Item 1.01 Entry into a Material Definitive
Agreement
Merger Agreement
On November 15, 2021, Archimedes
Tech SPAC Partners Co., a Delaware corporation (“Archimedes”), entered into a Merger Agreement (the “Merger Agreement”)
by and among Archimedes, ATSPC Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Archimedes (“Merger Sub”),
and SoundHound, Inc., a Delaware corporation (“SoundHound”). Pursuant to the terms of the Merger Agreement, a business combination
between Archimedes and SoundHound will be effected through the merger of Merger Sub with and into SoundHound, with SoundHound surviving
the merger as a wholly owned subsidiary of Archimedes (the “Merger”). The board of directors of Archimedes has (i) approved
and declared advisable the Merger Agreement, the Merger and the other transactions contemplated thereby and (ii) resolved to recommend
approval of the Merger Agreement and related transactions by the stockholders of Archimedes.
Merger Consideration
The total consideration to
be paid by Archimedes to SoundHound security holders at the Closing will be an amount equal to $2.0 billion, with outstanding SoundHound
stock options and warrants assumed by Archimedes included on a net exercise basis.
Treatment of SoundHound Securities
Cancellation of Securities.
Each share of SoundHound capital stock, if any, that is owned by Archimedes, Merger Sub, SoundHound, or any of their subsidiaries
(as treasury stock or otherwise) immediately prior to the Effective Time, will automatically be cancelled and retired without any conversion
or consideration.
Preferred Stock. Immediately
prior to the Effective Time, each issued and outstanding share of SoundHound’s (i) Series A Preferred Stock, (ii) Series B Preferred
Stock, (iii) Series C Preferred Stock, (iv) Series C-1 Preferred Stock, (v) Series D Preferred Stock, (vi) Series D-1 Preferred Stock,
(vii) Series D-2 Preferred Stock, (viii) Series D-3 Preferred Stock, and (ix) Series D-3A Preferred Stock (collectively, “SoundHound
Preferred Stock”), will be converted into shares of Class A Common Stock, par value $0.0001 per share, of SoundHound (the “SoundHound
Class A Common Stock”) at the Conversion Ratio. The “Conversion Ratio” as defined in the Merger Agreement means an amount
equal to (a)(i) the sum of (A) $2,000,000,000, plus (B) the aggregate exercise price of outstanding SoundHound in-the-money stock options
and warrants, divided by (ii) the number of fully diluted SoundHound shares (including in-the-money stock options and warrants); divided
by (b) $10.00.
Class A Common Stock.
Each share of SoundHound Class A Common Stock issued and outstanding immediately prior to the Effective Time (other than any such
shares of SoundHound capital stock cancelled as described above and any dissenting shares) will be converted into the right to receive
a number of shares of Class A Common Stock, par value $0.0001 per share, of Archimedes (“Class A Common Stock”) at the Conversion
Ratio.
Class B Common Stock.
SoundHound does not currently have any Class B Common Stock authorized or outstanding. SoundHound intends to set up a special
committee of disinterested independent directors to consider a proposal from SoundHound’s founders to (1) authorize the creation
of a new class of common stock, Class B Common Stock, which will be identical to the SoundHound Class A Common Stock, but will entitle
the holders thereof to multiple votes per share on all matters on which stockholders are entitled to vote, with the number of votes per
share to be determined by the special committee and the founders if they reach agreement on the matter, and (2) immediately prior to the
Closing, exchange the shares of SoundHound Class A Common Stock held by SoundHound’s founders for Class B Common Stock in exchange
for consideration to be provided by SoundHound’s founders and as agreed to by SoundHound’s founders and the special committee,
and, in each case, subject to approval and ratification by SoundHound’s stockholders (excluding SoundHound’s founders and
their affiliates). If SoundHound’s founders and the special committee reach agreement with respect to the authorization and issuance
of the Class B Common Stock, which is approved and ratified by SoundHound’s stockholders (excluding SoundHound’s founders
and their affiliates), and accordingly shares of Class B Common Stock are issued by SoundHound prior to the closing of Merger, then such
shares of Class B Common Stock will be converted into the right to receive a number of shares of Class B Common Stock of Archimedes (“Archimedes
Class B Common Stock”) at the Conversion Ratio. The Archimedes Class B Common Stock will have the same multiple votes per share
as SoundHound’s Class B Common Stock.
Merger Sub Securities.
Each share of common stock, par value $0.0001 per share, of Merger Sub issued and outstanding immediately prior to the Effective
Time will be converted into and become one newly issued share of common stock of the Archimedes.
Stock Options.
At the Effective Time, each outstanding option to purchase shares of SoundHound Common Stock will be converted into an option to purchase,
subject to substantially the same terms and conditions as were applicable under such options prior to the Effective Time, shares of Class
A Common Stock equal to the number of shares subject to such option prior to the Effective Time multiplied by the Conversion Ratio, with
the per share exercise price equal to the exercise price prior to the Effective Time divided by the Conversion Ratio.
Warrants. Immediately
prior to the Effective Time, each outstanding warrant to purchase shares of SoundHound capital stock that is unvested as of immediately
prior to the Effective Time shall be automatically converted into a warrant to purchase, subject to substantially the same terms and conditions
as were applicable under such warrants prior to the Effective Time, shares of the Class A Common Stock, proportionately adjusted for the
Conversion Ratio, with the per share exercise price equal to the exercise price prior to the Effective Time divided by the Conversion
Ratio.
Restricted Stock and
SoundHound RSUs. Any outstanding restricted shares of SoundHound Common Stock that have not vested as of the Effective Time will
have the same continuing vesting periods apply to the Merger Consideration Shares (as defined in the Merger Agreement) issued in exchange
for such restricted shares.
Prior to the Closing, each
SoundHound RSU (as defined in the Merger Agreement) will be converted into a restricted stock unit of Archimedes, subject to substantially
the same terms and conditions as were applicable under the SoundHound RSU, except that upon conversion thereof, the holder of a SoundHound
RSU will receive the same consideration that they would have received if such SoundHound RSU was converted into SoundHound Common Stock
immediately prior to the Effective Time.
Representations and Warranties
The Merger Agreement contains
customary representations and warranties of the parties thereto with respect to, among other things, (a) corporate existence and power,
(b) authorization to enter into the Merger Agreement and related transactions, (c) governmental authorization, (d) capital structure,
(e) corporate records, (f) subsidiaries, (g) consents, (h) financial statements, (i) books and records, (j) internal accounting controls,
(k) absence of changes, (l) real and personal property, (m) litigation, (n) material contracts, (o) licenses and permits, (p) compliance
with laws, (q) intellectual property, (r) accounts payable and affiliate loans, (s) employee matters and benefits, (t) tax matters, (u)
environmental laws, (v) directors and officers, (w) insurance, (x) related party transactions, and (y) listing of securities.
Covenants
The Merger Agreement includes
customary covenants of the parties with respect to operation of their respective businesses prior to consummation of the Merger and efforts
to satisfy conditions to consummation of the Merger. The Merger Agreement also contains additional covenants of the parties, including,
among others, access to information, cooperation in the preparation of the Form S-4 and Proxy Statement (as each such terms are defined
in the Merger Agreement) required to be filed in connection with the Merger and to obtain all requisite approvals of each party’s
respective stockholders including, in the case of Archimedes, approvals of the second amended and restated certificate of incorporation,
amended and restated bylaws, the omnibus incentive plan and employee stock purchase plan, post-merger board of directors, and the share
issuance under Nasdaq rules. Archimedes has also agreed to include in the Proxy Statement the recommendation of its board that stockholders
approve all of the proposals to be presented at the special meeting.
Each party’s representations,
warranties and pre-Closing covenants will not survive Closing and no party has any post-Closing indemnification obligations.
Archimedes Omnibus Incentive Plan and Employee Stock Purchase
Plan
Archimedes has agreed to approve and adopt an omnibus
equity incentive plan (the “Incentive Plan”) and employee stock purchase plan (the “ESPP”), in each case to be
effective as of the Closing and in a form mutually acceptable to Archimedes and SoundHound, subject to approval of the Incentive Plan
and the ESPP by the Archimedes’ stockholders. The Incentive Plan will provide for an initial aggregate share reserve equal to 10%
of the number of shares of Archimedes Common Stock on a fully diluted basis at the Closing and a 5% “evergreen” provision
that will provide for an automatic increase on the first day of each fiscal year in the number of shares available for issuance under
the Incentive Plan as mutually determined by SoundHound and Archimedes.
Non-Solicitation Restrictions
Each of Archimedes and SoundHound
has agreed that from the date of the Merger Agreement to the Effective Time or, if earlier, the valid termination of the Merger Agreement
in accordance with its terms, it will not initiate any negotiations with any party relating to an Acquisition Proposal or Alternative
Transaction (as such terms are defined in the Merger Agreement) or enter into any agreement relating to such a proposal. Each of Archimedes
and SoundHound has also agreed to be responsible for any acts or omissions of any of its respective representatives that, if they were
the acts or omissions of the Archimedes or SoundHound, as applicable, would be deemed a breach of the party’s obligations with respect
to these non-solicitation restrictions.
Conditions to Closing
The consummation of the Merger
is conditioned upon, among other things, (i) the absence of any applicable law or order restraining, prohibiting or imposing any condition
on the consummation of the Merger and related transactions, (ii) the expiration or termination of the waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, (iii) receipt of any consent, approval or authorization required by any Authority (as
defined in the Merger Agreement), (iv) have no action brought by any Authority to enjoin or otherwise restrict the consummation of the
Closing, (v) Archimedes having at least $5,000,001 of net tangible assets either immediately prior to or upon consummation of the Merger,
(vi) approval by SoundHound stockholders of the Merger and related transactions, (vii) approval by Archimedes stockholders of the Merger
and related transactions, (viii) the conditional approval for listing by Nasdaq of the shares of Class A Common Stock to be issued in
connection with the transactions contemplated by the Merger Agreement and the Subscription Agreements (as defined herein) and satisfaction
of initial and continued listing requirements, (ix) the Form S-4 becoming effective in accordance with the provisions of the Securities
Act of 1933, as amended (“Securities Act”), (x) solely with respect to Archimedes and Merger Sub, (A) SoundHound having duly
performed or complied with all of its obligations under the Merger Agreement in all material respects, (B) the representations and warranties
of SoundHound being true and correct in all respects unless failure would not have or reasonably be expected to have a Material Adverse
Effect (as defined in the Merger Agreement) on SoundHound or any of its subsidiaries, (C) no event having occurred that would result in
a Material Adverse Effect on SoundHound or any of its subsidiaries, and (D) resignation of certain SoundHound directors as set forth in
the Merger Agreement, and (xi) solely with respect to SoundHound, (A) Archimedes and Merger Sub having duly performed or complied with
all of their respective obligations under the Merger Agreement in all material respects, (B) no event having occurred that would result
in a Material Adverse Effect on Archimedes or Merger Sub, (C) the size and composition of the post-Closing board of directors of Archimedes
being established as set forth in the Merger Agreement, (D) the amount of Parent Closing Cash (as defined in the Merger Agreement) being
at least equal to the aggregate amount of commitments under the Subscription Agreements as of the date of the Merger Agreement, (E) total
fees and expenses of Archimedes incurred or payable at Closing in connection with consummation of the Merger and related transactions
not exceeding $10,300,000, and (F) Archimedes having amended its warrant agreement for its private warrants dated March 10, 2021 as necessary
in order for the private warrants to be accounted for as equity (rather than as liabilities) under U.S. GAAP, SEC requirements and other
applicable law.
Termination
The Merger Agreement may be
terminated at any time prior to the Effective Time as follows:
(i) by either Archimedes or
SoundHound if the Merger and related transactions are not consummated on or before the six month anniversary of the Merger Agreement (the
“Outside Date”), provided that, if the SEC has not declared the Form S-4 effective on or prior to the five month anniversary
of the Merger Agreement, then the Outside Date will be extended by one additional month, provided further that, the failure to consummate
the transaction by the Outside Date is not due to a material breach by the party seeking to terminate the Agreement;
(ii) by either Archimedes
or SoundHound if any Authority has issued any final decree, order, judgment, award, injunction, rule or consent or enacted any law, having
the effect of permanently enjoining or prohibiting the consummation of the Merger, provided that, the party seeking to terminate cannot
have breached its obligations under the Merger Agreement and such breach was a substantial cause of, or substantially resulted in, such
action by the Authority.
(iii) by mutual written consent
of Archimedes and SoundHound duly authorized by each of their respective boards of directors;
(iv) by either Archimedes
or SoundHound if the other party has breached any of its covenants or representations and warranties such that closing conditions would
not be satisfied by the earlier of (A) the Outside Date and (B) 30 days following receipt by the breaching party of a written notice of
the breach;
(v) by Archimedes if
SoundHound has not received approval from SoundHound stockholders for the Merger and related transactions by five business days following
the effective date of the Form S-4, provided that upon SoundHound receiving the such stockholder approval, Archimedes will no longer have
any right to so terminate the Merger Agreement;
The Merger Agreement and other
agreements described below have been included to provide investors with information regarding their respective terms. They are not intended
to provide any other factual information about Archimedes, SoundHound or the other parties thereto. In particular, the assertions embodied
in the representations and warranties in the Merger Agreement were made as of a specified date, are modified or qualified by information
in one or more confidential disclosure letters prepared in connection with the execution and delivery of the Merger Agreement, may be
subject to a contractual standard of materiality different from what might be viewed as material to investors, or may have been used for
the purpose of allocating risk between the parties. Accordingly, the representations and warranties in the Merger Agreement are not necessarily
characterizations of the actual state of facts about Archimedes, SoundHound or the other parties thereto at the time they were made or
otherwise and should only be read in conjunction with the other information that Archimedes makes publicly available in reports, statements
and other documents filed with the SEC. Archimedes and SoundHound investors and securityholders are not third-party beneficiaries under
the Merger Agreement.
Certain Related Agreements
Parent Support Agreements.
In connection with the execution of the Merger Agreement, certain stockholders of Archimedes, SoundHound and Archimedes entered into support
agreements (the “Parent Support Agreements”) pursuant to which the stockholders of Archimedes that are parties to the Parent
Support Agreements have agreed to vote all shares of common stock, par value $0.0001 per share, of Archimedes beneficially owned by them
in favor of the Merger and related transactions.
Company Support Agreements.
In connection with the execution of the Merger Agreement, certain stockholders of SoundHound, SoundHound and Archimedes entered into support
agreements (the “Company Support Agreements”), pursuant to which the stockholders of SoundHound that are parties to the
Company Support Agreements have agreed to vote all shares of SoundHound Stock beneficially owned by them in favor of the Merger and related
transactions.
Subscription Agreements.
In connection with the execution of the Merger Agreement, Archimedes entered into subscription agreements (collectively, the “Subscription
Agreements”) with certain accredited investors (the “Subscribers”) pursuant to which the Subscribers have agreed to
purchase, and Archimedes has agreed to sell to the Subscribers, an aggregate of 11,100,000 shares of Class A Common Stock (“PIPE
Shares”), for a purchase price of $10.00 per share and an aggregate purchase price of $111,000,000. The purpose of the sale of
the PIPE Shares is to raise additional capital for use in connection with the Merger and to meet the minimum cash requirements provided
in the Merger Agreement. The PIPE Shares are identical to the shares of Class A Common Stock that will be held by Archimedes’ public
stockholders at the time of the Closing, except that the PIPE Shares will not be entitled to any redemption rights and will not be registered
with the SEC. The obligations to consummate the transactions contemplated by the Subscription Agreements are conditioned upon, among other
things, customary closing conditions and the consummation of the Merger and related transactions contemplated by the Merger Agreement.
Lock-Up
Agreements. In connection with the execution of the Merger Agreement, certain key SoundHound stockholders have agreed,
subject to certain customary exceptions, not to (i) sell, offer to sell, contract or agree to sell, pledge or otherwise dispose of,
directly or indirectly, any shares of Class A Common Stock and Class B Common Stock (collectively, “Common Stock”) held
by them (such shares, together with any securities convertible into or exchangeable for or representing the rights to receive shares
of Common Stock if any, acquired during the Lock-Up Period (as defined below), the “Lock-up Shares”), (ii) enter into a
transaction that would have the same effect, (iii) enter into any swap, hedge or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the Lock-Up Shares or otherwise, or engage in any short sales or
other arrangement with respect to the Lock-Up Shares or (iv) publicly announce any intention to effect any transaction specified in
clause (i) or (ii) until the date that is six months after the Closing Date (the period from the date of the agreement until such
date, the “Lock-Up Period”).
Amended and Restated
Registration Rights Agreement. At the closing, Archimedes will enter into an amended and restated registration rights agreement
(the “Amended and Restated Registration Rights Agreement”) with certain existing stockholders of Archimedes with respect
to the shares of Class A Common Stock they own at the Closing, and with certain SoundHound stockholders who will be affiliates of Archimedes
with respect to the Merger Consideration after the Closing. The Amended and Restated Registration Rights Agreement will require Archimedes
to, among other things, file a resale shelf registration statement on behalf of the stockholders no later than 60 days after the Closing.
The Amended and Restated Registration Rights Agreement will also provide certain demand registration rights and piggyback registration
rights to the stockholders, subject to underwriter cutbacks and issuer blackout periods. Archimedes will agree to pay certain fees and
expenses relating to registrations under the Amended and Restated Registration Rights Agreement.
The foregoing descriptions of agreements and the transactions and documents
contemplated thereby are not complete and are subject to and qualified in their entirety by reference to the Merger Agreement, form of
Parent Support Agreement, form of Company Support Agreement, form of Subscription Agreement, form of Lock-Up Agreement and form of Amended
and Restated Registration Rights Agreement, copies of which are filed with this Current Report on Form 8-K as Exhibits 2.1, 10.1, 10.2,
10.3, 10.4 and 10.5, respectively, and the terms of which are incorporated by reference herein.