Item 1.01 Entry into a Material Definitive Agreement.
In connection with its proposed business combination (the "Business
Combination") with WeWork Inc. ("WeWork"), BowX Acquisition Corp., a Delaware
corporation ("BowX"), previously filed a registration statement on Form S-4
(Registration No. 333-256133) with the SEC, which includes a document that
serves as a prospectus and proxy statement of BowX, referred to as a proxy
statement/prospectus. The definitive proxy statement/prospectus was filed with
the Securities and Exchange Commission (the "SEC") on September 20, 2021 and was
sent to all BowX stockholders as of September 14, 2021 (the record date for
voting on the proposed transaction). As previously disclosed in the proxy
statement/prospectus, in August 2021, WeWork and Cushman & Wakefield U.S., Inc.,
a Delaware corporation ("C&W"), entered into a non-binding exclusive strategic
partnership to market both landlords and businesses on WeWork's management
experience platform and on new jointly developed solutions, and entered into a
Memorandum of Understanding with respect to such non-binding strategic
partnership in August 2021 (the "Memorandum of Understanding"). The material
terms of the Memorandum of Understanding are non-binding and subject to
finalization of definitive documentation. There can be no assurance that WeWork
will enter into definitive documentation or consummate the transactions with
C&W, or that WeWork will realize the anticipated benefits of its partnership
with C&W. Additionally, as previously disclosed in the proxy
statement/prospectus, in August 2021, C&W, WeWork and BowX entered into
discussions regarding a potential transaction where C&W would provide up to
$150,000,000.00 in a non-dilutive backstop equity facility on mutually agreeable
terms.
On October 13, 2021, BowX entered into a backstop subscription agreement (the
"Backstop Subscription Agreement") with DTZ Worldwide Limited (the "Backstop
Investor"), a parent company to C&W, pursuant to which, and on the terms and
subject to the conditions of which, the Backstop Investor has committed to
subscribe for the number of shares of BowX Class A common stock, par value
$0.0001 per share ("Class A Shares"), validly redeemed by the public
stockholders of BowX, in connection with the merger between BowX, WeWork, and
BowX Merger Subsidiary Corp, a Delaware corporation and a wholly owned
subsidiary of BowX, subject to a cap of 15,000,000 Class A Shares (the "Cap").
The purchase price for such Class A Shares is equal to $10.00 per share
multiplied by the number of Class A Shares validly redeemed by the public
stockholders of BowX in connection with the Business Combination subject to the
Cap, for an aggregate purchase price of up to $150,000,000 (the "Backstop
Investment"). The terms of the Backstop Investment substantially conform to the
terms of the subscription agreements that were executed on March 25, 2021 (the
"Other Subscription Agreements") with certain investors (collectively, the "PIPE
Investors"), pursuant to which, and on the terms and subject to the conditions
of which, the PIPE Investors collectively subscribed for 80,000,000 Class A
Shares for an aggregate purchase price equal to $10.00 per share (the "PIPE
Investment") to be consummated substantially concurrently with the closing of
the Business Combination ("Closing"). The Backstop Investment will also be
consummated substantially concurrently with the Closing.
The consummation of the Backstop Investment is subject to certain conditions,
including (i) the satisfaction or (to the extent permitted by applicable law)
waiver of the conditions to the Merger Agreement (other than conditions that by
their nature may only be satisfied at the Closing, but subject to the
satisfaction or waiver of such conditions as of the Closing), (ii) the accuracy
of the representations and warranties made by BowX and the Backstop Investor,
subject to the materiality standards set forth in the Backstop Subscription
Agreement, (iii) the compliance of the other party with such party's covenants
under the Backstop Subscription Agreement in all material respects, (iv) the
absence of any injunction or order enjoining or prohibiting the issuance and
sale of the shares under the Backstop Subscription Agreement, (v) the absence of
amendments or waivers to the Merger Agreement that would reasonably be expected
to be materially adverse to the economic benefits that Backstop Investor would
reasonably expect to receive under the Backstop Subscription Agreement and the
absence of amendments or waivers to the Other Subscription Agreements that
materially benefits the PIPE Investors unless the Backstop Investor has been
offered substantially the same benefits and (v) the binding provisions of the
Memorandum of Understanding, between C&W, and WeWork remaining in full force and
effect and WeWork not having materially breached its exclusivity obligations
thereunder. The binding provisions include (i) exclusivity with respect to the
strategic partnership to market both landlords and businesses on WeWork's
management experience platform and on new jointly developed solutions (the
"Strategic Partnership"), (ii) obligations relating to the mutual agreement for
any public announcement about the Memorandum of Understanding or the Strategic
Partnership contemplated thereby, (iii) WeWork providing C&W with certain global
all access memberships at no charge, (iv) confidentiality obligations and
(v) obligations to cooperate and provide certain information with respect to the
Strategic Partnership.
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A copy of the Backstop Subscription Agreement is attached hereto as Exhibit 10.1
and is incorporated herein by reference, and the foregoing description of the
Backstop Subscription Agreement does not purport to be complete and is qualified
in its entirety by reference thereto.
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 in this Item 3.02. The Class A Shares to be issued
in connection with the Backstop Investment, if any, will not be registered under
the Securities Act of 1933, as amended (the "Securities Act"), and will be
issued in reliance on the exemption from registration requirements thereof,
provided by Section 4(a)(2) of the Securities Act.
Additional Information and Where to Find It
This communication relates to a proposed transaction between BowX and WeWork.
This communication is not a proxy statement or solicitation of a proxy, consent
or authorization with respect to any securities or in respect of the potential
transaction and shall not constitute an offer to sell or a solicitation of an
offer to buy the securities of WeWork, the combined company or BowX, nor shall
there be any sale of any such securities in any state or jurisdiction in which
such offer, solicitation, or sale would be unlawful prior to registration or
qualification under the securities laws of such state or jurisdiction. No offer
of securities shall be made except by means of a prospectus meeting the
requirements of the Securities Act of 1933, as amended. BowX has filed a
registration statement on Form S-4 (Registration No. 333-256133) with the SEC,
which includes a document that serves as a prospectus and proxy statement of
BowX, referred to as a proxy statement/prospectus. The definitive proxy
statement/prospectus was filed with the SEC on September 20, 2021 and was sent
to all BowX stockholders as of September 14, 2021 (the record date for voting on
the proposed transaction). Before making any voting decision, investors and
security holders of BowX are urged to read the registration statement, the proxy
statement/prospectus and all other relevant documents filed with the SEC in
connection with the proposed transaction because they contain important
information about the proposed transaction. Investors and security holders will
be able to obtain free copies of the registration statement, the proxy
statement/prospectus and all other relevant documents filed with the SEC by BowX
through the website maintained by the SEC at www.sec.gov.
Participants in Solicitation
BowX and its directors and executive officers may be deemed to be participants
in the solicitation of proxies from BowX's stockholders in connection with the
proposed transaction. A list of the names of the directors and executive
officers of BowX and information regarding their interests in the business
combination is set forth in BowX's registration statement on
Form S-4 (Registration No. 333-256133) filed with the SEC. Additional
information regarding the interests of such persons and other persons who may be
deemed participants in the solicitation is contained in the registration
statement and the proxy statement/prospectus. You may obtain free copies of
these documents as described in the preceding paragraph.
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Forward-Looking Statements
Certain statements made in this communication are "forward looking statements"
within the meaning of the "safe harbor" provisions of the United States Private
Securities Litigation Reform Act of 1995. Such "forward-looking statements" with
respect to the proposed transaction between WeWork and BowX include statements
regarding the benefits of the transaction, the anticipated timing of the
transaction and the products and markets of WeWork. These forward-looking
statements generally are identified by the words "believe," "project," "expect,"
"anticipate," "estimate," "intend," "strategy," "future," "opportunity," "plan,"
"pipeline," "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 communication, including
but not limited to: (i) the risk that the transaction may not be completed in a
timely manner or at all, which may adversely affect the price of BowX's
securities, (ii) the risk that the transaction may not be completed by BowX's
business combination deadline and the potential failure to obtain an extension
of the business combination deadline if sought by BowX, (iii) the failure to
satisfy the conditions to the consummation of the transaction, including the
adoption of the Merger Agreement by the shareholders of BowX, the satisfaction
of the minimum amount in the trust account following redemptions by BowX's
public shareholders 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 inability to complete the PIPE
Investment, (vi) the occurrence of any event, change or other circumstance that
could give rise to the termination of the Merger Agreement, (vii) the effect of
the announcement or pendency of the transaction on WeWork's business
relationships, operating results, and business generally, (viii) risks that the
proposed transaction disrupts current plans and operations of WeWork and
potential difficulties in WeWork employee retention as a result of the
transaction, (ix) the outcome of any legal proceedings that may be instituted
against WeWork or against BowX related to the Merger Agreement or the proposed
transaction, (x) the ability to maintain the listing of BowX's securities on a
national securities exchange, (xi) the price of BowX's securities may be
volatile due to a variety of factors, including changes in the competitive and
regulated industries in which BowX plans to operate or WeWork operates,
variations in operating performance across competitors, changes in laws and
regulations affecting BowX's or WeWork's business, WeWork's inability to
implement its business plan or meet or exceed its financial projections and
changes in the combined capital structure, (xii) changes in general economic
conditions, including as a result of the COVID-19 pandemic, and (xiii) the
ability to implement business plans, forecasts, and other expectations after the
completion of the proposed transaction, and identify and realize additional
opportunities. The foregoing list of factors is not exhaustive. You should
carefully consider the foregoing factors and the other risks and uncertainties
described in the registration statement on Form S-4 discussed above, the proxy
statement/prospectus and other documents filed or that may be filed by BowX 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 WeWork
and BowX 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 WeWork nor BowX gives any assurance that either
WeWork or BowX, or the combined company, will achieve its expectations.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description
10.1 Backstop Subscription Agreement, dated as of October 13, 2021, by
and between BowX Acquisition Corp. and DTZ Worldwide Limited
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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