Item 1.01. Entry into a Material Definitive Agreement
On May 29, 2021, AeroVironment, Inc. (the "Company") and SoftBank Corp.
("SoftBank") entered into the Sixth Amendment Agreement (the "JVA Amendment") to
the Joint Venture Agreement governing their joint venture HAPSMobile Inc., a
Japanese company formed in December 2017. Pursuant to the JVA Amendment, the
Company (a) has exclusive rights from HAPSMobile for the future design and
manufacturing work of the existing Solar HAPS currently referred to as the
"Sunglider" subject to the Company's quality, performance and cost for such work
being competitive with third parties and (b) subject to the foregoing, must
remain the design and manufacturing authority for the existing Solar HAPS
aircraft and future variants thereof, provided, however that if the Company is
not capable of performing the necessary work due to unforeseen events, or where
the Company's quality, performance or cost of the work performed is not
competitive with that of third parties, HAPSMobile shall have the right to use a
second supplier. Additionally, the Company and SoftBank agreed that neither of
them would compete with HAPSMobile, including by engaging in similar project(s)
with third parties, in the areas of the use of Solar HAPS in commercial
telecommunication applications, provided, however, that each of the Company and
SoftBank may discuss, test, partner or conduct other activities with other
aircraft manufacturers and Solar HAPS providers where such activities are
conducted on behalf of or for the ultimate benefit of HAPSMobile.
The foregoing description of the JVA Amendment does not purport to be complete
and is qualified in its entirety by reference to the complete text of the JVA
Amendment. The Company intends to seek confidential treatment for certain
portions of the JVA Amendment. The Company will file the JVA Amendment as an
exhibit to its Annual Report on Form 10-K for the year ended April 30, 2021.
Item 1.02. Termination of a Material Definitive Agreement
On May 29, 2021, the Company entered into an amendment (the "DDA Amendment") to
the Design and Development Agreement (the "DDA") with HAPSMobile. The parties
agreed to the DDA Amendment in anticipation of the Company and SoftBank Corp.
("SoftBank") entering into a Master Design and Development Agreement with each
other to continue the design and development of the Solar HAPS aircraft
developed under the DDA. Pursuant to the DDA Amendment, the Company and
HAPSMobile agreed (a) to terminate the DDA effective as of March 31, 2021 and
(b) consider all work conducted by the Company under the DDA for the sixty day
period following March 31, 2021 as work to wind down the DDA for which the
Company would be compensated its incurred costs (as defined in the DDA) during
such wind down period.
The foregoing description of the DDA Amendment does not purport to be complete
and is qualified in its entirety by reference to the complete text of the DDA
Amendment. The Company intends to seek confidential treatment for certain
portions of the DDA Amendment. The Company will file the DDA Amendment as an
exhibit to its Annual Report on Form 10-K for the year ended April 30, 2021.
Item 8.01. Other Events
On May 29, 2021, the Company and SoftBank entered into a Master Design and
Development Agreement ("MDDA") to continue the development of Solar HAPS.
Pursuant to the MDDA, which has a five-year term, SoftBank will issue orders to
the Company for the Company to perform design and development services and
produce deliverables as specified in the applicable order(s). Upon the execution
of the MDDA, SoftBank issued to the Company, and the Company accepted, the first
order under the MDDA which has a maximum value of $51.2 million.
Concurrent with the execution of the MDDA, each of SoftBank and the Company
agreed to lend HAPSMobile JPY500,000,000 ($4.6 million), which loans are
convertible into shares of HAPSMobile under certain conditions, and to cooperate
with each other to explore restructuring and financing options for HAPSMobile to
continue the development of Solar HAPS.
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