Document:

morenovalleyfirstamendme

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                law or the SEC to disclose.  Landlord and tenant further expressly agree that there shall be no                  press releases or other publicity originated by the parties hereto, or any representatives thereof,                  concerning the subject Amendment transaction, without the prior written consent of both parties,                  not to be unreasonably withheld, conditioned or delayed.            I.      Landlord and Tenant each (i) have agreed to permit the use from time to time, where appropriate,                  of facsimile or other electronic signatures in order to expedite the transaction contemplated by this                  Amendment, (ii) intend to be bound by its respective facsimile or other electronic signature, (iii)                  are aware that the other will rely on the facsimile transmitted or other electronically transmitted                  signature, and (iv) acknowledge such reliance and waives any defenses to the enforcement of this                  Amendment and the documents affecting the transaction contemplated by this Amendment based                  on the fact that a signature was sent by facsimile or electronic transmission only.                                                        [SIGNATURES ARE ON FOLLOWING PAGE]        IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Amendment as of the day and year first  above written.                                               LANDLORD:                                                    MORENO KNOX, LLC,                                         a Delaware limited liability company                                                                                  By:     SRG Moreno Knox, L.P.,                                                 a California limited partnership                                         Its:         Managing Member                                                                                          By:    Regis Contractors, Inc.,                                                        a California corporation                                                 Its:         General Partner                                                                                                         By:    /s/ Peter M. Rooney__________                                                          Name:   Peter M. Rooney____________                                                        Title:  Vice President______________                                                                          TENANT:                                                    DECKERS OUTDOOR CORPORATION,                                         a Delaware corporation                                                                                  By:    /s/ Thomas A. George____________                                         Name: Thomas A. George_______________                                        Title:  Chief Financial Officer___________                                                              1141792.14/OC    298582-00001/6-5-17/bhn/jdc                    -9-morenovallyesecondamendm

              SECOND AMENDMENT TO STANDARD INDUSTRIAL LEASE (NET)          THIS SECOND AMENDMENT TO STANDARD     INDUSTRIAL LEASE (NET) (this "Amendment"} is  made and entered into as of the 17th day of July, 2017 ("Eff~tive Date"), by and between MORENO KNOX, LLC, a  Delaware limited liability company ("Landlord"), and DECKERS OUTDOOR CORPORATION, a Delaware  corporation ("Tenant").                                        RECITALS   A.     Landlord and Tenant are parties to that certain Standard Industrial Lease (Net) dated as of December 5, 2013         (the "Original Lease"), as amended by that certain First Amendment to Standard Industrial Lease (Net) dated as         of June 6, 2017 by and between Landlord and Tenant (the "First Amendment"). The Original Lease, as         modified by the First Amendment, may be referred to herein as the "Lease." Pursuant to the Lease, as of the         Expansion Rent Commencement Date (as defmed in the First Amendment), Landlord will lease to Tenant         space containing approximately I ,530,944 square feet (which includes the Original Premises and the         Expansion Space, as such terms are defmed in the First Amendment) (the "Premises"), which will consist of the         entire building located at 17791 Perris Boulevard, Moreno Valley, CA 92551 (the "Building"), which Building         is part of the project consisting of approximately 71.29 acres commonly known as Vantage Pointe Logistics         Center (the "Project").   B.     Landlord is engaged in discussions to sell the Project, including the Premises (the "Potential Sale"). The         closing date of the Potential Sale shall be referred to herein as the "Potential Closing Date".   C.     The parties hereto desire to amend the Lease, all on the following terms and conditions set forth in this         Amendment.          NOW, THEREFORE,  in consideration of the mutual covenants and agreements herein contained and other  good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant  agree as follows:   I.     Construction/Property Management After the Potential Closing Date. Notwithstanding anything to the         contrary contained in the Lease, if the Potential Closing Date occurs before the Delivery Date (as defined in the         First Amendment), then commencing on the Potential Closing Date and continuing until the Delivery Date,         Landlord shall retain SRG Development, L.P., a Delaware limited partnership ("Development Manager"), as         the development manager for the construction of Landlord's Work (as defined in the First Amendment) and any         other work required to be completed by Landlord in connection with the Expansion Space as set forth in the         First Amendment, pursuant to a separate agreement between Landlord and Development Manager. Further,         notwithstanding anything to the contrary contained in the Lease, if the Potential Closing Date occurs before the         Delivery Date (as defined in the First Amendment), then commencing on the Potential Closing Date and         continuing until the Delivery Date, Landlord shall retain Sares Regis Management Company, L.P., a Delaware         limited partnership ("Property Manager"), as the property manager for the Building, pursuant to a separate         agreement between Landlord and Property Manager.   II.    Converted Amount. Pursuant to Section IV of the First Amendment, Tenant hereby elects to convert all of         the Abated Amount to a cash payment (such amount being the "Converted Amount"). The Converted Amount         is hereby agreed by Landlord and Tenant to be equal to a cash payment of Four Million Three Hundred         Twenty-Two Thousand One Hundred Twenty-Six and 04/100 Dollars ($4,322, 126.04). Provided Tenant is not         in default under the Lease, as amended hereby, beyond any applicable notice and cure period as of the         applicable payment date, then Landlord shall pay to Tenant, within thirty (30) days after the Effective Date of         this Amendment, the Converted Amount as set forth above. Upon such payment by Landlord to Tenant,         Tenant shall no longer be entitled to any Abated Amount pursuant to Paragraph IV of the First Amendment and         such Paragraph shall be deemed deleted in its entirety and of no further force or effect, and Tenant shall         thereafter be responsible to pay the applicable monthly Basic Rent and NNN Charges as they become due and         payable under the Lease, as amended hereby.     II 52618.04/0C  298582·0000117·17·17/bhn/Jdc             · I-  4425562v3/ 100550.0 I 22  

 

 HI.   Prooosition 13 Protection.          A.    As ofthe Effective Date of this Amendment, Landlord and Tenant agree that Tenant shall continue to               have "Proposition 13 Protection" for the entire Premises, as applicable, through and including               November 30,2022, pursuant to Paragraph ll(c) of the Original Lease, as amended by Section VII of               the First Amendment; provided, however, that Paragraph ll(c)(iii) of the Original Lease is hereby               deemed deleted in its entirety and is of no further force or effect.          B.    The payment of Tax Expenses for the Expansion Space shall commence on the Expansion Rent               Commencement Date as set forth in the First Amendment, prorated for any partial months as set forth               in the Lease.          C.    For purposes of calculating the Tax Increase resulting from the Potential Sale following the close of               escrow of the Potential Sale, if applicable, notwithstanding anything to the contrary in               Paragraph ll(c)(i) of the Original Lease, landlord and Tenant acknowledge and agree that: (i) the               Tax Expenses for the Original Premises for the 2017 - 2018 tax year (exclusive of any special               assessments and fixed charges) shall be deemed to be Six Hundred Twenty-Five Thousand Eight               Hundred Eleven and 64/100 Dollars ($625,81 1.64); and (ii)the Tax Expenses for the Expansion               Space for the 2018 - 20 19 tax year (exclusive of any special assessments and fixed charges) shall be               deemed to be Five Hundred Ninety-One Thousand Seven Hundred Sixty-Five and 80/100 Dollars               ($591,765.80).          D.    Landlord and Tenant further acknowledge and agree that the amounts for the Tax Expenses listed in               Paragraph III.C above are reasonable estimates of the actual Tax Expenses for the respective portions               of the Premises and the applicable periods listed in Paragraph III.C above, for the purpose of               calculating the Tax Increase that will result from a Reassessment occurring after the close of escrow               of the Potential Sale. For clarity, Landlord and Tenant hereby acknowledge and agree that (i) the               following amounts of Tax Expenses (exclusive qfany special assessments and fixed charges) are to be               paid by Tenant in the event the Potential Sale closes escrow, and that, (ii) except as to any special               assessments and fixed charges, Tenant shall have no obligation to pay in excess of the aggregate total               of the amounts listed below for the Original Premises and the Expansion Space combined for each               such period, regardless of whether the amounts billed by the County are combined in one tax bill or               are billed separately for any separate tax parcels on which the Premises is located:                                        Tax Expenses for         Tax Expenses for                Period               the Original Premises*    the Expansion Space*                                         (annually)                (annually)        July I, 2017 to June 30,2018     $625,81 1.64               N/Au        July I, 2018 to June 30,2019     $638,327.87              $591,765.80        July 1, 20 19 to June 30, 2020   $651,094.43              $603,601.12        July I, 2020 to June 30, 2021    $664 116.32              $615,673.14        July I, 2021 to June 30, 2022    $677,398.65              $627986.60      July 1, 2022 to November 30, 2022 $287,894.42***           $266,894.31 ***      December 1, 2022 to June 30, 2023 Amount billed by County*** Amount billed by County* ••        July I, 2023 to June 30, 2024 Amount billed by County Amount billed by County        July 1, 2024 to June 30,2025 Amount billed by County  Amount billed by Cou®'_        July I, 2025 to June 30, 2026 Amount billed by County Amount billed I?Y_ CoW!_ty        July 1, 2026 to June 30,2027 Amount billed by County  Amount billed by County        July 1, 2027 to June 30, 2028 Amount billed by County Amount billed by County          *Tax Expenses listed above are exclusive of special assessments and fixed charges billed by the County         ** Payment for Expansion Space does not commence until Expansion Rent Commencement Date         *** Annual amount of Tax Expenses prorated on a monthly basis    1152618.04/0C  298582.0000117-17-17/bhn/Jdc             -2-  4425562v3/100550.0122  

 

  IV.  Waiver of Right of First Befusa!. Notwithstanding anything contained in the Lease to the contrary, Tenant         hereby waives its Right of first Refusal (as set forth in Rider 3 of the Original Lease, as amended by Paragraph         XII of the First Amendment) with respect to the Potential Sale only. In accordance with Rider 3 ofthe  Original         Lease, in the event that the Potential Sale fails to close escrow on or before March 26,2018, Tenant's Right of         First Refusal shall be reinstated and shall remain in full force and effect pursuant to Rider 3 of the Original         Lease, as amended by Paragraph XII of the First Amendment.    V.    Miscellaneous.          A.    This Amendment sets forth the entire agreement between the parties with respect to the matters set               forth herein. Except as set forth in this Amendment, there have been no additional oral or written               representations or agreements. Tenant acknowledges that it has no tennination or cancellation               options, options to extend (except as provided in the Lease), options to expand, rights of first offer               or rights of first refusal (except as provided in the Lease as modified by this Amendment).          B.    Except as herein modified or amended, the provisions, conditions and terms of the Lease shall remain               unchanged and in full force and effect.          C.    In the case of any inconsistency between the provisions of the Lease and this Amendment, the               provisions of this Amendment shall govern and control.          D.    Submission of this Amendment by Landlord is not an offer to enter into this Amendment but rather is               a solicitation for such an offer by Tenant. Landlord shall not be bound by this Amendment until both               Tenant and Landlord have executed and Landlord has delivered the same to Tenant.          E.    The capitalized terms used in this Amendment shall have the same definitions as set forth in the Lease               to the extent that such capitalized tenns are defined therein and not redefined in this Amendment.          F.    Except for Cresa ("Tenant's Broker") and Landlord's Broker, as defined below, Tenant hereby               represents to Landlord that Tenant has dealt with no other brokers in connection with this               Amendment. Tenant agrees to indemni:l)' and hold Landlord, its trustees, members, principals,               beneficiaries, partners, officers, directors, employees, mortgagee(s) and agents, and the respective               principals and members of any such agents harmless from all claims of any brokers (except for               Tenant's Broker and Landlord's Broker) claiming to have represented Tenant in connection with this               Amendment. Except for Lee & Associates ("Landlord's Broker") and Tenant's Broker, Landlord               hereby represents to Tenant that Landlord has dealt with no other brokers in connection with this               Amendment. Landlord agrees to indemnifY and hold Tenant, its trustees, members, principals,               beneficiaries, partners, officers, directors, employees, and agents, and the respective principals and               members of any such agents harmless from all claims of any brokers (except for Tenant's Broker and               Landlord's Broker) claiming to have represented Landlord in connection with this Amendment.               Landlord agrees to pay Tenanfs Broker and Landlord's Broker pursuant to a separate agreement.          G.    This Amendment may be executed in counterparts, each of which shall be deemed an original, but all               of which, together, shall constitute one and the same Amendment.          H.    Landlord and Tenant (and their agents. brokers, vendors, consultants, etc.) agree to keep all               information with respect to the transaction contemplated herein strictly confidential between Landlord               and Tenant; provided, however, (A) Landlord shall be allowed to disclose the terms of this               Amendment to its existing and/or prospective lenders, potential buyers, partners, attorneys,               consultants, accountants, agents, employees, real estate and loan brokers and as it might be required               by law to disclose, and (B) Tenant shall be allowed to disclose the tenns of this Amendment to               Tenant's attorneys, accountants, consultants, agents and as it might be required by law or the SEC to               disclose. Landlord and Tenant further expressly agree that there shall be no press releases or other               publicity originated by the parties hereto, or any representatives thereof, concerning the subject     1152618.04/0C  298582-00001/7-17 -17/bhn/jdc            -3-  4425562v3/100550.0122  

 

               Amendment transaction, without the prior written consent of both parties, not to be unreasonably                 withheld, conditioned or delayed.          I.      Landlord and Tenant each (i) have agreed to permit the use from time to time, where appropriate, of                 facsimile or other electronic signatures in order to expedite the transaction contemplated by this                 Amendment, (ii) intend to be bound by its respective facsimile or other electronic signature, (iii) are                 aware that the other will rely on the facsimile transmitted or other electronically transmitted signature,                 and (iv) acknowledge such reliance and waives any defenses to the enforcement of this Amendment                 and the documents affecting the transaction contemplated by this Amendment based on the fact that a                 signature was sent by facsimile or electronic transmission only.          J.      Tenant acknowledges and agrees that notwithstanding anything in this Amendment to the contrary, in                 no event shall Landlord be obligated to enter into an agreement for, or effectuate, the Potential Sale,                 and Landlord shall have no liability to Tenant in the event the Potential Sale does not occur.                                 !SIGNATURES ARE ON FOLLOWING PAGEl    1152618.04/0C  298S82·00001n-t7-171bhn/jdC                   -4-  4425562v3/100550.0122  

 

       IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Amendment as of the day and year  first above written.                                           LANDLORD:                                                                              MORENO KNOX, LLC,                                       a Delaware limited liability company                                                                              By:     SRG Moreno Knox, L.P.,                                                a California limited partnership                                       Its:         Managing Member                                                                                      By:    Regis Contractors, Inc.,                                                      a California corporation                                               Its:         General Partner                                                                                                     By:     /s/ Larry Lukanish____________                                                      Name:   Larry Lukanish______________                                                      Title:  Vice President_______________                                                                                                                                                            TENANT:                                                                              DECKERS OUTDOOR CORPORATION,                                       a Delaware corporation                                                                              By:     /s/ Thomas A. George ___________                                       Name:   Thomas A. George______________                                       Title:  Chief Financial Officer___________                                                                                                                                                                      1152618.03/OC                                                                                      298582-00001/5-15-18/bhn/bjw                   -5-

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