🧾 What This Document Is 📜

This material is a highly technical compilation of three major legal agreements: a Third Supplemental Indenture and a Convertible Note Purchase Agreement. These documents are not designed for the average reader; they are complex legal filings detailing fundamental changes to the company's existing debt structure.

In simple terms, this filing tells us that Vertical Aerospace is fundamentally reorganizing its debt and securing a large new financing round from a major institutional investor, Mudrick Capital. These amendments reset the clock on the debt, increase the collateral, and outline the mechanics for the company to raise an additional $50 million.

👉 Why it matters: This filing is a massive signal about the company's financial status and its plans for the future. It shows the company is proactively restructuring its obligations and taking capital when it's needed most.

🏢 About Vertical Aerospace 🛩️

Vertical Aerospace Ltd. is the company at the center of these agreements. While the filing doesn't detail its product lineup, it confirms the company operates in the highly capital-intensive aerospace and electric mobility sector. The core activity involves issuing convertible notes and shares to fund these operations.

The company is primarily managed out of the Cayman Islands, with a key subsidiary guarantor (Vertical Aerospace Group Ltd) incorporated in England and Wales, which provides essential security for the debt.

👉 In simple terms: Vertical Aerospace is an advanced manufacturer (implied by the industry and the scale of the financing) that relies on complex financial deals to fund its ambitious growth plans.

💰 The Original Debt Structure and Guarantor 🔗

The cornerstone of this filing is the existing debt, known as Convertible Senior Secured PIK Toggle Notes. Originally issued with an aggregate principal amount of US$200,000,000, this debt agreement has been substantially amended over time.

The debt structure was originally governed by a Base Indenture (dated December 16, 2021). Over the years, this structure was amended twice (in late 2024), and now a third supplemental indenture is being executed, cementing the new, long-term terms.

The security for this debt is backed by the Subsidiary Guarantor, Vertical Aerospace Group Ltd, meaning the subsidiary is legally responsible for paying back the money if the main company struggles to do so.

🗓️ Key Debt Term Extensions and Changes ⏳

The primary goal of the Third Supplemental Indenture is to update and extend the key financial metrics of the Notes, giving the company more time and clarifying the repayment mechanism.

• New Maturity Date: The original debt maturity date is extended significantly to December 15, 2030.
  • Why it matters: Extending the maturity date means the company does not have to plan for a massive repayment of this debt for another six years, providing crucial breathing room for operations and continued investment.
• Conversion Prices: The fixed conversion prices are clearly set: $2.75 per ordinary share for approximately $130 million of the principal, and $3.50 per ordinary share for the remainder of the Notes.
  • Why it matters: These fixed prices determine exactly how much equity (shares) the noteholders will receive if the company eventually repays the debt by converting the notes into shares.
• Redemption Multipliers: The agreement introduces three tiers for the "Redemption Multiplier"—the percentage used to calculate the amount owed upon conversion.
  • If redemption occurs on or after April 20, 2026 but before the seventh anniversary of the Issue Date, the multiplier is 112.0%.
  • If redemption occurs between the seventh and eighth anniversaries, the multiplier is 106.0%.
  • If redemption occurs on or after the eighth anniversary, the multiplier is 100.0%.
  • Why it matters: This mechanism means that the value of the repayment increases over time, rewarding the noteholders for keeping the debt outstanding.

🤝 New Financing: Additional Notes Facility 💸

The Convertible Note Purchase Agreement formalizes a massive new financing commitment from an institutional investor, Mudrick Capital Management L.P.

• The Investor: Mudrick Capital Management L.P. ("the Purchaser") is the buyer of these new debt instruments.
• The Facility Size: Vertical Aerospace has secured a Note Facility with a total commitment amount of up to US$50,000,000 (the "Commitment Amount").
  • Why it matters: This is a direct infusion of capital that the company can draw upon, giving it immediate working funds for operations or expansion.
• How Funds are Drawn: The company does not receive all $50 million at once. It must submit a "Draw Notice" to the Purchaser to request funds. Each individual Drawdown is limited to $5,000,000 (though three such draws are permitted in a three-month period for a total of up to $15,000,000).
• Payment Mechanics: To issue the Additional Notes, the company must pay the Purchaser the full principal amount (the Draw Amount) plus any Pre-Issuance Accrued Interest.
  • Why it matters: The company must calculate and pay interest that has accumulated since the last payment date, protecting the investor's interest while the funds are pending.

✨ Other Equity Securities Issued 📈

The agreements also detail the issuance and structuring of new preferred shares, which adds another layer to the company's capital structure.

• Series A Preferred Shares: The company has the ability to issue up to $250,000,000 face amount of Series A Convertible Preferred Shares to Yorkville.
  • Why it matters: This gives the company a large, separate source of capital that is structured differently from the convertible notes, offering financing flexibility.

🛡️ Investor Protections and Rights (Repurchase Right) 🔒

The agreements establish specific rights that protect the original noteholders, ensuring they can buy back their debt if they wish.

• The 2026 Issuer Repurchase Right: Starting in 2026, the company gains the right to repurchase the Additional Notes held by the Purchaser.
• Repurchase Price: The repurchase price is set at a cash amount equal to the principal plus all accrued interest, multiplied by 112%.
  • Why it matters: This provides a guaranteed, highly favorable mechanism for the investor to exit their investment in a defined, profitable manner.
• Repurchase Standstill: When a repurchase notice is delivered, the Purchaser agrees to suspend its conversion rights, a standard protective measure for the company during a buyback event.

🔑 Legal Compliance and Guarantees 📜

Because these deals are complex, they are protected by extensive legal warrants and representations from the company.

• Guarantees: The Subsidiary Guarantor commits to being the guarantor of the Notes, reinforcing the debt's security.
• Material Adverse Effect (MAE): Both the Issuer and the Purchaser make detailed representations that no "Material Adverse Effect" has occurred. This is a critical legal clause; if a truly massive, unforeseen crisis (like a major geopolitical shift or operational collapse) happens, it could potentially void the terms of the agreement.
• Corporate Authority: The Issuer and Subsidiary Guarantor warrant that they are validly existing legal entities with the corporate power and authority to enter into and perform these massive financial obligations.

📅 Key Contacts and Next Steps 📞

• The Company (Issuer): Vertical Aerospace Ltd.
• CEO: Stuart Simpson
• Trustee/Collateral Agent: U.S. Bank Trust Company, National Association
• Noteholder/Purchaser: Mudrick Capital Management L.P.

The documents specify that the Purchaser has a pre-existing substantive relationship with the Issuer and that the additional notes are not part of a public offering.

🧠 The Analogy 🏡

Think of the company's debt as a mortgage on a house. The original mortgage agreement (the Base Indenture) was nearing its end, so the company and the investor had to renegotiate the terms. This new filing is like the homeowner (Vertical Aerospace) approaching the bank (U.S. Bank/Trustee) and the primary lender (Mudrick Capital) to say: "We need more time, we need more cash, and we need to set up a clearer, longer-term plan." They are extending the loan timeline to 2030 and making the loan "bankable" by adding new, specific guarantees and collateral, securing the future of the property.

🧩 Final Takeaway 💡

Vertical Aerospace is executing a major corporate financing overhaul, extending its core debt maturity to 2030 and securing an additional $50 million commitment. This restructuring is critical for providing the necessary time and capital to fund its long-term expansion in the electric aerospace market.