Item 1.01 Entry into a Material Definitive Agreement.
As previously announced, on April 29, 2021, Gores Metropoulos II, Inc. (the
"Company") entered into an Agreement and Plan of Merger (the "Merger
Agreement"), by and among the Company, Sunshine Merger Sub I, Inc. ("First
Merger Sub"), Sunshine Merger Sub II, LLC ("Second Merger Sub") and Sonder
Holdings Inc. ("Sonder"). Pursuant to the Merger Agreement, among other things,
the parties thereto will undertake the following transactions (collectively, the
"Mergers"): (a) the merger of First Merger Sub with and into Sonder, with Sonder
continuing as the surviving corporation (the "First Merger"); and
(b) immediately following the First Merger and as part of the same overall
transaction as the First Merger, the merger of Sonder with and into Second
Merger Sub, with Second Merger Sub continuing as the surviving entity.
Amendment to the Merger Agreement
On October 27, 2021, the parties entered into an amendment to the Merger
Agreement ("Amendment No. 1"). Amendment No. 1 modifies the Merger Agreement by,
among other things: (a) reducing the amount of the Aggregate Company Stock
Consideration (as defined in the Merger Agreement) to a number of shares of the
Company's common stock, par value $0.0001 per share (the "Company Common
Stock"), equal to the result of (i) $1,901,603,000, divided by (ii) $10.00; (b)
including a representation of the Company, First Merger Sub and Second Merger
Sub that 1,277,285 shares of the Company's Class F common stock, par value
$0.0001 per share (the "Class F Common Stock"), will be cancelled for no
consideration immediately prior to the effective time of the First Merger (as
further described below under the heading "Share Surrender Agreement"); (c)
including a representation of the Company, First Merger Sub and Second Merger
Sub that the Company has delivered to Sonder executed subscription agreements
pursuant to which certain subscribers have agreed to purchase 32,216,785 shares
of Company Common Stock for an aggregate purchase price equal to approximately
$309,394,998 (as further described below under the heading "Subscription
Agreements"); (d) providing that the Company, Sonder or one or more of their
affiliates may enter into a delayed draw note purchase agreement or other
similar loan, credit or note purchase agreement pursuant to which notes,
warrants or other equity will be issued by the Company, Sonder and/or one or
more of their affiliates at or after the effective time of the First Merger;
(e) extending from October 28, 2021 to January 31, 2022 the date after which the
Company and Sonder would have a right to terminate the Merger Agreement if the
transactions contemplated by the Merger Agreement, including the Mergers (the
"Business Combination"), have not been consummated (provided that the delay in
closing the Business Combination by such date is not due to the breach of the
Merger Agreement by the party seeking to terminate); and (f) revising the
Company's Amended and Restated Certificate of Incorporation and Amended and
Restated Bylaws which will be put in place in connection with the Business
Combination.
The foregoing summary of Amendment No. 1 is qualified in its entirety by the
text of Amendment No. 1 (including the form of the Company's Amended and
Restated Certificate of Incorporation and the form of the Company's Amended and
Restated Bylaws attached as exhibits thereto), which is incorporated by
reference as Exhibit 2.1 to this Current Report on Form 8-K (the "Current
Report").
Subscription Agreements
Amendment to Existing Subscription Agreements
As previously disclosed, on April 29, 2021, the Company entered into
subscription agreements (the "Existing Subscription Agreements") with certain
investors (the "Existing Subscribers") and Gores Metropoulos Sponsor II, LLC
(the "Sponsor"), pursuant to which the Existing Subscribers and the Sponsor have
agreed to purchase an aggregate of 20,000,000 shares of Company Common Stock in
a private placement for $10.00 per share (the "Existing PIPE"). Each Existing
Subscription Agreement provided that such agreement was to terminate with no
further force and effect in the event the closing of the Business Combination
had not occurred by October 28, 2021, among other things.
On October 27, 2021, the parties entered into an amendment to the Existing
Subscription Agreements (the "Existing Subscription Amendment"), pursuant to
which, among other things, the date such Existing Subscription Agreements
terminate if the Business Combination has not been consummated was extended from
October 28, 2021 to January 31, 2022.
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A copy of the form of the Existing Subscription Amendment is incorporated by
reference as Exhibit 10.1 to this Current Report. The foregoing description of
the Existing PIPE is qualified in its entirety by reference thereto.
New Subscription Agreements
On October 27, 2021, the Company entered into subscription agreements (the "New
Subscription Agreements") with certain investors, including the Sponsor (the
"New Subscribers"), pursuant to which the New Subscribers have agreed to
purchase an aggregate of 11,507,074 shares of Company Common Stock in a private
placement for $8.89 per share (the "New PIPE"). Each New Subscription Agreement
is to terminate with no further force and effect upon the earliest to occur of:
(a) such date and time as the Merger Agreement is terminated in accordance with
its terms; (b) the mutual written agreement of the parties to such New
Subscription Agreement; (c) any of the conditions to closing set forth in such
New Subscription Agreement not being satisfied or waived on or prior to the
closing and, as a result thereof, the transactions contemplated by such New
Subscription Agreement not being consummated at the closing; and (d) January 31,
2022, if the closing of the Business Combination shall not have occurred by such
date.
A copy of the form of the New Subscription Agreements is incorporated by
reference as Exhibit 10.2 to this Current Report. The foregoing description of
the New PIPE is qualified in its entirety by reference thereto.
Additional Sponsor Commitment Subscription Agreement
On October 27, 2021, the Company entered into a subscription agreement (the
"Additional Sponsor Commitment Subscription Agreement") with the Sponsor,
substantially similar to the Sponsor's Existing Subscription Agreement (as
amended), whereby the Sponsor separately agreed to purchase an additional
709,711 shares of Company Common Stock in a private placement for $10.00 per
share. The Additional Sponsor Commitment Subscription Agreement will
automatically terminate with no further force and effect upon the earliest to
occur of: (a) such date and time as the Merger Agreement is terminated in
accordance with its terms; (b) the mutual written agreement of the parties to
such Additional Sponsor Commitment Subscription Agreement; (c) any of the
conditions to closing set forth in such Additional Sponsor Commitment
Subscription Agreement not being satisfied or waived on or prior to the closing
and, as a result thereof, the transactions contemplated by such Additional
Sponsor Commitment Subscription Agreement not being consummated at the closing;
and (d) January 31, 2022, if the closing of the Business Combination shall not
have occurred by such date.
The total amount to be raised under in the aggregate under all of the Existing
Subscription Agreements, all of the New Subscription Agreements and the
Additional Sponsor Commitment Subscription Agreement is $309,394,998.
Share Surrender Agreement
On October 27, 2021, the Company entered into a share surrender agreement (the
"Share Surrender Agreement"), by and between the Company and the Sponsor,
pursuant to which the Sponsor agreed to surrender 1,277,285 shares of Class F
Common Stock immediately prior to the effective time of the First Merger,
contingent on the satisfaction of the conditions to closing set forth in the
Merger Agreement. The Share Surrender Agreement is incorporated by reference as
Exhibit 10.3 to this Current Report. The foregoing description of the Share
Surrender Agreement is qualified in its entirety by the text of the Share
Surrender Agreement.
Item 8.01 Other Events.
Term Sheet regarding Delayed Draw Note Purchase Agreement
On October 25, 2021, Sonder entered into a non-binding term sheet with certain
PIPE Investors (the "Purchasers") for the sale of an aggregate of $220 million
in principal amount of delayed draw subordinated secured notes (the "Delayed
Draw Notes") to be available to the post-Business Combination Company following
the completion of the Business Combination. The term sheet also contemplates
that the Purchasers would be issued warrants to purchase shares of the
post-Business Combination Company's Common Stock equal to 15.0% of the principal
amount committed (calculated assuming a per share value of $10.00).
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Sonder intends to close the Delayed Draw Note Purchase Agreement in the fourth
quarter of 2021. However, there can be no assurance that Sonder will be able to
complete the sale of the proposed Delayed Draw Notes on these anticipated terms
or at all.
On October 28, 2021, the Company issued a press release announcing the execution
of Amendment No. 1. The press release is attached hereto as Exhibit 99.1 and
incorporated by reference herein. Notwithstanding the foregoing, information
contained on the Company's or Sonder's website and the websites of any of their
respective affiliates referenced in Exhibit 99.1 or linked therein or otherwise
connected thereto does not constitute part of, nor is it incorporated by
reference into, this Current Report.
Attached as Exhibit 99.2 and incorporated by reference herein is the transaction
summary slide, dated as of October 28, 2021, that will be used by the Company
and Sonder with respect to the Business Combination, as amended by Amendment
No. 1.
Additional Information and Where to Find It
Additional information about the proposed Business Combination among Sonder, the
Company and certain subsidiaries of the Company, including a copy of the Merger
Agreement, are provided in a Current Report on Form 8-K which was filed by the
Company with the SEC and is available at www.sec.gov. In connection with the
proposed Business Combination, the Company filed a registration statement on
Form S-4 (the "Registration Statement") that includes a preliminary proxy
statement, prospectus and consent solicitation statement with respect to the
Company's securities to be issued in connection with the proposed Business
Combination. The Registration Statement is not yet effective. The Registration
Statement, including the proxy statement/prospectus/consent solicitation
statement contained therein, when it is declared effective by the SEC, will
contain important information about the proposed Business Combination and the
other matters to be voted upon at a meeting of the Company's stockholders to be
held to approve the proposed Business Combination and other matters (the
"Special Meeting") and is not intended to provide the basis for any investment
decision or any other decision in respect of such matters. The Company may also
file other documents regarding the proposed Business Combination with the SEC.
Company stockholders and other interested persons are advised to read, when
available, the Registration Statement and the proxy statement/prospectus/consent
solicitation statement, as well as any amendments or supplements thereto,
because they will contain important information about the proposed Business
Combination.
When available, the definitive proxy statement/prospectus/consent solicitation
statement will be mailed to Company stockholders as of a record date to be
established for voting on the proposed Business Combination and the other
matters to be voted upon at the Special Meeting. Investors and securityholders
will also be able to obtain copies of the definitive proxy
statement/prospectus/consent solicitation statement and all other relevant
documents filed or that will be filed with the SEC without charge, once
available, at the SEC's website at www.sec.gov or by directing a request to:
6260 Lookout Road, Boulder, CO 80301, attention: Jennifer Kwon Chou, or by
contacting Morrow Sodali LLC, the Company's proxy solicitor, for help, toll-free
at (800) 662-5200 (banks and brokers can call collect at (203) 658-9400).
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Participants in Solicitation
The Company, Sonder and their respective directors and officers may be deemed
participants in the solicitation of proxies of Company stockholders in
connection with the proposed Business Combination. Company stockholders and
other interested persons may obtain, without charge, more detailed information
regarding the interests of those persons and other persons who may be deemed
participants in the proposed Business Combination by reading the Company's
registration statement on Form S-1 (File No. 333-251663), which was declared
effective by the SEC on January 19, 2021, and the proxy
statement/prospectus/consent solicitation statement regarding the proposed
Business Combination. You may obtain free copies of these documents as described
in the preceding paragraph.
Forward Looking Statements
This Current Report may contain a number of "forward-looking statements" as
defined in the Private Securities Litigation Reform Act of 1995. Forward-looking
statements include, but are not limited to, statements about Sonder's forecasted
revenue growth and cash flow (including Sonder's outlook for Total Revenue and
Adjusted EBITDA for the year ended December 31, 2021), Sonder's forecasted
growth in units (including Sonder's forecast for growth in Total Portfolio for
the year ended December 31, 2021), information concerning the Company's or
Sonder's possible or assumed future financial or operating results and metrics,
business strategies, debt levels, competitive position, industry environment,
potential growth opportunities, future operations, products and services,
planned openings, expected unit contractings and the effects of regulation,
including whether the proposed Business Combination will generate returns for
stockholders. These forward-looking statements are based on the Company's or
Sonder's management's current expectations, estimates, projections and beliefs,
as well as a number of assumptions concerning future events. When used in this
Current Report, the words "estimates," "projected," "expects," "anticipates,"
"forecasts," "plans," "intends," "believes," "seeks," "may," "will," "should,"
"future," "propose" and variations of these words or similar expressions (or the
negative versions of such words or expressions) are intended to identify
forward-looking statements. These forward-looking statements are not guarantees
of future performance, conditions or results, and involve a number of known and
unknown risks, uncertainties, assumptions and other important factors, many of
which are outside the Company's or Sonder's management's control, that could
cause actual results to differ materially from the results discussed in the
forward-looking statements. These risks, uncertainties, assumptions and other
important factors include, but are not limited to: (a) the occurrence of any
event, change or other circumstances that could give rise to the termination of
the Merger Agreement (as amended by Amendment No. 1) and the proposed Business
Combination contemplated thereby; (b) the inability to complete the proposed
Business Combination due to the failure to obtain approval of the stockholders
of the Company or other conditions to closing in the Merger Agreement (as
amended by Amendment No. 1); (c) the ability to meet Nasdaq's listing standards
following the consummation of the proposed Business Combination; (d) the
inability to complete the Existing PIPE, the New PIPE or the private placement
contemplated by the Additional Sponsor Commitment Subscription Agreement;
(e) the risk that the proposed Business Combination disrupts current plans and
operations of Sonder or its subsidiaries as a result of the announcement and
consummation of the transactions described herein; (f) the ability to recognize
the anticipated benefits of the proposed Business Combination, which may be
affected by, among other things, competition, the ability of the combined
company to grow and manage growth profitably, maintain relationships with
customers and suppliers and retain its management and key employees; (g) costs
related to the proposed Business Combination; (h) changes in applicable laws or
regulations, including legal or regulatory developments (such as the SEC's
statement on accounting and reporting considerations for warrants in special
purpose acquisition companies); (i) the possibility that Sonder may be adversely
affected by other economic, business and/or competitive factors; (j) risks
related to the impact of the COVID-19 pandemic, including the Delta variant and
potential governmental and other restrictions (including travel restrictions)
resulting therefrom; (k) the inability of Sonder to enter into a definitive
delayed draw note purchase agreement; and (l) other risks and uncertainties
described in the final proxy statement/prospectus/consent solicitation
statement, including those under the heading "Risk Factors" therein, and other
documents filed by the Company from time to time with the SEC. You are cautioned
not to place undue reliance upon any forward-looking statements, which speak
only as of the date made. Except as required by law, neither the Company nor
Sonder undertakes any obligation to update or revise its forward-looking
statements to reflect events or circumstances after the date of this report.
Additional risks and uncertainties are identified and discussed in the Company's
reports filed and to be filed with the SEC and available at the SEC's website at
www.sec.gov.
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Disclaimer
This Current Report relates to a proposed Business Combination between the
Company and Sonder. This document does not constitute an offer to sell or
exchange, or the solicitation of an offer to buy or exchange, any securities,
nor shall there be any sale of securities in any jurisdiction in which such
offer, sale or exchange would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Exhibit
2.1* Amendment No. 1, dated as of October 27, 2021, to the Agreement and
Plan of Merger, dated as of April 29, 2021, by and among Gores
Metropoulos II, Inc., Sunshine Merger Sub I, Inc., Sunshine Merger Sub
II, LLC and Sonder Holdings Inc.
10.1 Form of Amendment to Gores Metropoulos II Subscription Agreement,
dated as of October 27, 2021.
10.2 Form of New Subscription Agreements.
10.3 Share Surrender Agreement, dated as of October 27, 2021, by and
between Gores Metropoulos II, Inc. and Gores Metropoulos Sponsor II,
LLC.
99.1 Press Release issued by the Company on October 28, 2021.
99.2 Transaction Summary Slide, dated October 28, 2021.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
* The schedules to this Exhibit have been omitted in accordance with Regulation
S-K Item 601(b)(2). The Company agrees to furnish supplementally a copy of any
omitted schedule to the SEC upon its request.
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