Item 1.01 Entry into a Material Definitive Agreement.
Merger Agreement
On May 11, 2021, InterPrivate II Acquisition Corp., a Delaware corporation
("InterPrivate"), entered into an Agreement and Plan of Merger by and among
InterPrivate, TMPST Merger Sub I Inc., a Delaware corporation and a direct,
wholly-owned subsidiary of InterPrivate ("First Merger Sub"), TMPST Merger Sub
II LLC, a Delaware limited liability company and a direct, wholly-owned
subsidiary of InterPrivate ("Second Merger Sub"), and Getaround, Inc., a
Delaware corporation ("Getaround") (as may be amended and/or restated from time
to time, the "Merger Agreement"). The Merger Agreement was unanimously approved
by InterPrivate's board of directors. If the Merger Agreement is approved by
InterPrivate's and Getaround's stockholders (and the other closing conditions
are satisfied or waived in accordance with the Merger Agreement), and the
transactions contemplated by the Merger Agreement are consummated, (a) First
Merger Sub will merge with and into Getaround (the "First Merger"), with
Getaround being the surviving corporation of the First Merger; and
(b) immediately following the First Merger and as part of the same overall
transaction as the First Merger, the surviving corporation from the First Merger
will merge with and into Second Merger Sub (the "Second Merger" and, together
with the First Merger, the "Mergers"), with Second Merger Sub being the
surviving company of the Second Merger (such transactions, collectively, the
"Proposed Transaction"). In addition, in connection with the consummation of the
Proposed Transaction (the "Closing"), InterPrivate will be renamed "Getaround,
Inc." and is referred to herein as "Pubco" as of the time following the Closing
and such change of name.
Merger Consideration
Under the Merger Agreement, holders of Getaround's equity interests are expected
to receive approximately $800,000,000 ("the Base Purchase Price") in aggregate
consideration in the form of Pubco Class A common stock, par value $0.0001 per
share ("Pubco Class A Common Stock"), equal to the quotient obtained by dividing
(i) the Base Purchase Price by (ii) the per share price of $10.00 at the Closing
plus the number of shares of Pubco Class A Common Stock comprising the Earnout
Shares (as defined below).
Under the Merger Agreement, immediately prior to the effective time of the First
Merger and after each the exercise of any issued and outstanding Getaround
preferred stock warrants, each issued and outstanding share of Getaround
preferred stock, Getaround non-voting common stock and Getaround Class B
non-voting common stock will automatically convert into one share of Getaround
common stock. At the effective time of the First Merger, each share of Getaround
common stock issued and outstanding immediately prior to the effective time of
the First Merger, including any shares resulting from the conversion of any
securities convertible into Getaround common stock in connection with the
Closing, will be canceled and automatically deemed, for all purposes, to
represent the right to receive a number of shares of Pubco Class A Common Stock
set forth opposite the names of the holders of such Getaround common stock set
forth in the Payment Spreadsheet (as defined in the Merger Agreement).
In addition, under the Merger Agreement, at the effective time of the First
Merger, (i) each Company In-the-Money Vested Option (as defined in the Merger
Agreement) that is outstanding and unexercised immediately prior to the
effective time of the First Merger will be converted (with such conversion
calculated net of any applicable exercise price) into a right to receive a
number of shares of Pubco Class A Common Stock as set forth in the Payment
Spreadsheet, (ii) each option to purchase shares of Getaround common stock
granted under the Getaround stock plan that is not a Company In-the-Money Vested
Option and that is outstanding and unexercised immediately prior to the
effective time of the First Merger will be assumed by InterPrivate and will be
converted into an option to purchase shares of Pubco Class A Common Stock,
(iii) each restricted stock unit covering shares of Getaround common stock
granted under the Getaround stock plan that is unvested and outstanding
immediately prior to the effective time of the First Merger will be assumed by
InterPrivate and will be converted into a restricted stock unit covering shares
of Pubco Class A Common Stock, (iv) after giving effect to the exercise of all
Getaround warrants for Getaround capital stock in accordance with their terms
prior to the Closing, each warrant to purchase shares of Getaround capital stock
that is outstanding and unexercised immediately prior to the effective time of
the First Merger (whether vested or unvested) will automatically terminate in
accordance with its terms and be of no further or effect as of the effective
time of the First Merger; provided that the foregoing will not affect the
ability of a holder of any Getaround warrants to exercise any such Getaround
warrants in connection with the Proposed Transactions pursuant to the terms of
Getaround warrants and (v) each Bridge Note (as defined in the Merger Agreement)
and New Getaround Bridge Note
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(as defined in the Merger Agreement) that is outstanding at the effective time
of the First Merger will convert in accordance with its terms and each holder
thereof will receive that number of shares of Pubco Class A Common Stock set
forth opposite such holder's name in the Payment Spreadsheet.
9,333,333 shares of Pubco Class A Common Stock issuable as part of the Base
Purchase Price will be set aside in an escrow account at Closing (the "Escrow
Shares"). One million (1,000,000) Escrow Shares will be set aside and allocated
as agreed upon by InterPrivate and Getaround, including for the benefit of some
or all of the Non-Redeeming Parent Stockholders (as defined in the Merger
Agreement). In the event of a PIPE Investment (as defined below), a number of
Escrow Shares equal to (i) 8,333,333 multiplied by (ii) a fraction, (A) the
numerator of which will be the lesser of (y) the PIPE Investment Amount (as
defined below) and (z) $125,000,000 and (B) the denominator of which will be
$125,000,000 (the "PIPE Protection Shares"), will be set aside for the benefit
of the PIPE Investors (as defined below) and will be allocable to the PIPE
Investors pursuant to the PIPE Subscription Agreements (as defined below) and
the Escrow Agreement (as defined in the Merger Agreement), and the PIPE
Protection Shares will be the only shares of Pubco Class A Common Stock in the
Escrow Account set aside for the PIPE Investors. Further, subject to the terms
of Escrow Shares reserved for Non-Redeeming Parent Stockholders and the PIPE
Investors, a remaining portion of the Escrow Shares, including any remaining
PIPE Protection Shares not allocated (the "Additional Shares") will be set aside
and allocated as agreed upon by Parent and Getaround, including, in case the
PIPE Investment Amount is less than $125,000,000, for the benefit of some or all
of the Non-Redeeming Parent Stockholders. If InterPrivate and Getaround are
unable to agree upon an allocation of the Additional Shares, then all of the
Additional Shares will be allocated for the benefit of the Non-Redeeming Parent
Stockholders. After giving effect to the aforesaid, should any of the Escrow
Shares remain, then InterPrivate and Getaround will, as soon as practicable,
instruct the Escrow Agent to distribute such Escrow Shares pro rata to
Getaround's stockholders.
In addition to the aggregate consideration above, following the Closing, Pubco
will issue up to an additional 34,000,000 shares of Pubco Class A Common Stock
("Earnout Shares") to equity interest holders of Getaround and holders of Bridge
Notes and up to an additional 11,000,000 shares of Pubco Class A Common Stock to
certain personnel of Getaround as earnout consideration in tranches based upon
the volume weighted average price of Pubco Class A Common Stock for any twenty
(20) Trading Days (as defined in the Merger Agreement) within a period of thirty
(30) consecutive Trading Days at any time following the Closing Date (as defined
in the Merger Agreement) until the seven (7) year anniversary of the Closing
Date. These price targets range from $13.50 to $55. Further, the payment of the
earnout consideration is subject to acceleration in the event of a change of
control of Pubco in which the stockholders of Pubco have the right to exchange
their shares for consideration based on certain value thresholds.
Representations, Warranties and Covenants
The parties to the Merger Agreement have made customary representations and
warranties for transactions of this type. The representations and warranties
made under the Merger Agreement will not survive the Closing except for claims
with respect to actual fraud. In addition, the parties to the Merger Agreement
agreed to be bound by certain customary covenants for transactions of this type,
including, among others, covenants with respect to the conduct of the business
and operations of InterPrivate and Getaround and their respective subsidiaries
prior to the Closing. The covenants under the Merger Agreement also will not
survive the Closing unless they are, by their terms, required to be performed
after the Closing and except for claims with respect to actual fraud. The
parties agreed to, subject to certain exceptions, use their respective best
efforts to consummate the Proposed Transaction in the most expeditious manner
practicable.
Conditions to Closing
The obligations of the parties (or, in some cases, some of the parties) to
. . .
Item 3.02 Unregistered Sales of Equity Securities.
The disclosure set forth above in Item 1.01 of this Current Report on Form 8-K
is incorporated by reference herein. The securities that may be issued in
connection with the Mudrick Subscription Agreement will not be registered under
the Securities Act in reliance on the exemption from registration provided by
Section 4(a)(2) of the Securities Act and/or Regulation D promulgated
thereunder.
Additional Information and Where to Find It
This Current Report on Form 8-K relates to the Proposed Transaction, but does
not contain all the information that should be considered concerning the
Proposed Transaction and is not intended to form the basis of any investment
decision or any other decision in respect of the Proposed Transaction.
InterPrivate intends to file with the SEC a registration statement on Form S-4
relating to the Proposed Transaction that will include a proxy statement of
InterPrivate and a prospectus of InterPrivate. When available, the definitive
proxy statement/prospectus and other relevant materials will be sent to all
InterPrivate stockholders as of a record date to be established for voting on
the Proposed Transaction. InterPrivate also will file other documents regarding
the Proposed Transaction with the SEC. Before making any voting decision,
investors and securities holders of InterPrivate are urged to read the
registration statement, the proxy statement/prospectus and all other relevant
documents filed or that will be filed with the SEC in connection with the
Proposed Transaction as they become available because they will contain
important information about InterPrivate, Getaround and the Proposed
Transaction.
Investors and securities holders will be able to obtain free copies of the proxy
statement/prospectus and all other relevant documents filed or that will be
filed with the SEC by InterPrivate through the website maintained by the SEC at
www.sec.gov. In addition, the documents filed by InterPrivate may be obtained
free of charge from InterPrivate's website at https://ipvspac.com/ or by written
request to InterPrivate at InterPrivate II Acquisition Corp., 1350 Avenue of the
Americas, 2nd Floor, New York, NY 10019.
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Participants in Solicitation
InterPrivate and Getaround and their respective directors and officers may be
deemed to be participants in the solicitation of proxies from InterPrivate's
stockholders in connection with the Proposed Transaction. Information about
InterPrivate's directors and executive officers and their ownership of
InterPrivate's securities is set forth in InterPrivate's filings with the SEC,
including InterPrivate's Annual Report on Form 10-K for the fiscal year ended
December 31, 2021, which was filed with the SEC on March 31, 2022. To the extent
that such persons' holdings of InterPrivate's securities have changed since the
amounts disclosed in InterPrivate's Annual Report on Form 10-K, such changes
have been or will be reflected on Statements of Change in Ownership on Form 4
filed with the SEC. Additional information regarding the names and interests in
the Proposed Transaction of InterPrivate's and Getaround's respective directors
and officers and other persons who may be deemed participants in the Proposed
Transaction may be obtained by reading the proxy statement/prospectus regarding
the Proposed Transaction when it becomes available. You may obtain free copies
of these documents as described in the preceding paragraph.
Forward-Looking Statements
This Current Report on Form 8-K contains certain forward-looking statements
within the meaning of the federal securities laws with respect to the Proposed
Transaction between Getaround and InterPrivate, including statements regarding
the benefits of the Proposed Transaction, the anticipated timing of the
completion of the Proposed Transaction, the services offered by Getaround and
the markets in which it operates, the expected total addressable market for the
services offered by Getaround, the sufficiency of the net proceeds of the
proposed transaction to fund Getaround's operations and business plan and
Getaround's projected future results. These forward-looking statements generally
are identified by the words "believe," "project," "expect," "anticipate,"
"estimate," "intend," "strategy," "future," "opportunity," "plan," "may,"
"should," "will," "would," "will be," "will continue," "will likely result," and
similar expressions. Forward-looking statements are predictions, projections and
other statements about future events that are based on current expectations and
assumptions and, as a result, are subject to risks and uncertainties. Many
factors could cause actual future events to differ materially from the
forward-looking statements in this document, including, but not limited to:
(i) the risk that the Proposed Transaction may not be completed in a timely
manner or at all; (ii) the risk that the Proposed Transaction may not be
completed by InterPrivate's business combination deadline and the potential
failure to obtain an extension of the business combination deadline if sought by
InterPrivate; (iii) the failure to satisfy the conditions to the consummation of
the Proposed Transaction, including the adoption of the business combination
agreement by the stockholders of InterPrivate and Getaround, the satisfaction of
the minimum trust account amount following redemptions by InterPrivate's public
stockholders and the receipt of certain governmental and regulatory approvals;
(iv) the lack of a third-party valuation in determining whether or not to pursue
the Proposed Transaction; (v) the occurrence of any event, change or other
circumstance that could give rise to the termination of the business combination
agreement; (vi) the effect of the announcement or pendency of the Proposed
Transaction on Getaround's business relationships, performance, and business
generally; (vii) risks that the Proposed Transaction disrupts current plans and
operations of Getaround as a result; (viii) the outcome of any legal proceedings
that may be instituted against Getaround, InterPrivate or others related to the
business combination agreement or the Proposed Transaction; (ix) the ability to
meet New York Stock Exchange listing standards at or following the consummation
of the Proposed Transaction; (x) the ability to recognize the anticipated
benefits of the Proposed Transaction, which may be affected by a variety of
factors, including changes in the competitive and highly regulated industries in
which Getaround operates, variations in performance across competitors, changes
in laws and regulations affecting Getaround's business and the ability of
Getaround and the post-combination company to retain its management and key
employees; (xi) the ability to implement business plans, forecasts, and other
expectations after the completion of the Proposed Transaction, gauge and adapt
to industry trends and changing host, guest and consumer preferences, and
identify and realize additional opportunities; (xii) the risk of adverse or
changing economic conditions, including the resulting effects on consumer
spending, and the possibility of rapid change in the highly competitive industry
in which Getaround operates; (xiii) the risk that Getaround and its current and
future partners are unable to successfully develop and scale Getaround's
products and offerings, or experience significant delays in doing so; (xiv) the
risk that Getaround may never achieve or sustain profitability; (xv) the risk
that Getaround will need to raise additional capital to execute its business
plan, which may not be available on acceptable terms or at all; (xvi) the risk
that the post-combination company experiences difficulties in managing its
growth and expanding operations; (xvii) the risk that third-party suppliers and
manufacturers are not able to fully and timely meet their obligations;
(xviii) the ability to maintain strategic partnerships, including integrations
and collaborations with original equipment manufacturers and ride hailing apps;
(xix) the risk of product liability or regulatory lawsuits or proceedings
relating to Getaround's products and offerings; (xx) the risk that Getaround is
unable to secure or protect its intellectual property; (xxi) the effects of
COVID-19 or other public health crises on Getaround's business and results of
operations,
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the travel and transportation industries, travel and transportation trends, and
the global economy generally; and (xxii) costs related to the Proposed
Transaction. The foregoing list of factors is not exhaustive. You should
carefully consider the foregoing factors and the other risks and uncertainties
described in the "Risk Factors" section of InterPrivate's Annual Report on Form
10-K, Quarterly Reports on Form 10-Q, the registration statement on Form S-4 and
proxy statement/prospectus discussed above and other documents filed by
InterPrivate from time to time with the SEC. These filings identify and address
other important risks and uncertainties that could cause actual events and
results to differ materially from those contained in the forward-looking
statements. Forward-looking statements speak only as of the date they are made.
Readers are cautioned not to put undue reliance on forward-looking statements,
and Getaround and InterPrivate assume no obligation and do not intend to update
or revise these forward-looking statements, whether as a result of new
information, future events, or otherwise. Neither Getaround nor InterPrivate
. . .
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Description
2.1* Merger Agreement, dated as of May 11, 2022, by and among
InterPrivate, First Merger Sub, Second Merger Sub, and Getaround.
10.1* Mudrick Subscription Agreement, dated as of May 11, 2022, by and
between InterPrivate and Mudrick.
10.2 Form of Company Holders Support Agreement.
10.3 Form of Sponsor Support Agreement.
10.4 Form of Amended and Restated Registration Rights Agreement.
104 Cover Page Interactive Data File (embedded with the Inline XBRL
document)
* Certain exhibits and schedules to this Exhibit have been omitted in accordance
with Regulation S-K, Item 601(a)(5). InterPrivate agrees to furnish
supplementally a copy of all omitted exhibits and schedules to the Securities
and Exchange Commission upon its request.
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