AMENDMENT TO LEASE AGREEMENT
Exhibit 10.6
AMENDMENT TO LEASE AGREEMENT
THIS AMENDMENT TO LEASE AGREEMENT (“Amendment”) is made and entered into this
18th day of December, 2009 by and between HF LOGISTICS I, LLC, a Delaware limited
liability company (“Landlord”) and SKECHERS USA, INC., a Delaware corporation
(“Tenant”).
RECITALS
A. Landlord and Tenant entered into a Lease Agreement dated September 25, 2007 (the
“Lease”) pursuant to which Landlord leased to Tenant certain premises as more fully
described therein (the “Premises”).
B. The parties desire to 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 Lease Term (as described on Page 3) shall begin on the Commencement Date and shall end
on the last day of the two hundred fortieth (240th) full calendar month thereafter (the
“Termination Date”). There will be no renewal options, and accordingly Addendum 3 to the
Lease is hereby deleted in its entirety.
2. This Amendment is intended to enable the Landlord to procure at least Fifty Million Dollars
($50,000,000) in third-party construction financing for the Premises. In the event that
construction financing is not procured in time for construction to begin by June 1, 2010, this
Amendment shall be null and void and of no further effect and the parties shall revert back to the
original Lease in its entirety.
3. The Base Rent (as described on Page 3) shall be Nine Hundred Thirty-Three Thousand Eight
Hundred Ninety-Four and 44/100 Dollars ($933,894.44) per month during the entire Lease Term, and
Addendum 1 is hereby amended accordingly. The Base Rent is computed as $.513 per square foot based
on 1,820,457 net rentable square feet of space in the Building (and the definition of “Building”
(as described on Page 1) is hereby amended accordingly), but is subject to adjustment as set forth
in Xxxxxxxx 0, Xxxxxxxxx 1 if the actual number of net rentable square feet in the Building is
higher or lower than that amount.
4. The Premises shall consist of the Building, together with the parking areas, landscaped
areas and other areas consisting of approximately 110 acres of land situated at the NWC of Xxxxxxxx
Avenue and Eucalyptus Avenue in Xxxxxx Valley (Rancho Belago), California, as shown on the revised
Site Plan attached to this Amendment as “Exhibit “A” (Revised)”.
5. Tenant shall have a period (the “Fixturization Period”) of four and one-half (41/2)
months after the date of Substantial Completion to install its tenant improvements, fixtures and
personal property. All terms and conditions of this Lease shall be in full force
and effect during the Fixturization Period (including, but not limited to, the obligation to
pay Base Rent and Operating Expenses). Provided, however, that all Base Rent paid by Tenant during
the Fixturization Period shall be credited against Base Rent due for the last four and one-half
(41/2) months of the first year of the Term. The Fixturization Period is in addition to any
additional time afforded to Tenant for fixturization which may arise prior to the date of
Substantial Completion.
6. The following provisions of the Lease are hereby deleted:
(a) Delay in Possession (Pages 1-3), except those provisions which relate to the Pre-Ordered
Equipment, which shall remain in full force and effect.
(b) Tenant Improvements (Addendum 2, Paragraph 6).
(c) Indemnification Regarding Prior Lease (Addendum 4, Paragraph 7).
7. The first sentence in Xxxxxxxx 0, Xxxxxxxxx 5(a) (Determination of Substantial Completion)
is hereby amended to delete the following: “provided that such commencement of construction shall
not be more than 120 days following receipt of all entitlements, approvals and all required
building permits from the applicable governmental authorities”. The second sentence of Xxxxxxxx 0,
Xxxxxxxxx 0(x) is hereby deleted.
8. The Final Plans shall provide that solar panels will be installed (not later than eighteen
(18) months after the date of Substantial Completion) as required for the office space within the
Building (approximately 52,000 square feet).
9. Xxxxxxxx 0, Xxxxxxxxx 3 (Expansion Site) is hereby deleted in its entirety and replaced
with the following:
“Expansion Rights. Tenant may elect to expand into
another building (the “Expansion Building”) of approximately
500,000 net rentable square feet to be constructed on the
approximately 24.2 acres of land which is situated to the west of
where the Building is to be constructed, as depicted on Exhibit “A”
(Revised) (the “Expansion Area”), provided the following
conditions are satisfied:
(a) Tenant shall give Landlord notice of its intention to
expand (the “Expansion Notice”) not later than a date which
is five (5) years after the date of Substantial Completion, time
being of essence.
(b) The Expansion Building must contain approximately 500,000
square feet of net rentable space, and the style of the Expansion
Building and quality of the construction of the Expansion Building
shall be consistent with the style of the Building and the quality
of the construction of the Building.
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(c) Construction of the Expansion Building shall commence as
soon as possible after Tenant gives the Expansion Notice, subject to
reasonable time periods to develop plans, specifications and
construction drawings (which shall be subject to mutual approval of
Landlord and Tenant), to obtain any necessary entitlements
(including building permits), to obtain consents of governmental
authorities and third parties, and to procure construction financing
reasonably acceptable to Landlord. The expansion of the Building
will be subject to Landlord and Tenant jointly procuring
construction financing which requires that Landlord provide no more
than thirty percent (30%) of the hard costs of construction as
equity.
(d) If the expansion right is exercised by Tenant and the
Expansion Building is constructed, for all purposes under this Lease
the term “Building” shall thereafter be deemed to include the
Expansion Building.
(e) Tenant shall take occupancy of the Expansion Building no
later than ten (10) business days after the date of Substantial
Completion. Upon Tenant’s occupancy of the Expansion Building, Base
Rent under the Lease shall be increased to account for the net
rentable area within the Expansion Building, and shall be computed
as the Base Rent for the original Building (on a per square foot
basis), increased for (i) increases in construction and ownership
costs, including increases in costs of financing, and (ii) increases
due to general increases in the market rental in the geographic area
in which the Premises are situated (it being understood that any
such increases are independent of the increases in clause (i)
above).
(f) If Tenant fails to timely exercise its right to expand, or
if Tenant exercises its right to expand but any of the foregoing
conditions are not satisfied (either at the time that Tenant gives
the Expansion Notice, or at any time thereafter until construction
of the Expansion Building commences) then Tenant shall have no right
to expand, the expansion right shall terminate, and the portion of
the Premises upon which the Expansion Building was to be constructed
shall be deemed removed from the description of the “Premises”.
Tenant acknowledges that Landlord shall thereafter be free to use or
develop such land in any way that it deems proper, and Tenant shall
have no rights whatsoever with respect thereto, or to object to any
such use or development, all of which rights are expressly waived by
Tenant.
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(g) The parties will execute any further amendment to the Lease
or other documentation reasonably required as a result of the
exercise (or non-exercise) of Tenant’s expansion rights and/or the
construction of the Expansion Building.”
10. Notwithstanding anything to the contrary in the Lease, Operating Expenses shall not
include any property management fee payable to Landlord, or any affiliate of Landlord, or any third
party, and Tenant shall have no obligation to pay any property management fee.
11. If Tenant (or its affiliate) becomes a member of Landlord, then any default by Tenant (or
such affiliate) under the Landlord’s Operating Agreement (beyond any applicable notice and/or cure
period set forth therein) shall be an immediate Event of Default under the Lease.
12. The Final Plans (as defined in Xxxxxxxx 0, Xxxxxxxxx 1 of the Lease) as approved by the
Landlord and Tenant, are attached hereto as Exhibit “B”.
13. Capitalized terms used in this Amendment shall have the same meanings as set forth in the
Lease, unless a different definition is set forth herein.
14. Except as amended herein, all terms and conditions of the Lease shall remain in full force
and effect, as originally written.
15. This Amendment shall not be effective unless and until the parties, or their
affiliates, have entered into a “joint venture agreement” as described in that certain term sheet dated December 18, 2009
and initialed by the parties.
(signature page follows)
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first above
written.
| “LANDLORD” | “TENANT” | |||||||
| HF LOGISTICS I, LLC, a Delaware limited liability company |
SKECHERS USA, INC., a Delaware corporation | |||||||
By
|
/s/ Iddo Benzeevi |
By | /s/
Xxxxx Xxxxxxxx |
|||||
| Iddo Benzeevi, President and | Its | COO | ||||||
| Chief Executive Officer | ||||||||
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EXHIBIT “A”
(REVISED)
SITE PLAN
(REVISED)
SITE PLAN
EXHIBIT “B”
SPECIFICATIONS
