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EXHIBIT 1.1
8,750,000 SHARES
STRATOS LIGHTWAVE, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
______, 2000
LEHMAN BROTHERS INC.
CIBC WORLD MARKETS CORP.
U.S. BANCORP PIPER JAFFRAY INC.
ROBERT W. BAIRD & CO. INCORPORATED
TUCKER ANTHONY INCORPORATED
FIDELITY CAPITAL MARKETS,
a division of National Financial
Services Corporation
As Representatives of the several
Underwriters named in Schedule 1,
c/o Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285
Dear Sirs:
Stratos Lightwave, Inc., a Delaware corporation (the "Company"),
proposes to sell 8,750,000 shares (the "Firm Stock") of the Company's common
stock, par value $0.01 per share (the "Common Stock").
It is understood that, subject to the conditions hereinafter stated,
8,750,000 shares of the Firm Stock will be sold to the several Underwriters
named in Schedule 1 hereto (the "Underwriters") in connection with the offering
and sale of such Firm Stock. Lehman Brothers Inc., CIBC World Markets Corp.,
U.S. Bancorp Piper Jaffray Inc., Robert W. Baird & Co. Incorporated, Tucker
Anthony Incorporated and Fidelity Capital Markets, a division of National
Financial Services Corporation shall act as representatives (the
"Representatives") of the several Underwriters.
In addition, the Company proposes to grant to the Underwriters an
option to purchase up to an additional 1,312,500 shares of the Common Stock on
the terms and for the purposes set forth in Section 2 (the "Option Stock"). The
Firm Stock and the Option Stock, if purchased, are hereinafter collectively
called the "Stock." This is to confirm the agreement concerning the purchase of
the Stock from the Company by the Underwriters.
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SECTION 1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY.
The Company represents, warrants and agrees that:
(a) A registration statement on Form S-1 with respect to the Stock has
(i) been prepared by the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and the rules and
regulations (the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") thereunder, (ii) been filed with the Commission
under the Securities Act and (iii) become effective under the Securities Act.
The registration statement contains the prospectus to be used in connection with
the offering and sale of the Stock. Copies of such registration statement and
each of the amendments thereto have been delivered by the Company to you. As
used in this Agreement, "Effective Time" means the date and the time as of which
such registration statement, or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission; "Effective Date"
means the date of the Effective Time; "Preliminary Prospectus" means each
prospectus included in such registration statement, or amendments thereof,
before it became effective under the Securities Act and any prospectus filed
with the Commission by the Company with the consent of the Representatives
pursuant to Rule 424(a) of the Rules and Regulations; "Registration Statement"
means such registration statement, as amended at the Effective Time, including
all information contained in the final prospectus filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations and deemed to be a part of
the registration statement as of the Effective Time pursuant to Rule 430A of the
Rules and Regulations; and "Prospectus" means the prospectus first used to
confirm sales of Stock. If the Company has filed an abbreviated registration
statement to register additional shares of Common Stock pursuant to Rule 462(b)
under the Securities Act (the "Rule 462 Registration Statement"), then any
reference herein to the term "Registration Statement" shall be deemed to include
such Rule 462 Registration Statement. The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus.
(b) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the Commission, as
the case may be, conform in all material respects to the requirements of the
Securities Act and the Rules and Regulations and do not and will not, as of the
applicable effective date (as to the Registration Statement and any amendment
thereto), as of the applicable filing date (as to the Prospectus and any
amendment or supplement thereto) and as of the relevant Delivery Date contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
PROVIDED, that no representation or warranty is made as to information contained
in or omitted from the Registration Statement or the Prospectus in reliance upon
and in conformity with written information furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for inclusion
therein which is more specifically described in Section 8(e).
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(c) The Company and each of its subsidiaries (as defined in Section 15)
have been duly incorporated or organized, have all power and authority necessary
to own or hold their respective properties and to conduct the businesses in
which they are engaged, are validly existing as corporations or limited
liability companies in good standing under the laws of their respective
jurisdictions of incorporation or organization, and are duly qualified to do
business and are in good standing as foreign corporations or foreign limited
liability companies in each jurisdiction in which their respective ownership or
lease of property or the conduct of their respective businesses requires such
qualification, except where the failure to be so qualified would not be
reasonably likely, individually or in the aggregate, to have a material adverse
effect on the condition (financial or other), business, properties or results of
operations of the Company and its subsidiaries taken as a whole ("Material
Adverse Effect"). None of the subsidiaries of the Company other than Stratos
Lightwave, LLC, Bandwidth Semiconductor LLC, Stratos Micro Systems, Inc. and
Stratos Limited, a United Kingdom corporation ("Stratos Limited") is a
"Significant Subsidiary," as such term is defined in Rule 405 of the Rules and
Regulations.
(d) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and conform to the description thereof contained in the Prospectus; and all of
the issued shares of capital stock and outstanding membership interests of each
subsidiary of the Company have been duly and validly authorized and issued and
are fully paid, non-assessable and owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims, except for the
outstanding membership interest in MP Optical Communications LLC, as to which
the Company owns 60%.
(e) The shares of the Stock to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and, when issued
and delivered against payment therefor in accordance with this Agreement, will
be duly and validly issued, fully paid and non-assessable, and will conform to
the descriptions thereof contained in the Prospectus.
(f) This Agreement has been duly authorized, executed and delivered by
the Company and is in full force and effect and constitutes a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, subject to (1) judicial principles limiting the availability of
specific performance, injunctive relief and other equitable remedies; and (2)
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting creditors' rights generally.
(g) Each of (i) the Master Separation Agreement, (ii) the Master
Transitional Services Agreement, (iii) the Employee Matters Agreement, (iv) the
Tax Sharing and Indemnification Agreement, (v) the Initial Public Offering and
Distribution Agreement, and (vi) the Registration Rights Agreement, each
agreement referred to in clauses (i) through (iii) dated as of May 28, 2000, and
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each agreement referred to in clauses (iv), (v) and (vi) dated as of June [__],
2000, and each between the Company and Methode Electronics, Inc., a Delaware
corporation ("Methode") and (vii) the General Assignment and Assumption
Agreement dated as of May 27, 2000 between Methode and Stratos Lightwave, LLC, a
Delaware limited liability company and a wholly owned subsidiary of the Company
("Stratos LLC") (the agreements referred to in clauses (i) through (vii) of this
paragraph (g) are collectively referred to herein as the "Intercompany
Agreements"), has been duly authorized, executed and delivered by the Company or
Stratos LLC, as applicable, is in full force and effect and constitutes a valid
and binding obligation of the Company or Stratos LLC, as applicable, enforceable
against the Company or Stratos LLC, as applicable, in accordance with its terms,
subject to (1) judicial principles limiting the availability of specific
performance, injunctive relief and other equitable remedies; and (2) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to or affecting creditors' rights generally.
(h) The execution, delivery and performance of this Agreement or any
Intercompany Agreement will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement 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 is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject, except
for consents required in connection with the contribution and/or distribution
contemplated by the Intercompany Agreements which have been identified in
writing to the Underwriters, the failure of which to obtain would not
individually or in the aggregate have a Material Adverse Effect, nor will such
actions result in any violation of the provisions of the charter or by-laws of
the Company or any of its subsidiaries or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their properties or assets; and
except for such consents, approvals, authorizations, registrations or
qualifications as may be required under applicable state securities laws in
connection with the purchase and distribution of the Stock by the Underwriters,
no consent, approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body or any person or entity is
required for the execution, delivery and performance of this Agreement or any
Intercompany Agreement.
(i) Except as described in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting such
person the right to require the Company to file a registration statement under
the Securities 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 the Registration Statement or in any
securities being registered pursuant to any other registration statement filed
by the Company under the Securities Act.
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(j) The Offered Securities have been approved for listing on the
National Association of Securities Dealers Automated Quotation system subject
only to notice of issuance.
(k) Except as disclosed in the Registration Statement, the Company has
not sold or issued any shares of Common Stock during the six-month period
preceding the date of the Prospectus, including any sales pursuant to Rule 144A
under, or Regulations D or S of, the Securities Act other than shares issued
pursuant to employee benefit plans, qualified stock options plans or other
employee compensation plans or pursuant to outstanding options, rights or
warrants.
(l) Neither the Company nor any of its subsidiaries has sustained,
since the date of the latest audited financial statements included in the
Prospectus, any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since such date, there
has not been any change in the capital stock or long-term debt of the Company or
any of its subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the general
affairs, management, consolidated financial position, stockholders' equity,
results of operations, or business of the Company and its subsidiaries,
otherwise than as set forth or contemplated in the Prospectus.
(m) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or included in
the Prospectus present fairly the financial condition and results of operations
of the entities purported to be shown thereby, at the dates and for the periods
indicated, and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved. The assumptions used in preparing the pro forma financial statements
included in the Registration Statement and the Prospectus provide a reasonable
basis for presenting the significant effects directly attributable to the
transactions or events described therein, the related pro forma adjustments give
appropriate effect to those assumptions, and the pro forma columns therein
reflect the proper application of those adjustments to the corresponding
historical financial statement amounts.
(n) Ernst & Young LLP, who have certified certain financial statements
of the Company, whose report appears in the Prospectus and who have delivered
one of the initial letters referred to in Section 7(f) hereof, are independent
public accountants as required by the Securities Act and the Rules and
Regulations; and KPMG LLP, whose report appears in the Prospectus and who have
delivered one of the initial letters referred to in Section 7(f) hereof, were
independent accountants as required by the Securities Act and the Rules and
Regulations during the periods covered by the financial statements on which they
reported.
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(o) The Company and each of its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to all
personal property owned by them, in each case free and clear of all liens,
encumbrances and defects, except such as are described in the Prospectus or such
as do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries; and all assets held under lease by the Company and
its subsidiaries are held by them under valid, subsisting and enforceable
leases, with such exceptions as are not material and do not interfere with the
use made and proposed to be made of such property and buildings by the Company
and its subsidiaries.
(p) The Company and each of its subsidiaries carry, or are 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 businesses in similar
industries.
(q) Except as would not be reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect and except as reflected in the
description of the litigation in the Prospectus, (i) the Company and its
subsidiaries are or will be the sole owners, free and clear of any lien or
encumbrance, of, or have a valid license to, all U.S. and foreign trademarks,
service marks, logos, designs, trade names, internet domain names and corporate
names, patents, registered designs, copyrights, mask works, computer software
and databases, web sites and web pages and related items (and all intellectual
property and proprietary rights incorporated therein) and all other trade
secrets, research and development, formulae, know-how, proprietary and
intellectual property rights and information, whether or not registered,
including all grants, registrations and applications relating thereto
(collectively, the "Intellectual Property Rights"), necessary for the conduct of
its business as now conducted as described in the Prospectus (such Intellectual
Property Rights owned by or licensed to the Company, collectively, the "Company
Rights"); (ii) the purported rights of the Company and its subsidiaries in the
Company Rights are valid and enforceable; (iii) except for the litigation
specifically referenced in the Prospectus, neither the Company nor any
subsidiary has received any demand, claim, notice or inquiry from any Person in
respect of the Company Rights which challenges, threatens to challenge or
inquires as to whether there is any basis to challenge, the validity of, or the
rights of the Company or such subsidiary in, any such Company Rights, and
neither the Company nor any subsidiary knows of any basis for any such
challenge; (iv) neither the Company nor any subsidiary is in violation or
infringement of, or has violated or infringed, any Intellectual Property Rights
of any other Person; and (v) to the knowledge of the Company and its
subsidiaries, no Person is infringing any Company Rights.
(r) Except as described in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its subsidiaries
is a party or of which any property or assets of the Company or any of its
subsidiaries is the subject which, if determined adversely to the Company or
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any of its subsidiaries, would be reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect; and to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by governmental
authorities or by others.
(s) There are no contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the Registration Statement
by the Securities Act or by the Rules and Regulations which have not been
described in the Prospectus or filed as exhibits to the Registration Statement.
(t) No relationship, direct or indirect, exists between or among the
Company on the one hand, and the directors, officers, stockholders, customers or
suppliers of the Company on the other hand, which is required to be described in
the Prospectus which is not so described.
(u) No labor disturbance by the employees of the Company exists or, to
the knowledge of the Company, is imminent, which would be reasonably likely,
individually or in the aggregate, to have a Material Adverse Effect.
(v) Each "employee benefit plan" within the meaning of the Employee
Retirement Income Security Act of 1974, as amended, ("ERISA") in which employees
of the Company or any of its subsidiaries participates or as to which the
Company or any of its subsidiaries has any liability (collectively, the "ERISA
Plans") is in compliance in all material respects with all presently applicable
provisions of the ERISA and the Internal Revenue Code of 1986, as amended (the
"Code"); no "reportable event" (as defined in ERISA) has occurred with respect
to any ERISA plan for which the Company would have any liability; the Company
has not incurred and does not expect to incur liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any ERISA Plan or (ii)
Sections 412 or 4971 of the Code; and each ERISA 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. The description of the Company's stock option, stock bonus and
other stock plans or arrangements, and of the options or other rights granted or
exercised thereunder, set forth in the Prospectus are accurate and complete in
all material respects.
(w) The maintenance and termination of the Methode Electronics, Inc.
Employee Stock Ownership Plan will not result in any liability affecting the
Company or its subsidiaries under Section 4975 of the Code or Section 502(i) of
ERISA.
(x) Since the date as of which information is given in the Prospectus
through the date hereof, and except as may otherwise be disclosed in the
Prospectus, the Company has not (i) issued or granted any securities, (ii)
incurred any liability or obligation, direct or contingent, other than
liabilities and obligations which were incurred in the ordinary course of
business, (iii) entered
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into any transaction not in the ordinary course of business or (iv) declared or
paid any dividend on its capital stock.
(y) The Company (i) makes and keeps accurate books and records and (ii)
maintains internal accounting controls which provide reasonable assurance that
(A) transactions are executed in accordance with management's authorization, (B)
transactions are recorded as necessary to permit preparation of its financial
statements and to maintain accountability for its assets, (C) access to its
assets is permitted only in accordance with management's authorization and (D)
the reported accountability for its assets is compared with existing assets at
reasonable intervals.
(z) Neither the Company nor any of its subsidiaries (i) is in violation
of its charter or by-laws, (ii) is in default, and no event has occurred which,
with notice or lapse of time or both, would constitute such a default, in the
due performance or observance of any term, covenant or condition contained in
any material indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which it is a party or by which it is bound or to
which any of its properties or assets is subject or (iii) is in violation in any
material respect of any law, ordinance, governmental rule, regulation or court
decree to which it or its property or assets may be subject or has failed to
obtain any material license, permit, certificate, franchise or other
governmental authorization or permit necessary to the ownership of its property
or to the conduct of its business.
(aa) Neither the Company nor any of its subsidiaries, nor any director,
officer, agent, employee or other person associated with or acting on behalf of
the Company or any of its subsidiaries, 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 provision of the Foreign Corrupt Practices Act of 1977; or
made any bribe, rebate, payoff, influence payment, kickback or other unlawful
payment.
(bb) Except as disclosed in the Prospectus, neither the Company nor any
of its subsidiaries is in violation of any statute, law, rule, regulation,
decision, decree, judgment, permit, license or order of any governmental agency
or body or any court, domestic or foreign, relating to the protection or
restoration of the environment or to human health or safety, including without
limitation those relating to the use, disposal or release of substances of any
kind which are subject to regulation under the foregoing (collectively,
"environmental laws"), owns, leases or operates any property contaminated with
any substance subject to regulation under environmental laws in violation of
environmental laws, is liable pursuant to environmental laws for any release,
disposal or contamination that has not been remediated at any location, or has
received notice of, or entered into any negotiations or agreements with any
third party relating to, any liability or potential liability under
environmental laws affecting them or their properties, assets or operations,
which violation, contamination, liability or potential liability would be
reasonably likely, individually or in the aggregate, to have a Material
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Adverse Effect or would otherwise be material in the context of the sale of the
Stock; and the Company is not aware of any facts, events, circumstances or
pending investigations which might lead to such violation, contamination,
liability or potential liability. Except as disclosed in the Prospectus, neither
the Company nor any of its subsidiaries is a party to or the subject of, or to
the Company's knowledge is contemplated as a party to or the subject of, any
material pending or threatened administrative or judicial action or proceeding
or order relating to environmental laws.
(cc) Neither the Company nor any subsidiary is, or after giving effect
to the offering and sale of the stock and the application of the proceeds
thereof as described in the Prospectus, will be, an "investment company" as
defined in the Investment Company Act of 1940, as amended.
(dd) The Company has caused Methode and each executive officer, key
employee, director and director nominee of the Company to furnish to the
Representatives, a letter or letters, substantially in the form of Exhibit A-1,
A-2 or A-3 hereto, as applicable, relating to the sales and certain other
dispositions of shares of Common Stock and certain other securities.
(ee) The Company has not offered, or caused the Underwriters to offer,
any Stock to any person pursuant to the Directed Share Program (as defined
below) with the specific intent to unlawfully influence (i) a customer or
supplier of the Company to alter the customer's or supplier's level or type of
business with the Company or (ii) a trade journalist or publication to write or
publish favorable information about the Company or its products.
SECTION 2. PURCHASE OF THE STOCK BY THE UNDERWRITERS. On the basis of
the representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 8,750,000 shares of
the Firm Stock to the several Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase the number of shares of the Firm
Stock set forth opposite that Underwriter's name in Schedule 1 hereto. The
respective purchase obligations of the Underwriters with respect to the Firm
Stock shall be rounded among the Underwriters to avoid fractional shares, as the
Representatives may determine.
In addition, the Company grants to the Underwriters an option to
purchase up to 1,312,500 shares of Option Stock. Such option is granted for the
purpose of covering over-allotments in the sale of Firm Stock and is exercisable
as provided in Section 4 hereof. Shares of Option Stock shall be purchased
severally for the account of the Underwriters in proportion to the number of
shares of Firm Stock set forth opposite the name of such Underwriters in
Schedule 1 hereto. The respective purchase obligations of each Underwriter with
respect to the Option Stock shall be adjusted by the Representatives so that no
Underwriter shall be obligated to purchase Option Stock other than in 100 share
amounts.
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The price of both the Firm Stock and any Option Stock shall be $______
per share.
The Company shall not be obligated to deliver any of the Stock to be
delivered on any Delivery Date (as hereinafter defined), except upon payment for
all the Stock to be purchased on such Delivery Date as provided herein.
SECTION 3. OFFERING OF STOCK BY THE UNDERWRITERS.
Upon authorization by the Representatives of the release of the Firm
Stock, the several Underwriters propose to offer the Firm Stock for sale upon
the terms and conditions set forth in the Prospectus.
It is intended that this underwriting shall constitute a qualified
underwriting transaction within the meaning of Treasury Regulation
Section 1.351-1(a)(3).
It is understood that approximately ______ shares of the Firm Stock
("Directed Shares") will initially be reserved by the Underwriters for offer and
sale to employees and persons having business relationships with the Company and
its subsidiaries ("Directed Share Participants") upon the terms and conditions
set forth in the Prospectus and in accordance with the rules and regulations of
the National Association of Securities Dealers, Inc. Under no circumstances will
Lehman Brothers or any Underwriter be liable to the Company or to any Directed
Share Participant for any action taken or omitted to be taken in good faith in
connection with such Directed Share Program. To the extent that any Directed
Shares are not affirmatively reconfirmed for purchase by any Directed Share
Participants on or immediately after the date of this Agreement, such Directed
Shares may be offered to the public as part of the public offering contemplated
hereby.
The Company agrees to pay all reasonable fees and disbursements
incurred by the Underwriters in connection with the Directed Share Program,
including counsel fees and any stamp duties or other taxes incurred by the
Underwriters in connection with the Directed Share Program.
In connection with the offer and sale of the Directed Shares, the
Company agrees, promptly upon a request in writing, to indemnify and hold
harmless Lehman Brothers and the other Underwriters from and against any loss,
claim, damage, expense, liability or action which (i) arises out of, or is based
upon, any untrue statement or alleged untrue statement of a material fact
contained in any material prepared by or with the approval of the Company for
distribution to Directed Share Participants in connection with the Directed
Share Program or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, (ii) arises out of the failure of any Directed Share Program
Participant to pay for and accept delivery of Directed Shares that the
Participant agreed to purchase or (iii) is otherwise related to the Directed
Share Program, other than losses, claims,
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damages or liabilities (or expenses relating thereto) that are finally
judicially determined to have resulted directly from the bad faith or gross
negligence of Lehman Brothers.
SECTION 4. DELIVERY OF AND PAYMENT FOR THE STOCK. Delivery of and
payment for the Firm Stock shall be made at the offices of Dewey Ballantine LLP,
1301 Avenue of the Americas, New York, New York 10019, on the fourth full
business day following the date of this Agreement or at such other date or place
as shall be determined by agreement between the Representatives and the Company.
This date and time are sometimes referred to as the "First Delivery Date." On
the First Delivery Date, the Company shall deliver or cause to be delivered
certificates representing the Firm Stock to the Representatives for the account
of each Underwriter against payment to or upon the order of the Company of the
purchase price by wire transfer in immediately available funds. Time shall be of
the essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligation of each Underwriter
hereunder. Upon delivery, the Firm Stock shall be registered in such names and
in such denominations as the Representatives shall request in writing not less
than two full business days prior to the First Delivery Date. For the purpose of
expediting the checking and packaging of the certificates for the Firm Stock,
the Company shall make the certificates representing the Firm Stock available
for inspection by the Representatives in New York, New York not later than 2:00
P.M., Chicago time, on the business day prior to the First Delivery Date.
The option granted in Section 2 will expire 30 days after the date of
this Agreement and may be exercised in whole or in part from time to time by
written notice being given to the Company by the Representatives. Such notice
shall set forth the aggregate number of shares of Option Stock as to which the
option is being exercised, the names in which the shares of Option Stock are to
be registered, the denominations in which the shares of Option Stock are to be
issued and the date and time, as determined by the Representatives, when the
shares of Option Stock are to be delivered; provided, however, that this date
and time shall not be earlier than the First Delivery Date nor earlier than the
second business day after the date on which the option shall have been exercised
nor later than the fifth business day after the date on which the option shall
have been exercised. The date and time the shares of Option Stock are delivered
are sometimes referred to as a "Second Delivery Date" and the First Delivery
Date and any Second Delivery Date are sometimes each referred to as a "Delivery
Date."
Delivery of and payment for the Option Stock shall be made at the place
specified in the first sentence of the first paragraph of this Section 4 (or at
such other place as shall be determined by agreement between the Representatives
and the Company) at 10:00 A.M., Chicago time, on such Second Delivery Date. On
such Second Delivery Date, the Company shall deliver or cause to be delivered
the certificates representing the Option Stock to the Representatives for the
account of each Underwriter against payment to or upon the order of the Company
of the purchase price by wire transfer in immediately available funds. Time
shall be of the essence, and delivery at the time and place specified pursuant
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to this Agreement is a further condition of the obligation of each Underwriter
hereunder. Upon delivery, the Option Stock shall be registered in such names and
in such denominations as the Representatives shall request in the aforesaid
written notice. For the purpose of expediting the checking and packaging of the
certificates for the Option Stock, the Company shall make the certificates
representing the Option Stock available for inspection by the Representatives in
New York, New York, not later than 2:00 P.M., Chicago time, on the business day
prior to such Second Delivery Date.
SECTION 5. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees:
(a) To prepare the Prospectus in a form approved by the Representatives
and to file such Prospectus pursuant to Rule 424(b) under the Securities Act not
later than Commission's close of business on the second business day following
the execution and delivery of this Agreement or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) under the Securities Act; to make no
further amendment or any supplement to the Registration Statement or to the
Prospectus except as permitted herein; to advise the Representatives, promptly
after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any supplement to
the Prospectus or any amended Prospectus has been filed and to furnish the
Representatives with copies thereof; to advise the Representatives, promptly
after it receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus, of the suspension of the qualification of the
Stock for offering or sale in any jurisdiction, of the initiation or threatening
of any proceeding for any such purpose, or of any request by the Commission for
the amending or supplementing of the Registration Statement or the Prospectus or
for additional information; and, in the event of the issuance of any stop order
or of any order preventing or suspending the use of any Preliminary Prospectus
or the Prospectus or suspending any such qualification, to use promptly its best
efforts to obtain its withdrawal;
(b) To furnish promptly to each of the Representatives and to counsel
for the Underwriters a signed copy of the Registration Statement as originally
filed with the Commission, and each amendment thereto filed with the Commission,
including all consents and exhibits filed therewith;
(c) To deliver promptly to the Representatives such number of the
following documents as the Representatives shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits) and (ii)
each Preliminary Prospectus, the Prospectus and any amended or supplemented
Prospectus; and, if the delivery of a prospectus is required at any time after
the Effective Time in connection with the offering or sale of the Stock or any
other securities relating thereto and if at such time any events shall have
occurred 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
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fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary to amend or
supplement the Prospectus in order to comply with the Securities Act, to notify
the Representatives and, upon their request, to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an amended or
supplemented Prospectus which will correct such statement or omission or effect
such compliance.
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the judgment of the Company or the Representatives, be required by
the Securities Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any Prospectus
pursuant to Rule 424 of the Rules and Regulations, to furnish a copy thereof to
the Representatives and counsel for the Underwriters and obtain the consent of
the Representatives to the filing;
(f) As soon as practicable after the Effective Date, to make generally
available to the Company's security holders and to deliver to the
Representatives an earnings statement of the Company and its subsidiaries (which
need not be audited) complying with Section 11(a) of the Securities Act and the
Rules and Regulations (including, at the option of the Company, Rule 158);
(g) For a period of five years following the Effective Date, to furnish
to the Representatives copies of all materials furnished by the Company to its
shareholders and all public reports and all reports and financial statements
furnished by the Company to the principal national securities exchange upon
which the Common Stock may be listed pursuant to requirements of or agreements
with such exchange or to the Commission pursuant to the Exchange Act or any rule
or regulation of the Commission thereunder;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for offering and
sale under the securities laws of such jurisdictions as the Representatives may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Stock; provided that in connection therewith
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;
(i) For a period of 180 days from the date of the Prospectus, not to,
directly or indirectly, (1) offer for sale, sell, pledge or otherwise dispose of
(or enter into any transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any time in the future
of) any shares of
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Common Stock or securities convertible into or exchangeable for Common Stock
(other than the Stock and shares issued pursuant to the terms of employee
benefit plans, qualified stock option plans or other employee compensation plans
as in effect on the date hereof or pursuant to currently outstanding options,
warrants or rights), or sell or grant options, rights or warrants with respect
to any shares of Common Stock or securities convertible into or exchangeable for
Common Stock (other than the grant of options pursuant to option plans existing
on the date hereof), or (2) enter into any swap or other derivatives transaction
that transfers to another, in whole or in part, any of the economic benefits or
risks of ownership of such shares of Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Stock or other securities, in cash or otherwise, in each case without the prior
written consent of Lehman Brothers Inc. on behalf of the Underwriters;
(j) To take such steps as shall be necessary to ensure that neither the
Company nor any subsidiary shall become an "investment company" as defined in
the Investment Company Act of 1940, as amended; and
(k) In connection with the Directed Share Program, to restrict the
Directed Shares to the extent required by the National Association of Securities
Dealers, Inc. or the rules of such association from sale, transfer, assignment,
pledge or hypothecation for a period of three months following the date of the
effectiveness of the Registration Statement, and Lehman Brothers Inc. will
notify the Company as to which Participants will need to be so restricted. At
the request of Lehman Brothers Inc., the Company will direct the transfer agent
to place stop transfer restrictions upon such securities for such period of
time.
SECTION 6. EXPENSES. The Company agrees to pay (a) the costs incident
to the authorization, issuance, sale and delivery of the Stock and any taxes
payable in that connection; (b) the costs incident to the preparation, printing
and filing under the Securities Act of the Registration Statement and any
amendments and exhibits thereto; (c) the costs of distributing the Registration
Statement as originally filed and each amendment thereto and any post-effective
amendments thereof (including, in each case, exhibits), any Preliminary
Prospectus, the Prospectus and any amendment or supplement to the Prospectus,
all as provided in this Agreement; (d) the costs of producing and distributing
this Agreement, any Supplemental Agreement Among Underwriters and any other
related documents in connection with the offering, purchase, sale and delivery
of the stock; (e) the filing fees and fees and disbursements of counsel incident
to the review by the National Association of Securities Dealers, Inc. of the
terms of sale of the Stock; (f) any applicable listing or other fees; (g) the
fees and expenses (not in excess, in the aggregate, of $10,000) of qualifying
the Stock under the securities laws of the several jurisdictions as provided in
Section 5(h) and of preparing, printing and distributing a Blue Sky Memorandum
(including related fees and expenses of counsel to the Underwriters); (h) all
costs and expenses of the Underwriters, including the fees and disbursements of
counsel for the Underwriters, incident to the Directed Share Program described
in Section 3; (i) the costs and expenses of the Company relating to investor
presentations on any "road show" undertaken in
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connection with the marketing of the offering of the Stock, including, without
limitation, expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged in connection with the
road show presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company and any such
consultants, and the cost of any aircraft chartered in connection with the road
show and (j) all other costs and expenses incident to the performance of the
obligations of the Company under this Agreement; provided that, except as
provided in this Section 6 and in Section 11 the Underwriters shall pay their
own costs and expenses, including the costs and expenses of their counsel, any
transfer taxes on the Stock which they may sell and the expenses of advertising
any offering of the Stock made by the Underwriters.
SECTION 7. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the Company
contained herein, to the performance by the Company of its obligations
hereunder, and to each of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the Commission in
accordance with Section 5(a); no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission; and any request of the Commission for inclusion of additional
information in the Registration Statement or the Prospectus or otherwise shall
have been complied with.
(b) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Stock, the Registration
Statement and the Prospectus, and all other legal matters relating to this
Agreement shall be reasonably satisfactory in all material respects to counsel
for the Underwriters, and the Company shall have furnished to such counsel all
documents and information that they may reasonably request to enable them to
pass upon such matters.
(c) Lord, Bissell & Brook shall have furnished to the Representatives
their written opinion, as counsel to the Company, addressed to the Underwriters
and dated such Delivery Date, in form and substance reasonably satisfactory to
the Representatives, to the effect that:
(i) The Company and each of its subsidiaries (other than Stratos
Limited) have been duly incorporated or organized, have all power and
authority necessary to own or hold their respective properties and
conduct the businesses in which they are engaged, are validly existing
as corporations or limited liability companies in good standing under
the laws of their respective jurisdictions of incorporation or
organization, are duly qualified to do business and are in good
standing as foreign corporations or foreign limited liability
companies in each jurisdiction in
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which their respective ownership or lease of property or the conduct
of their respective businesses requires such qualification and except
where the failure to be so qualified would not be reasonably likely,
individually or in the aggregate, to have a Material Adverse Effect;
(ii) The Company has an authorized capitalization as set forth in
the Prospectus under the caption "Description of Capital Stock", and
all of the issued shares of capital stock of the Company have been
duly and validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof contained in the
Prospectus under the caption "Description of Capital Stock"; and all
of the issued shares of capital stock or membership interests of each
subsidiary of the Company (other than Stratos Limited) have been duly
and validly authorized and issued and are fully paid, non-assessable
and are owned directly or indirectly by the Company, free and clear of
all liens, encumbrances, equities or claims except as set forth in the
Operating Agreement of MP Optical Communications LLC dated January 19,
1999;
(iii) The shares to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and, when
issued and delivered against payment therefor will be duly and validly
issued, fully paid and non-assessable and will conform to the
description thereof contained in the Prospectus under the caption
"Description of Capital Stock";
(iv) Except as described in the Prospectus, there are no
preemptive or other rights to subscribe for or to purchase, nor any
restriction upon the voting or transfer of, any shares of the Stock
pursuant to the Company's charter or by-laws or any agreement or other
instrument known to such counsel;
(v) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries is
a party or of which any property or assets of the Company or any of
its subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would be reasonably likely,
individually or in the aggregate, to have a Material Adverse Effect;
and, to the best of such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened
by others;
(vi) The Registration Statement was declared effective under the
Securities Act as of the date and time specified in such opinion, the
Prospectus was filed with the Commission pursuant to the subparagraph
of Rule 424(b) of the Rules and Regulations specified in such opinion
on the date specified therein and no stop order suspending the
effectiveness of the Registration Statement has been issued and, to
the best knowledge of such
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counsel, no proceeding for that purpose is pending or threatened by
the Commission;
(vii) The Registration Statement and the Prospectus and any
further amendments or supplements thereto made by the Company prior to
such Delivery Date (except for the financial statements, financial
schedules and other financial data included therein, as to which such
counsel need express no opinion ) comply as to form in all material
respects with the requirements of the Securities Act and the Rules and
Regulations;
(viii) The statements contained in the Prospectus under the
captions "Description of Capital Stock," "Shares Eligible For Future
Sale" and "Arrangements Between Methode Electronics and Stratos
Lightwave," insofar as they describe statutes, rules and regulations,
contracts and agreements, constitute a fair summary thereof;
(ix) To the best of such counsel's knowledge, there are no
contracts or other documents which are required to be described in the
Prospectus or filed as exhibits to the Registration Statement by the
Securities Act or by the Rules and Regulations which have not been
described or filed as exhibits to the Registration Statement;
(x) This Agreement has been duly authorized, executed and
delivered by the Company.
(xi) Each of the Intercompany Agreements has been duly
authorized, executed and delivered by the Company, Methode and, as
applicable, Stratos LLC, thereto and each is in full force and effect
and constitutes a valid and binding obligation of each such party,
enforceable against each such party in accordance with its terms,
subject to (1) judicial principles limiting the availability of
specific performance, injunctive relief and other equitable remedies;
and (2) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to or affecting
creditors' rights generally.
(xii) The issue and sale of shares of Stock being delivered on
such Delivery Date by the Company pursuant to this Agreement and the
execution, delivery and performance of this Agreement and the
Intercompany Agreements have been duly authorized by all necessary
corporate action on the part of the Company, Methode and, as
applicable, Stratos LLC, and to the extent required, their
shareholders and do not and will not conflict with or result in a
breach or violation of any of the terms and provisions of, and do not
and will not constitute a default (or an event which with the giving
of notice or lapse of time or both is reasonably likely to constitute
a default) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any assets or properties of the Company,
Methode or any of their respective subsidiaries under, (A) the
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charter, by-laws or other organizational documents of the Company,
Methode or any of their respective subsidiaries, (B) to the best
knowledge of such counsel, any statute, rule, regulation, requirement,
order or decree of any governmental or regulatory agency or body or
any court having jurisdiction over the Company, Methode or any of
their subsidiaries or any of their properties, assets or operations or
(C) to the best knowledge of such counsel, any indenture, mortgage,
loan or credit agreement, note, lease, permit, license or other
agreement or instrument to which the Company, Methode or any of their
subsidiaries is a party or by which the Company, Methode or any of
their subsidiaries is bound or to which any of the properties, assets
or operations of the Company, Methode or any of their subsidiaries is
subject, except, in the case of clause (C), for consents required in
connection with the contribution and/or distribution contemplated by
the Intercompany Agreements which have been identified in writing to
the Underwriters.
(xiii) To the best of such counsel's knowledge, except for such
consents, approvals, authorizations, registrations or qualifications
as may be required under applicable state securities laws in
connection with the purchase and distribution of the Stock by the
Underwriters, and except for consents required in connection with the
contribution and/or distribution contemplated by the Intercompany
Agreements which have been identified in writing to the Underwriters,
no consent, approval, authorization or order of, or filing or
registration with, any court or governmental agency or body or any
person or entity is required for the execution, delivery or
performance of this Agreement or any Intercompany Agreement.
(xiv) To the best knowledge of such counsel, neither the Company
nor any of its subsidiaries (A) is in violation of its charter,
by-laws or other organizational documents, (B) is in default, and no
event has occurred which, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of any
term, covenant or condition contained in any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which it
is a party or by which it is bound or to which any of its properties
or assets is subject or (C) is in violation of any law, ordinance,
governmental rule, regulation or court decree to which it or its
property or assets may be subject or has failed to obtain any license,
permit, certificate, franchise or other governmental authorization or
permit necessary to the ownership of its property or to the conduct of
its business, except, in the case of clauses (B) and (C), as would not
be reasonably likely, individually or in the aggregate, to have a
Material Adverse Effect.
(xv) Except as described in the Prospectus, to the best of such
counsel's knowledge, there are no contracts, agreements or
understandings between the Company and any person granting such person
the right to require the Company to file a registration statement
under the Securities Act with respect to any securities of the Company
owned or to be owned
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by such person or to require the Company to include such securities in
the securities registered pursuant to the Registration Statement or in
any securities being registered pursuant to any other registration
statement filed by the Company under the Securities Act; and
(xvi) Neither the Company nor any subsidiary is, or after giving
effect to the offering and sale of the stock and the application of
the proceeds thereof as described in the Prospectus, will be an
"investment company" as defined in the Investment Company Act of 1940,
as amended.
Such opinion shall also be to the effect that (x) such counsel has acted as
counsel to the Company in connection with the preparation of the Registration
Statement and (y) based on the foregoing, no facts have come to the attention of
such counsel which lead them to believe that the Registration Statement (except
for the financial statements and financial schedules and other financial data
included therein, as to which such counsel need express no view) as of the
Effective Date, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading, or that the Prospectus (except for
the financial statements and financial schedules and other financial data
included therein, as to which such counsel need express no view) as of its date
and as of such Delivery Date contains any untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The foregoing opinion and statement may be
qualified by a statement to the effect that such counsel does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus (other than as set
forth in clauses (ii), (iii), (vii), (viii) and (ix) above), and no inference to
the contrary should be drawn from the fact that James W. Ashley, Jr., a partner
of such counsel, is a director of Methode. Further, the opinions in clauses (i)
and (ii) above may be delivered by local counsel reasonably satisfactory to
counsel for the Underwriters or, with respect to such opinions, Lord, Bissell &
Brook may rely upon opinions of local counsel, provided that it shall state that
it believes that both counsel for the Underwriters and it are justified in
relying on such opinions, and provided that such opinions of local counsel are
attached to the opinion of Lord, Bissell & Brook;
(d) Matheson Ormsby Prentice shall have furnished to the
Representatives their written opinion, as special counsel to the Company,
addressed to the Underwriters and dated such Delivery Date, in form and
substance reasonably satisfactory to the Representatives, to the effect that:
(i) Stratos Limited has been duly incorporated, has all power and
authority necessary to own or hold its properties and conduct the
businesses in which it is engaged, is validly existing as a
corporation under the laws of its jurisdiction of incorporation, is
duly qualified to do
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business and is the subject of a certificate of good standing
certificate from the Companies' House;
(ii) All of the issued shares of capital stock of Stratos Limited
have been duly and validly authorized and issued and are fully paid,
non-assessable;
(iii) The transfer of all issued shares of Stratos Limited to the
Company pursuant to the Master Separation Agreement has been duly
authorized by all necessary corporate action on the part of Stratos
Limited, and does not and will not conflict with or result in a breach
or violation of any of the terms and provisions of, and does not and
will not constitute a default (or an event which with the giving of
notice or lapse of time or both is reasonably likely to constitute a
default) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any assets or properties of Stratos Limited
under (A) the charter, by-laws or equivalent organizational documents
of Stratos Limited or (B) to the best knowledge of such counsel, any
statute, rule or regulation governing Stratos Limited or any of its
properties, assets or operations; and
(iv) To the best of such counsel's knowledge, no consent,
approval, authorization or order of, or filing or registration with,
any court or governmental agency or body or any person or entity is
required for the transfer of all outstanding shares of Stratos Limited
to the Company pursuant to the Master Separation Agreement.
(e) Niro Scavone Haller & Niro shall have furnished to the
Representatives their written opinion, as special counsel to the Company,
addressed to the Underwriters and dated such Delivery Date, in form and
substance reasonably satisfactory to the Representatives, to the effect that
such counsel has read the statements in the Prospectus under the captions "Risk
Factors - We are currently involved in pending litigation which, if decided
against us, could impair our ability to prevent others from using our
technology, result in the loss of future royalty income and require us to pay
significant monetary damages" and "Business - Litigation" with respect to
pending intellectual property litigation filed by the Company and, insofar as
such statements constitute summaries of legal matters, contracts, agreements,
documents or proceedings referred to therein, or refer to statements of law or
legal conclusions, such statements are accurate in all material respects and
fairly present the information purported to be shown;
(f) David Newman, Esq. shall have furnished to the Representatives his
written opinion, as counsel to the Company, addressed to the Underwriters and
dated such Delivery Date, in form and substance reasonably satisfactory to the
Representatives, to the effect that:
(i) to the best of such counsel's knowledge and belief, the
Company's rights in the trademark Stratos Lightwave and the trade name
"Stratos Lightwave, Inc." are valid and enforceable; and (ii) except
as
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reflected in the description of the litigation in the Prospectus, to
the best of such counsel's knowledge and belief, except as would not
be reasonably likely, individually or in the aggregate, to have a
Material Adverse Effect, (A) the Company and its subsidiaries are the
sole owners, free and clear of any lien or valid encumbrance, of, or
have a valid license, to, the Company Rights; and (B) the purported
rights of the Company and its subsidiaries in the Company Rights are
valid and enforceable; and (iii) the litigations identified in the
Prospectus under the caption "Business--Litigation" are the only
litigations involving the Company Rights.
(g) The Representatives shall have received from Dewey Ballantine LLP,
counsel for the Underwriters, such opinion or opinions, dated such Delivery
Date, with respect to the issuance and sale of the Stock, the Registration
Statement, the Prospectus and other related matters as the Representatives may
reasonably 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) At the time of execution of this Agreement, the Representatives
shall have received from each of Ernst & Young LLP and KPMG LLP a letter or
letters, in form and substance satisfactory to the Representatives, addressed to
the Underwriters and dated the date hereof (i) confirming that they are
independent public accountants within the meaning of the Securities Act and are
in compliance with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission and (ii)
stating, as of the date hereof (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Prospectus, as of a date not more than five days
prior to the date hereof), the conclusions and findings of such firm with
respect to the financial information and other matters ordinarily covered by
accountants' "comfort letters" to underwriters in connection with registered
public offerings.
(i) With respect to the letter or letters of Ernst & Young LLP and KPMG
LLP referred to in the preceding paragraph and delivered to the Representatives
concurrently with the execution of this Agreement (the "initial letters"), the
Company shall have furnished to the Representatives a letter (the "bring-down
letter") of such accountants, addressed to the Underwriters and dated such
Delivery Date (i) confirming that they are independent public accountants within
the meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission, (ii) stating, as of the date of the bring-down
letter (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date of the
bring-down letter), the conclusions and findings of such firm with respect to
the financial information and other matters covered by the initial letters and
(iii) confirming the conclusions and findings set forth in the initial letters.
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(j) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chairman of the Board, its
President or a Vice President, and its chief financial officer stating that:
(i) The representations, warranties and agreements of the Company
in Section 1 are true and correct as of such Delivery Date; the
Company has complied with all its agreements contained herein; and the
conditions set forth in Sections 7(a) and 7(k) have been fulfilled;
and
(ii) They have carefully examined the Registration Statement and
the Prospectus and, in their opinion (A) as of the Effective Date, the
Registration Statement and Prospectus did not include any untrue
statement of a material fact and did not omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and (B) since the Effective Date no event has
occurred which should have been set forth in a supplement or amendment
to the Registration Statement or the Prospectus.
(k) Since the date of the latest audited financial statements included
in the Prospectus, (A) neither the Company nor any of its subsidiaries shall
have sustained any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus and (B) there shall not have been any
change in the capital stock or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a prospective change,
in or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Prospectus, the
effect of which, in any such case described in clause (A) or (B), is, in the
judgment of the Representatives, so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Stock being delivered on such Delivery Date on the terms and in the
manner contemplated in the Prospectus.
(l) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or in the over-the-counter market shall
have been suspended or minimum prices shall have been established on any such
exchange or such market by the Commission, by such exchange or by any other
regulatory body or governmental authority having jurisdiction, (ii) a banking
moratorium shall have been declared by Federal or state authorities, (iii) the
United States shall have become engaged in hostilities, there shall have been an
escalation in hostilities involving the United States or there shall have been a
declaration of a national emergency or war by the United States or (iv) there
shall have occurred such a material adverse change in general economic,
political or financial conditions (or the effect of international conditions on
the financial markets in the United States shall be such) as to make it, in the
judgment of the Representatives, impracticable or inadvisable to proceed with
the public offering or delivery of the
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Stock being delivered on such Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(m) The "lockup" agreements, each substantially in the form of Exhibit
A-1, A-2 and A-3 hereto, as applicable, and executed by Methode and each
executive officer, key employee, director and director nominee of the Company
listed on Schedule 1 to Exhibit A-2 and Schedule 1 to A-3 hereto, relating to
the sales and certain other dispositions of shares of Common Stock and certain
other securities, delivered to the Representatives on or before the date hereof,
shall be in full force and effect on such Delivery Date.
(n) The Intercompany Agreements shall be in full force and effect and
constitute valid and binding obligations of each of the parties thereto,
enforceable against such parties in accordance with their respective terms,
subject to (1) judicial principles limiting the availability of specific
performance, injunctive relief and other equitable remedies; and (2) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to or affecting creditors' rights generally.
(o) As of the date of this Agreement, Methode shall have validly
transferred or caused the transfer to the Company of all assets and liabilities
relating to its optical subsystems and optical components businesses including,
without limitation, all assets and liabilities necessary for the Company to
conduct its business as described in the Prospectus.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
SECTION 8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold harmless each Underwriter, its
officers and employees and each person, if any, who controls any Underwriter
within the meaning of the Securities Act, from and against any loss, claim,
damage or liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or action
relating to purchases and sales of Stock), to which that Underwriter, officer,
employee or controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement thereto, or (B) in
any materials or information provided to investors by, or with the approval of,
the Company in connection with the marketing of the offering of the Stock
("Marketing Materials"), including any roadshow or investor presentations made
to investors by the Company (whether in person or electronically), (ii) the
omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any
23
<PAGE>
amendment or supplement thereto, or in any Marketing Materials, any material
fact required to be stated therein or necessary to make the statements therein
not misleading or (iii) any act or failure to act or any alleged act or failure
to act by any Underwriter in connection with, or relating in any manner to, the
Stock 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 non-appealable 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), and
shall reimburse each Underwriter and each such officer, employee or controlling
person promptly upon demand for any legal or other expenses reasonably incurred
by that Underwriter, officer, employee or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred; PROVIDED, HOWEVER,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of, or is based upon,
any untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or in any such amendment or supplement, in reliance upon and in
conformity with written information concerning such Underwriter furnished to the
Company through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein which information consists solely of the
information specified in Section 8(e). The foregoing indemnity agreement is in
addition to any liability which the Company may otherwise have to any
Underwriter or to any officer, employee or controlling person of that
Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, its officers and employees, each of its directors,
and each person, if any, who controls the Company within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Company or any such
director, officer or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment or supplement
thereto, or (ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any amendment or
supplement thereto, any material fact required to be stated therein or necessary
to make the statements therein not misleading, but in each case only to the
extent that the untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information concerning such Underwriter furnished to the Company through the
Representatives by or on behalf of that Underwriter specifically for inclusion
therein, which information consists solely of the information specified in
Section 8(e), and shall reimburse the Company and any such director, officer,
employee or controlling person for
24
<PAGE>
any legal or other expenses reasonably incurred by the Company or any such
director, officer, employee or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which any Underwriter may
otherwise have to the Company or any such director, officer, employee or
controlling person.
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section 8, notify the indemnifying party in writing of the
claim or the commencement of that action; PROVIDED, HOWEVER, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have under this Section 8 except to the extent it has been materially
prejudiced by such failure and, PROVIDED, further, that the failure to notify
the indemnifying party shall not relieve it from any liability which it may have
to an indemnified party otherwise than under this Section 8. If any such claim
or action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; PROVIDED, HOWEVER, that
the Representatives shall have the right to employ counsel to represent jointly
the Representatives and those other Underwriters and their respective officers,
employees and controlling persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the Underwriters
against the Company under this Section 8 if, in the reasonable judgment of the
Representatives, it is advisable for the Representatives and those Underwriters,
officers, employees and controlling persons to be jointly represented by
separate counsel, and in that event the fees and expenses of such separate
counsel shall be paid by the Company. Notwithstanding anything contained herein
to the contrary, if indemnity may be sought pursuant to Section 8(a) hereof in
respect of such claim or action, then in addition to such separate firm for the
indemnified parties, the indemnifying party shall be liable for the fees and
expenses of not more than one separate firm (in addition to any local counsel)
for the Lehman Brothers Entities for the defense of any loss, claim, damage,
liability or action arising out of the Directed Share Program. No indemnifying
party shall (i) without the prior written consent of the indemnified parties
(which consent shall not be unreasonably withheld), settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of
25
<PAGE>
such claim, action, suit or proceeding, or (ii) be liable for any settlement of
any such action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with the consent of the indemnifying
party or if there be a final judgment of the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any indemnified party
from and against any loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall for any
reason be unavailable to or insufficient to hold harmless an indemnified party
under Section 8(a) or 8(b) in respect of any loss, claim, damage or liability,
or any action in respect thereof, referred to therein, then each indemnifying
party shall, in lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability, or action in respect thereof, (i) in such proportion
as shall be 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 Stock
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 with respect to
the statements or omissions which resulted in such loss, claim, damage or
liability, or action in respect thereof, 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 with respect to such offering shall be deemed
to be in the same proportion as the total net proceeds from the offering of the
Stock purchased under this Agreement (before deducting expenses) received by the
Company, on the one hand, and the total underwriting discounts and commissions
received by the Underwriters with respect to the shares of the Stock purchased
under this Agreement, on the other hand, bear to the total gross proceeds from
the offering of the shares of the Stock under this Agreement, 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 whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the Underwriters, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section were to be 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 into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section shall be deemed to include, for
purposes of this Section 8(d), 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 Section 8(d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Stock underwritten by it and distributed
to the public was offered to the public exceeds the amount of any damages which
such Underwriter has
26
<PAGE>
otherwise paid or become liable to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute as
provided in this Section 8(d) are several in proportion to their respective
underwriting obligations and not joint.
(e) The Underwriters severally confirm and the Company acknowledges
that the statement with respect to the delivery of the Stock on behalf of the
Underwriters set forth on the cover page of, the concession and reallowance
figures appearing under the caption "Underwriting," the last sentence of the
twelfth paragraph under the caption "Underwriting" and the thirteenth paragraph
under the caption "Underwriting" in, the Prospectus constitute the only
information concerning such Underwriters furnished in writing to the Company by
or on behalf of the Underwriters specifically for inclusion in the Registration
Statement and the Prospectus.
SECTION 9. DEFAULTING UNDERWRITERS.
If, on any Delivery Date, any Underwriter defaults in the performance
of its obligations under this Agreement, the remaining non-defaulting
Underwriters shall be obligated to purchase the Stock which the defaulting
Underwriter agreed but failed to purchase on such Delivery Date in the
respective proportions which the number of shares of the Firm Stock set opposite
the name of each remaining non-defaulting Underwriter in Schedule 1 hereto bears
to the total number of shares of the Firm Stock set opposite the names of all
the remaining non-defaulting Underwriters in Schedule 1 hereto; PROVIDED,
HOWEVER, that the remaining non-defaulting Underwriters shall not be obligated
to purchase any of the Stock on such Delivery Date if the total number of shares
of the Stock which the defaulting Underwriter or Underwriters agreed but failed
to purchase on such date exceeds 10% of the total number of shares of the Stock
to be purchased on such Delivery Date, and any remaining non-defaulting
Underwriter shall not be obligated to purchase more than 110% of the number of
shares of the Stock which it agreed to purchase on such Delivery Date pursuant
to the terms of Section 3. If the foregoing maximums are exceeded, the remaining
non-defaulting Underwriters, or those other underwriters satisfactory to the
Representatives who so agree, shall have the right, but shall not be obligated,
to purchase, in such proportion as may be agreed upon among them, all the Stock
to be purchased on such Delivery Date. If the remaining Underwriters or other
underwriters satisfactory to the Representatives do not elect to purchase the
shares which the defaulting Underwriter or Underwriters agreed but failed to
purchase on such Delivery Date, this Agreement (or, with respect to the Second
Delivery Date, the obligation of the Underwriters to purchase, and of the
Company to sell, the Option Stock) shall terminate without liability on the part
of any non-defaulting Underwriter or the Company, except that the Company will
continue to be liable for the payment of expenses to the extent set forth in
Sections 6 and 11. As used in this Agreement, the term "Underwriter" includes,
for all purposes of this
27
<PAGE>
Agreement unless the context requires otherwise, any party not listed in
Schedule 1 hereto who, pursuant to this Section 9, purchases Stock which a
defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default. If other
underwriters are obligated or agree to purchase the Stock of a defaulting or
withdrawing Underwriter, either the Representatives or the Company may postpone
the Delivery Date for up to seven full business days in order to effect any
changes that in the opinion of counsel for the Company or counsel for the
Underwriters may be necessary in the Registration Statement, the Prospectus or
in any other document or arrangement.
SECTION 10. TERMINATION. The obligations of the Underwriters hereunder
may be terminated by the Representatives by notice given to and received by the
Company prior to delivery of and payment for the Firm Stock if, prior to that
time, any of the events described in Sections 7(k) or 7(l) shall have occurred
or if the Underwriters shall decline to purchase the Stock for any reason
permitted under this Agreement, including, without limitation, the failure of
any condition to the Underwriters' obligations hereunder.
SECTION 11. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the Company
shall fail to tender the Stock for delivery to the Underwriters by reason of any
failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed, or because any other condition of the
Underwriters' obligations hereunder required to be fulfilled by the Company
(including, without limitation, with respect to the transactions) is not
fulfilled, the Company will reimburse the Underwriters for all reasonable
out-of-pocket expenses (including fees and disbursements of counsel) incurred by
the Underwriters in connection with this Agreement and the proposed purchase of
the Stock, and upon demand the Company shall pay the full amount thereof to the
Representatives. If this Agreement is terminated pursuant to Section 9 by reason
of the default of one or more Underwriters, the Company shall not be obligated
to reimburse any defaulting Underwriter on account of the expenses which the
Company is obligated to pay pursuant to Section 6 and this Section 11.
SECTION 12. NOTICES, ETC. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail, telex
or facsimile transmission to Lehman Brothers Inc., Three World Financial Center,
New York, New York 10285, Attention: Syndicate Department (Fax: 212-526-6588),
with a copy, in the case of any notice pursuant to Section 8(c), to the Director
of Litigation, Office of the General Counsel, Lehman Brothers Inc., Three World
Financial Center, 10th Floor, New York, NY 10285;
(b) if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration
28
<PAGE>
Statement, Attention: [_________] (Fax:__________), with a copy to Lord, Bissell
& Brook, 115 S. LaSalle Street, Chicago, Illinois 60603, Attention: James W.
Ashley, Jr. (Fax: 312-443-0336); PROVIDED, HOWEVER, that any notice to an
Underwriter pursuant to Section 8(c) shall be delivered or sent by mail, telex
or facsimile transmission to such Underwriter at its address set forth in its
acceptance telex to the Representatives, which address will be supplied to any
other party hereto by the Representatives upon request. Any such statements,
requests, notices or agreements shall take effect at the time of receipt
thereof. The Company shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the Underwriters by
Lehman Brothers Inc. on behalf of the Representatives.
SECTION 13. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement
shall inure to the benefit of and be binding upon the Underwriters, the Company,
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of the person or
persons, if any, who control any Underwriter within the meaning of Section 15 of
the Securities Act and (B) the indemnity agreements set forth in Section 8 shall
be deemed to be for the benefit of the indemnified parties described therein.
Nothing in this Agreement is intended or shall be construed to give any person,
other than the persons referred to in this Section 13, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
contained herein.
SECTION 14. SURVIVAL. The respective indemnities, representations,
warranties and agreements of the Company and the Underwriters contained in this
Agreement or made by or on behalf on them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Stock and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any of them or any person controlling any of them.
SECTION 15. DEFINITION OF THE TERMS "BUSINESS DAY" AND "SUBSIDIARY."
For purposes of this Agreement, (a) "business day" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close and (b) "subsidiary" has the meaning set forth in Rule 405 of the Rules
and Regulations.
SECTION 16. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of New York without regard to principles
of conflicts of laws.
SECTION 17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
29
<PAGE>
SECTION 18. HEADINGS. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
30
<PAGE>
If the foregoing correctly sets forth the agreement between the Company
and the Underwriters, please indicate your acceptance in the space provided for
that purpose below.
Very truly yours,
STRATOS LIGHTWAVE, INC.
By:
-------------------------------
Name:
Title:
Accepted:
LEHMAN BROTHERS INC.
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By LEHMAN BROTHERS INC.
By:
-------------------------------
Authorized Representative
31
<PAGE>
SCHEDULE 1
<TABLE>
<CAPTION>
Underwriters Number of Shares of Firm Stock to be
Purchased
<S> <C>
Lehman Brothers Inc.......................................
CIBC World Markets Corp...................................
U.S. Bancorp Piper Jaffray Inc............................
Robert W. Baird & Co. Incorporated........................
Tucker Anthony Incorporated...............................
Fidelity Capital Markets, a division of National
Financial Services Corporation..........................
Total.....................................................
</TABLE>
<PAGE>
Exhibit A-1
LOCK-UP LETTER AGREEMENT
METHODE ELECTRONICS, INC.
LEHMAN BROTHERS INC.
CIBC WORLD MARKETS CORP.
U.S. BANCORP PIPER JAFFRAY INC.
ROBERT W. BAIRD & CO. INCORPORATED
TUCKER ANTHONY INCORPORATED
FIDELITY CAPITAL MARKETS,
a division of National Financial
Services Corporation
As Representatives of the several
Underwriters
c/o Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285
Dear Sirs:
Methode Electronics, Inc., a Delaware corporation ("Methode"),
understands that you and certain other firms propose to enter into an
Underwriting Agreement (the "Underwriting Agreement") providing for the purchase
by you and such other firms (the "Underwriters") of shares (the "Shares") of
Common Stock, par value $0.01 per share (the "Common Stock"), of Stratos
Lightwave, Inc., a Delaware corporation (the "Company"), and that the
Underwriters propose to reoffer the Shares to the public (the "Offering").
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, Methode hereby
irrevocably agrees that, without the prior written consent of Lehman Brothers
Inc., on behalf of the Underwriters, Methode will not, directly or indirectly,
(1) offer for sale, sell, pledge, or otherwise dispose of (or enter into any
transaction or device that is designed to, or could be expected to, result in
the disposition by any person at any time in the future of) any shares of Common
Stock (including, without limitation, shares of Common Stock that may be deemed
to be beneficially owned by the undersigned in accordance with the rules and
regulations of the Securities and Exchange Commission and shares of Common Stock
that may be issued upon exercise of any option or warrant) or securities
convertible into or exchangeable for Common Stock (other than the Shares) owned
by Methode on the date of execution of this Lock-Up Letter Agreement or on the
date of the completion of the Offering or hereafter acquired by Methode, or (2)
enter into any swap or other derivatives transaction that transfers to another,
in whole or in part, any of the economic benefits or risks of ownership of such
shares of Common Stock, whether any such transaction described in clause (1) or
(2)
A-1-1
<PAGE>
above is to be settled by delivery of Common Stock or other securities, in cash
or otherwise, for a period of 180 days after the date of the final prospectus
relating to the Offering (the "Prospectus"). Notwithstanding the foregoing,
without the prior written consent of Lehman Brothers Inc., Methode may
distribute all of the Common Stock of the Company it owns in a "spin-off"
distribution to its stockholders intended to be tax-free to those stockholders
as described in the Prospectus.
In furtherance of the foregoing, the Company and its Transfer Agent are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this Lock-Up Letter Agreement.
It is understood that, if the Company notifies you that it does not
intend to proceed with the Offering, if the Underwriting Agreement does not
become effective, or if the Underwriting Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the Shares, the undersigned will be released from
our obligations under this Lock-Up Letter Agreement.
Methode understands that the Company and the Underwriters will proceed
with the Offering in reliance on this Lock-Up Letter Agreement.
Whether or not the Offering actually occurs depends on a number of
factors, including market conditions. Any Offering will only be made pursuant to
an Underwriting Agreement, the terms of which are subject to negotiation between
the Company and the Underwriters.
Methode hereby represents and warrants that the undersigned has full
power and authority to enter into this Lock-Up Letter Agreement on behalf of
Methode and that, upon request, Methode will have executed on its behalf any
additional documents necessary in connection with the enforcement hereof. Any
obligations of Methode hereunder shall be binding upon the successors and
assigns of Methode.
Very truly yours,
METHODE ELECTRONICS, INC.
By:
----------------------------
Name:
Title:
Dated:
-------------
A-1-2
<PAGE>
Exhibit A-2
LOCK-UP LETTER AGREEMENT
DIRECTORS, DIRECTOR NOMINEES AND EXECUTIVE OFFICERS
LEHMAN BROTHERS INC.
CIBC WORLD MARKETS CORP.
U.S. BANCORP PIPER JAFFRAY INC.
ROBERT W. BAIRD & CO. INCORPORATED
TUCKER ANTHONY INCORPORATED
FIDELITY CAPITAL MARKETS,
a division of National Financial
Services Corporation
As Representatives of the several
Underwriters
c/o Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285
Dear Sirs:
The undersigned understands that you and certain other firms propose to
enter into an Underwriting Agreement (the "Underwriting Agreement") providing
for the purchase by you and such other firms (the "Underwriters") of shares (the
"Shares") of Common Stock, par value $0.01 per share (the "Common Stock"), of
Stratos Lightwave, Inc., a Delaware corporation (the "Company"), and that the
Underwriters propose to reoffer the Shares to the public (the "Offering").
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of Lehman
Brothers Inc., on behalf of the Underwriters, the undersigned will not, directly
or indirectly, (1) offer for sale, sell, pledge, or otherwise dispose of (or
enter into any transaction or device that is designed to, or could be expected
to, result in the disposition by any person at any time in the future of) any
shares of Common Stock (including, without limitation, shares of Common Stock
that may be deemed to be beneficially owned by the undersigned in accordance
with the rules and regulations of the Securities and Exchange Commission and
shares of Common Stock that may be issued upon exercise of any option or
warrant) or securities convertible into or exchangeable for Common Stock owned
by the undersigned on the date of execution of this Lock-Up Letter Agreement or
on the date of the completion of the Offering (including without limitation any
such shares purchased in the directed share program related to the Offering), or
(2) enter into any swap or other derivatives transaction that transfers to
another, in whole or in part, any of the economic benefits or risks of ownership
of such shares of Common Stock, whether any such transaction described in clause
(1) or (2)
A-2-1
<PAGE>
above is to be settled by delivery of Common Stock or other securities, in cash
or otherwise, for a period of 180 days after the date of the final Prospectus
relating to the Offering. Notwithstanding the foregoing, it is agreed that
transfers of shares of Common Stock as a bona fide gift by the undersigned to a
donee will not be subject to the restrictions set forth herein; PROVIDED that
prior to such gift, each donee shall execute and deliver to Lehman Brothers a
duplicate form of this Lock-Up Letter Agreement pursuant to which such donee
agrees to become subject to and bound by the terms hereof.
In furtherance of the foregoing, the Company and its Transfer Agent are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this Lock-Up Letter Agreement.
It is understood that, if the Company notifies you that it does not
intend to proceed with the Offering, if the Underwriting Agreement does not
become effective, or if the Underwriting Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the Shares, the undersigned will be released from
our obligations under this Lock-Up Letter Agreement.
The undersigned understands that the Company and the Underwriters will
proceed with the Offering in reliance on this Lock-Up Letter Agreement.
Whether or not the Offering actually occurs depends on a number of
factors, including market conditions. Any Offering will only be made pursuant to
an Underwriting Agreement, the terms of which are subject to negotiation between
the Company and the Underwriters.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Letter Agreement and that,
upon request, the undersigned will execute any additional documents necessary in
connection with the enforcement hereof. Any obligations of the undersigned shall
be binding upon the heirs, personal representatives, successors and assigns of
the undersigned.
Very truly yours,
By:
---------------------------
Name:
Title:
Dated:
---------------
A-2-2
<PAGE>
Schedule 1 to Exhibit A-2
William J. McGinley
James W. McGinley
Philip W. Schofield
David A. Slack
Michael P. Galvin
Brian J. Jackman
C. Daniel Nelsen
Edward J. O'Connell
<PAGE>
Exhibit A-3
LOCK-UP LETTER AGREEMENT
KEY EMPLOYEES
LEHMAN BROTHERS INC.
CIBC WORLD MARKETS CORP.
U.S. BANCORP PIPER JAFFRAY INC.
ROBERT W. BAIRD & CO. INCORPORATED
TUCKER ANTHONY INCORPORATED
FIDELITY CAPITAL MARKETS,
a division of National Financial
Services Corporation
As Representatives of the several
Underwriters
c/o Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285
Dear Sirs:
The undersigned understands that you and certain other firms propose to
enter into an Underwriting Agreement (the "Underwriting Agreement") providing
for the purchase by you and such other firms (the "Underwriters") of shares (the
"Shares") of Common Stock, par value $0.01 per share (the "Common Stock"), of
Stratos Lightwave, Inc., a Delaware corporation (the "Company"), and that the
Underwriters propose to reoffer the Shares to the public (the "Offering").
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of Lehman
Brothers Inc., on behalf of the Underwriters, the undersigned will not, directly
or indirectly, (1) offer for sale, sell, pledge, or otherwise dispose of (or
enter into any transaction or device that is designed to, or could be expected
to, result in the disposition by any person at any time in the future of) any
shares of Common Stock (including, without limitation, shares of Common Stock
that may be deemed to be beneficially owned by the undersigned in accordance
with the rules and regulations of the Securities and Exchange Commission and
shares of Common Stock that may be issued upon exercise of any option or
warrant) or securities convertible into or exchangeable for Common Stock owned
by the undersigned on the date of execution of this Lock-Up Letter Agreement or
on the date of the completion of the Offering (including without limitation any
such shares purchased in the directed share program related to the Offering) for
a period of 90 days after the date of the final Prospectus relating to the
Offering, or (2) enter into any swap or other derivatives transaction that
transfers to another, in whole or in part, any of the economic benefits or risks
of ownership of such shares
A-3-1
<PAGE>
of Common Stock for a period of 180 days after the date of the final Prospectus
relating to the Offering, whether any such transaction described in clause (1)
or (2) above is to be settled by delivery of Common Stock or other securities,
in cash or otherwise. For the avoidance of doubt, it is understood that the
provisions of clause (2) above shall not, after a period of 90 days from the
date of the final Prospectus relating to the Offering, be deemed to prohibit
outright offers, sales, pledges or other dispositions of shares of Common Stock
by the undersigned as described in clause (1) above. Notwithstanding the
foregoing, it is agreed that transfers of shares of Common Stock as a bona fide
gift by the undersigned to a donee will not be subject to the restrictions set
forth herein; PROVIDED that prior to such gift, each donee shall execute and
deliver to Lehman Brothers a duplicate form of this Lock-Up Letter Agreement
pursuant to which such donee agrees to become subject to and bound by the terms
hereof.
In furtherance of the foregoing, the Company and its Transfer Agent are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this Lock-Up Letter Agreement.
It is understood that, if the Company notifies you that it does not
intend to proceed with the Offering, if the Underwriting Agreement does not
become effective, or if the Underwriting Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the Shares, the undersigned will be released from
our obligations under this Lock-Up Letter Agreement.
The undersigned understands that the Company and the Underwriters will
proceed with the Offering in reliance on this Lock-Up Letter Agreement.
Whether or not the Offering actually occurs depends on a number of
factors, including market conditions. Any Offering will only be made pursuant to
an Underwriting Agreement, the terms of which are subject to negotiation between
the Company and the Underwriters.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Letter Agreement and that,
upon request, the undersigned will execute any additional documents necessary in
connection with the enforcement hereof. Any obligations of the undersigned shall
be binding upon the heirs, personal representatives, successors and assigns of
the undersigned.
Very truly yours,
By:
----------------------------
Name:
Title:
Dated:
-----------------
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<PAGE>
Schedule 1 to Exhibit A-3
Richard C.E. Durrant
David R. Lipinski
Kenneth R. Marchman
Everett S. McGinley
Georgette L. Meyer
David W. Norling
Michael T. Perkins
Donald A. Rimdzius
Robert M. Scharf
