.

13

 

               (xi) Final lien waivers from the General Contractor and all material subcontractors and
suppliers supplying services or material in connection with the construction and equipping of the
Project (excepting only liens or claims relating to matters that may be the subject of legitimate
disputes between the Development Manager or Owner, on the one hand, and the General Contractor or
subcontractors performing work on the Project or any portion thereof, on the other hand, provided
the same have been bonded off or insured over to the reasonable satisfaction of the Owner and the
Lender).

               (xii) An “ALTA-ACSM As Built” survey of the Project completed by a licensed surveyor,
certified as to accuracy.

               (xiii) The Punchlist, including for each item shown thereon, the estimated time and cost of
completing such item.

          (b) For purposes hereof, the “Statement of Project Costs” shall mean a statement of the total
of all Project Costs incurred in connection with the completion of the Project, and also including
all items on the Punchlist. Development Manager shall prepare and deliver to Owner a reconciliation
of the Statement of Project Costs with the Development Budget, both in the aggregate and for each
major line item in the Development Budget.

          (c) Development Manager acknowledges that the Project shall not be deemed complete until
Development Manager has completed the Closeout of the Project, including satisfaction of all of the
conditions set forth in this Section 2.11, completion of all items on the Punchlist, and
satisfaction of all other conditions to completion set forth in the Construction Loan Agreement
(herein referred to as “Completion of the Project”). Upon Completion of the Project (or if this
Agreement is otherwise terminated), to the extent not previously done, Development Manager shall
do, and execute and/or deliver to Owner (and Skechers Member with respect to item (i)) the
following with respect to the Project, all of which shall be done, executed and/or delivered as
promptly as is reasonably practicable:

               (i) Prepare a final accounting of all funds possessed by or under the coordination or control
of Development Manager, reflecting receipts and disbursements in connection with the Project
through the date of Completion of the Project or termination, as applicable.

               (ii) Return the balance of monies of Owner held by Development Manager.

               (iii) Execute and/or deliver all documents and instruments necessary to transfer to Owner or
its nominee, to the extent transferable, all permits held by Development Manager necessary to
construct the Project.

               (iv) Take such other actions as Owner may reasonably require to assure an orderly transition
of management of the completion of the Project.

14

 

ARTICLE 3

TERM OF AGREEMENT AND PERSONNEL

     Section 3.1 Term. The term of this Agreement shall commence upon the date of this Agreement
and shall continue, unless sooner terminated in accordance herewith, until Completion of the
Project.

     Section 3.2 Personnel. Development Manager shall designate an individual to serve as the
project manager (the “Project Manager”). Development Manager shall ensure that the Project Manager
shall be competent to perform the services required as such.

          (a) Project Manager shall devote such portion of his or her time, efforts and management
skills to the Project using Due Care as is reasonably necessary and appropriate to complete the
Project, subject to Force Majeure, in accordance with the Project Schedule and Development Budget.

          (b) Any communication given to the Project Manager by Owner shall be deemed to have been given
to Development Manager.

          (c) Development Manager will also provide such personnel and assistants, including
professional and secretarial/clerical support staff, as may be necessary to perform its Development
Services in a diligent and timely manner. Development Manager shall be responsible out of its own
funds for all salaries, overhead, costs and expenses related to the employment of the Project
Manager and any other personnel by Development Manager, which salaries, overhead, costs and
expenses shall expressly not be a reimbursable item. All persons, other than independent
contractors, employed by Development Manager in the performance of its responsibilities hereunder
shall be exclusively controlled by and shall be the employees of Development Manager and not of
Owner, and Owner shall have no liability, responsibility or authority with respect thereto.

ARTICLE 4

DEVELOPMENT BUDGET AND LIABILITY

OF DEVELOPMENT MANAGER

     Section 4.1 Increases in Development Budget. Subject to any restrictions set forth herein or
in the LLC Agreement regarding increases in the Development Budget, the Development Budget will
automatically be increased from time to time to include therein all of the following (collectively,
the “Added Costs”):

          (a) Increases in the Project Costs resulting from change orders which are
Approved by Owner;

          (b) Increases in the Project Costs incurred in connection with changes in the
scope of the Project caused by changes in Applicable Laws that are required by such Applicable Laws
to be complied with;

15

 

          (c) Increases in Project Costs due to expressly permitted increases in the guarantied maximum
cost under the Project Construction Contract;

          (d) Increases in Project Costs due to (i) Force
Majeure (as defined herein); or

          (e) Increases
in Project Costs pursuant to Section 4.6 below.

     Increases in Project Costs include (without duplication) those increases which result from time
delays due to the occurrence of any of the foregoing events ((a)-(d)).

     Section 4.2 For purposes hereof, the term “Force Majeure” means the following events or
circumstances, to the extent that they cause the delay of performance of any obligation hereunder
by Development Manager and (except as otherwise provided below) that could not, through the use of
Due Care by Development Manager, be anticipated and mitigated: (a) strikes, lockouts or picketing;
(b) riot, civil commotion, insurrection and war; (c) fire or other casualty, accidents, acts of God
or public enemy; (d) unusually adverse weather conditions not reasonably expected for the location
of the Project and the time of year in question, or (e) any other similar event which delays the
Completion of the Project and which is beyond the reasonable control of the Development Manager.
However, in no event shall any of the following be deemed to constitute Force Majeure: (i) failure
to obtain financing for or, failure to refinance, the purchase, construction or ownership of the
Project; (ii) inability to pay when due monetary sums; or (iii) the acts or omissions of the
Development Manager or any other Person acting by, through or under the Development Manager
(including without limitation, the acts or omissions of such Person that cause the event of Force
Majeure). If the Development Manager shall be delayed, hindered or prevented from performance of
its obligation to achieve Completion of the Project in accordance with this Agreement by reason of
Force Majeure, the time for such performance shall be extended on a day-for-day basis for each day
of actual delay, provided that the following requirements are complied with by the Development
Manager: (y) the Development Manager shall give prompt written notice of such occurrence to Owner
and Skechers Member, describing the Force Majeure event with specificity, and (z) the Development
Manager shall diligently attempt to remove, resolve or otherwise eliminate such Force Majeure event
and minimize the cost and time delay associated with such event, keep the Owner and Skechers Member
advised with respect thereto, and commence performance of its obligations under this Agreement
promptly upon such removal, resolution or elimination.

     Section 4.3 Development Manager’s Indemnity. Development Manager shall indemnify Owner and
its partners, members, managers, shareholders, directors, officers and employees and the heirs,
successors and assigns of each of the foregoing (collectively, the “Indemnified Parties”), defend
the Indemnified Parties and hold the Indemnified Parties harmless from and against any and all
suits, actions or claims and from resulting damages, losses, costs or expenses (including
reasonable attorneys’ fees and court costs, but excluding consequential damages and punitive
damages) incurred by the Indemnified Parties or any one or more of them due to or arising from,
directly or indirectly, (a) the grossly negligent acts, or omissions, willful misconduct or
material breach of this Agreement by Development Manager, (b) the misapplication or
misappropriation by Development Manager of any funds of Owner, (c) the actions of Development
Manager outside the scope of authority granted to Development

16

 

Manager under this Agreement, or (d) the material breach by the Development Manager of any of its
material obligations under this Agreement.

     Section 4.4 Owner’s Indemnity. Owner shall indemnify the Development Manager and its members,
managers, shareholders, directors, officers and employees and the heirs, successors and assigns of
each of the foregoing (collectively, the “Manager Indemnified Parties”), defend the Manager
Indemnified Parties and hold the Manager Indemnified Parties harmless from and against any and all
suits, actions or claims and from resulting damages, losses, costs or expenses (including
reasonable attorneys’ fees and court costs, but excluding consequential damages and punitive
damages) incurred by the Manager Indemnified Parties or any one or more of them due to or arising
from, directly or indirectly, the willful misconduct or breach of this Agreement by Owner or any
other loss not subject to the indemnification obligations set forth
in Section 4.3 arising from the
performance of Development Manager’s obligations under this Agreement (except to the extent
resulting from the acts or omissions of HF Member in violation of any provisions in the LLC
Agreement).

     Section 4.5 Records. Records of all time charged to the Project, and records of Development
Services performed shall be maintained on a customary and consistent basis and shall be available
to Owner at mutually convenient times and upon reasonable prior written notice for review and
audit. Development Manager shall maintain all accounting records and receipts for at least three
(3) years from Completion of the Project. Records regarding any dispute involving this Agreement
shall be maintained until such dispute is resolved.

     Section 4.6
Time Delays/Arbitration. Under the LLC Agreement, certain matters may be
submitted to binding arbitration. If, as a result of the institution of any arbitration between HF
Member and Skechers Member, the arbitrator determines that there is a resulting change in the
Project Schedule, then the Project Schedule shall be modified accordingly.

ARTICLE 5

COMPENSATION

     Section 5.1 Development Manager Fee. In consideration of Development Manager’s Services
hereunder, Owner shall pay to Development Manager a fee (the “Development Manager Fee”), equal to
three and one-half percent (3.5%) of the total Project Costs (including both Hard Costs and Soft
Costs, but exclusive of the cost of the Land, as reflected in the Development Budget) minus the
original principal balance of the HF Loan (as defined in the LLC Agreement). Subject to
availability of draws under the Construction Loan, such fee shall be paid in equal monthly
installments over the pro-forma construction period (as set forth in the Project Schedule).
Development Manager shall not be entitled to reimbursement of any expenses incurred in performing
the Development Services that represent compensation of any of Development Manager’s employees or
otherwise represent Development Manager’s overhead, but Development Manager shall be entitled to
reimbursement of reasonable out-of-pocket expenses incurred in performing the Development Services.

17

 

     Section 5.2 Third Party Consultants. It is contemplated that Owner will engage all
contractors, architects, engineers, attorneys and other consultants and professionals to be
employed in connection with the Project. Development Manager is not obligated to pay the
compensation of any such third party consultants or professionals (other than on behalf of Owner).

ARTICLE 6

INSURANCE

     Section 6.1 Development Manager Insurance. Development Manager shall procure and maintain (or
cause the General Contractor to procure and maintain), throughout the term of this Agreement all
insurance required pursuant to this Section 6.1.

          (a) The form and substance of all insurance policies obtained by Development Manager in
meeting the requirements under this Section 6.1 shall be subject to reasonable approval by Owner.
All such policies shall be issued by insurance companies qualified to transact insurance in the
state or commonwealth in which the Project is located and with a minimum financial rating of A-
Class IX by A.M. Best, or otherwise acceptable to Owner. Development Manager shall furnish a
certificate from its insurance carrier(s) ten (10) days before commencement of the work, and
annually thereafter, demonstrating that it has complied with the above requirements and stating
that the insurer will provide not less than thirty (30) days prior notice of the cancellation,
non-renewal, or material change in any of the coverages so required.

          (b) Insurance
provided under Section 6.1(c):

               (i) Shall be primary and not in excess of or contributing to any insurance or self-insurance
maintained by Owner, any other party whom Owner identifies, or its respective consultants and
agents;

               (ii) For
insurance specified by Section 6.1(c) shall be endorsed to state that Owner, and
any other party whom Owner identifies and their respective partners, members, managers, directors,
officers, and employees are named as Additional Insureds as per ISO Form CG2037 1001. if reasonably
available, or its substantial equivalent.

          (c) (i) Commercial General Liability Insurance, with a
combined single limit of $1,000,000 for bodily injury and property damage per occurrence and annual
project aggregate of $2,000,000, and $1,000,000 for completed operations.

               (ii) Business Automobile Liability Insurance, with a combined single limit for bodily injury and property damage per
accident of $1,000,000 covering any and all owned, non-owned and hired autos and including
Broadened Pollution Coverage per CA9948 or its equivalent.

               (iii) Worker’s Compensation and Employer’s Liability Insurance that provides the statutory
benefits required by law (but not less than $1,000,000 for Employer’s Liability Insurance) .

18

 

               (iv) Excess liability insurance, following the form, supplementing the general liability, auto
liability, and employers liability referenced above with minimum limits of $5,000,000.

          (d) Any insurance that contains a deductible or self-insured retention in excess of $25,000 shall require
Approval by Owner.

          (e) Development Manager shall require the General Contractor to procure and
maintain insurance as specified in Section 6.1(c).

          (f) If Development Manager desires to have limits in excess of those required or desires to
carry additional coverages for its own protection, the arrangements therefor and the cost thereof
shall be the sole responsibility of Development Manager. Otherwise, such insurance shall be paid
for by Owner, to the extent not paid by the General Contractor.

          (g) Within ten (10) days of Owner’s request, Development Manager shall provide such requesting
party copies of all insurance policies required under Section 6.1(c).

          (h) In the event Development Manager does not comply with the insurance requirements as set
forth under Section 6.1, Owner may, at its option (and without waiving any other rights or
remedies),to the extent possible, obtain and maintain such insurance, and the cost of such
insurance shall be paid by Development Manager and may be deducted from Development Manager’s
compensation.

     Section 6.2 Owner Insurance. Owner shall procure and maintain all insurance pursuant to this
Section 6.2 covering Development Manager, the General Contractor and all other contractors and
professionals and Owner.

          (a) All such policies shall be issued by insurance companies qualified to transact insurance
in the state or commonwealth in which the Project is located and with a minimum financial rating of
A- Class IX by A.M. Best.

          (b) Insurance provided under Section 6.2(c):

               (i) Shall be endorsed to state that the right of cancellation or material change in coverage
by the insurance carrier is waived, unless thirty (30) days’ written notice is furnished by
registered mail to Development Manager.

          (c) Within thirty (30) days following the Effective Date and for so long as the Improvements
are under construction pursuant to the Project Construction Contract, Owner shall obtain and
maintain “Builders Risk” Property Insurance on an “all risk” peril form ( including all usual and
customary coverage for a Project of this nature) for an amount equal to the completed replacement
value of the Improvements. Such insurance shall include the interests of Owner, Development
Manager, the General Contractor and subcontractors in the work, as their interests may appear. A
certificate of insurance evidencing the foregoing shall be provided to Development Manager upon
request.

19

 

     Section 6.3 Waiver of Subrogation. To the fullest extent permitted without invalidating any
insurance policies required hereunder, Owner and Development Manager waive all rights against (a)
each other and any of their subcontractors, agents and employees, each of the other, and (b) the
General Contractor, the Project Architect, and any of their subcontractors, agents and employees,
for damages caused by fire or other perils to the extent covered by property insurance obtained to
this Section 6.3 or other property insurance applicable to the construction of the Project, except
such rights as they have to proceeds of such insurance held by the Owner as fiduciary. The Owner or
Development Manager, as appropriate, shall require of the General Contractor, the Project
Architect, and the subcontractors, agents and employees of each of them, by appropriate agreements,
written where legally required for validity, similar waivers each in favor of other parties
enumerated herein. The policies shall provide such waivers of subrogation by endorsement or
otherwise. A waiver of subrogation shall be effective as to a person or entity even though that
person or entity would otherwise have a duty of indemnification, contractual or otherwise, did not
pay the insurance premium directly or indirectly, and whether or not the person or entity had an
insurable interest in the property damaged.

ARTICLE 7

LIMITATION AS TO SERVICES AND AUTHORITY

     Section 7.1 Limitation. Without otherwise relieving Development Manager of its obligation to
perform the Development Services:

          (a) Nothing in this Agreement shall be construed to relieve the
Project Architect, the Project Engineers, or any other contractors, subcontractors, consultants,
suppliers, attorneys or other professionals rendering services in connection with the Project of
their responsibilities to perform their duties in accordance with the terms of their respective
contracts, or to preclude Owner or Development Manager from pursuing their respective rights
vis-à-vis such consultants or professionals. Furthermore, the furnishing of services by the Owner
or other consultants of Owner shall not be construed to relieve Development Manager of its
responsibility to perform its duties in accordance with this Agreement.

          (b) Development Manager shall have no right or obligation to execute any contract or agreement
for or on behalf of Owner except as expressly authorized in writing from time to time by Owner.

     Section 7.2 Owner and Skechers Member Approvals. Except to the extent expressly permitted
under the Development Budget or this Agreement, and without limitation on the other restrictions
contained in this Agreement, Development Manager shall not take any action, expend any sum, make
any decision, give any consent, approval or authorization, enter into any agreement or incur any
obligation with respect to any of the following matters unless and until the same have been
Approved by Owner and approved by Skechers Member: (a) any change in the Approved Plans; or (b) any
material expenditure or incurring of any material obligation by or on behalf of Owner except for
expenditures made and obligations incurred pursuant to and specifically set forth in the
Development Budget.

20

 

ARTICLE 8

OWNER AND INDEPENDENT CONSULTANTS

     Section 8.1 Owner’s Inspection Rights.

          (a) Development Manager acknowledges that Owner has the right to inspect the Project and to
review all of General Contractor’s applications for payment and all of Development Manager’s
applications for disbursement of Construction Loan proceeds during normal business hours and upon
reasonable prior written notice to Development Manager. Development Manager agrees (i) to
reasonably cooperate with Owner in connection with the performance by Development Manager of its
Development Services hereunder, (ii) to provide Owner and Skechers Member copies of all
correspondence, notices, schedules and other information that Development Manager provides, or is
required hereunder to provide to Lender, such delivery to be simultaneous with delivery of such
information to Lender, (iii) except as expressly permitted under this Agreement and/or the LLC
Agreement, not to amend this Agreement, the Approved Plans, the Development Budget or the Project
Schedule without the Approval by Owner and approval by Skechers Member.

          (b) Skechers Member may retain (at its expense) independent third-party consultants to advise
and assist with the Project. Development Manager agrees to reasonably cooperate with such
consultants, and to allow such consultants access, with no time, place or prior notice requirement
or other restrictions, requirements or limitations (except as provided in this Agreement and
reasonable safety regulations of the General Contractor that apply also to Development Manager) to
inspect the Project, the work in progress, all work sites involved in connection with construction
of the Project (whether located on the Land or otherwise) and Development Manager’s and the General
Contractor’s books and records in connection therewith. Without limiting the generality of the
foregoing, representatives of Skechers Member shall have the right to attend all monthly
construction meetings of the General Contractor and the Project Architect or the Project Engineers,
and all construction meetings of the General Contractor and representatives of the Lender.
Development Manager shall keep Skechers Member reasonably informed of any such meetings so that
representatives of Skechers Member may attend.

ARTICLE 9

TERMINATION

     Section 9.1 Termination by Owner. If (a) Development Manager defaults in the performance of
any of its obligations hereunder in any material respect and fails to cure such failure within
thirty (30) days following written notice thereof or, in the case of any such failure which can be
cured but not within such thirty (30) day period, if Development Manager fails to begin reasonable
steps to cure such failure within thirty (30) days following written notice thereof or does not
thereafter diligently prosecute such cure to completion within ninety (90) days in the aggregate
following written notice thereof, or (b) Development Manager commits any act in its capacity as
Development Manager involving fraud, bad faith, willful misconduct or gross negligence, or (c) the
HF Member defaults under the LLC Agreement (after any applicable

21

 

notice and cure period) then Owner may, without prejudice to Owner’s other rights or remedies under
the LLC Agreement, at law or in equity, terminate this Agreement and take possession of all work
performed hereunder by Development Manager and perform the Development Services by whatever method
Owner may deem expedient including continuing to use any contractors, subcontractors or other
professional consultants engaged on the Project. In the event this Agreement is terminated
pursuant to this Section 9.1, Development Manager shall not be entitled to any portion of the
Development Manager Fee not theretofore paid to Development Manager, and if termination is pursuant
to clauses (a) or (b) above, in addition to any other measure of damages available under the LLC
Agreement, at law or in equity, Owner shall be entitled to recover from Development Manager all
actual damages (expressly excluding consequential or punitive damages) incurred by Owner in
connection with the Project resulting from Development Manager’s default hereunder, including all
costs and expenses incurred by Owner in pursuing remedies hereunder or in contracting with another
development manager to complete the Project.

     Section 9.2 Suspension and Termination by Development Manager. If Owner fails to pay
Development Manager any portion of the Development Manager Fee due to Development Manager
hereunder, then (except in the case of a good faith dispute as to amounts due or in the case of a
failure to pay resulting from the acts or omissions of the HF Member), Development Manager may,
without prejudice to Development Manager’s other rights or remedies, after giving Owner ten (10)
days’ written notice, suspend performance unless Owner makes the required payment within such ten
(10) day period. If Development Manager suspends performance, it will be without prejudice to
Development Manager’s right to terminate this Agreement at any time after the date that is thirty
(30) days following the date of such default by Owner unless Owner timely cures the default in
question within the aforesaid 30-day period. Any suspension by Development Manager of its
performance hereunder pursuant to this Section 9.2 shall in no event cause Development Manager to
be in default hereunder and (a) any additional costs incurred for the Completion of the Project as
a result of or in connection with such suspension of performance shall be deemed to be included
within the meaning of “Added Costs” as used in this Agreement; and (b) any delays in the Completion
of the Project as a result thereof or in connection therewith shall be deemed to extend all
affected dates set forth in the Project Schedule. In addition, whether Development Manager
suspends performance or terminates this Agreement pursuant to this
Section 9.2, Development Manager
shall be entitled to any and all rights and remedies available at law or in equity (expressly
excluding consequential or punitive damages).

ARTICLE 10

MISCELLANEOUS

     Section 10.1 Protection of Persons or Property. If Development Manager becomes aware of any
emergency on the Project affecting the safety of persons or property, Development Manager shall
take all commercially reasonable prudent actions to prevent threatened damage, injury or loss, and
Development Manager shall notify Owner as soon as practicable thereafter of such emergency. Unless
such emergency was caused by the gross negligence or willful misconduct of Development Manager,
Owner shall reimburse Development Manager for all reasonable costs incurred by it in connection
with such actions.

22

 

     Section 10.2 Applicable Law. This Agreement shall be construed in accordance with the laws of
the State of California.

     Section 10.3 Jurisdiction. Jurisdiction for all legal actions, including cross claims brought
by Owner or Development Manager against the other, which may arise as a result of any question,
matter or dispute concerning the Project or this Agreement shall lie exclusively with the
appropriate California court in the County of Los Angeles.

     Section 10.4 Notices. All notices required under this Agreement shall be deemed to have been
received by the addressee if delivered to a duly authorized representative of the Person for whom
they are intended or if sent by certified mail, return receipt requested, by hand or by overnight
courier, addressed as follows:

	 	 	 

	If to Owner:

	 	Highland Fairview-SKX, LLC
	 

	 	c/o Highland Fairview Properties
	 

	 	14225 Corporate Way
	 

	 	Moreno Valley, California 92553
	 

	 	Attention:      Iddo Benzeevi
	 
	 	 
	With a copy to:

	 	Skechers RB, LLC
	 

	 	c/o Skechers USA, Inc.
	 

	 	228 Manhattan Beach Boulevard
	 

	 	Manhattan Beach, California 90266
	 

	 	Attention:      David Weinberg
	 

	 	                       Chief Operating Officer
	 
	 	 
	If to Development Manager:

	 	HFC Holdings, LLC
	 

	 	c/o Highland Fairview Properties
	 

	 	14225 Corporate Way
	 

	 	Moreno Valley, California 92553
	 

	 	Attention:      Iddo Benzeevi
	 
	 	 
	With Additional Copy to:

	 	James Lieb, Esq.
	 

	 	Executive Vice President
	 

	 	TG Services, Inc.
	 

	 	4 Stage Coach Run
	 

	 	East Brunswick, New Jersey 08816
	 
	 	 
	 

	 	- and -
	 
	 	 
	 

	 	Danette Fenstermacher
	 

	 	3070 Bristol Street, Ste 320
	 

	 	Costa Mesa, California 92626

     Either party may change its address for the giving of notices by notice given in accordance
with this Section.

23

 

     Section 10.5 Extent of Agreement. This Agreement represents the entire and integrated
agreement between the parties hereto with respect to Development Services and supersedes all prior
negotiations, representations or agreements, either written or oral. This Agreement may only be
amended by written instrument executed by Development Manager, Owner, and Skechers Member.

     Section 10.6 Severability. In the event that any of the provisions, or portions or
applications thereof, of this Agreement are held to be unenforceable or invalid by any court of
competent jurisdiction, such invalid or unenforceable provision shall in no way affect the validity
and enforceability of the remaining provisions, or portions or applications thereof.

     Section 10.7 Successors and Assigns. Owner and Development Manager, respectively, bind
themselves, their successors, assigns and legal representatives to the other party to this
Agreement and to the successors, assigns and legal representatives of such other party with respect
to all covenants of this Agreement. Neither party may assign this Agreement or any of its
obligations to perform under this Agreement without the express written consent of the other.
However, Owner has the right to assign its rights hereunder to the Lender.

     Section 10.8 Counterparts. This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original agreement and all of which together shall constitute one
agreement.

     Section 10.9 Third Party Beneficiaries. This Agreement is intended for the benefit of, and
shall be enforceable by, only Development Manager, Owner, Skechers Member and their respective
permitted successors and assigns, and not by any third parties, including creditors of Owner or
Development Manager, except to the extent that Owner’s rights under this Agreement have been
assigned to the Lender.

     Section 10.10 Effect of Waiver or Consent. A waiver or consent, express or implied, to or of
any breach or default by any party in the performance of that party of its obligations under this
Agreement is not a consent or waiver to or of any other breach or fault in the performance by that
party of the same or any other obligation with that party with respect to this Agreement. Failure
on the part of that party to complain of any act of any party or to declare any party in default
with respect to this Agreement, irrespective of how long that failure continues, does not
constitute a waiver by that party of its rights with respect to that default until the applicable
statute of limitations has run.

     Section 10.11 Further Assurances. In connection with this Agreement and the transactions
contemplated hereby, each party shall execute and deliver any additional documents and instruments
in performing additional acts that may be necessary or appropriate to effectuate and perform the
provisions of this Agreement and those transactions.

     Section 10.12 Attorneys’ Fees. If any litigation is instituted by any party against another
party relating to this Agreement or the subject matter thereof, the party prevailing in such
litigation shall be entitled to recover, in addition to all damages allowed by law and other
relief, all court costs and reasonable attorneys’ fees incurred in connection therewith.

24

 

     Section 10.13 Independent Contractor; Licenses. In performing its services hereunder,
Development Manager shall be an independent contractor. Development Manager shall, at its own
expense, qualify to do business in California (if not already qualified) and obtain and maintain
such licenses, if any, as may be required to be issued and held in its name for the performance by
Development Manager of the Development Services under this Agreement.

     Section 10.14 Agreement Negotiation. This Agreement is the result of detailed negotiations
between the parties and the terms herein have been agreed upon after prolonged discussions. All
parties agree and acknowledge that they were represented by competent counsel in such negotiations
and that in construing this Agreement neither party shall be considered to have drafted this
Agreement.

     Section 10.15 Skechers Member Approvals. Any approvals or consents to be given by Skechers
Member hereunder shall not be unreasonably withheld or delayed.

(signature pages follow)

25

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date.

	 	 	 	 	 	 	 	 	 	 	 	 	 

	“OWNER”	 	 	 	“DEVELOPMENT MANAGER”
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	HF LOGISTICS -SKX, LLC, a Delaware limited

liability company	 	 	 	HFC HOLDINGS, LLC, a Delaware limited liability 

company
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	HF Logistics I, LLC, a Delaware limited

liability company, it’s Managing Member	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	By	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 	 

Iddo Benzeevi, its Chief Executive Officer
	 

	 	By:	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 

Iddo Benzeevi, President and Chief

Executive Officer	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	Skechers RB, LLC, a Delaware limited

liability company, it’s Managing Member	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Skechers USA, Inc., a Delaware

Corporation, It’s sole member	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 

David Weinberg, Chief Operating

Officer	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 

Robert Greenberg, Chief Executive

Officer	 	 	 	 	 	 

JOINDER

Skechers RB, LLC, a Delaware limited liability company and Skechers USA, Inc., a Delaware
corporation, each hereby joins in the execution of this Agreement as a third party beneficiary of
this Agreement and for the purposes of confirming their agreement to comply with and perform those
obligations applicable to Skechers Member or Skechers Parent set forth herein.

	 	 	 	 	 	 	 	 	 	 	 

	“SKECHERS PARENT”	 	 	 	“SKECHERS MEMBER”
	 
	 	 	 	 	 	 	 	 	 	 
	SKECHERS USA, INC., a Delaware corporation	 	 	 	SKECHERS RB, LLC, a Delaware limited liability

company
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	Skechers USA, Inc, a Delaware corporation, its

sole member
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	David Weinberg, Chief Operating Officer	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	By:	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	David Weinberg, Chief Operating Officer
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	Robert Greenberg, Chief Executive Officer	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	By:	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	Robert Greenberg, Chief Executive Officer

26

 

EXHIBIT “A”

DEVELOPMENT BUDGET AND

PROJECT SCHEDULE

EXHIBIT “A”

 

 

Exhibit A

	 	 	 	 	 	 	 	 	 

	Land
	 	 	 	 	 	$	30,000,000	 
	 
	 	 	 	 	 	 	 	 
	Construction Costs
	 	 	 	 	 	 	[*]	 
	 
	 	 	 	 	 	 	 	 
	Fees, Bonds and Permits
	 	 	 	 	 	 	 	 
	Governmental Fees
	 	 	[*]	 	 	 	 	 
	Construction Bonds
	 	 	[*]	 	 	 	 	 
	Impact Fees
	 	 	 	 	 	 	 	 
	MSHCP
	 	 	[*]	 	 	 	 	 
	Kangaroo Rat
	 	 	[*]	 	 	 	 	 
	Area Drainage Fee
	 	 	[*]	 	 	 	 	 
	DIF
	 	 	[*]	 	 	 	 	 
	TUMF
	 	 	[*]	 	 	 	 	 
	Schools
	 	 	[*]	 	 	 	 	 
	EMWD
	 	 	[*]	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	Total Fees, Bonds and Permits
	 	 	 	 	 	 	[*]	 
	 
	 	 	 	 	 	 	 	 
	Technical Consultants
	 	 	 	 	 	 	 	 
	Entitlements
	 	 	[*]	 	 	 	 	 
	Engineering, Traffic and Other
	 	 	[*]	 	 	 	 	 
	Building Architectural & Structural
	 	 	[*]	 	 	 	 	 
	Landscaping
	 	 	[*]	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	Total Technical Consultants
	 	 	 	 	 	 	[*]	 
	 
	 	 	 	 	 	 	 	 
	Other Costs
	 	 	 	 	 	 	 	 
	Leasing 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 Reimbursements
	 	 	 	 	 	 	 	 
	Area 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

[1] [*]% on Total Project Cost, net of land, costs to date and management fee

		 	
	*	 	Confidential Portions Omitted and Filed Separately with  the
Commission.

 

 

Exhibit A-1

Skechers T.I. Requests

			
	
	 	Date: 1/29/2010

	 	 	 	 	 	 	 	 	 
	CSI	 	 	Tenant Improvements - Current Plans & Requests thru 2009	 	 	Total	 
	 	 	 	 	 General Conditions
	 	 	 	 
	 	00-7213	 	 	General Conditions
	 	$	[*]	 
	 	01-3100	 	 	Project Management
	 	$	[*]	 
	 	01-5126	 	 	Temporary Lighting
	 	$	[*]	 
	 	01-7423	 	 	Final cleaning
	 	$	[*]	 
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	General Conditions — Subtotal:
	 	$	[*]	 
	 	 	 	 	Site
	 	 	 	 
	 	32-1313	 	 	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:
	 	$	[*]	 

See Additional Sheet for Continuation

* Confidential Portions
Omitted and Filed Separately with the Commission.

1

 

Exhibit A-1

Skechers
T.I. Requests

			
	 	 	 
	
	 	Date: 1/29/2010

	 	 	 	 	 	 	 	 	 
	CSI	 	 	Tenant Improvements - Current Plans & Requests thru 2009	 	Total	 
	 	 	 	 	Building
	 	 	 	 
	 	03-2100	 	 	Reinforcement Steel
	 	$	[*]	 
	 	03-3100	 	 	Lightweight Concrete
	 	$	[*]	 
	 	 	 	 	WEI Racking Foundations
	 	$	[*]	 
	 	05-1223	 	 	Structural Steel
	 	$	[*]	 
	 	05-3113	 	 	Metal Decking
	 	$	[*]	 
	 	05-7313	 	 	Glazed Decorative Hand Railing
	 	$	[*]	 
	 	06-1113	 	 	Rough Carpentry
	 	$	[*]	 
	 	06-2033	 	 	Finish Carpentry (Millwork)
	 	$	[*]	 
	 	 	 	 	Solid Surface Fabrication
	 	$	[*]	 
	 	06-8200	 	 	Fiber Glass Reinforced Plastic (Marlite)
	 	$	[*]	 
	 	07-1113	 	 	Bituminous Dampproofing
	 	$	[*]	 
	 	 	 	 	Water Proofing Showers
	 	$	[*]	 
	 	07-2116	 	 	Insulation
	 	$	[*]	 
	 	07-4213	 	 	Metal Wall / Soffit Panels
	 	$	[*]	 
	 	07-6200	 	 	Sheet Metal Flashing & trim
	 	$	[*]	 
	 	07-7236	 	 	Skylights
	 	$	[*]	 
	 	08-1213	 	 	Doors / Frames / Hardware
	 	$	[*]	 
	 	08-8000	 	 	Glass & Glazing
	 	$	[*]	 
	 	09-2116	 	 	Gypsum Board Assemblies
	 	$	[*]	 
	 	09-3100	 	 	Thin-Set Tile
	 	$	[*]	 
	 	09-5113	 	 	Acoustical Panel Ceilings
	 	$	[*]	 
	 	09-6223	 	 	Bamboo Flooring & Base
	 	$	[*]	 
	 	09-6536	 	 	Static Control Resilient Flooring
	 	$	[*]	 
	 	09-6816	 	 	Carpeting
	 	$	[*]	 
	 	09-6953	 	 	Access Flooring Accessories (Mats)
	 	$	[*]	 
	 	09-9100	 	 	Paint & Wall Covering
	 	$	[*]	 
	 	10-1400	 	 	Plastic Signage Restrooms
	 	$	[*]	 
	 	10-2813	 	 	Metal Toilet Compartment & Accessories
	 	$	[*]	 
	 	10-4416	 	 	Fire
Extinguishers & Cabinets
	 	$	[*]	 
	 	10-5113	 	 	Lockers & Benches
	 	$	[*]	 
	 	12-2413	 	 	Roller Shades
	 	$	[*]	 
	 	14-2423	 	 	Hydraulic Passenger Elevator
	 	$	[*]	 
	 	21-1313	 	 	Wet-Pipe Sprinkler Systems
	 	$	[*]	 
	 	 	 	 	Fm-200 Suppression System
	 	$	[*]	 
	 	 	 	 	Pre-Action Interlock
	 	$	[*]	 
	 	22-4213	 	 	Commercial Water Closet, Urinals, Fixtures
	 	$	[*]	 
	 	23-0000	 	 	Heating, Ventilating & Air Conditioning
	 	$	[*]	 
	 	26-0100	 	 	Electrical
	 	$	[*]	 
	 	26-5113	 	 	Lighting
	 	$	[*]	 
	 	28-3100	 	 	Fire Alarm
	 	$	[*]	 
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	Building — Subtotal:
	 	$	[*]	 
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	General Conditions / Site / Building — Subtotal:
	 	$	[*]	 
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	Liability Insurance ([*]%)
	 	$	[*]	 
	 	 	 	 	 
	 	 	 
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	Subtotal:
	 	$	[*]	 
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	Profit and Overhead ([*]%)
	 	$	[*]	 
	 	 	 	 	 
	 	 	 	 
	 	 	 	 	Total:
	 	$	[*]	    

 

* Confidential Portions Omitted and Filed Separately
with the Commission.

2

 

AMENDMENT TO DEVELOPMENT MANAGEMENT AGREEMENT

     THIS AMENDMENT TO DEVELOPMENT MANAGEMENT AGREEMENT (this “Amendment”) is made and entered
into effective as of the 30th day of January, 2010 (the “Effective Date”), by and
between HF LOGISTICS-SKX, LLC (“Owner”); and HFC HOLDINGS, LLC, a Delaware limited liability
company (“Development Manager”).

RECITALS:

     A. Owner and Development Manager entered into a certain Development Management Agreement
(the “Agreement”) effective as of the Effective Date.

     B. The Agreement provides that a Project Schedule was to be attached as Exhibit “A”
thereto, but inadvertently no Project Schedule was attached to the Agreement.

     C. The parties desire to amend the Agreement to include the Project Schedule.

     NOW, THEREFORE, the parties agree as follows:

     1. The Project Schedule, which is attached to this Amendment as Exhibit “A”, shall be
the Project Schedule, as defined in the Agreement.

     2. In all other respects, the Agreement shall remain in full force and effect as originally
written.

     3. Capitalized terms used in this Amendment shall have the same meanings as set forth in the
Agreement.

(signature page follows)

 

 

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the Effective Date.

	 	 	 	 	 	 	 	 	 	 	 

	“OWNER”	 	 	 	“DEVELOPMENT MANAGER”	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	HF LOGISTICS -SKX, LLC,
a Delaware limited
liability company	 	 	 	HFC HOLDINGS, LLC, a Delaware limited liability
company	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	HF Logistics I,
LLC, a Delaware limited
liability company, it’s
Managing Member	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Iddo Benzeevi, its Chief Executive Officer	 	 
	By:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	Iddo
Benzeevi,
President
and
Chief
Executive
Officer	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	Skechers R.B., LLC,
a Delaware limited
liability company, it’s
Managing Member	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	Skechers
U.S.A., Inc., a
Delaware
Corporation,
It’s sole member	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	David Weinberg, Chief Operating Officer	 	 	 	 	 	 	 	 

JOINDER

Skechers R.B., LLC, a Delaware limited liability company and Skechers U.S.A., Inc., a Delaware
corporation, each hereby joins in the execution of this Amendment as a third party beneficiary of
the Agreement and for the purposes of confirming their agreement to comply with and perform those
obligations applicable to Skechers Member or Skechers Parent set forth herein and therein.

	 	 	 	 	 	 	 	 	 	 	 

	“SKECHERS PARENT”	 	 	 	“SKECHERS MEMBER”	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	SKECHERS U.S.A., INC., a Delaware corporation	 	 	 	SKECHERS R.B., LLC, a Delaware limited liability
company	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	Skechers U.S.A., Inc., a Delaware corporation,	 	 
	By:

	 	 	 	 	 	 	 	its sole member	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	David Weinberg, Chief Operating Officer	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	David Weinberg, Chief Operating Officer	 	 

2

 

EXHIBIT “A”

PROJECT SCHEDULE

 

 

EXHIBIT “C-1”

HF NOTE

Exhibit “C-1”

 

 

UNSECURED PROMISSORY NOTE

			
	$14,000,000
	 	January 30, 2010

     FOR VALUE RECEIVED, HF LOGISTICS-SKX, LLC, a Delaware limited
liability company (“Maker”), does hereby promise to pay to the order of HF LOGISTICS I, LLC, a
Delaware limited liability company (“Payee”), at its office at 14225 Corporate Way, Moreno Valley,
CA 92553, or at such other place as the Payee may from time to time designate in writing, the
principal sum of FOURTEEN MILLION DOLLARS ($14,000,000), with interest thereon as provided in this
Note.

     1. Certain Definitions. For the purposes hereof, the terms set forth below shall have the
following meanings: (a) “Applicable Law” shall mean (i) the laws of the United States of America
applicable to contracts made or performed in the State of Delaware, now or at any time hereafter
prescribing or eliminating maximum rates of interest on loans and extensions of credit, (ii) the
laws of the State of Delaware now or at any time hereafter prescribing or eliminating maximum rates
of interest on loans and extensions of credit, and (iii) any other laws at any time applicable to
contracts made or performed in the State of Delaware which permit a higher interest rate ceiling
hereunder.

     (b) “Business Day” shall mean any day other than a Saturday, Sunday or any other day
on which commercial banks are authorized or permitted to be closed for business in the
State of Delaware.

     (c) “Facility” shall mean the building, together with parking areas, landscaped areas
and other improvements, containing approximately 1,820,457 square feet to be constructed by
Maker in accordance with the Lease (as defined below).

     (d) “Highest Lawful Rate” shall mean at the particular time in question the maximum
rate of interest which, under Applicable Law, Payee is then permitted to charge Maker in
regard to the loan evidenced by this Note. If the maximum rate of interest which, under
Applicable Law, Payee is permitted to charge Maker in regard to the loan evidenced by this
Note shall change after the date hereof, the Highest Lawful Rate shall be automatically
increased or decreased, as the case may be, from time to time as of the effective date of
each change in the Highest Lawful Rate without notice to Maker. For purposes of determining
the Highest Lawful Rate under the Applicable Law, all fees and other charges contracted
for, charged or received by Payee in connection with the loan evidenced by this Note which
are either deemed interest under Applicable Law or required under Applicable Law to be
deducted from the principal balance hereof to determine the rate of interest charged on
this Note shall be taken into account.

     (e) “Interest Rate” shall mean six percent (6%) per annum.

1

 

     (f) “Lease” shall mean that certain Lease Agreement dated September 25, 2007, by and
between HF Logistics I, LLC, a Delaware limited liability company (“HF”), as landlord, and
Skechers USA, Inc., a Delaware corporation, as tenant, as the same may be amended.

     (g) “Maturity Date” shall mean the earlier to occur of (i) ten (10) years after the
date of this Note, or (ii) the sale or other disposition by Maker of the entire Property,
or (iii) the refinancing of the Property which provides sufficient net proceeds to pay the
entire Unpaid Principal Balance plus all accrued but unpaid interest, or (iv) the
dissolution of Maker, or (v) the consummation of a buy-out of the membership interest of a
member of Maker pursuant to the buy-sell process as described in the Limited Liability
Company Agreement of Maker dated of even date herewith (the “LLC Agreement”), subject to
acceleration upon the occurrence of an Event of Default as provided herein.

     (h) “Property” means the real property, together with all improvements now or
hereafter located thereon, situated in Moreno Valley, California, which is the subject of
the Lease.

     (i) “Substantial Completion” shall have the meaning set forth in the Lease. (j)
“Unpaid Principal Balance” shall mean, at any time, the amount of principal of this Note,
less any amounts of principal repaid.

     2. Payment of Principal and Interest.

     (a) Interest on the Unpaid Principal Balance shall be computed at a rate equal to the
lesser of (i) the Interest Rate or (ii) the Highest Lawful Rate and shall commence as of
the date of this Note.

     (b) Interest accruing under this Note shall be computed on the basis of the actual
number of days elapsed based upon a three hundred sixty (360) day year.

     (c) If the date for any payment hereunder falls on a day which is not a Business Day,
then such payment shall be due on the next following Business Day, and such additional time
shall be included in the calculation of interest then due.

     (d) Principal and interest under this Note shall be paid as follows:

     (i) Payments of accrued interest and principal shall be paid on the first day
of each month, commencing on the first day of the month after the date of this
Note, but only to the extent that there is Available Cash (as such term is defined
in the LLC Agreement, and subject to any changes in priority of distributions of
Available Cash set forth therein) prior to any distributions of Available Cash to
the members of Maker. Provided however, that as long as there is any unpaid
balance of principal or accrued interest due to Skechers RB, LLC, a Delaware
limited liability company (“Skechers”) under that certain unsecured promissory note
of even date herewith from Maker to Skechers (the “Skechers Note”), then payments
under this Note and under the Skechers Note shall be made pro rata according to the
ratio of the unpaid principal balance of both this Note and the

2

 

Skechers Note. If there is insufficient Available Cash to pay any monthly
installment of interest due hereunder, the interest shortfall will accrue, but the
accrued amount will not bear additional interest.

     (ii) The entire remaining Unpaid Principal Balance and all accrued but unpaid
interest shall be due and payable, together with accrued interest, on the Maturity
Date.

     (e) All payments on this Note shall be applied first to accrued and unpaid interest on
the Unpaid Principal Balance, and then to the payment of the Unpaid Principal Balance.

     3. Prepayment. The Unpaid Principal Balance may be prepaid in whole or in part, at any time,
without penalty or prepayment premium.

     4. Waivers. Maker and all sureties, endorsers, accommodation parties, guarantors and other
parties now or hereafter liable for the payment of this Note, in whole or in part, hereby severally
(a) waive demand, notice of demand, presentment for payment, notice of nonpayment, notice of
default, protest, notice of protest, notice of intent to accelerate, notice of acceleration, notice
of dishonor and all other notices, and further waive diligence in collecting this Note, in taking
action to collect this Note, in bringing suit to collect this Note, or in enforcing this Note or
any of the security for this Note; (b) agree to any substitution, subordination, exchange or
release of any security for this Note or the release of any person primarily or secondarily liable
for the payment of this Note; (c) agree that Payee shall not be required to first institute suit or
exhaust its remedies hereon against Maker or others liable or to become liable for the payment of
this Note or to enforce its rights against any security for the payment of this Note; and (d)
consent to any extension of time for the payment of this Note, made by agreement by Payee with any
person now or hereafter liable for the payment of this Note, even if Maker is not a party to such
agreement. This Note is payable in lawful money of the United States, without prior notice or
demand, and without offset or deduction of any nature.

     5. Events of Default.

     (a) Upon the happening of any of the following events (each an “Event of Default”), Payee may,
at its option, by notice to Maker, declare immediately due and payable the entire Unpaid Principal
Balance together with all accrued interest. Events of Default are the following:

               (i) If Maker fails
to pay any principal and/or interest under this Note as and when same becomes due and payable, and
such failure to pay is not cured within five (5) Business Days following the date written notice of
such failure to pay is given by Payee to Maker; or

               (ii) Maker shall fail to observe or perform any
other covenant contained in this Note (other than that specified in
Section 5(a)(i)) and such
failure shall continue for ten (10) days after notice to Maker of such failure.

3

 

               (iii) Maker shall (A) apply for or consent to the appointment of a receiver, trustee,
liquidator or custodian of itself or of all or a substantial part of its property, (B) make a
general assignment for the benefit of its creditors, (C) be dissolved or liquidated, (D) become
insolvent, (E) commence a voluntary case or other proceeding seeking liquidation, reorganization or
other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or consent to any such relief or to the appointment of or taking
possession of its property by any official in an involuntary case or other proceeding commenced
against it or (F) take any action for the purpose of effecting any of the foregoing.

               (iv) Proceedings for the appointment of a receiver, trustee, liquidator or custodian of Maker
of all or a substantial part of the property of Maker, or an involuntary case or other proceedings
seeking liquidation, reorganization or other relief with respect to Maker or the debts of Maker
under any bankruptcy, insolvency or other similar law now or hereafter in effect shall be commenced
and an order for relief entered or such proceeding shall not be dismissed or discharged within
thirty (30) days of commencement.

     (b) The failure of Payee to exercise the foregoing option of acceleration upon the
occurrence of an Event of Default shall not constitute a waiver of the right to exercise
the same or any other option of acceleration at any subsequent time, and no such failure
shall nullify any prior exercise of any such option without the express written consent of
Payee.

     6. Intentionally Omitted.

     7. Compliance with Law. All agreements between Maker and Payee, whether now existing or
hereafter arising and whether written or oral, are hereby limited so that in no contingency,
whether by reason of demand or acceleration of the Maturity Date or otherwise, shall the interest
contracted for, charged, received, paid or agreed to be paid to Payee in regard to the loan
evidenced by this Note exceed the maximum amount permissible under Applicable Law. If, from any
circumstance whatsoever, interest would otherwise be payable to Payee in excess of the maximum
amount permissible under Applicable Law, the interest payable to Payee shall be reduced to the
maximum amount permissible under Applicable Law; and if from any circumstance Payee shall ever
receive anything of value deemed interest by Applicable Law in excess of the maximum amount
permissible under Applicable Law, an amount equal to the excessive interest shall be applied to the
reduction of the principal hereof and not to the payment of interest, or if such excessive amount
of interest exceeds the Unpaid Principal Balance hereof, such excess shall be refunded to Maker.
All interest paid or agreed to be paid to Payee shall, to the extent permitted by Applicable Law,
be amortized, prorated, allocated, and spread throughout the full period (including any renewal or
extension) until payment in full of the principal so that the interest hereon for such full period
shall not exceed the maximum amount permissible under Applicable Law. Payee expressly disavows any
intent to contract for, charge or receive interest in an amount which exceeds the maximum amount
permissible under Applicable Law. This section shall control all agreements between Maker and
Payee.

     8. Attorneys’ Fees and Costs. In the event that following an Event of Default
this
Note is placed in the hands of an attorney for collection, or in the event thereafter this Note is
collected in whole or in part through legal proceedings of any nature, then and in any such case
Maker promises to pay on demand by Payee, and, to the extent unpaid upon such demand, there

4

 

shall be added to the Unpaid Principal Balance, all reasonable costs of collection, including, but
not limited to, reasonable attorneys’ fees incurred by Payee on account of such collection, whether
or not suit is filed (including attorneys fees incurred in connection with any Bankruptcy
proceeding (including stay litigation) and on appeal).

     9. Cumulative Rights. No delay on the Payee in the exercise of any power or right under this
Note shall operate as a waiver thereof, nor shall a single or partial exercise of any power or
right preclude other or further exercise thereof or the exercise of any other power or right.

     10. Headings. The section headings used in this Note are for convenience of reference only,
and shall not affect the meaning or interpretation of this Note.

     11. Governing Law. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF DELAWARE AND THE LAWS OF THE UNITED STATES APPLICABLE TO TRANSACTIONS IN THE STATE
OF DELAWARE.

     12. Successors and Assigns. The term “Payee” shall include any of Payee’s permitted
successors and assigns, to whom the benefits of this Note shall inure. This Note shall bind Maker
and its successors and assigns (but no assignment or delegation of this Note by Maker shall release
Maker from liability hereunder).

     EXECUTED by Maker as of the date set forth above.

	 	 	 	 	 	 	 	 	 

	“OWNER”	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	HF LOGISTICS -SKX, LLC, a Delaware limited
liability company	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:	 	HF Logistics I, LLC, a Delaware limited

liability company, It’s Managing Member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

Iddo Benzeevi, President and Chief
Executive Officer
	 
	 	 	 	 	 	 	 	 
	By:	 	Skechers RB, LLC, a Delaware limited

liability company, it’s Managing Member	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Skechers USA, Inc., a Delaware

Corporation, It’s sole member
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 

David Weinberg, Chief Operating

Officer	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 

Robert Greenberg, Chief Executive

Officer	 	 

	 	 	 	 	 

5

 

EXHIBIT
“C-2”

SKECHERS NOTE

Exhibit “C-2”

 

 

UNSECURED PROMISSORY NOTE 

			
	$1,000,000
	 	January 30, 2010

     FOR VALUE RECEIVED, HF LOGISTICS-SKX, LLC, a Delaware limited liability company (“Maker”),
does hereby promise to pay to the order of SKECHERS RB, LLC, a Delaware limited liability company
(“Payee”), at its office at 228 Manhattan Beach Blvd, Manhattan Beach, CA 90266, or at such other
place as the Payee may from time to time designate in writing, the principal sum of ONE MILLION
DOLLARS ($1,000,000), with interest thereon as provided in this Note.

     1. Certain Definitions. For the purposes hereof, the terms set forth below shall have
the following meanings:

     (a) “Applicable Law” shall mean (i) the laws of the United States of America applicable to
contracts made or performed in the State of Delaware, now or at any time hereafter prescribing or
eliminating maximum rates of interest on loans and extensions of credit, (ii) the laws of the State
of Delaware now or at any time hereafter prescribing or eliminating maximum rates of interest on
loans and extensions of credit, and (iii) any other laws at any time applicable to contracts made
or performed in the State of Delaware which permit a higher interest rate ceiling hereunder.

     (b) “Business Day” shall mean any day other than a Saturday, Sunday or any other day
on which commercial banks are authorized or permitted to be closed for business in the
State of Delaware.

     (c) “Facility” shall mean the building, together with parking areas, landscaped areas
and other improvements, containing approximately 1,820,457 square feet to be constructed by
Maker in accordance with the Lease (as defined below).

     (d) “Highest Lawful Rate” shall mean at the particular time in question the maximum
rate of interest which, under Applicable Law, Payee is then permitted to charge Maker in
regard to the loan evidenced by this Note. If the maximum rate of interest which, under
Applicable Law, Payee is permitted to charge Maker in regard to the loan evidenced by this
Note shall change after the date hereof, the Highest Lawful Rate shall be automatically
increased or decreased, as the case may be, from time to time as of the effective date of
each change in the Highest Lawful Rate without notice to Maker. For purposes of determining
the Highest Lawful Rate under the Applicable Law, all fees and other charges contracted
for, charged or received by Payee in connection with the loan evidenced by this Note which
are either deemed interest under Applicable Law or required under Applicable Law to be
deducted from the principal balance hereof to determine the rate of interest charged on
this Note shall be taken into account.

     (e) “Interest Rate” shall mean six percent (6%) per annum.

1

 

     (f) “Lease” shall mean that certain Lease Agreement dated September 25, 2007, by and
between HF Logistics I, LLC, a Delaware limited liability company (“HF”), as landlord, and
Skechers USA, Inc., a Delaware corporation, as tenant, as the same may be amended.

     (g) “Maturity Date” shall mean the earlier to occur of (i) ten (10) years after the
date of this Note, or (ii) the sale or other disposition by Maker of the entire Property,
or (iii) the refinancing of the Property which provides sufficient net proceeds to pay the
entire Unpaid Principal Balance plus all accrued but unpaid interest, or (iv) the
dissolution of Maker, or (v) the consummation of a buy-out of the membership interest of a
member of Maker pursuant to the buy-sell process as described in the Limited Liability
Company Agreement of Maker dated of even date herewith (the “LLC Agreement”), subject to
acceleration upon the occurrence of an Event of Default as provided herein.

     (h) “Property” means the real property, together with all improvements now or
hereafter located thereon, situated in Moreno Valley, California, which is the subject of
the Lease.

     (i) “Substantial Completion” shall have the meaning set forth in the Lease.

     (j) “Unpaid Principal Balance” shall mean, at any time, the amount of principal of
this Note, less any amounts of principal repaid.

     2. Payment of Principal and Interest.

     (a) Interest on the Unpaid Principal Balance shall be computed at a rate equal to the
lesser of (i) the Interest Rate or (ii) the Highest Lawful Rate and shall commence as of
the date of this Note.

     (b) Interest accruing under this Note shall be computed on the basis of the actual
number of days elapsed based upon a three hundred sixty (360) day year.

     (c) If the date for any payment hereunder falls on a day which is not a Business Day,
then such payment shall be due on the next following Business Day, and such additional time
shall be included in the calculation of interest then due.

     (d) Principal and interest under this Note shall be paid as follows:

     (i) Payments of accrued interest and principal shall be paid on the first day
of each month, commencing on the first day of the month after the date of this
Note, but only to the extent that there is Available Cash (as such term is defined
in the LLC Agreement, and subject to any changes in priority of distributions of
Available Cash set forth therein) prior to any distributions of Available Cash to
the members of Maker. Provided however, that as long as there is any unpaid
balance of principal or accrued interest due to HF under that certain unsecured
promissory note of even date herewith from Maker to HF (the “HF Note”), then
payments under this Note and under the HF Note shall be made pro rata according to
the ratio of the unpaid principal balance of both this Note and the HF Note. If
there is insufficient Available Cash to pay any monthly installment of interest due

2

 

     hereunder, the interest shortfall will accrue, but the accrued amount will not bear
additional interest.

     (ii) The entire remaining Unpaid Principal Balance and all accrued but unpaid
interest shall be due and payable, together with accrued interest, on the Maturity
Date.

     (e) All payments on this Note shall be applied first to accrued and unpaid interest on
the Unpaid Principal Balance, and then to the payment of the Unpaid Principal Balance.

     3. Prepayment. The Unpaid Principal Balance may be prepaid in whole or in part, at any
time, without penalty or prepayment premium.

     4. Waivers. Maker and all sureties, endorsers, accommodation parties, guarantors and
other parties now or hereafter liable for the payment of this Note, in whole or in part, hereby
severally (a) waive demand, notice of demand, presentment for payment, notice of nonpayment, notice
of default, protest, notice of protest, notice of intent to accelerate, notice of acceleration,
notice of dishonor and all other notices, and further waive diligence in collecting this Note, in
taking action to collect this Note, in bringing suit to collect this Note, or in enforcing this
Note or any of the security for this Note; (b) agree to any substitution, subordination, exchange
or release of any security for this Note or the release of any person primarily or secondarily
liable for the payment of this Note; (c) agree that Payee shall not be required to first institute
suit or exhaust its remedies hereon against Maker or others liable or to become liable for the
payment of this Note or to enforce its rights against any security for the payment of this Note;
and (d) consent to any extension of time for the payment of this Note, made by agreement by Payee
with any person now or hereafter liable for the payment of this Note, even if Maker is not a party
to such agreement. This Note is payable in lawful money of the United States, without prior notice
or demand, and without offset or deduction of any nature.

     5. Events of Default.

     (a) Upon the happening of any of the following events (each an “Event of Default”), Payee may,
at its option, by notice to Maker, declare immediately due and payable the entire Unpaid Principal
Balance together with all accrued interest. Events of Default are the following:

               (i) If Maker fails
to pay any principal and/or interest under this Note as and when same becomes due and payable, and
such failure to pay is not cured within five (5) Business Days following the date written notice of
such failure to pay is given by Payee to Maker; or

               (ii) Maker shall fail to observe or perform any
other covenant contained in this Note (other than that specified in Section 5(a)(i)) and such
failure shall continue for ten (10) days after notice to Maker of such failure.

               (iii) Maker shall (A) apply for or consent to the appointment of a receiver, trustee,
liquidator or custodian of itself or of all or a substantial part of its property, (B) make a
general assignment for the benefit of its creditors, (C) be dissolved or liquidated,

3

 

(D) become insolvent, (E) commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency
or other similar law now or hereafter in effect or consent to any such relief or to the appointment
of or taking possession of its property by any official in an involuntary case or other proceeding
commenced against it or (F) take any action for the purpose of effecting any of the foregoing.

               (iv) Proceedings for the appointment of a receiver, trustee, liquidator or custodian of Maker
of all or a substantial part of the property of Maker, or an involuntary case or other proceedings
seeking liquidation, reorganization or other relief with respect to Maker or the debts of Maker
under any bankruptcy, insolvency or other similar law now or hereafter in effect shall be commenced
and an order for relief entered or such proceeding shall not be dismissed or discharged within
thirty (30) days of commencement.

     (b) The failure of Payee to exercise the foregoing option of acceleration upon the
occurrence of an Event of Default shall not constitute a waiver of the right to exercise
the same or any other option of acceleration at any subsequent time, and no such failure
shall nullify any prior exercise of any such option without the express written consent of
Payee.

     6. Intentionally Omitted.

     7. Compliance with Law. All agreements between Maker and Payee, whether now existing
or hereafter arising and whether written or oral, are hereby limited so that in no contingency,
whether by reason of demand or acceleration of the Maturity Date or otherwise, shall the interest
contracted for, charged, received, paid or agreed to be paid to Payee in regard to the loan
evidenced by this Note exceed the maximum amount permissible under Applicable Law. If, from any
circumstance whatsoever, interest would otherwise be payable to Payee in excess of the maximum
amount permissible under Applicable Law, the interest payable to Payee shall be reduced to the
maximum amount permissible under Applicable Law; and if from any circumstance Payee shall ever
receive anything of value deemed interest by Applicable Law in excess of the maximum amount
permissible under Applicable Law, an amount equal to the excessive interest shall be applied to the
reduction of the principal hereof and not to the payment of interest, or if such excessive amount
of interest exceeds the Unpaid Principal Balance hereof, such excess shall be refunded to Maker.
All interest paid or agreed to be paid to Payee shall, to the extent permitted by Applicable Law,
be amortized, prorated, allocated, and spread throughout the full period (including any renewal or
extension) until payment in full of the principal so that the interest hereon for such full period
shall not exceed the maximum amount permissible under Applicable Law. Payee expressly disavows any
intent to contract for, charge or receive interest in an amount which exceeds the maximum amount
permissible under Applicable Law. This section shall control all agreements between Maker and
Payee.

     8. Attorneys’ Fees and Costs. In the event that following an Event of
Default this
Note is placed in the hands of an attorney for collection, or in the event thereafter this Note is
collected in whole or in part through legal proceedings of any nature, then and in any such case
Maker promises to pay on demand by Payee, and, to the extent unpaid upon such demand, there shall
be added to the Unpaid Principal Balance, all reasonable
costs of collection, including, but not limited to, reasonable attorneys’ fees incurred by Payee on
account of such collection,

4

 

whether or not suit is filed (including attorneys fees incurred in connection with any Bankruptcy
proceeding (including stay litigation) and on appeal).

     9. Cumulative Rights. No delay on the Payee in the exercise of any power or right
under this Note shall operate as a waiver thereof, nor shall a single or partial exercise of any
power or right preclude other or further exercise thereof or the exercise of any other power or
right.

     10. Headings. The section headings used in this Note are for convenience of reference
only, and shall not affect the meaning or interpretation of this Note.

     11. Governing Law. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF DELAWARE AND THE LAWS OF THE UNITED STATES APPLICABLE TO TRANSACTIONS IN
THE STATE OF DELAWARE.

     12. Successors and Assigns. The term “Payee” shall include any of Payee’s permitted
successors and assigns, to whom the benefits of this Note shall inure. This Note shall bind Maker
and its successors and assigns (but no assignment or delegation of this Note by Maker shall release
Maker from liability hereunder).

     EXECUTED by Maker as of the date set forth above.

“OWNER”

HF LOGISTICS -SKX, LLC, a Delaware limited

liability company

	 	 	 	 	 

	By:

	 	HF Logistics I, LLC, a Delaware limited
	 	 
	 

	 	liability company, it’s Managing Member	 	 
	 
	 	 	 	 

	 	 	 	 	 	 	 
	 	 	 	 
	 	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Iddo Benzeevi, President and Chief	 	 
	 

	 	 	 	Executive Officer	 	 
	 
	 	 	 	 	 	 

	 	 	 	 	 

	By:

	 	Skechers RB, LLC, a Delaware limited liability	 	 
	 

	 	company, it’s Managing Member	 	 
	 
	 	 	 	 

	 	 	 	 	 	 	 
	 	 	 	 
	 	 	By:

	 	Skechers USA, Inc., a Delaware	 	 
	 

	 	 	 	Corporation, It’s sole member	 	 	 
	 
	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	      
	 	 	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	David Weinberg, Chief Operating	 	 
	 

	 	 	 	 	 	Officer	 	 
	 
	 	 	 	 	 	 	 	 
	      
	 	 	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Robert Greenberg, Chief Executive	 	 
	 

	 	 	 	 	 	Officer	 	 

5

 

EXHIBIT “D”

INITIAL APPROVED OPERATING BUDGET

Exhibit “D”

 

 

Exhibit D

1 of 5

HF Logistics-SKX LLC Operating Budget

Building and Expansion Sites

			
	
	 	Date: 1/29/2010

Operating Budget Estimate

	 	 	 	 	 	 	 	 	 
	Year
	 	 	2011	 	 	 	2012	 
	Duration in Months
	 	 	6	 	 	 	12	 
	 	 	 
	Physical Occupancy
	 	 	50	%	 	 	100	%
	 
	 	 	 	 	 	 	 	 
	Rent Building
	 	$	0.513	 	 	$	0.513	 
	 
	 	 	 	 	 	 	 	 
	Sq Ft Building
	 	 	1,820,457	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	REVENUES (D-1)
	 	 	6,739,057	 	 	 	9,275,589	 
	 
	 
	 	 	 	 	 	 	 	 
	EXPENSES
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Building (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

Skechers Building Site Only

			
	
	 	Date: 1/29/2010

Operating Budget Estimate

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Year
	 	 	 	 	 	 	2011	 	 	 	2012	 
	Duration in Months
	 	 	 	 	 	 	6	 	 	 	12	 
	 	 	 	 	 	 	 
	Physical Occupancy
	 	 	 	 	 	 	50	%	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Rent Building Site
	 	 	 	 	 	$	0.513	 	 	$	0.513	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Sq Ft Building
	 	 	 	 	 	 	1,820,457	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	REVENUES
	 	2011 $/SF/MO	 	 	 	 	 	 	 	 
	Scheduled Base Rent
	 	$	0.513	 	 	$	5,603,367	 	 	$	11,206,733	 
	Base Rent Abatement
	 	 	 	 	 	 	 	 	 	 	(4,202,525	)
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	Total Scheduled Base Rent
	 	 	 	 	 	 	5,603,367	 	 	 	7,004,208	 
	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Expense Reimbursements
	 	 	0.098	 	 	 	1,071,416	 	 	 	2,142,832	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Solar Revenue (1)
	 	 	 	 	 	 	64,274	 	 	 	128,549	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	EFFECTIVE GROSS REVENUE
	 	 	0.425	 	 	 	6,739,057	 	 	 	9,275,589	 
	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	OPERATING EXPENSES
	 	 	 	 	 	 	 	 	 	 	 	 
	Repairs
	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 
	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

			
	
	 	Date: 1/29/2010

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Building Site - Maintenance	 
	No.	 	Description	 	Unit	 	Quantity	 	 	Unit Price	 	 	Total	 
	 
	1
	 	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:	 	 	1,820,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	
Cost/SF:	 	$	[*]	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

Maintenance Costs Include-

 

			
	Yearly Inspection, Flushing, Camera of Sewer/Cleanouts	 	 
	 
	Graffiti Repair, Bulbs/Fixtures	 	 
	 
	Based upon Recycled Water Use Exhibit and EMWD water rates	 	 
	 
	Assume 54 palm trees trim 2 times per year at $[*]/tree/trimming	 	 
	 
	Graffiti Repair, Periodic Painting	 	 

* Confidential Portions
Omitted and Filed Separately with the Commission.

 

 

Exhibit D-3

4 of 5

			
	
	 	Date: 1/29/2010

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Expansion Site - Maintenance
	No.	 	Description	 	Unit	 	Quantity	 	 	Unit Price	 	 	Total	 
	 
	1
	 	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:	 	$	[*]	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

Maintenance Costs Include-

 

			
	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

			
	
	 	Date: 1/29/2010

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Property Owners Association (POA) - Maintenance	 
	No.	 	Description	 	Unit	 	Quantity	 	 	Unit Price	 	 	Total	 	 	 	 	 
	 
	1
	 	Landscape - Parkway	 	SF	 	 	87,000	 	 	$	[*]	 	 	$	[*]	 	 	 	 	 
	2
	 	Drainage - Spreading Facility	 	SF	 	 	400,750	 	 	$	[*]	 	 	$	[*]	 	 	 	 	 
	3
	 	Common Driveway - Maintenance	 	LS	 	 	1	 	 	$	[*]	 	 	$	[*]	 	 	 	 	 
	4
	 	Insurance	 	annual	 	 	 	 	 	$	[*]	 	 	$	[*]	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	
Subtotal:	 	$	[*]	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
Contingency ([*]%):	 	$	[*]	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	
Total:	 	$	[*]	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Acres
	 	 	 	 	
Allocated to Building Site	 	 	[*]	 	 	 	82.6	 
	 	 	 	 	
Allocated to Expansion Site	 	 	[*]	 	 	 	27.4	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	[*]	 	 	 	110	 
	 	 	 	 	
Other Parcels	 	 	[*]	 	 	 	20	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	
Total	 	 	[*]	 	 	 	130	 

Maintenance Costs Include

 

			
	Hydroseed Slopes, Trash, Graffiti, Growth Control	 	 
	 
	Yearly Re-Stripe, Monthly Sweeping, Red Curb Paint	 	 
	 
	General Liability, Personal Property & Professional Liability Insurance	 	 

* Confidential Portions
Omitted and Filed Separately with the Commission.

 

 

EXHIBIT “E”

INTENTIONALLY OMITTED

Exhibit “E”

 

 

EXHIBIT “F”

CONSTRUCTION LOAN COMMITMENT

Exhibit “F”

 

 

			
	 
	 	
	 
	 
	 	Commercial Real Estate Banking

FL7-528-15-08

1 Alhambra Plaza Penthouse

Coral Gables, FL 33134

February 1, 2009

HF Logistics-SKX, LLC,

a Delaware limited liability company

4000 Island Boulevard, Penthouse 2

Williams Island, FL 33160

	 	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”)

Gentlemen:

          Bank of America, N.A., as administrative agent and as a leader (“Bank of America” or the
“Agent”) offers to make a portion of the Loan to HF Logistics — SKX, LLC, a Delaware limited
liability company (the “Borrower”), upon the following terms and conditions:

          1. Loan Amount: The lesser of $55,000,000 or (i) 58% of the Lender approved
appraised value of the Project (as hereinafter defined); (ii) 55% of the cost to construct;
(iii) 1.40
times the coverage ratio using stress tests of 8% rate, 30-year amortization and first year
NOI as per
the approved appraisal. The $55,000,000 loan amount is predicated upon Agent loaning
$35,000,000 and the balance of $20,000,000 being arranged by Banc of America Securities, LLC
(“BAS” or “Arranger”).

          2. Interest Rate:

               (a) “BBA LIBOR Daily Floating Rate” means a daily fluctuating rate of interest
per annum equal to (i) the applicable London Interbank Offered Rate

“London Interbank Offered Rate” means the rate per annum equal to the
British Bankers’ Association LIBOR Rate (“BBA LIBOR”), as published by
Reuters (or other commercially available source providing quotations of BBA LIBOR
as selected by Administrative Agent from time to time) as determined each Business
Day at approximately 11:00 a.m. London time two (2) London Banking Days before the
commencement of the Interest Period, for deposits in U.S. Dollars (for delivery on
the first day of such Interest Period) with a term equivalent to such Interest
Period as adjusted from time to time in Lender’s sole discretion for reserve
requirements deposit insurance assessment rates and other regulatory costs. If
such rate is not available at

 

 

such time for any reason, then the rate for that Interest Period will be determined
by such alternate method as reasonably selected by Administrative Agent;

               (b) Interest on the Loan shall be charged at a per annum rate equal to the
sum of (i) BBA LIBOR Daily Floating Rate (which Rate will be not less than 150 basis points)
and (ii) 450 basis points until default.

               (c) After default, interest on the Loan shall be charged at a per annum rate
equal to non-default rate plus 400 basis points.

          3. Interest Payments: Interest on the outstanding principal balance of the Loan
shall be payable monthly commencing on the 15th day of the first calendar month
following the date
of closing of the Loan and continuing on the 15th day of each and every calendar month
thereafter
until the Loan has been repaid in full. Interest reserve must be acceptable to Agent.

          4. Late Charge: Four percent (4%) of any payment more than fifteen (15) days late.

          5. Principal Payments: Commencing with the first day of the first month
following the first payment of rent by Skechers pursuant to the Lease, the Borrower shall make
principal payments in an amount derived assuming a thirty (30) year amortization and interest
at the
rate of the greater of eight percent (8%) per annum or the rate then paid on ten (10) year
Treasury
Notes plus 250 basis points. The entire principal balance of the Loan shall be paid in full on
the
Maturity Date.

          6. Maturity Date: Twenty-four (24) months from the “Closing Date” (as herein
defined), subject to extension as hereinafter provided.

          7.
Maturity Date Extensions: Borrower shall have one (1) option to extend the
Maturity Date of the Loan, for an additional six (6) month period, upon satisfaction of all of
the
following conditions: (i) no event of default shall have occurred and is continuing during the
term of
the Loan, and no act or event shall be then occurring which would be an event of default but
for the
giving of notice or the passage of time, or both; (ii) the Borrower shall have paid to Lender,
a fee in
the amount of $25,000 the (“Extension Fee”) for such extension; (iii) the Borrower shall have
received an unconditional certificate of occupancy for the use of the Building; (iv) Skechers
shall
have taken occupancy and commenced to pay rent pursuant to the Lease; (v) revenue from the
building shall equal or exceed a 1.40 times to debt coverage ratio using stress tests of the
greater of
an 8% rate or the 10-year Treasury plus 250 basis points and a 30-year amortization and (vi)
the loan
to value ratio does not exceed 58% based upon an updated appraisal which may be required by
the
Lender.

          8. Prepayment: Borrower may prepay all or any portion of the Loan at any time
without fee premium or penalty.

          9. Borrower’s Entity: Borrower shall be single purpose entity whose sole
business shall be the development and operation of the Project.

2

 

          10. Guarantor: The full repayment of the Loan and the payment and performance
of all of the obligations
of the Borrower under the Loan Documents shall be unconditionally and irrevocably guaranteed by TG
Development Corp., a Delaware corporation. Upon Skechers taking occupancy of the Bidding and
commencing rent payments, the principal repayment portion of Guarantors obligations hereunder shall
be reduced to fifty percent (50%) of the Loan Amount. Until the Loan has been repaid, Guarantor
must (i) maintain a minimum book net worth of $150,000,000.00 during the term of the Loan (The
covenant will be tested quarterly based on unaudited financial statements); (ii)not incur
contingent liability in an aggregate amount exceeding $25,000,000.00 other than the Loan without
the prior written consent of Lender which consent Leader may withhold in its sole and absolve
discretion; provided further that there shall be no restriction on contingent liability incurred by
Guarantor in connection with any loan made for the acquisition or development of income producing
commercial real estate; and (iii) not transfer any assets except: (x) in the ordinary course of
business for fair value (w) to an entity that is wholly owned by the Guarantor, (y) to any
unrelated third parry for fair and reasonably equivalent value or (z) with the Lender’s prior
written approval of other assets. The Borrower shall promptly notify the Lender of any transfer of
material assets whether or not the Lender’s approval is required.

          11. Borrower’s Equity: Prior to the Closing Date, the Borrower shall have
provided evidence to the Agent’s sole satisfaction of its having contributed total equity in
the Project
of $60,120,000.

          12. Collateral: To secure the repayment of the Loan the Borrower shall grant the
Lender a first Construction Deed of Trust lien and security interest in and to the following
property
(the “Mortgaged Property”):

               (a) Land. An approximately 83-acre parcel of real property located in
Moreno Valley, Riverside County, California being more particularly described in Exhibit
“A”
attached; hereto.

               (b) Improvements. A build to suit industrial warehouse containing
approximately 1,820,000 square feet to be leased to Skechers. General Contractor must be
acceptable to Agent and provide a bonded Guaranteed Maximum Price Contract also acceptable to
Agent. Funding of hard cost contingency not to exceed pace of construction and amount must be
acceptable to Bank and Bank’s consultant.

               (c) Personal Property. All tangible and intangible personal property now
or hereafter located on or used in the construction of or in connection with or arising from
the
operation of the Project.

               (d) Certificate of Deposit. A $5,500,000 Certificate of Deposit issued by
Agent in the name of Borrower, which shall be assigned unto Agent until such time as the Loan has
been fully repaid. At Borrower’s option, Borrower may satisfy the aforementioned condition by
having Guarantor maintain minimum liquidity of $7,000,000.00 during the term of the Loan (The
covenant will be tested quarterly based on unaudited financial statements).

          13. Purpose of the Loan Advance: The purpose of the Loan is to finance the construction of
the Building expected to be LEED certified and necessary on and off site improvement as required by
the Lease (collectively, the “Improvement”).

3

 

          14. Commencement and Completion of Improvements: The Borrower shall commence
construction of the Improvements within thirty (30) days following the closing of the Loan (the
“Commencement Date”), and shall diligently and continuously proceed with the completion of all of
the site work and the construction of all Improvements, all of which shall be completed no later
than the sooner of the date that the Improvements must be delivered to Skechers pursuant to the
lease or twenty (20) months from the Closing Date.

          15. Budget and Advance of the Loan.

               (a) The cost of the development of the Project shall not exceed a budget
which has been
approved by the Agent; the line item for the Land in such budget shall not exceed the As-Is Land
Value per the Agent-approved appraisal.

               (b) Advances of the Loan shall be made pursuant to the Agent’s customary terms and conditions.

          16. Fees: Borrower shall pay fees pursuant to a fee letter of even date
herewith.

          17. Payment and Performance Bond: A dual obligee payment and performance bond issued
by a surety acceptable to Agent naming Agent as co-insured with Borrower is required with respect
to the construction of the Project.

          18. Prelease Requirements. At or before closing of the Loan, the Borrower shall have
entered into a Lease with Skechers for the lease of 100% of the Improvements which Lease shall be
acceptable to the Agent in sole and absolute discretion and shall provide for a term of not less
than twenty (20) years. In addition, the Borrower, Tenant and Agent shall have entered into a
Subordination and Non-Disturbance Agreement satisfactory to Agent in its sole and absolute
discretion.

          19. Agent’s Counsel: Our attorney (“Agent’s Counsel”) in this matter is Chava Genet,
of Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., 2200 Museum Tower, 150 West Flagler
Street, Miami, Florida 33130 (305) 789-3200.

          20. Agent’s Costs:
 Whether or not the Loan is closed (for any reason whatsoever), the
Borrower shall be responsible for the payment of, and shall promptly pay, all fees, expenses,
taxes (except income taxes payable by Agent), other charges and any out-of-pocket expenses that
may be charged to the Agent or incurred by the Agent in connection with this Commitment or any
events, transactions, or documents required or contemplated by this Commitment, including, without
limitation legal fees and disbursements charged by counsel for the Agent plus all costs and
expenses incurred in connection therewith; premiums for title insurance; recording fees;
abstracting charges; brokerage fees or commissions (whether earned or claimed); documentary stamp
taxes; intangible taxes; appraisal fees; construction advisors’ fees; and survey costs.

          21. Indemnification. The Borrower shall indemnify and hold the Agent harmless from any
loss or damage, including reasonable attorneys fees and costs, incurred or arising by reason of
this Commitment or the making of the Loan (except for liability, loss, expense or damage arising

4

 

from the gross negligence or willful misconduct of the Agent or its directors, officers, agents,
employees, and attorney).

          22.
Inspections: Borrower shall pay all costs and expenses incidental to engineering and
architectural review and construction inspections performed by an inspector appointed by Agent, and
for an environmental assessment of property which shall be reviewed and accepted by Agent prior to
closing of Loan. Borrower shall advance all sums required for such review and inspection. A third
party construction consultant engaged by Bank shall review the plans, specifications, permits, budget,
construction schedule, and other construction related matters,
as well as each progress payment. A Plan & Cost Review will be required prior to closing.

          23. Syndication: The Facility is required to be pre-syndicated before closing. Syndication
will not commence until the Borrower has delivered executed Fee and Mandate Letters and paid the
required fees.

          24. Assignment and
Participations: Usual and customary for facilities of this type, including
customary provisions allowing the Lenders to assign or grant participations with the consent of the
Agent and Borrower, which consent shall not be unreasonably withheld or delayed.

          25.
Waivers/Amendments & Required Lenders: Usual and customary for facilities of this type,
including amendments and waivers of the provisions of the loan agreement and other definitive
credit documentation will require the approval of Lenders holding loans and commitments
representing more than 66 2/3% of the aggregate amount of loans and commitments under the loan
documents (“Required Lenders”), except that the consent of all of the Lenders affected thereby
shall be required with respect to (a) increases in commitment amounts, (b) reductions of principal,
interest, or fees, (c) extensions of scheduled maturities or times for payment, (d) modification to
the guaranty from the Guarantors, (e) release of a material obligor, and (f) such other items as
may be negotiated in the final loan documents.

          26. Voting Rights: Amendments, consents, or waivers to the Facility will require
consent of the Required Lenders, except for any amendment, consent, or waiver that would: (i) extend
the maturity of the Facility; (ii) reduce the amount of any interest, fees, principal, or other
amount payable to the Lenders; (iii) reduce or increase the commitment of any Lender; and (iv)
change the percentage specified for Required Lenders; all of which will require unanimous consent
of the Lenders.

          27. Termination: The Loan shall be closed and the first advance of the Loan shall be
made on or before April 15, 2010 (the “Closing Date”), in accordance with all provisions hereof. If
such closing and advance have not been consummated by the Closing Date, Agent’s obligation to make
the Loan shall terminate and the Agent shall have no further obligation hereunder.

          28. Material Adverse Effect: Bank of America’s obligations hereunder shall terminate
if, prior to closing, Bank of America determines, in its sole judgment, that there shall exist any
conditions regarding the Project, or the operations, business, assets, liabilities or condition
(financial or otherwise, including credit rating) of Borrower, Guarantor, or Skechers or there
shall have occurred a material adverse change in, or there shall exist any material adverse
conditions in, the market for syndicated bank credit facilities or the financial, banking, credit
or debt capital markets generally, that could be expected to cause the Facility to become
delinquent or prevent any

5

 

Guarantor
from performing its obligations under any guaranty or to materially and adversely affect
the value or marketability of the Facility or the Project or Bank of America’s ability to syndicate
the Facility.

          29. Clear Market: From the date of acceptance of the these terms and conditions and
continuing until Closing, there shall be no competing offering, placement or arrangement of any
debt securities or bank financing by or on behalf of the Borrower or Sponsor. The Borrower or
Guarantor would immediately notify the Arranger if any such
transaction were contemplated.

          30.
USA Patriot Act Notice: The Agent hereby notifies the Borrower, Guarantor and
Sponsor that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 10756 (signed
into law October 26, 2001)) (the “Act”), the Agent are
required to obtain, verify and record
information that identifies Borrower, Guarantor and Sponsor, which information includes that name
and address of Borrower, Guarantor and Sponsor and other information that will allow the Agent to
identify Borrower, Guarantor and Sponsor in accordance with the Act.

          31. Confidentiality: All provisions of this Commitment Letter are to be kept strictly
confidential and the Borrower agrees not to disclose the contents or existence of this Commitment
Letter to any third party(s) without prior written consent of the Agent.

          32. Dispute Resolution. Any dispute between the parties shall be resolved pursuant to
procedures described in Exhibit B hereto.

          If within five (5) days after the date hereof this offer has not been accepted by the
execution of a copy hereof and the delivery of the same to the Agent’s office, together with
payment of the required portion of the Upfront Fee, it shall be withdrawn and cancelled unless such
acceptance date is extended in writing by the Agent.

	 	 	 	 	 
	 	Very truly yours,

BANK OF AMERICA, N.A.

 	 
	 	By:  	/s/ Kim Abreu
 	 
	 	 	Kim Abreu, Senior Vice President 	 
	 	 	 	 
	 

6

 

	 	 	 	 	 
	BANC OF AMERICA SECURITIES LLC

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 

Agreed and Accepted this 1st day of February, 2010:

	 	 	 	 	 
	BORROWER:

HF LOGISTICS — SKX, LLC.,

a Delaware limited liability company

 	 	 
	By:  	HF Logistics I, LLC, managing member

 	 	 
	By:  	/s/ Donald Elbert
 	 	 
	 	Donald Elbert, Senior Vice President 	 	 
	 	 	 	 
	 
	GUARANTOR:

TG DEVELOPMENT Corp., 

a Delaware Corporation

 	 	 
	By:  	/s/ Donald Elbert
 	 	 
	 	Donald Elbert, Senior Vice President 	 	 
	 	 	 	 
	 

7

 

EXHIBIT A

LEGAL DESCRIPTION OF PROPERTY

 

EXHIBIT B

DISPUTE RESOLUTION

     Dispute Resolution.

     (a) Arbitration. Except to the extent expressly provided below, any Dispute shall, upon the
request of any party, be determined by binding arbitration in accordance with the Federal
Arbitration Act, Title 9, United States Code (or if not applicable, the applicable state law), the
then-current rules for arbitration of financial services disputes of AAA and the “Special Rules”
set forth below. In the event of any inconsistency, the Special Rules shall control. The filing of
a court action is not intended to constitute a waiver of the right of Borrower, Administrative
Agent or any Lender, including the suing party, thereafter to require submittal of the Dispute to
arbitration. Any party to this Agreement may bring an action, including a summary or expedited
proceeding, to compel arbitration of any Dispute in any court having jurisdiction over such action.
For the purposes of this Dispute Resolution Section only, the terms “party” and “parties” shall
include any parent corporation, subsidiary or affiliate of Administrative Agent involved in the
servicing, management or administration of any obligation described in or evidenced by this
Agreement, together with the officers, employees, successors and assigns of each of the foregoing.

     (b) Special Rules.

     (i) The arbitration shall be conducted in any U.S. state where real or tangible
personal property collateral is located, or if there is no such collateral, in the city and
county where Administrative Agent is located pursuant to its address for notice purposes in
this Agreement.

     (ii) The arbitration shall be administered by AAA, who will appoint an arbitrator. If
AAA is unwilling or unable to administer or legally precluded from administering the
arbitration, or if AAA is unwilling or unable to enforce or legally precluded from enforcing
any and all provisions of this Dispute Resolution Section, then any party to this Agreement
may substitute, without the necessity of the agreement or consent of the other party or
parties, another arbitration organization that has similar procedures to AAA but that will
observe and enforce any and all provisions of this Dispute Resolution Section. All Disputes
shall be determined by one arbitrator; however, if the amount in controversy in a Dispute
exceeds Five Million Dollars ($5,000,000), upon the request of any party, the Dispute shall
be decided by three arbitrators (for purposes of this Agreement, referred to collectively as
the “arbitrator”).

     (iii) All arbitration hearings will be commenced within ninety (90) days of the demand
for arbitration and completed within ninety (90) days from the date of commencement;
provided, however, that upon a showing of good cause, the arbitrator shall be
permitted to extend the commencement of such hearing for up to an additional sixty (60)
days.

 

 

     (iv) The judgment and the award, if any, of the arbitrator shall be issued within
thirty (30) days of the close of the hearing. The arbitrator shall provide a concise
written statement setting forth the reasons for the judgment and for the award, if any.
The arbitration award, if any, may be submitted to any court having jurisdiction to be
confirmed and enforced, and such confirmation and enforcement shall not be subject to
arbitration.

     (v) The arbitrator will give effect to statutes of limitations and any waivers
thereof in determining the disposition of any Dispute and may dismiss one or more claims
in the arbitration on the basis that such claim or claims is or are barred. For purposes
of the application of the statute of limitations, the service on AAA under applicable AAA
rules of a notice of Dispute is the equivalent of the filing of a lawsuit.

     (vi) Any dispute concerning this Dispute Resolution Section, including any such
dispute as to the validity or enforceability hereof or whether a Dispute is arbitrable,
shall be determined by the arbitrator; provided, however, that the arbitrator
shall not be permitted to vary the express provisions of these Special Rules or the
Reservations of Rights in subsection (c) below.

     (vii) The arbitrator shall have the power to award legal fees and costs pursuant to
the terms of this Agreement

     (viii) The arbitration will take place on an individual basis without reference to,
resort to, or consideration of any form of class or class action.

     (c) Reservations of Rights. Nothing in this Agreement shall be deemed to (i) limit
the applicability of any otherwise applicable statutes of limitation and any waivers contained in
this Agreement, or (ii) apply to or limit the right of Administrative Agent or any Lender (A) to
exercise self help remedies such as (but not limited to) setoff, or (B) to foreclose judicially or
nonjudicially against any real or personal property collateral, or to exercise judicial or
nonjudicial power of sale rights, (C) to obtain from a court provisional or ancillary remedies
such as (but not limited to) injunctive relief, writ of possession, prejudgment attachment, or the
appointment of a receiver, or (D) to pursue rights against a party to this Agreement in a
third-party proceeding in any action brought against Administrative Agent or any Lender in a
state, federal or international court, tribunal or hearing body (including actions in specialty
courts, such as bankruptcy and patent courts). Subject to the terms of this Agreement,
Administrative Agent and any Lender may exercise the rights set forth in clauses (A) through (D),
inclusive, before, during or after the pendency of any arbitration proceeding brought pursuant to
this Agreement. Neither the exercise of self help remedies nor the institution or maintenance of
an action for foreclosure or provisional or ancillary remedies shall constitute a waiver of the
right of any party, including the claimant in any such action, to arbitrate the merits of the
Dispute occasioning resort to such remedies. No provision in the Loan Documents regarding
submission to jurisdiction and/or venue in any court is intended or shall be construed to be in
derogation of the provisions in any Loan Document for arbitration of any Dispute.

     (d) Conflicting Provisions for Dispute Resolution. If there is any conflict between the
terms, conditions and provisions of this Section and those of any other provision or agreement for

 

 

arbitration or dispute resolution, the terms, conditions and provisions of this Section shall
prevail as to any Dispute arising out of or relating to (i) this Agreement, (ii) any other Loan
Document, (iii) any related agreements or instruments, or (iv) the transaction contemplated herein
or therein (including any claim based on or arising from an alleged personal injury or business
tort). In any other situation, if the resolution of a given Dispute is specifically governed by
another provision or agreement for arbitration or dispute resolution, the other provision or
agreement shall prevail with respect to said Dispute.

     (e) Waiver of Trial By Jury: BORROWER. GUARANTORS AND AGENT HEREBY KNOWINGLY,
IRREVOCABLY VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATIONBASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
COMMITMENT AND ANY DOCUMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF BORROWER, THE
GUARANTORS OR AGENT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR AGENT ENTERING INTO THIS
COMMITMENT.

THE WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.

 

 

EXHIBIT “G”

HF REPRESENTATIONS AND WARRANTIES

     The following constitute representations and warranties of HF to Skechers and the Company,
which are made as of the Effective Date, and also as of the date that fee title to the Property is
contributed to the Company and which may be enforced by either Skechers or the Company:

          a. HF has all legal power, right and authority to convey, or cause to be
conveyed, HF’s interest in the Property (and, when applicable, the fee interest in the
Property) to the Company pursuant to this Agreement and to execute and deliver, or cause the
execution and delivery, of all documents required to consummate the transactions
contemplated hereby.

          b. All requisite action has been taken in connection with the conveyance of
HF’s interest in the Property to the Company pursuant to this Agreement and the execution of
all documents required to consummate the transactions contemplated hereby.

          c. The execution and delivery of the conveyance documents contemplated hereby
do not require the consent or approval of any third party nor shall such execution and
delivery result in a breach or violation of any applicable law or conflict with, breach,
result in a default under or violate any contract or agreement to which HF is a party, or by
which HF or the Property is bound.

          d. Neither HF nor any HF Affiliate has received written notice or has actual
knowledge of any pending or threatened actions, suits, arbitrations, claims or proceedings,
at law or in equity, affecting the Property, or in which HF or the Master Landlord is, or
will be, a party by reason of Master Landlord’s ownership or HF’s interest in the Property
(except for the Sierra Club Litigation (as defined herein)).

          e. Neither HF nor any HF Affiliate has received written notice of or has
actual knowledge of any attachments, execution proceedings, assignments for the benefit of
creditors, insolvency, bankruptcy, reorganization or other proceedings pending against HF.

          f. Neither HF nor any HF Affiliate has entered into any contracts for the
sale, exchange or other disposition of the Property, or any portion thereof, which are still
in force and effect, nor do there exist any rights of first refusal, options or other rights
of any other Person to purchase all or any portion of the Property.

          g. HF’s sole interest in the Property is a leasehold interest in the Property
pursuant to the Master Lease, and Master Landlord holds fee simple title to the Property.
Pursuant to the Master Lease, HF will acquire fee title to the Property prior to the time
that it is obligated to convey the Property to the Company, or the Master Landlord will
convey fee title to the Property directly to the Company.

          h. Neither HF nor any HF Affiliate has received written notice of or has
actual knowledge of the commencement or intended commencement of any proceeding in eminent
domain, or similar proceeding by any governmental authority which would affect the Property.

 

 

          i. In accordance with California Health and Safety Code §25359.7, HF hereby
gives Skechers and the Company notice and informs them that HF has no knowledge of the
release of any hazardous materials located on or beneath the Property, except to the extent
(if any) reflected in environmental reports delivered to Skechers.

          j. The Lease is in full force and effect. Neither HF nor to HF’s knowledge,
Skechers Parent, are in default thereunder, nor to HF’s knowledge do any facts or
circumstances exist that, with the passage of time or the giving of notice, or both, will or
could constitute a default by Skechers Parent thereunder.

          k. Neither HF nor any of its Affiliates has received any written notice or
has other actual knowledge of any change contemplated in any laws, ordinances or
restrictions affecting the Property, or any judicial or administrative action, or any action
by adjacent landowners with respect to the Property, and neither HF nor any of its
Affiliates has received any written notice or has other actual knowledge or any other fact,
circumstance or condition, financial or otherwise, which would materially present, limit,
impede or render materially more costly the construction of the Project or the use or
operation of the Property as contemplated by this Agreement.

          l. To HF’s and its Affiliates’ actual knowledge, except as disclosed in the
environmental reports delivered by HF to Skechers, there are no acts, omissions, events,
circumstances or conditions on, at, under or in connection with the Property that constitute
a material violation of, or require remediation under, any applicable environmental law,
including any pollution, contamination, degradation, damage or injury caused by, related to,
arising from or in connection with the generation, use, handling, treatment, storage,
disposal, discharge, emission or release of a hazardous material at the Property (an
“Environmental Condition”). HF or its Affiliate has satisfied all material
applicable governmental reporting requirements in connection with any known Environmental
Condition existing on the Property. To HF’s actual knowledge, there is no basis for a claim
by any third party against HF in connection with an Environmental Condition at the Property.

          m. Neither HF nor its Affiliates has entered into or is subject to any
leases, occupancy agreements, licenses or similar agreements affecting the occupancy or
possession of the Property, other than the Lease (and the Master Lease).

          n. Except for required construction permits, HF or its Affiliates have
obtained (or will obtain prior to the closing of the Construction Loan) all material
necessary entitlements to construct the Project as contemplated by this Agreement and the
Project will not constitute a violation of the Property’s zoning classification or other
similar governmental requirements (including, without limitation, parking requirements).

          o. The Master Lease is in full force and effect and neither party is in
default thereunder, nor do any facts or circumstances exist which would, with the passage of
time and/or the giving of notice, constitute a default by either party thereunder.

          p. The Property is not subject to any monetary liens or encumbrances (other
than the lien of current real property taxes), or to any nonmonetary encumbrances which
would have a material adverse effect on the ability of the Company to perform its
obligations under this Agreement or Skechers Parent’s ability to perform its obligations
under the Lease, or which could result in the termination or extinguishment of the Lease.

 

 

          q. Neither HF nor any HF Affiliate has caused any changes in the zoning or
other entitlements affecting the Property since the date of execution of the Lease which
would have a material adverse effect on Skechers Parent’s rights under the Lease or to
operate its intended business (as described in the Lease) on the Property.

 

 

EXHIBIT “H”

SIERRA CLUB LITIGATION SETTLEMENT AGREEMENT

Exhibit “H”

 

 

SETTLEMENT AGREEMENT

     This settlement agreement (this “Agreement”) is made at Moreno Valley, California as of January
7, 2010, between the SIERRA CLUB, a California not-for-profit corporation, on the one
hand, and THE CITY OF MORENO VALLEY (the “City”), HIGHLAND FAIRVIEW PARTNERS, I, a California
general partnership, HIGHLAND FAIRVIEW PARTNERS, II, a California general partnership, HIGHLAND
FAIRVIEW PARTNERS, III, a Delaware general partnership, and HIGHLAND FAIRVIEW PARTNERS,
IV, a Delaware partnership, and HF LOGISTICS I, LLC, a California limited liability company,
(collectively, “Highland Fairview”), on the other hand, with the respect to the following
facts:

     A. Highland Fairview is the owner of a site located in the City. The site, which contains
approximately 158 acres, is bounded on the north by State Route 60, on the east by Theodore Street,
on the south by future Eucalyptus Avenue and on the west by Redlands Boulevard (the “Project
Site”).

     B. Highland Fairview intends to develop the Project Site in three phases with a total of 2,620,000
square feet of logistic uses, associated office space, and commercial uses (the “Project”). The
Project is known as the Highland Fairview Corporate Park.

     C. The first phase of the Project will include a building containing 1,820,000 square feet which
has been leased to Skechers USA, Inc. (“Skechers”). The building will be used primarily for
logistic uses and some associated office and commercial facilities (the “Skechers Building”).

     D. Highland Fairview also owns approximately 1,800 acres of land located south and east of the
Project Site which is subject to the Moreno Highlands Specific Plan (the “Specific Plan Area”)
which has vested development rights under a development agreement. Highland Fairview is considering
developing the Specific Plan Area in the near future and may, as part of that development, seek to
include industrial uses in areas not currently so designated in the Moreno Highlands Specific Plan.

     E. On February 10, 2009, the City Council certified that environmental impact report P07-157 (the
“EIR”) analyzing the environmental impacts of the Project had been prepared in compliance with the
California Environmental Quality Act (“CEQA”) and then granted a number of approvals including
general plan amendment PA07-0089, change of zone PA07-0088, tentative parcel map 35629, PA07-0090
and plot plan PA07-0091 for the Project (the “Project Approvals”).

     F. The development of the Specific Plan Area is unrelated to the that of the Project and no
development of the Specific Plan Area has been authorized by the Project Approvals.

     G. On February 20. 2009, the Sierra Club filed a lawsuit entitled Sierra Club v. City
of Moreno Valley, Riverside Superior Court Case No. RIC 519566, which sought to set aside
the Project Approvals, primarily on the basis that the EIR failed to comply with CEQA (the
“Lawsuit”).

1

 

     H. The Sierra Club, the City and Highland Fairview wish to resolve the dispute between them
concerning the Lawsuit, the Project and the development of the Project Site on the terms set forth
in this Agreement. Further, they seek to work together to pursue areas of common interest.

     I. The Sierra Club wants the City to adopt a climate action plan and a solar energy incentive
program and to require additional Code enforcement for commercial properties in order to decrease
the emission of greenhouse gases, conserve energy and protect the health of the City’s inhabitants.
Highland Fairview concurs that the plans, programs and actions sought by the Sierra Club could be
beneficial, endorses them and will use its best efforts to encourage the City to consider them. The
City believes that the actions desired by the Sierra Club are worthy of consideration, but cannot
and does not commit to their adoption. The City Council, in response to the Sierra Club’s concerns,
has directed staff to prepare both a climate action plan, projected to be available for
consideration by the Council within 18 months, and to review possible participation in the Western
Riverside County Council of Governments’ proposed program to facilitate the production of solar
energy, including the use of the financing mechanism available under
AB 811. However, because all
of the plans, programs and actions are solely within the City Council’s legislative authority which
cannot be contracted away neither the City nor Highland Fairview can guarantee that either of them
will be adopted.

     J. The Sierra Club is concerned that truck traffic serving the Project could unduly
impact Redlands Boulevard and wants that truck traffic to use. Theodore Street to the greatest
extent practical. Neither the City nor Highland Fairview has any objection to reducing the amount
of truck traffic using Redlands Boulevard.

     K. The Sierra Club has been concerned about truck traffic on a portion of Ironwood Avenue. The City
Council, in response to the Sierra Club’s concerns, has eliminated the truck route designation for
Ironwood Avenue between Moreno Beach Drive and Theodore Street.

     L. The Sierra Club further wants Skechers to take several steps to minimize the emission of
greenhouse gases. These steps are solely within the control of Skechers and require Skechers’
agreement in order to allow Highland Fairview to take the actions specified in this Agreement.
Highland Fairview concurs that the actions sought by the Sierra Club could be beneficial and wants
to assist the Sierra Club in seeing that they are seriously considered. However, because Highland
Fairview does not control Skechers’ actions, it cannot guarantee
that any of them will occur.

     M. This Agreement is acknowledged by the parties to be a compromise settlement and does not
constitute an admission of the validity of any claims which have been, or might have been, made in
the Lawsuit. However, Highland Fairview desires that the settlement be comprehensive with respect
to the Project and that there shall be no further opposition to the Project on the terms set out in
this Agreement.

2

 

     N. Civil Code § 1542 states:

“A general release does not extend to claims which the creditor does not know or suspect to exist
in his or her favor at the time of executing the release which if known by him or her must have
materially affected his or her settlement with the debtor.”

     IN LIGHT OF THE FOREGOING FACTS, II IS MUTUALLY AGREED THAT:

     1. Immediately upon the execution of this Agreement, the Sierra Club shall dismiss the Lawsuit in
its entirety and as to all parties, with prejudice, and shall then provide conformed copies of the
dismissal to Robert L. Hansen, the City’s Interim City Attorney, and to Kenneth B. Bley, Highland
Fairview’s counsel.

     2. Highland Fairview shall include a requirement in the contract with the general contractor for
the Project that all off-road equipment with a horsepower rating of 25 hp or greater used on the
Project Site during the construction of the Project will meet a minimum Tier II rating and at least
80% of such equipment will meet a minimum Tier III rating and that the general contractor certify
that this requirement has been satisfied. Highland Fairview shall provide a copy of the
certification to the Sierra Club upon receipt of the certification from the general contractor

     3. Highland Fairview shall include a requirement in the contract with the general contractor for
the Project that diesel-powered portable generators not be used during the construction of the
Project.

     4. Highland Fairview shall:

     a. Provide the amount of electrical power generated through solar cells mounted on the roof of the
Skechers Building to the extent needed to provide for the estimated energy demand of the 50,000 sq
ft office portion of the Skechers Building. The construction of the solar cells will be initiated
within six months of Skechers’ occupancy of the Building and completed within 18 months of
Skechers’ occupancy of the Building. Highland Fairview
anticipates that AB 811 sources of funds
will be used to finance the construction of the solar cells as well as incentive programs from the
City electrical utility which axe comparable to the programs offered by Southern California Edison,
i.e., which will yield the same economic result, but such programs are not yet adopted by
the City and may not be; and

     b. Provide the City and the Sierra Club with the appropriate design documents demonstrating that
the electrical energy demand of the 50,000 sq ft office portion of the Skechers Building will be
met by the solar cells to be mounted on the roof of the Skechers Building; and

     c. Design and construct the roof of the Skechers Building to accommodate the maximum number of
solar cells; and

     d. Increase the amount of electrical power generated through solar cells mounted on the roof of the
Skechers Building within ten years to provide 100% of the

3

 

energy needed for the Project to the extent that it is reasonably and economically feasible for
Highland Fairview to do so. This will largely depend upon the policies adopted by the City’s
electrical utility with respect to the subsidization of solar-generated electrical energy, which
requires a rate of not less than $0.22 per kilowatt-hour, the rate currently paid by Southern
California Edison under its performance-based incentive program, and provisions on a par with
Southern California Edison’s solar subsidy programs. Further, Highland Fairview will expand the
solar energy generating capacity of the Skechers Building based upon the benefits afforded through
AB 811 financing and grants, incentives provided by the City’s electrical utility, federal and
state tax programs and commercially reasonable financing such that the maximum investment does not
exceed $7,500,000 and the projected after-tax return generated is at least 5.5% over the rate for
20 year United States Treasury bonds but not less than 10% in any event. Should Highland Fairview
develop solar capacity beyond the energy usage required by the Project, the excess energy will be
sold to a utility provider at a mutually agreeable negotiated rate. Highland
Fairview can not guarantee that any increase in the amount of electrical power generated through
solar cells will occur because neither the necessary policies nor the rate to be paid have been
adopted by the City and may not be.

     5. Highland Fairview shall provide solar water heaters, which may include supplemental
conventional heating sources, throughout the Project for all personal uses, such as bathrooms and
showers, but not for industrial uses.

     6. Highland
Fairview shall provide the signs required by Mitigation Measure AQ-11 at locations,
and of a size, to be easily readable from future Eucalyptus Avenue.

     7. Highland Fairview shall physically configure the access areas to future Eucalyptus
Avenue so that large trucks (over 10,000 pounds) will be required to make a left turn, towards
Theodore Street, when exiting the Project Site unless prohibited by the City from doing so.

     8. Highland Fairview shall provide on-site signs directing large trucks (over 10,000 pounds)
leaving the Project Site to use Theodore Avenue unless prohibited by the City from doing so.

     9. Highland Fairview shall provide the landscaped median in Eucalyptus Avenue between Redlands
Boulevard and Theodore Street in substantially the form currently planned, as shown on Exhibit A,
subject to final approval by the City.

     10. Highland Fairview shall provide a disclosure document in substantially the following form to
each buyer/lessee of any residential unit developed on property owned by Highland Fairview which is
located southerly of State Route 60 and within 300 feet of the Project Site. The document shall be
signed by the buyer/lessee and recorded against the unit:

     “Buyer/Lessee acknowledges that the property which Buyer/Lessee is purchasing/leasing is
located in the vicinity of the Highland Fairview Corporate Park project. Buyer/Lessee acknowledges
that, in addition to commercial and office uses, there are, or may be, distribution warehouses for
national and regional

4

 

Companies
located within the Corporate Park project. As a result of these uses, there will be
automobile and truck traffic, which may operate on a 24/7 basis for pick up and delivery of
products from various buildings from within the Corporate Park project. There may also be increased
diesel fumes, which contain toxic air contaminants which are known to cause cancer, noise and light
as a result of the operations of these facilities. A copy of the Highland Fairview Corporate Park
Environmental Impact Report, which includes a detailed evaluation of the potential impacts of the
Corporate Park project, has been made available for the Buyer’s/Lessee’s review.”

     11. Highland
Fairview shall within 30 days of the receipt of a written request from the Sierra Club,
contribute $100,000 to the Riverside Land Conservancy. The
contribution may only be used for the
preservation of agriculture through the purchase of agricultural land or of agricultural
conservation casements on agricultural land located in Riverside County.

     12. If Highland Fairview includes industrial uses in areas not currently designated for industrial
uses in the Moreno Highlands Specific Plan, it shall provide buffers of commercial uses within the
Specific Plan Area between industrial uses and residential uses. The extent of the buffers shall be
determined by appropriate technical studies conducted by a qualified third party air quality
expert, selected and paid for by Highland Fairview, subject to the City’s approval.

     13. The Skechers building has been designed with the goal of achieving LEED silver certification.
Highland Fairview shall seek to obtain the highest commercially reasonable level of LEED
certification of the Skechers Building and shall, in any event, take all of the actions set forth
on Exhibit B. As used in this Agreement, “commercially reasonable” shall mean that the actions
involved are capable of being accomplished in a successful manner within a reasonable period of
time taking into account economic and other circumstances that would be considered by a prudent
commercial entity.

     14. Highland Fairview shall submit a formal request to the California Department of Transportation
(“CalTrans”) for the installation of signs to be installed, at Highland Fairview’s expense, along
State Route 60, east bound and west bound, directing Project traffic to the Theodore Street exit.

     15. To the extent consistent with the Project Approvals and adopted City regulations and policies:

     a. The design and installation of improvements and signs shall direct all large trucks (over 10,000
pounds) to use Theodore Street, rather than Redlands Boulevard, when entering or leaving the
Project Site unless the site-specific traffic analysis required prior to the approval of a plot
plan for Phase III (condition TE3 of the Project Approvals. City Council Resolution 2009-10) provides compelling evidence that: ands

     (i) Keeping large trucks (over 10,000 pounds) off of Redlands Boulevard will cause Eucalyptus
Avenue. Theodore Street or its on – or off-ramps to State Route 60 to fall below the City’s Level
of Service standard; and

5

 

     (ii) Mitigation within the limits of the currently planned right of way
of Theodore Street is unavailable to improve the Level of Service to acceptable
levels; and

     (iii) Allowing large trucks (over 10,000 pounds) to use Redlands Boulevard
will not cause Redlands Boulevard to fall below the applicable City’s Level
of Service Standards after mitigation.

     b. To the extent that any part of subparagraph a above is found not to be consistent
with existing Project Approvals or City regulations or policies, Highland Fairview shall
apply for and the City will consider, under its existing procedures and preserving the
Council’s legislative and discretionary policy authority, modifications of conditions,
and/or amendments to existing Project Approvals, regulations and policies.

     16. The City Council has, in Study Session of October 20, 2009 or previously, directed City
staff to analyze, as quickly as feasible, and then to report back to the Council, for its
consideration without commitment to adoption, each of the following:

     a. The adoption/enforcement of a City-wide commercial truck idling ordinance; and

     b. The acquisition, generation and distribution of “green” energy by the City’s
electric utility; and

     c. An amendment of the City’s Municipal Code current lighting standards to incorporate
the guidelines of the International Dark Sky Association and the exterior lighting
standards set forth in the Palm Desert Municipal Code; and

     d. The submission of a request to CalTrans and/or the Riverside County Transportation
Commission that a regional traffic mitigation fee be adopted for the Improvement of State
Route 60; and

     e. The use of LED lamps in City-owned streetlights.

     17. Highland Fairview shall require any user of the Skechers facility, other than Skechers,
and will use reasonable efforts to seek to have Skechers:

     a. Have its trucking fleet (all trucks owned and operated by Skechers) and all trucking
carriers that distribute Skechers’ products to its retail stores be classified as SmartWay 1.0 or
higher at the time that it takes possession of the Skechers building, increase the SmartWay
classification to 1.25 for Skechers’ trucking fleet and such other trucking carriers within five
years and provide an annual report to Highland Fairview, which Highland Fairview shall then provide
to the Sierra Club; and

     b. Continue to provide incentives to its employees to encourage carpooling; and

6

 

     c. Conduct an annual review for five years following the occupancy of the Skechers Building to
determine the level of use of alternatively fueled vehicles and the demand for designated spaces
for such vehicles, beyond the 37 spaces already designated. Spaces located closest to
building entries will be converted by Highland Fairview from general parking to alternatively fueled
vehicle parking to meet the demand; and

     d. Conduct an annual review for five years following the occupancy of the Skechers Building to
determine the level of use of plug-in electrical vehicles and the demand for plug-in-stations.
Additional plug-in-stations will be provided by Highland Fairview to meet the demand; and

     e.
Not use diesel-powered “yard goats” in its operations.

     18. Highland Fairview shall provide the Sierra Club with notice of the submission of any
application for a discretionary permit for the development of the Project within five business days
of the submission.

     19. The Sierra Club shall not sue to invalidate the development, use or modification of the
Project, including, but not limited to, any approvals needed for the development of any phase of
the Project, as long as the development or use is consistent with the terms of this Agreement and
the Project, as analyzed in the EIR, and any modification will not result in a significant adverse
impact on the environment, as defined in CEQA Guidelines § 15382, as determined by the
City. For the purpose of this Agreement, changes in the manner in which the Project is financed, in
whole or in part, and removal of vegetation within State Route 60 right-of- way shall not be
considered to be significant adverse impacts on the environment by the Sierra Club. Nothing in this
paragraph 19 shall apply to a modification of the terms of this Agreement.

     20. Highland Fairview shall pay Johnson & Sedlack, the Sierra Club’s attorneys, $183,000
within 10 days of the dismissal of the Lawsuit. Except for this payment, each party shall bear its
own attorneys’ fees and costs incurred in connection with the Lawsuit and the preparation of this
Agreement.

     21. Any party alleging a breach of this Agreement shall provide written notice of the alleged
breach to the party alleged to be in breach. That party shall then have 30 days from receipt of the
notice in which to cure the breach or to begin curing the breach if it is one which cannot be cured
within 30 days. If the breach has not been cured within the 30 day period or, if no effort has been
begun within the 30 day period for a breach which cannot be cured within the 30 day period, then
the party alleging the breach shall be entitled to avail itself of its legal remedies.

     22. All notices and communications shall be provided in writing, which may be delivered by
e-mail, to the following addresses:

	 	 	 

	Sierra Club Environmental Law Program:

	 	85 Second Street
	 

	 	San Francisco, CA 94105
	 

	 	Aaron.Isherwood@sierraclub.org

7

 

	 	 	 

	Sierra Club, San Gorgonio Chapter:

	 	Chapter Chair/Conservation Chair
	 

	 	4079 Mission Inn Avenue
	 

	 	Riverside, CA 92501-3204
	 

	 	san.gorgonio.chapter@sierraclub.org
	 
	 	 
	Sierra Club, Moreno Valley Group:

	 	Ann Turner-McKibben and George
	 

	 	Hague
	 

	 	P.O. Box 1325
	 

	 	Moreno Valley, CA 92556-1325
	 

	 	morenovalleygroup@yahoo.com
	 
	 	 
	with a copy to Raymond W. Johnson, Esq.:

	 	Johnson & Sedlack
	 

	 	26785 Camino Seco
	 

	 	Temecula, CA 92590
	 

	 	esqaicp@wildblue.net
	 
	 	 
	The City attention of the City Manager,
	 	 
	w/ copy attention of the City Attorney:

	 	14177 Frederick Street
	 

	 	P.O. Box 88005
	 

	 	Moreno Valley, CA 92552
	 

	 	CMOffice@moval.org
	 

	 	CityAttorney@moval.org
	 
	 	 
	Highland Fairview:

	 	14225 Corporate Way
	 

	 	Moreno Valley, CA 92553
	 

	 	ibenzeevi@highlandfairview.com
	 
	 	 
	with a copy to Kenneth B. Bley, Esq.:

	 	Cox, Castle & Nicholson LLP
	 

	 	2049 Century Park East, 28th Floor,
	 

	 	Los Angeles CA 90067
	 

	 	kbley@coxcastle.com

Any address may be changed by providing written notice to all of the other parties.

     23. Except as set forth in this Agreement, the Sierra Club releases the City and Highland
Fairview and their owners, affiliates, members, officers, employees, agents and attorneys from any
and all claims, demands, liabilities, obligations, costs, expenses, fees, actions, and/or causes of
action arising out of, or connected to, the Lawsuit or the Project, whether known,
unknown or suspected and the Sierra Club hereby waives the provisions of Civil Code § 1542 set
forth in Recital N. The release in this paragraph 23 is a separate consideration for the release
contained in paragraph 24 and the Sierra Club would not have executed this Agreement nor agreed to
this paragraph 23 but for the release contained in paragraph 24.

     24. Except as set forth in this Agreement, the City and Highland Fairview release the Sierra
Club and its members, officers, employees, agents and attorneys from any and all claims, demands,
liabilities, obligations, costs, expenses, fees, actions, and/or causes of action arising out of,
or connected to, the Lawsuit or the Project, whether known, unknown or suspected and the

8

 

City and Highland Fairview hereby waive the provisions of Civil Code § 1542 set forth in Recital N.
The release in this paragraph 24 is a separate consideration for the release contained in paragraph
23 and neither the City nor Highland Fairview would have executed this Agreement nor agreed to this
paragraph 24 but for the release contained in paragraph 23.

     25. The rights and obligations of the Sierra Club under this Agreement are personal
to it and may not be transferred or assigned to any other person or entity. This Agreement is
entered into solely for the benefit of the parties hereto and, with the exception of the Sierra
Club, their successors, transferees and assigns. Other than the parties hereto and, with the
exception of the Sierra Club, their successors, transferees and assigns, no third party shall be
entitled, directly or indirectly, to base any claim, or to have any right arising from, or related
to, this Agreement.

     26. The parties to this Agreement shall act in good faith and shall take all further actions
reasonably necessary to effectuate the letter and the spirit of this Agreement.

     27. This Agreement and all rights and obligations arising out of it shall be construed in
accordance with the laws of the State of California.

     28. Any litigation arising out of this Agreement shall be conducted only in the Riverside
Superior Court. Only equitable remedies shall be available to the prevailing party in any such
litigation, damages for breach of this Agreement being expressly
waived. Each party to any such
litigation shall bear its own attorneys’ fees and costs, the right to recover them under any
statute, including, but not limited to Code of Civil Procedure § 1021.5, any Rule of Court or any
rule of law being expressly waived.

     29. This Agreement contains the entire agreement and understanding concerning the Lawsuit and
the Project and supersedes and replaces all prior negotiations or proposed agreements, written or
oral. Each of the parties hereto acknowledges that no other party, nor the agents nor the attorneys
for any party, has made any promise, representation or warranty whatsoever, express or implied, not
contained herein, to induce the execution of this Agreement and acknowledges that this Agreement
has not been executed in reliance upon any promise, representation or warranty not contained
herein.

     30. This Agreement may not be amended except in a writing signed by all the parties hereto.

     31. The parties to this Agreement hereby acknowledge that they have undertaken an independent
investigation of the facts concerning the Lawsuit and the Project. The parties expressly assume the
risk that the true facts concerning the foregoing may differ from those currently understood by
them.

     32. Each individual signing this Agreement represents and warrants that he or she has been
authorized to do so by proper action of the party on whose behalf he or she has signed.

     33. This Agreement may be signed in one or more counterparts and, when all parties have signed
the original or a counterpart, such counterparts, whether originals, facsimiles or email
attachments, together shall constitute one original document.

9

 

	 	 	 	 	 
	January 7, 2010 	SIERRA CLUB

 	 
	 	By: 	
[ILLEGIBLE]	 
	 	 	Its: CHAPTER CHAIR, SAN GORGONIO CHAPTER 	 
	 	 	 
	 
	January 11, 2010 	          THE CITY OF MORENO VALLEY

 	 
	 	By: 	
[ILLEGIBLE] 	 
	 	 	Its: MAYOR 	 
	 	 	 
	 
	January 7, 2010 	HIGHLAND FAIRVIEW PARTNERS I

By: HFP Realty Investment, LP, its Managing Partner

By: HFP Realty Holdings, LLC, its General Partner

 	 
	 	By: 	
/s/ Iddo Benzeevi 	 
	 	 	Its: President 	 
	 	 	 
	 
	January 7, 2010 	HIGHLAND FAIRVIEW PARTNERS II 

By: New Sands Holdings, LP, its Managing Partner

By: Sand Holdings, LLC, its General Partner

 	 
	 	By: 	
/s/ Iddo Benzeevi 	 
	 	 	Its: President 	 
	 	 	 
	 
	January 7, 2010 	HIGHLAND FAIRVIEW PARTNERS III 

By: HFP Realty Investment, LP, its Managing Partner

By: HFP Realty Holdings, LLC, its General Partner

 	 
	 	By: 	
/s/ Iddo Benzeevi 	 
	 	 	Its: President 	 
	 	 	 	 

10

 

	 	 	 	 	 
	January 7, 2010 	HIGHLAND FAIRVIEW PARTNERS IV 

By: Sinclair Holdings, LP, its Managing Partner

By: Sinclair Realty Holdings, LLC, its General 

       Partner

 	 
	 	By: 	
Iddo Benzeevi 	 
	 	 	Its: President 	 
	 	 	 
	 
	January 7, 2010 	HF LOGISTICS I, LLC

 	 
	 	By: 	
Iddo Benzeevi 	 
	 	 	Its: President 	 
	 	 	 
	 
	APPROVED AS TO FORM:

January 11, 2010 	

JOHNSON & SEDLACK

 	 
	 	By: 	
/s/ Raymond W. Johnson 	 
	 	 	Raymond W. Johnson 	 
	 	 	Attorneys for the SIERRA CLUB 	 
	 
	January 11, 2010 	CITY ATTORNEY

OF THE CITY OF MORENO VALLEY

 	 
	 	By: 	
[ILLEGIBLE] 	 
	 	 	Its: INTERIM CITY ATTORNEY 	 
	 	 	 
	 
	January 7, 2010 	COX CASTLE & NICHOLSON LLP

 	 
	 	By: 	
/s/ Kenneth B. Bley 
	 	Kenneth B. Bley 	 
	 	 	Attorneys 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.

4 of 5

 

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.

5 of 5

 

EXHIBIT “I”

SECOND LEASE AMENDMENT

Exhibit “I”

 

 

SECOND AMENDMENT TO LEASE AGREEMENT

     THIS SECOND AMENDMENT TO LEASE AGREEMENT (“Second Amendment”) is made and entered into
this 12th day of April, 2010 by and between HF LOGISTICS-SKX T1, LLC, a Delaware limited
liability company (“Landlord”) and SKECHERS U.S.A., INC., a Delaware corporation
(“Tenant”).

RECITALS

     A. HF LOGISTICS I, LLC, a Delaware limited liability company and Tenant entered into that
certain Lease Agreement dated September 25, 2007 (the “Original Lease”), as amended by that certain
Amendment to Lease Agreement dated December 18, 2009 (the “First Amendment”, and collectively, the
“Lease”) pursuant to which HF LOGISTICS I, LLC leased to Tenant certain premises situated
at the northwest corner of Theodore Street and Eucalyptus Avenue in Moreno Valley, California, as
more fully described therein.

     B. HF Logistics I, LLC has assigned all of its right, title and interest as landlord under the
Lease to Landlord, and Landlord has assumed the obligations of HF Logistics I, LLC, as landlord
under the Lease.

     C. The parties desire to further amend the Lease.

     NOW, THEREFORE, for a good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:

     1. The definition “Premises” as defined on page 1 of the Original Lease and modified in
Section 4 of the First Amendment shall mean:

	 	 	 	“The Building, together with the parking areas, landscaped areas and other
areas consisting of approximately 82.59 acres of land situated at the NWC of
Theodore Street and Eucalyptus Avenue in Moreno Valley (Rancho Belago),
California, as shown on the draft of Parcel Map No. 35629 attached to this
Second Amendment as “Exhibit “A” (Revised)”.”

     For clarification, the approximately 22.37 acres shown on Exhibit “A” (Revised)
attached hereto (which area is identified as Parcel 2), which area comprises the “Expansion Area”,
is not included within the definition of “Premises”.

     Notwithstanding the foregoing, it is agreed that until the recordation of a final parcel map,
the Premises and the Expansion Area have been established by lot line adjustments, and that
accordingly the acreage and dimensions thereof may not be exactly the same as set forth on Exhibit
A (Revised). However, Landlord represents and warrants to Tenant that the acreage and dimensions
thereof will be substantially the same, and that any discrepancies will not materially impact the
rights or obligations of Tenant or Landlord under the Lease.

 

 

     2. The Final Plans (as originally defined in Addendum 2 Paragraph 1 of the Lease) shall be the
Plans and Specifications transmitted by HF Logistics I, LLC to Tenant (by “You Send It”) on January
29, 2010.

     3. Tenant acknowledges that title to the Expansion Area is or will be held by HF Logistics-SKX
T2, LLC, a Delaware limited liability company (“T2”), which is an affiliate of Landlord.
In the event that Tenant timely exercises its right to the Expansion Area pursuant to the Lease, T2
agrees to immediately convey its interest in the Expansion Area to Landlord; provided, however, if
(x) the Premises are encumbered by a deed of trust at the time Tenant exercises its expansion
option and the beneficiary thereunder will not either finance the construction of the Expansion
Building or consent to the Expansion Area being encumbered by a new construction loan (or if the
ownership of the Expansion Area by T1 will otherwise impede obtaining construction financing for
the construction of the Expansion Building), or (y) the Premises have been taken by foreclosure or
a transaction in lieu thereof, then T2 shall retain the Expansion Area, Tenant and T2 shall enter
into a new lease on the same terms and conditions as would have applied to the Expansion Area
pursuant to the Lease, and the Expansion Area shall be deemed removed from the Lease.

     4. Tenant acknowledges that the Base Rent under the Lease is Nine Hundred Thirty-Three
Thousand Eight Hundred Ninety-Four and 44/100 Dollars ($933,894.44) per month, but that it has
prepaid only the amount of Six Hundred Seventy-Nine Thousand Five Hundred Forty Dollars ($679,540).
The differential (being Two Hundred Fifty-Four Thousand Three Hundred Fifty-Four Dollars
($254,354)) shall be paid by Tenant to Landlord no later than the Commencement Date (as defined in
the Lease).

     5. Capitalized terms used in this Second Amendment shall have the same meanings as set forth
in the Lease, unless a different definition is set forth herein.

     6. Except as amended herein, all terms and conditions of the Lease shall remain in full force
and effect.

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

	 	 	 	 	 	 	 

	“LANDLORD”	 	“TENANT”
	 
	 	 	 	 	 	 
	HF LOGISTICS I, LLC, a Delaware	 	SKECHERS U.S.A., INC., a Delaware
	limited liability company	 	corporation
	 
	 	 	 	 	 	 
	By

	 	 
	 	By
	 	 
	 

	 	 

Iddo Benzeevi, President and
	 	 	 	 
 David
Weinberg, Chief Operating Officer
	 

	 	Chief Executive Officer
	 	 	 	 

2

 

HF Logistics-SKX T2, LLC, a Delaware limited liability company, hereby joins in the execution of
this Second Amendment to confirm its obligation to be bound by the provisions of the Lease insofar
as they relate to the Expansion Area and Tenant’s expansion option regarding the same.

	 	 	 	 	 	 	 	 	 

	 	 	HF LOGISTICS-SKX T2, LLC, a Delaware
	 	 	limited liability company
	 
	 	 	 	 	 	 	 	 
	 	 	By: HF LOGISTICS SKX, LLC, a Delaware
	 	 	       limited liability company, its sole
	 	 	       member
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	HF LOGISTICS I, LLC, a
	 	 	 	 	 	 	Delaware limited liability
	 	 	 	 	 	 	company, its managing member
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By 
	 	 	 	 	 	 	 

	 	 	 	 	 	 	Iddo Benzeevi, President and
	 	 	 	 	 	 	Chief Executive Officer
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	SKECHERS R.B., LLC, a
	 	 	 	 	 	 	Delaware limited liability
	 	 	 	 	 	 	company, its managing member
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By: SKECHERS U.S.A., Inc., a
	 	 	 	 	 	 	       Delaware limited liability
	 	 	 	 	 	 	       company, its sole member
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By 
	 	 	 	 	 	 	 

	 	 	 	 	 	 	       David Weinberg, Chief
	 	 	 	 	 	 	       Operating Officer

3

 

EXHIBIT “A”

(REVISED)

SITE PLAN

 

EXHIBIT “J”

INTENTIONALLY OMITTED

Exhibit “J”

 

 

EXHIBIT “K”

ESCROW AGREEMENT

Exhibit “K”

 

 

ESCROW AGREEMENT

          This Escrow Agreement (“Agreement”) is made and entered into this ______ day of March,
2010, by and between SKECHERS R.B., LLC, a Delaware limited liability company (“Skechers”),
HF LOGISTICS-SKX, LLC, a Delaware limited liability company (“HF Logistics”), HF
LOGISTICS-SKX T1, LLC, a Delaware limited liability company (“LLC”) and BANK OF AMERICA,
N.A. (“Escrow Agent”).

WITNESSETH:

          Escrow Agent does hereby acknowledge receipt from Skechers, the sum of Thirty Million Dollars
($30,000,000), by wire transfer into Escrow Agent’s Account No. 1499708217 entitled in the name of
“Bank of America, N.A. for the benefit of HF Logistics-SKX T1, LLC” (the “Account”), which
funds constitute Skechers’ initial capital contribution to HF Logistics, upon the Closing Date (as
defined below), and the subsequent capital contribution by HF Logistics to the LLC immediately
thereafter.

          Escrow Agent shall hold all funds in the Account (including accrued interest) in escrow, and
shall disburse same only in accordance with the provisions of this Agreement. The Account shall
bear interest at Escrow Agent’s usual interest rate for demand deposit accounts which the parties
hereto acknowledge and agree may be subject to fluctuations in accordance with Escrow Agent’s
normal business practices.

          The terms and conditions of the escrow are as follows:

          The parties hereto for themselves, their successors and assigns, do hereby agree as follows:

          1. Subject to the provisions of Paragraph 11 below, Escrow Agent shall hold all funds
(including accrued interest) in the Account, to be disbursed on the date of closing (“Closing
Date”) of the construction loan to be extended by Bank of America, N.A. (as administrative
agent and as a lender, “Lender”) to the LLC in accordance with the commitment dated
February 1, 2010 (the “Construction Loan”), as follows:

               (a) all accrued interest in the Account (at Lender’s demand deposit rate) through the Closing
Date shall be promptly disbursed to Skechers on the Closing Date pursuant to written wire transfer
or other disbursement instructions to be provided by Skechers provided that Escrow Agent shall have
no obligation to disburse such accrued interest unless and until Skechers provides Escrow Agent
with such disbursement instructions, and

               (b) the balance of funds in the Account (including interest at Lender’s demand deposit rate
accruing after the Closing Date) shall be disbursed in accordance with the terms and conditions of
the loan documents which evidence and govern the Construction Loan (collectively, the “Loan
Documents”).

 

 

               (c) Notwithstanding the foregoing, in the event the Closing Date does not occur on or before
June 1, 2010 (unless on or before June 1, 2010, Skechers has given Escrow Agent written notice to
hold the funds in the Account beyond that date), all funds in the Account (including accrued
interest) shall be immediately disbursed to Skechers according to wire transfer or other
disbursement instructions to be provided to Escrow Agent in writing by Skechers, provided that
Escrow Agent shall have no obligation to disburse such funds unless and until Skechers provides
Escrow Agent with written wire instructions or other disbursement instructions. Once the funds
have been so disbursed, this Agreement shall automatically terminate and Escrow Agent shall have no
further obligations hereunder.

               (d) Upon the occurrence of the Closing Date and the disbursement of the accrued interest
pursuant to Paragraph 1(b) above, (1) this Agreement shall automatically terminate and
Escrow Agent shall have no further obligations hereunder; and (2) Bank of America, N.A.’s sole
obligations with respect to the Account shall be governed by the terms and conditions of the Loan
Documents and shall arise only in Bank of America, N.A.’s capacity as Administrative Agent and a
Lender under the Loan Documents.

          2. This Agreement is a personal one between the parties hereto and the Escrow Agent, and no
amendment of this Agreement by the parties (which shall be in writing) shall be binding on the
Escrow Agent unless and until the Escrow Agent, in its reasonable discretion, shall give its
written consent thereto.

          3. No person, firm, corporation or other entity will be recognized by the Escrow Agent as a
successor or assign of any party hereto until there shall be presented by the Escrow Agent evidence
satisfactory to it of such succession or assignment.

          4. The Escrow Agent shall have no duties or responsibilities except as expressly provided in
this Agreement (and no duties or obligations of the Escrow Agent shall be implied by virtue of this
Agreement). The Escrow Agent shall not be obligated to recognize nor have any liability or
responsibility arising under any other agreement to which the Escrow Agent is not a party, even
though reference thereto may be made herein or a copy thereof attached hereto.

          5. The Escrow Agent shall not be responsible for the identity, authority or rights of any
person, firm, corporation or other entity, executing or delivering or purporting to execute or
deliver this Agreement or any document or security deposited hereunder or any endorsement thereof
or assignment thereof.

          6. The Escrow Agent shall not be responsible for the sufficiency, genuineness or validity of
or title to any document or funds deposited or to be deposited with it pursuant to any provisions
of this Agreement.

          7. The Escrow Agent may rely upon any instrument in writing reasonably believed by it to be
genuine and sufficient and properly presented by the parties hereto, and shall not be liable or
responsible for any action taken or omitted in accordance with the provisions

2

 

thereof. The Escrow Agent may assume the validity and accuracy of any statements or
assertions contained in such writing or instrument; and may assume that any person purporting to
give any writing, notice, advice or instruction in connection with the provisions hereof has been
duly authorized to do so. The Escrow Agent shall not be liable in any manner for the sufficiency
or correctness as to form, manner of execution or validity of any written instructions delivered to
it; nor as to the identity, authority or rights of any person executing the same.

          8. The Escrow Agent shall not be liable or responsible for any act it may do or omit to do in
the exercise of reasonable care.

          9. The Escrow Agent may consult with counsel of its own choice and shall have full and
complete authorization and protection for any action taken or suffered by it hereunder in good
faith and in accordance with the opinion of such counsel. The Escrow Agent shall not be liable for
any mistakes of fact or error of judgment, or for any acts or omissions of any kind unless caused
by its willful misconduct or gross negligence or uncured breach of this Agreement.

          10. In case any property held by the Escrow Agent hereunder shall be attached, garnished or
levied upon under any order of court, or the delivery thereof shall be stayed or enjoined by any
order of court, or any other order, judgment or decree shall be made or entered by any court
affecting such property, or any part thereof, the Escrow Agent is hereby expressly authorized, in
its reasonable discretion, to obey and comply with all writs, orders, judgments or decrees so
entered or issued, and in case the Escrow Agent obeys and complies with any such writ, order,
judgment or decree, except for Escrow Agent’s gross negligence, willful misconduct or breach of
this Agreement, it shall not be liable to any of the parties hereto, their successors or assigns,
or to any other person, firm or corporation, by reason of such compliance notwithstanding that such
writ, order, judgment or decree be subsequently reversed, modified, annulled, set aside or vacated.

          11. In the event of doubt by the Escrow Agent as to its duties or liabilities under the
provisions of this Agreement, the Escrow Agent may, in its sole discretion, continue to hold the
monies and other property which are the subject of this escrow until the parties mutually agree to
the disbursement thereof and evidence such agreement by a written instrument delivered to the
Escrow Agent, or until a judgment is entered by a court of competent jurisdiction. Alternatively,
Escrow Agent may deposit all the monies and other property then held pursuant to this Agreement
with the Clerk of the Superior Court in Los Angeles County, California, and upon notifying all
parties concerned of such action, all liability on the part of the Escrow Agent shall fully
terminate, except to the extent of accounting for any monies or property theretofore delivered out
of escrow. In the event of any suit among the parties hereto, the prevailing party(ies) shall be
entitled to recover from the other party(ies) reasonable attorneys’ fees and costs incurred, said
fees and costs to be charged and assessed as court costs in favor of the prevailing party(ies). In
the event of any suit wherein Escrow Agent interpleads the subject matter of this escrow, Escrow
Agent shall be entitled to recover from the other parties its reasonable attorneys’ fees and costs
incurred. All parties agree that the Escrow Agent shall not be liable to any party to this
Agreement or any other person, firm, corporation or other entity for

3

 

monies and other property subject to this escrow, except for misdelivery thereof due to breach
of this Agreement or gross negligence on the part of the Escrow Agent.

          12. The Escrow Agent shall not be entitled to compensation for its services. However, Escrow
Agent shall be entitled to reimbursement of reasonable attorneys’ fees and costs to the extent
provided in Paragraph 11 above. The Escrow Agent, at is own cost and expense (except as
provided in Paragraph 11), may employ agents and attorneys for the reasonable protection of
the escrow property held hereunder and of itself. The parties hereto jointly and severally agree
to pay Escrow Agent for any and all costs, expenses and attorneys’ fees to which it is entitled
hereunder upon demand.

          13. This Agreement is entered into in the State of Florida and the rights and obligations of
the parties hereto shall be governed by, construed and enforced in accordance with the laws of such
State.

          14. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT. ANY OF THE PARTIES HERETO MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO
THE WAIVER OF SUCH PARTY’S RIGHT TO TRIAL BY JURY.

          15. This Agreement may be executed and delivered (including by facsimile or other electronic
transmission) in one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original, but all of which taken
together shall constitute one and the same agreement.

(signature pages follow)

4

 

          IN WITNESS WHEREOF, the parties have executed this Escrow Agreement as of the date first above
written.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	“SKECHERS”	 	 	 	“LLC”  
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	SKECHERS R.B., LLC, a Delaware limited
 liability company	 	 	 	HF LOGISTICS-SKX T1, LLC, a Delaware 
limited liability company
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	Skechers U.S.A., Inc, a Delaware
	 	 	 	By:
	 	HF LOGISTICS -SKX, LLC, a Delaware	 	 	 	 	 	 
	 

	 	corporation, its sole member
	 	 	 	 	 	limited liability company, its sole member	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	HF Logistics I, LLC, a Delaware limited	 	 	 	 	 	 
	By:

	 	 	 	 	 	 	 	liability company, its Managing Member	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	David Weinberg, Chief Operating Officer	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Iddo Benzeevi, President and Chief	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Executive Officer	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	Skechers R.B., LLC, a Delaware limited	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	liability company, its Managing Member	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

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

	 	 	 	 	 	 	 	Corporation, its sole member	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	David Weinberg, Chief Operating Officer	 	 	 	 	 	 

5

 

	 	 	 	 	 
	“HF LOGISTICS”

HF LOGISTICS-SKX, LLC, a Delaware

limited liability company, its sole member

 	 	 
	By:  	HF Logistics I, LLC, a Delaware limited 
liability company, its Managing Member 	 	 
	 	 	 	 
	By:  	 	 	 
	 	Iddo Benzeevi, President and Chief 	 	 
	 	Executive Officer 	 	 
	 	 	 
	By:  	Skechers R.B., LLC, a Delaware limited 
liability company, its Managing Member 	 	 
	 	 	 	 
	By:  	Skechers U.S.A., Inc., a Delaware 
Corporation, its sole member 	 	 
	 	 	 	 
	By:  	 	 	 
	 	David Weinberg, Chief Operating Officer	 	 
	 	 	 	 

6

 

     By executing this Agreement below, Escrow Agent acknowledges its duties as Escrow Agent
hereunder and agrees to perform its obligations hereunder.

	 	 	 	 	 
	 	“ESCROW AGENT”

BANK OF AMERICA, N.A.

 	 
	 	By:  	 	 
	 	  	Its: 
	 
	 	 	 	 
	 

7

 

EXHIBIT “L”

ASSIGNMENT OF MASTER LEASE AGREEMENT

Exhibit “L”

 

 

ASSIGNMENT OF LEASE

(MASTER LEASE)

     THIS ASSIGNMENT OF LEASE (“Assignment”) is made and entered into this 12th
day of April, 2010 (the “Effective Date”) by and among HF LOGISTICS I, LLC, a
Delaware limited liability company (“Assignor”), HF LOGISTICS-SKX T1, LLC, a Delaware
limited liability company (“T1”), and HF LOGISTICS-SKX T2, LLC, a Delaware limited
liability company (“T2”), and together with T1, collectively, “Assignees”).

WITNESSETH:

     For valuable consideration, receipt of which is acknowledged, Assignor and Assignees
agree as follows:

     1. Assignment and Assumption.

          (a) Assignor hereby assigns and transfers to T1 all right, title and interest of Assignor in,
to and under the lease (the “Lease”) described as follows with respect to the Development
Parcel (as such term is defined in the Limited Liability Company Agreement of T1): Amended and
Restated Master Lease Agreement dated as of September 25, 2007 between 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), and HIGHLAND FAIRVIEW PARTNERS II (formerly known as Sand Properties
Partners, a California general partnership), as landlord (collectively “Landlord”), and
Assignor, as tenant.

          (b) Assignor hereby assigns and transfers to T2 all right, title and interest of Assignor in,
to and under the Lease with respect to the Expansion Parcel (as such term is defined in the Limited
Liability Company Agreement of T2):

          (c) Assignees hereby accept the foregoing assignment, and assume and agree to perform all of
the covenants and agreements in the Lease to be performed by the landlord with respect to its
respective property that arise from and after the Effective Date.

     2. Assignor Representations. Assignor represents to Assignees as follows:

          (a) It is the sole, lawful owner of the tenant’s interest in the Lease and Assignor has not
sold, assigned, encumbered or transferred any interest in the Lease, or any part thereof, to any
other person or entity.

 

          (b) To the best of Assignor’s knowledge, the Lease is in full force and effect and neither
Landlord nor Assignor, as tenant, is in default thereunder.

     3. Indemnification. Assignor agrees to indemnify, defend and hold harmless Assignees
from and against any and all claims, liabilities, obligations, losses, causes of action, judgments,
settlements, demands, threats, costs, fines, penalties (including reasonable fees, expenses,
disbursements and investigative costs of attorneys and consultants) arising out of the performance
or nonperformance by Assignor of all duties and obligations of tenant under the Lease (to the
extent that they relate to the Development Parcel) arising or accruing prior to the Effective Date.
The foregoing indemnification shall terminate upon the closing of the “Construction Loan” (as
defined in that certain Amended and Restated Limited Liability Company Agreement of HF
LOGISTICS-SKX, LLC entered into as of April 12, 2010, but effective as of January 30, 2010).

     4. Governing Law. This Assignment shall be governed by and construed in accordance
with the laws of the State of California.

     5. Successors and Assigns. This Assignment shall be binding upon and shall inure to
the benefit of Assignor and Assignees and their respective successors and assigns.

     6. Capitalized Terms. Capitalized terms used in this Assignment shall have the same
meanings as set forth in the Lease, unless a different definition is set forth herein.

(signature pages follow)

2

 

     IN WITNESS WHEREOF, Assignor and Assignees have executed this Assignment as of the Effective
Date.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	“ASSIGNOR”	 	“T1”	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	HF LOGISTICS I, LLC, a Delaware	 	HF LOGISTICS-SKX T1, LLC, a	 	 
	limited liability company	 	Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By	 	 	 	By:	 	HF LOGISTICS-SKX, LLC, a	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	Iddo Benzeevi, President and 	 	 	 	Delaware limited liability company,	 	 
	 	  	Chief Executive Officer	 	 	 	its sole member	 	 
	 
	 	 	 	 
	 
	 		 	 	 	By:	 	HF Logistics I, LLC, a	 	 
	 
	 	 	 	 	 	 	 	Delaware limited liability	 	 
	 
	 	 	 	 	 	 	 	company, its managing	 	 
	 
	 	 	 	 	 	 	 	member	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	By:	 	 
	 
	 	 	 	 	 	 	 	 	 	 

Iddo Benzeevi, President
	 
	 	 	 	 	 	 	 	 	 	and Chief Executive
	 
	 	 	 	 	 	 	 	 	 	Officer
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	SKECHERS R.B., LLC, a	 	 
	 	 	 	 	 	 	 	 	Delaware limited liability	 	 
	 	 	 	 	 	 	 	 	company, its managing	 	 
	 	 	 	 	 	 	 	 	member	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	By:	 	Skechers U.S.A., Inc., a
	 
	 	 	 	 	 	 	 	 	 	Delaware corporation, its
	 
	 	 	 	 	 	 	 	 	 	sole member
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	By:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	David Weinberg, Chief
	 
	 	 	 	 	 	 	 	 	 	 	 	Operating Officer

	 	 	 	 	 	 	 	 	 	 	 

3

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	“T2”	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	HF LOGISTICS-SKX T2, LLC, a	 	 
	 	 	 	 	Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	HF LOGISTICS-SKX, LLC, a	 	 
	 	 	 	 	 	 	Delaware limited liability company,	 	 
	 	 	 	 	 	 	its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	By:	 	HF Logistics I, LLC, a	 	 
	 
	 	 	 	 	 	 	 	Delaware limited liability	 	 
	 
	 	 	 	 	 	 	 	company, its managing	 	 
	 
	 	 	 	 	 	 	 	member	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	By:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 

Iddo Benzeevi, President	 	 
	 
	 	 	 	 	 	 	 	 	 	and Chief Executive	 	 
	 
	 	 	 	 	 	 	 	 	 	Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	SKECHERS R.B., LLC, a	 	 
	 	 	 	 	 	 	Delaware limited liability	 	 
	 	 	 	 	 	 	company, its managing	 	 
	 	 	 	 	 	 	member	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	By:	 	Skechers U.S.A., Inc., a	 	 
	 
	 	 	 	 	 	 	 	 	 	Delaware corporation, its	 	 
	 
	 	 	 	 	 	 	 	 	 	sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	By:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	David Weinberg, Chief	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	Operating Officer	 	 

4

 

EXHIBIT “M”

ASSIGNMENT OF LEASE

Exhibit “M”

 

 

ASSIGNMENT OF LEASE

(SKECHERS LEASE)

     THIS ASSIGNMENT OF LEASE (“Assignment”) is made and entered into this
12th day of April, 2010 (the “Effective Date”) by and between HF LOGISTICS I,
LLC, a Delaware limited liability company (“Assignor”) and HF LOGISTICS-SKX T1, LLC, a
Delaware limited liability company (“Assignee”).

WITNESSETH:

     For valuable consideration, receipt of which is acknowledged, Assignor and Assignee agree
as follows:

     1. Assignment and Assumption.

          (a) Assignor hereby assigns and transfers to Assignee all right, title and interest of
Assignor in, to and under the lease (the “Lease”) described as follows: Lease Agreement
dated September 25, 2007 between Assignor, as landlord, and Skechers U.S.A., Inc., a Delaware
corporation (“Tenant”), as tenant, as amended by that certain Amendment to Lease Agreement
dated December 18, 2009, by and between Assignor and Tenant. The foregoing assignment includes the
transfer by Assignor to Assignee of all rights to prepaid rents (including, without limitation,
operating expenses) under the Lease. It is understood and agreed that the actual transfer of the
prepaid rent and operating expenses (Eight Hundred Ninety-Eight Thousand Two Hundred Eighty-One
Dollars ($898,281)) shall be made by Assignor to Assignee no later than the Commencement Date (as
defined in the Lease).

          (b) Assignee hereby accepts the foregoing assignment, and assumes and agrees to perform all of
the covenants and agreements in the Lease to be performed by the landlord thereunder that arise
from and after the Effective Date.

     2. Assignor Representations. Assignor represents to Assignee as follows:

          (a) It is the sole, lawful owner of the landlord’s interest in the Lease and Assignor has not
sold, assigned, encumbered or transferred any interest in the Lease, or any part thereof, to any
other person or entity.

          (b) To the best of Assignor’s knowledge, the Lease is in full force and effect and neither
Tenant nor Assignor, as landlord, is in default thereunder.

     3. Indemnification. Assignor agrees to indemnify, defend and hold harmless Assignee
from and against any and all claims, liabilities, obligations, losses, causes of action, judgments,
settlements, demands, threats, costs, fines, penalties (including reasonable fees, expenses,
disbursements and investigative costs of attorneys and consultants) arising out of the performance
or nonperformance by Assignor of all duties and obligations of landlord under the Lease arising or
accruing prior to the Effective Date. The foregoing indemnification shall terminate upon the
closing of the “Construction Loan” (as defined in that certain Amended and Restated

 

 

Limited Liability Company Agreement of HF LOGISTICS-SKX, LLC entered into as of April 12,
2010, but effective as of January 30, 2010).

     4. Governing Law. This Assignment shall be governed by and construed in accordance
with the laws of the State of California.

     5. Successors and Assigns. This Assignment shall be binding upon and shall inure to
the benefit of Assignor and Assignee and their respective successors and assigns.

(signature page follows)

2

 

     IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment as of the Effective
Date.

	 	 	 	 	 

	“ASSIGNOR”	 	“ASSIGNEE”
	 
	 	 	 	 
	HF LOGISTICS I, LLC, a Delaware limited 

liability company	 	HF LOGISTICS-SKX T1, LLC, a

Delaware limited liability company
	 
	 	 	 	 
	By:  
 
 Iddo
Benzeevi, President and Chief
Executive Officer

	 	By:
	 	HF LOGISTICS-SKX, LLC, a Delaware

limited liability company, its sole

member

	 	 	 	 	 

	 

	 	By:
	 	HF Logistics I, LLC, a Delaware
	 

	 	 	 	limited liability company, its
	 

	 	 	 	managing member

	 	 	 	 	 

	 

	 	By:
	 	 
	 

	 	 	 	 
	 

	 	 	 	Iddo Benzeevi, President and
	 

	 	 	 	Chief Executive Officer

	 	 	 	 	 

	 

	 	By:
	 	SKECHERS R.B., LLC, a
	 

	 	 	 	Delaware limited liability
	 

	 	 	 	company, its managing member

	 	 	 	 	 

	 

	 	By:
	 	Skechers U.S.A., Inc, a
	 

	 	 	 	Delaware corporation, its
	 

	 	 	 	sole member

	 	 	 	 	 

	 

	 	By:
	 	 
 
 David
Weinberg, Chief
	 

	 	 	 	Operating Officer

3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00180-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00180-of-00352.parquet"}]]