MODIFICATION AGREEMENT

This Modification Agreement (the “Second Modification”) is made to be effective as of July 1, 2014 (the “Effective Date”) by and between MIRALOMA BORROWER CORPORATION, a Delaware corporation (the “Trustor”) whose address is 3450 East Miraloma Avenue, Anaheim, California 92806, and AMERICAN NATIONAL INSURANCE COMPANY, a Texas insurance company (the “Beneficiary”), whose address is Attn: Mortgage and Real Estate Investments, 2525 South Shore Blvd., Suite 207, League City, Texas 77573, to evidence their agreement as follows:

WHEREAS, Trustor executed that certain Deed of Trust, Assignment of Rents and Security Agreement (the “Mortgage”) dated August 10, 2010, recorded with the Official Records of Orange County, California as Instrument No. 2010000406573, covering the property more particular described therein (the “Original Mortgaged Premises”), securing payment of a Promissory Note secured by Mortgage of even date therewith in the original principal amount of $16,800,000.00, executed by Trustor, and payable to the order of Beneficiary, bearing interest as therein provided and being due and payable as therein provided (the “Note”); and

WHEREAS, pursuant to that certain Modification of Deed Of Trust, Assignment of Rents and Security Agreement and Other Agreements And Partial Release dated as of November 13, 2013 and recorded December 6, 2013 as Instrument No. 2013000662281 in the Official Records of Orange County, California (“First Modification”), Trustor and Beneficiary did modify the Mortgage and all other documents which secure, evidence or relate to the Note (collectively, with the Note and the Mortgage, as amended by the First Modification, the “Loan Documents”) to, among other things, modify the description of the Premises encumbered by the Mortgage to the description attached hereto as Exhibit A and made a part hereof (the “Amended Mortgaged Premises”); and

WHEREAS, the Loan Documents, as amended by this Second Modification, are collectively referred to herein as the “Amended Loan Documents”; and

WHEREAS, on December 7, 2011, Beneficiary, Trustor and WELLS FARGO BANK, NATIONAL ASSOCIATION, as collateral agent (in such capacity, together with its successors and assigns, the “Revolving Agent”) for its own benefit and the benefit of certain other credit parties (collectively, with the Revolving Agent, the “Revolving Lenders”), PS HOLDINGS AGENCY CORP., as term agent (in such capacity, together with its successors and assigns, the “Term Agent”, and, together with the Revolving Agent, the “Collateral

Agents”) for its own benefit and the benefit of certain other credit parties (collectively, with the Term Agent, the “Term Credit Parties”, and, together with the Revolving Lenders, the “Lenders”), PACIFIC SUNWEAR OF CALIFORNIA, INC., a California corporation (“PacSun”), and PACIFIC SUNWEAR STORES CORP., a California corporation (“Stores”) did execute and deliver that certain unrecorded Mortgagee’s Waiver and Collateral Access Agreement (the “Waiver”); and

WHEREAS, the Beneficiary is the owner and holder of the Note and the Mortgage and all other Amended Loan Documents; and

WHEREAS, Trustor desires to increase the principal balance of the Note and to further amend the Mortgage, the Note and the other Loan Documents, and Beneficiary has agreed to such amendments as described herein.

NOW, THEREFORE, for and in consideration of the premises and the mutual covenants and agreements herein contained, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

“Trustor acknowledges and agrees that (i) the monthly installment described in this paragraph is based on the Adjusted Contract Rate and (ii) Beneficiary may,

but is not obligated to, recalculate the monthly installment due under this Note based upon any change in the rate of interest in effect under this Note, including, but not limited to, a change in interest rate resulting from calculation of interest at the Default Rate as provided in this Note.”

“This Note shall not be prepayable in whole or in part prior to July 1, 2017 (“Closed Prepayment Period”). Thereafter, Trustor reserves the privilege of paying this Note in full on any interest payment date; provided, however, that in addition to the principal and accrued interest payable upon any such prepayment, Trustor agrees and promises to pay a premium equal to a percentage of the principal remaining unpaid on the interest payment date next preceding the date of such prepayment according to the following schedule: four percent (4%) during the period commencing July 1, 2017 and ending June 30, 2018; three percent (3%) during the period commencing July 1, 2018 and ending June 30, 2019; two percent (2%) during the period commencing July 1, 2019 and ending June 30, 2020; one percent (1%) during the period commencing July 1, 2020 and ending June 30, 2021, and thereafter until the loan is paid in full; provided that no premium shall be due on payments made within 120 days of the Extended Maturity Date or as a result of the application of insurance or condemnation proceeds to the repayment of the indebtedness due under this Note. If during the Closed Prepayment Period, an Event of Default hereunder exists and the Extended Maturity Date is accelerated by Beneficiary, a tender of payment of the amount necessary to satisfy the entire indebtedness evidenced by this Note, as amended, or secured by the Mortgage, as amended, or the other Amended Loan Documents made at any time prior to a foreclosure sale shall be deemed to constitute an attempted evasion by Trustor of the preceding restrictions on the right of prepayment and shall be deemed a voluntary prepayment hereunder, and such payment must therefore include a prepayment fee equal to the lesser of (a) the prepayment fee provided for in this paragraph, or if no fee is provided, 8% on the then outstanding principal balance, or (b) the maximum amount, which when added to all other interest charged, paid or contracted for hereunder, would not exceed the Maximum Nonusurious Rate for this loan.

                    

                

BEFORE me ____________________, a Notary Public, on this day personally appeared ______________________, the _________________ of AMERICAN NATIONAL INSURANCE COMPANY, a Texas insurance company, on behalf of said insurance company, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same for the purposes and consideration therein expressed.

Given under my hand and seal of office on June ___, 2014.

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NOTARY PUBLIC-STATE OF TEXAS