Gensler 2500 Broadway Suite 300 Santa Monica, California 90404 USA From: Warwick Wicksman Sent: Friday, April 30, 2010 8:17 AM To: Rich Kahn' Subject: LSJ Fee Discount and Design Intent Rich, I have not heard back from you or Mr. Epstein regarding the design for the Screening Room and Pool Area at LSJ. If Mr. Epstein intends to proceed with the original design (not the revised alternate version), here is what I can offer as a "discount" on the fees: Consultant Mark-ups: The 15% mark-up indicated in our contract (see paragraph D.4) does not apply to the Consultants in our current contract. It is specifically for any future Consultants, or for additional Consultant work, if required for the project. The Consultant fees listed on Attachment B do not include an across-the-board 15% mark-up. In most cases, while we did start with some mark-up, it was decreased or eliminated in an attempt to maintain our total fee, as the scope for the Consultants became more defined. • I can offer a total credit of $7,775 off the Consultants CD Phase fees. That is based on a reducing the mark-ups where they still exist, to 10% max. I cannot discount the mark-up on our current Consultant Invoice. Gensler Fees: As I wrote earlier this week, I cannot reduce our fee for work already completed, invoiced and paid. If I did that, I run the risk of not being able to complete the services we are contracted for. • I can offer to reduce ow current outstanding invoice, and the balance of our CD Phase work, by 10%. That would be total discount of $13,500 from our CD fees ($4,100 off current Invoice #244010, dated 2/15/10, $8,100 of the balance of our CD fee for the Pool Area, $800 off our CD fee for the ATV Garage, and $500 off our Allowance for Dock House CD review). • I can offer to reduce or CA Phase services by 10%, for an additional savings of $9,500, if we convert those services to a Time + Materials Allowance. In addition to these discounts, I can reduced our mark-up on future reimbursable expenses from 12% to 10% (we already agreed to reduce our standard 15% mark-up on reimbursable expenses to 12%, during contract negotiations with Darren (see paragraph D.3.). I cannot reduce the mark-up on reimbursables in the current or previous invoices. EFTA00734093

Rich, I must remind you that we did go through extensive negotiations, over a long period, with Mr. Epstein and his team. We have also already added scope to our work (like the laundry room, re•design of several areas after design approval, and even the alternate design concept after the project was put on hold), without requesting additional fees. We offer these discounts in anticipation that Mr. Epstein will authorize Gensler and our Consultants to move fonvard with this project. If Mr. Epstein authorizes us to move forward with the alternate design for the pool area and screening room, we can still discount current Invoice #244010 by the $4,100 noted above. However, the rest of the fees for Gensler and our Consultants will need to be renegotiated, once the revised scope is defined, and we can analyze the effort it will take to get the project back on track. If Mr. Epstein decides to terminate our agreement for this project, we expect to the current invoices to be paid in full immediately, per the terms of our agreement. Rich, I hope this meets your needs. Please let me know if you have any questions, or if you need additional information. Thanks, Wanvick Warwick Wicksman, AIA Principal Gensler 2500 Broadway Suite 300 Santa Monica, California 90404 USA From: Wanvick Wicksman Sent: Wednesday, April 28, 2010 9:05 AM To: 'Rich Kahn' Subject: RE: Re: Hi Rich, EFTA00734094

I am reviewing your proposal to "discount" our fees, and will get back to you in the next day or so, after some further review and some internal meetings. However, I do have some preliminary thoughts and questions. First and foremost, I need to understand if Mr. Epstein is planning to have us proceed with the current design, or if we will be proceeding with the new design concept he requested after the project was put on hold. If we are proceeding with the original design, we can discuss discounting some of the fees. If we are going to pursue the new design, we need to settle up the current invoices, and discuss the fees associated with the re-design effort. We spent a lot of time negotiating the contract, including the scope and ow fees, with Mr. Epstein and Darren lndyke. A copy of the signed contract is attached for your reference. As you can see, the scope and fee breakdown is quite complete. We were almost complete with the Architectural scope work when the project was put on hold. We had completed all of the preliminary phases, and were 60% complete on the CD phase. We also added additional scope — the added laundry area — without requesting additional fees. If Mr. Epstein wants to move forward with the original design, I will look into discounting a portion of ow remaining work. I am concerned about discounting work already completed, however, as I do not want to risk our ability to finish the project. I cannot discount our previous consultant or reimbursable mark-ups. These items are part of our tax basis for the City of Santa Monica, and the mark-up covers ow tax liability for this, and our administration of these items. However, I can review reducing our mark-up percentage on these items for the remainder of the work. I will have a more complete response to this request by the end of the week. Thanks, Wanvick Warwick Wicksman. AI A Principal Gensler 2500 Broadway Suite 300 Santa Monica, California 90404 USA From: Rich Kahn [mailto: Sent: Tuesday, April 27, 2010 9:10 AM To: Warwick Wicksman Subject: RE: Re: Thanks for calling this morning. Hopefully we can resolve this issue and get the project moving forward ASAP as I know Mr. Epstein would like to work with you. Based on our conversation I would like a discount of $62,390.88 on Mr. Epstein's balance due based on the following calculations: EFTA00734095

Per Contract Total Gensler Fees to be paid 547,000.00 Total Consultants Fees to be paid 456,250.00 Profit percentage = 15% 15% 68.437.50 Total Expenses paid to date 40,594.08 Projected Future expenses 30,000.00 Profit percentage = 12% 12% 8 471.29 Total Gensler Fees 623,908.79 Requested Discount - 10% 62,390.88 I look forward to hearing from you. Thank you. Rich Kahn HBRK Associates Inc. 301 East 66th Street, Suite 1OF New York, NY 10065 tel fax cell From: Wanvick Wicksman Sent: Monday, April 26, 2010 5:50 PM To: Rich Kahn Subject: RE: Re: Rich, sorry I missed you today. I will be on a construction site all day tomorrow, but will call you early tomorrow so we can touch base. Wanvick Warwick Wicksman, AIA EFTA00734096