Athena Consumer (NYSE:ACAQ) announced this afternoon that it has entered into a forward purchase agreement (FPA) to help secure its combination with EV-maker e.GO.

The FPA announcement comes days after Athena added $15 million in bridge financing to its deal with e.GO. Brucke Funding provided the funding, which is drawable in three tranches maturing at the earlier of the deal’s close or nine months out from the first borrowing. It will hold a 1% interest rate and e.GO will be required to pay at least $4.5 million minus interest once it matures.

On September 29, 2022, Athena and e.GO agreed to an FPA with Vellar Opportunity Fund SPV LLC – Series 3 for an OTC Equity Prepaid Forward Transaction. As part of the FPA, Vellar intends, but is not obligated, to purchase up to 15,000,000 shares of ACAQ through a broker in the open market from holders who have redeemed their shares. The total number of additional shares that may be purchased is not allowed to exceed the difference of the maximum number of shares and the recycled shares.

Additionally, Vellar has agreed to hold the subject shares in a bankruptcy remote special purpose vehicle for the benefit of e.GO. It also is not allowed to own more than 9.9% of the shares on a post-combination pro forma basis.

Athena and e.GO have agreed that any proceeds from the shares may be used by Vellar to recoup any fees owed under the credit agreement, by and among e.GO, as borrower, Brucke Funding LLC, Brucke Agent LLC and certain lenders party thereto, and Vellar, as administrative agent and collateral agent.

Further, the FPA provides that no later than the earlier of one local business day after the closing of the deal and the date any assets from Athena’s trust account are disbursed, Vellar shall be paid an amount equal to the redemption price indicated to investors ahead of the redemption deadline multiplied by the number of Recycled Shares, minus 10%.

In addition to the prepayment amount, Athena has to pay an amount equal to the product of 1,500,000 multiplied by the redemption price. This will be for the purpose of repayment of Vellar having purchased shares from third parties in the open market through a broker in connection with the share consideration, which shares will not be included in the FPA, and will be free and clear of all obligations of Vellar.

And from time to time following the closing, Vellar is allowed to sell the subject shares without payment obligation to the combined company until the proceeds from the sales equal 10% of the product of the number of shares and the initial price or in the case of a default under the bridge agreement, all amounts that are due under such agreement.

Vellar, however, may sell the subject shares, to terminate the FPA. Before the closing or the combined company following the closing will be entitled to proceeds from the sales of terminated shares. This will be equal to the product of the number of Terminated Shares multiplied by the Reset Price.

Following the Closing, the reset price will initially be the per share Redemption Price, but will be adjusted on the first scheduled trading day of each month starting on the first calendar month following the closing to the lowest of the then-current Reset Price,  $10.00 and the volume weighted average price of the shares of the last trading day immediately prior to the reset date, but not lower than $4.00. This is provided, however, that to the extent Athena, the combined company, or e.GO sells, enters any agreement to sell or grants any right to reprice, or otherwise dispose of or issue any shares or securities, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, shares, at an effective price per share less than the then existing Reset Price, then the Reset Price shall be modified to equal such reduced price.

The maturity date will be the second anniversary of the closing, and upon the occurrence of maturity, the combined company is obligated to pay Vellar an amount equal to the product of the Maximum Number of Shares less the number of Terminated Shares multiplied by $2.50.

Additionally, the Maturity Consideration will be payable by TopCo, in cash or shares. In the case of cash, this will be equal to the product of the Maximum Number of Shares less the Terminated Shares, except if such Shares were sold and the sale proceeds were applied to outstanding Leakage Amounts or in the case of a default any amounts outstanding thereunder and any fees, costs or expenses of the Borrower and $2.50. In the case of shares, this will be equal to such a Number of Shares with a value equal to the product of the Maximum Number of Shares less any Shares sold, except if the Shares were sold and the sale proceeds were applied to outstanding leakage or in the event of a default any amounts outstanding thereunder, and $2.50 divided by the VWAP of the shares fr the lower of the last 30 trading days and 10 tradings days prior to the maturity date.

The FPA may be terminated if there is a failure to complete the Business Combination on or before the end date, the deal is terminated, and if the shares are delisted. If there is a termination, there will be a breakup fee payable to Vellar from e.GO following the closing. The fee will be equal to all of Vellar’s fees, costs and expenses in an amount to not exceed $75,000 plus $3 million in the event that the deal is terminated or unable to be completed for reasons solely attributable to e.GO.

The parties initially announced their $913 million merger on July 28. Aachen, Germany-based e.GO designs and manufactures compact EVs designed for urban markets at microfactories, which it believes will provide a more capital efficient entry to the market.