EXHIBIT 10.18(A) LEASE

 

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                                                                EXHIBIT 10.18(a)

 

 

                                      LEASE

 

         THIS LEASE, dated this 14th day of APRIL, 2000 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 #7, 8, and 9, second floor,

south building 904 Manhattan Avenue, Manhattan Beach, CA__90266___.

 

ARTICLE 2. TERM OF LEASE AND DELIVERY OF PREMISES.

 

         The term of this Lease shall be for FIVE (4), THREE (3) MONTHS

commencing on the 1st day of APRIL 2000, and ending on the 30th day of June,

2004.

 

         If Landlord, for any reason whatsoever, cannot deliver possession of

the said premises to Tenant within __15__ 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.

 

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         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

 

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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.

 

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         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

 

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                  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 sha