1,800,000 Shares
KOPIN CORPORATION
Common Stock, $.01 par value
UNDERWRITING AGREEMENT
----------------------
October ____, 1999
Credit Suisse First Boston Corporation
CIBC ▇▇▇▇▇▇▇▇▇▇▇ Corp.
▇.▇. ▇▇▇▇▇▇▇▇▇, Towbin
Pacific Growth Equities, Inc.
As Representatives of the Several Underwriters,
c/o Credit Suisse First Boston Corporation,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. Kopin Corporation, a Delaware corporation ("Company")
proposes to issue and sell 1,800,000 shares (the "Firm Securities") of its
Common Stock, $.01 par value per share (its "Securities"). The Company also
proposes to sell to the Underwriters, at the option of the Underwriters, an
aggregate of not more than 270,000 additional shares of its Securities (the
"Optional Securities"). The Firm Securities and the Optional Securities are
herein collectively called the "Offered Securities". The Company hereby agrees
with the several Underwriters named in Schedule A hereto ("Underwriters") as
follows:
2. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, the several Underwriters that:
(i) A registration statement (No. 333-87429) relating to the Offered
Securities, including a form of prospectus, has been filed with the
Securities and Exchange Commission ("Commission") and either (A) has been
declared effective under the Securities Act of 1933 ("Act") and is not
proposed to be amended or (B) is proposed to be amended by amendment or
post-effective amendment. If such registration statement (the "initial
registration statement") has been declared effective, either (A) an
additional registration statement (the "additional registration statement")
relating to the Offered Securities may have been filed with the Commission
pursuant to Rule 462(b) ("Rule 462(b)") under the Act and, if so filed, has
become effective upon filing pursuant to such Rule and the Offered
Securities all have been duly registered under the Act pursuant to the
initial registration statement and, if applicable, the additional
registration statement or (B)
such an additional registration statement is proposed to be filed with the
Commission pursuant to Rule 462(b) and will become effective upon filing
pursuant to such Rule and upon such filing the Offered Securities will all
have been duly registered under the Act pursuant to the initial
registration statement and such additional registration statement. If the
Company does not propose to amend the initial registration statement or if
an additional registration statement has been filed and the Company does
not propose to amend it, and if any post-effective amendment to either such
registration statement has been filed with the Commission prior to the
execution and delivery of this Agreement, the most recent amendment (if
any) to each such registration statement has been declared effective by the
Commission or has become effective upon filing pursuant to Rule 462(c)
("Rule 462(c)") under the Act or, in the case of the additional
registration statement, Rule 462(b). For purposes of this Agreement,
"Effective Time" with respect to the initial registration statement or, if
filed prior to the execution and delivery of this Agreement, the additional
registration statement means (A) if the Company has advised the
Representatives that it does not propose to amend such registration
statement, the date and time as of which such registration statement, or
the most recent post-effective amendment thereto (if any) filed prior to
the execution and delivery of this Agreement, was declared effective by the
Commission or has become effective upon filing pursuant to Rule 462(c), or
(B) if the Company has advised the Representatives that it proposes to file
an amendment or post-effective amendment to such registration statement,
the date and time as of which such registration statement, as amended by
such amendment or post-effective amendment, as the case may be, is declared
effective by the Commission. If an additional registration statement has
not been filed prior to the execution and delivery of this Agreement but
the Company has advised the Representatives that it proposes to file one,
"Effective Time" with respect to such additional registration statement
means the date and time as of which such registration statement is filed
and becomes effective pursuant to Rule 462(b). "Effective Date" with
respect to the initial registration statement or the additional
registration statement (if any) means the date of the Effective Time
thereof. The initial registration statement, as amended at its Effective
Time, including all material incorporated by reference therein, including
all information contained in the additional registration statement (if any)
and deemed to be a part of the initial registration statement as of the
Effective Time of the additional registration statement pursuant to the
General Instructions of the Form on which it is filed and including all
information (if any) deemed to be a part of the initial registration
statement as of its Effective Time pursuant to Rule 430A(b) ("Rule
430A(b)") under the Act, is hereinafter referred to as the "Initial
Registration Statement". The additional registration statement, as amended
at its Effective Time, including the contents of the initial registration
statement incorporated by reference therein and including all information
(if any) deemed to be a part of the additional registration statement as of
its Effective Time pursuant to Rule 430A(b), is hereinafter referred to as
the "Additional Registration Statement". The Initial Registration Statement
and the Additional Registration are hereinafter referred to collectively as
the "Registration Statements" and individually as a "Registration
Statement". The form of prospectus relating to the Offered Securities, as
first filed with the Commission pursuant to and in accordance with Rule
424(b) ("Rule 424(b)") under the Act or (if no such filing is required) as
included in a Registration Statement, including all material incorporated
by reference in such prospectus, is hereinafter referred to as the
"Prospectus". No document has been or will be prepared or distributed in
reliance on Rule 434 under the Act.
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(ii) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement: (A) on the Effective
Date of the Initial Registration Statement, the Initial Registration
Statement conformed in all material respects to the requirements of the Act
and the rules and regulations of the Commission ("Rules and Regulations")
and did not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading, (B) on the Effective Date of the
Additional Registration Statement (if any), each Registration Statement
conformed or will conform, in all material respects to the requirements of
the Act and the Rules and Regulations and did not include, or will not
include, any untrue statement of a material fact and did not omit, or will
not omit, to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and (C) on the
date of this Agreement, the Initial Registration Statement and, if the
Effective Time of the Additional Registration Statement is prior to the
execution and delivery of this Agreement, the Additional Registration
Statement each conforms, and at the time of filing of the Prospectus
pursuant to Rule 424(b) or (if no such filing is required) at the Effective
Date of the Additional Registration Statement in which the Prospectus is
included, each Registration Statement and the Prospectus will conform, in
all material respects to the requirements of the Act and the Rules and
Regulations, and neither of such documents includes, or will include, any
untrue statement of a material fact or omits, or will omit, to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading. If the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement: on the Effective Date of the Initial Registration Statement, the
Initial Registration Statement and the Prospectus will conform in all
material respects to the requirements of the Act and the Rules and
Regulations, neither of such documents will include any untrue statement of
a material fact or will omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading,
and no Additional Registration Statement has been or will be filed. The two
preceding sentences do not apply to statements in or omissions from a
Registration Statement or the Prospectus based upon written information
furnished to the Company by any Underwriter through the Representatives
specifically for use therein, it being understood and agreed that the only
such information is that described as such in Section 7(b) hereof.
(iii) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with
power and authority (corporate and other) to own its properties and conduct
its business as described in the Prospectus; and the Company is duly
qualified to do business as a foreign corporation in good standing in all
other jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification except where the
failure to be so qualified does not have a material adverse effect on the
condition (financial or other), business, prospects, properties, net worth
or results of operations of the Company and its subsidiaries (as defined
below) taken as a whole ("Material Adverse Effect").
(iv) Each majority owned subsidiary of the Company (each a "Subsidiary"
and collectively the "Subsidiaries") has been duly incorporated and is an
existing corporation in good standing under the laws of the jurisdiction of
its incorporation, with power and authority (corporate and other) to own
its properties and conduct its business as described in the Prospectus; and
each Subsidiary is duly qualified to do business as a foreign
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corporation in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business requires such
qualification except where the failure to be so qualified does not have a
Material Adverse Effect; all of the issued and outstanding capital stock of
each Subsidiary has been duly authorized and validly issued and is fully
paid and nonassessable; and the capital stock of each Subsidiary, directly
or through Subsidiaries, is owned free from liens, encumbrances and
defects.
(v) The Offered Securities and all other outstanding shares of capital
stock of the Company have been duly authorized and validly issued, fully
paid and nonassessable and conform to the description thereof contained in
the Prospectus; and the stockholders of the Company have no preemptive
rights with respect to the Securities.
(vi) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person that would
give rise to a valid claim against the Company or any Underwriter for a
brokerage commission, finder's fee or other like payment in connection with
this offering.
(vii) There are no contracts, agreements or understandings between the
Company and any person granting such person the right (which right has not
been waived) to require the Company to file a registration statement under
the Act with respect to any securities of the Company owned or to be owned
by such person or to require the Company to include such securities in the
securities registered pursuant to a Registration Statement or in any
securities being registered pursuant to any other registration statement
filed by the Company under the Act.
(viii) Except as disclosed in the Prospectus, there are no outstanding
(x) securities or obligations of the Company or any Subsidiary convertible
into or exchangeable for any capital stock of the Company or any such
Subsidiary, (y) warrants, rights or options to subscribe for or purchase
from the Company or any such Subsidiary any such capital stock or any such
convertible or exchangeable securities or obligations, or (z) obligations
of the Company or any such Subsidiary to issue any shares of capital stock,
any such convertible or exchangeable securities or obligations, or any such
warrants, rights or options.
(ix) Except for the shares of capital stock of each of the Subsidiaries
owned by the Company and such Subsidiaries, neither the Company nor any
such Subsidiary owns any shares of stock or any other equity securities of
any corporation or has any equity interest in any firm, partnership,
association or other entity, except as described in or contemplated by the
Prospectus.
(x) The Offered Securities have been approved for listing subject to
notice of issuance on the Nasdaq Stock Market's National Market.
(xi) Neither the Company nor any of its affiliates, nor any person
acting on behalf of any of them has, directly or indirectly, (x) taken any
action designed to cause or to result in, or that has constituted or which
might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Offered Securities, or (y) since the filing of the
Initial Registration Statement (I) sold, bid for, purchased, or paid anyone
any compensation for soliciting
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purchases of, the Offered Securities or (II) paid or agreed to pay to any
person any compensation for soliciting another to purchase any other
securities of the Company.
(xii) No consent, approval, authorization, or order of, or filing with,
any governmental agency or body or any court is required to be obtained or
made by the Company for the consummation of the transactions contemplated
by this Agreement in connection with the sale of the Offered Securities,
except such as have been obtained and made under the Act and such as may be
required under state securities laws.
(xiii) The execution, delivery and performance of this Agreement, and
the consummation of the transactions herein contemplated will not result in
a breach or violation of any of the terms and provisions of, or constitute
a default under, any statute, any rule, regulation or order of any
governmental agency or body or any court, domestic or foreign, having
jurisdiction over the Company or any Subsidiary or any of their properties,
or any agreement or instrument to which the Company or any such Subsidiary
is a party or by which the Company or any such Subsidiary is bound or to
which any of the properties of the Company or any such Subsidiary is
subject, or the charter or by-laws of the Company or any such Subsidiary.
(xiv) This Agreement has been duly authorized, executed and delivered
by the Company.
(xv) Except as disclosed in the Prospectus, the Company and its
Subsidiaries have good and marketable title to all real properties and all
other properties and assets owned by them, in each case free from liens,
encumbrances and defects that would materially affect the value thereof or
materially interfere with the use made or to be made thereof by them; and
except as disclosed in the Prospectus, the Company and its Subsidiaries
hold any leased real or personal property under valid and enforceable
leases with no exceptions that would materially interfere with the use made
or to be made thereof by them.
(xvi) The Company and its Subsidiaries possess adequate certificates,
authorities or permits issued by appropriate governmental agencies or
bodies necessary to conduct the business now operated by them and have not
received any notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit that, if
determined adversely to the Company or any of its Subsidiaries, would
individually or in the aggregate have a Material Adverse Effect.
(xvii) No labor dispute with the employees of the Company or any
Subsidiary exists or, to the knowledge of the Company, is imminent that
might have a Material Adverse Effect.
(xviii) Except as disclosed in the Prospectus, the Company and each of
its Subsidiaries have the right to use or can acquire on reasonable terms
all trademarks, trade names, trade secrets, servicemarks, inventions,
patent rights, mask works, copyrights, licenses, software code, audiovisual
works, formats, algorithms and underlying data, approvals and governmental
authorizations now used in, or which are necessary for fulfillment of their
respective obligations or the conduct of their respective businesses as now
conducted or proposed to be conducted as described in the Prospectus;
except as discussed in the Prospectus, the expiration of any trademarks,
trade names, trade secrets, servicemarks,
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inventions, patent rights, mask works, copyrights or licenses would not
have a Material Adverse Effect; and neither the Company nor any of its
Subsidiaries is infringing any trademark, trade name rights, patent rights
relating to patents that have issued, mask works, copyrights, licenses,
trade secret, servicemarks or other similar rights of others, and there is
no claim being made against the Company or any of its Subsidiaries
regarding trademark, trade name, patent, mask work, copyright, license,
trade secret or other infringement or assertion of intellectual property
rights which could have a Material Adverse Effect. With respect to the
Company's patent portfolio (including those under license from the
Massachusetts Institute of Technology), all requisite maintenance fees have
been paid in the United States and foreign jurisdictions and no patent or
patent application has lapsed for failure to pay such fees. The Company has
agreements in place with such employees, consultants or other persons or
parties engaged by the Company or any Subsidiary sufficient to enable the
Company and any Subsidiary to fulfill their contractual obligations and to
conduct their respective businesses as now conducted as described in the
Prospectus and providing for the assignment to the Company of all
intellectual property rights in the work performed and the protection of
the trade secrets and confidential information of the Company, each of its
Subsidiaries and of third parties.
(xix) Neither the Company nor any of its Subsidiaries is in violation of
any statute, any rule, regulation, decision or order of any governmental
agency or body or any court, domestic or foreign, relating to the use,
disposal or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to hazardous
or toxic substances (collectively, "environmental laws"), and the Company
and each of its Subsidiaries have received all permits, licenses or other
approvals required of them under applicable environmental laws and the
Company and each Subsidiary is in compliance with all terms and conditions
of any such permits, licenses or other approvals except where the failure
to receive such permits, licenses or approvals or failure to comply
therewith would not individually or in the aggregate have a Material
Adverse Effect; and the Company is not aware of any pending investigation
which might lead to such a claim.
(xx) Neither the Company nor any of its Subsidiaries is in violation of
any statute, any rule, regulation, decision or order of any governmental
agency or body of any court, domestic or foreign relating to occupational
safety and health and the Company and its Subsidiaries have received all
permits, licenses or other approvals required of them under applicable
federal and state occupational safety and health laws and regulations to
conduct their respective businesses, and the Company and each such
Subsidiary is in compliance with all terms and conditions of any such
permit, license or approval, except any such violation of law or
regulation, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such
permits, licenses or approvals which would not, individually or in the
aggregate, have a Material Adverse Effect.
(xxi) Except as disclosed in the Prospectus, there are no pending
actions, suits or
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proceedings against or affecting the Company, any of its Subsidiaries or
any of their respective properties that, if determined adversely to the
Company or any of its Subsidiaries, would individually or in the aggregate
have a Material Adverse Effect, or would materially and adversely affect
the ability of the Company to perform its obligations under this Agreement,
or which are otherwise material in the context of the sale of the Offered
Securities; and no such actions, suits or proceedings are threatened or, to
the Company's knowledge, contemplated.
(xxii) The financial statements included in each Registration Statement
and the Prospectus present fairly the financial position of the Company and
its consolidated subsidiaries as of the dates shown and their results of
operations and cash flows for the periods shown, and such financial
statements have been prepared in conformity with the generally accepted
accounting principles in the United States ("GAAP") applied on a consistent
basis.
(xxiii) Except as disclosed in the Prospectus, since the date of the
latest audited financial statements included in the Prospectus, there has
been no material adverse change, nor any development or event involving a
prospective material adverse change, in the condition (financial or other),
business, prospects, properties, net worth or results of operations of the
Company and its Subsidiaries taken as a whole, and, except as disclosed in
or contemplated by the Prospectus, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class
of its capital stock.
(xxiv) Deloitte & Touche LLP, who have certified certain financial
statements of the Company and its consolidated Subsidiaries and delivered
their report with respect to the audited consolidated financial statements
and schedules included in the Registration Statements and the Prospectus,
are independent public accountants as required by the Act and the
applicable rules and regulations thereunder.
(xxv) The Company and each of its Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (w) transactions are executed in accordance with management's general
or specific authorizations; (x) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and to
maintain asset accountability; (y) access to assets is permitted only in
accordance with management's general or specific authorization; and (z) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(xxvi) No Subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, making any other
distribution on such Subsidiary's capital stock, repaying to the Company
any loans or advances to such Subsidiary from the Company or transferring
any of such Subsidiary's property or assets to the Company or any other
Subsidiary of the Company, and the Company is not currently prohibited,
directly or indirectly, from paying any dividends or making any other
distribution on its capital stock, in each case except as described in or
contemplated by the Prospectus or prohibited by applicable law.
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(xxvii) The Company has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file would not have a
Materially Adverse Effect) and has paid all taxes required to be paid by it
and any other assessment, fine or penalty levied against it, to the extent
that any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in good faith
or as described in or contemplated by the Prospectus.
(xxviii) The Company and each of its Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the businesses in which they
are engaged; neither the Company nor any such Subsidiary has been refused
any insurance coverage sought or applied for; and neither the Company nor
any such Subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or
to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not have a Material Adverse
Effect.
(xxix) 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"); 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 liability; the Company has not
incurred and does not expect to incur liability under (x) Title IV of ERISA
with respect to termination of, or withdrawal from, any "pension plan" or
(y) 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
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.
(xxx) No default exists, and no event has occurred which, with notice
or lapse of time or both, would constitute a default in the due performance
and observance of any term, covenant or condition of any indenture,
mortgage, deed of trust, lease or other agreement or instrument to which
the Company or any of its Subsidiaries is a party or by which the Company
or any of its Subsidiaries or any of their respective properties is bound.
(xxxi) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, neither the Company
nor any of its Subsidiaries has sustained any material loss or interference
with their
8
respective businesses or properties from fire, flood, hurricane, accident
or other calamity, whether or not covered by insurance, or from any labor
dispute or any legal or governmental proceeding, and there has been no
materially adverse change (including, without limitation, a change in
management or control), or development involving a prospective materially
adverse change, in the condition (financial or otherwise), management,
earnings, property, business affairs or business prospects, stockholders'
equity, net worth or results of operations of the Company or any of its
Subsidiaries, taken as a whole, other than as described in or contemplated
by the Prospectus (exclusive of any amendments or supplements thereto).
(xxxii) Except as disclosed in the Prospectus, no receiver or
liquidator (or similar person) has been appointed in respect of the Company
or any Subsidiary of the Company or in respect of any part of the assets of
the Company or any Subsidiary of the Company; no resolution, order of any
court, regulatory body, governmental body or otherwise, or petition or
application for an order, has been passed, made or to the Company's
knowledge presented for the winding up of the Company or any Subsidiary of
the Company or for the protection of the Company or any such Subsidiary
from its creditors; and the Company has not, and no Subsidiary of the
Company has, stopped or suspended payments of its debts, become unable to
pay its debts or otherwise become insolvent.
(xxxiii) The Company is not and, after giving effect to the offering
and sale of the Offered Securities and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment company"
as defined in the Investment Company Act of 1940.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to purchase
from the Company at a purchase price of $ per share, that number of
Firm Securities (rounded up or down, as determined by Credit Suisse First Boston
Corporation ("CSFBC") in its discretion, in order to avoid fractions) obtained
by multiplying 1,800,000 Firm Securities by a fraction the numerator of which is
the number of Firm Securities set forth opposite the name of such Underwriter in
Schedule A hereto and the denominator of which is the total number of Firm
Securities.
The Company will deliver the Firm Securities to the Representatives for the
accounts of the Underwriters, against payment of the purchase price in Federal
(same day) funds by official bank check or checks or wire transfer to an account
at a bank reasonably acceptable to CSFBC drawn to the order of the Company, at
the office of , at A.M., New York time, on ,
or at such other time not later than seven full business days thereafter as
CSFBC and the Company determine, such time being herein referred to as the
"First Closing Date". The certificates for the Firm Securities so to be
delivered will be in definitive form, in such denominations and registered in
such names as CSFBC requests and will be made available for
9
checking and packaging at the office of [Boston Equiserve, L.P.] at least 24
hours prior to the First Closing Date.
In addition, upon written notice from CSFBC given to the Company from time
to time not more than 30 days subsequent to the date of the Prospectus, the
Underwriters may purchase all or less than all of the Optional Securities at the
purchase price per Security to be paid for the Firm Securities. The Company
agrees to sell to the Underwriters the Optional Securities. Such Optional
Securities shall be purchased from the Company for the account of each
Underwriter in the same proportion as the number of Firm Securities set forth
opposite such Underwriter's name bears to the total number of Firm Securities
(subject to adjustment by CSFBC to eliminate fractions) and may be purchased by
the Underwriters only for the purpose of covering over-allotments made in
connection with the sale of the Firm Securities. No Optional Securities shall be
sold or delivered unless the Firm Securities previously have been, or
simultaneously are, sold and delivered. The right to purchase the Optional
Securities or any portion thereof may be exercised from time to time and to the
extent not previously exercised may be surrendered and terminated at any time
upon notice by CSFBC to the Company.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "Optional Closing Date", which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "Closing Date"), shall be determined by CSFBC
but shall be not later than five full business days after written notice of
election to purchase Optional Securities is given. The Company will deliver the
Optional Securities being purchased on each Optional Closing Date to the
Representatives for the accounts of the several Underwriters, against payment of
the purchase price therefor in Federal (same day) funds by official bank check
or checks or wire transfer to an account at a bank reasonably acceptable to
CSFBC drawn to the order of the Company, at the office of .
The certificates for the Optional Securities being purchased on each Optional
Closing Date will be in definitive form, in such denominations and registered in
such names as CSFBC requests upon reasonable notice prior to such Optional
Closing Date and will be made available for checking and packaging at the office
of [Boston Equiserve, L.P.] at a reasonable time in advance of such Optional
Closing Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
5. Certain Agreements of the Company. The Company agrees with the several
Underwriters that:
(a) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement, the Company will file the
Prospectus with the Commission pursuant to and in accordance with subparagraph
(1) or (2) (as consented to by CSFBC) of Rule 424(b) not later than the second
business day following the execution and delivery of this Agreement (or, if
applicable and if consented to by CSFBC, subparagraph (4) or (5)).
The Company will advise CSFBC promptly of any such filing pursuant to
Rule 424(b). If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement and an additional
registration statement is necessary to register a portion of the Offered
Securities under the Act but the Effective Time thereof has not occurred as of
such execution and delivery, the Company will file the additional registration
statement or, if filed, will file a post-
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effective amendment thereto with the Commission pursuant to and in accordance
with Rule 462(b) on or prior to 10:00 P.M., New York time, on the date of this
Agreement or, if earlier, on or prior to the time the Prospectus is printed and
distributed to any Underwriter, or will make such filing at such later date as
shall have been consented to by CSFBC (such consent not to be unreasonably
withheld).
(b) The Company will advise CSFBC promptly of any proposal to amend
or supplement the initial or any additional registration statement as filed or
the related prospectus or the Initial Registration Statement, the Additional
Registration Statement (if any) or the Prospectus and will not effect such
amendment or supplementation without CSFBC's consent (such consent not to be
unreasonably withheld); and the Company will also advise CSFBC promptly of the
effectiveness of each Registration Statement (if its Effective Time is
subsequent to the execution and delivery of this Agreement) and of any amendment
or supplementation of a Registration Statement or the Prospectus and of the
institution by the Commission of any stop order proceedings in respect of a
Registration Statement and will use its best efforts to prevent the issuance of
any such stop order and to obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with sales by
any Underwriter or dealer, any event occurs as a result of which the Prospectus
as then amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it is necessary at any time to amend the Prospectus to comply
with the Act, the Company will promptly notify CSFBC of such event and will
promptly prepare and file with the Commission, at its own expense, an amendment
or supplement which will correct such statement or omission or an amendment
which will effect such compliance. Neither CSFBC's consent to, nor the
Underwriters' delivery of, any such amendment or supplement shall constitute a
waiver of any of the conditions set forth in Section 6.
(d) As soon as practicable, but not later than the Availability Date
(as defined below), the Company will make generally available to its
securityholders an earnings statement covering a period of at least 12 months
beginning after the Effective Date of the Initial Registration Statement (or, if
later, the Effective Date of the Additional Registration Statement) which will
satisfy the provisions of Section 11(a) of the Act. For the purpose of the
preceding sentence, "Availability Date" means the 45th day after the end of the
fourth fiscal quarter following the fiscal quarter that includes such Effective
Date, except that, if such fourth fiscal quarter is the last quarter of the
Company's fiscal year, "Availability Date" means the 90th day after the end of
such fourth fiscal quarter.
(e) The Company will furnish to the Representatives copies of each
Registration Statement (5 of which will be signed and will include all
exhibits), each related preliminary prospectus, and, so long as a prospectus
relating to the Offered Securities is required to be delivered under the Act in
connection with sales by any Underwriter or dealer, the Prospectus and all
amendments and supplements to such documents, in each case in such quantities as
CSFBC reasonably requests. The Prospectus shall be so furnished on or prior to
3:00 P.M., New York time, on the business day following the later of the
execution and delivery of this Agreement or the Effective Time of the Initial
Registration Statement. All other such documents shall be so furnished as soon
as available. The Company will pay the expenses of printing and distributing to
11
the Underwriters all such documents.
(f) The Company will arrange for the qualification of the Offered
Securities for sale under the laws of such jurisdictions as CSFBC designates and
will use its best reasonable efforts to maintain such qualifications in effect
so long as required for the distribution.
(g) During the period of 5 years hereafter, the Company will furnish
to the Representatives and, upon request, to each of the other Underwriters, as
soon as practicable after the end of each fiscal year, a copy of its annual
report to stockholders for such year; and the Company will furnish to the
Representatives (i) as soon as available, a copy of each report and any
definitive proxy statement of the Company filed with the Commission under the
Securities Exchange Act of 1934 or mailed to stockholders, and (ii) from time to
time, such other public information concerning the Company as CSFBC may
reasonably request.
(h) For a period of 90 days after the date hereof, the Company will
not offer, sell, contract to sell, pledge or otherwise dispose of, directly or
indirectly, or file with the Commission a registration statement under the Act
relating to, any additional shares of its Securities or securities convertible
into or exchangeable or exercisable for any shares of its Securities, or
publicly disclose the intention to make any such offer, sale, pledge,
disposition or filing, without the prior written consent of CSFBC, except
issuances of Securities pursuant to the conversion or exchange of convertible or
exchangeable securities or the exercise of warrants or options, in each case
outstanding on the date hereof, grants of employee stock options pursuant to the
terms of a plan in effect on the date hereof, or issuances of Securities
pursuant to the exercise of such options.
(i) The Company agrees with the several Underwriters that the Company
will pay all expenses incident to the performance of the obligations of the
Company under this Agreement, (i) for any filing fees and other expenses
(including fees and disbursements of counsel) in connection with qualification
of the Offered Securities for sale under the laws of such jurisdictions as CSFBC
designates and the printing of memoranda relating thereto, (ii) for the filing
fee incident to, and the reasonable fees and disbursements of counsel to the
Underwriters in connection with, the review by the National Association of
Securities Dealers, Inc. of the Offered Securities, (iii) for any travel
expenses of the Company's officers and employees and any other expenses of the
Company in connection with attending or hosting meetings with prospective
purchasers of the Offered Securities, (iv) for expenses incurred in distributing
preliminary prospectuses and the Prospectus (including any amendments and
supplements thereto) to the Underwriters, (v) all expenses arising from the
quoting of the Offered Securities on the Nasdaq National Market, and (vi) all
arrangements relating to the preparation, issuance and delivery to the
Underwriters of any certificates evidencing the Offered Securities, including
transfer agent's and registrar's fees.
(j) The Company will apply the net proceeds from the sale of the
Offered Securities as set forth under "Use of Proceeds" in the Prospectus.
(k) Neither the Company nor any of its affiliates, nor any person
acting on behalf of any of them will, directly or indirectly, (i) take any
action designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Offered Securities or (ii) (x) sell, bid for, purchase, or pay anyone any
compensation for soliciting purchases of, the Offered Securities or (y) pay or
agree to pay to any person any compensation for
12
soliciting another to purchase any other securities of the Company.
(l) If at any time during the 25-day period after the Registration
Statement becomes effective or during the period prior to any Closing Date, any
rumor, publication or event relating to or affecting the Company shall occur as
a result of which in the Representatives' reasonable judgment the market price
of the Offered Securities has been or is likely to be materially affected
(regardless of whether such rumor, publication or event necessitates a
supplement to or amendment of the Prospectus), the Company will, after notice
from the Representatives advising the Company to the effect set forth above,
forthwith prepare, consult with the Representatives concerning the substance of,
and disseminate a press release responding to or commenting on such rumor,
publication or event or other public statement, that is reasonably satisfactory
to the Representatives.
6. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Firm Securities on the
First Closing Date and the Optional Securities to be purchased on each Optional
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Company herein, to the accuracy of the statements
of Company officers made pursuant to the provisions hereof, to the performance
by the Company of its obligations hereunder and to the following additional
conditions precedent:
(a) The Representatives shall have received a letter, dated the date
of delivery thereof (which, if the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement, shall be on or prior to the date of this Agreement or, if the
Effective Time of the Initial Registration Statement is subsequent to the
execution and delivery of this Agreement, shall be prior to the filing of
the amendment or post-effective amendment to the registration statement to
be filed shortly prior to such Effective Time), of Deloitte & Touche LLP
confirming that they are independent public accountants within the meaning
of the Act and the applicable published Rules and Regulations thereunder
and stating to the effect that:
(i) in their opinion the financial statements and schedules
examined by them and included in the Registration Statements comply as to
form in all material respects with the applicable accounting requirements
of the Act and the related published Rules and Regulations;
(ii) on the basis of their review, a reading of the latest
available interim financial statements of the Company, inquiries of
officials of the Company who have responsibility for financial and
accounting matters and other specified procedures, nothing came to their
attention that caused them to believe that:
(A) the unaudited financial statements included in the
Registration Statements do not comply as to form in all material respects
with the applicable accounting requirements of the Act and the related
published Rules and Regulations or any material modifications should be
made to such
13
unaudited financial statements for them to be in conformity with generally
accepted accounting principles;
(B) the unaudited consolidated total revenues, total expenses,
loss from operations, net income (loss) and net income (loss) per share
amounts for the six-month periods ended June 27, 1998 and July 3, 1999
included in the Prospectus do not agree with the amounts set forth in the
unaudited consolidated financial statements for those same periods or were
not determined on a basis substantially consistent with that of the
corresponding amounts in the audited statements of income;
(C) at the date of the latest available balance sheet read by
such accountants, or at a subsequent specified date not more than three
business days prior to the date of such letter, there was any change in the
capital stock or any increase in short-term indebtedness or long-term debt
of the Company and its consolidated subsidiaries or, at the date of the
latest available balance sheet read by such accountants, there was any
decrease in consolidated total current assets or total assets, as compared
with amounts shown on the latest balance sheet included in the Prospectus;
or
(D) for the period from the closing date of the latest income
statement included in the Prospectus to the closing date of the latest
available income statement read by such accountants there were any
decreases, as compared with the corresponding period of the previous year,
in consolidated net sales or net operating income in the total or per share
amounts of consolidated net income;
except in all cases set forth in clauses (A), (B), (C) and (D) above
for changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(iii) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information contained
in the Registration Statements (in each case to the extent that such dollar
amounts, percentages and other financial information are derived from the
general accounting records of the Company and its subsidiaries subject to
the internal controls of the Company's accounting system or are derived
directly from such records by analysis or computation) with the results
obtained from inquiries, a reading of such general accounting records and
other procedures specified in such letter and have found such dollar
amounts, percentages and other financial information to be in agreement
with such results, except as otherwise specified in such letter.
For purposes of this subsection, (i) if the Effective Time of the Initial
Registration Statements is subsequent to the execution and delivery of this
Agreement, "Registration
14
Statements" shall mean the initial registration statement as proposed to be
amended by the amendment or post-effective amendment to be filed shortly
prior to its Effective Time, (ii) if the Effective Time of the Initial
Registration Statements is prior to the execution and delivery of this
Agreement but the Effective Time of the Additional Registration Statement
is subsequent to such execution and delivery, "Registration Statements"
shall mean the Initial Registration Statement and the additional
registration statement as proposed to be filed or as proposed to be amended
by the post-effective amendment to be filed shortly prior to its Effective
Time, and (iii) "Prospectus" shall mean the prospectus included in the
Registration Statements.
(b) If the Effective Time of the Initial Registration Statement is
not prior to the execution and delivery of this Agreement, such Effective
Time shall have occurred not later than 10:00 P.M., New York time, on the
date of this Agreement or such later date as shall have been consented to
by CSFBC. If the Effective Time of the Additional Registration Statement
(if any) is not prior to the execution and delivery of this Agreement, such
Effective Time shall have occurred not later than 10:00 P.M., New York
time, on the date of this Agreement or, if earlier, the time the Prospectus
is printed and distributed to any Underwriter, or shall have occurred at
such later date as shall have been consented to by CSFBC. If the Effective
Time of the Initial Registration Statement is prior to the execution and
delivery of this Agreement, the Prospectus shall have been filed or shall
be filed in a timely manner with the Commission in accordance with the
Rules and Regulations and Section 5 of this Agreement. Prior to such
Closing Date, no stop order suspending the effectiveness of a Registration
Statement shall have been issued and no proceedings for that purpose shall
have been instituted or, to the knowledge of the Company or the
Representatives, shall be contemplated by the Commission.
(c) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development or event
involving a prospective change, in the condition (financial or other),
business, prospects, properties, net worth or results of operations of the
Company or its Subsidiaries which, in the judgment of a majority in
interest of the Underwriters including the Representatives, is material and
adverse and makes it impractical or inadvisable to proceed with completion
of the public offering or the sale of and payment for the Offered
Securities; (ii) any downgrading in the rating of any debt securities of
the Company by any "nationally recognized statistical rating organization"
(as defined for purposes of Rule 436(g) under the Act), or any public
announcement that any such organization has under surveillance or review
its rating of any debt securities of the Company (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (iii) any
suspension or limitation of trading in securities generally on the New York
Stock Exchange, or any setting of minimum prices for trading on such
exchange, or any suspension of trading of any securities of the Company on
any exchange or in the over-the-counter market; (iv) any banking moratorium
declared by U.S. Federal or New York authorities; or (v) any outbreak or
escalation of major hostilities in which the United States is involved, any
declaration of war by Congress or any other substantial national or
international calamity or emergency if, in the judgment of a majority in
interest of the Underwriters including the Representatives, the effect of
any such outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the public
offering or the sale of and payment for the Offered Securities.
15
(d) The Representatives shall have received an opinion, dated such
Closing Date, of ▇▇▇▇▇▇▇ ▇▇▇▇, LLP, counsel for the Company, to the effect that:
(i) Each of the Company and its Subsidiaries other than Kowon
Technology Co. Ltd. (its "U.S. Subsidiaries"), (A) has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation, (B) is duly
qualified and in good standing as a foreign corporation in those
jurisdictions set forth as an exhibit to the opinion, and (C) has all
requisite corporate power and authority to own or lease its properties
and conduct its business as described in the Registration Statement
and Prospectus;
(ii) The Company owns of record and, except as otherwise
indicated, to the best of such counsel's knowledge, beneficially,
directly or indirectly, one hundred percent (100%) of the outstanding
shares of capital stock of its U.S. Subsidiaries, all such shares have
been duly authorized and validly issued, and, assuming payment
therefor in accordance with the resolutions authorizing such
issuances, are fully paid and non-assessable; to the best of such
counsel's knowledge, such shares were not issued in violation of any
preemptive or similar rights and are owned free and clear of any
liens, charges, claims, encumbrances, pledges, security interests,
defects or other restrictions or equities of any kind whatsoever
(other than restrictions arising under Federal or state securities
law);
(iii) The authorized capital stock of the Company is as set forth
in the Prospectus under the heading "Capitalization". All Securities
issued and outstanding prior to the issuance of the Offered Securities
have been duly authorized and validly issued and, assuming payment
therefor in accordance with the resolutions authorizing such issuances
or in accordance with the terms of the applicable option or warrant,
as the case may be, are fully paid and non-assessable; and none of
such shares were issued in violation of any statutory preemptive or,
to the best of such counsel's knowledge, other similar rights. To the
best of such counsel's knowledge, the Offered Securities are not and
will not be subject to any preemptive or other similar rights. The
Offered Securities being offered by the Company have been duly
authorized by all necessary corporate action of the Company and, when
issued, paid for and delivered in accordance with the terms of the
Underwriting Agreement, and the certificates evidencing such Offered
Securities are duly countersigned by or issued by the Company's
transfer agent and registrar, will be validly issued, fully paid and
non-assessable;
(iv) The Registration Statement has become effective under the
Act, and any required filing of the Prospectus pursuant to Rule 424(b)
has been made in the manner and within the time period required by
Rule 424(b), and, to the best of such counsel's knowledge, no stop
order suspending the effectiveness of the Registration Statement has
been issued, and no proceedings for that purpose have been duly
instituted or threatened by the Commission;
(v) The descriptions in the Prospectus summarizing (a) documents
specifically referenced under the heading "Business--The Kopin
Solution",
16
"Business--Markets and Customers", and "Business--Sales and
Marketing", (b) the leases and agreements specifically referenced
under the heading "Manufacturing and Facilities", (c) the descriptions
of the transactions specifically referenced under the heading
"Investments in Related Businesses" and (d) the matters specifically
referenced under the heading "Legal Proceedings" are accurate
summaries of such documents and matters in all material respects. Such
counsel does not know of any contracts or documents of a character
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
which are not described and filed as required;
(vi) The statements set forth in the Company's Registration
Statement on Form 8-A, dated February 20, 1992, in the second
paragraph under the sub-heading "Common Stock" and in the second
paragraph under the heading "Preferred Stock," insofar as such
statements purport to summarize certain provisions of the capital
stock of the Company, provide a fair summary of such provisions; such
counsel has reviewed the statements set forth under Item 15 in the
Registration Statement, insofar as such statements constitute a
summary of the legal matters, documents or proceedings referred to
therein, and such statements fairly present the information called for
with respect to such legal matters, documents and proceedings in all
material respects as required by the Act and the Exchange Act and the
respective rules and regulations thereunder;
(vii) The Registration Statement, as of its effective date, and
the Prospectus as of its date (in each case other than the financial
statements, the notes thereto and the related schedules and accounting
information and other financial and statistical data included in such
Registration Statement or Prospectus, as to which such counsel need
not express an opinion), excluding in each case the documents
incorporated by reference therein, complied as to form in all material
respects with the applicable requirements of the Act and the rules and
regulations thereunder;
(viii) To such counsel's knowledge, each of the documents
incorporated by reference into the Registration Statement as of its
effective date, and the Prospectus as of its date (in each case as of
the filing with the Commission of such document, and as such document
has been amended, and in each case other than the financial
statements, the notes thereto and the related schedules and accounting
information and other financial and statistical data included therein
as to which such counsel need not express an opinion) complied as to
form in all material respects with the requirements of the Exchange
Act and the rules and regulations thereunder, provided, however, that
such opinion as to compliance with form is based solely on the
statements contained in the applicable document so incorporated and,
for the purpose of clarification, no opinion is given as to the
accuracy, completeness or fairness of such statements;
(ix) All of the Offered Securities have been accepted for
quotation on the Nasdaq National Market, subject to official notice of
issuance;
(x) The Company has the corporate power to enter into the
Underwriting
17
Agreement and the Underwriting Agreement has been duly authorized by
all necessary corporate action on the part of the Company and has been
duly executed and delivered by the Company;
(xi) The issuance, offering and sale of the Offered Securities
to the Underwriters by the Company pursuant to the Underwriting
Agreement, the compliance by the Company with the other provisions of
the Underwriting Agreement and the consummation by the Company of the
transactions contemplated by the Underwriting Agreement do not (a)
require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as
have been obtained or made or such as may be required by the
securities laws of the United States of America, in connection with
the offer and sale of the Offered Securities by the Underwriters
(except such as may be required under state securities or Blue Sky
laws or the bylaws and rules of the NASD in connection with the
purchase and distribution of the Offered Securities by the
Underwriters, as to which such counsel need not express an opinion) or
(b) to the best of such counsel's knowledge, conflict with or result
in a breach or violation of any of the terms and provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
lease or other agreement or instrument to which the Company or its
U.S. Subsidiaries is a party or by which the Company or its U.S.
Subsidiaries is bound, or the corporate charter or bylaws of the
Company or its U.S. Subsidiaries or any of its respective properties,
or any statute or any judgment, decree, order, rule or regulation of
any court or other governmental authority or any arbitrator known to
us and applicable to the Company or its U.S. Subsidiaries;
(xii) To such counsel's knowledge, except as set forth in the
Registration Statement or Prospectus, there are no pending or
threatened actions, suits, claims, proceedings or investigations to
which the Company or its U.S. Subsidiaries is a party or to which the
property of the Company or its U.S. Subsidiaries is subject that are
required to be disclosed in the Registration Statement or the
Prospectus and that are not disclosed as required;
(xiii) The Company is not an "investment company" and,
immediately after giving effect to the Offering and the application of
the proceeds therefrom as described in the Prospectus under the
heading "Use of Proceeds," will be an "investment company" as defined
in the 1940 Act;
(xiv) Except as disclosed in the Prospectus or the Underwriting
Agreement, to the best of such counsel's knowledge, no person,
corporation, trust, partnership, association or other entity has the
right to include and/or register any securities of the Company in the
Registration Statement (other than such rights which have been waived,
assuming the due authority and execution of the person or entity
granting such waiver, or such rights that have expired by reason of
lapse of time following notification of the Company's intent to file
the Registration Statement) or to require the Company to file any
registration statement prior to the date one hundred eighty (180) days
following the effective date of the Registration Statement; and
18
(xix) Such counsel has participated in certain conferences with
officers and other representatives of the Company, representatives of
the independent certified public accountants for the Company and
representatives of the Underwriters, at which conferences the contents
of the Registration Statement and the Prospectus and related matters
were discussed and, although such counsel is not passing upon and does
not assume any responsibility for, nor has such counsel independently
verified, the accuracy, completeness or fairness of the statements
contained in the Registration Statement and Prospectus, on the basis
of the foregoing, no facts have come to such counsel's attention that
have caused such counsel to believe that either the Registration
Statement (other than the financial statements, the notes thereto and
the related schedules and other financial and accounting information
and statistical data included therein or omitted therefrom any
documents incorporated by reference therein, as to which such counsel
need not express a view), at the time such Registration Statement
became effective and as of the Closing Date, or the Prospectus as of
the date thereof and as of the Closing Date, contained any 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 (except, in the case of both the Registration
Statement and Prospectus, for the financial statements, the notes
thereto and the related schedules and other financial and accounting
information and statistical data contained therein and any documents
incorporated by reference therein, as to which such counsel need not
express a view).
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company and public officials.
(e) The Representatives shall have received a legal opinion from
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, PC, patent counsel for the Company, dated
the Closing Date, to the effect that:
(i) The statements in the Registration Statement and Prospectus
under the captions "Risk Factors - We may not be successful in
protecting our intellectual property and proprietary rights" and
"Business -Patents, Proprietary Rights and Licenses" insofar as such
statements constitute summaries of matters of law, are accurate and
complete statements or summaries of the matters set forth therein.
(ii) To such counsel's knowledge, the Registration Statement and the
Prospectus do not contain any untrue statement of a material fact with
respect to the patent position of the Company, or omit to state any
material fact relating to the patent position of the Company which is
required to be stated in the Registration Statement and the Prospectus
or is necessary to make the statements therein not misleading.
(iii) The Company has clear title to the United States patents and
patent applications mentioned in the Prospectus as being owned by the
Company (collectively, the "Patents"). Such counsel has no knowledge
of any facts that the
19
Company lacks, or will be unable to obtain, any rights or licenses to
use all Intellectual Property necessary to the conduct of its business
as now or proposed to be conducted by the Company as described in the
Prospectus. To such counsel's knowledge, there are no facts which
would form a basis for any of the Patents being held invalid or
non-enforceable.
(iv) The Company has obtained licenses from the Massachusetts
Institute of Technology under certain United States Patents and patent
applications mentioned in the Prospectus (the "Licensed Patents"). To
such counsel's knowledge, there are no facts which would form a basis
for any of the patents within the Licensed Patents being held invalid
or non-enforceable or any of the patents or applications within the
Licensed Patents having lapsed for failure to pay required fees.
(v) To such counsel's knowledge, the contractual obligations of the
Company described in the Registration Statement and the Prospectus
have not and will not adversely affect the proprietary rights of the
Company, except under circumstances of misappropriation by third
parties. To such counsel's knowledge, except as disclosed in the
Prospectus, the Company has obtained all material licenses required
for the conduct of its business, and such licenses are in full force
and effect and the Company in all respects is complying therewith.
Except as and to the extent set forth in the Prospectus, neither the
Company nor any of its Subsidiaries is under any obligation to pay to
any third party, royalties or fees of any kind by the terms of
contracts known to us with respect to any patents, patent
applications, patent rights, inventions, trade secrets, know-how,
trademarks, trademark applications, service marks, service ▇▇▇▇
applications, trade names, copyrights or other information
(collectively, "Intellectual Property").
(vi) There are no legal or governmental proceedings pending (other
than regarding patent and trademark applications pending) relating to
Intellectual Property owned or used by the Company; and to such
counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or others. There are no legal
or governmental proceedings pending or, to such counsel's knowledge,
any accusation, threat or suggestion by a third party of infringement
by the Company of any Intellectual Property of such third party. There
are no pending or, to such counsel's knowledge, threatened
governmental proceedings, in the United States or any other
jurisdiction, including but not limited to reexaminations and
oppositions, which could affect the validity or enforceability of any
Intellectual Property of the Company.
(vii) We have paid all maintenance and other fees required to
maintain the enforceability of all U.S. patents and patent
applications owned by the Company which are licensed or sublicensed to
any third party.
(viii) We have paid all maintenance and other fees required to
maintain the enforceability of all U.S. and foreign patents owned by
the Company as described in the Registration Statement and Prospectus;
and, we have paid all maintenance and other fees required to maintain
the pendency of all U.S. and foreign applications owned by the Company
as described in the Registration Statement and
20
Prospectus.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company and public officials.
(f) The Representatives shall have received from ▇▇▇▇▇, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇, LLP, counsel for the Underwriters, such opinion or opinions,
dated such Closing Date, with respect to the incorporation of the Company,
the validity of the Offered Securities delivered on such Closing Date, the
Registration Statements, the Prospectus and other related matters as the
Representatives may require, and the Company shall have furnished to such
counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(h) The Representatives shall have received a certificate, dated such
Closing Date, of the President or any Vice President and a principal
financial or accounting officer of the Company in which such officers, to
the best of their knowledge after reasonable investigation, shall state
that: the representations and warranties of the Company in this Agreement
are true and correct; the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to such Closing Date; no stop order suspending the
effectiveness of any Registration Statement has been issued and no
proceedings for that purpose have been instituted or, to the best of the
Company's knowledge, are contemplated by the Commission; the Additional
Registration Statement (if any) satisfying the requirements of
subparagraphs (1) and (3) of Rule 462(b) was filed pursuant to Rule 462(b),
including payment of the applicable filing fee in accordance with Rule
111(a) or (b) under the Act, prior to the time the Prospectus was printed
and distributed to any Underwriter; and, subsequent to the respective dates
as of which information is given in the Registration Statement and the
Prospectus, there has been no material adverse change, nor any development
or event involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of the
Company and its Subsidiaries taken as a whole except as set forth in or
contemplated by the Prospectus or as described in such certificate.
The Company will furnish the Representatives with such conformed copies of such
opinions, certificates, letters and documents as the Representatives reasonably
request. CSFBC may in its sole discretion waive on behalf of the Underwriters
compliance with any conditions to the obligations of the Underwriters hereunder,
whether in respect of an Optional Closing Date or otherwise.
7. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Underwriter, its partners, directors and officers and each
person, if any who controls such Underwriter within the meaning of Section 15 of
the Act, against any losses, claims, damages or liabilities, joint or several,
to which such Underwriter may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon (i) any untrue statement or alleged
untrue statement made by the Company in Section 2 hereof, or (ii) any untrue
statement or alleged untrue statement of any material fact contained in any
Registration Statement, the Prospectus, or any amendment or supplement thereto,
or any related preliminary prospectus, or arise out of or are based upon the
omission or alleged
21
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; 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 in or omission or alleged omission from
any of such documents in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and agreed
that the only such information furnished by any Underwriter consists of the
information described as such in subsection (b) below; and provided, further,
that with respect to any untrue statement or alleged untrue statement in or
omission or alleged omission from any preliminary prospectus the indemnity
agreement contained in this subsection (a) shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages or
liabilities purchased the Offered Securities concerned, to the extent that a
prospectus relating to such Offered Securities was required to be delivered by
such Underwriter under the Act in connection with such purchase and any such
loss, claim, damage or liability of such Underwriter results from the fact that
there was not sent or given to such person, at or prior to the written
confirmation of the sale of such Offered Securities to such person, a copy of
the Prospectus (exclusive of material incorporated by reference) if the Company
had previously furnished copies thereof to such Underwriter.
(b) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company, its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the Act against any
losses, claims, damages or liabilities to which the Company may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are based
upon 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 each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives specifically for use
therein, and will reimburse any legal or other expenses reasonably incurred by
the Company in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred, it being understood
and agreed that the only such information furnished by any Underwriter consists
of (i) the concession and reallowance figures appearing in the fourth paragraph
under the caption "Underwriting," (ii) the information contained in the eighth
and ninth paragraphs under the caption "Underwriting."
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies an indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other
22
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. Notwithstanding
the preceding sentence, if an indemnified party reasonably determines that there
may be legal defenses available to it which are different from or in addition to
those available to such indemnifying party, then counsel to the indemnified
party shall be entitled to conduct the defense on behalf of the indemnified
party to the extent reasonably determined by such counsel to protect the
interests of the indemnified party, it being understood that both of such
counsel will cooperate with each other to conduct the defense of such action as
efficiently as possible. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party unless such (i) settlement includes an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action and (ii) does not include a statement as to, or an admission of,
fault, culpability or a failure to act by or on behalf of an indemnified party.
(d) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a), (b) or
(c) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a), (b) or (c) above (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other from the offering of
the Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Company 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 bear to the total underwriting discounts and commissions received
by the Underwriters. 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 Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in
the first sentence of this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of
23
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations in this
subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section shall be in addition
to any liability which the Company may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each director of the Company, to each officer of the Company who
has signed a Registration Statement and to each person, if any, who controls the
Company within the meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Offered Securities hereunder on either the First
or any Optional Closing Date and the aggregate number of shares of Offered
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total number of shares of Offered Securities
that the Underwriters are obligated to purchase on such Closing Date, CSFBC may
make arrangements satisfactory to the Company for the purchase of such Offered
Securities by other persons, including any of the Underwriters, but if no such
arrangements are made by such Closing Date, the non-defaulting Underwriters
shall be obligated severally, in proportion to their respective commitments
hereunder, to purchase the Offered Securities that such defaulting Underwriters
agreed but failed to purchase on such Closing Date. If any Underwriter or
Underwriters so default and the aggregate number of shares of Offered Securities
with respect to which such default or defaults occur exceeds 10% of the total
number of shares of Offered Securities that the Underwriters are obligated to
purchase on such Closing Date and arrangements satisfactory to CSFBC and the
Company for the purchase of such Offered Securities by other persons are not
made within 36 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter or the Company, except
as provided in Section 9 (provided that if such default occurs with respect to
Optional Securities after the First Closing Date, this Agreement will not
terminate as to the Firm Securities or any Optional Securities purchased prior
to such termination). As used in this Agreement, the term "Underwriter" includes
any person substituted for an Underwriter under this Section. Nothing herein
will relieve a defaulting Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Underwriter, the Company or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Offered Securities. If this Agreement is terminated pursuant
to Section 8 or if for any reason the purchase of the Offered Securities by the
Underwriters is not consummated, the Company shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 5 and the respective
obligations of the Company and the Underwriters pursuant to Section 7 shall
remain in effect, and if any Offered Securities have been purchased hereunder
the representations and warranties in Section 2 and all obligations under
Section 5 shall also remain in effect. If the purchase of the Offered Securities
by the Underwriters is not consummated for any reason other than solely because
of the termination of this Agreement pursuant to Section 8 or the occurrence of
any event
24
specified in clause (iii), (iv) or (v) of Section 6(c), the Company will
reimburse the Underwriters for all out-of-pocket expenses (including fees and
disbursements of counsel) reasonably incurred by them in connection with the
offering of the Offered Securities.
10. Notices. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to
the Representatives, c/o Credit Suisse First Boston Corporation, Eleven Madison
Avenue, New York, N.Y. 10010-3629, Attention: Investment Banking
Department -Transactions Advisory Group, or, if sent to the Company, will be
mailed, delivered or telegraphed and confirmed to it at ,
Attention: ; provided, however, that any notice to an Underwriter
pursuant to Section 7 will be mailed, delivered or telegraphed and confirmed to
such Underwriter.
11. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective personal representatives and
successors and the officers and directors and controlling persons referred to in
Section 7, and no other person will have any right or obligation hereunder.
12. Representation. The Representatives will act for the several
Underwriters in connection with the transactions contemplated by this Agreement,
and any action under this Agreement taken by the Representatives jointly or by
CSFBC will be binding upon all the Underwriters.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to principles
of conflicts of laws.
The Company hereby submits to the non-exclusive jurisdiction of the Federal
and state courts in the Borough of Manhattan in The City of New York in any suit
or proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby.
25
If the foregoing is in accordance with the Representatives' understanding
of our agreement, kindly sign and return to the Company one of the counterparts
hereof, whereupon it will become a binding agreement among the Company and the
several Underwriters in accordance with its terms.
Very truly yours,
KOPIN CORPORATION
By---------------------------------------
[Insert title]
The foregoing Underwriting Agreement is hereby confirmed and
accepted as of the date first above written.
Credit Suisse First Boston Corporation
CIBC ▇▇▇▇▇▇▇▇▇▇▇ Corp.
▇.▇. ▇▇▇▇▇▇▇▇▇, Towbin
Pacific Growth Equities, Inc.
Acting on behalf of themselves and as the
Representatives of the several Underwriters.
By Credit Suisse First Boston Corporation
By--------------------------------------
[Insert title]
26
SCHEDULE A
Number of
Firm Securities
Underwriter to be Purchased
----------- ---------------
Credit Suisse First Boston Corporation--------------------------
CIBC ▇▇▇▇▇▇▇▇▇▇▇ Corp.
▇.▇. ▇▇▇▇▇▇▇▇▇, Towbin
Pacific Growth Equities, Inc.
----------------
Total------------------------------------------ ================
27
