Item 1.01 Entry into a Material Definitive Agreement.

Asset Purchase Agreement



On October 18, 2020, Cree, Inc. ("Cree" or the "Company") entered into an Asset
Purchase Agreement (the "Purchase Agreement") with SMART Global Holdings, Inc.,
a Cayman Islands exempted company ("SGH"), and Chili Acquisition, Inc., a wholly
owned subsidiary of SGH (collectively with SGH, "SMART"). The transaction, which
was approved by both Cree's Board of Directors and SMART's Board of Directors,
is targeted to close in the first calendar quarter of 2021, subject to customary
closing conditions and governmental approvals.

Pursuant to the Purchase Agreement, Cree will sell to SMART, and SMART will (i)
purchase from Cree, (a) certain equipment, inventory, intellectual property
rights, contracts, and real estate comprising Cree's LED Products business,
which consists of LED chips and LED components, (b) all of the issued and
outstanding equity interests of Cree Huizhou Solid State Lighting Company
Limited, a limited liability company organized under the laws of the People's
Republic of China and an indirect wholly owned subsidiary of Cree, and (c)
Cree's ownership interest in Cree Venture LED Company Limited, Cree's joint
venture with San'an Optoelectronics Co., Ltd. (collectively, the "LED
Business"); and (ii) assume certain liabilities related to the LED Business
(collectively (i) and (ii), the "Transaction"). Cree will retain certain assets
used in and pre-closing liabilities associated with the LED Business.

The purchase price for the LED Business consists of (i) a payment of $50 million
in cash, subject to customary adjustments, (ii) an unsecured promissory note
issued to Cree by SGH in the amount of $125 million (the "Purchase Price Note"),
(iii) the potential to receive an earn-out payment of up to $125 million based
on the revenue and gross profit performance of the LED Business in the first
four full fiscal quarters following the closing (the "Earnout Period"), also
payable in the form of a unsecured promissory note of SGH (the "Earnout Note"),
and (iv) the assumption of certain liabilities. The Purchase Price Note and the
Earnout Note, if earned, will accrue interest at a rate of three-month LIBOR
plus 3.0% with interest paid every three months and one bullet payment of
principal and all accrued and unpaid interest will be payable on each note's
maturity date. The Purchase Price Note will mature on August 15, 2023, and the
Earnout Note, if issued, will mature on the third anniversary of the completion
of the Earnout Period.

In connection with the Transaction, Cree and SMART will also enter into certain
ancillary and related agreements, including (i) an Intellectual Property
Assignment and License Agreement, which will assign to SMART certain
intellectual property owned by Cree and its affiliates and license to SMART
certain additional intellectual property owned by Cree, (ii) a Transition
Services Agreement, which is designed to ensure a smooth transition of the LED
Business to SMART, (iii) a Wafer Supply and Fabrication Services Agreement,
pursuant to which Cree will supply SMART with certain silicon carbide materials
and fabrication services for four years, and (iv) a Real Estate License
Agreement, which will allow SMART to use certain premises owned by Cree to
conduct the LED Business for a period of up to 24 months after closing.


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The Purchase Agreement contains customary representations, warranties and
covenants, including covenants to cooperate in seeking regulatory approvals. The
Purchase Agreement also requires each of the Company and SMART to indemnify the
other party for certain damages that the indemnified party may suffer following
the closing of the Transaction.

The completion of the Transaction is subject to the satisfaction or waiver of a
number of conditions set forth in the Purchase Agreement, including the receipt
of governmental and regulatory consents and approvals and expiration of any
mandatory waiting period related thereto, and other customary closing
conditions. The Purchase Agreement provides for customary termination rights of
the parties and also provides that, in the event the Purchase Agreement is
terminated in connection with certain specified regulatory-related
circumstances, SMART may be required to pay Cree a termination fee of $4
million.

Item 7.01 Regulation FD Disclosure.

On October 19, 2020, Cree issued a press release announcing the execution of the Purchase Agreement. The press release is furnished as Exhibit 99.1 and incorporated by reference into Item 7.01 of this report.



In connection with the announcement of the Purchase Agreement, Cree intends to
provide supplemental information regarding the Transaction in connection with
presentations to analysts and investors. The slides that will be made available
in connection with the presentations are furnished as Exhibit 99.2 and
incorporated by reference into Item 7.01 of this report.

The information in this Item 7.01, including Exhibits 99.1 and 99.2, shall not
be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act
of 1934, as amended, or otherwise subject to the liability of that Section.
Furthermore, the information in Item 7.01 of this report shall not be deemed
incorporated by reference into the filings of Cree under the Securities Act of
1933, as amended.


Item 9.01   Financial Statements and Exhibits.



(d)  Exhibits

          Exhibit No.                      Description of Exhibit

          99.1                               Press Release    ,     dated     October     1    9    ,
                                           2020
          99.2                               I    nvestor Presentation,     dated October 19, 2020
          104                              Cover Page Interactive Data File (embedded within the Inline
                                           XBRL document)







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Cautionary Statements Regarding Forward Looking Statements



This report contains forward-looking statements involving risks and
uncertainties, both known and unknown, that may cause Cree's actual results to
differ materially from those indicated in the forward-looking statements.
Forward-looking statements by their nature address matters that are, to
different degrees, uncertain, such as statements about the anticipated benefits
of the transaction, including future financial and operating performance. Actual
results, including with respect to Cree's ability to complete the transaction on
time or at all and Cree's ability to realize the full purchase price, could
differ materially from these forward looking statements due to a number of
factors, including, but not limited to, risks associated with divestiture
transactions generally, including the inability to obtain, or delays in
obtaining, required regulatory approvals, issues, delays or complications in
completing carveout activities to allow the LED Business to operate on a
standalone basis after the closing, including incurring unanticipated costs to
complete such activities; the ability of the LED Business to generate sufficient
revenue and gross profit in the first full four quarters post-transaction close
to result in payment of the targeted earnout payment or any earnout payment; the
ability of SMART to pay the notes used to finance the transaction; risks
associated with integration or transition of the operations, systems and
personnel of the LED Business, each, as applicable within the term of the
post-closing transition services agreement between SMART and Cree; unfavorable
reaction to the sale by customers, competitors, suppliers and employees; the
risk that costs associated with the transaction will be greater than Cree
expects; risks relating to the COVID-19 pandemic that might delay or otherwise
impact Cree's ability to complete the transaction or transition operations and
employees as Cree anticipates; and other factors discussed in Cree's filings
with the Securities and Exchange Commission (SEC), including its report on Form
10-K for the fiscal year ended June 28, 2020, and subsequent reports filed with
the SEC. These forward-looking statements represent Cree's judgment as of the
date hereof. Any forward-looking statements included in this report are as of
the date made and Cree does not intend to update them if its views later change.
These forward-looking statements should not be relied upon as representing
Cree's views as of any date subsequent to the date of this report.

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