Item 1.01 Entry Into A Material Definitive Agreement.
Business Combination Agreement
On March 30, 2021, Qell Acquisition Corp., a Cayman Islands exempted company
("Qell"), entered into a Business Combination Agreement (as it may be amended,
supplemented or otherwise modified from time to time, the "Business Combination
Agreement"), by and among Qell DutchCo B.V., a Netherlands limited liability
company and wholly owned subsidiary of Qell Partners LLC ("Holdco"), Queen
Cayman Merger LLC, a Cayman Islands limited liability company ("Merger Sub"),
and Lilium GmbH, a German limited liability company ( "Lilium").
The Business Combination Agreement and the transactions contemplated thereby
were approved by the boards of directors of each of Qell, Holdco and Lilium.
The Business Combination
The Business Combination Agreement provides for, among other things, the
following transactions on closing (collectively, the "Business Combination"):
· After signing of the Business Combination Agreement, and prior to closing of
the Business Combination, the legal form of Holdco shall be changed from a
private company with limited liability (besloten vennootschap met beperkte
aansprakelijkheid) to a public limited liability company (naamloze
vennootschap);
· Qell will merge with and into Merger Sub (the "Merger"), with Merger Sub as
the surviving company (the "Surviving Company") in the merger and, after
giving effect to such merger, becoming a wholly owned subsidiary of Holdco;
· In connection with the Merger, each issued and outstanding ordinary share of
Qell will be converted into a claim for a corresponding equity security in
the Merger Sub, and such claim shall then be automatically contributed into
Holdco in exchange for one ordinary share in the share capital of Holdco (a
"Holdco Ordinary Share");
· Immediately following the Merger, Merger Sub and Holdco will cause Merger Sub
to, commence winding up under the Cayman LLC Act and distribute all of its
tangible and intangible assets (including all cash) and transfer any and all
of its liabilities to Holdco (the "Liquidation Distribution and Assumption");
· Immediately following the Liquidation Distribution and Assumption, Holdco
will take a series of actions including, but not limited to, (i) consummation
of the Private Placement (as defined below), (ii) appointment of Daniel
Wiegand as executive director to the board of directors of Holdco, and (iii)
execution of the Holdco Board Agreements (as defined in the Business
Combination Agreement);
· The shareholders of Lilium will exchange (the "Exchange") their interests in
Lilium for Holdco Ordinary Shares. All Lilium shareholders, but for Daniel
Wiegand, will receive Class A Holdco Ordinary Shares in the Exchange. Daniel
Wiegand will receive Class B Holdco Ordinary Shares in the Exchange. Class B
Holdco Ordinary Shares will rank parri passu with Class A Holdco Ordinary
Shares in all respects, provided they will be entitled to 3x super voting
rights, subject to customary sunset provisions; and
· Each outstanding warrant to purchase a Class A ordinary share of Qell will,
by its terms, convert into a warrant to purchase one Holdco Ordinary Share,
on the same contractual terms.
Business Combination Consideration
In accordance with the terms and subject to the conditions of the Business
Combination Agreement, the consideration to be received by the shareholders of
Lilium in connection with the transactions contemplated under the Business
Combination Agreement shall be an aggregate number of Holdco Ordinary Shares
equal to (a) $2,400,000,000, divided by (b) $10.00. Each Qell shareholder will
receive one Holdco Ordinary Share per Qell ordinary share, as set forth above.
Cash held in the trust account net of redemptions and the proceeds of the
Private Placement (as defined below), less the transaction costs of the Business
Combination, will be received by Holdco and used for general corporate purposes
after the Business Combination.
Representations and Warranties; Covenants
Under the Business Combination Agreement, the respective parties made customary
representations and warranties for transactions of this type regarding
themselves. The representations and warranties made under the Business
Combination Agreement shall not survive the closing of the Business Combination.
In addition, the parties to the Business Combination Agreement made covenants
that are customary for transactions of this type.
Conditions to Each Party's Obligations
Consummation of the transactions contemplated by the Business Combination
Agreement is subject to customary conditions of the respective parties, and
conditions customary to special purpose acquisition companies, including the
approval of Qell's shareholders.
In addition, consummation of the transactions contemplated by the Business
Combination Agreement is subject to other closing conditions, including, among
others: (i) there has been no Company Material Adverse Effect (as defined in the
Business Combination Agreement); (ii) the registration statement to be filed by
Holdco has become effective; and (iii) the Aggregate Holdco Transaction Proceeds
(as defined in the Business Combination Agreement) shall be equal to or greater
than $450,000,000.
Termination
The Business Combination Agreement may be terminated under certain customary and
limited circumstances at any time prior to the closing of the Business
Combination, including (i) by either party, if the closing of the Business
Combination has not occurred on or before the later of (A) the date that is 6
calendar months after the date of the Business Combination Agreement, and (B)
the date that is 6 calendar months following (x) notification from the German
BMWi (as defined in the Business Combination Agreement) that a certificate of
non-objection is required in respect of the Business Combination, or (y) the
parties to the Business Combination Agreement coming to the mutual decision to
seek a certificate of non-objection from the German BMWi, unless the breach of
any covenants or obligations under the Business Combination Agreement by the
party seeking to terminate shall have proximately caused the failure to
consummate the transactions contemplated by the Business Combination Agreement
on or before such date and (ii) by either party, if Qell's shareholders do not
approve the Business Combination at a meeting of Qell's shareholders. If the
Business Combination Agreement is validly terminated, none of the parties to the
Business Combination Agreement will have any liability or any further obligation
under the Business Combination Agreement, except in the case of willful or
material breach or actual fraud.
A copy of the Business Combination Agreement is filed with this Current Report
on Form 8-K as Exhibit 2.1 and is incorporated herein by reference, and the
foregoing description of the Business Combination Agreement is qualified in its
entirety by reference thereto. The Business Combination Agreement contains
representations, warranties and covenants that the respective parties made to
each other as of the date of the Business Combination Agreement or other
specific dates. The assertions embodied in those representations, warranties and
covenants were made for purposes of the contract among the respective parties
and are subject to important qualifications and limitations agreed to by the
parties in connection with negotiating such agreement. The representations,
warranties and covenants in the Business Combination Agreement are also modified
in important part by the underlying disclosure schedules which are not filed
publicly and which are subject to a contractual standard of materiality
different from that generally applicable to stockholders and were used for the
purpose of allocating risk among the parties rather than establishing matters as
facts. We do not believe that these schedules contain information that is
material to an investment decision.
Sponsor Letter Agreement
Concurrent with the execution of the Business Combination Agreement, Qell
Partners LLC, a Cayman Islands exempted company ("Qell Sponsor"), Qell, Holdco
and Lilium entered into a Sponsor Letter Agreement (the "Sponsor Letter
Agreement"), pursuant to which the Qell Sponsor has agreed (a) to vote in favor
of the Business Combination Agreement and the transactions contemplated thereby
and take all actions reasonably necessary to cause the closing of the Business
Combination, including execution of the Holdco shareholder approval, (b) to
waive any adjustment to the conversion ratio set forth in the Qell's amended and
restated memorandum and articles of association or any other anti-dilution or
similar protection with respect to the class B ordinary shares of Qell held by
them, and (c) forfeit 1,828,945 of the Holdco Ordinary Shares acquired by the
Qell Sponsor in connection with the Merger, and subject 3,063,422 of the Holdco
Ordinary Shares acquired by the Qell Sponsor in connection with the Merger (in
addition to any New Shares (as defined in the Sponsor Letter Agreement) issued
with respect to such Holdco Ordinary Shares) to certain time and performance
vesting provisions.
A copy of the Sponsor Letter Agreement is filed with this Current Report on
Form 8-K as Exhibit 10.1 and is incorporated herein by reference, and the
foregoing description of the Sponsor Letter Agreement is qualified in its
entirety by reference thereto.
Private Placement
Concurrently with the execution of the Business Combination Agreement, Qell and
. . .
Item 7.01 Regulation FD Disclosure.
On March 30, 2021, Qell issued a press release announcing the execution of the
Business Combination Agreement and the Private Placement. The press release is
attached hereto as Exhibit 99.1 and incorporated by reference herein.
The foregoing (including Exhibit 99.1) is being furnished pursuant to Item 7.01
and will not be deemed to be filed for purposes of Section 18 of the Securities
and Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise be
subject to the liabilities of that section, nor will it be deemed to be
incorporated by reference in any filing under the Securities Act or the Exchange
Act.
Additional Information
In connection with the proposed transactions, Holdco intends to file a
Registration Statement on Form F-4, which will include a preliminary prospectus
of Holdco and preliminary proxy statement of Qell. Qell will mail a definitive
proxy statement/prospectus and other relevant documents to its
shareholders. Investors and security holders of Qell are advised to read, when
available, the proxy statement/prospectus in connection with Qell's solicitation
of proxies for its extraordinary general meeting of shareholders to be held to
approve the proposed transaction (and related matters) because the proxy
statement/prospectus will contain important information about the proposed
transaction and the parties to the proposed transaction. The definitive
proxy statement/prospectus will be mailed to shareholders of Qell as of a record
date to be established for voting on the proposed transaction. Shareholders will
also be able to obtain copies of the proxy statement/prospectus, without charge,
once available, at the Securities and Exchange Commission's ("SEC") website at
www.sec.gov or by directing a request to: Qell Acquisition Corp., 505 Montgomery
Street, Suite 1100, San Francisco, CA 94111.
Participants in the Solicitation
Qell, Lilium, Holdco and their respective directors, executive officers, other
members of management, and employees, under SEC rules, may be deemed to be
participants in the solicitation of proxies of Qell's shareholders in connection
with the Business Combination. Investors and security holders may obtain more
detailed information regarding the names and interests in the Business
Combination of Qell's directors and officers in Qell's filings with the SEC,
including Qell's Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2020, which was filed with the SEC on November 13, 2020, and such
information and names of Lilium's directors and executive officers will also be
in the Registration Statement on Form F-4 to be filed with the SEC by Holdco,
which will include the proxy statement of Qell for the Business Combination.
Forward Looking Statements
Certain statements made herein are not historical facts but are forward-looking
statements for purposes of the safe harbor provisions under The Private
Securities Litigation Reform Act of 1995. Forward-looking statements generally
are accompanied by words such as "believe," "project," "may," "will," "will be,"
"will likely result," "estimate," "continue," "anticipate," "intend," "expect,"
"should," "would," "plan," "strategy," "opportunity," "predict," "potential,"
"seem," "seek," "future," outlook" and similar expressions that predict or
indicate future events or trends or that are not statements of historical
matters. These forward-looking statements include, but are not limited to,
statements regarding future events, the Business Combination between Qell,
Holdco, Lilium and Merger Sub (collectively, for the purposes of this paragraph,
the "Group"), the estimated or anticipated future results and benefits of the
combined company following the Business Combination, including the likelihood
and ability of the parties to successfully consummate the Business Combination,
future opportunities for the combined company, the anticipated timing of the
Business Combination, the Group's proposed business and business model, the
markets and industry in which the Group intends to operate, the anticipated
timing of the commercialization and launch of the Group's business in phases,
the expected results of the Group's business and business model when launched in
phases, and the Group's projected future results, including estimates related to
revenue, EBITDA and gross margins, and other statements that are not historical
facts. These statements are based on assumptions and the current expectations of
Qell's management with respect to future events. These statements are not
predictions of actual performance and are subject to change at any time. These
forward-looking statements are provided for illustrative purposes only and are
not intended to serve as, and must not be relied on, by any investor as a
guarantee, an assurance, a prediction or a definitive statement of fact or
probability. Actual events and circumstances are difficult or impossible to
predict and will differ from assumptions. Many actual events and circumstances
are beyond the control of Qell and Lilium. These statements are subject to a
number of risks and uncertainties regarding Qell's businesses and the Business
Combination, and actual events or results may differ materially. The Group will
operate in a rapidly changing emerging industry. New risks emerge every day.
Many factors could cause actual future events or results to differ materially
from the statements made herein. These risks and uncertainties include, but are
not limited to, general economic, political and business conditions; applicable
taxes, inflation, interest rates and the regulatory environment; the outcome of
judicial proceedings to which Lilium is or may become a party; the risk that the
proposed transaction is not completed in a timely manner or at all, which may
adversely affect the price of Qell's securities; the risk that the proposed
transaction is not completed by Qell's Business Combination deadline and the
potential failure to obtain an extension of the Business Combination deadline if
sought by Qell; the inability of the parties to consummate the Business
Combination or the occurrence of any event, change or other circumstances that
could give rise to the termination of the Business Combination Agreement; the
outcome of any legal proceedings that may be instituted against the parties
following the announcement of, or relating to, the Business Combination; the
receipt of an unsolicited offer from another party for an alternative business
transaction that could interfere with the Business Combination; failure to
satisfy the conditions to the consummation of the Business Combination,
including the risk that the approval of the shareholders of Qell or Lilium for
the potential transaction is not obtained; failure to realize the anticipated
benefits of the Business Combination, including as a result of a delay in
consummating the potential transaction or difficulty in integrating the
businesses of Qell and Lilium; the risk that the Business Combination disrupts
current plans and operations, including as a result of the announcement and
consummation of the Business Combination; the ability of the combined company to
grow and manage growth profitably and retain its key employees and the potential
difficulties in employee retention as a result of the Business Combination; the
amount of redemption requests made by Qell's shareholders; failure to satisfy
the minimum trust account amount following redemptions by Qell's shareholders;
the inability to secure necessary governmental and regulatory approvals; the
lack of a third party valuation in Qell's determination to pursue the Business
Combination; the occurrence of any event, change or other circumstance that
could give rise to the termination of the Business Combination Agreement; the
impact of COVID-19 on Lilium's business or the Business Combination; the effect
of the announcement or pendency of the Business Combination on Lilium's business
relationships, performance and operations generally; the inability to obtain or
maintain the listing of the post-combination company's securities on Nasdaq
following the Business Combination; the risk that the market price of Qell and
the post-combination company's securities may be volatile due to a variety of
factors, such as changes in the competitive environment in which the Group will
operate, the regulatory framework of the industry in which the Group will
operate, developments in the Group's business and operations, and changes in the
capital structure; the Group's ability to implement business plans, operating
models, forecasts, and other expectations and identify and realize additional
business opportunities after the completion of the Business Combination; general
economic downturns or general systematic changes to the industry in which the
Group will operate, including a negative safety incident involving one of the
Group's competitors that results in decreased demand for the Group's jets or
services; the failure of the Group and its current and future business partners
to successfully develop and commercialize the Group's business, or significant
delays in its ability to do so; the risk that the post-combination company never
achieves or sustains profitability; the failure by the post-combination company
to raise additional capital necessary to execute its business plan, which may
not be available on acceptable terms or at all; difficulties in managing the
post-combination company's growth, moving between development phases or
expanding its operations; failure by third-party suppliers, component
manufacturers or service provider partners to fully and timely meet their
obligations or deliver the high-level customer service that the Group's
. . .
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description
2.1† Business Combination Agreement, dated as March 30, by and among
Qell Acquisition Corp., Qell DutchCo B.V., Queen Cayman Merger LLC
and Lilium GmbH.
10.1 Sponsor Letter Agreement, dated as of March 30, 2021 by and between
Qell Acquisition Corp., Qell Partners, LLC, Qell DutchCo B.V. and
Lilium GmbH.
10.2 Form of Subscription Agreement.
99.1 Press release, dated March 30, 2021.
† Certain of the exhibits and schedules to this exhibit have been omitted in
accordance with Regulation S-K Item 601(b)(2). The Registrant agrees to
furnish supplementally a copy of all omitted exhibits and schedules to the
SEC upon its request.
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