Computervision International Corp. - Page 17

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          royalty” arrangement under which CV could manufacture                       
          workstations but would be discouraged from being its primary                
          manufacturer because the “royalty” paid Sun with respect to the             
          workstations would increase as the number of workstations                   
          manufactured by CV increased.                                               
               During June 1983, representatives of CV and Sun met to                 
          discuss the proposals and to develop the framework for their                
          business relationship.  During the negotiations, CV sought to               
          minimize the price at which it would purchase workstations by               
          maximizing the discount from Sun’s list price for Sun’s products,           
          and Sun sought to maximize the selling price of the workstations,           
          and sought to minimize the discount from its list price.  CV                
          pressed for a higher discount although it was aware that, in the            
          computer industry, a 45-percent discount was on the high end of             
          normal purchase discounts given by suppliers to original                    
          equipment manufacturers (OEM’s).  Near the conclusion of the June           
          1983 meeting, CV and Sun discussed giving CV warrants to purchase           
          Sun stock as means of reducing the cost to CV of the transaction            
          with Sun.                                                                   
               The Preliminary Agreement                                              
               The negotiations culminated in an agreement that was signed            
          on or about June 17, 1983 (June 17, 1983, agreement), and that              
          established guidelines for the joint development and manufacture            
          of workstations by CV and Sun.  The June 17, 1983, agreement                
          provided that the relationship between CV and Sun was to                    




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