EXHIBIT 10.18
LEASE
THIS LEASE, dated this 10th day of SEPTEMBER, 1998 by and between
DOLORES L. MC NABB (hereinafter "Landlord"), and SKECHERS USA, INC. a California
corporation thereinafter "Tenant").
WITNESSETH:
ARTICLE 1. PREMISES LEASED.
In consideration of the rent and other charges herein specified to be
paid and the covenants and conditions to be observed and performed by Tenant.
Landlord does hereby lease to Tenant and Tenant does hereby lease from Landlord
those premises hereinafter referred to as "said premises" within the office
building commonly known and designated as OFFICES #3, 4, and 5, second floor,
north building 904 Manhattan Avenue, Manhattan Beach, CA
ARTICLE 2. TERM OF LEASE AND DELIVERY OF PREMISES.
The term of this Lease shall be for 5 years 9 1/2 months commencing on
the 15th day of September, 1998, and ending on the 30 day of June, 2004.
OPTIONS TO EXTEND - See Paragraph A on Exhibit "A" attached hereto.
If Landlord, for any reason whatsoever, cannot deliver possession of
the said premises to Tenant within __________ days after the commencement of the
term hereof, this Lease shall not be void or voidable, nor shall Landlord be
liable to Tenant for any loss or damage resulting therefrom, but in that event
all rent shall be abated during the period between the commencement of the said
term and the time when Landlord delivers possession.
ARTICLE 3. RENT
See Exhibit "A"
ARTICLE 4. USE.
Said premises shall be occupied and used by Tenant solely for the
purposes of conducting therein the business stated in Exhibit "A". In addition
thereto:
A. No use shall be made or permitted of said premises or any part
thereof, nor acts done which shall constitute a nuisance or
unreasonable annoyance to other tenants in the office park
complex nor which shall violate, make inoperative or increase
the existing rate of any insurance policy held by or for the
benefit of Landlord.
B. Tenant shall at all times comply with all governmental rules,
regulations, ordinances, statute and is now in force or which
may hereafter be enforced pertaining to said premises and to
Tenant's use thereof, and a finding of guilty by a competent
court for any violation thereof shall be conclusively deemed a
default under this paragraph.
ARTICLE 5. LANDLORD SERVICES.
Landlord will provide services during reasonable hours of generally
recognized business days to be determined by Landlord, and subject to the rules
and regulations as set forth in Exhibit "A", as follows:
A. Heat and air-conditioning during the customary hours as
stipulated in the Rules and Regulations.
B. Electric current for ordinary lighting requirements and for
ordinary business appliances such as typewriters and adding
machines. Landlord shall not be required to furnish electrical
power to operate electrical motors of larger than fractional
horsepower. Landlord shall make additional charges for service
if Tenant has greater than normal requirements for such
services.
C. Tenant shall pay for all water, gas, electricity, light, power
and other utilities supplied to the Premises, together with
any taxes thereon. If any such services are not separately
metered to Tenant, Tenant shall pay a reasonable proportion to
be determined by Landlord of all charges jointly metered with
other premises. Replacement of fluorescent tubes in the
standard lighting fixtures installed in the premises by
Landlord shall be provided as required and billed to Tenant.
Landlord, however, shall not be liable for failure to furnish
any of the foregoing where such failure is caused by
conditions beyond the control of Landlord or by accidents,
repairs or strikes; nor shall such failure constitute an
eviction; nor shall Landlord be liable under any circumstances
except where caused by Landlord's negligence, for loss or
damage to property however occurring through or in connection
with or incidental to the furnishing of any of the foregoing.
ARTICLE 6. PARKING.
See Exhibit "A"
Landlord agrees at its own expense to construct and maintain, or cause
to be constructed and maintained, an automobile parking area and to maintain and
operate, or cause to be maintained and operated, said automobile parking area
during the term of this Lease for the benefit and use of Tenant, its employees,
customers and patrons and for other tenants and occupants of the office complex.
Wherever the words "automobile parking area" are used in this Lease, it is
intended that the same shall include the automobile parking stalls, driveways,
entrances and exits and sidewalks, pedestrian passageways in conjunction
therewith and other areas designated for parking. Landlord shall keep said
automobile parking area in a neat, clean and orderly condition, landscaped, and
shall repair any damage to the facilities thereof. Nothing contained herein
shall be deemed to create liability upon Landlord for any damage to motor
vehicles of customers or employees or from loss of property from within such
motor vehicles, unless caused by the negligence of Landlord, its agents,
servants and employees. Landlord shall also have the right to establish, and
from time to time change, alter and amend, and to enforce against all users of
said automobile parking area such reasonable rules and regulations (tenant, its
employees, customers and patrons from parking within specific portions
therefrom) as may be deemed necessary and advisable for the proper and efficient
operation and maintenance of said automobile parking area. The rules and
regulations herein provided shall include, without limitation, the hours during
which the automobile parking area shall be open for use.
Landlord shall at all times during the term of this Lease have the sole
and exclusive control of the automobile parking area, and may at any time and
from time to time during the term hereof exclude and restrain any person from
use or occupancy thereof; excepting, however, bona fide customers, patrons and
service-suppliers of Tenant and other tenants of Landlord who make use of said
area in accordance with any rules and regulations established by Landlord from
time to time with respect thereto. The rights of Tenant referred to in this
Article shall at all times be subject to the rights of Landlord and the other
tenants of Landlord, to use the same in common with Tenant, and it shall be the
duty of Tenant to keep all of said area free and clear of any obstruction
created or permitted by Tenant or resulting from Tenant's operations and to
permit the use of any of said area only for normal parking and ingress and
egress by said customers, patrons and service-suppliers to and from the office
park complex.
Tenant shall assume sole responsibility for satisfying the requirements
of the Environmental Protection Agency, or similar agencies, with respect to
their proportionate share of the parking areas.
ARTICLE 7. ALTERATIONS AND REPAIRS.
Tenant shall not make or suffer to be made any alterations, additions
or improvements to or of said premises or any part thereof without the written
consent of Landlord first had and obtained and any alterations, additions or
improvements to or of said premises, except movable furniture and trade
fixtures, shall at once become a part of the realty and belong to Landlord. In
the event Landlord consents to the making of any alteration, additions or
improvements to said premises by Tenant, the same shall be made by Tenant at
Tenant's sole cost and expense and any contractor or person selected by Tenant
to make the same must first be approved of in writing by Landlord. Upon the
expiration or sooner termination of the term, Tenant shall, upon demand by
Landlord, at Tenant's sole cost and expense, forthwith and with all due
diligence remove any alterations, additions or improvements made by Tenant,
designated by Landlord to be removed, and Tenant shall forthwith and with all
due diligence at its sole cost and expense, repair any damage caused by such
removal.
By entry hereunder, Tenant accepts the premises as being in good,
sanitary order, condition and repair Tenant shall at Tenant's sole cost and
expense keep said premises and every part thereof including glass in good
condition and repair, damage thereto by fire, earthquake, act of God or the
elements excepted, Tenant hereby waiving all rights to make repairs at the
expense of Landlord as provided by any law, statute or ordinance now or
hereafter in effect. Tenant shall, upon the expiration or sooner termination of
the term hereof, surrender said premises to Landlord in the same condition as
when received, ordinary wear and tear and damage by fire, earthquake, act of God
or the elements excepted. It is specifically understood and agreed that Landlord
has no obligation and has made no promises to alter, remodel, improve, repair,
decorate or paint said premises or any part thereof and that no representations
respecting the conditions of said premises or the building of which said
premises are a part have been made by Landlord to Tenant except as specifically
herein set forth. See Exhibit "A".
ARTICLE 8. CHANGES OR ALTERATIONS BY LANDLORD
Landlord reserves the right at any time and from time to time without
the same constituting an actual or constructive eviction and without incurring
any liability to Tenant therefore or otherwise affecting Tenant's obligations
under this Lease, to make such changes, alterations, additions, improvements,
repairs or replacements in or to the office complex (including said premises if
required so to do by any law or regulation) and the fixtures and equipment
thereof, as well as in or to the plenum area (air space above the ceiling), and
stairways thereof, as Landlord may deem necessary or desirable, and to change
the arrangement or location of entrances or passageways, doors and corridors,
provided, however, that there be no unreasonable obstruction of the right of
access to, or unreasonable interference with the use and enjoyment of said
premises by Tenant.
ARTICLE 9. LANDLORD'S NONLIABILITY
Landlord shall no be liable for any loss or damage to the goods, wares,
merchandise and other property of Tenant in, upon or about said premises or for
any injury to the person (including death) of Tenant or its employees, agents,
subtenants or invitees or other persons, caused by any use thereof, or arising
from any accident or fire or
other casualty thereon or from any other cause whatsoever, unless caused by
Landlord's negligence, nor shall Landlord be liable for any such loss, damage or
injury occurring anywhere in the office park complex and caused by the act or
neglect of Tenant, its agents or employees; and Tenant hereby waives on its
behalf all claims against Landlord for any such loss or injury and hereby agrees
to indemnify and save Landlord harmless from all liability for any such loss,
damage or injury and in the event action is brought against Landlord on account
of such loss, damage or liability and Landlord elects not to accept Tenant's
proffered defense of such action, Tenant shall nevertheless pay the cost of
Landlord's reasonable attorney's fees incurred in connection therewith.
ARTICLE 10. INSURANCE.
All insurance provided for herein shall name Landlord as an additional
insured as its interest may appear. Policies will provide a 30-day written
notice to Landlord in the event of cancellation by Tenant's insurance company.
Tenant agrees to maintain statutory Workmen's Compensation Insurance
and comprehensive public liability insurance with the following minimum limits:
combined single limit coverage of not less than $1,000,000 with respect to
personal injury death or property damage resulting from any one occurrence: the
minimum limits shall not, however limit the liability of Tenant hereunder.
It shall be Tenant's responsibility to maintain full "ALL RISK"
insurance on its property and rental value and glass insurance on said premises.
It shall be Landlord's responsibility to insure said premises against
fire and extended coverage damage.
So long as their respective insurers so permit, Tenant and Landlord
hereby mutually waive their respective rights of recovery against each other for
any loss insured by fire, extended coverage and other property insurance
policies existing for the benefit of the respective party. Each party shall
obtain any special endorsements, if required by their insurer, to evidence
compliance with the aforementioned waiver.
Certificates of insurance stating the above will be provided to
Landlord by Tenant.
ARTICLE 11. ASSIGNMENT AND SUBLETTING.
A. Tenant shall not transfer or assign this Lease, or any right
or interest hereunder, nor sublet said premises or any part
thereof, without the prior written consent (which consent
shall not be unreasonable withheld) and approval of Landlord
provided, however, that such consent shall not be unreasonably
withheld so long as (i) the proposed assignee or sublessee is
as financially and morally responsible as Tenant and (ii)
evidence satisfactory to Landlord is offered to show that the
proposed assignee or sublessee is likely to conduct on said
premises a business of a quality substantially equal to that
conducted by Tenant. No transfer or assignment, whether
voluntary or involuntary, by operation of law, under legal
process or proceedings, by receivership, in bankruptcy, or
otherwise, and no subletting shall be valid or effective
without such prior written consent and approval. Should Tenant
attempt to make or suffer to be made any such transfer,
assignment or subletting, except as aforesaid, or should any
of Tenant's rights under this Lease be sold or otherwise
transferred by or under court order or legal process or
otherwise or should Tenant be adjudged insolvent or bankrupt,
then and in any of the foregoing events Landlord may, at its
option, terminate this Lease forthwith by written notice
thereof to Tenant. Should Landlord consent to any such
transfer, assignment or subletting, such consent shall not
constitute a waiver of any of the restrictions of this Article
and the same shall apply to each successive transfer,
assignment or subletting hereunder, if any.
B. If Tenant hereunder is a corporation, an unincorporated
association, or a partnership, the transfer, assignment or
hypothecation of any stock or interest in such corporation,
association or partnership in the aggregate in excess of
Forty-nine percent (49%) shall be deemed an assignment within
the meaning and provisions of this Article; provided, however,
a transfer or assignment of any such stock or interest by a
shareholder or member to his spouse, children or grandchildren
is excepted from the foregoing provision.
ARTICLE 12. RIGHT OF ENTRY.
Landlord reserves and shall at any time and at all times have the right
to enter upon said premises to inspect the same, and perform any service to be
provided by Landlord to Tenant hereunder, to submit said premises to prospective
purchasers or tenants, to post notices of nonresponsibility, and to alter,
improve or repair said premises and any portion of the building of which said
premises are a part, without abatement of rent, and may for that purpose erect
scaffolding and other necessary structures where reasonably required by the
character of the work to be performed, always providing the entrance to said
premises shall not be blocked thereby, and further providing that the business
of Tenant shall not be interfered with unreasonably. Tenant hereby waives any
claim for damages for any injury or inconvenience to or interference with
Tenant's business, any loss of occupancy or quiet enjoyment of said premises,
and any other loss occasioned thereby. For each of the aforesaid purposes,
Landlord shall at all times have and retain a key with which to unlock all of
the doors in, upon and about said premises, excluding Tenant's vaults and safes,
and Landlord shall have the right to use any and all means which Landlord may
deem proper to open said doors in an emergency, in order to obtain entry to said
premises, and any entry to the premises obtained by landlord by any of said
means, or otherwise, shall not under any circumstances be construed or deemed to
be a forcible or unlawful entry into, or a detainer of said premises, or an
eviction of Tenant from said premises or any portion thereof.
ARTICLE 13. BANKRUPTCY-INSOLVENCY.
Tenant agrees that in the event all or substantially all of Tenant's
assets are placed in the hands of a receiver or trustee, and such receivership
or trusteeship continues for a period of 30 days, or should Tenant make an
assignment for the benefit of creditors or be adjudicated a bankrupt, or should
Tenant institute any proceedings under the Bankruptcy Act or under any amendment
thereof which may hereafter be enacted, or under any other act relating to the
subject of bankruptcy wherein Tenant seeks to be adjudicated a bankrupt, or to
be discharged of its debts, or to effect a plan of liquidation, composition or
reorganization, or should any involuntary proceeding be filed against the Tenant
under any such bankruptcy laws and Tenant consents thereto or acquiesces therein
by pleading or default, then this Lease or any interest in and to said premises
shall not become an asset in any of such proceedings and, in any such event and
in addition to any and all rights or remedies of Landlord hereunder, or by law
provided, it shall be lawful for Landlord to declare the Term hereof ended and
to re-enter said premises and take possession thereof and remove all persons
therefrom, Tenant shall have no further claim thereon or hereunder.
ARTICLE 14. LIENS.
Tenant shall not permit to be enforced against said premises, or any
part thereof, any mechanics', material-men's, contractors' or other liens
arising from, or any claims for damages growing out of, any work or repair or
alteration as herein authorized or otherwise arising (except from the actions of
Landlord), and Tenant shall pay or cause to be paid all of said liens and claims
before any action is brought to enforce the same against Landlord or said
premises: and Tenant agrees to indemnify and hold Landlord and said premises
free and harmless from all liability for any and all such liens and claims and
all costs and expenses in connection therewith. Tenant shall give Landlord no
less than 20 days prior notice in writing commencing construction of any kind on
the premises so that Landlord may post notices of nonresponsibility.
ARTICLE 15. LANDLORD PAYING CLAIMS.
Should Tenant fail to pay and discharge, when due and payable, any tax
or assessment, or any premium or other charge in connection with any insurance
policy or policies which Tenant is obligated to pay, or any lien or claim for
labor or material employed or used in, or any claim for damages arising out of
the repair, alterations, maintenance and use of said premises, as provided in
this Lease, after 10 days written notice from Landlord, the Landlord may, at its
option, and without waiving or releasing Tenant from any of Tenant's obligations
hereunder, pay any such tax, assessment, lien, claim, insurance premium or
charge, or settle or discharge any action therefore or satisfy any judgment
thereon. All costs, expenses and other sums, incurred or paid by Landlord in
connection therewith, together with interest at the rate of 10% per annum on
such costs, expenses and sums from the date incurred or paid by Landlord, shall
be deemed to be additional rent hereunder and shall be paid by Tenant with and
at the same time as the next installment of rent hereunder, and any default
therein shall constitute a breach of the covenants and conditions of this Lease.
ARTICLE 16. DESTRUCTION OF PREMISES.
A. In the event the building of which said premises are a part is
damaged by fire, or perils covered by insurance, the Landlord
shall:
1. In the event of total destruction, within a period of
90 days thereafter, commence repair, reconstruction
and restoration of said building and prosecute the
same diligently to completion, in which event this
Lease shall continue in full force and effect; or
within said 90 day period elect not to so repair,
reconstruct or restore said building, in which event
this Lease shall cease and terminate. In either
event, Landlord shall give the Tenant written notice
of its intention within said 90 day period. In the
event Landlord elects not to restore said building,
this Lease shall be deemed to have terminated as of
the date of such total destruction.
2. In the event of a partial destruction of the building
to an extent not exceeding 25% of the full insurable
value thereof and if the damage thereto is such that
the building may be repaired, reconstructed or
restored within a period of 90 days from the date of
the happening of such casualty and Landlord will
receive insurance proceeds sufficient to cover the
costs of such repairs, Landlord shall commence and
proceed diligently with the work of repair,
reconstruction and restoration and the Lease shall
continue in full force and effect; or if such work or
repair, reconstruction and restoration is such as to
require a period longer than 90 days or exceed 25% of
the full insurable value thereof, or if said
insurance proceeds will not be sufficient to cover
the cost of such repairs, Landlord may either elect
to so repair, reconstruct and restore and the Lease
shall continue in full force and effect, or Landlord
may elect not to repair, reconstruct or restore and
the Lease shall in such event terminate. Under any of
the conditions of this subparagraph, Landlord shall
give written notice to Tenant of its intention within
the period of 90 days. In the event Landlord elects
not to restore said building, this Lease shall be
deemed to have terminated as of the date of such
partial destruction.
B. Upon any termination of this Lease under any of the provisions
of this Article, the parties shall be released thereby without
further obligation to the other coincident with the surrender
of possession of the premises to Landlord except for items
which have theretofore accrued and are then unpaid.
C. In the event of repair, reconstruction and restoration as
herein provided, the rental provided to be paid under this
Lease shall be abated proportionately in the ratio which the
Tenant's use of said premises is impaired during the period of
such repair, reconstruction or restoration. Tenant shall not
be entitled to any compensation or damages for loss in the use
of the whole or any part of said premises and/or any
inconvenience or annoyance occasioned by any such damage,
repair, reconstruction or restoration.
D. Tenant shall not be released from any of its obligations under
this Lease except to the extent and upon the conditions
expressly stated in this Article. Notwithstanding anything to
the contrary contained in this Article, should Landlord be
delayed or prevented from repairing or restoring said damaged
premises within on (1) year after the occurrence of such
damage or destruction by reason of acts of God, war,
governmental restrictions, inability to procure the necessary
labor or materials, or other cause beyond the control of
Landlord, Landlord shall be relieved of its obligation to make
such repairs or restoration and Tenant shall be released from
its obligations under this Lease as of the end of said one (1)
year period.
E. In the event that damage is due to any other cause than set
forth in Paragraph A above, Landlord may elect to terminate
this Lease.
F. It is understood that if Landlord is obligated to or elects to
repair or restore as herein provided, Landlord shall be
obligated to make repairs or restoration only of those
portions of said building and said premises which were
originally provided at Landlord's expense; and the repair and
restoration of items not provided at Landlord's expense shall
be the obligation of Tenant.
ARTICLE 17. LATE PAYMENTS.
See Exhibit "A"
ARTICLE 18. REMEDIES.
Should Tenant at any time be in default hereunder with respect to any
rental payments or other charges payable by Tenant hereunder, and should such
default continue for a period of 10 days after written notice from Landlord, or
should Tenant be in default in performance of any other of its promises,
covenants or agreements herein contained (other than any breach under the
Article entitled "Assignment and Subletting" for which immediate notice of
termination may be given) and should such default continue for 30 days after
written notice thereof from Landlord to Tenant specifying the particulars of
such default, or should Tenant vacate or abandon the premises, this Lease shall
remain in full force and effect, provided, however, that in any of such events
and in addition to any or all other rights or remedies of Landlord hereunder or
by the law provided, it shall be, at the option of Landlord:
A. The right of Landlord to declare the term hereof ended and to
re-enter said premises and take possession thereof and remove
all persons therefrom, and Tenant shall have no further claim
thereon on thereunder; or
B. The right of Landlord, even though it may have brought an
action to collect rent and other charges without terminating
this Lease, to thereafter elect to terminate this Lease and
all of the rights of Tenant in or to said premises; or
C. The right of Landlord, without terminating this Lease, to
begin an action or actions to collect rent and other charges
hereunder which are from time to time past due and unpaid; it
being understood that the bringing of such action or actions
shall not terminate this Lease unless notice of termination is
given.
Should Landlord elect to terminate this Lease, Landlord shall be
entitled to recover from the Tenant as damages: (1) the worth at the time of
award of the amount by which the unpaid rent for the balance of the term after
the time of award exceeds the amount of such rental loss for the same period
that Tenant proves could be reasonably avoided (ii) the cost of recovering said
premises to the condition required in the Article entitled "Removal" and (iii)
such other amounts as are provided for in Section 1951.2 of the California Civil
Code
If Landlord shall elect to re-enter said premises, Landlord shall not
be liable for damages by reason of such re-entry.
Notwithstanding any other provision of this Article, Landlord agrees
that if the default complained of, other than for the payment of monies, is of
such a nature that the same cannot be cured within the 30 day period specified
above, then such default shall be deemed to be cured if the Tennant within such
a period shall have commenced the curing thereof and shall continue thereafter
withal the diligence to cause such curing and does so complete the same with the
use of such diligence.
All rights, options and remedies of Landlord contained in the Lease
shall be construed and held to be cumulative, and no on e of them shall be
exclusive of the other, and Landlord shall have the right to pursue anyone or
all of such remedies or any other remedy or relief which may be provided by law,
whether or not stated in this Lease. No waiver or any default of Tenant
hereunder shall be implied from any acceptance by Landlord or any rent
or other payments due hereunder or any omission by Landlord to take any action
or account of such default if such default persists or is repeated, and no
express waiver shall affect default other than as specified in said waiver. The
consent or approval by Landlord to or of any act by Tenant requiring Landlord's
consent or approval shall not be deemed to waive or render unnecessary
Landlord's consent or approval to or any of subsequent similar acts by Tenant.
ARTICLE 19. SECURITY DEPOSIT.
Tenant has deposited with Landlord the sum in the attached Exhibit "A"
as security for the full performance of the provision s of this Lease. If Tenant
defaults in any particular, Landlord may use or retain the whole or any part of
the security in lieu of any sum due Landlord including repair of damages or
cleaning of the premises upon termination or to defray any expense or damages
reasonably incurred by treason of the default, and Tenant shall on demand pay to
Landlord a like sum as additional security. If Tenant is not in default at the
termination of this Lease, Landlord shall return the deposit to Tenant and may
do this by either paying this sum to Tenant or crediting it against the last
payment(s) of rent. Landlord's obligation respecting the deposit is that of a
debtor, not a trustee, the fund my be commingled to dissipate, or both and not
interest shall accrue thereon,
ARTICLE 20. ATTORNEY'S FEES.
In the event that any action shall be instituted by either of the
parties hereto for the enforcement of any of its rights or remedies in and under
this Lease, the party in whose favor judgment shall be rendered shall be
entitled to recover from the other party all costs incurred by said prevailing
party in said action, including reasonable attorney's fees to be fixed by the
court therein.
ARTICLE 21. REMOVAL
A. Personal Property. Upon the expiration of the Term of this
Lease, or upon any earlier termination of this Lease, Tenant
shall quit and surrender possession of the said premises to
Landlord in the same condition as upon delivery of possession
to Tennant hereunder, reasonable wear and tar and damage by
fire, acts of God, the elements and unavoidable casualty
excepted. Before surrendering possession of said premises as
aforesaid, Tenant shall, without expense to Landlord, remove
or cause to be removed from said premises all signs,
furnishings, equipment, trade fixtures, merchandise and other
personal property placed therein. And all rubbish and debris,
and Tenant shall repair all damage to said premises resulting
g from such removal. If requested by Landlord, Tenant shall
execute, acknowledge and deliver to Landlord an instrument in
writing releasing and quitclaiming to Landlord all tights,
title an interest in Tenant in and to said premises by reason
of this lease or otherwise. If Tenant fails to remove any of
its sins, furnishings, equipment, trade fixtures, merchandise,
or other personal property within 10 days after the expiration
or termination of this Lease, then Landlord may, at its sole
option (1) treat Tenant as a holdover, in which even the
provision of the Article of this Lease regarding Holding Over
shall apply: (ii) deem any and all of such items abandoned and
the sole property of Landlord, or (iii) remove any or all of
such items and dispose of same to any manner or store same for
Tenant, in which event the expense of such disposition or
storage shall be borne by Tenant and shall be immediately due
and payable.
B. Fixtures, Equipment and Improvements. All fixtures, equipment
improvements and appurtenances attached to or built into said
premises prior to or during the Term, whether by Landlord at
its expense or a the expense of Tenant or both, shall be and
remain part of said premises and shall not be removed b Tenant
at the end of the Term unless otherwise expressly provided for
in this Lease. Such fixtures, equipment, improvements and
appurtenances shall include by not be limited to" all floor
coverings, drapes, paneling, molding, doors vaults (exclusive
of vault doors), plumbing systems, electrical systems,
lighting systems, cooling systems, ventilation systems,
sprinkling systems, silencing equipment, communication
systems, all fixtures and outlets for the systems mentioned
above and for all telephone, radio, telegraph and television
purposes, and any special flooring or ceiling installations.
ARTICLE 22. PAYMENTS AND NOTICES.
A. Payments of Rent: The rent specified herein shall be paid to
Landlord or to such other person or persons or at such other
address or addresses as Landlord hereafter may designate by
written notice to Tenant. Payment of rent to any person or
persons so designated by Landlord shall exonerate Tenant from
all responsibility therefore or for the proper distribution
thereof.
B. Notices. Any notice or demands which may or must be given by
either party to the other hereunder shall be deemed to have
been duly given when made by personal service or in writing
and deposited for mailing by United States mail, postage
prepaid, addressed as following or to such other place as the
partied may hereafter in writing direct.
To Landlord: At the address set forth on the signature page
of this Lease
To Tenant: At the address set forth on the signature page
of this Lease
ARTICLE 23. EMINENT DOMAIN
A. Definition of Terms. The terms "total taking" as used in this
Article means the taking of the entire premises under the
power of eminent domain or a taking of so much of said
premises as to prevent or substantially impair the conduct of
Tenant's business therein. The term "partial taking" means the
taking of a portion only of said premises which does not
constitute a total taking as above defined
B. Total Taking. If during the term here of, there shall be a
total taking by public authority under the power of eminent
domain, then the leasehold estate of Tenant in and to said
premises shall cease and terminate as of the dated actual
physical possession thereof shall be so taken.
C. Partial Taking. If during said term there shall be a partial
taking of said premises, this Lease shall terminate as to the
portion of said premises taken upon the date upon which actual
possession of said premises is taken pursuant to said eminent
domain proceedings, but said Lease shall continue in force and
effect as to the remainder of said premises. The minimum
guaranteed rental payable by Tenant for the balance of said
term shall be abated in the ration that the square footage of
floor area of said premises taken bears to the total floor
area of said premises at the time of such taking.
D. Taking of Parking Area. In the event there shall be a taking
of the parking area such that Landlord can no longer comply
with applicable municipal parking ordinances or similar
regulations of other public agencies Landlord may substitute
therefore reasonably equivalent parking in a location
reasonably close to said premises: provided that if Landlord
fails to make such substitution within a reasonable time
following such taking. Tenant may, at its option, terminate
this Lease by notice to Landlord. If this Lease is not so
terminated by Tenant, there shall be no reduction, change or
abatement of any rent or other charge payable by Tenant
hereunder and this Lease shall continue in full force and
effect.
E. Allocation of Award. All compensation and damages awarded for
the taking of said premises, or any portion or portions
thereof, shall, except as otherwise herein provided, belong to
and be the sole property of Landlord, and Tenant shall not
have any claim or be entitled to any award for the diminution
in value of its leasehold hereunder or for the value of any
unexpired term of this Lease": provided, however, Tenant shall
be entitled to any award that may be made for the taking of or
injury to or on account of any cost or loss Tenant may sustain
in the removal of Tenant's merchandise, fixtures, equipment
and furnishings.
F. Effect of Termination. If this Lease is terminated, in whole
or in part pursuant, to any of the provisions of this Article,
all rentals and other charges payable by Tenant to Landlord
hereunder and attributable to the premises taken, shall be
paid up to the date upon which actual physical possession
shall be taken by the condemner and the parties shall
thereupon be released form all further liability in relation
thereto.
G. Voluntary Sales. A voluntary sale by Landlord to any
pubic body or agency having the power of eminent domain,
either under threat of condemnation or while condemnation
proceedings are pending, shall be deemed to be a taking under
the power of eminent domain for the purpose of this Article.
ARTICLE 24. HOLDING OVER.
This Lease shall terminate and become null and void without further
notice upon the expiration of the Term herein specified, and any holding over by
Tenant after such expiration shall not constitute a renewal thereof, to give
Tenant any rights under this Lease, except as otherwise herein provided, it
being understood and agreed that this Lease cannot be renewed, extended or in
any manner modified except in writing signed by both parties hereto: provided,
however, that nothing in the Article shall be construed to alter or impair the
provisions of Article 231 hereof. If Tenant shall hold over for any period after
the expiration of said Term, Landlord may, at it's option, exercise by written
notice to Tenant, treat Tenant as a tenant from month-to-month commencing on the
1st day following the expiration of this Lease and subject to the terms and
condition herein contained except that the Basic Rental portion of the monthly
rental, which shall b payable in advance shall be 150$% of said Basic Rental
applicable to the date of expiration. If Tenant ails to surrender the premises
upon the expiration of the Lease despite demand to do so by Landlord, Tenant
shall indemnify and hold Landlord harmless from all loss or liability including
without limitation, any claims made by any succeeding Tenant founded on or
resulting from such failure to surrender,
ARTICLE 25. SUBORDINATION AND STATEMENT OF TENANT.
The rights of Tenant under this Lease are and shall be subject to and
subordinate to all present and future ground or underlying Leases and amendments
thereto, the declaration and recording of covenants, conditions and restrictions
relating to the office complex and operation thereof, and the lien of any
mortgage and/or any deed or trust or other encumbrance which now exists or may
hereafter affect said premises together with all renewals, modifications,
consolidations, replacements or extensions thereof: Tenant covenants and agree
that it will execute without further consideration any and all instruments
desired by Landlord subordinating in the manner requested by Landlord this
Lease; provided that any Lienor or encumbrancor relying on such subordination or
such additional
agreements will covenant with Tenant that this Lease shall remain in full force
and effect, and tenant shall not be disturbed in the event of sale or
foreclosure so long as Tenant is not in default hereunder. Tenant agrees to
attorney to the successor in interest of landlord following any transfer of such
interest either voluntarily or by operation of law and to recognize such
successor as Landlord under this Lease. However, if Landlord so elects, this
Lease shall be deemed prior to lien to any mortgage, deed of trust or other
encumbrance upon or including the premises regardless of date of recording and
Tenant will execute a statement in writing to such effect at Landlord's request.
Landlord is hereby irrevocably appointed and authorized as agent and
attorney-in-fact of Tenant to execute all subordination instruments in the event
Tenant fails to execute said instruments within five (5) days after notice form
Landlord demanding the execution thereof.
Statement of Tenant. Tenant shall, at any time and from time to time,
upon not less that 10 (10) days prior written notice by Landlord, execute,
acknowledge, and deliver to Landlord a statement in writing certifying that this
lease is unmodified and in full force and effect (or, if there has been any
modification thereof, that the same is in full force and effect as modified and
stating the modification or modifications) and that Landlord is not in default,
except as specified in such statement, in regard to any of its covenants or
obligations under this Lease, and further setting forth the dated to which all
sums payable as rental hereunder have been paid in advance, if any, and such
other statements relating to delivery and acceptance of the premises as
Landlord's lender, Lienor, encoumbrancor or purchaser may require.
ARTICLE 26. TRANSFER BY LANDLORD.
The term "landlord" as used in this Lease, so far as covenants or
obligations on the part of Landlord are concerned, shall mean and include only
the owner or owners at the time in question of the fee ownership or prime
leasehold estate in said premises, and in the event of any transfer or transfers
of the title to said premises, Landlord herein named (and in case of any
subsequent transfers or conveyances, the then grantor), except as hereinafter
provided, shall be automatically freed and relieved from and after the date of
such transfer or conveyance, of all personal liability as respected to
performances of any covenants or obligations on the part of Landlord contained
in this Leas thereafter to be performed; provided that any funds in which Tenant
has an interest which are in the hands of such Landlord or the then grantor at
the time of such transfer shall be turned over to the grantee, and any amount
then due and payable to Tenant by Landlord or the then grantor under any
provisions of this Lease shall be paid to Tenant. It is intended hereby that the
covenants and obligations contained in this Lease on the part of Landlord,
shall, subject to the foregoing, be binding on Landlord, it's successors and
assigns, only during and in respect of their respective successive periods of
ownership.
ARTICLE 27. MODIFICATION FOR LENDER
If, in connection with obtaining financing for this office park
complex, the lender shall request reasonable modifications in the lease as a
condition to such financing. Tenant will not unreasonably withhold, delay or
defer its consent thereto, provided that such modifications to not increase the
obligations of Tenant hereunder or materially adversely affect the leasehold
interested hereby created.
ARTICLE 28. INABILITY TO PERFORM.
This Lease and the obligations of Tenant to pay rent hereunder and to
keep, observe and perform all the other terms, covenants, conditions, provisions
and agreements of this Lease on the part of Tenant to be kept, observed or
performed shall in no way be affected, impaired or excused because Landlord is
unable to fulfill any of its obligations under this Lease or to supply, or is
delayed in supplying any service expressly or impliedly to be supplied or is
unable to supply, or is delayed in supplying any equipment or fixtures, if
Landlord is prevented or delayed from doing so by reason of strike or labor
troubles, unavailability of materials or any other cause beyond the control of
Landlord.
ARTICLE 29. SURRENDER OR CANCELLATION.
The voluntary or other surrender of this Lease by Tenant, or a mutual
cancellation thereof, shall not work a merger, and shall, at the option of
Landlord, terminate all or any existing subleases or may at the option of
Landlord, operate as an assignment to Landlord or any or all of such subleases
ARTICLE 30. RULES AND RETULATIONS.
Tenant agrees to obey the rules an regulations in Exhibit "A" as well
as such reasonable rules and regulations as may b hereafter adopted by Landlord
for the safety, care and cleanliness of the office park complex and said
premises and the preservation of good order thereon. Landlord shall not be
responsible to Tenant for the nonperformance by any other Tenant or occupant of
the office park complex of any of said rules and regulations.
ARTICLE 31. SCOPE AND AMENDMENT.
This Lease is and shall be considered to be the only agreement between
the parties hereto. All negotiations and oral agreements acceptable to both
parties are included herein. No amendment or other modification of this Lease
shall be effective unless in writing.
ARTICLE 32. SAFETY AND HEALTH.
Tenant covenants at all times during the Term of this Lease to comply
with the requirements of the Occupational Safety and Health act of 1970, 29
U.S.C. Section 651 et seq and any analogous legislation in California
(collectively, the "Act"), to the extent that the Act applies to said premises
and any activities thereon and without limiting the generality of the foregoing,
Tenant covenants to maintain all working areas, all machinery, structures,
electrical facilities and the like upon said premises in any condition that
fully complies with the requirements of the Act, including such requirements as
would be applicable with respect to agents, employees or contractors of Landlord
who may from time to time be present upon said premises, and Tenant agrees to
indemnify and hold harmless Landlord from any liability, claims or damages
arising as a result of a breach of the foregoing covenant and from all costs,
expenses and charges arising therefrom including, without limitation, attorneys'
fees and court costs incurred by Landlord in connection therewith, which
indemnity shall survive the expiration or termination of this Lease.
ARTICLE 33. MISCELLANEOUS.
Time is of the essence of this Lease. The Article headings herein are
used only for the purpose of convenience and shall not be deemed to contain or
limit the subject matter of the Articles hereof, nor to be considered in the
construction thereof. Each and all of the obligations, covenants, conditions and
restrictions of this Lease shall inure to the benefit of and be binding upon and
enforceable against, as the case may require, the successors and assigns of
Landlord, and subject to the restrictions against assignments and subletting in
this Lease contained, any authorized assignee, transferee, sublessee and other
successor in interest of Tenant.
In this Lease the neuter gender includes the feminine and masculine and
the singular number includes the plural wherever the context so requires.
The term "Tenant" as used in this Lease shall mean and include each
person who executes this Lease, jointly and severally, and the act of or notice
from, or notice or refund to, or the signature of, any one or more of such
persons, with respect to the tenancy or this Lease, including, but not limited
to, any renewal, extensions, expiration, termination or modification of this
Lease, shall be binding upon each and all of the persons executing this Lease as
Tenant with the same force and effect as if each and all of them had so acted or
so given or received such notice or refund or so signed.
IN WITNESS WHEREOF, the parties hereto have caused this Lease to be
executed on the date hereinafter set forth, following their respective
signatures.
By: /s/ Dolores L. McNabb SKECHERS USA, INC.,
---------------------------------- a Delaware Corporation
By: /s/ David Weinberg
-----------------------------------
Date: September 10, 1998 Date: September 14, 1998
Address: P.O. Box 10001 Address: 228 Manhattan Beach Boulevard
Torrance, CA 90505 Manhattan Beach, CA 90266
______________________________________ ___________________________________
"Landlord" "Tenant"
ALL RENTS ARE DUE ON OR BEFORE THE 1ST OF EACH MONTH AND MAILS TO:
D.L. MC NABB
P.O. BOX 10001
TORRANCE, CA 90505
RULES AND REGULATIONS
1
No sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed or printed or affixed on or to any part of the outside or
inside of any building without the written consent of Landlord first had and
obtained, and Landlord shall have the right to remove any such sign, placard,
picture, advertisement, name or notice without notice to and at the expense of
Tenant.
All signs or lettering on doors or buildings shall conform to uniform
specifications and standards established by Landlord and shall be printed,
painted and affixed by Landlord and billed to Tenant.
Tenant shall not place anything or allow anything to be placed near the
glass of any window, door, partition or wall which may appear unsightly from
outside said premises; provided, however, that Landlord is to furnish and
install a building standard window drapery at all exterior windows.
2
Tenant shall not obtain for use upon the premises ice, drinking water,
towel and other similar services or accept barbering or bootblacking services on
the premises, except from persons authorized by Landlord and at the hours and
under regulations fixed by Landlord.
3
The bulletin board or directory of the building, if any, will be
provided exclusively for the display of the name and location of Tenant only,
and Landlord reserves the right to exclude any other names therefrom.
4
The sidewalks, halls, passages, entrances, and stairways shall not be
obstructed or used by Tenant for any purpose other than for ingress and egress.
The halls, passages, exits, entrances, stairways, balconies and roofs are not
for the use of the general public and Landlord shall in all cases retain the
right to control and prevent access thereto by all persons whose presence in the
judgment of Landlord shall be prejudicial to the safety, character, reputation
and interests of the premises and tenants, provided that nothing herein
contained shall be construed to prevent such access to persons with whom Tenant
normally deals in the ordinary course of Tenant's business unless such persons
are engaged in illegal activities. Neither Tenant nor employees or invitees of
Tenant shall go upon the roof of any building.
5
Tenant shall not alter any lock nor install any new or additional locks
or any bolts on any door of said premises.
6
The toilet rooms, urinals, wash bowls and other apparatus shall not be
used for any purpose other than that for which they were constructed and no
foreign substance of any kind whatsoever shall be thrown therein. The expense of
any breakage, stoppage or damage resulting from the violation of this rule shall
be borne by Tenant.
7
Tenant shall not overload the floor of said premises or mark, drive
nails (normal decorating excepted), screw or drill into the partitions, woodwork
or plaster or in any way deface said premises.
8
No equipment of any kind shall be brought into any building without the
consent of Landlord, and any moving of furniture, freight and equipment into or
out of any building shall be done at such time and in such manner as Landlord
shall designate. Landlord shall have the right to prescribe the weight, size and
position of all safes and other heavy equipment brought into any building and
also the times and manner of moving the same in and out of the building. Safes
or other heavy objects shall, if considered necessary by Landlord, stand on wood
strips of such thickness as is necessary to properly distribute the weight.
Landlord will not be responsible for loss of or damage to any such safe or
property from any cause and all damage done to the building by moving or
maintaining any such safe or other property shall be repaired at the expense of
Tenant.
9
Cleaning of carpets and windows shall be the responsibility of Tenant
and shall be paid by Tenant.
10
Tenant shall not use, keep or permit to be used or kept, any foul or noxious gas
or substance in said premises, or permit or suffer said premises to be occupied
or used in a manner offensive or objectionable to Landlord or other occupants of
any building by reason of noise, odors and/or vibrations, or interfere in any
way with the other tenants or those having business therein, nor shall any
animals or birds be brought in or kept in or about said premises.
11
Tenant shall not use, keep or permit to be used any of the areas within
the office complex in any manner which shall cause litter and/or defacing of the
buildings, other improvements or landscaping. Tenant agrees that as far as is
practical and reasonable, to require its employees and invitees to conform to
the rules and regulations set out herein and any additional rules and
regulations which are hereafter adopted.
12
All pedestrian traffic within the office complex shall be limited to
paved streets and sidewalks and areas specifically designated or approved by
Landlord for such uses, e.g., lunch areas, etc.
13
Said premises shall not be used for the storage of merchandise, for
washing clothes, for lodging or cooking in conjunction therewith, or for any
improper, objectionable or immoral purposes.
14
Tenant shall not use or keep in said premises or the building any
kerosene, gasoline or inflammable or combustible fluid or material, or use any
method of heating or air-conditioning other than that supplied or approved in
writing by Landlord.
15
Landlord will direct electricians as to where and how telephone and
telegraph wires are to be introduced. No boring or cutting for wires will be
allowed without the consent of Landlord. The location of telephones, call boxes
and other office equipment affixed to said premises shall be subject to the
approval of Landlord. Landlord reserves the right to enter upon said premises
for the purpose of installing additional electrical wiring and/or other
utilities for benefit of Tenant or adjoining tenants.
16
Tenant, upon termination of the tenancy, shall deliver to Landlord the
keys to offices and rooms which shall have been furnished Tenant or which Tenant
shall have had made, and in the event of loss of any keys so furnished, Tenant
shall pay Landlord therefore.
17
Tenant shall not lay linoleum, tile, carpet or other similar floor
covering so that the same shall be affixed to the floor of said premises in any
manner except as approved by Landlord. The expense of repairing any damage
resulting from a violation of this rule or removal of any floor covering shall
be borne by Tenant.
18
If deemed necessary by Landlord, access on Saturdays, Sundays and legal
holidays, and on other days between the hours of 6:00 p.m. and 8:00 a.m. the
following day, to the office complex, or to the halls, corridors, or stairways
in any of the building, or to said premises may be refused unless the person
seeking access is known to the person or employee in charge, has a pass, or is
properly identified. Landlord shall in no case be liable for damages for any
error with regard to the admission to or exclusion from the office complex of
any person. In case of invasion, mob, riot, public excitement, or other
commotion, Landlord reserves the right to prevent access to the office complex
during the continuance of the same by closing the doors or otherwise, for the
safety of the tenants and protection of property.
19
Tenant shall see that the doors of said premises are closed and
security locked before leaving the building. Tenant must observe strict care and
caution to assure that all water faucets or water apparatus are entirely shut
off before Tenant or Tenant's employees leave said premises, and that all
electrical switches shall likewise be shut off to prevent waste or damage.
20
Landlord reserves the right to exclude or expel from the office park
complex any person who, in the judgment of Landlord, is intoxicated or under the
influence of liquor or drugs, or who shall in any manner do any act in violation
of any of the rules and regulations.
21
No vending machine or machines of any description shall be installed,
maintained or operated upon said premises without the written consent of
Landlord.
22
Landlord shall have the right, exercisable without notice and without
liability to Tenant, to charge the name and the street address of the building
of which said premises are a part.
23
The parking areas within the office complex shall be used solely for
passenger type vehicles during normal office hours and the parking of trucks,
trailers, recreational vehicles and campers is specifically prohibited. No
vehicle of any type shall be stored within the parking areas at any time. In the
event that a vehicle is disabled, it shall be removed within 48 hours. There
shall be no "For Sale" or other advertising signs on or about any parked
vehicle. All vehicles shall be parked in the designated parking areas in
conformance with all signs and other markings.
24
Tenant shall not place any improvements or movable objects including
antennas, outdoor furniture, etc. in the parking areas, landscaped area or other
areas outside of said premises, or on the roof of said premises.
25
"Office complex" refers to the entire office building development of
Landlord.
26
Landlord reserves the right to make such other rules and regulations as in its
judgment may be for the safety, care and cleanliness of said premises and the
office complex for the preservation of good order therein. Tenant agrees to
abide by all such rules and regulations hereinabove stated and any additional
rules and regulations which are adopted.
ADDENDUM TO LEASE
FOR PREMISES COMMONLY KNOWN AND DESIGNATED AS:
OFFICES #3, 4, AND 5, SECOND FLOOR OF THE NORTH BUILDING
904 MANHATTAN AVENUE,
MANHATTAN BEACH, CALIFORNIA
This Addendum to Lease executed on September __, 1998, by and between
DOLORES MCNABB, as Landlord, and SKECHERS USA, INC., as Tenant, is an integral
part of said Lease as if full set forth therein.
A. OPTION TO EXTEND LEASE TERM.
So long as Tenant has fully performed all the obligations on its part to
be performed, Landlord hereby grants to Tenant two (2) consecutive options to
extend this lease for five (5) years each, on the same terms and conditions as
are contained herein except as to increases in real estate taxes as hereinafter
provided. It is contemplated that Tenant's occupancy shall be continuous;
therefore, in the event Tenant fails to exercise any of the options granted
herein, the remaining options shall immediately expire and be of no further
force or effect. The parties specifically acknowledge that the Lease rent terms
provide for annual increases of 3%. Such increases shall continue to be applied
annually during each and every option exercised hereunder.
Tenant shall exercise each such option by delivering written notice to
Landlord at least six (6) months, but not more than twelve (12) months, prior to
the end of each five (5) year term. TIME IS OF THE ESSENCE in regard to the
delivery of the notice. In the event Tenant fails to deliver written notice as
herein provided, the options granted herein shall expire and be of no further
force or effect.
B. RENT.
Tenant shall pay to Landlord rent, free from all claims, demands or
set-offs against Landlord of any kind or character whatsoever, except as
otherwise expressly provided to the contrary, in advance, in the amount of
$167,945.82, payable $3,375 on execution of this lease and thereafter on the
first day of each month as follows:
November 1, 1998 to September 30, 1999 $2250.00 per month
October 1, 1999 to September 30, 2000 $2317.50 per month
October 1, 2000 to September 30, 2001 $2387.00 per month
October 1, 2001 to September 30, 2002 $2458.61 per month
October 1, 2002 to September 30, 2003 $2532.37 per month
October 1, 2003 to June 30, 2004 $2608.34 per month
LATE PAYMENTS: In the event that Tenant shall fail to pay to Landlord
within 5 days of the date when due, any payment owing to Landlord pursuant to
the terms of this lease, Tenant shall pay Landlord a late charge in the amount
of ten percent (10%) of the rent payment then due in addition to said rent.
SQUARE FOOTAGE DISCLAIMER: The parties hereto hereby acknowledge that
during the negotiations for this Lease, the parties discussed the rent as a
function of an amount per square feet of rentable space. Prior to the execution
of this Lease, Tenant has had the opportunity to inspect the space and satisfy
itself as to the size and suitability of the space for its intended purposes.
The parties hereto hereby agree the above dollar figures of rent shall be due
and payable regardless of the actual square feet in the demised premises and
Tenant acknowledges that Landlord makes no representation or warranty as to the
actual size of the premises. Any discussions concerning a rental per square foot
of space is superceded by this provision.
C. USE.
The sole permitted use of the premises shall be commercial office and
related activities.
D. REAL ESTATE TAXES-OPTION PERIODS.
Upon the exercise of the options hereinabove provided for, Tenant agrees
to pay during the term of each such option period, or periods, as the case may
be, its pro rata share of any increase in real estate taxes and assessments
levied or imposed against the real property of which the demised premises are a
part over an above the taxes imposed on said real property during the fifth year
of the original term of this Lease (the base year). The parties hereto
acknowledge and agree that Tenant occupies approximately 12.5% of the building
and agree that for purposes of this provision that Tenant shall pay 12.5% of any
such increase. Landlord shall provide Tenant with a copy of the tax bill for the
sixth year (the base year) of the initial term along with a copy of the tax bill
for each year during any option period that Tenant continues in possession under
this Lease. Tenant shall pay to Landlord one half of its pro rata share (12.5%)
of such increase on or before December 10 of each year and the remaining on half
of its pro rata share (12.5%) on or before April 10 of each year.
E. AIR CONDITIONING REPAIR AND MAINTENANCE.
Landlord has provided an air conditioner that services Offices 1, 2, 3, 4
and 5 on the second floor of the north building. Tenant hereby agrees that it
will pay any and all costs related to the repair and maintenance of said air
conditioner. Further, the parties hereby the air conditioner servicing Offices 1
through 5 is on Landlord's house meter and the gas servicing said Offices is not
separately metered. The parties hereby agree that a reasonable estimate of
the monthly electrical and gas costs for Office #3, 4, and 5 is $175.00. Tenant
hereby pay to Landlord $175.00 per month as reimbursement for such costs. Each
year during the term of this Lease, such monthly amount shall be increased by 3%
to reflect the anticipated general increase in costs. In the event electrical
costs are increased substantially for any reason that makes the above sum
unrealistic, as increased annually, the parties agree such sum shall be
increased in an amount that reflects such substantial increase in such costs.
Tenant may, at its discretion, elect to install separate meters for the gas and
electric, at its sole and exclusive expense, and pay the utility costs for
Offices 3, 4, and 5 directly. Tenant acknowledges that concurrent with the
installation of the electrical meter, it would also have to install a separate
air conditioner in order to isolate the expenses to said Offices #3, 4, and 5.
Air Conditioning to Offices #3, 4 and 5 shall be provided between the
hours of 7:30 A.M. and 5:30 P.M. Monday through Friday or each week.
F. SECURITY DEPOSIT
Tenant shall pay Landlord on execution of this Lease the sum of $4,500.00
as a security deposit in accordance with the provisions of Paragraph 19 of the
Lease.
G. PARKING
Landlord hereby grants to Tenant the exclusive use of one (1) parking, the
location of which will be designated by Landlord.
H. RULES AND REGULATIONS
The Rules and regulations attached hereto are hereby incorporated by this
reference as if fully set forth herein and shall be an integral part of this
Lease.
I. ASSIGNMENT
Notwithstanding the provisions of Paragraph 11 of the Lease, no consent
from Landlord shall be required for the assignment of this Lease under the
following circumstances, each of which shall be considered a Permitted
Assignment:
(1) the transfer of stock of Tenant to members of the immediate
family of a shareholder of Tenant, to a living trust for
estate-planning purposes,or by will or intestacy; or,
(2) Tenant sells or offers for sale its voting stock to the public
in accordance with the qualifications or registration
requirements of the State of California and the Security Act
of 1933, as amended.
H. TENANT'S RIGHT TO TERMINATE IN THE EVENT OF DESTRUCTION OF THE PREMISES
Notwithstanding the provisions of Paragraph 16. DESTRUCTION OF PREMISES of
the Lease, in the event Landlord cannot complete the repairs and return
possession to Tenant within a period of six (6) months, Tenant shall have the
option of terminating this Lease. Notice of such election to terminate shall be
given by Tenant to Landlord within ten (10) days of Tenant's receipt of written
notice from Landlord that the repair period is projected to exceed six (6)
months. In the event Tenant fails to so notify Landlord in writing, this right
to terminate shall expire.
I. MUTUAL INDEMNIFICATION
Tenant Agrees to defend, with counsel reasonably satisfactory to Landlord,
indemnify and hold harmless, Landlord, its agents, employees, officers,
directors, shareholders, partners, members and representatives (collectively
"Landlord") from and against any and all loss, cost, action liability, damage or
expense, including but not limited to, penalties, fines, attorneys' fees or
costs (collectively "claims"), to any person, property or entity resulting from
the following: (i) the negligence or wilful misconduct of Tenant, its agents,
employees or contractors; (ii) Tenant's default or breach of any of the terms
and conditions of this Lease; and (iii) any occurrences within the Premises, not
resulting from the negligence or wilful misconduct of Landlord, its agents,
employees or contractors.
Landlord agrees to defend, with counsel reasonably satisfactory to Tenant,
indemnify and hold harmless, Tenant, its agents, employees, officers, directors,
shareholders, partners, members and representatives (collectively "Tenant") from
and against any and all loss, cost, action, liability, damage or expense,
including but not limited to, penalties, fines, attorneys' fees or costs
(collectively "claims"), to any person, property or entity resulting from the
following: (i) the negligence or wilful misconduct of Landlord, its agents,
employees or contracts; (ii) Landlord's default or breach of any of the terms
and conditions of this Lease; and (iii) any occurrences within the Premises, not
resulting from the negligence or wilful misconduct of Tenant, its agents,
employees or contractors.
Notwithstanding the foregoing, however, because Landlord is required to
maintain property insurance on the Building, and because of the existence of
waivers of subrogation set forth in this Lease, Landlord hereby agrees to
defend, indemnify and hold Tenant harmless on any Claims to the extent such
claim is covered by such insurance, even if resulting from the negligent acts,
omissions or misconduct of Tenant or those of its agents, employees or
contractors. Similarly, since Tenant must carry insurance to cover its personal
property within the premises, and because of the waivers of subrogation set
forth n this Lease, Tenant hereby agrees to defend, indemnify and hold Landlord
harmless from any claims to the extent any such claim is covered by such
insurance, even if resulting from the negligent acts, omissions or misconduct of
Landlord or those of its agents, employees or contractors. The provisions of
this section shall survive the expiration or sooner termination of the Lease
with respect to any occurrences, claims or liabilities occurring prior to such
expiration or termination.
LANDLORD TENANT
DOLORES MCNABB SKECHERS USA, INC.,
a California corporation
/s/ DOLORES L. MCNABB by: /s/ DAVID WEINBERG
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Date: September 10, 1998 by: David Weinberg, CFO
---------------------------
Date: September 14, 1998