Item 1.01 Entry into a Material Definitive Agreement.
On October 25, 2022, Fast Radius Operations, Inc., a Delaware corporation ("Fast
Radius Operations") and wholly owned subsidiary of Fast Radius, Inc., a Delaware
corporation (the "Company"), and United Parcel Service General Services Co., a
Delaware corporation ("UPS"), entered into the Termination Agreement (defined
below). The disclosure included under Item 1.02 below is incorporated herein by
reference.
On October 31, 2022, the Company entered into (i) a Third Amendment to Loan and
Security Agreement (the "SVB Amendment") with Silicon Valley Bank ("SVB"),
which, among other things, amended that certain Loan and Security Agreement,
dated as of December 29, 2020 (as amended, the "SVB Credit Agreement"), by and
between Fast Radius Operations and SVB and (ii) a Third Amendment to Loan and
Security Agreement (the "SVB Capital Amendment" and, together with the SVB
Amendment, the "Amendments") with SVB Innovation Credit Fund VIII, L.P. ("SVB
Capital"), which, among other things, amended that certain Loan and Security
Agreement, dated as of September 10, 2021 (as amended, the "SVB Capital Credit
Agreement" and, together with the SVB Credit Agreement, the "Credit
Agreements"), by and between Fast Radius Operations and SVB Capital.
The Amendments amended the Credit Agreements to, among other things, defer the
payment of principal otherwise due under the Credit Agreements on November 1,
2022, in the aggregate amount of $2,627,777.78. If the Company achieves certain
specified milestones (the "Milestones"), the payment of principal otherwise due
under the Credit Agreements on December 1, 2022, in the aggregate amount of
$2,627,777.78 will be deferred until January 1, 2023, at which time the Company
will be required to make monthly payments of principal (including the deferred
principal) in the aggregate amount of $3,802,777.78 plus accrued but unpaid
interest through the maturity dates under the Credit Agreements. If the Company
does not achieve the Milestones, then commencing on December 1, 2022, the
Company will be required to make monthly payments of principal (including the
deferred principal) in the aggregate amount of $3,097,777.78 plus accrued but
unpaid interest. The Amendments also revised the maturity dates under the
Credits Agreement from April 3, 2023 (under the SVB Capital Credit Agreement)
and December 1, 2024 (under the SVB Credit Agreement), in each case to the
earlier of (a) April 3, 2023, or (b) December 23, 2022, in the event the
Milestones are achieved.
The foregoing description of the Amendments does not purport to be complete and
is qualified in its entirety by the terms and conditions of the Amendments,
which will be filed as exhibits to the Company's Annual Report on Form 10-K for
the period ending December 31, 2022.
Item 1.02 Termination of a Material Definitive Agreement.
On October 25, 2022, Fast Radius Operations and UPS entered into a Termination
Agreement (the "Termination Agreement") pursuant to which the parties mutually
agreed to terminate that certain Amended and Restated Discount Agreement, dated
as of March 21, 2019, by and between Fast Radius Operations and UPS (as amended,
the "Discount Agreement"), with such termination effective as of October 25,
2022.
Under the Discount Agreement, Fast Radius Operations had agreed to compensate
UPS in the form of equity royalties or a quarterly cash payment equal to six
percent (6%) of Fast Radius Operations' gross revenues up to an aggregate
cumulative maximum of approximately $7.6 million in exchange for UPS agreeing to
exclusively promote Fast Radius Operations in its sales and marketing efforts as
UPS's exclusive on-demand manufacturing partner. UPS also owns in excess of 10%
of the Company's outstanding common stock. As of June 30, 2022, the Company
recognized $3.4 million as a related party accrued liability on its condensed
consolidated balance sheet in respect of the Discount Agreement.
Pursuant to the Termination Agreement and in settlement of all past and future
liabilities that would have been owed under the Discount Agreement, Fast Radius
Operations will transfer and convey to UPS an amount equal to $1.5 million
within three days after the consummation of any sale of (i) all or a majority of
the equity of Fast Radius Operations or (ii) all or a majority of Fast Radius
Operations' assets. The Termination Agreement also included a mutual release,
pursuant to which Fast Radius Operations and UPS each released the other from
any claims and liabilities under the Discount Agreement.
The Termination Agreement does not affect any other agreements between Fast
Radius Operations and UPS, including the Company's lease with UPS at their
Worldport facility in Louisville, Kentucky.
The foregoing description of the Termination Agreement does not purport to be
complete and is qualified in its entirety by the terms and conditions of the
Termination Agreement, a copy of which will be filed as an exhibit to the
Company's Annual Report on Form 10-K for the period ending December 31, 2022.
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Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
Exhibit
No. Description
104 Cover Page Interactive Data File (formatted as Inline XBRL and
contained in Exhibit 101).
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