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EXHIBIT 10.1
7,000,000 Shares
SKECHERS U.S.A., INC.
Class A Common Stock
($0.001 Par Value)
UNDERWRITING AGREEMENT
June 9, 1999
BT Alex. Xxxxx Incorporated
Prudential Securities Incorporated
As Representatives of the Several Underwriters
c/o BT Alex. Xxxxx Incorporated
Xxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Skechers U.S.A., Inc., a Delaware corporation (the "COMPANY"), proposes
to sell to the several underwriters (the "UNDERWRITERS") named in Schedule I
hereto for whom you are acting as representatives (the "REPRESENTATIVES") an
aggregate of 7,000,000 shares (the "FIRM SHARES") of the Company's Class A
Common Stock, $0.001 par value (the "CLASS A COMMON STOCK"). The respective
amounts of the Firm Shares to be so purchased by the several Underwriters are
set forth opposite their names in Schedule I hereto. A certain selling
stockholder named in Schedule II hereto (the "SELLING STOCKHOLDER") also
proposes to sell at the Underwriters' option an aggregate of up to 1,050,000
additional shares of the Company's Class A Common Stock (the "OPTION SHARES") as
set forth below. The Company and the Selling Stockholder are sometimes referred
to herein collectively as the "SELLERS."
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As the Representatives, you have advised the Company and the Selling
Stockholder (a) that you are authorized to enter into this Agreement on behalf
of the several Underwriters, and (b) that the several Underwriters are willing,
acting severally and not jointly, to purchase the numbers of Firm Shares set
forth opposite their respective names in Schedule I, plus their pro rata portion
of the Option Shares if you elect to exercise the over-allotment option in whole
or in part for the accounts of the several Underwriters. The Firm Shares and the
Option Shares (to the extent the aforementioned option is exercised) are herein
collectively called the "SHARES." The shares of Class A Common Stock and Class B
Common Stock, $0.001 par value (the "CLASS B COMMON STOCK"), of the Company to
be outstanding after giving effect to the sales contemplated hereby are
hereinafter referred to as the "COMMON STOCK."
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
STOCKHOLDER.
(a) The Company and the Selling Stockholder, jointly and
severally, represent and warrant to each of the Underwriters as follows:
(i) A registration statement on Form S-1 (File
No. 333-60065) with respect to the Shares has been prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as amended (the
"ACT"), and the Rules and Regulations (the "RULES AND REGULATIONS") of the
Securities and Exchange Commission (the "COMMISSION") thereunder and has been
filed with the Commission. Copies of such registration statement, including any
amendments thereto, the preliminary prospectuses (meeting the requirements of
the Rules and Regulations) contained therein and the exhibits, financial
statements and schedules, as finally amended and revised, have heretofore been
delivered by the Company to you. Such registration statement, together with any
registration statement filed by the Company pursuant to Rule 462(b) of the Act
and post-effective amendments no. 1 and no. 2 filed with the Commission on June
8, 1999 and June 9, 1999 (the "POST-EFFECTIVE AMENDMENTS"), herein referred to
as the "REGISTRATION STATEMENT," which shall be deemed to include all
information omitted therefrom in reliance upon Rule 430A and contained in the
Prospectus referred to below, has become effective under the Act and, except for
the Post-Effective Amendments, no other post-effective amendment to the
Registration Statement has been filed as of the date of this Agreement.
"PROSPECTUS" means the form of prospectus first filed with the Commission
pursuant to Rule 424(b). Each preliminary prospectus included in the
Registration Statement prior to the time it becomes effective is herein referred
to as a "PRELIMINARY PROSPECTUS." Any reference herein to the Registration
Statement, any Preliminary Prospectus or to the Prospectus shall be deemed to
refer to and include any supplements or amendments thereto, filed with the
Commission after the date of filing of the Prospectus under Rules 424(b) or
430A, and prior to the termination of the offering of the Shares by the
Underwriters.
(ii) The Company has been duly organized and is
validly existing as a corporation in good standing under the laws of the State
of Delaware, with corporate power and authority to own or lease its properties
and conduct its business as described in the Registration Statement. The
subsidiary of the
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Company listed in Exhibit 21 to Item 16(a) of the Registration Statement (the
"SUBSIDIARY") has been duly organized and is validly existing as a corporation
in good standing under the laws of the jurisdiction of its incorporation, with
corporate power and authority to own or lease its properties and conduct its
business as described in the Registration Statement. The Company and the
Subsidiary are duly qualified to transact business in all jurisdictions in which
the conduct of their business requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on the
earnings, business, management, properties, assets, rights, operations or
condition (financial or otherwise) of the Company and the Subsidiary taken as a
whole. The outstanding shares of capital stock of the Subsidiary have been duly
authorized and validly issued, are fully paid and non-assessable and are owned
by the Company free and clear of all liens, encumbrances and equities and
claims; and no options, warrants or other rights to purchase, agreements or
other obligations to issue or other rights to convert any obligations into
shares of capital stock or ownership interests in the Subsidiary are
outstanding.
(iii) Except for the Subsidiary, the Company does
not own or control, directly or indirectly, any corporation, association or
other entity.
(iv) The outstanding shares of Common Stock of
the Company, including all shares to be sold by the Selling Stockholder, have
been duly authorized and validly issued and are fully paid and non-assessable;
the Shares to be issued and sold by the Company have been duly authorized and
when issued and paid for as contemplated herein will be validly issued, fully
paid and non-assessable; and no preemptive rights of stockholders exist with
respect to any of the Shares or the issue and sale thereof. Neither the filing
of the Registration Statement nor the offering or sale of the Shares as
contemplated by this Agreement gives rise to any rights, other than those which
have been waived or satisfied, for or relating to the registration of any shares
of Common Stock.
(v) The information set forth under the caption
"Capitalization" in the Prospectus is true and correct. All of the Shares
conform to the description thereof contained in the Registration Statement. The
form of certificates for the Shares conforms to the corporate law of the
jurisdiction of the Company's incorporation.
(vi) The Commission has not issued an order
preventing or suspending the use of any Prospectus relating to the proposed
offering of the Shares nor instituted proceedings for that purpose. The
Registration Statement contains, and the Prospectus and any amendments or
supplements thereto will contain, all statements which are required to be stated
therein by, and will conform, to the requirements of the Act and the Rules and
Regulations. The Registration Statement and any amendment thereto do not
contain, and will not contain, any untrue statement of a material fact and do
not omit, and will not omit, to state any material fact required to be stated
therein or necessary to make the statements therein not misleading. The
Prospectus and any amendments and supplements thereto do not contain, and will
not contain, any untrue statement of material fact; and do not omit, and will
not 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; provided, however, that the Company makes no
representations or warranties as to information contained in or omitted from the
Registration Statement or
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the Prospectus, or any such amendment or supplement, in reliance upon, and in
conformity with, written information furnished to the Company by or on behalf of
any Underwriter through the Representatives, specifically for use in the
preparation thereof.
(vii) The financial statements of the Company and
the Subsidiary, together with related notes and schedules as set forth in the
Registration Statement, present fairly the financial position and the results of
operations and cash flows of the Company and the Subsidiary, at the indicated
dates and for the indicated periods. Such financial statements and related
schedules have been prepared in accordance with generally accepted principles of
accounting, consistently applied throughout the periods involved, except as
disclosed therein, and all adjustments necessary for a fair presentation of
results for such periods have been made. The financial data set forth in the
Prospectus under the captions "Prospectus Summary - Summary Financial Data",
"Selected Financial Data" and "Capitalization" presents fairly the information
shown therein and such data has been compiled on a basis consistent with the
financial statements presented therein and the books and records of the Company.
(viii) KPMG LLP, who have certified certain of the
financial statements filed with the Commission as part of the Registration
Statement, are independent public accountants as required by the Act and the
Rules and Regulations.
(ix) There is no action, suit, claim or
proceeding pending or, to the knowledge of the Company, threatened against the
Company or the Subsidiary before any court or administrative agency or otherwise
which if determined adversely to the Company or the Subsidiary might result in
any material adverse change in the earnings, business, management, properties,
assets, rights, operations or condition (financial or otherwise) of the Company
and of the Subsidiary, taken as a whole, or to prevent the consummation of the
transactions contemplated hereby, except as set forth in the Registration
Statement.
(x) The Company and the Subsidiary have good and
marketable title to all of the properties and assets reflected in the financial
statements (or as described in the Registration Statement) hereinabove
described, subject to no lien, mortgage, pledge, charge or encumbrance of any
kind except those reflected in such financial statements (or as described in the
Registration Statement) or which do not materially and adversely affect the
value of such property and do not materially interfere with the use made or
proposed to be made of such property by the Company and the Subsidiary. The
Company and the Subsidiary occupy their leased properties under valid and
binding leases with such exceptions as are not material and do not materially
interfere with the use made or proposed to be made of such real property,
conforming in all material respects to the description thereof set forth in the
Registration Statement.
(xi) The Company and the Subsidiary have filed
all Federal, State, local and foreign tax returns which have been required to be
filed and have paid all taxes indicated by said returns and all assessments
received by them or either of them to the extent that such taxes have become due
and are not being contested in good faith and for which an adequate reserve for
accrual has been established in accordance with generally accepted accounting
principles. All tax liabilities have been adequately provided
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for in the financial statements of the Company, and the Company has not received
any notification of taxes due and owing from the Internal Revenue Service or
California taxation authorities.
(xii) Since the respective dates as of which
information is given in the Registration Statement, as it may be amended or
supplemented, there has not been any material adverse change or any development
known to the Company that is likely to result in the future in a material
adverse change in or affecting the earnings, business, management, properties,
assets, rights, operations or condition (financial or otherwise), of the Company
and the Subsidiary taken as a whole, whether or not occurring in the ordinary
course of business, there has not been any material transaction entered into by
the Company or the Subsidiary, other than transactions in the ordinary course of
business and changes and transactions described in the Registration Statement,
as it may be amended or supplemented, and the Company and the Subsidiary have
not incurred any material contingent obligations.
(xiii) Neither the Company nor the Subsidiary is
or, with the giving of notice or lapse of time or both, will be in violation of
or in default under its Certificate of Incorporation or Bylaws, as applicable,
or under any agreement, lease, contract, indenture or other instrument or
obligation to which it is a party or by which it, or any of its properties, is
bound and which default would have a material adverse effect on the earnings,
business, management, properties, assets, rights, operations or condition
(financial or otherwise) of the Company and the Subsidiary taken as a whole. The
execution and delivery of this Agreement and the consummation of the
transactions herein contemplated and the fulfillment of the terms hereof will
not conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust or other
agreement or instrument that is material to the Company and the Subsidiary taken
as a whole, or of the Certificate of Incorporation or Bylaws of the Company or
any order, rule or regulation applicable to the Company or the Subsidiary of any
court or of any regulatory body or administrative agency or other governmental
body having jurisdiction.
(xiv) Each approval, consent, order,
authorization, designation, declaration or filing by or with any regulatory,
administrative or other governmental body necessary in connection with the
execution and delivery by the Company of this Agreement and the consummation of
the transactions herein contemplated (except such additional steps as may be
required by the Commission, the National Association of Securities Dealers, Inc.
(the "NASD") or such additional steps as may be necessary to qualify the Shares
for public offering by the Underwriters under state securities or Blue Sky laws)
has been obtained or made and is in full force and effect.
(xv) The Company and the Subsidiary own or
possess adequate licenses or other rights to use all patents, patent rights
inventions, trade secrets, copyrights, trademarks, service marks, trade names,
technology and know-how currently employed or proposed to be employed by it in
connection with their business as described in the Prospectus. Neither the
Company nor the Subsidiary is obligated to pay a royalty, grant a license, or
provide other consideration to any third party in connection with its patents,
copyrights, trademarks, service marks, trade names, or technology other than
royalties, licenses or other consideration that would not be material to the
business of the Company and the Subsidiary taken as a whole or as disclosed in
the Prospectus, and except as disclosed in the Prospectus, neither the Company
nor
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the Subsidiary has received any notice of infringement or conflict with (and
neither the Company nor the Subsidiary knows of any infringement or conflict
with) asserted rights of others with respect to any patents, patent rights,
inventions, trade secrets, copyrights, trademarks, service marks, trade names,
technology or know-how which infringement or conflict, if the subject of an
unfavorable decision, would be material to the business of the Company and the
Subsidiary taken as a whole. Except as disclosed in the Prospectus, the
discoveries, inventions, products or processes of the Company and the Subsidiary
referred to in the Prospectus do not, to the knowledge of the Company or the
Subsidiary, infringe or conflict with any right or patent of any third party, or
any discovery, invention, product or process which is the subject of a patent
application filed by any third party, known to the Company or the Subsidiary,
which infringement or conflict is material to the business of the Company and
the Subsidiary taken as a whole.
(xvi) Neither the Company nor, to the Company's
knowledge, any of its affiliates has taken or may take, directly or indirectly,
any action designed to cause or result in, or which has constituted or which
might reasonably be expected to constitute, the stabilization or manipulation of
the price of the shares of Common Stock to facilitate the sale or resale of the
Shares.
(xvii) Neither the Company nor the Subsidiary is,
and after giving effect to the offering and sale of the Shares and the
application of the proceeds thereof as described in the Prospectus neither the
Company nor the Subsidiary will be, an "investment company" or an "affiliated
person" of or "promoter" or "principal underwriter" for an "investment company,"
within the meaning of such terms under the Investment Company Act of 1940, (as
amended, the "1940 ACT") and the rules and regulations of the Commission
thereunder.
(xviii) The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurances 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 conformity with generally accepted accounting
principles and to maintain accountability for assets; (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
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(xix) The Company and the Subsidiary carry, or is
covered by, insurance in such amounts and covering such risks as is adequate for
the conduct of their respective businesses and the value of their respective
properties and as is customary for companies engaged in similar industries.
(xx) The Company is in compliance in all material
respects with all presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"), the violation of which would have a
material adverse effect on the earnings, business, management, properties,
assets, rights, operations or condition (financial or otherwise) of the Company;
no "reportable event" (as defined in ERISA) has occurred with respect to any
"pension plan" (as defined in ERISA) for which the Company would have any
material liability; the Company has not incurred and does not expect to incur
liability under (i) Title IV of
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ERISA with respect to termination of, or withdrawal from, any "pension plan" or
(ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the "CODE");
and each "pension plan" for which the Company would have any material liability
that is intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has occurred, whether by action
or by failure to act, which would cause the loss of such qualification.
(xxi) To the Company's knowledge, there are no
affiliations or associations between any member of the NASD and any of the
Company's officers, directors or 5% or greater securityholders, except as set
forth in the Registration Statement.
(xxii) The Company has full corporate power and
authority to enter into this Agreement and perform the transactions contemplated
hereby. This Agreement has been duly authorized, executed and delivered by the
Company and constitutes a valid and binding obligation the Company enforceable
in accordance with its terms except as rights to indemnity and contribution
hereunder may be limited as a matter of applicable public policy or by
applicable laws and except as the enforcement hereof may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws
affecting creditors' rights generally, or by general equitable principles.
(xxiii) The execution and delivery of the Agreement
and Plan of Merger dated as of May 7, 1999 (the "MERGER AGREEMENT") between
Skechers U.S.A., Inc., a California corporation (the "CALIFORNIA CORPORATION"),
and the Company, effecting the reincorporation of the California Corporation
under the laws of the State of Delaware, was duly authorized by all necessary
corporate action on the part of each of the California Corporation and the
Company. Each of the California Corporation and the Company had all corporate
power and authority to execute and deliver the Merger Agreement, to file the
Merger Agreement with the Secretary of State of California and the Secretary of
State of Delaware and to consummate the reincorporation contemplated by the
Merger Agreement, and the Merger Agreement at the time of execution and filing
constituted a valid and binding obligation of each of the California Corporation
and the Company, enforceable in accordance with its terms and except as the
enforcement hereof may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting creditors' rights generally, or
by general equitable principles.
(xxiv) No material labor dispute with the employees
of the Company or the Subsidiary exists, except as described in the Prospectus,
or, to the knowledge of the Company and the Subsidiary, is imminent.
(xxv) No business relationship, or related party
transactions, exists between or among the Company or the Subsidiary, on the one
hand, and the directors officers, stockholders, customers or suppliers of the
Company or the Subsidiary, on the one hand, which is required to be described in
the Prospectus that is not so described.
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(xxvi) Neither the Company nor the Subsidiary, nor
any director, officer, agent, employee or other person associated with or acting
on behalf of the Company or the Subsidiary, has used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense relating to
political activity; made any direct or indirect unlawful payment to any foreign
or domestic government official or employee from corporate funds; violated or is
in violation of any provisions of the Foreign Corrupt Practices Act of 1972; or
made any bribe, rebate, payoff, influence payment, kickback or other unlawful
payment.
(xxvii) Neither the Company nor the Subsidiary is a
"passive foreign investment company" within the meaning of Section 1296 of the
Code for its taxable year which includes the date hereof and to the knowledge of
the Company and the Subsidiary, neither the Company nor the Subsidiary will be a
"passive foreign investment company" for the subsequent taxable year.
(xxviii) Except as disclosed in the Prospectus, there
is no (i) administrative or judicial proceeding pending or, to the Company's
knowledge, threatened to which the Company or the Subsidiary is a party or to
which any of the properties of the Company or the Subsidiary is subject arising
under any Federal, state or local provisions that have been enacted or adopted
regulating the discharge of materials into the environment or primarily for the
purpose of protecting the environment; or (ii) material adverse effect upon the
Company or the Subsidiary arising from compliance with Federal, state and local
provisions which have been enacted or adopted regulating the discharge of
materials into the environment or otherwise relating to the protection of the
environment.
(xxix) For all periods from its election under
Subchapter S of the Code until June 8, 1999 (the "TERMINATION DATE"), the
California Corporation was qualified as an S Corporation pursuant to an election
validly made under Subchapter S of the Code and any applicable state statute
(which election has not been and will not be revoked or terminated for any such
period) and the California Corporation has not been and will not be subject to
Federal corporate taxes for such periods. The Subchapter S election of the
California Corporation will be terminated on the Termination Date, and the
Company will be subject to federal corporate income taxes from and after the
date of such termination but not for any prior period. In connection with the
termination, income and loss of the California Corporation for the S termination
year will not be allocated pro rata under Section 1362(e) of the Code.
(xxx) The Final 1998 Distribution and the Final
Tax Distribution (as such terms are defined in the Prospectus) are legal and
valid under Section 170 of the Delaware General Corporation Law and, to the
extent applicable, Section 500 of the California General Corporation Law.
(b) The Selling Stockholder represents and warrants as
follows:
(i) Such Selling Stockholder now has and at the
Option Closing Date (as such date is hereinafter defined) will have good and
marketable title to the Option Shares to be sold by such Selling Stockholder,
free and clear of any liens, encumbrances, equities and claims, and full right,
power and authority to effect the sale and delivery of such Option Shares; and
upon the delivery of, against
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payment for, such Option Shares pursuant to this Agreement, the Underwriters
will acquire good and marketable title thereto, free and clear of any liens,
encumbrances, equities and claims.
(ii) This Agreement has been duly authorized,
executed and delivered by such Selling Stockholder and constitutes a valid and
binding obligation of such Selling Stockholder enforceable in accordance with
its terms except as rights to indemnity and contribution hereunder may be
limited as a matter of applicable public policy or by applicable laws and except
as the enforcement hereof may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting creditors' rights generally, or
by general equitable principles. Such Selling Stockholder has full right, power
and authority to execute and deliver this Agreement, the Power of Attorney and
the Custody Agreement referred to below and to perform its obligations under
such Agreements. The execution and delivery of this Agreement and the
consummation by such Selling Stockholder of the transactions herein contemplated
and the fulfillment by such Selling Stockholder of the terms hereof will not
require any consent, approval, authorization, or other order of any court,
regulatory body, administrative agency or other governmental body (except as may
be required under the Act, state securities laws or Blue Sky laws) and will not
result in a breach of any of the terms and provisions of, or constitute a
default under, any indenture, mortgage, deed of trust or other agreement or
instrument to which such Selling Stockholder is a party, or of any order, rule
or regulation applicable to such Selling Stockholder of any court or of any
regulatory body or administrative agency or other governmental body having
jurisdiction the effect of which would prevent consummation of the transactions
contemplated hereby.
(iii) Such Selling Stockholder has not taken and
will not take, directly or indirectly, any action designed to, or which has
constituted, or which might reasonably be expected to cause or result in the
stabilization or manipulation of the price of the Common Stock of the Company
and, other than as permitted by the Act, such Selling Stockholder will not
distribute any prospectus or other offering material in connection with the
offering of the Shares.
(iv) Such Selling Stockholder is familiar with
the Registration Statement and has no knowledge of any material fact, condition
or information not disclosed in the Registration Statement which has materially
adversely affected or may materially adversely affect the business of the
Company or the Subsidiary; and the sale of the Option Shares by such Selling
Stockholder pursuant hereto is not prompted by any information concerning the
Company or the Subsidiary which is not set forth in the Registration Statement.
The information pertaining to such Selling Stockholder under the caption
"Principal Stockholders" in the Prospectus is complete and accurate in all
material respects.
2. PURCHASE, SALE AND DELIVERY OF THE FIRM SHARES.
(a) On the basis of the representations, warranties and
covenants herein contained, and subject to the conditions herein set forth, the
Company agrees to sell to the Underwriters and each Underwriter agrees,
severally and not jointly, to purchase, at a price of $10.23 per share, the
number of Firm Shares set forth opposite the name of each Underwriter in
Schedule I hereof, subject to adjustments in accordance with Section 9 hereof.
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(b) Payment for the Firm Shares to be sold hereunder is
to be made in Federal (same day) funds to an account designated by the Company
against delivery of certificates therefor to the Representatives for the several
accounts of the Underwriters. Such payment and delivery are to be made through
the facilities of the Depository Trust Company at 10:00 a.m., New York time, on
the third business day after the date of this Agreement or at such other time
and date not later than five business days thereafter as you and the Company
shall agree upon, such time and date being herein referred to as the "CLOSING
DATE." (As used herein, "BUSINESS DAY" means a day on which the New York Stock
Exchange is open for trading and on which banks in New York are open for
business and not permitted by law or executive order to be closed.) The
certificates for the Firm Shares will be delivered in such denominations and in
such registrations as the Representatives request in writing not later than the
second full business day prior to the Closing Date, and will be made available
for inspection by the Representatives at least one business day prior to the
Closing Date.
(c) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Selling Stockholder hereby grants an option to the several
Underwriters to purchase the Option Shares at the price per share as set forth
in the first paragraph of this Section 2. The option granted hereby may be
exercised in whole or in part by giving written notice (i) at any time before
the Closing Date and (ii) only once thereafter within 30 days after the date of
this Agreement, by you, as Representatives of the several Underwriters, to the
Attorney-in-Fact and the Custodian setting forth the number of Option Shares as
to which the several Underwriters are exercising the option, the names and
denominations in which the Option Shares are to be registered and the time and
date at which such certificates are to be delivered. The time and date at which
certificates for Option Shares are to be delivered shall be determined by the
Representatives but shall not be earlier than three nor later than 10 full
business days after the exercise of such option, nor in any event prior to the
Closing Date (such time and date being herein referred to as the "OPTION CLOSING
DATE"). If the date of exercise of the option is three or more days before the
Closing Date, the notice of exercise shall set the Closing Date as the Option
Closing Date. The number of Option Shares to be purchased by each Underwriter
shall be in the same proportion to the total number of Option Shares being
purchased as the number of Firm Shares being purchased by such Underwriter bears
to the total number of Firm Shares, adjusted by you in such manner as to avoid
fractional shares. The option with respect to the Option Shares granted
hereunder may be exercised only to cover over-allotments in the sale of the Firm
Shares by the Underwriters. You, as Representatives of the several Underwriters,
may cancel such option at any time prior to its expiration by giving written
notice of such cancellation to either of the Attorneys-in-Fact. To the extent,
if any, that the option is exercised, payment for the Option Shares shall be
made on the Option Closing Date in Federal (same day) funds drawn to the order
of "Xxxxxx X. Xxxxxxxxx and M. Xxxxx Xxxxxxxxx as Trustees of the Xxxxxxxxx
Family Trust" against delivery of certificates therefor through the facilities
of the Depository Trust Company, New York, New York.
(d) Certificates in negotiable form for the total number
of the Shares to be sold hereunder by the Selling Stockholder have been placed
in custody with American Stock Transfer and Trust Company as custodian (the
"CUSTODIAN") pursuant to the Custody Agreement executed by the Selling
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Stockholder for delivery of all Option Shares to be sold hereunder by the
Selling Stockholder. The Selling Stockholder specifically agrees that the Option
Shares represented by the certificates held in custody for the Selling
Stockholder under the Custody Agreement are subject to the interests of the
Underwriters hereunder, that the arrangements made by the Selling Stockholder
for such custody are to that extent irrevocable, and that the obligations of the
Selling Stockholder hereunder shall not be terminable by any act or deed of the
Selling Stockholder (or by any other person, firm or corporation including the
Company, the Custodian or the Underwriters) or by operation of law (including
the dissolution or other termination of the Selling Stockholder) or by the
occurrence of any other event or events, except as set forth in the Custody
Agreement. If any such event should occur prior to the delivery to the
Underwriters of the Option Shares hereunder, certificates for the Option Shares
shall be delivered by the Custodian in accordance with the terms and conditions
of this Agreement as if such event has not occurred.
(e) If on the Option Closing Date the Selling Stockholder
fails to sell the Option Shares, the Company agrees that it will sell or arrange
for the sale of that number of shares of Class A Common Stock to the
Underwriters which represents the Option Shares which such Selling Stockholder
has failed to so sell, as set forth in Schedule II hereto, or such lesser number
as may be requested by the Representatives.
3. OFFERING BY THE UNDERWRITERS.
It is understood that the several Underwriters are to make a
public offering of the Firm Shares as soon as the Representatives deem it
advisable to do so. The Firm Shares are to be initially offered to the public at
the initial public offering price set forth in the Prospectus. The
Representatives may from time to time thereafter change the public offering
price and other selling terms. To the extent, if at all, that any Option Shares
are purchased pursuant to Section 2 hereof, the Underwriters will offer them to
the public on the foregoing terms.
It is further understood that you will act as the
Representatives for the Underwriters in the offering and sale of the Shares in
accordance with a Master Agreement Among Underwriters entered into by you and
the several other Underwriters.
4. COVENANTS OF THE COMPANY AND THE SELLING STOCKHOLDER.
(a) The Company covenants and agrees with the several
Underwriters that:
(i) The Company will (A) use its best efforts to
cause the Registration Statement to become effective or, if the procedure in
Rule 430A of the Rules and Regulations is followed, to prepare and timely file
with the Commission under Rule 424(b) of the Rules and Regulations a Prospectus
in a form approved by the Representatives containing information previously
omitted at the time of effectiveness of the Registration Statement in reliance
on Rule 430A of the Rules and Regulations and (B) not file any amendment to the
Registration Statement or supplement to the Prospectus of which the
Representatives shall not previously have been advised and furnished with a copy
or to which the
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Representatives shall have reasonably objected in writing or which is not in
compliance with the Rules and Regulations and (C) file on a timely basis all
reports and any definitive proxy or information statements required to be filed
by the Company with the Commission subsequent to the date of the Prospectus and
prior to the termination of the offering of the Shares by the Underwriters.
(ii) The Company will advise the Representatives
promptly (A) when the Registration Statement or any post-effective amendment
thereto shall have become effective, (B) of receipt of any comments from the
Commission, (C) of any request of the Commission for amendment of the
Registration Statement or for supplement to the Prospectus or for any additional
information, and (D) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the use of the
Prospectus or of the institution of any proceedings for that purpose. The
Company will use its best efforts to prevent the issuance of any such stop order
preventing or suspending the use of the Prospectus and to obtain as soon as
possible the lifting thereof, if issued.
(iii) The Company will cooperate with the
Representatives in endeavoring to qualify the Shares for sale under the
securities laws of such jurisdictions as the Representatives may reasonably have
designated in writing and will make such applications, file such documents, and
furnish such information as may be reasonably required for that purpose,
provided the Company shall not be required to qualify as a foreign corporation
or to file a general consent to service of process in any jurisdiction where it
is not now so qualified or required to file such a consent. The Company will,
from time to time, prepare and file such statements, reports, and other
documents, as are or may be required to continue such qualifications in effect
for so long a period as the Representatives may reasonably request for
distribution of the Shares.
(iv) The Company will deliver to, or upon the
order of, the Representatives, from time to time, as many copies of any
Preliminary Prospectus as the Representatives may reasonably request. The
Company will deliver to, or upon the order of, the Representatives during the
period when delivery of a Prospectus is required under the Act, as many copies
of the Prospectus in final form, or as thereafter amended or supplemented, as
the Representatives may reasonably request. The Company will deliver to the
Representatives at or before the Closing Date, four signed copies of the
Registration Statement and all amendments thereto including all exhibits filed
therewith, and will deliver to the Representatives such number of copies of the
Registration Statement (including such number of copies of the exhibits filed
therewith that may reasonably be requested), and of all amendments thereto, as
the Representatives may reasonably request.
(v) The Company will comply with the Act and the
Rules and Regulations, and the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), and the rules and regulations of the Commission thereunder, so
as to permit the completion of the distribution of the Shares as contemplated in
this Agreement and the Prospectus. If during the period in which a prospectus is
required by law to be delivered by an Underwriter or dealer, any event shall
occur as a result of which, in the judgment of the Company or in the reasonable
opinion of the Underwriters, it becomes necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances existing at the time
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the Prospectus is delivered to a purchaser, not misleading, or, if it is
necessary at any time to amend or supplement the Prospectus to comply with any
law, the Company promptly will prepare and file with the Commission an
appropriate amendment to the Registration Statement or supplement to the
Prospectus so that the Prospectus as so amended or supplemented will not, in the
light of the circumstances when it is so delivered, be misleading, or so that
the Prospectus will comply with the law. (vi) The Company will make generally
available to its security holders, as soon as it is practicable to do so, but in
any event not later than 15 months after the effective date of the Registration
Statement, an earning statement (which need not be audited) in reasonable
detail, covering a period of at least 12 consecutive months beginning after the
effective date of the Registration Statement, which earning statement shall
satisfy the requirements of Section 11(a) of the Act and Rule 158 of the Rules
and Regulations and will advise you in writing when such statement has been so
made available.
(vii) Prior to the Closing Date, the Company will
furnish to the Underwriters, as soon as they have been prepared by or are
available to the Company, a copy of any unaudited interim financial statements
of the Company for any period subsequent to the period covered by the most
recent financial statements appearing in the Registration Statement and the
Prospectus.
(viii) No offering, sale, short sale or other
disposition of any shares of Common Stock of the Company or other securities
convertible into or exchangeable or exercisable for shares of Common Stock or
derivative of Common Stock (or agreement for such) will be made for a period of
180 days after the date of this Agreement, directly or indirectly, by the
Company otherwise than hereunder or with the prior written consent of BT Alex.
Xxxxx Incorporated on behalf of the Underwriters, except for the grant of
options to purchase shares of Common Stock pursuant to the 1998 Stock Option,
Deferred Stock and Restricted Stock Plan and shares of Common Stock issued
pursuant to the exercise of options granted under such plan and the grant of
purchase rights and issuance of shares under the 1998 Employee Stock Purchase
Plan, provided that such options and grants shall not vest, or the Company shall
obtain the written consent of the holder thereof not to transfer such shares,
until the end of such 180-day period.
(ix) The Company will list, subject to notice of
issuance, the Shares on the New York Stock Exchange.
(x) The Company has caused each officer,
director, stockholder and optionholder of the Company to furnish to you, on or
prior to the date of this agreement, a letter or letters, in form and substance
satisfactory to the Underwriters, pursuant to which each such person agrees,
subject to certain limited exceptions set forth therein, not to offer, pledge,
sell, contract to sell, sell any option or contract to purchase, sell short,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, or enter into any swap or similar agreement that
transfers, in whole or in part, any of the economic consequences of ownership of
the Common Stock, for a period commencing on the date of the Prospectus and
continuing to a date 180 days after such date, except with the prior written
consent of BT Alex. Xxxxx Incorporated on behalf of the Underwriters ("LOCKUP
AGREEMENTS").
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(xi) The Company has caused each stockholder of
the Company to enter into, on or prior to the date of this agreement, an S
Corporation Termination, Tax Allocation and Indemnification Agreement
substantially in the form filed as an exhibit to the Registration Statement (the
"S CORPORATION AGREEMENT").
(xii) The Company shall apply the net proceeds of
its sale of the Shares as set forth in the Prospectus and shall include such
disclosure in reports with the Commission with respect to the sale of the Shares
and the application of the proceeds therefrom as may be required in accordance
with Rule 463 under the Act.
(xiii) The Company shall not invest, or otherwise
use the proceeds received by the Company from its sale of the Shares in such a
manner as would require the Company or the Subsidiary to register as an
investment company under the 1940 Act.
(xiv) The Company will maintain a transfer agent
and, if necessary under the jurisdiction of incorporation of the Company, a
registrar for the Class A Common Stock.
(xv) The Company will not take, directly or
indirectly, any action designed to cause or result in, or that has constituted
or might reasonably be expected to constitute, the stabilization or manipulation
of the price of any securities of the Company.
(b) The Selling Stockholder covenants and agrees with the
several Underwriters that:
(i) The Selling Stockholder will not offer,
pledge, sell, contract to sell, sell any option or contract to purchase, sell
short, purchase any option or contract to sell, grant any option, right or
warrant to purchase, lend or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, or enter into any swap or similar
agreement that transfers, in whole or in part, any of the economic consequences
of ownership of the Common Stock, for a period commencing on the date of the
Prospectus and continuing to a date 180 days after such date, otherwise than
hereunder or with the prior written consent of alex. Xxxxx & Sons Incorporated
on behalf of the Underwriters; provided, however, that such restrictions shall
not apply to the Shares; and, provided, further, that such restrictions shall
not apply to shares of Class A Common Stock purchased by the Selling Stockholder
in the open market following the offering of the Shares.
(ii) In order to document the Underwriters'
compliance with the reporting and withholding provisions of the Tax Equity and
Fiscal Responsibility Act of 1982 and the Interest and Dividend Tax Compliance
Act of 1983 with respect to the transactions herein contemplated, the Selling
Stockholder agrees to deliver to you prior to or at the Closing Date a properly
completed and executed United States Treasury Department Form W-8 or W-9 (or
other applicable form or statement specified by Treasury Department regulations
in lieu thereof).
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(iii) The Selling Stockholder will not take,
directly or indirectly, any action designed to cause or result in, or that has
constituted or might reasonably be expected to constitute, the stabilization or
manipulation of the price of any securities of the Company.
5. COSTS AND EXPENSES.
The Company will pay all costs, expenses and fees incident to
the performance of the obligations of the Sellers under this Agreement,
including, without limiting the generality of the foregoing, the following:
accounting fees of the Company; the fees and disbursements of counsel for the
Company and the Selling Stockholder; the cost of printing and delivering to, or
as requested by, the Underwriters copies of the Registration Statement,
Preliminary Prospectuses, the Prospectus, this Agreement, the Underwriters'
Selling Memorandum, the Underwriters' Invitation Letter, the Listing
Application, the Blue Sky Survey and any supplements or amendments thereto; the
filing fees of the Commission; the filing fees and expenses (including legal
fees and disbursements) incident to securing any required review by the NASD of
the terms of the sale of the Shares; the Listing Fee of the New York Stock
Exchange; and the expenses, including the fees and disbursements of counsel for
the Underwriters, incurred in connection with the qualification of the Shares
under state securities or Blue Sky laws. To the extent, if at all, that the
Selling Stockholder engages special legal counsel to represent it in connection
with this offering, the fees and expenses of such counsel shall be borne by such
Selling Stockholder. Any transfer taxes imposed on the sale of the Shares to the
several Underwriters will be paid by the Sellers pro rata. The Company agrees to
pay all costs and expenses of the Underwriters, including the fees and
disbursements of counsel for the Underwriters, incident to the offer and sale of
directed shares of the Class A Common Stock by the Underwriters to employees and
persons having business relationships with the Company and the Subsidiary. The
Sellers shall not, however, be required to pay for any of the Underwriters
expenses (other than those related to qualification under NASD regulation and
state securities or Blue Sky laws) except that, if this Agreement shall not be
consummated because the conditions in Section 6 hereof are not satisfied, or
because this Agreement is terminated by the Representatives pursuant to Section
11 hereof, or by reason of any failure, refusal or inability on the part of the
Company or the Selling Stockholder to perform any undertaking or satisfy any
condition of this Agreement or to comply with any of the terms hereof on their
part to be performed, unless such failure to satisfy said condition or to comply
with said terms is due to the default or omission of any Underwriter, then the
Company shall reimburse the several Underwriters for reasonable out-of-pocket
expenses, including fees and disbursements of counsel, reasonably incurred in
connection with investigating, marketing and proposing to market the Shares or
in contemplation of performing their obligations hereunder; but the Company and
the Selling Stockholder shall not in any event be liable to any of the several
Underwriters for damages on account of loss of anticipated profits from the sale
by them of the Shares.
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6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS.
The several obligations of the Underwriters to purchase the
Firm Shares on the Closing Date and the Option Shares, if any, on the Option
Closing Date are subject to the accuracy, as of the Closing Date or the Option
Closing Date, as the case may be, of the representations and warranties of the
Company and the Selling Stockholder contained herein, and to the performance by
the Company and the Selling Stockholder of their covenants and obligations
hereunder and to the following additional conditions:
(a) The Registration Statement and all post-effective
amendments thereto shall have become effective and any and all filings required
by Rule 424 and Rule 430A of the Rules and Regulations shall have been made, and
any request of the Commission for additional information (to be included in the
Registration Statement or otherwise) shall have been disclosed to the
Representatives and complied with to their reasonable satisfaction. No stop
order suspending the effectiveness of the Registration Statement, as amended
from time to time, shall have been issued and no proceedings for that purpose
shall have been taken or, to the knowledge of the Company or the Selling
Stockholder, shall be contemplated by the Commission and no injunction,
restraining order, or order of any nature by a Federal or state court of
competent jurisdiction shall have been issued as of the Closing Date which would
prevent the issuance of the Shares.
(b) The Representatives shall have received on the
Closing Date or the Option Closing Date, as the case may be, the opinion of
Freshman, Marantz, Orlanski, Xxxxxx & Xxxxx ("FMOCK"), counsel for the Company
and the Selling Stockholder, dated the Closing Date or the Option Closing Date,
as the case may be, addressed to the Underwriters (and stating that it may be
relied upon by counsel to the Underwriters) to the effect that:
(i) The Company has been duly organized and is
validly existing as a corporation in good standing under the laws of the State
of Delaware, with corporate power and authority to own or lease its properties
and conduct its business as described in the Registration Statement; the
Subsidiary has been duly organized and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its incorporation, with
corporate power and authority to own or lease its properties and conduct its
business as described in the Registration Statement; the Company and the
Subsidiary are duly qualified to transact business in all jurisdictions in which
the conduct of their business requires such qualification, except where the
failure to be so qualified would not have a materially adverse effect upon the
business of the Company and the Subsidiary taken as a whole; and the outstanding
shares of capital stock of the Subsidiary have been duly authorized and validly
issued and are fully paid and non-assessable and are owned by the Company; and,
to the best of such counsel's knowledge, the outstanding shares of capital stock
of the Subsidiary are owned free and clear of all liens, encumbrances and
equities and claims, and no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any
obligations into any shares of capital stock or of ownership interests in the
Subsidiary are outstanding.
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(ii) To such counsel's knowledge, except for the
Subsidiary, the Company does not own or control, directly or indirectly, any
corporation, association or other entity;
(iii) The Company has authorized and outstanding
capital stock as set forth under the caption "Capitalization" in the Prospectus;
the authorized shares of the Company's Common Stock have been duly authorized;
the outstanding shares of the Company's Common Stock, including the Shares to be
sold by the Selling Stockholder, have been duly authorized and validly issued
and are fully paid and non-assessable; all of the Shares conform to the
description thereof contained in the Prospectus; the certificates for the
Shares, assuming they are in the form filed with the Commission, are in due and
proper form; the shares of Common Stock, including the Option Shares, if any, to
be sold by the Company pursuant to this Agreement have been duly authorized and
will be validly issued, fully paid and non-assessable when issued and paid for
as contemplated by this Agreement; and no preemptive rights of stockholders
arising under the Company's Certificate of Incorporation or, to such counsel's
knowledge, otherwise exist with respect to any of the Shares or the issue or
sale thereof.
(iv) Except as described in or contemplated by
the Prospectus, to the knowledge of such counsel, there are no outstanding
securities of the Company convertible or exchangeable into or evidencing the
right to purchase or subscribe for any shares of capital stock of the Company
and there are no outstanding or authorized options, warrants or rights of any
character obligating the Company to issue any shares of its capital stock or any
securities convertible or exchangeable into or evidencing the right to purchase
or subscribe for any shares of such stock; and except as described in the
Prospectus, to the knowledge of such counsel, no holder of any securities of the
Company or any other person has the right, contractual or otherwise, which has
not been satisfied or effectively waived, to cause the Company to sell or
otherwise issue to them, or to permit them to underwrite the sale of, any of the
Shares or the right to have any Common Stock or other securities of the Company
included in the Registration Statement or the right, as a result of the filing
of the Registration Statement, to require registration under the Act of any
shares of Common Stock or other securities of the Company.
(v) The Registration Statement has become
effective under the Act and, to such counsel's knowledge, no stop order
proceedings with respect thereto have been instituted or are pending or
threatened under the Act.
(vi) The Registration Statement, the Prospectus
and each amendment or supplement thereto comply as to form in all material
respects with the requirements of the Act and the applicable rules and
regulations thereunder (except that such counsel need express no opinion as to
the financial statements and related schedules therein).
(vii) The statements (A) in the Prospectus under
the captions "Risk Factors -- Anti-Takeover Provisions, "Risk Factors -- Shares
Eligible for Future Sale," "Management," "Certain Transactions," "Description of
Capital Stock" and "Shares Eligible for Future Sale; Registration Rights" and
(B) in the Registration Statement in Items 14 and 15, in each case insofar as
such statements
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constitute a summary of documents referred to therein or matters of law, fairly
summarize in all material respects the information called for with respect to
such documents and matters.
(viii) Such counsel does not know of any contracts
or documents required to be filed as exhibits to the Registration Statement or
described in the Registration Statement or the Prospectus which are not so filed
or described as required, and such contracts and documents as are summarized in
the Registration Statement or the Prospectus are fairly summarized in all
material respects.
(ix) Such counsel knows of no legal or
governmental proceedings pending or threatened against the Company or the
Subsidiary, except as set forth in the Prospectus, which, if determined
adversely to the Company would have a material adverse effect on the business of
the Company.
(x) The execution and delivery of this Agreement
and the consummation of the transactions herein contemplated do not and will not
conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under any agreement or instrument known to such counsel to
which the Company or the Subsidiary is a party or by which the Company or the
Subsidiary may be bound, which default would have a material adverse effect on
the business of the Company and the Subsidiary, taken as a whole, or affect the
ability of the Company to consummate the transactions contemplated hereby or
under the Certificate of Incorporation or Bylaws of the Company.
(xi) This Agreement has been duly authorized,
executed and delivered by the Company.
(xii) No approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory, administrative or
other governmental body is necessary in connection with the execution and
delivery of this Agreement and the consummation of the transactions herein
contemplated (other than as may be required by the NASD or as required by state
securities and Blue Sky laws as to which such counsel need express no opinion)
except such as have been obtained or made, specifying the same.
(xiii) The Company is not, and will not become, as
a result of the consummation of the transactions contemplated by this Agreement,
and application of the net proceeds therefrom as described in the Prospectus,
required to register as an investment company under the 1940 Act.
(xiv) Each of this Agreement, the Power of
Attorney and the Custody Agreement has been duly authorized, executed and
delivered on behalf of the Selling Stockholder.
(xv) The Selling Stockholder has full legal
right, power and authority, and any approval required by law (other than as
required by state securities and Blue Sky laws as to which such counsel need
express no opinion), to sell, assign, transfer and deliver the Shares to be sold
by such Selling Stockholder.
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(xvi) The Custody Agreement and the Power of
Attorney executed and delivered by the Selling Stockholder is valid and binding.
(xvii) To our knowledge, the Underwriters (assuming
that they are bona fide purchasers within the meaning of the Uniform Commercial
Code) have acquired good and marketable title to the Shares being sold by the
Selling Stockholder on the Closing Date, and the Option Closing Date, as the
case may be, free and clear of all liens, encumbrances, equities and claims.
In rendering such opinion FMOCK may rely as to matters
governed by the laws of states other than Delaware or Federal laws on local
counsel in such jurisdictions, provided that in each case FMOCK shall state that
they believe that they and the Underwriters are justified in relying on such
other counsel. In addition to the matters set forth above, such opinion shall
also include a statement to the effect that nothing has come to the attention of
such counsel which leads them to believe that (i) the Registration Statement, at
the time it became effective under the Act (but after giving effect to any
modifications incorporated therein pursuant to Rule 430A under the Act) and as
of the Closing Date or the Option Closing Date, as the case may be, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and (ii) the Prospectus, or any supplement thereto, on the date it was filed
pursuant to the Rules and Regulations and as of the Closing Date or the Option
Closing Date, as the case may be, contained an untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements, in the light of the circumstances under which they are made, not
misleading (except that such counsel need express no view as to financial
statements, schedules and statistical information therein). With respect to such
statement, FMOCK may state that their belief is based upon the procedures set
forth therein, but is without independent check and verification.
(c) The Representatives shall have received on the
Closing Date or the Option Closing Date, as the case may be, the opinion of
Xxxxxxxxx & Xxxxxx, special intellectual property counsel for the Company, dated
the Closing Date or the Option Closing Date, as the case may be, addressed to
the Underwriters (and stating that it may be relied upon by counsel to the
Underwriters) to the effect that:
(i) the Company is listed in the records of the
United States Patent and Trademark Office ("PTO") as the holder of record of the
registered trademarks "SKECHERS" and the "S in Shield design" (collectively, the
"TRADEMARKS"). To such counsel's knowledge, except as set forth in the
Prospectus or otherwise disclosed to the Underwriters in writing, there is no
claim of any party other than the Company to any ownership interest or lien with
respect to any of the Trademarks. As of March 31, 1999, to the best of such
counsel's knowledge based on information provided by local counsel, the Company
has a valid registered trademark or trademark application corresponding to the
Trademarks in each of the foreign jurisdictions listed on Exhibit A;
(ii) the statements in the Prospectus under the
captions "Risk Factors -- Ability to Protect Intellectual Property," and
"Business -- Intellectual Property Rights" (the "INTELLECTUAL PROPERTY
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PORTIONS"), to our knowledge, insofar as such statements relate to trademarks,
patents, intellectual property or any legal matters, documents and proceedings
relating thereto fairly present the information called for with respect to such
legal matters, documents and proceedings and fairly summarize the matters
referred to therein.
(iii) to such counsel's knowledge, except as set
forth in the Prospectus or otherwise disclosed to the Underwriters in writing,
there is not pending or threatened in writing any action, suit, proceeding or
claim by others (A) challenging the validity or scope of the Trademarks or any
other material trademarks, trademark applications or domain names held by or
licensed to the Company, or (B) , asserting that any trademark is infringed by
the activities of the Company described in the Prospectus or by the manufacture,
use, sale, promotion or advertising of any of the Company's products or use of
its domain names.
(iv) to such counsel's knowledge, except as set
forth in the Prospectus or otherwise disclosed to the Underwriters in writing,
there is not pending or threatened in writing any action, suit, proceeding or
claim by the Company asserting infringement on the part of any third party of
the Trademarks or any other trademarks, domain names, trade names or advertising
slogans held by or licensed to the Company that are material to the business of
the Company.
(d) The Representatives shall have received from Xxxxxx
Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation ("WSGR"), counsel for the
Underwriters, an opinion dated the Closing Date or the Option Closing Date, as
the case may be, substantially to the effect specified in subparagraphs (ii) (as
to matters relating to the shares only), (iv) and (ix) of Paragraph (b) of this
Section 6, and that the Company is a duly organized and validly existing
corporation under the laws of the State of Delaware. In rendering such opinion
WSGR may rely as to all matters governed other than by the laws of the State of
Delaware or Federal laws on the opinion of counsel referred to in Paragraph (b)
of this Section 6. In addition to the matters set forth above, such opinion
shall also include a statement to the effect that nothing has come to the
attention of such counsel which leads them to believe that (i) the Registration
Statement, or any amendment thereto, as of the time it became effective under
the Act (but after giving effect to any modifications incorporated therein
pursuant to Rule 430A under the Act) as of the Closing Date or the Option
Closing Date, as the case may be, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and (ii) the
Prospectus, or any supplement thereto, on the date it was filed pursuant to the
Rules and Regulations and as of the Closing Date or the Option Closing Date, as
the case may be, contained an untrue statement of a material fact or omitted to
state a material fact, necessary in order to make the statements, in the light
of the circumstances under which they are made, not misleading (except that such
counsel need express no view as to financial statements, schedules and
statistical information therein). With respect to such statement, WSGR may state
that their belief is based upon the procedures set forth therein, but is without
independent check and verification.
(e) You shall have received, on each of the dates hereof, the
Closing Date and the Option Closing Date, as the case may be, a letter dated the
date hereof, the Closing Date or the Option
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Closing Date, as the case may be, in form and substance satisfactory to you, of
KPMG LLP confirming that they are independent public accountants within the
meaning of the Act and the applicable published Rules and Regulations thereunder
and stating that in their opinion the financial statements and schedules
examined by them and included in the Registration Statement comply in form in
all material respects with the applicable accounting requirements of the Act and
the related published Rules and Regulations; and containing such other
statements and information as is ordinarily included in accountants' "comfort
letters" to Underwriters with respect to the financial statements and certain
financial and statistical information contained in the Registration Statement
and Prospectus.
(f) The Representatives shall have received on the
Closing Date or the Option Closing Date, as the case may be, a certificate or
certificates of the Chief Executive Officer and the Chief Financial Officer of
the Company, signing on behalf of the Company, to the effect that, as of the
Closing Date or the Option Closing Date, as the case may be, each of them
severally represents as follows:
(i) The Registration Statement has become
effective under the Act and no stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceedings for such purpose have
been taken or are, to the Company's knowledge, contemplated by the Commission;
(ii) The representations and warranties of the
Company contained in Section 1 hereof are true and correct as of the Closing
Date or the Option Closing Date, as the case may be;
(iii) All filings required to have been made
pursuant to Rules 424 or 430A under the Act have been made;
(iv) As of the effective date of the Registration
Statement, the statements contained in the Registration Statement were true and
correct, and such Registration Statement and Prospectus did not omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading, and since the effective date of the
Registration Statement, no event has occurred which should have been set forth
in a supplement to or an amendment of the Prospectus which has not been so set
forth in such supplement or amendment; and
(v) Since the respective dates as of which
information is given in the Registration Statement and Prospectus, there has not
been any material adverse change or any development involving a prospective
material adverse change in or affecting the condition, financial or otherwise,
of the Company and the Subsidiary taken as a whole or the earnings, business,
management, properties, assets, rights, operations, condition (financial or
otherwise) or prospects of the aeompany and the Subsidiary taken as a whole,
whether or not arising in the ordinary course of business.
(g) The Firm Shares and Option Shares, if any, shall have
been listed subject to notice of issuance on the New York Stock Exchange.
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(h) The Underwriters shall have received on the Closing
Date a certificate, dated the Closing Date and signed by the Selling Stockholder
(or by their attorney-in-fact on their behalf), to the effect that the
representations and warranties of the Selling Stockholder contained in Section 1
of this Agreement are true and correct as of the Closing Date and that each
Selling Shareholder has complied with all of the agreements and satisfied all of
the conditions on its part to be performed or satisfied hereunder on or prior to
before the Closing Date
(i) The Lockup Agreements described in Section 4(x) shall
have been delivered to the Company and shall not have been amended.
(j) The S Corporation Agreement described in Section
4(xi) shall have been delivered to the Company and shall not have been amended.
The opinions and certificates mentioned in this Agreement
shall be deemed to be in compliance with the provisions hereof only if they are
in all material respects satisfactory to the Representatives and to WSGR,
counsel for the Underwriters.
If any of the conditions hereinabove provided for in this
Section 6 shall not have been fulfilled when and as required by this Agreement
to be fulfilled, the obligations of the Underwriters hereunder may be terminated
by the Representatives by notifying the Company and the Selling Stockholder of
such termination in writing or by telegram at or prior to the Closing Date or
the Option Closing Date, as the case may be.
In such event, the Selling Stockholder, the Company and the
Underwriters shall not be under any obligation to each other (except to the
extent provided in Sections 5 and 8 hereof).
7 CONDITIONS OF THE OBLIGATIONS OF THE SELLERS.
The obligations of the Sellers to sell and deliver the portion
of the Shares required to be delivered as and when specified in this Agreement
are subject to the conditions that at the Closing Date or the Option Closing
Date, as the case may be, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and in effect or proceedings
therefor initiated or threatened.
8 INDEMNIFICATION.
(a) The Company agrees:
(1) to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of the Act, against any losses, claims, damages or liabilities to which
such Underwriter or any such controlling person may become subject under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material
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fact contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading any act or failure to
act, or (iii) any alleged act or failure to act by any Underwriter in connection
with, or relating in any manner to, the Shares or the offering contemplated
hereby, and which is included as part of or referred to in any loss, claim,
damage, liability or action arising out of or based upon matters covered by
clause (i) or (ii) above (provided, that the Company shall not be liable under
this clause (iii) to the extent that it is determined in a final judgment by a
court of competent jurisdiction that such loss, claim, damage, liability or
action resulted directly from any such acts or failures to act undertaken or
omitted to be taken by such Underwriter through its gross negligence or willful
misconduct); provided, however, that the Company will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement, or omission or
alleged omission made in the Registration Statement, any Preliminary Prospectus,
the Prospectus, or such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company by or through the
Representatives specifically for use in the preparation thereof.
(2) to reimburse each Underwriter and each such
controlling person upon demand for any legal or other out-of-pocket expenses
reasonably incurred by such Underwriter or such controlling person in connection
with investigating or defending any such loss, claim, damage or liability,
action or proceeding or in responding to a subpoena or governmental inquiry
related to the offering of the Shares, whether or not such Underwriter or
controlling person is a party to any action or proceeding. In the event that it
is finally judicially determined that the Underwriters were not entitled to
receive payments for legal and other expenses pursuant to this subparagraph, the
Underwriters will promptly return all sums that had been advanced pursuant
hereto.
(b) The Selling Stockholder agrees to indemnify the
Underwriters and each person, if any, who controls any Underwriter within the
meaning of the Act, against any losses, claims, damages or liabilities to which
such Underwriter or controlling person may become subject under the Act or
otherwise to the same extent as indemnity is provided by the Company pursuant to
Section 8(a) above. In no event, however, shall the liability of the Selling
Stockholder for indemnification under this Section 8(a) exceed the sum of (i)
the proceeds received by the Selling Stockholder from the Underwriters in the
offering and (ii) the lesser of (A) the amount received by the Selling
Stockholder in repayment of promissory notes issued by the Company, which had an
aggregate of $12.2 million principal amount at December 31, 1998, and (B) $10.0
million. This indemnity obligation will be in addition to any liability which
the Company may otherwise have.
(c) Each Underwriter severally and not jointly will
indemnify and hold harmless the Company, each of its directors, each of its
officers who have signed the Registration Statement, the Selling Stockholder,
and each person, if any, who controls the Company or the Selling Stockholder
within the meaning of the Act, against any losses, claims, damages or
liabilities to which the Company or any such director, officer, Selling
Stockholder or controlling person may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out
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of or are based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto, or (ii) the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances under which they were made; and will reimburse upon
demand any legal or other expenses reasonably incurred by the Company or any
such director, officer, Selling Stockholder or controlling person in connection
with investigating or defending any such loss, claim, damage, liability, action
or proceeding; provided, however, that each Underwriter will be liable in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission has been made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by or through the Representatives
specifically for use in the preparation thereof. This indemnity agreement will
be in addition to any liability which such Underwriter may otherwise have.
(d) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to this Section 8, such person (the
"INDEMNIFIED PARTY") shall promptly notify the person against whom such
indemnity may be sought (the "INDEMNIFYING PARTY") in writing. No
indemnification provided for in Section 8(a), (b) or (c) shall be available to
any party who shall fail to give notice as provided in this Section 8(d) if the
party to whom notice was not given was unaware of the proceeding to which such
notice would have related and was materially prejudiced by the failure to give
such notice, but the failure to give such notice shall not relieve the
indemnifying party or parties from any liability which it or they may have to
the indemnified party for contribution or otherwise than on account of the
provisions of Section 8(a), (b) or (c). In case any such proceeding shall be
brought against any indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party and shall pay as incurred the
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own counsel
at its own expense. Notwithstanding the foregoing, the indemnifying party shall
pay as incurred (or within 30 days of presentation) the fees and expenses of the
counsel retained by the indemnified party in the event (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel, (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them or (iii) the
indemnifying party shall have failed to assume the defense and employ counsel
acceptable to the indemnified party within a reasonable period of time after
notice of commencement of the action. It is understood that the indemnifying
party shall not, in connection with any proceeding or related proceedings in the
same jurisdiction, be liable for the reasonable fees and expenses of more than
one separate firm for all such indemnified parties. Such firm shall be
designated in writing by you in the case of parties indemnified pursuant to
Section 8(a) or (b) and by the Company and the Selling Stockholder in the case
of parties indemnified pursuant to Section 8(c). The indemnifying party shall
not be liable for any settlement of any proceeding effected without its written
consent but if settled with such
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consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. In addition, the
indemnifying party will not, without the prior written consent of the
indemnified party, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action or proceeding of which
indemnification may be sought hereunder (whether or not any indemnified party is
an actual or potential party to such claim, action or proceeding) unless such
settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim, action or
proceeding.
(e) If the indemnification provided for in this Section 8
is unavailable to or insufficient to hold harmless an indemnified party under
Section 8(a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) in such proportion as
is appropriate to reflect the relative benefits received by the Company and the
Selling Stockholder on the one hand and the Underwriters on the other from the
offering of the Shares. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company and the Selling Stockholder on the
one hand and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities, (or
actions or proceedings in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Selling Stockholder on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company and the Selling Stockholder
bear to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault 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 or the Selling Stockholder on the one hand or the
Underwriters on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Stockholder and the Underwriters
agree that it would not be just and equitable if contributions pursuant to this
Section 8(e) were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this Section 8(e). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) referred to above in this Section 8(e) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (e), (i) no
Underwriter shall be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Shares purchased by
such Underwriter, (ii) no person guilty of fraudulent misrepresentation (within
the
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meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation, and (iii) the
Selling Stockholder shall not be required to contribute any amount in excess of
the sum of (x) the proceeds received by the Selling Stockholder from the
Underwriters in the offering and (y) the lesser of (A) the amount received by
the Selling Stockholder in repayment of promissory notes issued by the Company,
which had an aggregate of $12.2 million principal amount at December 31, 1998,
and (B) $10.0 million. The Underwriters' obligations in this Section 8(e) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(f) In any proceeding relating to the Registration
Statement, any Preliminary Prospectus, the Prospectus or any supplement or
amendment thereto, each party against whom contribution may be sought under this
Section 8 hereby consents to the jurisdiction of any court having jurisdiction
over any other contributing party, agrees that process issuing from such court
may be served upon him or it by any other contributing party and consents to the
service of such process and agrees that any other contributing party may join
him or it as an additional defendant in any such proceeding in which such other
contributing party is a party.
(g) Any losses, claims, damages, liabilities or expenses
for which an indemnified party is entitled to indemnification or contribution
under this Section 8 shall be paid by the indemnifying party to the indemnified
party as such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Company and the Selling Stockholder set
forth in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Underwriter or
any person controlling any Underwriter, the Company, its directors or officers
or any persons controlling the Company, (ii) acceptance of any Shares and
payment therefor hereunder, and (iii) any termination of this Agreement. A
successor to any Underwriter, or to the Company, its directors or officers, or
any person controlling the Company, shall be entitled to the benefits of the
indemnity, contribution and reimbursement agreements contained in this
Section 8.
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9 DEFAULT BY UNDERWRITERS.
If on the Closing Date or the Option Closing Date, as the case
may be, any Underwriter shall fail to purchase and pay for the portion of the
Shares which such Underwriter has agreed to purchase and pay for on such date
(otherwise than by reason of any default on the part of the Company or the
Selling Stockholder), you, as Representatives of the Underwriters, shall use
your reasonable efforts to procure within 36 hours thereafter one or more of the
other Underwriters, or any others, to purchase from the Company and the Selling
Stockholder such amounts as may be agreed upon and upon the terms set forth
herein, the Firm Shares or Option Shares, as the case may be, which the
defaulting Underwriter or Underwriters failed to purchase. If during such 36
hours you, as such Representatives, shall not have procured such other
Underwriters, or any others, to purchase the Firm Shares or Option Shares, as
the case may be, agreed to be purchased by the defaulting Underwriter or
Underwriters, then (a) if the aggregate number of shares with respect to which
such default shall occur does not exceed 10% of the Firm Shares or Option
Shares, as the case may be, covered hereby, the other Underwriters shall be
obligated, severally, in proportion to the respective numbers of Firm Shares or
Option Shares, as the case may be, which they are obligated to purchase
hereunder, to purchase the Firm Shares or Option Shares, as the case may be,
which such defaulting Underwriter or Underwriters failed to purchase, or (b) if
the aggregate number of shares of Firm Shares or Option Shares, as the case may
be, with respect to which such default shall occur exceeds 10% of the Firm
Shares or Option Shares, as the case may be, covered hereby, the Company and the
Selling Stockholder or you as the Representatives of the Underwriters will have
the right, by written notice given within the next 36-hour period to the parties
to this Agreement, to terminate this Agreement without liability on the part of
the non-defaulting Underwriters or of the Company or of the Selling Stockholder
except to the extent provided in Section 8 hereof. In the event of a default by
any Underwriter or Underwriters, as set forth in this Section 9, the Closing
Date or Option Closing Date, as the case may be, may be postponed for such
period, not exceeding seven days, as you, as Representatives, may determine in
order that the required changes in the Registration Statement or in the
Prospectus or in any other documents or arrangements may be effected. The term
"Underwriter" includes any person substituted for a defaulting Underwriter. Any
action taken under this Section 9 shall not relieve any defaulting Underwriter
from liability in respect of any default of such Underwriter under this
Agreement.
10 NOTICES.
All communications hereunder shall be in writing and, except
as otherwise provided herein, will be mailed, delivered, telecopied or
telegraphed and confirmed as follows: if to the Underwriters, to BT Alex. Xxxxx
Incorporated, Xxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx X.
Xxxxx; with a copy to BT Alex. Xxxxx Incorporated, One Bankers Trust Plaza, 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: General Counsel; if to the
Company or the Selling Stockholder, to 000 Xxxxxxxxx Xxxxx Xxxxxxxxx, Xxxxxxxxx
Xxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxx Xxxxxxxxx.
-00-
00
00 XXXXXXXXXXX.
(x) This Agreement may be terminated by you by notice to
the Sellers at any time prior to the Closing Date if any of the following has
occurred: (i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change or any
development involving a prospective material adverse change in or affecting the
condition, financial or otherwise, of the Company and the Subsidiary taken as a
whole or the earnings, business, management, properties, assets, rights,
operations, condition (financial or otherwise) or prospects of the Company and
the Subsidiary taken as a whole, whether or not arising in the ordinary course
of business, (ii) any outbreak or escalation of hostilities or declaration of
war or national emergency or other national or international calamity or crisis
or change in economic or political conditions if the effect of such outbreak,
escalation, declaration, emergency, calamity, crisis or change on the financial
markets of the United States would, in your reasonable judgment, make it
impracticable or inadvisable to market the Shares or to enforce contracts for
the sale of the Shares, or (iii) suspension of trading in securities generally
on the New York Stock Exchange or the American Stock Exchange or limitation on
prices (other than limitations on hours or numbers of days of trading) for
securities on either such Exchange, (iv) the enactment, publication, decree or
other promulgation of any statute, regulation, rule or order of any court or
other governmental authority which in your opinion materially and adversely
affects or may materially and adversely affect the business or operations of the
Company, (v) declaration of a banking moratorium by United States or New York
State authorities, (vi) any downgrading, or placement on any watch list for
possible downgrading, in the rating of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Exchange Act); (vii) the suspension of trading of the
Company's Class A Common Stock by the New York Stock Exchange, the Commission,
or any other governmental authority or, (viii) the taking of any action by any
governmental or regulatory body or agency in respect of its monetary or fiscal
affairs which in your reasonable opinion has a material adverse effect on the
securities markets in the United States; or
(b) as provided in Sections 6 and 9 of this Agreement.
12 SUCCESSORS.
This Agreement has been and is made solely for the benefit of
the Underwriters, the Company and the Selling Stockholder and their respective
successors, executors, administrators, heirs and assigns, and the officers,
directors and controlling persons referred to herein, and no other person will
have any right or obligation hereunder. No purchaser of any of the Shares from
any Underwriter shall be deemed a successor or assign merely because of such
purchase.
13 INFORMATION PROVIDED BY UNDERWRITERS.
The Company, the Selling Stockholder and the Underwriters
acknowledge and agree that the only information furnished or to be furnished by
any Underwriter to the Company for inclusion in any Prospectus or the
Registration Statement consists of the information set forth in the last
paragraph on the
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front cover page (insofar as such information relates to the Underwriters), the
legend set forth on the inside front cover of the Prospectus and the information
under the caption "Underwriting" in the Prospectus.
14 MISCELLANEOUS.
The reimbursement, indemnification and contribution agreements
contained in this Agreement and the representations, warranties and covenants in
this Agreement shall remain in full force and effect regardless of (a) any
termination of this Agreement, (b) any investigation made by or on behalf of any
Underwriter or controlling person thereof, or by or on behalf of the Company or
its directors or officers and (c) delivery of and payment for the Shares under
this Agreement.
This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Maryland.
If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Selling Stockholder, the
Company and the several Underwriters in accordance with its terms.
Any person executing and delivering this Agreement as Attorney-in-Fact
for a Selling Stockholder represents by so doing that he has been duly appointed
as Attorney-in-Fact by such Selling Stockholder pursuant to a validly existing
and binding Power of Attorney which authorizes such Attorney-in-Fact to take
such action.
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Very truly yours,
SKECHERS U.S.A., INC.
By: /s/ Xxxxxx Xxxxxxxxx
--------------------------------------
Chief Executive Officer
SELLING STOCKHOLDER
Xxxxxx X. Xxxxxxxxx and M. Xxxxx Xxxxxxxxx
as Trustees of The Xxxxxxxxx Family Trust
/s/ Xxxxxx Xxxxxxxxx
------------------------------------------
Xxxxxx X. Xxxxxxxxx
/s/ M. Xxxxx Xxxxxxxxx
------------------------------------------
M. Xxxxx Xxxxxxxxx
The foregoing Underwriting Agreement is
hereby confirmed and accepted as of the
date first above written.
BT ALEX. XXXXX INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
As Representatives of the several
Underwriters listed on Schedule I
By: BT Alex. Xxxxx Incorporated
By: /s/ illegible
-----------------------------
Authorized Officer
31
SCHEDULE I
SCHEDULE OF UNDERWRITERS
NUMBER OF FIRM SHARES
UNDERWRITER TO BE PURCHASED
-------------------------------------------------------------------------------------- ------------------------------
BT Alex. Xxxxx Incorporated........................................................ 1,715,000
Prudential Securities Incorporated................................................. 735,000
Bear Xxxxxxx & Co. Inc............................................................. 300,000
CIBC World Markets................................................................. 300,000
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities............................................ 300,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated................................. 300,000
Xxxxxx Xxxxxxx & Co. Incorporated.................................................. 300,000
Xxxxxxx Xxxxx Barney Inc........................................................... 300,000
Xxxxxxxxxxx Xxxxxxx Securities, Inc................................................ 300,000
Xxxxxxxx & Partners, L.P........................................................... 175,000
X.X. Xxxxxxxx & Co................................................................. 175,000
Xxxx Xxxxxxxx Xxxxxxx.............................................................. 175,000
EBI Securities Corporation......................................................... 175,000
Xxxxxx, Xxxxx Xxxxx, Inc........................................................... 175,000
Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc.................................................. 175,000
Gruntal & Co., L.L.C............................................................... 175,000
Josephthal & Co. Inc............................................................... 175,000
McDonald Investments Inc., a Keycorp Company....................................... 175,000
Xxxxx X. Xxxxxx & Co. Inc.......................................................... 175,000
Suntrust Equitable Securities Corporation.......................................... 175,000
Xxxxxx Xxxxxxx Incorporated........................................................ 175,000
First Security Xxx Xxxxxx.......................................................... 175,000
Wedbush Xxxxxx Securities Inc...................................................... 175,000
TOTAL.............................................................................. 7,000,000
---------
32
SCHEDULE II
SCHEDULE OF SELLING STOCKHOLDER
NUMBER OF OPTION SHARES
SELLING STOCKHOLDER TO BE PURCHASED
------------------------------------------------------------------------------------ --------------------------------
Xxxxxx X. Xxxxxxxxx and M. Xxxxx Xxxxxxxxx as trustees of the Xxxxxxxxx Family Trust 1,050,000
TOTAL 1,050,000
