RE: Intel Connection... From 2/28/97 10K for SMSC. Nice call 24601. I'm impressed!
10. SUBSEQUENT EVENT
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 $14,654,000, 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, the Company and Intel have signed a Letter of Intent
to enter into, and are currently negotiating, an agreement whereby (i) Intel
would agree to integrate the Company's current and future devices into a
specified number of Intel's motherboard designs, and consider integrating such
devices into additional motherboard designs, and (ii) the Company would grant
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 on 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. |
