Item 3.02
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Unregistered Sales of Equity Securities.
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On June 5, 2019, Marvell Technology Group Ltd. (the Company) issued a warrant to purchase nine million (9,000,000) (subject to adjustment in
certain cases) of the Companys common shares, $0.002 par value, at an exercise price of $22.63 per share to Arm Limited (the Warrant). The Warrant was issued in connection with the execution of a Collaboration Agreement between the
parties dated as of June 5, 2019.
The Warrant will vest when each of the following conditions has been satisfied: (1) clearance by the Committee on
Foreign Investment in the United States has been received, (2) all amounts payable by Arm Limited under (A) the Collaboration Agreement and (B) the Collaboration Agreement dated November 1, 2018 between Arm Limited and the
Company, have been fully paid, and (3) the Company has achieved an aggregate total of five hundred million dollars ($500,000,000) of ARM Server Business Revenue (as defined in the Collaboration Agreement) over four consecutive fiscal quarters.
Once vested, the Warrant may be exercised at the election of Arm Limited, in whole but not in part, by the tender to the Company of a notice of exercise.
On the exercise date, the Company will calculate the Net Payment Amount (as defined in the Warrant). In no event shall the Net Payment Amount exceed an aggregate value of Two Hundred and Ten Million Dollars ($210,000,000) (the Value
Cap). To the extent that the Net Payment Amount would exceed the Value Cap then the Net Payment Amount shall equal the Value Cap, and Arm Limited shall not have any right to any additional payment or have any right to acquire any common shares
pursuant to the Warrant in excess of such Value Cap. The Company, in its sole discretion, may choose to satisfy the Net Payment Amount in cash, common shares or a combination thereof. In certain instances, the Warrant will be automatically
exercised.
The Warrant shall expire on the earliest to occur of (i) the date that is the seventh anniversary of the grant date; (ii) the
termination of the Collaboration Agreement pursuant to certain terms thereof; or (iii) material breach by Arm Limited of the Collaboration Agreement.
The Warrant has not been registered under the Securities Act of 1933, as amended (the Securities Act), and was issued in reliance upon the
exemptions from registration provided by Section 4(2) of the Securities Act and/or Rule 506 of Regulation D. The Warrant agreement contained representations from the holder of the warrant to support the Companys reasonable belief that the
holder acquired the warrant for its own accounts and not with a view to distribution in violation of the Securities Act, and that the holder is an accredited investors as defined in Regulation D.
The foregoing summary of the Warrant does not purport to be complete and is qualified in its entirety by reference to the full text of such agreement. A copy
of the Warrant is attached as Exhibit 99.1 to this Current Report on Form
8-K
and is incorporated herein by reference.