Kevin B. Kimberlin and Joni R. Steele, et al. - Page 4

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          (Ventures).  Ventures, a New York-based investment banking firm             
          that specializes in obtaining early-stage financing for                     
          technology companies, is a wholly owned subsidiary of Spencer               
          Trask.  The terms of the 1993 PPA provided that Ventures would              
          attempt to raise $3 million to $5 million through a private                 
          placement offering of Ciena stock.  In exchange for such                    
          services, Ciena agreed to pay Ventures a cash commission equal to           
          10 percent of the amount raised and issue Ventures warrants3 to             
          purchase a number of shares (i.e., based on the number of shares            
          sold in the offering).  The warrants were exercisable for a                 
          period of 5 years at $5 per share.                                          
               On April 8, 1994, Ciena and Ventures amended the 1993 PPA to           
          allow another investment banking firm to serve as the placement             
          agent for the offering of Ciena series A convertible preferred              
          stock.  These changes were memorialized by an amended private               
          placement agreement (1994 PPA).  The 1994 PPA provided that                 
          following Ciena’s series A convertible preferred stock offering,            
          Ventures would serve as the placement agent in the offering of              

               3  Warrants, also referred to as “stock warrants”, are                 
          similar to stock options.  They are certificates that allow the             
          owner to purchase a specified number of shares, at a specified              
          time, for a specified price.  Whereas stock options are normally            
          granted to employees, warrants are granted to the general public.           
          They are typically options to purchase stock over a long period             
          and are freely transferable instruments.  Black’s Law Dictionary            
          1617 (8th ed. 2004).                                                        

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