ST JOHN KNITS INTERNATIONAL INC
LEASE AMENDMENT AND EXTENSION AGREEMENT
<DOCUMENT>
<TYPE>EX-10.26
<SEQUENCE>4
<FILENAME>0004.txt
<DESCRIPTION>LEASE AMENDMENT AND EXTENSION AGREEMENT
<TEXT>

<PAGE>

                                                                   EXHIBIT 10.26

                     LEASE AMENDMENT AND EXTENSION AGREEMENT

     This Lease Amendment and Extension Agreement ("Agreement") is entered into
by and between St. John Knits, Inc., a California corporation as Tenant and GM
Properties, a California general partnership as Landlord under that certain
Industrial Real Estate Lease dated June 1, 1986, as amended ("Lease") between
Landlord and Tenant.

                                 R E C I T A L S

A.   Landlord and Tenant previously amended the Lease on April 1, 1997 to
provide for the construction of additional facilities to be used by Tenant and
now desire to amend the Lease to reflect the total square footage of the
property subject to Lease.

B.   Landlord and Tenant have expressed a desire to extend the term of and
modify the provisions of the Lease to provide Tenant the right to occupy the
Property for an additional five (5) year term and to grant to Tenant the option
to renew such extended term for an additional five (5) year term.

C.   Landlord and Tenant desire to enter into this Lease Amendment and Extension
Agreement to set forth the terms and conditions under which Tenant shall
continue to occupy the Property.

     In consideration of the foregoing recitals and the covenants and conditions
hereinafter contained, the parties agree as follows:

1.   LEASE TERM. The term of this Agreement shall be a period of five (5) years,
     ----------
     commencing June 1, 2001 and ending May 31, 2006. Tenant shall have the
     right to extend the Term for one additional five (5) year period in
     accordance with the provisions of Section 3 below.

2.   PROPERTY. Section 1.04 of the Lease is hereby modified to reflect a total
     --------
     of 88,096 square feet of Property subject to the Lease. All rental and
     other computations under the Lease shall be based on 88,096 square feet.

3.   BASE RENT. Base Rent during the extension Term shall be $66,072.00 per
     ---------
     month for the first twelve months ($0.75 per square foot per month). Base
     Rent shall be increased annually on the 1st day of June of each year
     thereafter by an amount equal to 4% of the Base Rent due in May of each
     year.

4.   OPTION TO RENEW.
     ---------------

     2.   Landlord hereby grants to Tenant one (1) option (the "Option") to
          extend the Lease Term for an additional term of five (5) years (the
          "Extension"), on the


                                      -1-
<PAGE>

          same terms and conditions as set forth in the Lease, but at an
          increased rent as set forth below. The Option shall be exercised only
          by written notice delivered to Landlord at least one hundred eighty
          (180) days before the expiration of the Lease Term. If Tenant fails to
          deliver Landlord written notice of exercise of an Option within the
          prescribed time period, such Option shall lapse, and there shall be no
          further right to extend the Lease Term. The Option shall be
          exercisable by Tenant on the express conditions that (a) at the time
          of the exercise, and at all times prior to the commencement of such
          Extension, Tenant shall not be in default under any of the provisions
          of the Lease and (b) Tenant has not been ten (10) or more days late in
          the payment of rent more than a total of three (3) times during the
          Lease Term.

     b.   The Option is personal to the Tenant named in this Lease. If Tenant
          subleases any portion of the Property or assigns or otherwise
          transfers any interest under the Lease to any entity prior to the
          exercise of the Option (whether with or without Landlord's consent),
          such Option shall lapse. If Tenant subleases any portion of the
          Property or assigns or otherwise transfers any interest of Tenant
          under the Lease to any entity after the exercise of an Option but
          prior to the commencement of the Extension (whether with or without
          Landlord's consent), such Option shall lapse and the Lease Term shall
          expire as if such Option were not exercised. If Tenant subleases any
          portion of the Property or assigns or otherwise transfers any interest
          of Tenant under the Lease in accordance with this Lease after the
          exercise of the Option and after the commencement of the Extension
          related to such Option, then the term of the Lease shall expire upon
          the expiration of the Extension during which such sublease or transfer
          occurred.

     c.   The Base Rent during the Extension period shall be equal to the fair
          market rental of the Property during the Extension period determined
          as set forth below but in no event less than the Base Rent paid in the
          last month of the then expiring Term.

          i.   Fair Rental Value Adjustment.

               (1)  Not later than one hundred (100) days prior to the
                    commencement of the Extension term, Landlord and Tenant
                    shall meet in an effort to negotiate, in good faith, the
                    fair rental value of the Property as of the date of the
                    commencement of such Extension period. If Landlord and
                    Tenant have not agreed upon the fair rental value of the
                    Property at least ninety (90) days prior to the commencement
                    of the Extension period, the fair rental value shall be


                                      -2-
<PAGE>

                    determined by appraisal, by one or more appraisers or
                    brokers (herein called "Appraiser(s)"), as provided below.
                    If appraiser(s) are used, such appraiser(s) shall have at
                    least five (5) years' experience in the appraisal of
                    commercial/industrial real property in the area in which the
                    Property is located and shall be members of professional
                    organizations such as MAI or equivalent. If broker(s) are
                    used, such broker(s) shall have at least five (5) years'
                    experience in the sales and leasing of commercial/industrial
                    real property in the area in which the Property is located
                    and shall be members of professional organizations such as
                    the Society of Industrial and Office Realtors or equivalent.

               (2)  If Landlord and Tenant are not able to agree upon the fair
                    rental value of the property within the prescribed time
                    period, then Landlord and Tenant shall attempt to agree in
                    good faith upon a single appraiser not later than seventy-
                    five (75) days prior to the commencement of the Extension
                    period. If Landlord and Tenant are unable to agree upon a
                    single Appraiser within such time period, then Landlord and
                    Tenant shall each appoint one Appraiser not later than
                    sixty-five (65) days prior to the commencement of the
                    Extension period. Within ten (10) days thereafter, the two
                    (2) appointed Appraisers shall appoint a third (3rd)
                    Appraiser. If either Landlord or Tenant fails to appoint its
                    Appraiser within the prescribed time period, the single
                    Appraiser appointed shall determine the fair rental value of
                    the Property. If both parties fail to appoint Appraisers
                    within the prescribed time periods, then the first Appraiser
                    thereafter selected by a party shall determine the fair
                    rental value of the Property. Each party shall bear the cost
                    of its own Appraiser and the parties shall share equally the
                    cost of the single or third Appraiser, if applicable.

               (3)  For the purpose of such appraisal, the term "fair market
                    value" shall mean the price that a ready and willing tenant
                    would pay, as of the commencement of the Extension period,
                    as monthly rent to a ready and willing landlord of property
                    comparable to the Property if such property were exposed for
                    lease on the open market for a reasonable period of time and
                    taking into account all of the purposes for which such
                    property may be used. If a single Appraiser is chosen then
                    such Appraiser shall determine the fair rental value of the
                    Property. Otherwise, the

                                      -3-
<PAGE>

                    fair rental value of the Property shall be the arithmetic
                    average of the two (2) of the three (3) appraisals which are
                    closest in amount, and the third appraisal shall be
                    disregarded. In no event, however, shall the Base Rent be
                    reduced by reason of such computation. Landlord and Tenant
                    shall instruct the Appraiser(s) to complete the
                    determination of the fair rental value not later than thirty
                    (30) days prior to the commencement of the Extension period.
                    If the fair rental value is not determined prior to the
                    commencement of the Extension period, then Tenant shall
                    continue to pay to Landlord the Base Rent applicable to the
                    Property immediately prior to such Extension, until the fair
                    rental value is determined. When the fair rental value of
                    the Property is determined, Landlord shall deliver notice
                    thereof to Tenant, and Tenant shall pay to Landlord, within
                    ten (10) days after receipt of such notice, the difference
                    between the Base Rent actually paid by Tenant to Landlord
                    and the new Base Rent determined hereunder.

5.   FULL FORCE AND EFFECT. Except as modified in the manner set forth in this
     ---------------------
     Agreement, the Lease shall remain in full force and effect during the
     extension Term provided herein.

6.   FURTHER ASSURANCES. Each party agrees to perform any further acts and to
     ------------------
     execute and deliver any further documents which may be reasonably necessary
     to carry out the provisions of this Agreement.

Executed this 20 day of November, 2000 to be effective May 31, 2001.

Tenant:

St. John Knits, Inc., a California corporation

By: /s/ Dan DeMille
   -----------------------------------------


Landlord:

GM Properties, a California general partnership

By: /s/ Bob Gray
   -----------------------------------------
        Bob Gray, Managing General Partner

                                      -4-
</TEXT>
</DOCUMENT>
