| Item 1.01 | Entry into a Material Definitive Agreement. |
Note Purchase Agreement
On October 14, 2022, Wheels Up Partners LLC
(“WUP”), an indirect subsidiary of Wheels Up Experience Inc. (together with WUP, the “Company”), Wilmington
Trust, National Association, as subordination agent and trustee and Wheels Up Class A-1 Loan Trust 2022-1, a Delaware statutory
trust (the “Trust”), entered into a Note Purchase Agreement, dated as of October 14, 2022 (the “Note Purchase
Agreement”). The Note Purchase Agreement provides for the initial issuance by WUP of Series A-1 equipment notes (the “Equipment Notes”)
in the aggregate principal amount of $270.0 million secured by 134 of the Company’s owned aircraft fleet consisting of
(i) 72 Beechcraft and Textron King Air B300 aircraft, (ii) 31 Cessna Citation Excel, XLS and X aircraft, and (iii) 31
Hawker Beechcraft and Raytheon 400A aircraft (each such aircraft, an “Aircraft” and, collectively, the “Aircraft”).
On October 14, 2022, the transactions contemplated by the Note Purchase Agreement (collectively, the “Equipment Note Financing”)
were consummated as described below.
Indentures and Equipment Notes
Pursuant to the Note Purchase Agreement, the Equipment
Notes were issued on October 14, 2022 under separate Trust Indentures and Mortgages (each, an “Indenture” and collectively,
the “Indentures”) with respect to each Aircraft entered into by WUP and Wilmington Trust, National Association, as the mortgagee
thereunder. The Equipment Notes bear interest at the rate of 12% per annum with annual amortization of principal amount equal to
10% per annum. The Equipment Notes were purchased by the Trust using the proceeds from loans made to the Trust pursuant to a Loan
Agreement, dated as of October 14, 2022 (the “Loan Agreement”), by and among the Trust, each lender from time
to time made party thereto, and Wilmington Trust, National Association, as facility agent and as security trustee for the lenders. The
Equipment Notes were issued by WUP, and loans were made to the Trust, for gross proceeds equal to 96% of the principal amount of the Equipment
Notes.
Interest on the Equipment Notes is payable quarterly
on each January 15, April 15, July 15 and October 15, beginning on January 15, 2023. The principal payments
of the Equipment Notes are scheduled for payment on the same dates as interest payments. The final expected distribution date of the Equipment
Notes varies from July 15, 2025 to October 15, 2029 depending on the type of Aircraft, unless the Company redeems the Equipment
Notes on an earlier date. The maturity of the Equipment Notes may be accelerated upon the occurrence of certain events of default, including
a failure by WUP (in some cases after notice or the expiration of a grace period, or both) to make payments under the applicable Equipment
Notes when due, a failure to comply with certain covenants and certain bankruptcy events involving the Company or its guarantors.
WUP’s obligations under the Equipment Notes
are guaranteed by the Company and certain of its subsidiaries. WUP is obligated to cause additional subsidiaries and affiliates of WUP
to become guarantors under certain circumstances.
The Note Purchase Agreement and each Indenture and the related guarantees
contain certain covenants, including a liquidity covenant that requires the Company to maintain minimum liquidity of $125 million,
a covenant that limits the maximum loan to value ratio of all aircraft financed, subject to certain cure rights of the Company, and restrictive
covenants that provide limitations under certain circumstances on, among other things: (i) certain acquisitions, mergers or disposals
of its assets; (ii) making certain investments or entering into certain transactions with affiliates; (iii) prepaying, redeeming
or repurchasing the Equipment Notes, subject to certain exceptions; and (iv) paying dividends and making certain other specified
restricted payments. Each Indenture contains customary events of default for transactions of this type, including cross-default provisions
among the Equipment Notes.
The Equipment Notes issued with respect to each
Aircraft are secured by a first-priority lien on such Aircraft and are cross-collateralized by the other Aircraft for which Equipment
Notes were issued under the Indentures. The Equipment Notes will also be secured by a lien on certain intellectual property assets of
the Company and certain of its subsidiaries. The Company may grant additional liens on such intellectual property assets that are senior
in priority to the liens on such intellectual property assets that secure the Equipment Notes, subject to certain exceptions.
The foregoing description of the agreements described
in this Current Report on Form 8-K are qualified in their entirety by reference to the respective agreements, copies of which are
filed as Exhibits 4.1 through 4.9 hereto and are incorporated by reference herein.