| Item 1.01 | Entry into a Material Definitive Agreement. |
As previously reported, on October 2, 2023, WeWork Inc. (the “Company” or “WeWork”) elected to withhold interest payments due on the (i) 15.000% First Lien Senior Secured PIK Notes due 2027, Series I (the “Series I First Lien Notes”), Series II (the “Series II First Lien Notes”) and Series III (the “Series III First Lien Notes”), (ii) 11.000% Second Lien Senior Secured PIK Notes due 2027 (the “Second Lien Notes”), (iii) 12.000% Third Lien Senior Secured PIK Notes due 2027, (iv) 11.000% Second Lien Exchangeable Senior Secured PIK Notes due 2027 (the “Second Lien Exchangeable Notes”), (v) 12.000% Third Lien Exchangeable Senior Secured PIK Notes due 2027 (the “Third Lien Exchangeable Notes”) and (vi) 12.000% Third Lien Senior Secured PIK Notes due 2027 (collectively, the “Secured Notes”), each issued by WeWork Companies LLC and WW Co-Obligor Inc. (together, the “Issuers”), and entered into the 30-day grace period provided for under the indentures governing the Secured Notes.
Following the entry into the 30-day grace period, the Company commenced discussions with certain stakeholders in its capital structure regarding improving its balance sheet as it takes steps to rationalize its real estate footprint. As lease renegotiations and the active discussions with key certain stakeholders in the Company’s capital structure are still ongoing, on October 30, 2023, the Company, the Issuers and certain of the Company’s subsidiaries entered into a Notes Forbearance Agreement (the “Forbearance Agreement”), which became effective on the same day, with certain noteholders (collectively, the “Forbearing Noteholders”) beneficially owning, collectively, (i) approximately 95.6% of the Series I First Lien Notes, (ii) approximately 93.9% of the Second Lien Notes, (iii) 100% of the Series II First Lien Notes, (iv) 100% of the Series III First Lien Notes, (v) 100% of the Second Lien Exchangeable Notes and (vi) 100% of the Third Lien Exchangeable Notes (collectively, the “Forbearing Notes”).
Pursuant to the Forbearance Agreement, subject to the terms and conditions set forth therein, the Forbearing Noteholders agreed to forbear from exercising any of their rights and remedies, including with respect to an acceleration, under the applicable indentures governing the Forbearing Notes or applicable law during the Forbearance Period (as defined below) as a result of the Issuers’ failure to make the interest payments on the Secured Notes payable on October 2, 2023. The Forbearance Agreement will terminate in seven days, unless extended or terminated earlier in the event of non-compliance with certain representations, covenants and other requirements set forth in the Forbearance Agreement (the “Forbearance Period”). The Company cannot provide any assurance that the Forbearing Noteholders will agree to extend the Forbearance Period.
The foregoing summary of the Forbearance Agreement does not purport to be complete and is qualified in its entirety by reference to the complete terms of the Forbearance Agreement, which is filed as Exhibit 10.1 hereto and is incorporated by reference into this Item 1.01.
| Item 1.02 | Termination of a Material Definitive Agreement. |
On October 30, 2023, WeWork Companies LLC (“WeWork Obligor”) entered into a satisfaction letter (the “Satisfaction Letter”) with SoftBank Vision Fund II-2 L.P. (“SVF”), Goldman Sachs International Bank, as senior tranche administrative agent, Kroll Agency Services Limited, as junior tranche administrative agent, and certain other issuing creditors and L/C participants party thereto, each of which is a party to that certain Credit Agreement, dated as of December 27, 2019 (as amended or otherwise modified from time to time, the “Credit Agreement”). Pursuant to the Satisfaction Letter, SVF will pay certain amounts and deposit cash collateral in order to effect a Date of Full Satisfaction (as defined in the Credit Agreement) and become subrogated to the rights of the secured parties under the Credit Agreement. Goldman Sachs International Bank, Kroll Agency Services Limited and certain issuing creditors and L/C participants party to the Satisfaction Letter, constituting the requisite Required L/C Participants (as defined in the Credit Agreement), agreed to forbear the exercise of any rights or remedies against the WeWork Obligor or the WeWork Collateral (as defined in the Credit Agreement) with respect to the specified defaults set forth therein, from the date of the Satisfaction Letter while SVF’s payment of amounts and cash collateralization contemplated thereunder is pending, except that such forbearance shall terminate if SVF does not make such payment and cash collateralization by November 3, 2023 or earlier if the Forbearance Agreement is terminated or certain restructuring events occur.
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