Exhibit 4.1
SKECHERS U.S.A., INC.
$75,000,000
PRINCIPAL AMOUNT
4.50% CONVERTIBLE SUBORDINATED NOTES DUE 2007
PURCHASE AGREEMENT
APRIL 4, 2002
CIBC WORLD MARKETS CORP.
4.50% CONVERTIBLE SUBORDINATED NOTES DUE 2007
OF SKECHERS U.S.A., INC.
CIBC WORLD MARKETS CORP.
April 4, 2002
CIBC World Markets Corp.
000 0xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Madams:
Skechers U.S.A., Inc., a Delaware corporation (the "COMPANY"),
proposes to issue and sell to CIBC World Markets Corp. ("CIBC" or the "INITIAL
PURCHASER"), an aggregate of $75,000,000 in principal amount of its 4.50%
Convertible Subordinated Notes due April 15, 2007 (the "FIRM NOTES"), subject to
the terms and conditions set forth herein. The Company also proposes to issue
and sell to the Initial Purchaser not more than an additional $15,000,000
aggregate principal amount of its 4.50% Convertible Subordinated Notes due April
4, 2007 (the "ADDITIONAL NOTES"), if requested by the Initial Purchaser as
provided in Section 2 hereof. The Firm Notes and the Additional Notes are herein
collectively referred to as the "NOTES." The Notes are to be issued pursuant to
the provisions of an indenture (the "INDENTURE"), to be dated as of the Closing
Date (as hereinafter defined), between the Company, and Xxxxx Fargo Bank,
National Association., as trustee (the "TRUSTEE"), pursuant to which the Notes,
as provided therein, will be convertible at the option of the holders thereof
into shares of the Company's Class A common stock, $0.001 par value per share
(the "CLASS A COMMON STOCK"). The Notes and the Class A Common Stock issuable
upon conversion thereof are herein collectively referred to as the "SECURITIES."
The Securities and the Indenture are more fully described in the Offering
Circular (as hereinafter defined). Capitalized terms used but not defined herein
shall have the meanings given to such terms in the Indenture.
1. OFFERING CIRCULAR. The Notes will be offered and sold to the Initial
Purchaser pursuant to one or more exemptions from the registration requirements
under the Securities Act of 1933, as amended (the "ACT"). The Company has
prepared an offering circular, dated April 4, 2002 (the "OFFERING CIRCULAR"),
relating to the Notes. All references to this Offering Circular shall include
the information incorporated by reference therein (the "INCORPORATED DOCUMENTS")
Upon original issuance thereof, and until such time as the same is no
longer required pursuant to the Indenture, the Notes (and all securities issued
in exchange therefor, in substitution thereof or upon conversion thereof) shall
bear the following legend:
"THIS NOTE AND ANY CLASS A COMMON SHARES ISSUABLE UPON THE CONVERSION OF
THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT
THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.
THIS NOTE AND ANY CLASS A COMMON SHARES ISSUABLE UPON CONVERSION OF THIS
NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT
(A)(1) TO A PERSON THAT THE TRANSFEROR REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT ACQUIRING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (3) TO AN
INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR WITHIN THE MEANING
OF RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES
ACT THAT PRIOR TO SUCH TRANSFER PROVIDES TO THE TRUSTEE FOR THE NOTES A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING
TO THE RESTRICTIONS ON TRANSFER OF THE NOTES (THE FORM OF THE LETTER CAN
BE OBTAINED FROM THE TRUSTEE FOR THE NOTES), (4) PURSUANT TO ANOTHER
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT (IF AVAILABLE) (AND
BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO SKECHERS U.S.A., INC.) OR
(5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT, AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.
THIS NOTE, ANY CLASS A COMMON SHARES ISSUABLE UPON ITS CONVERSION AND
ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO
TIME TO MODIFY THE RESTRICTIONS ON RESALES AND OTHER TRANSFERS OF THIS
NOTE AND ANY SUCH SHARES TO REFLECT ANY CHANGE IN APPLICABLE LAW OR
REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO
THE RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER OF
THIS NOTE AND SUCH SHARES SHALL BE DEEMED BY THE ACCEPTANCE OF
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THIS NOTE AND ANY SUCH SHARES TO HAVE AGREED TO ANY SUCH AMENDMENT OR
SUPPLEMENT."
2. AGREEMENTS TO SELL AND PURCHASE.
(a) On the basis of the representations, warranties and covenants
contained in this Purchase Agreement (this "AGREEMENT"), and subject to the
terms and conditions contained herein, the Company agrees to issue and sell to
the Initial Purchaser, and the Initial Purchaser agrees to purchase from the
Company, all of the Firm Notes at a purchase price equal to 100% of the
principal amount thereof (the "PURCHASE PRICE").
(b) On the basis of the representations and warranties contained in
this Agreement, and subject to its terms and conditions, (i) the Company agrees
to issue and sell the Additional Notes and (ii) the Initial Purchaser shall have
a right, but not the obligation, to purchase the Additional Notes, from the
Company at the Purchase Price. Additional Notes may be purchased solely for the
purpose of covering over-allotments made in connection with the offering of the
Firm Notes. The Initial Purchaser may exercise its right to purchase Additional
Notes in whole or in part from time to time by giving written notice thereof to
the Company at any time within 30 days after the date of this Agreement. Such
notice shall specify the aggregate principal amount of Additional Notes to be
purchased pursuant to such exercise and the date for payment and delivery
thereof. The date specified in any such notice shall be a business day (i) no
earlier than the Closing Date, (ii) no later than ten business days after such
notice has been given and (iii) no earlier than two business days after such
notice has been given.
3. TERMS OF OFFERING. The Initial Purchaser has advised the Company that
the Initial Purchaser will make offers (the "EXEMPT RESALES") of the Notes
purchased hereunder on the terms set forth in the Offering Circular, as amended
or supplemented, solely to persons whom the Initial Purchaser reasonably
believes to be "qualified institutional buyers" as defined in Rule 144A under
the Act ("QIB'S"). The Initial Purchaser will offer the Notes to QIB's initially
at a price equal to 100% of the principal amount thereof. Such price may be
changed at any time without notice.
Holders (including subsequent transferees) of the Securities will
have the registration rights set forth in the registration rights agreement (the
"REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in substantially
the form of Exhibit A hereto, for so long as such Securities constitute
"RESTRICTED SECURITIES" (as defined in the Registration Rights Agreement).
Pursuant to the Registration Rights Agreement, the Company will agree to file
with the Securities and Exchange Commission (the "COMMISSION"), under the
circumstances set forth therein, a shelf registration statement pursuant to Rule
415 under the Act (the "REGISTRATION STATEMENT") relating to the resale by
certain holders of the Securities and to use all reasonable best efforts to
cause such Registration Statements to be declared and remain effective and
usable for the periods specified in the Registration Rights Agreement. This
Agreement, the Indenture, the Notes, and the Registration Rights Agreement are
hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTS."
4. DELIVERY AND PAYMENT.
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(a) Delivery of, and payment of the Purchase Price for, the Firm
Notes shall be made at the offices of Xxxxxx & Xxxxxxx, 000 Xxxx Xxxxx Xxxxxx,
Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, or such other location as may be
mutually acceptable. Such delivery and payment shall be made at 10:00 a.m., New
York City time, on April 9, 2002 or at such other time on the same date or such
other date as the Initial Purchaser and the Company shall agree in writing. The
time and date of such delivery and the payment for the Firm Notes are herein
called the "CLOSING DATE."
(b) Delivery of, and payment for, any Additional Notes to be
purchased by the Initial Purchaser shall be made at the offices of Xxxxxx &
Xxxxxxx, 000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000 at
10:00 a.m., New York City time, on the date specified in the exercise notice
given by CIBC pursuant to Section 2(b) or such other time on the same or such
other date as the Initial Purchaser and the Company shall agree in writing. The
time and date of delivery and payment for any Additional Notes are hereinafter
referred to as an "OPTION CLOSING DATE."
(c) One or more of the Notes in definitive global form, registered
in the name of Cede & Co., as nominee of the Depository Trust Company ("DTC"),
having an aggregate principal amount corresponding to the aggregate principal
amount of the Notes (collectively, the "GLOBAL NOTE"), shall be delivered by the
Company to the Initial Purchaser (or as the Initial Purchaser directs) in each
case with any transfer taxes thereon duly paid by the Company against payment by
the Initial Purchaser of the Purchase Price thereof by wire transfer in same day
funds to the order of the Company. The Global Note shall be made available to
the Initial Purchaser for inspection not later than 9:30 a.m., New York City
time, on the business day immediately preceding the Closing Date.
5. AGREEMENTS OF THE COMPANY. The Company hereby agrees with the Initial
Purchaser as follows:
(a) To advise the Initial Purchaser promptly and, if requested by
the Initial Purchaser, to confirm such advice in writing of (i) the issuance by
any state securities commission of any stop order suspending the qualification
or exemption from qualification of any Securities for offering or sale in any
jurisdiction designated by the Initial Purchaser pursuant to Section 5(e) below,
or the initiation of any proceeding by any state securities commission or any
other federal or state regulatory authority for such purpose and (ii) the
happening of any event during the period referred to in Section 5(c) below that
makes any statement of a material fact made in the Offering Circular untrue or
that requires any additions to or changes in the Offering Circular in order to
make the statements therein not misleading. The Company shall use its reasonable
best efforts to prevent the issuance of any stop order or order suspending the
qualification or exemption of any Securities under any state securities or Blue
Sky laws and, if at any time any state securities commission or other federal or
state regulatory authority shall issue an order suspending the qualification or
exemption of any Securities under any state securities or Blue Sky laws, the
Company shall use its best efforts to obtain the withdrawal or lifting of such
order at the earliest possible time.
(b) To furnish the Initial Purchaser and those persons identified by
the Initial Purchaser to the Company as many copies of the Offering Circular,
any documents incorporated
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by reference therein, and any amendments or supplements thereto, as the Initial
Purchaser may reasonably request for the time period specified in Section 5(c).
Subject to the Initial Purchaser's compliance with its representations and
warranties and agreements set forth in Section 7 hereof, the Company consents to
the use of the Offering Circular, any documents incorporated by reference
therein, and any amendments and supplements thereto required pursuant hereto, by
the Initial Purchaser in connection with Exempt Resales.
(c) During such period as in the reasonable opinion of counsel for
the Initial Purchaser an Offering Circular is required by law to be delivered in
connection with Exempt Resales by the Initial Purchaser, (i) not to make any
amendment or supplement to the Offering Circular of which the Initial Purchaser
shall not previously have been advised or to which the Initial Purchaser shall
reasonably object after being so advised and (ii) to prepare promptly upon the
Initial Purchaser's reasonable request any amendment or supplement to the
Offering Circular that may be necessary or advisable in connection with such
Exempt Resales.
(d) If, during the period referred to in Section 5(c) above, any
event shall occur or condition shall exist as a result of which, in the opinion
of counsel to the Initial Purchaser, it becomes necessary to amend or supplement
the Offering Circular in order to make the statements therein, in the light of
the circumstances when the Offering Circular is delivered to a QIB, not
misleading, or if, in the opinion of counsel to the Initial Purchaser, it is
necessary to amend or supplement the Offering Circular to comply with any
applicable law, forthwith to prepare an appropriate amendment or supplement to
the Offering Circular so that the statements therein, as so amended or
supplemented, will not, in the light of the circumstances when it is so
delivered, be misleading, or so that the Offering Circular will comply with
applicable law, and to furnish to the Initial Purchaser and such other persons
as the Initial Purchaser may designate such number of copies thereof as the
Initial Purchaser may reasonably request.
(e) Prior to the sale of all Notes pursuant to Exempt Resales as
contemplated hereby, to cooperate with the Initial Purchaser and counsel to the
Initial Purchaser in connection with the registration or qualification of the
Notes for offer and sale to the Initial Purchaser and pursuant to Exempt Resales
under the securities or Blue Sky laws of such jurisdictions as the Initial
Purchaser may request and to continue such registration or qualification in
effect so long as required for Exempt Resales and to file such consents to
service of process or other documents as may be necessary in order to effect
such registration or qualification; provided, however, that the Company shall
not be required in connection therewith to qualify as a foreign corporation in
any jurisdiction in which it is not now so qualified or to take any action that
would subject it to general consent to service of process or taxation, other
than as to matters and transactions relating to the Offering Circular or Exempt
Resales, in any jurisdiction in which it is not now so subject.
(f) So long as the Notes are outstanding, (i) to mail and make
generally available as soon as practicable after the end of each fiscal year to
the record holders of the Notes a financial report of the Company and its
subsidiaries on a consolidated basis (and a similar financial report of all
unconsolidated subsidiaries, if any), it being agreed that all such financial
reports will include a consolidated balance sheet, a consolidated statement of
operations, a consolidated statement of cash flows and a consolidated statement
of stockholders' equity as of the end of and for such fiscal year, together with
comparable information as of the end of and for
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the preceding year, certified by the Company's independent public accountants
and (ii) to mail and make generally available as soon as practicable after the
end of each quarterly period (except for the last quarterly period of each
fiscal year) to such holders, a consolidated balance sheet, a consolidated
statement of operations and a consolidated statement of cash flows (and similar
financial reports of all unconsolidated subsidiaries, if any) as of the end of
and for such period, and for the period from the beginning of such year to the
close of such quarterly period, together with comparable information for the
corresponding periods of the preceding year.
(g) So long as the Notes are outstanding, to furnish to the Initial
Purchaser as soon as available copies of all reports or other communications
furnished by the Company to its security holders or furnished to or filed with
the Commission or any national securities exchange on which any class of
securities of the Company is listed and such other publicly available
information concerning the Company and/or its subsidiaries as the Initial
Purchaser may reasonably request.
(h) So long as any of the Notes remain outstanding and during any
period in which the Company is not subject to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), to make
available to any holder of Securities in connection with any sale thereof and
any prospective purchaser of such Securities from such holder the information
("RULE 144A INFORMATION") required by Rule 144A(d)(4) under the Act or the
information ("RULE 144 INFORMATION") required by Rule 144(c)(2) under the Act,
as applicable.
(i) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of the obligations of the Company under
this Agreement, including: (i) the fees, disbursements and expenses of counsel
to the Company and accountants of the Company in connection with the sale and
delivery of the Notes to the Initial Purchaser and pursuant to Exempt Resales,
and all other fees and expenses in connection with the preparation, printing,
filing and distribution of the Offering Circular, any documents incorporated by
reference and all amendments and supplements to any of the foregoing (including
financial statements), including the mailing and delivering of copies thereof to
the Initial Purchaser and persons designated by it in the quantities specified
herein, (ii) all costs and expenses related to the transfer and delivery of the
Notes to the Initial Purchaser and pursuant to Exempt Resales, including any
transfer or other taxes payable thereon, (iii) all costs of printing or
producing this Agreement, the other Operative Documents and any other agreements
or documents in connection with the offering, purchase, sale or delivery of the
Securities, (iv) all expenses in connection with the registration or
qualification of the Securities for offer and sale under the securities or Blue
Sky laws of the several states and all costs of printing or producing any
preliminary and supplemental Blue Sky memoranda in connection therewith
(including the filing fees and fees and disbursements of counsel for the Initial
Purchaser in connection with such registration or qualification and memoranda
relating thereto), (v) the cost of printing certificates representing the
Securities, (vi) all expenses and listing fees in connection with the
application for quotation of the Notes in The PORTAL Market of the National
Association of Securities Dealers, Inc. ("PORTAL"), (vii) the fees and expenses
of the Trustee and the Trustee's counsel in connection with the Indenture and
the Notes, (viii) the costs and charges of any transfer agent, registrar and/or
depositary (including DTC), (ix) any fees charged by rating agencies for the
rating of the Notes, (x) all costs and
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expenses of the Registration Statement, as set forth in the Registration Rights
Agreement, (xi) all expenses and listing fees in connection with the application
for listing the Class A Common Stock issuable upon conversion of the Notes on
the New York Stock Exchange (the "NYSE") and (xii) and all other costs and
expenses incident to the performance of the obligations of the Company hereunder
for which a provision is not otherwise made in this Section.
(j) To use its best efforts to effect the inclusion of the Notes in
PORTAL and to maintain the listing of the Notes on PORTAL for so long as the
Notes are outstanding.
(k) To obtain the approval of DTC for "book-entry" transfer of the
Notes, and to comply with all of its agreements set forth in the representation
letters of the Company to DTC relating to the approval of the Notes by DTC for
"book-entry" transfer.
(l) To cause the Class A Common Stock issuable upon conversion of
the Notes to be duly included for quotation on the NYSE prior to the Closing
Date, subject to notice of official issuance. The Company will ensure that such
Class A Common Stock remain included for quotation on the NYSE or any other
national securities exchange following the Closing Date for so long as any
shares of Class A Common Stock remain registered under the Exchange Act.
(m) The Company will reserve and keep available at all times, free
of preemptive rights, the shares of Class A Common Stock for the purpose of
enabling the Company to satisfy its obligations to issue the Class A Common
Stock upon conversion of the Notes.
(n) The Company shall not offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, or otherwise transfer or
dispose of, directly or indirectly, any shares of Class A Common Stock (other
than the issuance of Class A Common Stock upon conversion of the Notes and
issuance of Class A Common Stock under the Company's equity line), the Company's
Class B common stock, $0.001 par value per share ("CLASS B COMMON STOCK" and
together with the Class A Common Stock, the "COMMON STOCK") or any securities
convertible into or exercisable or exchangeable for Class A Common Stock or
Class B Common Stock, for a period of 90 days after the date hereof without the
prior written consent of CIBC. Notwithstanding the foregoing, during such period
(i) the Company may grant securities convertible into or exercisable or
exchangeable for Class A Common Stock or Class B Common Stock pursuant to the
Company's existing stock option, stock purchase or 401(k) plans, (ii) the
Company may issue shares of Common Stock upon the conversion or exchange of a
convertible or exchangeable security outstanding on the date hereof, and (iii)
the Company may create and issue up to $35,000,000 aggregate principal amount of
further Notes as further described under the section of the Offering Circular
entitled "Description of the Notes -- Further Issuances." The Company shall,
prior to or concurrently with the execution of this Agreement, deliver an
agreement executed by each of the directors and executive officers of the
Company to the effect that such person will not, during the period commencing on
the date such person signs such agreement and ending 30 days after the date
hereof, without the prior written consent of CIBC, (i) engage in any of the
transactions described in the first sentence of this paragraph (whether such
shares or any such securities are now owned by such individual or are hereafter
acquired) or (ii) enter into any swap
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or other arrangement that transfers to another, in whole or in part, any of the
economic consequences associated with the ownership of any Common Stock (whether
any such transactions described in clause (i) or (ii) is to be settled by the
delivery of Class A Common Stock or Class B Common Stock or such other
securities, in cash or otherwise). In addition, in such agreement each of the
directors and executive officers of the Company will have agreed not to make any
demand for or exercise any registration rights for a period of 30 days after the
date hereof without the prior written consent of CIBC.
(o) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act) that
would be integrated with the sale of the Notes to the Initial Purchaser or
pursuant to Exempt Resales in a manner that would require the registration of
any such sale of the Notes under the Act.
(p) During the period of two years after the Closing Date, the
Company will not, and will not permit any of its affiliates (as defined in Rule
144 under the Securities Act) to, resell any of the Securities that have been
reacquired by any of them.
(q) In connection with the offering, until CIBC shall have notified
the Company of the completion of the resale of the Securities, neither the
Company nor any of its subsidiaries or affiliates has or will, either alone or
with one or more other persons, bid for or purchase for any account in which it
or any of its subsidiaries or affiliates has a beneficial interest any
Securities or attempt to induce any person to purchase any Securities; and
neither it nor any of its subsidiaries or affiliates will make bids or purchases
for the purpose of creating actual, or apparent, active trading in, or of
raising the price of, the Securities.
(r) Not to voluntarily claim, and to actively resist any attempts to
claim, the benefit of any usury laws against the holders of any Notes.
(s) To comply with all of its agreements set forth in the
Registration Rights Agreement.
(t) To use the net proceeds received by it from the sale of the
Securities in the manner specified in the Offering Circular under the caption
"Use of Proceeds."
(u) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by it prior to the
Closing Date and to satisfy all conditions precedent to the delivery of the
Notes.
6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. As of the
date hereof, the Company represents and warrants to, and agrees with, the
Initial Purchaser that:
(a) The Offering Circular (including the Incorporated Documents)
does not, and any supplement or amendment to it will not, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties contained in this paragraph (a) shall not apply
to statements in or omissions from the Offering Circular (or any supplement or
amendment thereto) based upon
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information relating to the Initial Purchaser furnished to the Company in
writing by the Initial Purchaser expressly for use therein. None of the
Incorporated Documents as of the time they were filed or as of the date hereof
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 not
misleading. No stop order preventing the use of the Offering Circular, or any
amendment or supplement thereto, or any order asserting that any of the
transactions contemplated by this Agreement are subject to the registration
requirements of the Act, has been issued. The Incorporated Documents, at the
time they were or hereafter are filed or last amended, as the case may be, with
the Commission, complied and will comply in all material respects with the
requirements of the Exchange Act.
(b) Each of the Company and its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has the corporate power and
authority to carry on its business as described in the Offering Circular and to
own, lease and operate its properties, and each is duly qualified and is in good
standing as a foreign corporation authorized to do business in each jurisdiction
in which the nature of its business or its ownership or leasing of property
requires such qualification, except where the failure to be so qualified would
not have a material adverse effect on the business, prospects, financial
condition or results of operations of the Company and its subsidiaries, taken as
a whole (a "MATERIAL ADVERSE EFFECT").
(c) All outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid, non-assessable and not
subject to any preemptive or similar rights, and there are no restrictions upon
the voting or transfer of the Common Stock pursuant to the Company's charter or
by-laws or other governing documents or, except as set forth herein, any
agreement or other instrument to which the Company is a party or by which it may
be bound. The Company has the authorized and outstanding capital stock as set
forth in the Offering Circular, and there have been no changes in the
outstanding capital stock of the Company since the date set forth under the
heading "Capitalization" in the Offering Circular, except to the extent that
certain outstanding options and warrants set forth in the Offering Circular may
have been exercised.
(d) The entities listed on Schedule A hereto are the only
subsidiaries, direct or indirect, of the Company. All of the outstanding shares
of capital stock of each of the Company's subsidiaries have been duly authorized
and validly issued and are fully paid and non-assessable, and are owned by the
Company, directly or indirectly through one or more subsidiaries, free and clear
of any security interest, claim, lien, encumbrance or adverse interest of any
nature (each, a "LIEN").
(e) This Agreement has been duly authorized, executed and delivered
by the Company.
(f) The Indenture has been duly authorized by the Company and, when
duly executed and delivered by the Company and duly authorized, executed and
delivered by the Trustee, will be a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
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general applicability. On the Closing Date, the Indenture will conform in all
material respects to the requirements of the Trust Indenture Act of 1939, as
amended (the "TIA" or "TRUST INDENTURE ACT"), and the rules and regulations of
the Commission applicable to an indenture which is qualified thereunder.
(g) The Notes have been duly authorized and, when duly executed,
delivered and authenticated in accordance with the provisions of the Indenture
and when delivered to and paid for by the Initial Purchaser in accordance with
the terms of this Agreement, the Notes will be entitled to the benefits of the
Indenture and will be valid and binding obligations of the Company, enforceable
in accordance with their terms except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general applicability. On the
Closing Date, the Notes will conform as to legal matters to the description
thereof contained in the Offering Circular.
(h) The Notes are convertible into Class A Common Stock in
accordance with the terms of the Indenture; the shares of Class A Common Stock
initially issuable upon conversion of the Notes have been duly authorized and
reserved for issuance upon such conversion and, when issued upon such
conversion, will be validly issued, fully paid and nonassessable, will conform
to the description thereof contained in the Offering Circular and will be duly
authorized for listing on the NYSE, subject to notice of official issuance. The
stockholders of the Company or other holders of the Company's securities have no
pre-emptive or similar rights with respect to the Notes or the Class A Common
Stock issuable upon conversion of the Notes. The certificates evidencing the
Class A Common Stock issuable upon conversion of the Notes will be in due and
proper legal form.
(i) The Registration Rights Agreement has been duly authorized by
the Company and, when duly executed and delivered by the Company, and assuming
the due execution and delivery by the Initial Purchaser, will be a valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
(ii) rights of acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability. On the Closing Date,
the Registration Rights Agreement will conform as to legal matters to the
description thereof contained in the Offering Circular.
(j) Neither the Company nor any of its subsidiaries is (i) in
violation of its respective charter or by-laws (ii) in default in the
performance of any obligation, agreement, covenant or condition contained in any
indenture, loan agreement, mortgage, lease or other agreement or instrument that
is material to the Company and its subsidiaries, taken as a whole, to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or their respective property is bound or (iii) in violation of
any franchise, license, permit, judgment, decree, order, statute, rule or
regulation where the consequences of such violation would have a Material
Adverse Effect.
(k) No statute, rule, regulation or order that has been enacted,
adopted or issued by any governmental agency, and no injunction, restraining
order or order of any nature
10
by a Federal or state court of competent jurisdiction, to which either the
Company or any of its subsidiaries is subject, that has been issued or is
pending, (i) could interfere with or adversely affect the issuance of the
Securities, or (ii) could in any manner draw into question the validity of any
of the Operative Documents.
(l) The execution, delivery and performance of this Agreement and
the other Operative Documents by the Company, compliance by the Company with all
provisions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not (i) require any consent, approval,
authorization or other order of, or qualification with, any court or
governmental body or governmental agency (except such as may be required under
the securities or Blue Sky laws of the various states), (ii) conflict with or
constitute a breach of any of the terms or provisions of, or a default under,
the charter or by-laws of the Company or any of its subsidiaries or any
indenture, loan agreement, mortgage, lease or other agreement or instrument that
is material to the Company and its subsidiaries, taken as a whole, (iii) violate
or conflict with any applicable law or any rule, regulation, judgment, order or
decree of any court or any governmental body or agency having jurisdiction over
the Company, any of its subsidiaries or their respective property, (iv) result
in the imposition or creation of (or the obligation to create or impose) a Lien
under, any agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries or
their respective property is bound, or (v) result in the termination, suspension
or revocation of any Authorization (as defined below) of the Company or any of
its subsidiaries or result in any other impairment of the rights of the holder
of any such Authorization.
(m) Except as disclosed in the Offering Circular, there are no legal
or governmental proceedings pending or, to the Company's knowledge, threatened
to which the Company or any of its subsidiaries is or could be a party or to
which any of their respective property is or could be subject that might result,
singly or in the aggregate, in a Material Adverse Effect or could materially and
adversely affect the ability of the Company to perform its obligations under any
of the Operative Documents, or which are otherwise material in the context of
the sale of the Securities.
(n) Each of the Company and its subsidiaries is in compliance in all
material respects with all rules, laws and regulations relating to the use,
treatment, storage and disposal of toxic substances and the protection of health
or the environment ("ENVIRONMENTAL LAW") which are applicable to its business;
(ii) neither the Company nor any of its subsidiaries has received any written
notice from any governmental authority or third party of an asserted claim under
Environmental Laws; (iii) each of the Company and its subsidiaries has received
all permits, licenses and other approvals required of it under applicable
Environmental Laws to conduct its business and is in compliance with all terms
and conditions of any such permit, license or approval; (iv) to the Company's
knowledge, no facts currently exist that will require the Company or its
subsidiaries to make future material capital expenditures to comply with
Environmental Laws; and (v) no property which is or has been owned, leased or
occupied by the Company or its subsidiaries has been designated as a Superfund
site pursuant to the Comprehensive Environmental Response, Compensation of
Liability Act of 1980 ("CERCLA"), as amended (42 U.S.C. Section 9601, et seq.)
or otherwise designated as a contaminated site under applicable state or local
law. Neither the Company nor any of its subsidiaries has been
11
named as a "potentially responsible party" under the CERCLA. In the ordinary
course of its business, the Company periodically reviews the effect of
Environmental Laws on the business, operations and properties of the Company and
its subsidiaries, in the course of which the Company identifies and evaluates
associated costs and liabilities (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws, or any permit, license or approval, any
related constraints on operating activities and any potential liabilities to
third parties). On the basis of such review, the Company has reasonably
concluded that such associated costs and liabilities would not, singly or in the
aggregate, have a Material Adverse Effect.
(o) The Company is not, nor will it be, as a result of or after
giving effect to the issuance of the Securities and the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated thereby, (i) insolvent, (ii) left with an unreasonably small
capital with which to engage in its existing and anticipated businesses or (iii)
incurring debts beyond its ability to pay such debts as they mature. The Company
is not issuing the Securities in anticipation of insolvency.
(p) Neither the Company nor any of its subsidiaries has violated any
provisions of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or any provisions of the Foreign Corrupt Practices Act or the rules
and regulations promulgated thereunder, except for such violations which, singly
or in the aggregate, would not have a Material Adverse Effect. None of the
Company, its subsidiaries or any director, officer or employee of the Company or
its subsidiaries has, in the course of such person's actions for, or on behalf
of, the Company or its subsidiaries, used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity or made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds; and
none of the Company, its subsidiaries, or to the Company's knowledge, any
director, officer, employee, agent or other person acting on behalf of the
Company or its subsidiaries, has, in the course of such person's actions for, or
on behalf of, the Company or its subsidiaries made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
(q) Each of the Company and its subsidiaries has such permits,
licenses, consents, exemptions, franchises, authorizations and other approvals
(each, an "AUTHORIZATION") of, and has made all filings with and given all
notices to, all governmental or regulatory authorities and self-regulatory
organizations and all courts and other tribunals, including without limitation
under any applicable Environmental Laws, as are necessary to own, lease, license
and operate its respective properties and to conduct its business, except where
the failure to have any such Authorization or to make any such filing or notice
would not, singly or in the aggregate, have a Material Adverse Effect. Each such
Authorization is valid and in full force and effect and each of the Company and
its subsidiaries is in compliance with all the terms and conditions thereof and
with the rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and no event has occurred (including without
limitation the receipt of any notice from any authority or governing body) that
allows or, after notice or lapse of time or both, would allow, revocation,
suspension or termination of any such Authorization or results or, after notice
or lapse of time or both, would result in any other impairment of the rights
12
of the holder of any such Authorization; and such Authorizations contain no
restrictions that are burdensome to the Company or any of its subsidiaries;
except where such failure to be valid and in full force and effect or to be in
compliance, the occurrence of any such event or the presence of any such
restriction would not, singly or in the aggregate, have a Material Adverse
Effect.
(r) The Company and its subsidiaries have good and marketable title
in fee simple to all real property and good and marketable title to all personal
property owned by them that is material to the business of the Company and its
subsidiaries, in each case free and clear of all Liens and defects, except such
as are described in the Offering Circular or such as do not materially affect
the value of such property and do not interfere with the use made and proposed
to be made of such property by the Company and its subsidiaries; and any real
property and buildings held under lease by the Company and its subsidiaries are
held by them under valid, subsisting and enforceable leases with such exceptions
as are not material and do not interfere with the use made and proposed to be
made of such property and buildings by the Company and its subsidiaries, in each
case except as described in the Offering Circular.
(s) The Company and its subsidiaries own or license, free and clear
of all liens or encumbrances, or can acquire or license, free and clear of all
liens and encumbrances, on reasonable terms, all patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets, designs and
other unpatented and/or unpatentable designs, technologies, inventions and
innovations and proprietary or confidential information, systems or procedures),
rights to use names and likenesses, trademarks, service marks, domain names and
trade names ("INTELLECTUAL PROPERTY") currently employed by them in connection
with the business now operated by them or currently used in any products,
advertising or other materials distributed by them, except where the failure to
own or license or otherwise to be able to acquire or license, free and clear of
all liens and encumbrances, such Intellectual Property would not, singly or in
the aggregate, have a Material Adverse Effect; and neither the Company nor any
of its subsidiaries has received any notice of infringement of or conflict with
asserted rights of others with respect to any Intellectual Property or rights of
privacy that, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a Material Adverse Effect, in each case
except as described in the Offering Circular.
(t) Each agreement described in the Offering Circular or the
Incorporated Documents is in full force and effect and is valid and enforceable
by the Company or its subsidiary, as applicable, in accordance with its terms,
assuming the due authorization, execution and delivery thereof by each of the
other parties thereto except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
(ii) to the extent that rights to indemnity or contribution thereunder may be
limited by federal and state securities laws or the public policy underlying
such laws. None of the Company, any of its subsidiaries, or to the Company's
knowledge, any other party is in default in the observance or performance of any
term or obligation to be performed by it under such agreement, and no event has
occurred that with notice or lapse of time or both would constitute such a
default, in any such case where such default or event would have Material
Adverse Effect. No default exists, and no event has occurred that with notice or
lapse of time or both would constitute a default, in the due performance and
observance of any term, covenant or condition, by the Company or any of its
subsidiaries of any other agreement or instrument to which the
13
Company or any of its subsidiaries is a party or by which any of them or their
respective properties or business may be bound or affected where such default or
event would have a Material Adverse Effect.
(u) Except as disclosed in the Offering Circular, no relationship,
direct or indirect, exists between or among the Company or any of its
subsidiaries on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company or any of its subsidiaries on the other
hand, that would be required by the Act to be described in the Offering Circular
if the Offering Circular were a prospectus included in a registration statement
on Form S-1 filed with the Commission.
(v) There is no (i) significant labor practice complaint, grievance
or arbitration proceeding pending or, to the Company's knowledge, threatened
against the Company or any of its subsidiaries before the National Labor
Relations Board or any state or local labor relations board, (ii) strike, labor
dispute, slowdown or stoppage pending or threatened against the Company or any
of its subsidiaries or (iii) union representation question existing with respect
to the employees of the Company or any of its subsidiaries, except in the case
of clauses (i), (ii) and (iii) for such actions that singly or in the aggregate,
would not have a Material Adverse Effect. To the knowledge of the Company, no
collective bargaining organizing activities are taking place with respect to the
Company or any of its subsidiaries.
(w) All material tax returns required to be filed by the Company and
each of its subsidiaries in any jurisdiction have been filed, other than those
filings being contested in good faith, and all material taxes, including
withholding taxes, penalties and interest, assessments, fees and other charges
due pursuant to such returns or pursuant to any assessment received by the
Company or any of its subsidiaries have been paid, other than those being
contested in good faith and for which adequate reserves have been provided.
(x) The accountants, KPMG LLP, that have certified the financial
statements and supporting schedules included in the Offering Circular are
independent public accountants with respect to the Company, as required by the
Act and the Exchange Act. The historical financial statements, together with
related schedules and notes, set forth in the Offering Circular comply as to
form in all material respects with the requirements applicable to registration
statements on Form S-1 under the Act.
(y) The historical financial statements, together with related
schedules and notes forming part of the Offering Circular (and any amendment or
supplement thereto), present fairly the consolidated financial position, results
of operations and changes in financial position of the Company and its
subsidiaries on the basis stated or incorporated by reference in the Offering
Circular at the respective dates or for the respective periods to which they
apply; such statements and related schedules and notes have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed therein; and the other
financial and statistical information and data set forth or incorporated by
reference in the Offering Circular (and any amendment or supplement thereto)
are, in all material respects, accurately presented and prepared on a basis
consistent with such financial statements and the books and records of the
Company.
14
(z) The Company is not and, after giving effect to the offering and
sale of the Notes and the application of the net proceeds thereof as described
in the Offering Circular, will not be, an "investment company," as such term is
defined in the Investment Company Act of 1940, as amended.
(aa) Except as disclosed in the Offering Circular or other than has
been waived, there are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the Company to
file a registration statement under the Act with respect to any securities of
the Company or to require the Company to include such securities with the Notes
registered pursuant to any registration statement.
(bb) Neither the Company nor any of its subsidiaries nor any agent
thereof acting on the behalf of any of them has taken, and none of them will
take, any action that might cause this Agreement or the issuance or sale of the
Notes to violate Section 7 of the Exchange Act, or any regulation promulgated
thereunder, including without limitation, Regulation T (12 C.F.R. Part 220),
Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the
Board of Governors of the Federal Reserve System.
(cc) No "nationally recognized statistical rating organization" as
such term is defined for the purpose of Rule 436(g)(2) under the Act (i) has
imposed (or has informed the Company that it is considering imposing) any
condition (financial or otherwise) on the Company's retaining any rating
assigned to the Company or any securities of the Company or (ii) has indicated
to the Company that it is considering (A) the downgrading, suspension, or
withdrawal of, or any review for a possible change that does not indicate the
direction of the possible change in, any rating so assigned or (B) any change in
the outlook for any rating of the Company or any securities of the Company.
(dd) Since the respective dates as of which information is given in
the Offering Circular, other than as set forth in the Offering Circular
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement), (i) there has not occurred any material adverse change in the
condition, financial or otherwise, or the earnings, business, management or
operations of the Company and its subsidiaries, taken as a whole, (ii) there has
not been any material adverse change in the capital stock or in the long-term
debt of the Company or any of its subsidiaries, (iii) neither the Company nor
any of its subsidiaries has incurred any material liability or obligation,
direct or contingent except in the ordinary course of business, (iv) neither the
Company nor any of its subsidiaries has sustained any material loss or
interference with their respective assets, businesses or properties (whether
owned or leased) from fire, explosion, earthquake, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or any court or
legislative or other governmental action, order or decree that would have a
Material Adverse Effect; and (v) since the date of the latest consolidated
balance sheet included in the Offering Circular, except as reflected therein,
neither the Company nor any of its subsidiaries has (A) issued any securities
other than the issuance of securities pursuant to the exercise of options
granted under stock option plans or agreements existing prior to the date of the
latest consolidated balance sheet included in the Offering Circular, (B) entered
into any material transaction not in the ordinary course of business or (C)
declared or paid any dividend or made any distribution on any shares of its
capital stock or redeemed, purchased or otherwise acquired or agreed to redeem,
purchase or otherwise acquire any shares of its capital stock.
15
(ee) The books, records and accounts of each of the Company and each
of its subsidiaries accurately and fairly reflect, in reasonable detail, the
transactions in, and dispositions of, the assets of, and the results of
operations of, the Company and its subsidiaries, as applicable. Each of the
Company and each of its subsidiaries maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorization, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principals and to
maintain asset accountability, (iii) access to assets is permitted only in
accordance with management's general or specific authorization and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(ff) The Offering Circular, as of its date, contains all the
information specified in, and meets the requirements of, Rule 144A(d)(4) under
the Act.
(gg) When the Notes are issued and delivered pursuant to this
Agreement, the Notes will not be of the same class (within the meaning of Rule
144A under the Act) as any security of the Company that is listed on a national
securities exchange registered under Section 6 of the Exchange Act or that is
quoted in a United States automated inter-dealer quotation system.
(hh) No form of general solicitation or general advertising (as
defined in Regulation D under the Act) was used by the Company, or any of its
representatives (other than the Initial Purchaser, as to whom the Company makes
no representation) in connection with the offer and sale of the Notes
contemplated hereby, including without limitation articles, notices or other
communications published in any newspaper, magazine, or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising. No
securities of the same class as the Notes have been issued and sold by the
Company within the six-month period immediately prior to the date hereof.
(ii) Except as permitted by the Securities Act, neither the Company
nor any of its subsidiaries has distributed and, prior to the completion of the
initial distribution of the Notes (which includes the sale by the Initial
Purchaser), neither will distribute, any offering materials in connection with
the offering and sale of the Notes other than the Offering Circular.
(jj) The Company has not taken, nor will it take, directly or
indirectly, any action designed to or that might reasonably be expected to cause
or result in, or that has constituted or that might reasonably be expect to
constitute, the stabilization or manipulation of the price of the Common Stock
or the Notes.
(kk) Prior to the effectiveness of any Registration Statement, the
Indenture is not required to be qualified under the TIA.
(ll) No registration under the Act of the Securities is required for
the sale of the Securities to the Initial Purchaser as contemplated hereby or
for the Exempt Resales
16
assuming the accuracy of the Initial Purchaser's representations and warranties
and agreements set forth in Section 7 hereof.
(mm) Each certificate signed by any officer of the Company and
delivered to the Initial Purchaser or counsel for the Initial Purchaser shall be
deemed to be a representation and warranty by the Company to the Initial
Purchaser as to the matters covered thereby.
(nn) The Company is subject to Section 13 or 15(d) the Exchange Act.
(oo) Except as disclosed in the Offering Circular, there are no
contracts, agreements or understandings between the Company and any person that
would give rise to a valid claim against the Company or any Initial Purchaser
for a brokerage commission, finder's fee or other like payment in connection
with the sale of the Securities.
The Company acknowledges that the Initial Purchaser and, for
purposes of the opinions to be delivered to the Initial Purchaser pursuant to
Section 9 hereof, counsel to the Company and counsel to the Initial Purchaser
will rely upon the accuracy and truth of the foregoing representations and
hereby consents to such reliance.
7. INITIAL PURCHASER'S REPRESENTATIONS AND WARRANTIES. The Initial
Purchaser represents and warrants to, and agrees with, the Company:
(a) The Initial Purchaser is a QIB, with such knowledge and
experience in financial and business matters as is necessary in order to
evaluate the merits and risks of an investment in the Notes.
(b) The Initial Purchaser (A) is not acquiring the Securities with a
view to any distribution thereof or with any present intention of offering or
selling any of the Securities in a transaction that would violate the Act or the
securities laws of any state of the United States or any other applicable
jurisdiction and (B) will be reoffering and reselling the Securities only to
QIB's in reliance on the exemption from the registration requirements of the Act
provided by Rule 144A.
(c) The Initial Purchaser agrees that no form of general
solicitation or general advertising (within the meaning of Regulation D under
the Act) has been or will be used by such Initial Purchaser or any of its
representatives in connection with the offer and sale of the Securities pursuant
hereto, including without limitation articles, notices or other communications
published in any newspaper, magazine or similar medium or broadcast over
television or radio, or any seminar or meeting whose attendees have been invited
by any general solicitation or general advertising.
(d) The Initial Purchaser agrees that, in connection with Exempt
Resales, such Initial Purchaser will solicit offers to buy the Securities only
from, and will offer to sell the Securities only to, QIB's. The Initial
Purchaser further agrees that it will offer to sell the Securities only to, and
will solicit offers to buy the Securities only from persons whom the Initial
Purchaser reasonably believes are QIB's and that agree that (A) the Securities
purchased by them may be offered, resold, pledged or otherwise transferred
within the time period referred to under Rule 144(k) (taking into account the
provisions of Rule 144(d) under the Act, if applicable)
17
under the Act, as in effect on the date of the transfer of such Securities, only
(1) to a person whom the seller reasonably believes is a QIB acquiring for its
own account or for the account of a QIB in a transaction meeting the
requirements of Rule 144A under the Act, (2) pursuant to an exemption from
registration under the Act provided by Rule 144 thereunder (if available), (3)
to an Institutional Accredited Investor that prior to such transfer, furnishes
the Trustee a signed letter containing certain representations and agreements
relating to the registration and transfer of such Securities and, if requested
by the Company, an opinion of counsel acceptable to the Company that such
transfer is in compliance with the Act, (4) in accordance with another exemption
from the registration requirements under the Act (and based upon an opinion of
counsel acceptable to the Company) or (5) pursuant to an effective registration
statement and, in each case, in accordance with the applicable securities laws
of the United States or other jurisdictions and (B) such QIB's will deliver to
each person to whom such Securities or an interest therein is transferred a
notice substantially to the effect of the foregoing.
(e) The Initial Purchaser acknowledges that the Company, for
purposes of the opinions to be delivered to the Initial Purchaser pursuant to
Section 9 hereof, counsel to the Company and counsel to the Initial Purchaser
will rely upon the accuracy and truth of the foregoing representations and the
Initial Purchaser hereby consents to such reliance.
8. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless the Initial
Purchaser, its directors, its officers and each person, if any, who controls the
Initial Purchaser (within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act), from and against any and all losses, claims, damages,
liabilities and judgments (including without limitation any legal or other
expenses incurred in connection with investigating or defending any matter,
including any action that could give rise to any such losses, claims, damages,
liabilities or judgments) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Offering Circular (or any
amendment or supplement thereto) or any Rule 144 Information or Rule 144A
Information provided by the Company to any holder or prospective purchaser of
Securities pursuant to Section 5(h) 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 not misleading, except insofar as such
losses, claims, damages, liabilities or judgments are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to the Initial Purchaser furnished in writing to the
Company by the Initial Purchaser.
(b) The Initial Purchaser agrees to indemnify and hold harmless the
Company and its directors and officers and each person, if any, who controls
(within the meaning of Section 15 of the Act or Section 20 of the Exchange Act)
the Company to the same extent as the foregoing indemnity from the Company to
the Initial Purchaser but only with reference to information relating to the
Initial Purchaser furnished in writing to the Company by the Initial Purchaser
expressly for use in the Offering Circular.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"INDEMNIFIED PARTY"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing
and the indemnifying party shall assume the defense of
18
such action, including the employment of counsel reasonably satisfactory to the
indemnified party and the payment of all fees and expenses of such counsel, as
they are incurred (except that in the case of any action in respect of which
indemnity may be sought pursuant to both Sections 8(a) and 8(b), the Initial
Purchaser shall not be required to assume the defense of such action pursuant to
this Section 8(c) but may employ separate counsel and participate in the defense
thereof, but the fees and expenses of such counsel, except as provided below,
shall be at the expense of the Initial Purchaser). Any indemnified party shall
have the right to employ separate counsel in any such action and participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of the indemnified party unless (i) the employment of such counsel shall
have been specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of such action or
employ counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) include both
the indemnified party and the indemnifying party, and the indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it that are different from or additional to those
available to the indemnifying party (in which case the indemnifying party shall
not have the right to assume the defense of such action on behalf of the
indemnified party). In any such case, the indemnifying party shall not, in
connection with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for all indemnified
parties, and all such fees and expenses shall be reimbursed as they are
incurred. Such firm shall be designated in writing by CIBC, in the case of the
parties indemnified pursuant to Section 8(a), and by the Company, in the case of
parties indemnified pursuant to Section 8(b). The indemnifying party shall
indemnify and hold harmless the indemnified party from and against any and all
losses, claims, damages, liabilities and judgments by reason of any settlement
of any action (i) effected with its written consent or (ii) effected without its
written consent if the settlement is entered into more than twenty business days
after the indemnifying party shall have received a request from the indemnified
party for reimbursement for the fees and expenses of counsel (in any case where
such fees and expenses are at the expense of the indemnifying party) and, prior
to the date of such settlement, the indemnifying party shall have failed to
comply with such reimbursement request. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement or
compromise of, or consent to the entry of judgment with respect to, any pending
or threatened action in respect of which the indemnified party is or could have
been a party and indemnity or contribution may be or could have been sought
hereunder by the indemnified party, unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability on claims that are or could have been the subject matter of such
action 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 the indemnified party.
(d) To the extent the indemnification provided for in this Section 8
is unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, on the one hand, and the
19
Initial Purchaser, on the other hand, from the offering of the Securities or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company, on the one hand, and the Initial Purchaser, on the other hand, in
connection with the statements or omissions that resulted in such losses,
claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Company, on the
one hand, and the Initial Purchaser, on the other hand, shall be deemed to be in
the same proportion as the total net proceeds from the offering of the
Securities (after Initial Purchaser's discounts or commissions, but before
deducting expenses) received by the Company, and the total discounts and
commissions received by the Initial Purchaser bear to the total price to
investors of the Securities, in each case as set forth on the cover page of the
Offering Circular. The relative fault of the Company, on the one hand, and the
Initial Purchaser, on the other hand, shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company, on the one hand, or the Initial Purchaser,
on the other hand, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Initial Purchaser agree that it would not be
just and equitable if contribution pursuant to this Section 8(d) were determined
by pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such indemnified party in
connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section 8, the Initial
Purchaser shall not be required to contribute any amount in excess of the amount
by which the total discounts and commissions received by the Initial Purchaser
exceeds the amount of any damages that the Initial Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(e) The remedies provided for in this Section 8 are not exclusive
and shall not limit any rights or remedies that may otherwise be available to
any indemnified party at law or in equity.
9. CONDITIONS OF THE INITIAL PURCHASER'S OBLIGATIONS. The obligations of
the Initial Purchaser to purchase the Firm Notes under this Agreement on the
Closing Date and the Additional Notes, if any, on any Option Closing Date are
subject to the satisfaction of each of the following conditions.
(a) All the representations and warranties of the Company contained
in this Agreement shall be true and correct on the Closing Date, or on each
Option Closing Date, if any, with the same force and effect as if made on and as
of the Closing Date or on each Option Closing Date, if any.
20
(b) On or after the date hereof, (i) there shall not have occurred
any downgrading, suspension or withdrawal of, nor shall any notice have been
given of any potential or intended downgrading, suspension or withdrawal of, or
of any review (or of any potential or intended review) for a possible change
that does not indicate the direction of the possible change in, any rating of
the Company or any securities of the Company (including without limitation the
placing of any of the foregoing ratings on credit watch with negative or
developing implications or under review with an uncertain direction) by any
"nationally recognized statistical rating organization" as such term is defined
for the purpose of Rule 436(g)(2) under the Act, (ii) there shall not have
occurred any change, nor shall any notice have been given of any potential or
intended change, in the outlook for any rating of the Company or any securities
of the Company by any such rating organization and (iii) no such rating
organization shall have given notice that it has assigned (or is considering
assigning) a lower rating to the Notes than that on which the Notes were
marketed.
(c) Since the respective dates as of which information is given in
the Offering Circular, other than as set forth in the Offering Circular
(exclusive of any amendments or supplements thereto after the date of this
Agreement), (i) there shall not have occurred any change or any development
involving a prospective change in the condition, financial or otherwise, or the
earnings, business, management or operations of the Company and its
subsidiaries, taken as a whole, (ii) there shall not have been any change or any
development involving a prospective change in the capital stock or in the
long-term debt of the Company or any of its subsidiaries except in the ordinary
course of business, (iii) neither the Company nor any of its subsidiaries shall
have incurred any liability or obligation, direct or contingent except in the
ordinary course of business, and (iv) neither the Company nor any of its
subsidiaries shall have sustained any loss or interference with their respective
assets, businesses or properties (whether owned or leased) from fire, explosion,
earthquake, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or any court or legislative or other governmental action,
order or decree, the effect of which, in case of any event described in the
foregoing clause (i), (ii), (iii) or (iv), in the judgment of the Initial
Purchaser, is material and adverse and makes it impracticable to market the
Securities on the terms and in the manner contemplated in the Offering Circular.
(d) You shall have received on the Closing Date a certificate, dated
the Closing Date, and on an Option Closing Date, if any, dated such Option
Closing Date, signed by the President and the Chief Financial Officer of the
Company, confirming the matters set forth in Sections 6(dd), 9(a) and 9(b) and
stating that the Company has complied with all the agreements and satisfied all
of the conditions herein contained and required to be complied with or satisfied
on or prior to the Closing Date or Option Closing Date, as the case may be.
(e) You shall have received on the Closing Date and each Option
Closing Date, if any, an opinion (subject to customary qualifications,
limitations and exceptions and satisfactory to you and counsel for the Initial
Purchaser), dated the Closing Date or such Option Closing Date, as the case may
be, of Xxxxxxxxxxx & Xxxxxxxx LLP, counsel for the Company, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation under the laws of the State of Delaware. The Company
is duly qualified to transact
21
business and in good standing as a foreign corporation in the States of
California and New York. In rendering this opinion regarding good standing, we
have relied solely on good standing certificates of the Company as of a recent
date issued by each of the Delaware Secretary of State, California Secretary of
State and the New York Secretary of State, and in each case have made no
independent investigation or verification.
(ii) The Company has the requisite corporate power to enter
into, deliver and perform its obligations under the Purchase Agreement and to
issue and sell the Securities, other than those required under state and foreign
Blue Sky laws as to which such counsel need not render an opinion.
(iii) The Notes have been duly authorized by the Company and,
when executed and authenticated in accordance with the provisions of the
Indenture, assuming due authentication thereof by the Trustee, and delivered to
and paid for by the Initial Purchaser in accordance with the terms of the
Purchase Agreement, will be valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles,
and will be entitled to the benefits of the Indenture.
(iv) The Incorporated Documents, on the respective dates they
were filed, appeared on their face to comply in all material respects with the
requirements as to form for reports on Form 10-K and Form 8-A, as the case may
be, under the Exchange Act and the related rules and regulations in effect at
the respective dates of their filing.
(v) The Class A Common Stock to be issued upon conversion of the
Notes have been duly authorized and reserved and, when issued upon conversion of
the Notes in accordance with the terms of the Notes and the Indenture, will be
validly issued, fully paid and non-assessable, and the issuance of the Class A
Common Stock will not be subject to any preemptive rights arising by operation
of law or under the Company's Certificate of Incorporation or Bylaws or, to such
counsel's knowledge, similar rights under the documents listed in the exhibits
to the Incorporated Documents.
(vi) All necessary corporate action has been duly and validly
taken by the Company to authorize the execution, delivery and performance of the
Purchase Agreement and the issuance and sale of the Notes and, upon conversion
thereof, the Class A Common Stock. The Purchase Agreement has been duly and
validly authorized, executed and delivered by the Company and the Purchase
Agreement constitutes the legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms except as such
enforceability may be limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles.
(vii) Neither the execution and delivery by the Company of, and
the performance by the Company of its obligations under the Purchase Agreement,
the Indenture, the Registration Rights Agreement and the Securities (including,
without limitation, the issuance and sale by the Company of the Notes and, upon
conversion thereof, the Class A Common Stock)
22
will (a) give rise to a right to terminate or accelerate the due date of any
payment due under, or result in the breach of any express term or provision of,
or constitute a default (or any event which with notice or lapse of time, or
both, would constitute a default) under, or require consent or waiver under, or
result in the execution or imposition of any lien, charge, claim, security
interest or encumbrance upon any properties or assets of the Company pursuant to
the express terms of any indenture, mortgage, deed trust, note or other
agreement or instrument to which the Company is a party or by which the Company
or any of its assets or properties or businesses is bound and which is listed as
an exhibit to the Incorporated Documents, (b) to such counsel's knowledge,
violate any existing obligations of the Company under the express terms of any
judgment, decree, or order of any court or arbitrator or governmental agency or
body, which names the Company and is specifically directed to it or its
properties, (c) violate any applicable statute, rule or regulation of the
Federal laws of the United States of America and the laws of the States of
Delaware, New York and California or (d) violate any provision of the charter or
by-laws of the Company, except for such consents, waivers, approvals and
authorizations which have been obtained prior to the Closing Date.
(viii) No consent, approval, authorization, license,
registration, or qualification or order of any federal, Delaware, New York or
California court or governmental agency or regulatory body is required for the
due authorization, execution, delivery or performance by the Company of its
obligations under the Purchase Agreement, the Indenture, the Registration Rights
Agreement or the Securities except such as may be required by the securities or
Blue Sky laws of the various states in connection with the offer and sale of the
Securities (except, other than as set forth in paragraph (xv) below, we give no
opinion as to registration of the Securities under the Act and the qualification
of the Indenture under the Trust Indenture Act of 1939, as amended).
(ix) To such counsel's knowledge, without investigation except
where we have been engaged by the Company to give substantive attention to such
action, suit or proceeding, there is no litigation or governmental proceeding or
investigation, before any court or before or by any public body or board pending
or threatened in writing against, or involving the assets, properties or
businesses of, the Company which would have a Material Adverse Effect.
(x) Each of the Indenture and the Registration Rights Agreement
has been duly authorized, executed and delivered by, and is a valid and binding
agreement of, the Company, enforceable against the Company in accordance with
its terms except as such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws affecting the enforcement of creditors' rights generally and by general
equitable principles.
(xi) The Company is not an "investment company" or an entity
controlled by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
(xii) The statements in the Offering Circular under the caption
"Description of the Notes" insofar as such statement constitutes a summary of
documents referred to therein fairly summarize in all material respects such
documents and matters.
23
(xiii) The capital stock of the Company conforms in all material
respects to the description thereof contained in the Offering Circular under the
caption "Description of Share Capital."
(xiv) The statements in the Offering Circular under the caption
"Certain United States Federal Income Tax Consequences," insofar as such
statements constitute a summary of the United States federal tax laws referred
to therein, fairly summarize the matters referred to therein in all material
respects.
(xv) Assuming (i) each Initial Purchaser is a "qualified
institutional buyer" within the meaning of Rule 144A of the Act and (ii) the
accuracy of the representations and warranties and compliance with the
agreements of the Company in Section 6(ff) of the Purchase Agreement and of the
Initial Purchaser in Section 7 of the Purchase Agreement, it is not necessary in
connection with the offer, sale and delivery of the Securities to the Initial
Purchaser under the Purchase Agreement or in connection with the initial resale
of the Securities by the Initial Purchaser in accordance with Section 7 of the
Purchase Agreement and the Offering Circular to register the Securities under
the Act, or to qualify the Indenture under the Trust Indenture Act of 1939, as
amended, it being understood that no opinion is expressed as to any subsequent
resale of any of the Notes or the Class A Common Stock issuable upon conversion
of any of the Notes.
Such counsel is not called upon to opine as to factual matters, and
the character of determinations involved in the process is such that it is not
passing upon and does not need to assume any responsibility for the accuracy,
completeness or fairness of the information included in the Offering Circular.
Such counsel may assume the correctness and completeness of the information
included in the Offering Circular, and such counsel may make no independent
investigation or verification of that information. Such counsel can advise,
however, that in and on the basis of its review of the Offering Circular and its
participation in its preparation, nothing has come to such counsel's attention
that causes it to believe that the Offering Circular (including the Incorporated
Documents), as of its date or as of the date hereof, contained or contains an
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Such counsel is not called upon to
express an opinion with respect to, and the preceding paragraph does not
address, the financial statements and related notes and schedules, and other
financial, accounting, and statistical information, included in, incorporated by
reference in, or omitted from the Offering Circular, or any further amendment or
supplement thereto. Such counsel is also not called upon to express any opinion
with respect to any mater relating to compliance with financial covenants or
financial requirements.
(f) The Initial Purchaser shall have received on the Closing Date
and on each Option Closing Date, an opinion, dated the Closing Date, of Xxxxxx &
Xxxxxxx, counsel for the Initial Purchaser, in form and substance reasonably
satisfactory to the Initial Purchaser.
(g) The Initial Purchaser shall have received, at the time this
Agreement is executed and at the Closing Date and each Option Closing Date, if
any, letters dated the date hereof or the Closing Date or an Option Closing
Date, as the case may be, from KPMG LLP, independent public accountants, in form
and substance satisfactory to the Initial Purchaser
24
containing the information and statements of the type ordinarily included in
accountants' "comfort letters" with respect to the financial statements and
certain financial information contained in the Offering Circular.
(h) The Notes shall have been approved by the National Association
of Securities Dealers, Inc. for trading and duly listed in PORTAL.
(i) The Initial Purchaser shall have received a counterpart,
conformed as executed, of the Indenture which shall have been entered into by
the Company and the Trustee.
(j) The Company shall have executed the Registration Rights
Agreement, and the Initial Purchaser shall have received an original copy
thereof, duly executed by the Company.
(k) The Company shall not have failed at or prior to the Closing
Date or each Option Closing Date, if any, as the case may be, to perform or
comply with all of the agreements contained herein and required to be performed
or complied with by the Company at or prior to the Closing Date or Option
Closing Date, as the case may be.
10. EFFECTIVENESS OF AGREEMENT AND TERMINATION. This Agreement may be
terminated at any time on or prior to the Closing Date by the Initial Purchaser
by written notice to the Company if any of the following has occurred: (i) any
significant attack on or significant acts of terrorism involving the United
States, outbreak or escalation of hostilities excluding current hostilities in
Afghanistan, declaration by the United States of a national emergency or war or
other calamity or crisis or any change or development involving a prospective
change in United States or international, political, financial or economic
conditions which has a material adverse effect on financial markets so as to
make it, in your sole judgment, impracticable or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the Offering Circular,
(ii) the suspension or material limitation of trading in securities or other
instruments on the New York Stock Exchange, the American Stock Exchange, the
Chicago Board of Options Exchange, the Chicago Mercantile Exchange, the Chicago
Board of Trade or the Nasdaq National Market or limitation on prices for
securities or other instruments on any such exchange or the Nasdaq National
Market, (iii) the suspension of trading of any securities of the Company on any
exchange or in the over-the-counter market, (iv) the enactment, publication,
decree or other promulgation of any federal or state statute, regulation, rule
or order of any court or other governmental authority that in your judgment has
had, or will have, a Material Adverse Effect, (v) the declaration of a banking
moratorium by either federal or New York state authorities, (vi) any major
disruption of settlements of securities or (vii) the taking of any action by any
federal, state or local government or agency in respect of its monetary or
fiscal affairs that in your judgment has a material adverse effect on the
financial markets in the United States.
11. MISCELLANEOUS.
(a) Notices given pursuant to any provision of this Agreement shall
be addressed as follows: (i) if to the Company to Skechers U.S.A., Inc., 000
Xxxxxxxxx Xxxxx Xxxx., Xxxxxxxxx Xxxxx, Xxxxxxxxxx 00000, Attention Xxxxxx
Xxxxxxxx, with a copy to Xxxxxx X. Xxxxxxx, Xxxxxxxxxxx & Xxxxxxxx LLP, 00000
Xxxxx Xxxxxx Xxxx., 0xx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000 and (ii) if to the
Initial Purchaser, c/o CIBC World Markets Corp., 417 5th
25
Avenue, 2nd Floor, New York, New York 10016 Attention: __________, with a copy
to X. Xxxxx Xxxxxxxx, Xxxxxx & Xxxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx
00000, in any case to such other address as the person to be notified may have
requested in writing.
(b) The respective indemnities, contribution agreements,
representations, warranties and other statements of the Company and the Initial
Purchaser set forth in or made pursuant to this Agreement shall remain operative
and in full force and effect and will survive delivery of and payment for the
Securities regardless of (i) any investigation, or statement as to the results
thereof, made by or on behalf of the Initial Purchaser, the officers or
directors of the Initial Purchaser, any person controlling the Initial
Purchaser, the Company, the officers or directors of the Company, or any person
controlling the Company, (ii) acceptance of the Securities and payment for them
hereunder and (iii) termination of the Agreement.
(c) If for any reason the Notes are not delivered by or on behalf of
the Company as provided herein (other than as a result of any termination of
this Agreement pursuant to Section 10), the Company agrees to reimburse the
Initial Purchaser for all out-of-pocket expenses (including the fees and
disbursements of counsel) incurred by it. Notwithstanding any termination of
this Agreement, the Company shall be liable for all expenses which it has agreed
to pay pursuant to Section 5(i). The Company also agrees to reimburse the
Initial Purchaser and the officers, directors and each person, if any, who
controls the Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act for any and all fees and expenses (including
without limitation the fees and expenses of counsel) incurred by them in
connection with enforcing their rights under this Agreement (including without
limitation its rights under Section 8).
(d) Except as otherwise provided, this Agreement has been and is
made solely for the benefit of and shall be binding upon the Company, the
Initial Purchaser, the Initial Purchaser's directors and officers, any
controlling persons referred to herein, the directors of the Company and their
respective successors and assigns, all as and to the extent provided in this
Agreement, and no other person shall acquire or have any right under or by
virtue of this Agreement. The term "successors and assigns" shall not include a
purchaser of any of the Securities from the Initial Purchaser merely because of
such purchase.
(e) This Agreement shall be governed and construed in accordance
with the laws of the State of New York, including without limitation, Section
5-1401 of the New York General Obligations Law.
(f) This Agreement may be signed in various counterparts, which
together shall constitute one and the same instrument.
[Signature Page Follows]
26
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the Initial Purchaser by signing in the space provided
below.
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/ XXXXXXX X. XXXXXXXX
------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Managing Director
SCHEDULE A
SUBSIDIARIES
SKECHERS ENTITIES
I. DOMESTIC
CORPORATE ENTITY OPERATIONS EMPLOYEES
-------------------------------------------------------------------------------------------------
SKECHERS USA, INC., parent company of all other Skechers 1857
a Delaware corporation entities, both international &
000 Xxxxxxxxx Xxxxx Xxxx. domestic
Manhattan Beach, CA 90266
-------------------------------------------------------------------------------------------------
SKECHERS USA, INC., II Subsidiary that develops & maintains 88
a Delaware corporation U.S. intellectual property of Skechers;
000 Xxxxxxxxx Xxxxx Xxxx. includes design, production,
Manhattan Beach, CA 90266 advertising, marketing, display
merchandising and licensing
operations
-------------------------------------------------------------------------------------------------
SKECHERS By Mail, Inc. Subsidiary that operates xxxxxxxx.xxx none
a Delaware corporation internet store
000 Xxxxxxxxx Xxxxx Xxxx.
Manhattan Beach, CA 90266
-------------------------------------------------------------------------------------------------
Yale Investments, LLC, Single-asset real estate entity; owns none
a Delaware limited liability distribution center located at 0000 X.
xxxxxxxxxxx Xxxxxxxxx Xxx., Xxxxxxx, XX
000 Xxxxxxxxx Xxxxx Xxxx.
Manhattan Beach, CA 90266
-------------------------------------------------------------------------------------------------
Xxxxxx Investments, LLC, Real estate entity that owns property none
a California limited located at: 324, 340 & 000 Xxxxxxxxx Xxxx.,
liability company Manhattan Beach, CA
000 Xxxxxxxxx Xxxxx Xxxx.
Manhattan Beach, CA 90266
-------------------------------------------------------------------------------------------------
II. INTERNATIONAL
COUNTRY CORPORATE ADDITIONAL OPERATIONS EMPLOYEES
NAME/ADDRESS LOCATIONS
-------------------------------------------------------------------------------------------------
Switzerland SKECHERS SARL None holding company 0
00 Xxx xx xx Xxxxxxxx xxx Xxxxxxxx
0000 Xxxxxxxx Xxxxxxxxxxxxx
Xxxxxxxxxxx companies
-----------------------------------------------------------------------------------------------
CORPORATE ADDITIONAL
COUNTRY NAME/ADDRESS LOCATIONS OPERATIONS EMPLOYEES
-----------------------------------------------------------------------------------------------
England SKECHERS USA, Ltd. RETAIL: (1) wholesale and 34
Xxxxxxxxx House retail operations
9-11 Wyllyotts Place 291a-000x Xxxxxx Xx.
Xxxxxx Xxxx Xxxxxx X0 X0XX.
Potters Bar, England
Hertfordshire
United Kingdom
EN62JD
-----------------------------------------------------------------------------------------------
Germany SKECHERS USA RETAIL: (1) wholesale & retail 19
Deutschland GmbH xxxxxxxxxx
Xxxxxxxxxxx 00 XxxxxX Xxxx
00000 Xxxxxxxxxx, Xxxxx X000
Xxxxxxx Neue Mitte
Oberhausen 46047,
Germany
-----------------------------------------------------------------------------------------------
France SKECHERS USA RETAIL: (1) wholesale & retail 18
France SAS operations
00 xxx xxx Xxxxxxxxx 00-00 Xxx Xx Xxxxxx
00000 Xxxxx, Xxxxxx 00000 Xxxxx, Xxxxxx
-----------------------------------------------------------------------------------------------
EXHIBIT A
FORM OF REGISTRATION RIGHTS AGREEMENT
