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.
