| Item 1.01 | Entry into a Material Definitive Agreement. |
On December 21, 2022 (the “Closing
Date”), Evolv Technologies Holdings, Inc. (the “Company”) entered into a Loan and
Security Agreement (the “SVB Credit Agreement”) by and among the Company, Evolv Technologies, Inc., a
wholly-owned subsidiary of the Company, and Silicon Valley Bank, a California corporation (“SVB”), as the
lender. The SVB Credit Agreement provides for, on the Closing Date, an initial term loan advance in an original principal amount
equal to $30 million, with the opportunity to obtain, within 18 months after the Closing Date, additional term loan advances,
subject to satisfaction of certain conditions, in an aggregate principal amount equal to $20 million (subject to an increase of $25
million, upon satisfaction of certain conditions and approval from SVB), in each case, in order to finance hardware shipped to
customer locations (collectively, the “Term Loans”). Each advance of Term Loans will mature on the
36-month anniversary of the extension thereof.
The obligations under the SVB Credit Agreement
are secured by a perfected security interest in substantially all of the Company’s assets, except for intellectual property pursuant
to the terms of the SVB Credit Agreement.
The interest rate applicable to the Term Loans
is the greater of (a) the WSJ Prime Rate plus 1.0% or (b) 7.25% per annum. Interest under the SVB Credit Agreement is payable
monthly.
Each
Term Loan advance may be prepaid in full, subject to certain conditions, with payment of (calculated, in each case, based on the then-outstanding
principal amount of such Term Loan advance subject to prepayment) a prepayment premium equal to (i) 1.00% if prepaid on or prior
to December 21, 2023; (ii) 0.75% if prepaid after December 21, 2023 but on or prior to December 21, 2024; (iii) 0.50%
if prepaid after December 21, 2024 but on or prior to December 21, 2025; and (iv) 0.0%, if prepaid after December 21, 2025.
The SVB Credit Agreement contains customary representations
and warranties and customary affirmative and negative covenants, including, among other things, restrictions on indebtedness, liens, investments,
mergers, dispositions, prepayment of other indebtedness and dividends and other distributions. The SVB Credit Agreement also requires
that the Company maintain a liquidity ratio (defined as the ratio of cash (subject to certain exclusions set forth in the SVB Credit Agreement)
and certain billed accounts to debt owed to SVB) of no less than 2.00 to 1.00, tested as of the last day of each month.
The
SVB Credit Agreement also includes customary events of default, including failure to pay principal, interest or certain other amounts
when due, material inaccuracy of representations and warranties, violation of covenants, cross-default to other material indebtedness,
certain bankruptcy and insolvency events, certain undischarged judgments, material invalidity of guarantees or grant of security
interest, material adverse change, and change of control, in certain cases subject to certain thresholds and grace periods. If one or
more events of default occurs and continues beyond any applicable cure period, SVB may terminate its commitments to make further Term
Loans and declare all of the obligations of the Company under the SVB Credit Agreement to be immediately due and payable.
The foregoing description of the SVB Credit
Agreement is not complete and is qualified in its entirety by the full text of the SVB Credit Agreement, a copy of which is filed herewith
as Exhibit 10.1 and incorporated herein by reference.