Item 1.01 Entry into a Material Definitive Agreement.





Merger Agreement

ACE Convergence Acquisition Corp. ("ACE") is a blank check company incorporated as a Cayman Islands exempted company and formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. As previously disclosed in the January 7 Current Report, on January 7, 2021, ACE entered into an Agreement and Plan of Merger (the "Merger Agreement") with ACE Convergence Subsidiary Corp. a Delaware corporation and a direct wholly owned subsidiary of ACE ("Merger Sub"), and Achronix Semiconductor Corporation, a Delaware corporation ("Achronix").





The Merger

The Merger Agreement provides that, among other things and upon the terms and subject to the conditions thereof, the following transactions will occur (together with the other agreements and transactions contemplated by the Merger Agreement, the "Business Combination"):

(i) immediately prior to the effective time of the Merger, (a) each share of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series D1 Preferred Stock and Series D2 Preferred Stock of Achronix (collectively, the "Achronix Preferred Stock") will convert into one share of Achronix common stock, par value $0.001 per share, of Achronix (the "Achronix Common Stock") and, together with the Achronix Preferred Stock, the "Achronix Capital Stock") (such conversion, the "Achronix Preferred Conversion") and (b) all of the outstanding warrants to purchase shares of Achronix Capital Stock will be exercised in full or terminated in accordance with their respective terms (the "Achronix Warrant Settlement");

(ii) at the closing of the transactions contemplated by the Merger Agreement (the "Closing"), upon the terms and subject to the conditions of the Merger Agreement, (x) in accordance with the Delaware General Corporation Law, as amended ("DGCL"), Merger Sub will merge with and into Achronix, the separate corporate existence of Merger Sub will cease and Achronix will be the surviving corporation and a wholly owned subsidiary of ACE (the "Merger");

(iii) as a result of the Merger, among other things, all outstanding shares of Achronix Common Stock (after giving effect to the Achronix Preferred Conversion and the Achronix Warrant Settlement) as of immediately prior to the effective time of the Merger, will be cancelled in exchange for the right to receive shares of New Achronix Common Stock (as defined below) (at a deemed value of $10.00 per share) and cash;

(iv) as a result of and upon the Closing, among other things, all options to purchase and restricted stock units for shares of Achronix Common Stock outstanding as of immediately prior to the Merger will be converted into options to purchase and restricted stock units for shares of New Achronix Common Stock; and

(v) upon the effective time of the Merger (the "Effective Time"), ACE will immediately be renamed "Achronix Semiconductor Corporation.".

The Board of Directors of ACE (the "Board") has unanimously (i) approved and declared advisable the Merger Agreement, the Business Combination and the other transactions contemplated thereby and (ii) resolved to recommend approval of the Merger Agreement and related matters by the shareholders of ACE.





The Domestication

Prior to the Closing, subject to the approval of ACE's shareholders, and in accordance with the DGCL, Cayman Islands Companies Act (as amended) (the "CICL") and ACE's Amended and Restated Memorandum and Articles of Association (as may be amended from time to time, the "Cayman Constitutional Documents"), ACE will effect a deregistration under the CICL and a domestication under Section 388 of the DGCL (by means of filing a certificate of domestication (the "Certificate of Domestication") with the Secretary of State of the State of Delaware), pursuant to which ACE's jurisdiction of incorporation will be changed from the Cayman Islands to the State of Delaware (the "Domestication" and ACE, immediately after the Domestication, "New Achronix").





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In connection with the Domestication, (i) each of the then issued and outstanding Class A ordinary shares, par value $0.0001 per share, of ACE (the "ACE Class A Ordinary Shares"), will convert automatically, on a one-for-one basis, into a share of common stock, par value $0.0001, per share of New Achronix (after its Domestication) (the "New Achronix Common Stock"), (ii) each of the then issued and outstanding Class B ordinary shares, par value $0.0001 per share, of ACE (the "ACE Class B Ordinary Shares"), will convert automatically, on a one-for-one basis, into a share of New Achronix Common Stock, (iii) each then issued and outstanding warrant of ACE will convert automatically into a warrant to acquire one share of New Achronix Common Stock ("New Achronix Warrant"), pursuant to the Warrant Agreement, dated July 27, 2020, between ACE and Continental Stock Transfer & Trust Company, as warrant agent, and (iv) each then issued and outstanding unit of ACE (the "Cayman ACE Units") that have not been previously separated into the underlying ACE Class A ordinary shares and underlying ACE warrants upon the request of the holder thereof, will be cancelled and will entitle the holder thereof to one share of New Achronix Common Stock and one-half of one New Achronix Warrant.





Conditions to Closing

The Merger Agreement is subject to the satisfaction or waiver of certain customary closing conditions, including, among others, (i) approval of the Business Combination and related agreements and transactions by the respective shareholders of ACE and Achronix, (ii) effectiveness of the proxy / registration statement on Form S-4 to be filed by ACE in connection with the Business Combination, (iii) expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, (iv) receipt of approval for listing on The Nasdaq Stock Market LLC ("Nasdaq") for the shares of New Achronix Common Stock to be issued in connection with the Merger, (v) that ACE have at least $5,000,001 of net tangible assets upon Closing and (vi) the absence of any injunctions.

Other conditions to Achronix's obligations to consummate the Merger include, among others, that as of the Closing, (i) the Domestication has been completed, (ii) the amount of cash available in (x) the trust account into which substantially all of the proceeds of ACE's initial public offering and private placements of its warrants have been deposited for the benefit of ACE, certain of its public shareholders and the underwriters of ACE's initial public offering (the "Trust Account"), after deducting the amount required to satisfy ACE's obligations to its shareholders (if any) that exercise their rights to redeem their ACE Class A Ordinary Shares pursuant to the Cayman Constitutional Documents (but prior to payment of (a) any deferred underwriting commissions being held in the Trust Account and (b) any transaction expenses of ACE or its affiliates) (the "Trust Amount") plus (y) the PIPE Investment Amount (as defined below), is at least equal to or greater than $200,000,000.





Covenants

The Merger Agreement contains additional covenants, including, among others, providing for (i) the parties to conduct their respective businesses in the ordinary course through the Closing, (ii) the parties to not initiate any negotiations or enter into any agreements for certain alternative transactions, (iii) Achronix to prepare and deliver to ACE certain audited and unaudited consolidated financial statements of Achronix, (iv) ACE to prepare and file a proxy / registration statement on Form S-4 and take certain other actions to obtain the requisite approval of ACE shareholders of certain proposals regarding the Business Combination (including the Domestication), and (v) the parties to use reasonable best efforts to obtain necessary approvals from governmental agencies.

Representations and Warranties

The Merger Agreement contains customary representations and warranties by ACE, Merger Sub and Achronix. The representations and warranties of the respective parties to the Merger Agreement generally will not survive the Closing.





Termination

The Merger Agreement may be terminated at any time prior to the Closing (i) by mutual written consent of ACE and Achronix, (ii) by Achronix, if certain approvals of the shareholders of ACE, to the extent required under the Merger Agreement, are not obtained as set forth therein or if there is a Modification in Recommendation (as defined in the Merger Agreement), (iii) by ACE, if certain approvals of the stockholders of Achronix, to the extent required under the Merger Agreement, are not obtained within five business days after the proxy / registration statement on Form S-4 has been declared effective by the SEC and delivered or otherwise made available Achronix's stockholders, (iv) by either ACE or Achronix in certain other circumstances set forth in the Merger Agreement, including (a) if any Governmental Authority (as defined in the Merger Agreement) shall have issued or otherwise entered a final, nonappealable order making consummation of the Merger illegal or otherwise preventing or prohibiting consummation of the Merger and (b) in the event of certain uncured breaches by the other party or if the Closing has not occurred on or before July 15, 2021 (the "Agreement End Date").





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Certain Related Agreements



Subscription Agreements

As previously disclosed in the January 7 Current Report, on January 7, 2021, concurrently with the execution of the Merger Agreement, ACE entered into subscription agreements (the "Subscription Agreements") with certain investors (collectively, the "PIPE Investors"), pursuant to, and on the terms and subject to the conditions of which, the PIPE Investors have collectively subscribed for 15,000,000 shares of the ACE Common Stock for an aggregate purchase price equal to $150 million (the "PIPE Investment").

The obligation of the parties to consummate the purchase and sale of the shares covered by the Subscription Agreements is conditioned upon (i) there not being in force any injunction or order enjoining or prohibiting the issuance and sale of the shares covered by the Subscription Agreements, (ii) there not being any amendment or waiver of the terms of the Merger Agreement in a manner that is materially adverse to the PIPE Investors (in their capacity as such), (iii) accuracy of representations and warranties made in the Subscription Agreements and (iv) the prior or substantially concurrent consummation of the transactions contemplated by the Merger Agreement. The closings under the Subscription Agreements will occur substantially concurrently with the Closing. The Subscription Agreements provide that, solely with respect to subscriptions by third-party investors, ACE is required to file with the SEC, within fifteen (15) business days after the consummation of the transactions contemplated by the Merger Agreement, a shelf registration statement covering the resale of the shares of New Achronix common stock to be issued to any such third-party investor and to use its commercially reasonable efforts to have such registration statement declared effective as soon as practicable after the filing thereof but no later than the earlier of (i) the 90th day following the filing date thereof if the SEC notifies ACE that it will "review" such registration statement and (ii) the 10th business day after the date ACE is notified (orally or in writing, whichever is earlier) by the SEC that such registration statement will not be "reviewed" or will not be subject to further review.

Additionally, pursuant to the Subscription Agreements, the PIPE Investors agreed to waive any claims that they may have at the Closing or in the future as a result of, or arising out of, the Subscription Agreements against ACE, including with respect to the trust account. The Subscription Agreements will terminate, and be of no further force and effect, upon the earlier to occur of (i) such date and time as the Merger Agreement is terminated in accordance with its terms, (ii) upon the mutual written agreement of ACE and the applicable PIPE Investor, (iii) if the conditions set forth therein are not satisfied or are not capable of being satisfied prior to the Closing and, as a result thereof, the transactions contemplated therein will not be or are not consummated at the Closing, and (iv) July 15, 2021.

The foregoing description of the Subscription Agreements does not purport to be complete and is qualified in its entirety by the terms and conditions of the form of Subscription Agreement, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.

Backstop Subscription Agreement

As previously disclosed in the January 7 Current Report, on January 7, 2021, concurrently with the execution of the Merger Agreement, certain affiliates of ACE Convergence Acquisition LLC (the "Sponsor") (such affiliate, the "Backstop Investor") entered into a backstop subscription agreement (the "Backstop Subscription Agreement") with ACE, pursuant to, and on the terms and subject to the conditions on which, the Backstop Investor has committed to purchase, following the Domestication and prior to the Closing, shares of ACE's common stock, par value $0.001 per share, as such shares will exist as common stock following the Domestication, in a private placement for a purchase price of $10.00 per share to backstop certain redemptions by ACE shareholders, up to 5,000,000 shares of New Achronix common stock.





Sponsor Support Agreement

As previously disclosed in the January 7 Current Report, on January 7, 2021, ACE announced entry into a Support Agreement (the "Sponsor Support Agreement"), by and among ACE, the Sponsor, ACE's directors and officers and Achronix, pursuant to which the Sponsor and each director and officer of ACE agreed to, among other things, vote in favor of the Merger Agreement and the transactions contemplated thereby, in each case, subject to the terms and conditions contemplated by the Sponsor Support Agreement.

Achronix Holders Support Agreement

As previously disclosed in the January 7 Current Report, on January 7, 2021, ACE also announced entry into a Support Agreement (the "Achronix Holders Support . . .

Item 9.01. Financial Statements and Exhibits.





(d) Exhibits.



Exhibit No.                               Description
  2.1           Agreement and Plan of Merger, dated as of January 7, 2021
  10.1          Form of Subscription Agreements
  10.2          Form of Backstop Subscripting Agreement
  10.3          Sponsor Support Agreement, dated as of January 7, 2021
  10.4          Achronix Holders Support Agreement, dated as of January 7, 2021
  10.5          Form of Lock-Up Agreement

* All schedules have been omitted pursuant to item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the SEC upon request.





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