EXHIBIT 4.5
SKECHERS U.S.A., INC.
4.50% CONVERTIBLE SUBORDINATED NOTES DUE 2007
REGISTRATION RIGHTS AGREEMENT
April 9, 2002
CIBC World Markets Corp.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Skechers U.S.A., Inc., a Delaware corporation (the "Company"), proposes
to issue and sell to the Purchaser (as defined herein) upon the terms set forth
in the Purchase Agreement (as defined herein) its 4.50% Convertible Subordinated
Notes due 2007 (the "Securities"). As an inducement to the Purchaser to enter
into the Purchase Agreement and in satisfaction of a condition to the
obligations of the Purchaser thereunder, the Company agrees with the Purchaser
for the benefit of holders (as defined herein) from time to time of the
Registrable Securities (as defined herein) as follows:
1. Definitions.
(a) Capitalized terms used herein without definition shall have the
meanings ascribed thereto in the Purchase Agreement. As used in this
Registration Rights Agreement (the "Agreement"), the following defined terms
shall have the following meanings:
"Affiliate" of any specified person means any other person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with such specified person. For purposes of this definition, control of
a person means the power, direct or indirect, to direct or cause the direction
of the management and policies of such person whether by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to close.
"Commission" means the United States Securities and Exchange Commission,
or any other federal agency at the time administering the Exchange Act or the
Securities Act, whichever is the relevant statute for the particular purpose.
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"Class A Common Stock" means the Company's Class A common stock, $0.001
par value per share.
"DTC" means The Depository Trust Company.
"Effectiveness Period" has the meaning assigned thereto in Section
2(b)(i) hereof.
"Effective Time" means the date on which the Commission declares the
Shelf Registration Statement effective or on which the Shelf Registration
Statement otherwise becomes effective.
"Electing Holder" has the meaning assigned thereto in Section 3(a)(iii)
hereof.
"Exchange Act" means the United States Securities Exchange Act of 1934,
as amended.
The term "holder" means, when used with respect to any Security, the
Holder (as defined in the Indenture) and, with respect to any Class A Common
Stock, the record holder of such Class A Common Stock.
"Indenture" means the Indenture, dated as of April 9, 2002, between the
Company and Xxxxx Fargo Bank Minnesota, N.A., as Amended and supplemented from
time to time in accordance with its terms.
"Managing Underwriters" means the investment banker or investment
bankers and manager or managers that shall administer an underwritten offering,
if any, conducted pursuant to Section 7 hereof.
"NASD Rules" means the rules of the National Association of Securities
Dealers, Inc., as amended from time to time.
"Notice and Questionnaire" means a Notice of Registration Statement and
Selling Securityholder Questionnaire, substantially in the form of Exhibit A
attached hereto, relating to the Securities.
The term "person" means an individual, partnership, corporation, trust
or unincorporated organization, or a government or agency or political
subdivision thereof.
"Prospectus" means the prospectus (including, without limitation, any
preliminary prospectus, any final prospectus and any prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Securities Act)
included in the Shelf Registration Statement, as amended or supplemented by any
prospectus supplement with respect to the terms of the offering of any portion
of the Registrable Securities covered by the Shelf Registration Statement and by
all other amendments and supplements to such prospectus, including all material
incorporated by
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reference in such prospectus and all documents filed after the date of such
prospectus by the Company under the Exchange Act and incorporated by reference
therein.
"Purchase Agreement" means the Purchase Agreement, dated as of April 4,
2002, between the Company and the Purchaser.
"Purchaser" means the CIBC World Markets Corp.
"Registrable Securities" means all or any portion of the Securities
issued from time to time under the Indenture and the shares of Class A Common
Stock issuable upon conversion of such Securities; provided, however, that a
security ceases to be a Registrable Security when it is no longer a Restricted
Security.
"Restricted Security" means any Security or share of Class A Common
Stock issuable upon conversion thereof except any such Security or share of
Class A Common Stock that (i) has been registered pursuant to an effective
registration statement under the Securities Act and sold in a manner
contemplated by the Shelf Registration Statement, (ii) has been transferred in
compliance with Rule 144 under the Securities Act (or any successor provision
thereto) or is transferable pursuant to paragraph (k) of such Rule 144 (or any
successor provision thereto) or (iii) has otherwise been transferred and a new
Security or share of Class A Common Stock not subject to transfer restrictions
under the Securities Act has been delivered by or on behalf of the Company in
accordance with Section 2.6 of the Indenture.
"Rules and Regulations" means the published rules and regulations of the
Commission promulgated under the Securities Act or the Exchange Act, as in
effect at any relevant time.
"Securities Act" means the United States Securities Act of 1933, as
amended.
"Shelf Registration" means a registration effected pursuant to Section 2
hereof.
"Shelf Registration Statement" means a "shelf" registration statement
filed under the Securities Act providing for the registration of, and the sale
on a continuous or delayed basis by the holders of, all of the Registrable
Securities pursuant to Rule 415 under the Securities Act and/or any similar rule
that may be adopted by the Commission, filed by the Company pursuant to the
provisions of Section 2 of this Agreement, including the Prospectus contained
therein, any amendments and supplements to such registration statement,
including post-effective amendments, and all exhibits and all material
incorporated by reference in such registration statement.
"Trust Indenture Act" means the Trust Indenture Act of 1939, or any
successor thereto, and the rules, regulations and forms promulgated thereunder,
as the same shall be amended from time to time.
The term "underwriter" means any underwriter of Registrable Securities
in connection with an offering thereof under a Shelf Registration Statement.
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(b) Wherever there is a reference in this Agreement to a percentage
of the "principal amount" of Registrable Securities or to a percentage of
Registrable Securities, Class A Common Stock shall be treated as representing
the principal amount of Securities which was surrendered for conversion or
exchange in order to receive such number of shares of Class A Common Stock.
2. Shelf Registration.
(a) The Company shall, on or prior to 90 calendar days after the
Closing Date (as defined in the Purchase Agreement), file with the Commission a
Shelf Registration Statement relating to the offer and sale of the Registrable
Securities and, thereafter, shall use its reasonable best efforts to cause such
Shelf Registration Statement to be declared effective under the Securities Act
on or prior to 180 calendar days after the Closing Date; provided, however, that
no holder shall be entitled to be named as a selling securityholder in the Shelf
Registration Statement or to use the Prospectus for resales of Registrable
Securities unless such holder is an Electing Holder (as defined herein).
(b) The Company shall use its reasonable best efforts:
(i) to keep the Shelf Registration Statement continuously
effective in order to permit the Prospectus to be usable by holders for
resales of Registrable Securities until the earlier of (A) the date on
which there are no outstanding Registrable Securities and (B) the
expiration of the holding period applicable to such Registrable
Securities held by persons that are not affiliates of the Company under
Rule 144(k) of the Securities Act or any successor previously subject to
specific permitted exceptions (such period being referred to herein as
the "Effectiveness Period");
(ii) after the Effective Time, promptly upon the request of any
holder of Registrable Securities that is not then an Electing Holder, to
take any action reasonably necessary to enable such holder to use the
Prospectus for resales of Registrable Securities, including without
limitation any action necessary to identify such holder as a selling
securityholder in the Shelf Registration Statement; provided, however,
that nothing in this subparagraph shall relieve such holder of the
obligation to return a completed and signed Notice and Questionnaire to
the Company in accordance with Section 3(a) (ii) hereof; and
(iii) if at any time the Securities are convertible into
securities other than Class A Common Stock pursuant to Article Ten of
the Indenture, the Company shall, or shall cause any successor under the
Indenture to, cause such securities to be included in the Shelf
Registration Statement no later than the date on which the Securities
may then be convertible into such securities.
3. Registration Procedures.
(a) In connection with the Shelf Registration Statement, the
following provisions shall apply:
(i) Not less than 30 calendar days prior to the Effective Time,
as
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determined by the Company in good faith, the Company shall mail the
Notice and Questionnaire to the holders of Registrable Securities. No
holder shall be entitled to be named as a selling securityholder in the
Shelf Registration Statement as of the Effective Time, and no holder
shall be entitled to use the Prospectus for offers of Registrable
Securities at any time unless such holder has returned a completed and
signed Notice and Questionnaire to the Company by the deadline for
response set forth therein; provided, however, holders of Registrable
Securities shall have at least 20 calendar days from the date on which
the Notice and Questionnaire is first mailed to such holders to return a
completed and signed Notice and Questionnaire to the Company.
(ii) After the Effective Time, the Company shall, upon the
request of any holder of Registrable Securities that is not then an
Electing Holder, promptly send a Notice and Questionnaire to such
holder. The Company shall not be required to take any action to name
such holder as a selling securityholder in the Shelf Registration
Statement or to enable such holder to use the Prospectus for resales of
Registrable Securities until such holder has returned a completed and
signed Notice and Questionnaire to the Company.
(iii) The term "Electing Holder" shall mean any holder of
Registrable Securities that has returned a completed and signed Notice
and Questionnaire to the Company in accordance with Section 3(a)(i) or
3(a)(ii) hereof.
(b) The Company shall furnish to each Electing Holder, counsel to
the Electing Holders, and the Managing Underwriters, if any, no fewer than five
Business Days prior to the initial filing of the Shelf Registration Statement, a
copy of such Shelf Registration Statement, and shall furnish to such holders,
counsel to such holders, and the Managing Underwriters, if any, no fewer than
two Business Days prior to the filing of any amendment or supplement to the
Prospectus, a copy of such amendment or supplement and shall use all reasonable
efforts to reflect in each such document when so filed with the Commission such
comments as such holders and their respective counsel reasonably may propose;
provided, however, that the Company shall make the final decision as to the form
and content of each such document. If any such Shelf Registration Statement
refers to any Electing Holder by name or otherwise as the holder of any
securities of the Company, then such Electing Holder shall have the right to
require (i) the insertion therein of language, in form and substance reasonably
satisfactory to such Electing Holder, to the effect that the holding by such
Electing Holder of such securities is not to be construed as a recommendation by
such Electing Holder of the investment quality of the Company's securities
covered thereby and that such holding does not imply that such Electing Holder
will assist in meeting any future financial requirements of the Company or (ii)
in the event that such reference to such Electing Holder by name or otherwise is
not required by the Securities Act or any similar Federal statute then in force,
the deletion of the reference to such Electing Holder in any amendment or
supplement to the Registration Statement filed or prepared subsequent to the
time that such reference ceases to be required.
(c) From the date hereof until the end of the Effective Period, the
Company shall (subject to paragraph (j) below) promptly take such action as may
be necessary so that (i) each of the Shelf Registration Statement and any
amendment thereto and the Prospectus and any amendment or supplement thereto
(and each report or other document incorporated by reference
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therein in each case) complies in all material respects with the Securities Act
and the Exchange Act and the respective rules and regulations thereunder, (ii)
each of the Shelf Registration Statement and any amendment thereto does not,
when it becomes effective, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading and (iii) each of the Prospectus and any amendment or
supplement to the Prospectus does not at any time during the Effectiveness
Period include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(d) The Company shall promptly advise each Electing Holder, and
shall confirm such advice in writing if so requested by any such holder (which
notice pursuant to clauses (ii) through (iv) hereof shall be accompanied by an
instruction to suspend the use of the Prospectus until the requisite changes
have been made):
(i) when the Shelf Registration Statement and any amendment
thereto has been filed with the Commission and when the Shelf
Registration Statement or any post-effective amendment thereto has
become effective;
(ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration Statement or the
initiation of any proceedings for such purpose;
(iii) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the securities
included in the Shelf Registration Statement for sale in any
jurisdiction or the initiation of any proceeding for such purpose; and
(iv) if changes in the Shelf Registration Statement or the
Prospectus are required in order that the Shelf Registration Statement
and Prospectus do not contain an untrue statement of a material fact and
do not omit to state a material fact required to be stated therein or
necessary to make the statements therein (in the case of the Prospectus,
in light of the circumstances under which they were made) not
misleading.
(e) The Company shall use all reasonable efforts to prevent the
issuance, and if issued to obtain the withdrawal, of any order suspending the
effectiveness of the Shelf Registration Statement at the earliest possible time.
(f) The Company shall furnish to each requesting Electing Holder,
without charge, at least one copy of the Shelf Registration Statement and all
post-effective amendments thereto, including financial statements and schedules,
and, if such holder so requests in writing, all reports, other documents and
exhibits that are filed with or incorporated by reference in the Shelf
Registration Statement.
(g) The Company shall, during the Effectiveness Period, deliver to
each Electing Holder, without charge, as many copies of the Prospectus
(including each preliminary Prospectus) and any amendment or supplement thereto
as such Electing Holder may reasonably request; and the Company consents (except
during the continuance of any event described in
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Section 3(d)(iv) above) to the use of the Prospectus and any amendment or
supplement thereto by each of the Electing Holders in connection with the
offering and sale of the Registrable Securities covered by the Prospectus and
any amendment or supplement thereto during the Effectiveness Period.
(h) Prior to any offering of Registrable Securities pursuant to the
Shelf Registration Statement, the Company shall (i) register or qualify or
cooperate with the Electing Holders and a single counsel for the Electing
Holders in connection with the registration or qualification of such Registrable
Securities for offer and sale under the securities or "blue sky" laws of such
jurisdictions within the United States as any Electing Holder may reasonably
request, (ii) keep such registrations or qualifications in effect and comply
with such laws so as to permit the continuance of offers and sales in such
jurisdictions for so long as may be necessary to enable any Electing Holder or
underwriter, if any, to complete its distribution of Registrable Securities
pursuant to the Shelf Registration Statement, and (iii) take any and all other
actions necessary or advisable to enable the disposition in such jurisdictions
of such Registrable Securities; provided, however, that in no event shall the
Company be obligated to (A) qualify as a foreign corporation or as a dealer in
securities in any jurisdiction where it would not otherwise be required to so
qualify but for this Section 3(h) or (B) file any general consent to service of
process in any jurisdiction where it is not as of the date hereof so subject.
(i) The Company shall cooperate with the Electing Holders to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold pursuant to the Shelf Registration Statement,
which certificates shall not bear any restrictive legends and, if so required by
any securities exchange upon which any Registrable Securities are listed, shall
be penned, lithographed or engraved, or produced by any combination of such
methods, on steel engraved borders, and which certificates shall be free of any
restrictive legends and in such permitted denominations and registered in such
names as Electing Holders may request in connection with the sale of Registrable
Securities pursuant to the Shelf Registration Statement.
(j) Upon the occurrence of any fact or event contemplated by
paragraph 3(d)(iv) above, the Company shall (subject to the next sentence)
promptly prepare a post-effective amendment or supplement to the Shelf
Registration Statement or the Prospectus, or any document incorporated therein
by reference, or file any other required document so that, as thereafter
delivered to purchasers of the Registrable Securities included therein, the
Prospectus will not include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading. If the Company
notifies the Electing Holders in accordance with clauses (ii) through (iv) of
paragraph 3(d) above to suspend the use of the Prospectus until the requisite
changes to the Prospectus have been made, then each Electing Holder shall
suspend the use of the Prospectus and keep the notification provided pursuant to
paragraph 3(d) above confidential until (i) such Electing Holder has received
copies of the supplemented or amended Prospectus contemplated by the preceding
sentence or (ii) such Electing Holder is advised in writing by the Company that
the use of the Prospectus may be resumed and has received copies of any
additional or supplemental filings that are incorporated by reference in the
Prospectus. Notwithstanding the foregoing, but subject to Section 7 hereof, the
Company shall not be required to amend or supplement the Shelf Registration
Statement, any related Prospectus or any
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document incorporated by reference for a period not to exceed 60 consecutive
days if the Company is in possession of material non-public information the
disclosure of which would have a material adverse effect on the business,
operations, prospects, condition (financial or otherwise) of the Company and its
subsidiaries, taken as a whole.
(k) Not later than the Effective Time, the Company shall provide a
CUSIP number for the Registrable Securities that are debt securities.
(l) The Company shall use all reasonable efforts to comply with all
applicable Rules and Regulations, and to make generally available to its
securityholders as soon as practicable, but in any event not later than eighteen
months after (i) the effective date (as defined in Rule 158(c) under the
Securities Act) of the Shelf Registration Statement, (ii) the effective date of
each post-effective amendment to the Shelf Registration Statement, and (iii) the
date of each filing by the Company with the Commission of an Annual Report on
Form 10-K that is incorporated by reference in the Shelf Registration Statement,
an earnings statement of the Company and its subsidiaries complying with Section
11(a) of the Securities Act and the Rules and Regulations of the Commission
thereunder (including, at the option of the Company, Rule 158).
(m) Not later than the Effective Time, the Company shall cause the
Indenture to be qualified under the Trust Indenture Act; in connection with such
qualification, the Company shall cooperate with the Trustee under the Indenture
and the Holders (as defined in the Indenture) to effect such changes to the
Indenture as may be required for such Indenture to be so qualified in accordance
with the terms of the Trust Indenture Act; and the Company shall execute, and
shall use all reasonable efforts to cause the Trustee to execute, all documents
that may be required to effect such changes and all other forms and documents
required to be filed with the Commission to enable such Indenture to be so
qualified in a timely manner. In the event that any such amendment or
modification referred to in this Section 3(m) involves the appointment of a new
trustee under the Indenture, the Company shall appoint a new trustee thereunder
pursuant to the applicable provisions of the Indenture.
(n) In the event of an underwritten offering conducted pursuant to
Section 7 hereof, the Company shall (subject to paragraph 3(j) above), if
requested, promptly include or incorporate in a Prospectus supplement or
post-effective amendment to the Shelf Registration Statement such information as
the Managing Underwriters reasonably agree should be included therein and to
which the Company does not reasonably object and shall (subject to paragraph
3(j) above) make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after it is notified of the
matters to be included or incorporated in such Prospectus supplement or
post-effective amendment.
(o) The Company shall enter into such customary agreements
(including an underwriting agreement in customary form in the event of an
underwritten offering conducted pursuant to Section 7 hereof) and take all other
appropriate action in order to expedite and facilitate the registration and
disposition of the Registrable Securities, and in connection therewith, if an
underwriting agreement is entered into, cause the same to contain
indemnification provisions and procedures substantially identical to those set
forth in Section 5 hereof with respect to all parties to be indemnified pursuant
to Section 5 hereof; provided,
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however, the Company shall not be required to facilitate an underwritten
offering pursuant to the Shelf Registration Statement by any holders unless the
offering relates to at least $15,000,000 principal amount of Securities or the
equivalent number of shares of Class A Common Stock in which such Securities are
convertible.
(p) The Company shall:
(i) (A) make reasonably available for inspection by requesting
Electing Holders, any underwriter participating in any disposition
pursuant to the Shelf Registration Statement, and any attorney selected
in accordance with Section 4(b) hereof, one accountant and any other
agent retained by such holders or any such underwriter all relevant
financial and other records, pertinent corporate documents and
properties of the Company and its subsidiaries and (B) cause the
Company's officers, directors and employees to supply all information
reasonably requested by such holders or any such underwriter, attorney,
accountant or agent in connection with the Shelf Registration Statement,
in each case, as is customary for similar due diligence examinations;
provided, however, that all records, information and documents that are
designated in writing by the Company, in good faith, as confidential
shall be kept confidential by such holders and any such underwriter,
attorney, accountant or agent, unless such disclosure is made in
connection with a court proceeding or required by law, or such records,
information or documents become available to the public generally or
through a third party without an accompanying obligation of
confidentiality; and provided further that, if the foregoing inspection
and information gathering would otherwise disrupt the Company's conduct
of its business, such inspection and information gathering shall, to the
greatest extent possible, be coordinated on behalf of the requesting
Electing Holders and the other parties entitled thereto by one counsel
designated by and on behalf of Electing Holders and other parties;
(ii) in connection with any underwritten offering conducted
pursuant to Section 7 hereof, make such representations and warranties
to the Electing Holders participating in such underwritten offering and
to the Managing Underwriters, in form, substance and scope as are
customarily made by the Company to underwriters in primary underwritten
offerings of equity and convertible debt securities;
(iii) in connection with any underwritten offering conducted
pursuant to Section 7 hereof, obtain opinions of counsel to the Company
(which counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to the Managing Underwriters) addressed to each
requesting Electing Holder, covering such matters as are customarily
covered in opinions requested in primary underwritten offerings of
equity and convertible debt securities and such other matters as may be
reasonably requested by such Electing Holders and underwriters (it being
agreed that the matters to be covered by such opinions shall include,
without limitation, as of the date of the opinion and as of the
Effective Time or the date of the most recent post-effective amendment
thereto, as the case may be, the absence from the Shelf Registration
Statement and the Prospectus, including the documents incorporated by
reference therein, of an untrue statement of a material fact or the
omission of a material fact required to be stated therein or necessary
to make the statements therein (in the case of the Prospectus, in light
of the circumstances
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under which they were made) not misleading);
(iv) in connection with any underwritten offering conducted
pursuant to Section 7 hereof, obtain "cold comfort" letters and updates
thereof from the independent public accountants of the Company (and, if
necessary, from the independent public accountants of any subsidiary of
the Company or of any business acquired by the Company for which
financial statements and financial data are, or are required to be,
included in the Shelf Registration Statement), addressed to each
requesting Electing Holder (if such Electing Holder has provided such
letter, representations or documentation, if any, required for such cold
comfort letter to be so addressed) and the underwriters, in customary
form and covering matters of the type customarily covered in "cold
comfort" letters in connection with primary underwritten offerings;
(v) in connection with any underwritten offering conducted
pursuant to Section 7 hereof, deliver such documents and certificates as
may be reasonably requested by any Electing Holders and the Managing
Underwriters, if any, including without limitation certificates to
evidence compliance with Section 3(j) hereof and with any conditions
contained in the underwriting agreement or other agreements entered into
by the Company.
(q) The Company will use all reasonable efforts to cause the Class A
Common Stock issuable upon conversion of the Securities to be listed for
quotation on the New York Stock Exchange or other stock exchange or trading
system, if any, on which the Class A Common Stock primarily trades on or prior
to the Effective Time.
(r) The Company shall use all reasonable efforts to take all other
steps necessary to effect the registration, offering and sale of the Registrable
Securities covered by the Shelf Registration Statement contemplated hereby.
4. Registration Expenses.
(a) All fees and expenses incident to the performance of or
compliance with this Agreement by the Company shall be borne by it whether or
not any Shelf Registration Statement is filed or becomes effective and whether
or not any securities are issued or sold pursuant to any Shelf Registration
Statement. The fees and expenses referred to in the foregoing sentence shall
include, without limitation, (i) all registration and filing fees (including
without limitation fees and expenses (A) with respect to filings required to be
made with the National Association of Securities Dealers, Inc. and (B) in
compliance with securities or Blue Sky laws (including without limitation and in
addition to that provided for in (b) below, reasonable fees and disbursements of
counsel for the underwriters or counsel for the holders of Registrable
Securities in connection with Blue Sky qualifications of the Registrable
Securities )), (ii) printing expenses (including without limitation expenses of
printing certificates for Registrable Securities in a form eligible for deposit
with DTC and of printing Prospectuses if the printing of Prospectuses is
requested by the Managing Underwriters, if any), (iii) messenger, telephone and
delivery expenses, (iv) in the event of an underwritten offering of Registrable
Securities conducted pursuant to Section 7 hereof, or if in any other event the
Company requires that inspection and information gathering be coordinated by
counsel for the Electing Holders as
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provided in Section 3(p)(i) hereof, the Company shall pay the fees and
disbursements of counsel for the Company and one counsel for the holders of
Registrable Securities, in accordance with the provisions of Section 4(b)
hereof, (v) fees and disbursements of all independent certified public
accountants referred to in Section 3(p)(iv) hereof (including without limitation
the expenses of any special audit and "cold comfort" letters required by or
incident to such performance), (vi) Securities Act liability insurance, if the
Company desires such insurance, and (vii) fees and expenses of all other persons
retained by the Company. In addition, the Company shall pay its internal
expenses (including without limitation all salaries and expenses of its officers
and employees performing legal or accounting duties), the expense of any annual
audit, and the fees and expenses incurred in connection with the listing of the
securities on the New York Stock Exchange. Notwithstanding the foregoing or
anything in this Agreement to the contrary, each holder of the Registrable
Securities being registered shall pay all commissions, placement agent fees and
underwriting discounts and commissions with respect to any Registrable
Securities sold by it and the fees and disbursements of any counsel or other
advisors or experts retained by such holders (severally or jointly), other than
counsel and local counsel referred to in clause (iv) above.
(b) In connection with any registration hereunder, the Company shall
reimburse the holders of the Registrable Securities being registered in such
registration for the reasonable fees and disbursements of not more than one
counsel chosen by the holders of a majority in amount of the Registrable
Securities (determined on a fully converted basis) for whose benefit the
applicable Shelf Registration Statement is being prepared.
5. Indemnification and Contribution.
(a) Indemnification by the Company. Upon the registration of the
Registrable Securities pursuant to Section 2 hereof, the Company shall indemnify
and hold harmless each Electing Holder and each underwriter, selling agent or
other securities professional, if any, which facilitates the disposition of
Registrable Securities, and each of their respective officers and directors and
each person who controls such Electing Holder, underwriter, selling agent or
other securities professional within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act (each such person being sometimes referred
to as an "Indemnified Person") against any losses, claims, damages or
liabilities, joint or several, to which such Indemnified Person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Shelf Registration Statement or any Prospectus contained
therein or furnished by the Company to any Indemnified Person, or any amendment
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading, and the Company hereby agrees to reimburse such
Indemnified Person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Company shall not be liable
to any such Indemnified Person in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
such Shelf Registration Statement or Prospectus, or amendment or supplement
thereto, in reliance upon and in conformity with
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written information furnished to the Company by or on behalf of such Indemnified
Person expressly for use therein; provided, further, however, that the foregoing
indemnity agreement with respect to any preliminary Prospectus shall not inure
to the benefit of any Indemnified Person who failed to deliver a final
Prospectus (as then amended or supplemented, provided by the Company to the
several Indemnified Persons in the requisite quantity and on a timely basis to
permit proper delivery on or prior to the relevant transaction date) to the
person asserting any losses, claims, damages and liabilities and judgments
caused by any untrue statement or alleged untrue statement of a material fact
contained in any preliminary Prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, if such material misstatement or omission
or alleged material misstatement or omission was cured in the final Prospectus.
(b) Indemnification by the Holders and any Agents and Underwriters.
Each Electing Holder agrees, as a consequence of the inclusion of any of such
holder's Registrable Securities in any Shelf Registration Statement, and each
underwriter, selling agent or other securities professional, if any, which
facilitates the disposition of Registrable Securities shall agree, as a
consequence of facilitating such disposition of Registrable Securities,
severally and not jointly, to (i) indemnify and hold harmless the Company, its
directors and executive officers who sign such Shelf Registration Statement and
each person, if any, who controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, against any
losses, claims, damages or liabilities to which the Company or such other
persons may become subject, under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in such Shelf Registration Statement or Prospectus,
or any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of such holder, underwriter, selling agent or other securities
professional expressly for use therein and (ii) reimburse the Company and its
directors and officers who sign such Shelf Registration Statement for any legal
or other expenses reasonably incurred by the Company and such directors and
officers in connection with investigating or defending any such action or claim
as such expenses are incurred.
(c) Notices of Claims, Etc. Promptly after receipt by an indemnified
party under subsection (a) or (b) of this Section 5 of notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party under this Section 5, notify
such indemnifying party in writing of the commencement thereof; but the omission
to so notify the indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under this Section 5.
In the case that any such action is brought against any indemnified party it
shall notify the indemnifying party of the commencement thereof and such
indemnifying party shall be entitled to participate therein and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and,
12
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, such indemnifying party shall not be
liable to such indemnified party under this Section 5 for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, which consent will not be unreasonably withheld,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to, or an admission of, fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(d) Contribution. If the indemnification provided for in this
Section 5 is unavailable to or insufficient to hold harmless an indemnified
party under subsection (a) or (b) of this Section 5 in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative fault of the indemnifying party and the indemnified
party in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified party shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by such indemnifying party or by such indemnified party,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The parties hereto
agree that it would not be just and equitable if contribution pursuant to this
Section 5(d) were determined by pro rata allocation (even if the Electing
Holders or any underwriters, selling agents or other securities professionals or
all of them were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to in this Section 5(d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The obligations of the Electing
Holders and any underwriters, selling agents or other securities professionals
in this Section 5(d) to contribute shall be several in proportion to the
percentage of principal amount of Registrable Securities registered or
underwritten, as the case may be, by them and not joint.
(e) Notwithstanding any other provision of this Section 5, in no
event will any (i) Electing Holder be required to undertake liability to any
person under this Section 5 for any amounts in excess of the dollar amount of
the proceeds to be received by such holder from the sale of such holder's
Registrable Securities (after deducting any fees, discounts and commissions
13
applicable thereto) pursuant to any Shelf Registration Statement and (ii)
underwriter, selling agent or other securities professional be required to
undertake liability to any person hereunder for any amounts in excess of the
discount, commission or other compensation payable to such underwriter, selling
agent or other securities professional with respect to the Registrable
Securities underwritten by it and distributed to the public.
(f) The obligations of the Company under this Section 5 shall be in
addition to any liability that the Company may otherwise have to any Indemnified
Person and the obligations of any Indemnified Person under this Section 5 shall
be in addition to any liability that such Indemnified Person may otherwise have
to the Company. The remedies provided in this Section 5 are not exclusive and
shall not limit any rights or remedies that may otherwise be available to an
indemnified party at law or in equity.
6. Liquidated Damages. If (i) on or prior to 90 days after the Closing
Date, a Shelf Registration Statement has not been filed with the Commission,
(ii) on or prior to 180 days after the Closing Date, such Shelf Registration
Statement is not declared effective or, (iii) the Shelf Registration Statement
ceases to be effective or the Company otherwise prevents or restricts the
Electing Holders from making sales of Registrable Securities under such Shelf
Registration Statement during the Effectiveness Period for a period in excess of
60 consecutive days (each, a "Registration Default"), liquidated damages
("Liquidated Damages") will accrue on the Registrable Securities at a rate equal
to 0.5% of the principal amount of Registrable Securities per annum from and
including the day following such Registration Default to, but excluding, the day
on which such Registration Default is cured. The Company shall notify the
Trustee as promptly as possible, but in no event more than three Business Days
after each and every date on which a Registration Default occurs. Liquidated
Damages will be paid semi-annually in arrears, with the first semi-annual
payment due on the first Interest Payment Date in respect of the Registrable
Securities following the date on which such Liquidated Damages begin to accrue.
7. Underwritten Offering. Any holder of Registrable Securities who
desires to do so may sell Registrable Securities (in whole or in part) in an
underwritten offering; provided, however, the Company shall not be required to
facilitate an underwritten offering pursuant to the Shelf Registration Statement
by any holders unless the offering relates to at least $20,000,000 principal
amount of Securities or the equivalent number of shares of Class A Common Stock
in which such Securities are convertible. In any such underwritten offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by, and the underwriting arrangements
with respect thereto (including the size of the offering) will be approved by,
the holders of a majority of the Registrable Securities to be included in such
offering; provided, however, that such investment bankers and managers and
underwriting arrangements must be reasonably satisfactory to the Company. No
holder may participate in any underwritten offering contemplated hereby unless
(a) such holder agrees to sell such holder's Registrable Securities to be
included in the underwritten offering in accordance with any approved
underwriting arrangements, (b) such holder completes and executes all reasonable
questionnaires, powers of attorney, indemnities, underwriting agreements,
lock-up letters and other documents required under the terms of such approved
underwriting arrangements and (c) if such holder is not then an Electing Holder,
such holder returns a completed and signed Notice and Questionnaire to the
Company in accordance with Section 3(a)(ii) hereof within a reasonable amount of
time before such underwritten offering. The holders participating in any
underwritten
14
offering shall be responsible for any underwriting discounts and commissions and
fees and, subject to Section 4 hereof, expenses of their own counsel. The
Company shall pay all expenses customarily borne by issuers, including but not
limited to filing fees, the fees and disbursements of its counsel and
independent public accountants and any printing expenses incurred in connection
with such underwritten offering. Notwithstanding the foregoing or the provisions
of Section 3(n) hereof, upon receipt of a request from the Managing Underwriter
or a representative of holders of a majority of the Registrable Securities to be
included in an underwritten offering to prepare and file an amendment or
supplement to the Shelf Registration Statement and Prospectus in connection with
an underwritten offering, the Company may delay the filing of any such amendment
or supplement for up to 60 days if the Company is in possession of material
non-public information the disclosure of which would have a material adverse
effect on the business, operations, prospects, condition (financial or
otherwise) of the Company and its subsidiaries, taken as a whole.
8. Rules 144 and 144A.
The Company agrees, for so long as any Registrable Securities remain
outstanding and during any period in which the Company (a) is not subject to
Section 13 of 15(d) of the Exchange Act, to make available, upon request of any
holder of Registrable Securities, to such holder or beneficial owner of
Registrable Securities in connection with any sale thereof and any prospective
purchaser of such Registrable Securities designated by such holder or beneficial
owner, the information required by Rule 144A(d)(4) under the Securities Act in
order to permit resales of such Registrable Securities pursuant to Rule 144A of
the Securities Act, and (b) is subject to Section 13 of 15 (d) of the Exchange
Act, to make all filings required thereby in a timely manner in order to permit
resales of such Registrable Securities pursuant to Rule 144 of the Securities
Act.
9. Miscellaneous.
(a) Remedies. The Company acknowledges and agrees that any failure
by the Company to comply with its obligations under this Agreement may result in
material irreparable injury to the Purchaser or the holders of Registrable
Securities for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of any such failure, the Purchaser or any holder of Registrable Securities may
obtain such relief as may be required to specifically enforce the Company's
obligations hereunder. The Company further agrees to waive the defense in any
action for specific performance where a remedy at law would be adequate.
(b) Other Registration Rights. The Company will not, on or after the
date of this Agreement, enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the holders of Registrable
Securities in this Agreement or otherwise conflicts with the provisions hereof.
The Company shall not permit any securities other than the Registrable
Securities to be included in any Shelf Registration Statement. Except as set
forth in the Registration Rights Agreement, dated June 9, 1999 entered into by
and among the Company, the Xxxxxxxxx Family Trust and Xxxxxxx Xxxxxxxxx (where
such conflict has already been waived), the rights granted to the holders of
Registrable Securities hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's
15
securities under any agreement in effect on the date hereof.
(c) Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to or departures
from the provisions hereof may not be given unless (i) in the case of Section 2
hereof and this Section 9(c)(i), the Company has obtained the written consent of
holders of all outstanding Registrable Securities and (ii) in the case of all
other provisions hereof, the Company has obtained the written consent of holders
of a majority of the outstanding principal amount of Registrable Securities
(determined on a fully converted basis) (excluding Registrable Securities held
by the Company or its Affiliates). Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof that relates exclusively to the
rights of holders whose Registrable Securities are being sold pursuant to a
Shelf Registration Statement and that does not affect directly or indirectly the
rights of other holders of Registrable Securities may be given by the holders of
a majority of the outstanding principal amount of Registrable Securities
(determined on a fully converted basis) being sold by such holders pursuant to
such Shelf Registration Statement.
(d) Third Party Beneficiary. The holders of Registrable Securities
shall be third party beneficiaries to the agreements made hereunder between the
Company, on the one hand, and the Purchaser, on the other hand, and shall have
the right to enforce such agreements directly to the extent they may deem such
enforcement necessary or advisable to protect its rights or the rights of
holders of Registrable Securities hereunder.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be given as provided in the Indenture.
(f) Parties in Interest. The parties to this Agreement intend that
all holders of Registrable Securities shall be entitled to receive the benefits
of this Agreement and that any Electing Holder shall be bound by the terms and
provisions of this Agreement by reason of such election with respect to the
Registrable Securities that are included in a Shelf Registration Statement. All
the terms and provisions of this Agreement shall be binding upon, shall inure to
the benefit of and shall be enforceable by the respective successors and assigns
of the parties hereto and any holder from time to time of the Registrable
Securities to the aforesaid extent. In the event that any transferee of any
holder of Registrable Securities shall acquire Registrable Securities, in any
manner, whether by gift, bequest, purchase, operation of law or otherwise, such
transferee shall, without any further writing or action of any kind, be entitled
to receive the benefits of and, if an Electing Holder, be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions of
this Agreement to the aforesaid extent.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning, construction
or interpretation hereof.
16
(i) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, including without
limitation New York General Obligations Law Section 5-1401.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties hereto shall be enforceable to the fullest extent permitted by law.
(k) Survival. The respective indemnities, agreements,
representations, warranties and other provisions set forth in this Agreement or
made pursuant hereto shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Electing Holder, any director, officer or partner of such holder, any
agent or underwriter, any director, officer or partner of such agent or
underwriter, or any controlling person of any of the foregoing, and shall
survive the transfer and registration of the Registrable Securities of such
holder.
(l) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter hereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein, with respect to
the registration rights granted with respect to the Registrable Securities. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.
17
Please confirm by signing in the space provided below that the foregoing
correctly sets forth the agreement between the Company and you.
Very truly yours,
SKECHERS U.S.A., INC.
By: /s/ XXXXX XXXXXXXX
-----------------------------
Name: Xxxxx Xxxxxxxx
Title: Chief Financial Officer
CIBC WORLD MARKETS CORP.
By: /s/ XXXXXX X. XXXXXX
-----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Director
18
EXHIBIT A
SKECHERS U.S.A., INC.
Notice of Registration Statement
and
Selling Securityholder Questionnaire
(Date)
Reference is hereby made to the Registration Rights Agreement (the
"Registration Rights Agreement") between Skechers U.S.A., Inc. (the "Company")
and the Purchaser named therein. Pursuant to the Registration Rights Agreement,
the Company has filed with the United States Securities and Exchange Commission
(the "Commission") a registration statement on Form S-_ (the "Shelf Registration
Statement") for the registration and resale under Rule 415 of the Securities Act
of 1933, as amended (the "Securities Act"), of the Company's 4.50% Convertible
Subordinated Notes due 2007 (the "Securities") and the shares of Class A common
stock, $0.001 par value per share (the "Class A Common Stock"), issuable upon
conversion thereof. A copy of the Registration Rights Agreement is attached
hereto. All capitalized terms not otherwise defined herein shall have the
meanings ascribed thereto in the Registration Rights Agreement.
Each beneficial owner of Registrable Securities (as defined below) is
entitled to have the Registrable Securities beneficially owned by it included in
the Shelf Registration Statement. In order to have Registrable Securities
included in the Shelf Registration Statement, this Notice of Registration
Statement and Selling Securityholder Questionnaire ("Notice and Questionnaire")
must be completed, executed and delivered to the Company's counsel at the
address set forth herein for receipt ON OR BEFORE [DEADLINE FOR RESPONSE].
Beneficial owners of Registrable Securities who do not complete, execute and
return this Notice and Questionnaire by such date (i) will not be named as
selling securityholders in the Shelf Registration Statement and (ii) may not use
the Prospectus forming a part thereof for resales of Registrable Securities.
Certain legal consequences arise from being named as a selling
securityholder in the Shelf Registration Statement and related Prospectus.
Accordingly, holders and beneficial owners of Registrable Securities are advised
to consult their own securities law counsel regarding the consequences of being
named or not being named as a selling securityholder in the Shelf Registration
Statement and related Prospectus.
The term "Registrable Securities" is defined in the Registration Rights
Agreement to mean all or any portion of the Securities issued from time to time
under the Indenture and the shares of Class A Common Stock issuable upon
conversion of such Securities; provided, however, that a security ceases to be a
Registrable Security when it is no longer a Restricted Security.
The term "Restricted Security" is defined in the Registration Rights
Agreement to mean any Security or share of Class A Common Stock issuable upon
conversion thereof except any such Security or share of Class A Common Stock
that (i) has been registered pursuant to an
A-1
effective registration statement under the Securities Act and sold in a manner
contemplated by the Shelf Registration Statement, (ii) has been transferred in
compliance with Rule 144 under the Securities Act (or any successor provision
thereto) or is transferable pursuant to paragraph (k) of such Rule 144 (or any
successor provision thereto), or (iii) has otherwise been transferred and a new
Security or share of Class A Common Stock not subject to transfer restrictions
under the Securities Act has been delivered by or on behalf of the Company in
accordance with Section 2.6 of the Indenture.
ELECTION
The undersigned holder (the "Selling Securityholder") of Registrable
Securities hereby elects to include in the Shelf Registration Statement the
Registrable Securities beneficially owned by it and the Registrable Securities
listed below in Item (3). The undersigned, by signing and returning this Notice
and Questionnaire, agrees to be bound with respect to such Registrable
Securities by the terms and conditions of this Notice and Questionnaire and the
Registration Rights Agreement, including without limitation Section 5 of the
Registration Rights Agreement as if the undersigned Selling Securityholder were
an original party thereto.
The Selling Securityholder hereby provides the following information to
the Company and represents and warrants that such information is accurate and
complete:
QUESTIONNAIRE
Certain capitalized terms used in this Questionnaire are defined in
Appendix l attached hereto. Capitalized terms used in this Questionnaire but not
defined in Appendix 1 have the meanings given to them in the accompanying
letter.
(1) (a) Full legal name of Selling Securityholder:
---------------------------------------------------------------
(i) Is such Selling Securityholder a:
[ ] Corporation [ ] General Partnership
[ ] Individual [ ] Limited Partnership
[ ] Other (please specify:____________________)
(ii) In what state is such Selling Securityholder organized or
domiciled?
-----------------------------
(b) Full legal name of Registered Holder (if not the same as in (a)
above) of Registrable Securities listed in Item (4) below:
---------------------------------------------------------------
A-2
(c) Full legal name of DTC participant (if applicable and if not the
same as (b) above) through which Registrable Securities listed in
Item (4) below are held:
----------------------------------------------------------------
(2) Address for Notices to Selling Securityholder:
____________________________
____________________________
Telephone: ____________________________
Fax: ____________________________
Contact Person: ____________________________
(3) Beneficial Ownership of Securities by Another Entity or Individual:
(a) Is another entity or individual the Beneficial Owner of any
Securities or shares of Class A Common Stock issued upon
conversion of any Securities?
[ ] No (skip questions (b)-(e) below)
[ ] Yes (answer questions (b)-(e) below)
(b) What is the full legal name of such Beneficial Owner?
-----------------------------------------------------
(c) Is such Beneficial Owner a:
[ ] Corporation [ ] General Partnership
[ ] Individual [ ] Limited Partnership
[ ] Other (please specify:____________________)
(d) In what state is such Beneficial Owner organized or domiciled?
---------------------------------------------------
(e) Please provide the name, address and telephone number of a
contact person for such Beneficial Owner.
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
A-3
------------------------------------------------------------------------
(4) Beneficial Ownership of Securities:
Except as set forth below in this Item (4), the undersigned is not a
Beneficial Owner of any Securities or shares of Class A Common Stock
issued upon conversion of any Securities.
(a) Principal amount of Registrable Securities (as defined in the
Registration
Rights Agreement) Beneficially Owned: ___________________________
CUSIP No(s). of such Registrable Securities: ____________________
Number of shares of Class A Common Stock (if any) issued upon
conversion of such Registrable Securities:
_______________________________________
(b) Principal amount of Securities other than Registrable Securities
Beneficially Owned:
-----------------------------------------------------------------
CUSIP No(s). of such other Securities:
____________________________________ Number of shares of Class A
Common Stock (if any) issued upon conversion of such other
Securities:
-----------------------------------------------------------
(c) Principal amount of Registrable Securities that the undersigned
wishes to be included in the Shelf Registration Statement:
________________________________
CUSIP No(s). of such Registrable Securities to be included in the
Shelf Registration Statement:
-----------------------------------------------------------
Number of shares of Class A Common Stock (if any) issued upon
conversion of Registrable Securities that are to be included in
the Shelf Registration Statement:__________
(5) Beneficial Ownership of Other Securities of the Company:
Except as set forth below in this Item (5), the undersigned Selling
Securityholder is not a Beneficial Owner of any shares of Class A Common
Stock or any other securities of the Company, other than the Securities
and shares of Class A Common Stock listed above in Item (4).
State any exceptions here:
A-4
(6) Relationships with the Company:
Except as set forth below, neither the Selling Securityholder nor any of
its Affiliates, officers, directors or principal equity holders (5% or
more) has held any position or office or has had any other Material
Relationship with the Company (or its predecessors or Affiliates) during
the past three years.
State any exceptions here:
(7) Plan of Distribution:
Except as set forth below, the undersigned Selling Securityholder
intends to distribute the Registrable Securities listed above in Item
(4) only as follows (if at all): Such Registrable Securities may be sold
from time to time directly by the undersigned Selling Securityholder or,
alternatively, through underwriters, broker-dealers or agents who may
receive discounts, concessions or commissions from the Selling
Stockholder or the purchaser. Such Registrable Securities may be sold in
one or more transactions at fixed prices, at prevailing market prices at
the time of sale, at prices relating to the prevailing market prices at
the time of sale, at varying prices determined at the time of sale, or
at negotiated prices. Such sales may be effected in transactions (which
may involve crosses or block transactions) (i) on any national
securities exchange or quotation service on which the Registered
Securities may be listed or quoted at the time of sale, (ii) in the
over-the-counter market, (iii) in transactions otherwise than on such
exchanges or services or in the over-the-counter market, (iv) through
the writing of options, whether such options are listed on an option
exchange or otherwise, or (iv) through the settlement of short sales. In
connection with sales of the Registrable Securities or otherwise, the
Selling Securityholder may enter into hedging transactions with
broker-dealers or other financial institutions, which may in turn engage
in short sales of the Registrable Securities in the course of hedging
the positions they assume. The Selling Securityholder may also sell
Registrable Securities short and deliver Registrable Securities to close
out such short positions, or loan or pledge Registrable Securities to
broker-dealers that in turn may sell such securities.
State any exceptions here:
(8) Are you a Member, an affiliate of a Member, or a person associated with
a Member, of the National Association of Securities Dealers, Inc. (the
"NASD")?
Yes _____ No _____
A-5
If the answer to Question 8 is "yes", state (a) the name of any such
NASD Member, (b) the nature of your affiliation or association with such
NASD Member, (c) information as to such NASD Member's participation in
any capacity in the Offering or the original placement of the
Securities, (d) the number of shares of equity securities or face value
of debt securities of the Company owned by you, (e) the date such
securities were acquired and (f) the price paid for such securities.
------------------------------------------------------------------------
------------------------------------------------------------------------
--------------------------------------------.
(9) If you answered "yes" to Question 8 above, please fill out the following
table with respect to any purchases from the Company or any of its
Affiliates in a private placement within twelve months prior to the date
hereof (excluding your purchase of the Shares).
======================================================================
Amount and Name Price or Other
Date of Purchase Seller of Securities Consideration
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
======================================================================
Note: In no event may such method(s) of distribution take the form of an
underwritten offering of the Registrable Securities without the prior agreement
of the Company.
By signing below, the Selling Securityholder acknowledges that it
understands its obligation to comply, and agrees that it will comply, with the
provisions of the Exchange Act and the rules and regulations thereunder,
particularly Regulation M. The Selling Securityholder also acknowledges that it
understands that the answers to this Questionnaire are furnished for use in
connection with the Registration Statement and any amendments or supplements
thereto filed with the SEC pursuant to the Securities Act of 1933, as amended.
In the event that the Selling Securityholder transfers all or any
portion of the Registrable Securities listed in Item (3) above after the date on
which such information is provided to the Company, the Selling Securityholder
agrees to notify the transferee(s) at the time of the transfer of its rights and
obligations under this Notice and Questionnaire and the Registration Rights
Agreement.
By signing below, the Selling Securityholder consents to the disclosure
of the information contained herein in its answers to Items (1) through (9)
above and the inclusion of such information in the Shelf Registration Statement
and related Prospectus. The Selling
A-6
Securityholder understands that such information will be relied upon by the
Company in connection with the preparation of the Shelf Registration Statement
and related Prospectus.
The Selling Securityholder acknowledges that material misstatements and
omissions of material facts in the Registration Statement and any amendments or
supplement thereto may give rise to civil and criminal liabilities to the
Company and to each officer and director of the Company signing the Registration
Statement and to other persons signing such document. As a result, in accordance
with the Selling Securityholder's obligation under Section 3(a) of the
Registration Rights Agreement to provide such information as may be required by
law for inclusion in the Shelf Registration Statement, the Selling
Securityholder agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein which may occur subsequent to the
date hereof at any time while the Shelf Registration Statement remains in
effect. All notices hereunder and pursuant to the Registration Rights Agreement
shall be made in writing, by hand-delivery, first-class mail, or air courier
guaranteeing overnight delivery as follows:
(i) to the Company:
Skechers U.S.A., Inc.
000 Xxxxxxxxx Xxxxx Xxxx.
Xxxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention:_________________
(ii) with a copy to:
Xxxxxxxxxxx & Xxxxxxxx LLP
00000 Xxxxx Xxxxxx Xxxx.
0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxx Xxxxxxxx, Esq.
Once this Notice and Questionnaire is executed by the Selling
Securityholder and received by the Company's counsel, the terms of this Notice
and Questionnaire, and the representations and warranties contained herein,
shall be binding on, shall inure to the benefit of and shall be enforceable by
the respective successors, heirs, personal representatives, and assigns of the
Company and the Selling Securityholder (with respect to the Registrable
Securities Beneficially Owned by such Selling Securityholder and the Registrable
Securities listed in Item (3) above). This Agreement shall be governed in all
respects by the laws of the State of New York.
I confirm that, to the best of my knowledge and belief, the foregoing
statements (including without limitation the answers to this Questionnaire) are
correct.
IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused
this Notice and Questionnaire to be executed and delivered either in person or
by its duly authorized agent.
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Dated: __________________
------------------------------------
Selling Securityholder
(Print/type full legal name of
beneficial owner of Registrable
Securities)
By: ________________________________
Name:
Title:
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON
OR BEFORE [DEADLINE FOR RESPONSE] TO THE COMPANY'S COUNSEL AT:
Xxxxxxxxxxx & Xxxxxxxx LLP
00000 Xxxxx Xxxxxx Xxxx.
0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxx Xxxxxxxx, Esq.
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APPENDIX 1
DEFINITIONS
For the purpose of this Questionnaire, the following definitions apply:
1. Affiliate. As used in Questions 1 - 7 and Question 9, a person is an
"Affiliate" of a person if such person controls, is controlled by, or is under
common control with, another person. Please assume that an "Affiliate" of the
Company includes without limitation, any 5% stockholder of the Company
(including any person who owns, controls, or holds or holds an option to
acquire, and has the power to vote, 5% or more of the Company's outstanding
voting securities). "Control" is the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of an
entity, whether through the ownership of voting securities, by contract or
otherwise.
As used in Question 8 of this Questionnaire, an "affiliate" of an NASD
member has the following meaning:
(1) a company which controls, is controlled by or is under common
control with a member;
(2) the term affiliate is presumed to include, but is not limited to,
the following:
(a) a company will be presumed to control a member if the
company beneficially owns 10% or more of the outstanding
voting securities of a member which is a corporation, or
beneficially owns a partnership interest in 10% or more of
the distributable profits or losses of a member which is a
partnership;
(b) a member will be presumed to control a company if the
member and persons associated with the member beneficially
own (i) 10% or more of the outstanding subordinated debt
of a company, (ii) 10% or more of the outstanding voting
securities of a company which is a corporation or (iii) a
partnership interest in 10% or more of the distributable
profits or losses of a company which is a partnership;
(c) a company will be presumed to be under common control with
a member if:
(i) the same natural person or company controls both
the member and company by beneficially owning 10%
or more of the outstanding voting securities of a
member or company which is a corporation, or by
beneficially owning a partnership interest in 10%
or more of the distributable profits or losses of a
member or company which is a partnership; or
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(ii) a person having the power to direct or cause the
direction of the management or policies of the
member or the company also has the power to direct
or cause the direction of the management or
policies of the other entity in question.
2. Beneficial Owner. A "Beneficial Owner" of a security includes any person who,
directly or indirectly, through any contract, arrangement, understanding,
relationship or otherwise, has or shares voting power and/or investment power
with respect to such security. Voting power includes "the power to vote, or to
direct the voting, of such security" and investment power includes "the power to
dispose, or to direct the disposition, of such security."
A person is also a Beneficial Owner of a security if he has the right to
acquire beneficial ownership of such security, at any time within sixty days,
including but not limited to, any right to acquire through: (a) the exercise of
an option, warrant or right, (b) the conversion of a convertible security, (c)
the power to revoke a trust, discretionary account or similar arrangement, or
(d) the automatic termination of a trust, discretionary account or similar
arrangement; provided, however, that if the acquisition of an option, warrant,
right, convertible security or power described in (a), (b) or (c) is for the
purpose of maintaining or obtaining control over the issuer of the security, the
holder of the option, warrant, right, convertible security or power shall,
immediately upon such acquisition and regardless of when it is exercisable, be
deemed a beneficial owner of the underlying securities.
The possession of the legal power to vote and/or direct the disposition
of securities, absent unusual circumstances, will be sufficient to confer
beneficial ownership. Such power may be held directly, or indirectly, through
one or more controlled entities.
3. Material Relationship. The term "material relationship" has not been defined
by the Securities and Exchange Commission (the "SEC"). The SEC, however, is
likely to construe as material any relationship which tends to impact arm's
length bargaining in dealings with a company, whether arising from a close
business connection, family relationship, a relationship of control or
otherwise. For example, you should conclude that you have such a relationship
with any organization of which you own, directly or indirectly, 10% more of the
outstanding voting stock, or in which you have some other substantial interest,
and with any person or organization with whom you have, or with whom any
relative (or any other person or organization as to which you have any of the
foregoing other relationships) has, a contractual relationship.
4. Member. Rule 0120 of the NASD's Rules of Fair Practice defines the term
"member" to mean any individual, partnership, corporation or other legal entity
admitted to membership in the NASD, and Article l of the NASD's By-Laws defines
the term "person associated with a member" to mean every sole proprietor,
partner, officer, director, or branch manager of any member, or any natural
person occupying a similar status or performing similar functions, or any
natural person engaged in the investment banking or securities business who is
directly or indirectly controlling or controlled by such member (for example,
any employee), whether or not such person is registered or exempt from
registration with the NASD.
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