Computervision International Corp. - Page 24

                                       - 24 -                                         
          incentive for CV to do business with Sun.  The warrants served as           
          an incentive to CV to purchase workstations manufactured by Sun,            
          rather than to manufacture the workstations itself, during the              
          initial phase of the transaction between CV and Sun.  For                   
          workstations manufactured by Sun, the purchase agreement provided           
          a higher price to be paid by CV to Sun than the royalties that CV           
          was obligated to pay Sun for workstations manufactured by CV.               
          Consequently, the volume purchase levels at which the warrants              
          became exercisable would be reached more quickly were CV to                 
          purchase workstations manufactured by Sun than would be the case            
          if CV were to manufacture them itself and pay royalties to Sun.             
               The dollar volume of business at which the warrants became             
          exercisable was within the expected dollar volume of business to            
          be transacted between CV and Sun.  Although CV did not commit to            
          buying the volume specified in the investment agreement for                 
          exercisability of the warrants, its projections furnished to Sun            
          indicated that CV believed it would be able to effect purchases             
          at those volume levels.                                                     
               The joint development agreement contained provisions                   
          implementing the objectives of CV and Sun with respect to the               
          development of future products.  As noted above, Sun possessed              
          valuable technology and know-how with respect to the operation of           
          UNIX, an open computer operating system compatible with hardware            
          and software developed by companies besides CV and with which CV            






Page:  Previous  14  15  16  17  18  19  20  21  22  23  24  25  26  27  28  29  30  31  32  33  Next

Last modified: May 25, 2011