Item 1.01 Entry Into a Material Definitive Agreement.
On
i. The registered capital of Transchip will be increased fromRMB200,000 toRMB196,500,000 (the "Capital Increase"), and the increased portion of the registered capital will be subscribed by AHK, the Investors and Management Co as follows: (a) (i) RMB 77,330,000 will be subscribed by AHK and be contributed in-kind by way of a technology license by AHK pursuant to the Technology License Agreement (as defined below), (ii)RMB1,700,000 will be subscribed by AHK and contributed in cash, and (iii) initial registered capital in the amount ofRMB200,000 in Transchip will be transferred by Arteris Nanjing to AHK, following which AHK's aggregate capital contribution to Transchip will represent 40.321% of the registered capital of Transchip; (b) SME will contributeRMB 30,000,000 in cash, representing 15.267% of the registered capital of Transchip; (c) Luojia will contributeRMB 20,000,000 in cash, representing 10.178% of the registered capital of Transchip; (d) Guinie will contributeRMB26,500,000 in cash, representing 13.486% of the registered capital of Transchip; and (e) Management Co will subscribe for 20.748% of the registered capital of Transchip forRMB 40,770,000 , which will be reserved for Transchip's employee option plan. ii. Pursuant to a technology license agreement (the "Technology License Agreement"), AHK will license to Transchip certain uses of specific licensed products enabling Transchip to conduct its SoC chip platform and automotive system-level IP business in automotive application(s), including, among others, a 5-year design term for FlexNoC v.4.x, FlexWay v.4.x, CodaCache 1.x, Ncore v.3.x and Resilience and AI package (without standalone licensing nor sublicensing rights) by AHK to Transchip; upon expiry of the term, the parties may discuss a possible new license for a new 5-year design term.
Following the consummation of the foregoing transactions, and subject to closing
terms and conditions in the SPA, it is currently anticipated that AHK will hold
a 40.321% equity interest in Transchip and that Transchip will receive aggregate
cash proceeds from the Investors of
According to the SPA which also provides on shareholder rights, governance and
management of Transchip, AHK will be entitled to nominate one individual on
Transchip's three-person board of directors. It is currently contemplated that
the board of directors of Transchip will initially be comprised of an individual
nominated by SME, an individual nominated by AHK, and an individual nominated by
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