Kevin B. Kimberlin and Joni R. Steele, et al. - Page 5

                                        - 5 -                                         
          Ciena series B convertible preferred stock (series B offering).             
          Pursuant to the 1994 PPA, Ciena was obligated to pay Ventures a             
          cash commission and warrants to purchase a number of shares                 
          (i.e., based on the number of shares sold in the offering) of               
          series B convertible preferred stock.  In addition, the agreement           
               In the event * * * [Ciena] does not, at its option,                    
               proceed with the Offering on the terms set forth herein                
               * * * [Ciena] will issue to * * * [Ventures] a warrant,                
               exercisable for a period equal to the earlier of (x)                   
               three years or (y) the occurrence of an initial public                 
               offering, to purchase up to 150,000 shares of Series A                 
               Preferred at a price of $1.00 per share.                               
               Ciena subsequently decided not to use Ventures as the                  
          placement agent for its series B offering.  Instead, it sold its            
          series B stock through direct sales methods to institutional and            
          noninstitutional investors.  In December 1994, Ciena sold                   
          3,549,106 shares of series B stock for $1.50 per share and                  
          received a subscription for another 1 million shares, and in                
          January and February 1995, sold an additional 2,804,986 shares of           
          series B stock for $1.50 per share.  Ciena did not adhere to the            
          1994 PPA, and as a result, Ventures did not have the opportunity            
          to, and did not, perform any services for Ciena.  Ciena asserted            
          that the only redress available to Ventures, for Ciena’s failure            
          to use Ventures as the placement agent for the series B offering,           
          was the damages determined pursuant to the liquidated damages               

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  Next 

Last modified: November 10, 2007