In March 1997, the Company and Intel Corporation (Intel) entered into
a Common Stock and Warrant Purchase Agreement (the Agreement)
whereby Intel acquired approximately 1,543,000 of newly issued shares
of the Company's common stock for $9.50 per share, or approximately
$14,564,000, and received a three-year warrant to purchase an
additional 1,543,000 shares at a price per share which increases
from $10.45, to $11.40, and then to $12.35 on March 18, 1997, 1998
and 1999, respectively. In addition, in June 1997, the Company and
Intel entered into a separate agreement whereby (i) Intel agreed to
integrate the Company's current and future devices into a specific
number of Intel's motherboard designs, and will consider integrating
such devices into additional motherboard designs, and (ii) the Company
granted Intel certain manufacturing rights should the Company be unable
to perform its obligations as a supplier of such devices.
The Agreement provides Intel with certain rights, including a right
of first refusal upon certain proposed sales of common stock by the
Company, demand and other registration rights with respect to the shares
acquired under the Agreement, a right for Intel to designate a
representative to serve on the Company's board of directors and
anti-dilution rights.
The Agreement also imposes certain restrictions upon Intel, including
a limitation on Intel's ability to acquire additional shares of the
Company's common stock (referred to as a standstill arrangement),
and restrictions on the transfer of shares acquired pursuant to
the Agreement. The standstill arrangement would terminate in the
event of certain third-party tender offers for the Company's
common stock |
