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FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER
THIS FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER (this "First
Amendment") is made as of this 27th day of August, 1998 among Tellabs, Inc., a
Delaware corporation ("Parent"), White Oak Merger Corp., a Delaware corporation
and a direct wholly owned subsidiary of Parent ("Sub"), and CIENA Corporation, a
Delaware corporation (the "Company").
Parent, Sub and the Company are parties to that certain Agreement and
Plan of Merger dated as of June 2, 1998 (the "Merger Agreement"). Except as
otherwise defined or modified herein, all capitalized terms used in this First
Amendment shall have the meanings set forth in the Merger Agreement.
Concurrently herewith Parent and the Company are entering into an
amendment to the Stock Option Agreement in the form of the attached Exhibit A.
In consideration of the mutual agreements contained in the Merger
Agreement and in this First Amendment and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. AMENDMENTS TO MERGER AGREEMENT.
A. Amendment to Section 1.5(c) of the Merger Agreement. Section
1.5(c) of the Merger Agreement is hereby amended to read in its entirety as
follows:
"Subject to the provisions of Sections 1.8 and 1.10 hereof, each
share of Company Common Stock issued and outstanding immediately
prior to the Effective Time (other than shares to be cancelled in
accordance with Section 1.5(b)), together with the associated
Rights, shall be converted into 0.80 (such number being the
"Exchange Ratio") validly issued, fully paid and nonassessable
shares of Parent Common Stock. All such shares of Company Common
Stock and the associated Rights, when so converted, shall no longer
be outstanding and shall automatically be cancelled and retired and
each holder of a certificate representing any such shares shall
cease to have any rights with respect thereto, except the right to
receive any dividends and other distributions in accordance with
Section 1.7, certificates representing the shares of Parent Common
Stock into which such shares are converted and any cash, without
interest, in lieu of fractional shares to be issued or paid in
consideration therefor upon the surrender of such certificate in
accordance with Section 1.6."
B. Amendments to Section 5.7 of the Merger Agreement.
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(I) Section 5.7(b) of the Merger Agreement is hereby
amended to read in its entirety as follows:
(i) Notwithstanding any provision in this Agreement to the
contrary, if this Agreement is terminated (A) by the Company or
Parent pursuant to Section 7.1(e) and a Takeover Proposal existed
between the date hereof and the date of the Company Stockholder
Meeting, (B) by the Company or Parent pursuant to Section 7.1(g) or
(C) by Parent pursuant to Section 7.1(h) (except, in the case of
Section 7.1(h)(i), as provided in Sections 5.7(d) and 5.7(e)), then,
in each case, the Company shall (without prejudice to any other
rights Parent may have against the Company for breach of this
Agreement) reimburse Parent upon demand for all reasonable
out-of-pocket fees and expenses incurred or paid by or on behalf of
Parent or any Affiliate (as hereinafter defined) of Parent in
connection with this Agreement, the Stock Option Agreement and the
transactions contemplated herein or therein, including all fees and
expenses of counsel, investment banking firms, accountants and
consultants; provided, however, that the Company shall not be
obligated to make payments pursuant to this Section 5.7(b)(i) in
excess of $10,000,000 in the aggregate. As used herein, "Affiliate"
shall have the meaning set forth in Rule 405 under the Securities
Act.
(ii) Notwithstanding any provision in this Agreement
to the contrary, if this Agreement is terminated by the Company or
Parent pursuant to Section 7.1(f) and a Parent Takeover Proposal (as
defined below) existed between the date hereof and the date of the
Parent Stockholder Meeting, then Parent shall (without prejudice to
any other rights the Company may have against Parent for breach of
this Agreement) reimburse the Company upon demand for all reasonable
out-out-pocket fees and expenses incurred or paid by or on behalf of
the Company or any Affiliate of the Company in connection with this
Agreement, the Stock Option Agreement and the transactions
contemplated herein or therein, including all fees and expenses of
counsel, investment banking firms, accountants and consultants;
provided, however, that Parent shall not be obligated to make
payments pursuant to this Section 5.7(b)(ii) in excess of
$10,000,000 in the aggregate. As used herein, "Parent Takeover
Proposal" means any proposal or offer, or any expression of
interest, by any third party relating to Parent's willingness or
ability to receive or discuss a proposal or offer for a merger,
consolidation or other business combination, in each case pursuant
to which Parent is acquired by a third party.
(II) The first paragraph of Section 5.7(c) of the Merger
Agreement is hereby amended to read in its entirety as follows:
"Notwithstanding any provision in this Agreement to the
contrary, if (i)
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this Agreement is terminated by the Company or Parent pursuant to
Section 7.1(e) and a Takeover Proposal existed between the date
hereof and the date of the Company Stockholder Meeting and,
concurrently with or within twelve months after any such termination
a Third Party Acquisition Event (as defined below) occurs or the
Company shall enter into any letter of intent, agreement in
principle, acquisition agreement or other similar agreement with
respect to a Third Party Acquisition Event, (ii) this Agreement is
terminated by Parent or the Company pursuant to Section 7.1(g) or
(iii) this Agreement is terminated by Parent pursuant to Section
7.1(h) (except, in the case of Section 7.1(h)(i), as provided in
Sections 5.7(d) and 5.7(e)), then, in each case, the Company shall
(in addition to any obligation under Section 5.7(b) and without
prejudice to any other rights that Parent may have against the
Company for a breach of this Agreement) pay to Parent a fee (the
"Termination Fee") of $200,000,000 in cash, such payment to be made
promptly, but in no event later than, in the case of clause (i), the
later to occur of such termination and such Third Party Acquisition
Event or, in the case of clauses (ii) or (iii), such termination."
(III) Section 5.7(d) of the Merger Agreement is hereby amended
to read in its entirety as follows:
"No payment shall be required to be made by the Company
pursuant to Section 5.7(b)(i)(C) or 5.7(c)(iii) (in each case, with
respect to a termination of this Agreement pursuant to Section
7.1(h)(i)) if the following conditions are satisfied: (i) no
Takeover Proposal existed between the date hereof and the date of
the Company Stockholder Meeting; (ii) the event described in Section
7.1(h)(i) causing the termination of this Agreement occurred solely
as a result of Parent entering into a definitive written agreement
pursuant to which (x) Parent acquires, or one of Parent's
Subsidiaries merges with, another entity and (y) in consideration
therefor Parent agrees to issue Parent Common Stock or other voting
securities representing, in the aggregate, 20% or more of the then
outstanding shares of Parent Common Stock and other Parent voting
securities (a "Parent Acquisition Event"); and (iii) prior to the
occurrence of the event described in Section 7.1(h)(i) causing such
termination, (A) the Board of Directors of the Company, after due
deliberation and in the good faith exercise of its fiduciary duties
under applicable law (as advised by outside corporate counsel of the
Company), determined (1) to withdraw or modify such recommendation
solely because Parent notified the Company that it intended to enter
into or had entered into a definitive written agreement to effect a
Parent Acquisition Event and (2) that, solely as a result of such
Parent Acquisition Event, the Merger was no longer in the best
interests of the Company and its stockholders and (B) the Board of
Directors of the Company notified Parent that it had resolved to
withdraw or modify its recommendation in favor of the approval of
this Agreement within five business days of the receipt of Parent's
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notice.
(IV) A new Section 5.7(e) of the Merger Agreement is hereby
added to the Merger Agreement to read as follows:
"Notwithstanding any provision in this Agreement to the
contrary, and in lieu of any payments otherwise required to be made
by the Company pursuant to Section 5.7(b)(i)(C) or 5.7(c)(iii), if
(i) this Agreement is terminated by Parent pursuant to Section
7.1(h)(i) and (A) no Takeover Proposal existed between the date
hereof and the date of the Company Stockholder Meeting, (B) the
event described in Section 7.1(h)(i) causing the termination of this
Agreement occurred solely as a result of the occurrence of a
Material Adverse Effect on Parent (provided that, for purposes of
this Section 5.7(e)(i), a Material Adverse Effect on the results of
operations of Parent and its Subsidiaries shall only be deemed to be
such to the extent it relates to the long-term prospects of the
results of operations of Parent and its Subsidiaries taken as a
whole) and (C) prior to the occurrence of the event described in
Section 7.1(h)(i) causing the termination of this Agreement, the
Board of Directors of the Company determined in its reasonable good
faith judgment, on the basis of the advice of outside corporate
counsel of the Company, that the making of its recommendation to the
stockholders of the Company in favor of approval of this Agreement,
or the failure to withdraw or modify such recommendation, would
violate its fiduciary duties under applicable law solely in light of
the Material Adverse Effect on Parent or (ii) (A) no Takeover
Proposal existed between the date hereof and the proposed Closing
Date, (B) all of the conditions set forth in Sections 6.1 and 6.2
(other than Section 6.2(c)) of the Merger Agreement have been
fulfilled and (C) the Company has elected not to consummate the
transactions contemplated hereby on the basis of Section 6.2(c) not
being fulfilled, then, in each case, the Company shall (without
prejudice to any other rights that Parent may have against the
Company for a breach of this Agreement) pay to Parent a termination
fee of $50,000,000 in cash, such payment to be made promptly, but in
no event later than such termination."
(V) A new Section 5.7(f) is hereby added to the Merger
Agreement to read as follows:
"Notwithstanding any provision in this Agreement to the
contrary, if (i) this Agreement is terminated by the Company
pursuant to Section 7.1(i) or (ii) (A) all of the conditions set
forth in Sections 6.1 and 6.3 (other than Section 6.3(c)) of the
Merger Agreement have been fulfilled and (B) Parent has elected not
to consummate the transactions contemplated hereby on the basis of
Section 6.3(c) not being fulfilled, then, in each case, Parent shall
(without prejudice to any other rights the Company may have against
Parent for breach of this Agreement) pay to the Company a fee of
$100,000,000 in cash, such
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payment to be made promptly, but in no event later than such
termination."
C. Amendment to Section 7.1 of the Merger Agreement. New
Sections 7.1(j) and 7.1(k) are hereby added to the Merger Agreement to read as
follows:
"(j) by the Company if the Company shall have
made the $50,000,000 payment pursuant to Section 5.7(e)(ii); or
(k) by Parent if Parent shall have made the
$100,000,000 payment pursuant to Section 5.7(f)(ii)."
SECTION 2. REPRESENTATIONS AND WARRANTIES.
A. Representations and Warranties of Parent and Sub.
Parent and Sub represent and warrant to the Company as follows:
(1) Authority. On or prior to the date of this First
Amendment, the Boards of Directors of Parent and Sub have declared
the Merger (on terms and conditions set forth in the Merger
Agreement as amended by this First Amendment) advisable and fair to
and in the best interest to Parent and Sub, respectively, and their
respective stockholders, approved and adopted the Merger Agreement
(as amended hereby) in accordance with the DGCL, and the Board of
Directors of Parent has confirmed its resolution to recommend the
approval by Parent's stockholders of the issuance of Parent Common
Stock in connection with the Merger. Each of Parent and Sub has all
requisite corporate power and authority to enter into this First
Amendment and, subject to the approval by the stockholders of Parent
of the Share Issuance, to consummate the transactions contemplated
by the Merger Agreement, as amended hereby. The execution and
delivery of this First Amendment by Parent and Sub and the
consummation by Parent and Sub of the transactions contemplated by
the Merger Agreement, as amended hereby, have been duly authorized
by all necessary corporate action on the part of Parent and Sub
subject to (x) the approval by the stockholders of Parent of the
Share Issuance and (y) the filing of appropriate Merger documents as
required by the DGCL. This First Amendment has been duly executed
and delivered by Parent and Sub and (assuming the valid
authorization, execution and delivery of this First Amendment by the
Company and the valid and binding effect hereof on the Company)
constitutes the valid and binding obligation of Parent and Sub,
enforceable against each of them in accordance with its terms.
(2) Consents and Approvals; No Violation. Assuming that
all consents, approvals, authorizations and other actions described
in this Section 2.A.(2) have been obtained and all filings and
obligations described in this Section 2.A.(2) have been made, except
as set forth in Section 2.4 of the Parent
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Letter, the execution and delivery of this First Amendment does not,
and the consummation of the transactions contemplated by the Merger
Agreement, as amended hereby, will not, result in any violation of,
or default (with or without notice or lapse of time, or both) under,
or give to others a right of termination, cancellation or
acceleration of any obligation or the loss of a material benefit
under, or result in the creation of any lien, security interest,
charge or encumbrance upon any of the properties or assets of Parent
or any of its Subsidiaries under, any provision of (i) the Parent
Charter or the Parent Bylaws or the Certificate of Incorporation or
Bylaws of Sub, (ii) any provision of the comparable charter or
organization documents of any of Parent's Subsidiaries, (iii) any
loan or credit agreement, note, bond, mortgage, indenture, lease or
other agreement, instrument, permit, concession, franchise or
license applicable to Parent or any of its Subsidiaries or (iv) any
judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Parent or any of its Subsidiaries or any of their
respective properties or assets, other than, in the case of clauses
(ii), (iii) or (iv), any such violations, defaults, rights, liens,
security interests, charges or encumbrances that, individually or in
the aggregate, would not have a Material Adverse Effect on Parent,
materially impair the ability of Parent or Sub to perform their
respective obligations hereunder or prevent the consummation of any
of the transactions contemplated by the Merger Agreement, as amended
hereby. No filing or registration with, or authorization, consent or
approval of, any Governmental Entity is required by or with respect
to Parent or any of its Subsidiaries in connection with the
execution and delivery of this First Amendment by Parent or Sub or
is necessary for the consummation of the Merger and the other
transactions contemplated by the Merger Agreement, as amended
hereby, except for (i) in connection, or in compliance, with the
provisions of the HSR Act, the Securities Act and the Exchange Act,
(ii) the filing of the Certificate of Merger with the Secretary of
State of the State of Delaware and appropriate documents with the
relevant authorities of other states in which Parent or any of its
Subsidiaries is qualified to do business, (iii) such filings,
authorizations, orders and approvals as may be required to obtain
the State Takeover Approvals, (iv) such filings as may be required
in connection with the taxes described in Section 5.11 of the Merger
Agreement, (v) applicable requirements, if any, of state securities
or Blue Sky Laws and NASDAQ, (vi) as may be required under foreign
laws and (vii) such other consents, orders, authorizations,
registrations, declarations and filings the failure of which to be
obtained or made would not, individually or in the aggregate, have a
Material Adverse Effect on Parent, materially impair the ability of
Parent or Sub to perform its obligations hereunder or prevent the
consummation of any of the transaction contemplated by the Merger
Agreement, as amended hereby.
(3) Opinion of Financial Advisor. Parent has received
the written
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opinion of Xxxxxxx, Xxxxx & Co., dated the date hereof, to the
effect that, as of the date hereof, the Exchange Ratio (as amended
by this First Amendment) is fair to Parent from a financial point of
view.
B. Representations and Warranties of the Company. The
Company represents and warranties to Parent and Sub as follows:
(1) Authority. On or prior to the date of this First
Amendment, the Board of Directors of the Company has declared the
Merger (on terms and conditions set forth in the Merger Agreement as
amended by this First Amendment) advisable and fair to and in the
best interest of the Company and its stockholders, approved and
adopted this First Amendment in accordance with the DGCL, confirmed
its approval of the Stockholder Agreements and the Stock Option
Agreement (as amended), confirmed its resolution to recommend the
approval and adoption of the Merger Agreement (as amended hereby) by
the Company's stockholders and directed that the Merger Agreement
(as amended hereby) be submitted to the Company's stockholders for
approval and adoption. The Company has all requisite corporate power
and authority to enter into this First Amendment and, subject to
approval by the stockholders of the Company, to consummate the
transactions contemplated by the Merger Agreement, as amended
hereby. The execution and delivery of this First Amendment by the
Company and the consummation by the Company of the transactions
contemplated by the Merger Agreement, as amended hereby, have been
duly authorized by all necessary corporate action on the part of the
Company, subject, in the case of the Merger Agreement, as amended
hereby, only to (x) the approval of the Merger Agreement, as amended
hereby, by the stockholders of the Company and (y) the filing of
appropriate Merger documents as required by the DGCL. This First
Amendment has been duly executed and delivered by the Company and
(assuming the valid authorization, execution and delivery of this
First Amendment by Parent and Sub and the validity and binding
effect of this First Amendment on Parent and Sub) constitutes the
valid and binding obligation of the Company enforceable against the
Company in accordance with its terms.
(2) Consents and Approvals; No Violation. Assuming that
all consents, approvals, authorizations and other actions described
in this Section 2.B.(2) have been obtained and all filings and
obligations described in this Section 2.B.(2) have been made, except
as set forth in Section 3.4 of the Company Letter, the execution and
delivery of this First Amendment by the Company does not, and the
consummation of the transactions contemplated by the Merger
Agreement, as amended hereby, and compliance with the provisions of
the Merger Agreement, as amended hereby, will not, result in any
violation of, or default (with or without notice or lapse of time,
or both) under, or give to others a right of termination,
cancellation or acceleration of any obligation or
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the loss of a material benefit under, or result in the creation of
any lien, security interest, charge or encumbrance upon any of the
properties or assets of the Company or any of its Subsidiaries
under, any provision of (i) the Company Charter or the Company
Bylaws, (ii) any provision of the comparable charter or organization
documents of any of the Company's Subsidiaries, (iii) any loan or
credit agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise or license
applicable to the Company or any of its Subsidiaries or (iv) any
judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to the Company or any of its Subsidiaries or any of their
respective properties or assets, other than, in the case of clauses
(ii), (iii) or (iv), any such violations, defaults, rights, liens,
security interests, charges or encumbrances that, individually or in
the aggregate, would not have a Material Adverse Effect on the
Company or materially impair the ability of the Company to perform
its obligations hereunder or prevent the consummation of any of the
transactions contemplated by the Merger Agreement, as amended
hereby. No filing or registration with, or authorization, consent or
approval of, any Governmental Entity is required by or with respect
to the Company or any of its Subsidiaries in connection with the
execution and delivery of this First Amendment by the Company or is
necessary for the consummation of the Merger and the other
transactions contemplated by the Merger Agreement, as amended
hereby, except for (i) in connection, or in compliance, with the
provisions of the HSR Act, the Securities Act and the Exchange Act,
(ii) the filing of the Certificate of Merger with the Secretary of
State of the State of Delaware and appropriate documents with the
relevant authorities of other states in which the Company or any of
its Subsidiaries is qualified to do business, (iii) such filings,
authorizations, orders and approvals as may be required to obtain
the State Takeover Approvals, (iv) such filings as may be required
in connection with the taxes described in Section 5.11 of the Merger
Agreement, (v) applicable requirements, if may, of Blue Sky Laws and
NASDAQ, (vi) as may be required under foreign laws and (vii) such
other consents, orders, authorizations, registrations, declarations
and filings the failure of which to be obtained or made would not,
individually or in the aggregate, have a Material Adverse Effect on
the Company, materially impair the ability of the Company to perform
its obligations hereunder or prevent the consummation of any of the
transactions contemplated by the Merger Agreement, as amended
hereby.
(3) Opinion of Financial Advisor. The Company has
received the written opinion of Xxxxxx Xxxxxxx & Co. Incorporated,
dated the date hereof, to the effect that, as of the date hereof,
the Exchange Ratio (as amended by this First Amendment) is fair to
the Company's stockholders from a financial point of view, a copy of
which opinion has been delivered to Parent.
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(4) State Takeover Statutes; Certain Charter Provisions.
The Board of Directors of the Company has, to the extent such
statutes are applicable, taken all action (including appropriate
approvals of the Board of Directors of the Company) necessary to
exempt Parent, its Subsidiaries and affiliates, the Merger, this
First Amendment, the Stock Option Agreement, as amended, and the
transactions contemplated by the Merger Agreement, as amended
hereby, from Section 203 of the DGCL. To the Knowledge of the
Company, no other state takeover statutes or charter or bylaw
provisions are applicable to the Merger, this First Amendment, the
Stock Option Agreement, as amended, and the transactions
contemplated by the Merger Agreement, as amended hereby.
SECTION 3. MISCELLANEOUS.
A. The terms and provisions of the Merger Agreement, as amended
hereby, shall remain in full force and effect. All references to the Merger
Agreement contained therein shall mean the Merger Agreement, as amended hereby.
B. This First Amendment may be executed in counterparts, all of
which shall be considered one and the same agreement, and shall become effective
when one or more counterparts have been signed by each of the parties and
delivered to the other parties.
C. This First Amendment shall be governed by, and construed in
accordance with, the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
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IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
First Amendment to be signed by their respective officers thereunto duly
authorized all as of the date first written above.
TELLABS, INC.
By: /s/ XXXXXXX X. XXXXX
----------------------------
Name: Xxxxxxx X. Xxxxx
Title: President and
Chief Executive Officer
WHITE OAK MERGER CORP.
By: /s/ XXXXXXX X. XXXXX
----------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
CIENA CORPORATION
By: /s/ XXXXXXX X. XXXXXXX
----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President and
Chief Executive Officer
