Item 1.01. Entry into a Material Definitive Agreement.
Collaboration Agreement
On January 3, 2023, Archer Aviation Inc. (the "Company") entered into a
Manufacturing Collaboration Agreement (the "Collaboration Agreement") with
Stellantis N.V. ("Stellantis"), pursuant to which the Company and Stellantis
will collaborate on the development and implementation of the Company's
manufacturing operations for the production of its eVTOL aircraft products.
Pursuant to the Collaboration Agreement, Stellantis has agreed to provide
personnel, resources and assistance supporting, among other things, construction
plans and activities, powertrain automation, and manufacturing and industrial
engineering activities relating to the Company's eVOTL aircraft. In exchange,
the Company has granted Stellantis certain exclusivity rights with respect to,
among other things, the supply of technology, products or services to the
Company, as well as certain contract manufacturing activities. Additionally,
Stellantis has the right, in its sole discretion, to require the Company to
enter into one or more transactions for the manufacture or assembly of the
Company's aircraft.
Unless earlier terminated in accordance with the terms of the Collaboration
Agreement, the Collaboration Agreement will continue in effect until January 3,
2026. The Collaboration Agreement is subject to customary termination
provisions, including but not limited to termination by either party for the
other party's uncured, material breach.
Forward Purchase Agreement
In connection with the Collaboration Agreement, the Company entered into a
forward purchase agreement (the "Forward Purchase Agreement") with Stellantis on
January 3, 2023, pursuant to which the Company may elect, in the Company's sole
discretion, to issue and sell to Stellantis up to $150.0 million of shares
("Forward Purchase Shares") of the Company's Class A Common Stock, par value
$0.0001 per share ("Class A Shares"), following the satisfaction of certain
Milestones (as defined in the Forward Purchase Agreement) and pursuant to the
terms and conditions of the Forward Purchase Agreement. The first milestone with
respect to $25.0 million of Forward Purchase Shares shall be achieved on or
after the date of the execution of the Collaboration Agreement and the second
and third milestone with respect to $70.0 million and $55.0 million of Forward
Purchase Shares, respectively, will be satisfied upon achievement of certain
milestones associated with the Company's Midnight eVTOL aircraft and other
conditions as set forth in the Forward Purchase Agreement. The Forward Purchase
Shares to be issued pursuant to the Forward Purchase Agreement and in connection
with the achievement of a Milestone shall be equal to: (i) the total value of
Class A Shares associated with each Milestone, divided by (ii) the per share
price equal to 90% of the VWAP (as defined in the Forward Purchase Agreement).
From and after the date of the Forward Purchase Agreement, Stellantis will
maintain the right to nominate one individual for election to the board of
directors of the Company (the "Board") as a Class II director at the Company's
annual meeting of stockholders in 2023 through the date of the Company's annual
meeting of stockholders to occur in 2026 (which initial designee shall be
Barbara J. Pilarski who currently serves as a Class II director on the Board)
and, so long as Stellantis or its affiliates beneficially own Class A Shares
equal to at least 12.5% of the Company's outstanding Class A Shares, will have
the right to continue to nominate one individual for election to the Board as a
Class II director at the Company's annual meeting of stockholders to occur in
2026 through the date of the Company's annual meeting of stockholders in 2029.
The issuances of Forward Purchase Shares are subject to the satisfaction of
customary closing conditions as set forth in the Forward Purchase Agreement,
including but not limited to the expiration or termination of the applicable
waiting period under the Hart-Scott-Rodino Act.
The Forward Purchase Agreement provides that Stellantis will be subject to a
standstill provision commencing on the initial closing of the sale of Forward
Purchase Shares and ending on the earlier of (i) December 31, 2024 and (ii)
entry into a definitive agreement for a transaction that, if consummated, would
result in a Change in Control (as defined in the Forward Purchase Agreement)
(the "Standstill Period"). During the Standstill Period, Stellantis and its
affiliates will not, among other things (i) participate in any solicitation of
proxies, (ii) form, join or participate in any group (as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) and (iii) effect, offer or propose to effect, cause or participate in, or
in any way assist or facilitate any other person to effect, offer or propose to
effect or participate in, any tender or exchange offer, merger, consolidation,
acquisition, scheme of arrangement, business combination, recapitalization,
reorganization, sale or acquisition of all or substantially all assets,
liquidation, dissolution or other extraordinary transaction involving the
Company or any of its subsidiaries or joint ventures or any of their respective
securities.
In addition, subject to certain limited exceptions, Stellantis will also be
restricted from transferring or entering into an agreement that transfers the
economic consequences of ownership of any of Stellantis' Class A Shares, the
Forward Purchase Shares, the Warrant or any Class A Shares to be issued upon
exercise of the Warrant commencing on the initial closing of the sale of Forward
Purchase Shares and ending on the earlier of (i) December 31, 2024 and (ii) a
Change in Control, the entry into a definitive agreement for a transaction that,
if consummated, would result in a Change in Control or the announcement by a
third party to commence a tender or exchange offer that if consummated would
result in a Change in Control.
Unless earlier terminated in accordance with the terms of the Forward Purchase
Agreement, including upon certain terminations of the Collaboration Agreement,
the Forward Purchase Agreement will terminate on December 31, 2024.
The Forward Purchase Agreement also entitles Stellantis to certain registration
rights with respect to the Forward Purchase Shares and the Class A Shares
issuable upon exercise of the Warrant as set forth in the Registration Rights
Agreement.
Warrant Agreement
In connection with the Collaboration Agreement, the Company and Stellantis
entered into a warrant to purchase Class A Shares of the Company (the "Warrant
Agreement"), dated January 3, 2023, pursuant to which Stellantis is entitled to
purchase up to 15.0 million Class A Shares, at an exercise price of $0.01 per
share (the "Warrant"). The Warrant Agreement provides that the 15.0 million
Class A Shares will become vested and exercisable by Stellantis in three
separate tranches upon either (i) the performance by Stellantis of certain
undertakings set forth in the Collaboration Agreement or (ii) the VWAP for the
Class A Shares exceeding certain specified amounts. The Class A Shares subject
to the Warrant will become vested and exercisable upon (i) an Automotive OEM
Change of Control (as defined in the Collaboration Agreement) upon expiration of
Stellantis' right to terminate the Collaboration Agreement or (ii) a Liquidation
Event if the Collaboration Agreement is not terminated by the Company or
Stellantis prior to such Liquidation Event. The number of Class A Shares for
which the Warrant is exercisable, as well as the exercise price, may be adjusted
upon certain qualifying events, including but not limited to a merger, sales of
assets, reclassification or recapitalization. Pursuant to the terms of the
Warrant Agreement, the Warrant shall be exercisable, in whole or in part, but
solely with respect to Class A Shares that have become vested in accordance with
the Warrant Agreement, on or before (i) immediately prior to the closing of a
Liquidation Event, and (ii) January 3, 2028.
Registration Rights Agreement
In connection with the Forward Purchase Agreement, the Company and Stellantis
entered into a registration rights agreement (the "Registration Rights
Agreement"), dated January 3, 2023, pursuant to which the Company has granted
Stellantis certain demand, piggyback and resale shelf registration rights with
respect to the Forward Purchase Shares and the Class A Shares issuable upon
exercise of the Warrant. The registration rights terminate after Stellantis no
longer holds any Registrable Securities (as defined in the Registration Rights
Agreement) or with respect to any Registrable Securities, seven years after the
date such Registrable Securities were issued to Stellantis.
The foregoing descriptions of the terms of the Collaboration Agreement, the
Forward Purchase Agreement, the Warrant Agreement and the Registration Rights
Agreement (together, the "Agreements") do not purport to be complete and are
qualified in their entirety by reference to the full text of such Agreements,
copies of which are filed herewith as Exhibits 10.1, 10.2, 10.3 and 10.4,
respectively, and are incorporated by reference herein.
Item 3.02. Unregistered Sales of Equity Securities.
The information set forth above in Item 1.01 of this Current Report on
Form 8-K under the headings "Forward Purchase Agreement" and "Warrant Agreement"
are hereby incorporated by reference into this Item 3.02.
The Warrant, the shares issuable upon exercise of the Warrant and the Forward
Purchase Shares have or will be issued, respectively, pursuant to a private
placement in reliance on Section 4(a)(2) of the Securities Act of 1933, as
amended (the "Securities Act"). The Company will rely upon this exemption from
registration under the Securities Act for the issuance of such securities based
in part on the representations made by Stellantis in the Forward Purchase
Agreement and Warrant Agreement, respectively. Stellantis will acquire the
Warrant, the shares issuable upon exercise of the Warrant, and Forward Purchase
Shares, respectively, for investment purposes only, and not with a view to
resale or distribution in violation of any state or federal securities laws of
the United States, and appropriate legends will be affixed to the Warrant, the
shares issuable upon exercise of the Warrant, and the Forward Purchase Shares.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description
10.1* Manufacturing Collaboration Agreement, dated January 3, 2023, by and
between the Company and Stellantis
10.2* Forward Purchase Agreement, dated January 3, 2023, by and between the
Company and Stellantis
10.3 Warrant to Purchase Shares, dated January 3, 2023, by and between the
Company and Stellantis
10.4 Registration Rights Agreement, dated January 3, 2023, by and between
the Company and Stellantis
104 Cover Page Interactive Data File (the cover page XBRL tags are embedded
within the Inline XBRL document)
* Portions of this exhibit are redacted pursuant to Item 601(b)(10)(iv) of
Regulation S-K.
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