Document:

skx-ex1018c_640.htm

Exhibit 10.18(c)

Addendum 3 to Agreement for the availability of apace for the storage of goods and offices for

the management of this dated May 20, 2008

The undersigned:

Prologis Belgium Ill BVBA, registered with the RPR under number 0472.435.629, with its offices in Park Hill, Building A, 3rd Floor, Jan Emile Mommaertslaan 18, B-1831 Diegem and hereby represented by A.C. TOL,

hereafter referred to as ‘Prologis’

and

Skechers EDC sprl, with its registered office in 4041 Milmort, Parc Industriel Hauts-Sarts, Zone 3, avenue du Parc Industriel, registered with the RPR 0478.543.758, hereby represented by Mr. David Weinberg.

hereafter referred to as ‘Skechers EDC’ or as ‘Customer’

together referred to as the "Parties".

Whereas:

	
(A)
	
On May 20, 2008 Prologis and Skechers signed an "Agreement for the availability of space for the storage of goods and offices for the management of this" concerning the following real estate: Prologis Park Liege Distribution Center II with a total surface area of approximately 22,945 m2 and approximately 118 car parking space located in the Industrial Park Hauts Sarts, Milmort, Liege, Avenue Pare Industrial (hereafter referred to as 'the Availability Agreement DCII ');

	
(B)
	
On March 10, 2009, an "Addendum 1" was signed to confirm an ear1ier commencement date per March 11, 2009 and to adjust the annual price to be paid by Skechers to Prologis under the Availability Agreement DC II.

	
(C)
	
On December 22, 2009, an "Amendment 2" was signed to record the items that were added to the premises in addition to the specification of the Availability Agreement DC II and to indicate which of the parties is owner of the relevant items and who is responsible for the maintenance and replacement thereof.

	
(D)
	
Early 2013, as the current 5 year lease period (expiring on March 31, 2014) was approaching its expiry date, Prologis and Skechers started negotiations on the possible early termination of the Availability Agreement DC II by Skechers and on possible amendments to the provisions of the Availability Agreement DC II dealing with price and price indexation.

	
(E)
	
The abovementioned negotiations have resulted in an agreement whereby (i) Skechers has agreed not to terminate the Availability Agreement DC II by March 31, 2014; whereby (ii) Skechers and Prologis have agreed to extend the Availability Agreement DC II (on the terms and conditions set out below) with a period of at least ten (10) years; and whereby (iii) Skechers and Prologis have agreed to amend the price and price indexation mechanism, as further set out below.

	
(F)
	
Skechers and Prologis also entered into an Availability Agreement for the adjoining premises "Prologis Park Liege Distribution Center I with a total surface area of approximately 22,458 m2 and approximately 100 car parking space located in the Industrial Park Hauts-Sarts, Milmort, Liege, Avenue Parc Industriel" (hereinafter : "the Availability Agreement DC I"). The Availability Agreement DC I is extended and amended under the same conditions as recorded in this Addendum and these Agreements are indissolubly connected to each other.

 

	
1
	
Commencement and Duration of the Agreement 

Article 5 of the Availability Agreement DC II and Article 2 of Addendum 1 are replaced as follows:

After the lease period which will end on March 31, 2014, the Availability Agreement DC II will be extended for a period of ten (10) years until March 31, 2024 (hereinafter : "the Extended Period")..

If either party does not terminate the Availability Agreement DC II by registered mail not later than (12) months prior to the end of the Extended Period, this Availability Agreement DC II will be extended with an additional period of five (5) years. Unless a party terminates the Availability Agreement DC II by registered mail not later than (12) months prior to the end of that five (5) year period, the Availability Agreement DC II will each time be extended with consecutive periods of five (5) years.

Notice needs to be given by bailiff's writ or by registered letter. Notices hereunder shall be deemed given and effective

	
 
	
(i)
	
if delivered by a bailiff, upon delivery, or

	
 
	
(ii)
	
if sent by certified or registered mail, within five (5) days of deposit in the post office.

Skechers has a one-time option to terminate the Availability Agreement DC II at the fifth (5th) anniversary of the Extended Period (i.e., on March 31, 2019), subject to a notice period of 12 months in advance..

Termination of the Availability Agreement DC II can only take place in combination with termination of the Availability Agreement DC I.

If Skechers terminates both Availability Agreements DC II and DC I, a lump sum compensation payment (for the termination of both Availability Agreements DC II and DC I combined) in the amount of € 200,000 (two hundred thousand Euro) excluding VAT will be due by Skechers to Prologis (and whereby, unless otherwise instructed by Prologis, 50% of this amount shall be paid to Prologis Belgium III BVBA and the remaining 50% to Prologis Belgium II BVBA).

	
2
	
Price and Deposit

Article 3 of Availability Agreement DC II and Article 1, paragraphs 1 and 2 of Addendum 1 are replaced as follows :

As from April 1. 2014, the annual price will be € 1,017,485 (one million seventeen thousand four hundred and eighty-five Euro zero Eurocent) +VAT: € 213,671.85 (two hundred thirteen thousand six hundred seventy-one Euro and eighty-five Eurocent), hereafter referred to as the 'Price', payable per quarter and in advance in four (4) equal parts of € 254,371.25 (two hundred fifty-four thousand three hundred seventy-one Euro and twenty-five Eurocent + VAT: € 53,417.96 (fifty-three thousand four hundred seventeen Euro and ninety-six Eurocent) to be made by direct bank transfer to the bank account of Prologis.

The Price excluding VAT is broken down into:

 

	
Warehouse: 
	
 
	
€ 45.00 (forty-five Euro zero Eurocent). + VAT per sqm per annum

	
Office: 
	
 
	
€ 85.00 (eighty-five Euro zero Eurocent) + VAT per sqm per annum

	
Mezzanine storage: 
	
 
	
€ 23.00 (twenty-three Euro zero Eurocent) + VAT per sqm per annum

The new Price will be applicable as from April 1, 2014. The first payment will be related to the period from April 1, 2014 up and including 30 June 2014.

All other paragraphs of Article 1 of Addendum 1 will remain in force.

	
3
	
Price lndexation

The second and third paragraph of article 4 of the Availability Agreement DC II will be replaced as follows:

The Price will be annually indexed according to the following formula:

 

	
New Price = 
	
Price x new index

	
 
	
Basic index

Indexation will take place for the first time at the expiry of the first year of the Extended Period i.e. April 1, 2015. The basic index is that of the month prior to the commencement date of the Extended Period, i.e. the month March 2014, and the new Index is that of the month prior to the anniversary of the Extended Period.

2

All other paragraphs of this article 4 of the Availability Agreement DC II will remain in force.

Availability Agreement

Save as hereby amended, the Availability Agreement DC II shall continue in full force and effect until the Premises have been returned in accordance with the provisions of the Availability Agreement DC II.

Agreed and signed in two copies:

 

	
ProLogis Belgium II BVBA,
	
 
	
Skechers EDC sprl,

	
 
	
 
	
 

	
Place: 
	
 
	
Place: 

	
Date: 
	
 
	
Date: 

	
 
	
 
	
 

	
/s/ A. C. TOL
	
 
	
/s/ David Weinberg

	
 
	
 
	
 

	
Mr. A. C. TOL
	
 
	
Mr. David Weinberg

 

3skx-ex1018d_639.htm

 

Exhibit 10.18(d)

Addendum 4 to VAT Lease DC 2

Addendum 4 to the "Agreement for the availability of space for the storage

of goods and offices for the management of this", dated May 20, 2008

Between the undersigned:

	
1.
	
The limited liability company Prologis Belgium III BVBA, having its registered office at 2850 Boom, Scheldeweg I, registered with the Crossroads Bank for Enterprises under the number 0472.435.629 (RLE Antwerp) and with VAT number 0472.435.629,

represented by Mr. Bram Verhoeven, holder of a special proxy,

Hereafter referred to as "Prologis"

AND

	
2.
	
The limited liability company Skechers EDC Sprl, having its registered office at [4041 Milmort (Liege), avenue du Pare Industriel 3], registered with the Crossroads Bank for Enterprises under the number 0478.543.758 (RLE Liege) and with VAT number 0478.543.758,

represented by Mr. David Weinberg,

Hereafter referred to as "Skechers"

Prologis and Skechers hereinafter jointly referred to as "Parties" or individually as "Party";

AND

	
3.
	
The limited liability company under the laws of the State of Delaware (USA) Skechers USA Inc., having its registered office at CA 90266 Manhattan Beach (USA), Manhattan Beach Blvd. 228, and registered under the Commision File Number 001-1429 with I.R.S. Employer Identification No. 95-437615,

represented by Mr. David Weinberg,

hereinafter referred to as "Guarantor",

WHEREAS:

	
A.
	
Prologis and Skechers entered into an agreement dated 20 May 2008 and named "Agreement for the availability of space for the storage of goods and offices for the management of this", with respect to Prologis Park Liege Distribution Center II located in the Industrial Park Hauts-Sarts, Milmort, Liege, avenue du Pare Industriel (hereinafter referred to as the "Agreement DC II");

	
B.
	
Prologis and Skechers entered into an "Addendum I" to the Agreement DC II dated 10 March 2009 in which they agreed to confirm an earlier Commencement Date per March 11, 2009 and to adjust the annual price to be paid.

	
C.
	
Prologis and Skechers entered into an "Amendment 2" to the Agreement DC II dated 22 December 2009 in which they agreed to record the items added to the Premises and to indicate who is owner of the relevant items and who is responsible for the maintenance and replacement thereof.

	
D.
	
In 2013, Prologis and Skechers entered into an "Addendum 3" to the Agreement DC II in which they agreed to extend the Agreement DC II with a period of ten years and to amend the price and price indexation mechanism.

 

Addendum 4 to VAT Lease DC 2

 

	
E.
	
Previously, Skechers has also entered into an agreement dated 12 August 2002 and named "Agreement for the availability of space for the storage of goods and offices for the management of this", as amended, with respect to the adjoining premises Prologis Park Liege Distribution Center I located in the Industrial Park Hauts-Sarts, Milmort, Liege, avenue du Pare lndustriel (hereinafter referred to as the "Agreement DC I"). 

	
F.
	
Skechers has now entered into an agreement named "Warehouse Agreement" with respect to the adjoining premises Prologis Park Liege Distribution Center III located in the Industrial Park Hauts-Sarts, Milmort, Liege, Avenue Pare lndustriel" (hereinafter referred to as the "Agreement DC III").

	
G.
	
By way of present Agreement, Parties wish to extend and amend the Agreement DC II in order to, among others, align the duration of the Agreement DC II with the Agreement DC III.

THE FOLLOWING HAS BEEN AGREED:

Article 1 - Application of Agreement DC II - Condition Precedent

	
1.1.
	
Current Addendum 4 is an addendum to Agreement DC II as amended. The clauses of Agreement DC II as amended, which are not expressly waived or modified by this Addendum 4, remain unchanged. The defined terms and concepts of the Agreement DC II as amended, which are used in this Addendum 4 will therefore have the same meaning as in Agreement DC II as amended, except when this Addendum 4 expressly provides otherwise.

	
1.2.
	
The effectiveness and entry into force of the present Addendum 4 is conditional upon, cumulatively: 

	
(i)
	
the cumulative fulfilment of the Conditions Precedent under Article 1.1. and 1.2. of the Preliminary Part of Agreement DC Ill; and 

	
(ii)
	
the actual occupation of Prologis Park Liege Distribution Center III by Skechers as from the Commencement Date under Agreement DC Ill.

Article 2 - Duration

Article 5 of Agreement DC II, as amended by Article 2 of its Addendum I and Article I of its Addendum 3 is replaced as follows:

"The present Agreement is extended for an additional unreducible period of 15 consecutive years following the Commencement Date under Agreement DC III (hereinafter the "Extended Period'').

Following the expiry of the Extended Period, this Agreement will be automatically extended for subsequent periods of 5 years, unless one of the Parties expressly terminates present Agreement by registered mail or bailiff's writ served not less than (i) 12 months prior to the end of the Extended Period or (ii) 12 months prior to the end of the applicable five year extension period.

Notices hereunder shall be deemed given and effective (i) if delivered by a bailiff, upon delivery, or (it) ((sent by registered mail within two (2) business days at the date of deposit in the post office."

Article 3 - Price

As from the Commencement Date under Agreement DC III, Article 3, paragraphs 1-5, of the Agreement DC II, as amended by Article 1, paragraphs 1-5, of its Addendum I will be replaced as follows:

"3.1. The Parties agree that as from the Commencement Date under Agreement DC III the annual base compensation consists of

	
 
	
-
	
€ 40.00 / m2 / year for the Warehouse, i.e. a total amount of € 851,000.00 / year;

	
 
	
-
	
€ 23.00 / m2 / year for the Mezzanine, i.e. a total amount of € 46,598.00 / year;

	
 
	
-
	
€ 85.00 / m2 / year for the Office Space, i.e. a total amount of € 29,750.00 / year;

and has been determined at an amount of € 911,110.00 per year or € 227,777.50 per quarter, always to be increased with VAT, and excluding Services as defined in Article 9 and other expenses, and subject to yearly adjustment as described in Article 4 (hereinafter referred to as the "Price'').

2

Addendum 4 to VAT Lease DC 2

 

3.2 Skechers shall be granted a Price free period of 2 months equal to f 151,851.66 (VAT excluded), starting from the Commencement Date under Agreement DC Ill. Individual charges (as the case may be increased with VAT) and taxes are not included in the Price free period and will remain payable."

In addition, as from the Commencement Date under Agreement DC Ill, Article 3, paragraph 5, of the Agreement DC II, as amended by Article I, paragraph 4, of its Addendum I, will be replaced as follows:

''If Skechers, either in part of' in its entirety, is in default with the payment of the abovementioned quarterly payments of the Price on the aforementioned dates when the payments are due, overdue payment shall automatically bear interest at an interest rate determined in conformity with the Law of' 2 August 2002 relative to late payments in commercial transactions applicable on the due date, per annum, as from the date payments are due, and this without notice of default."

Article 4 - Adjustment of the Price

As from the Commencement Date under Agreement DC Ill, Article 4 of the Agreement DC II, as amended by Article 3 of its Addendum 3, will be replaced with the following text:

"4.1. The Annual Price is linked to the health index as published each month in the Belgian State Gazette.

4.2. The Annual Price will be adjusted automatically and as of right each year on January 1 (for the first time on January 1, 2016) and this in accordance with the following formula:

 

			
	
 
	
 
	
Annual Price X New index

	
New Annual Price
	
=
	
 

	
 

	
 
	
 
	
Base index

whereby

	
 
	
-
	
Annual Price = the Annual Price referred to in Article 3 of present Addendum 4;

	
 
	
-
	
base index = the health index of the month preceding the month during which Parties signed present Addendum 4, i.e. the index of August 2014, i.e. 100.12 (with 2013 = 100);

	
 
	
-
	
new index = the health index of the month preceding the month of the adjustment of the Price (December).

However, the new Annual Price will never be less than the Annual Price due during the year preceding the adjustment of the Annual Price.

4.3. In the event that the calculation and the publication of the health index should be discontinued or cancelled, the Annual Price will be linked to the consumer price index. In the event that the calculation and publication of the consumer index should be discontinued or cancelled, the Annual Price will be linked to the new index published by the Belgian government which might replace the consumer price index. In the event that no new official index is published and Parties fail to agree on a new method of adjusting the Annual Price, the method of adjustment will be determined by an expert appointed by the Justice of the Peace in whose jurisdiction the Premises are located.

4.4. It is explicitly agreed that Prologis shall only waive the right to adjust the Annual Price arising from this Article by a written confirmation, signed by the latter."

Article 5 - Bank Guarantee - Release

Article 3, paragraph 6 and Article 25 of the Agreement DC II, as amended by Article 1, paragraph 6 of its Addendum 1, shall not longer apply as from the Commencement Date under Agreement DC III.

As a result, on Commencement Date under Agreement DC III, the current bank guarantee provided by Skechers, as a security for the good performance of its obligations under the Agreement DC I and the Agreement DC II, shall be released by Prologis Belgium II Sprl and Prologis.

However, Article 20 of Agreement DC III shall apply.

3

Addendum 4 to VAT Lease DC 2

 

Present clause is without prejudice to the applicability and enforceability of Article 6.

Article 6 - Parent Company Guarantee ("hoofdelijke borgtocht/caution solidaire")

6.1. The Guarantor shall be jointly and severally liable with Skechers vis-a-vis Prologis for the good performance by Skechers of its obligations and undertakings under present Agreement.

6.2. The Guarantor waives its rights under articles 2026 and 2037 of the Civil Code.

6.3. The Guarantor agrees not to claim against Skechers the reimbursement of any payment made to Prologis in accordance to this Article 6 or accept any payment or security from Skechers, whenever such reimbursement or payment to the Guarantor could jeopardize the due compliance of Skechers of its obligations under the present Agreement.

6.4. Skechers shall provide Prologis with annual financial statements of the Guarantor at its first request. If there has been a material adverse change in the financial condition of the Guarantor, Skechers shall procure that another company acceptable to Prologis provides a replacement guarantee on the terms as set out in this Article and Skechers shall procure that such other company concludes an amendment to this Agreement upon written demand by Prologis.

6.5. The costs relating to the present guarantee, its enforcement before the courts or before a public official, and its execution shall be borne exclusively by the Guarantor.

6.6. The Guarantor declares that the entering into the parent company guarantee as described in present Article, is in accordance with its corporate purpose.

6.7. Present clause is without prejudice to the applicability and enforceability of Article 20 of Agreement DC III.

Article 7 - Registration of this Addendum 4

The registration of this Addendum 4 shall be done by Skechers.

All costs and duties which may arise from entering to this Addendum, the registration duties, the stamp duties, possible fines in case of late filing or non-filing with the Registrar's Office, will be at the charge of Skechers. As present Addendum 4 is an addendum to an agreement by which premises are put at the disposal of Skechers for activities as described in article 18, § 1, second section, 9° of the Belgian VAT Code, it will be registered at the fixed registration duty.

*

*         *

Done in                                    ,on        17/10/2014              2014, in four original counterparts, each Party and the Guarantor acknowledging receipt of a fully executed original copy, and one remaining counterpart being intended for the registration office.

Prologis

 

	
 
	
 
	
/s/ Bram Verhoeven

	
Name:
	
 
	
Bram Verhoeven

	
Capacity:
	
 
	
holder of a special proxy

Skechers

 

	
 
	
 
	
/s/ David Weinberg

	
Name:
	
 
	
Mr. David Weinberg

	
Capacity:
	
 
	
Director

4

Addendum 4 to VAT Lease DC 2

 

Guarantor

 

	
 
	
 
	
/s/ David Weinberg

	
Name:
	
 
	
Mr. David Weinberg

	
Capacity:
	
 
	
Director

 

 

5

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