Kevin B. Kimberlin and Joni R. Steele, et al. - Page 7

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          Ventures incurred in preparation of documents relating to the               
          1993 PPA and the 1994 PPA.  In addition, Spencer Trask, Ventures,           
          and each of its affiliates agreed to “forever release, acquit and           
          discharge [Ciena] * * * of and from the * * * [Spencer Trask]               
          claims and from any and all causes of action”.                              
               Following the execution of the SRA, Ventures designated Mr.            
          Kimberlin to receive warrants to purchase 250,000 shares of Ciena           
          stock, Spencer Trask to receive warrants to purchase 45,000                 
          shares, and Laura McNamara to receive warrants to purchase 5,000            
          shares.  On June 25, 1996, upon Mr. Kimberlin’s request, Ciena              
          reissued, to Kimberlin Partners, the warrants to purchase 250,000           
          shares.  Following a 5-for-1 stock split in February 1997, the              
          warrants to purchase 300,000 shares at $2 per share were                    
          converted into warrants to purchase 1,500,000 shares at an                  
          exercise price of 40 cents per share.                                       
               On February 5, 1997, Spencer Trask and Kimberlin Partners              
          exercised all of the warrants and purchased 1,500,000 shares of             
          Ciena series B convertible preferred stock.  Checks totaling                
          $600,000 were paid to Ciena.  On the date of exercise, the mean             
          selling price per share of Ciena preferred stock was $29.30.  On            
          February 7, 1997, Ciena held its initial public offering.  The              
          mean selling price per share of Ciena common stock on that date             
          was $35.68.                                                                 

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