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 Addendum 4, Paragraph 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 Theodore Avenue and Eucalyptus Avenue in Moreno
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

 

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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 Addendum 2, Paragraph 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 Addendum 2,
Paragraph 5(b) 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. Addendum 4, Paragraph 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 Addendum 2, Paragraph 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/ David Weinberg
 
   
 
  Iddo Benzeevi, President and   Its   COO     
 
  Chief Executive Officer       
 
   
 
             

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EXHIBIT “A”
(REVISED)
SITE PLAN
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EXHIBIT “B”
SPECIFICATIONS

 

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