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to purchase workstations from Sun. Sun believed that it was
unlikely that the parties would have agreed on the June 17, 1983,
agreement, or that the transactions outlined therein would have
been consummated, without the warrants.
Additionally, concerning a $2.5 million loan made to Sun by
CV, the June 17, 1983, agreement provided for the issuance of a
5-year, 8-percent, $1.5 million debenture convertible into
100,000 shares of Sun common stock, and a $1 million
nonconvertible note.7
6(...continued)
(a) On 100,000 shares of common stock at $12.00/share,
exercisable after CV has received $20 million of Sun-
manufactured product plus royalties paid by CV within 36
months after 1st production CV delivery for revenue.
(b) On 100,000 share[s] of common stock at
$15.00/share exercisable after CV has received $30 million
of Sun-manufactured product plus royalties paid by CV within
36 months of 1st production CV delivery for revenue.
7
The June 17, 1983, agreement provided in relevant part:
--Debenture
A $1.5 million debenture (5 year 8%) convertible into
100,000 shares of common stock, in conjunction with a $1.0
million loan at 8%, such loan to be repaid quarterly at the
rate of 10% of the previous three months invoices to CV
until the loan is repaid in full. (i.e., after $10 million
in invoices)
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