Item 1.01. Entry into a Material Definitive Agreement
Design-Build Agreement
On October 3, 2023, Archer Aviation Operating Corp., a Delaware corporation and wholly owned subsidiary of Archer Aviation Inc. (the “Company”), entered into a design-build agreement (the “Agreement”) with Evans General Contractors, LLC (the “Contractor”) relating to the design, coordination and build of the Company’s high-volume manufacturing facility in Covington, Georgia (the “Project”). The Company has agreed to pay the guaranteed maximum price of approximately $54.4 million to the Contractor for the Project, subject to certain adjustments for change orders and change directives issued by the Company and for costs resulting from uncontrollable circumstances. The Agreement contains other terms and conditions that are customary for this type of project.
The foregoing summary of the Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Agreement, which will be filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ending December 31, 2023.
Credit Agreement
On October 5, 2023, the Company entered into a credit agreement (the “Credit Agreement”), by and among the Company, as borrower, the Company’s wholly-owned domestic subsidiaries as guarantors, and Synovus Bank (“Synovus”), as administrative agent and lender, and the additional lenders from time to time party thereto (the “Lenders”). Pursuant to the Credit Agreement, the Company may request the Lenders to provide multiple delayed term loan advances (“Loans”) in an aggregate principal amount of up to $65.0 million for the construction and development of the Project, subject to certain limitations and requirements.
The Loans under the Credit Agreement shall accrue interest from and including the date the applicable advance is made but excluding the repayment date at a rate of the secured overnight financing rate (“SOFR”), plus 2.00% subject to a SOFR floor of 0.00%. The Company is required to make interest-only payments for 36 months on the Loans starting on November 14, 2023, followed by monthly interest and principal payments for the remaining maturity, with any outstanding principal, interest and other then outstanding indebtedness due at maturity.
The obligations of the Company under the Credit Agreement are jointly and severally guaranteed by the Company’s current and future wholly-owned domestic subsidiaries, and are secured by cash, general intangibles, instruments, securities, financial assets, security entitlements and other property maintained in a money market account at Synovus (the “Synovus Account”).
The Credit Agreement contains customary representations, warranties and ongoing affirmative and negative covenants and agreements. Pursuant to the Credit Agreement, the Company has agreed to maintain a cash balance of no less than $100.0 million in the Synovus Account subject to the terms of the Credit Agreement.
The Credit Agreement contains customary events of default relating to, among other things, the failure to pay principal or interest when due and payable, the breach of representations or warranties made by the Company or its subsidiary guarantors, non-performance of covenants, default on other material indebtedness, bankruptcy or insolvency events, and the occurrence of certain change of control events. The Credit Agreement matures on the earlier of October 5, 2033 or the date on which all outstanding Loans have been declared or automatically become due and payable pursuant to the terms of the Credit Agreement.
The foregoing summary of the Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Credit Agreement, which will be filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ending December 31, 2023.