WEWORK INC. Item 1.01 Entry into a Material Definitive Agreement.
Senior Secured Notes Indenture
Overview
OnJanuary 3, 2023 ,WeWork Companies LLC , aDelaware limited liability company (the "Issuer") and wholly-owned subsidiary ofWeWork Inc. , aDelaware corporation (the "Company"),WW Co-Obligor Inc. , aDelaware corporation and wholly-owned subsidiary of the Issuer (the "Co-Obligor" and, together with the Issuer, the "Issuers"), the guarantors party thereto (collectively, the "Guarantors") andU.S. Bank Trust Company, National Association , as trustee and collateral agent, entered into a Senior Secured Notes Indenture (the "Indenture") pursuant to which the Issuers issued$250 million in aggregate principal amount of Senior Secured Notes due 2025 (the "Notes") toSoftBank Vision Fund II-2 L.P. , a limited partnership established in Jersey ("SVF II") and affiliate of SoftBank Group Corp., a Japanese joint-stock company. The Notes were sold to SVF II pursuant to the Amended and RestatedMaster Senior Secured Notes Note Purchase Agreement, dated as ofOctober 20, 2021 (as amended, waived or otherwise modified from time to time, the "Secured NPA"), among the Issuers and SVF II. The Notes and related Guarantees (as defined below) have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), and were issued and sold in reliance on the exemption provided in Section 4(a)(2) of the Securities Act.
As of
Interest, Security and Guarantees
Unless earlier redeemed or repurchased, the Notes will mature onMarch 15, 2025 and bear interest at a rate of (i) 7.50% per annum to, but excluding,February 15, 2024 , payable semi-annually in cash in arrears, and (ii) 11.00% per annum from and afterFebruary 15, 2024 to, but excluding, the maturity date of the Notes, payable semi-annually in the form of PIK Interest (as defined, and in accordance with the terms set forth, in the Indenture).
The Notes are guaranteed (the "Guarantees") fully and unconditionally, and
jointly and severally, on a first lien senior secured basis by each of the
Issuer's wholly-owned restricted subsidiaries that guarantee the Issuer's
obligations under the senior letter of credit facility and junior letter of
credit facility under the Credit Agreement, dated as of
Redemption
The Issuer may redeem the Notes, in whole or in part, at any time at a price equal to 100% of the principal amount of the Notes redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, during the period fromFebruary 15, 2024 to, but excluding, the maturity date of the Notes, if the aggregate principal amount of Notes issued and outstanding, together with any PIK Interest that would accrue from the applicable date of determination to, but excluding, the maturity date of the Notes exceeds$500 million , the Issuer is required to repay, prepay, repurchase, redeem, legally defease or otherwise retire Notes at a price equal to 100% of such Notes in a sufficient aggregate principal amount such that the aggregate principal amount of Notes remaining outstanding following such redemption, together with such PIK Interest, does not exceed$500 million .
Change of Control
If a Change of Control (as defined in the Indenture) occurs, the Issuer is required to make an offer to purchase all of the Notes at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the date of such purchase.
Covenants and Events of Default
The terms of the Indenture, among other things, limit the ability of the Issuer and its restricted subsidiaries to (i) incur or guarantee additional indebtedness; (ii) create or incur liens; (iii) declare or pay dividends, redeem stock or make certain distributions to stockholders; (iv) make certain investments; (v) consolidate with or merge with or into or wind up into, or -------------------------------------------------------------------------------- sell, assign, convey, transfer, lease or otherwise dispose of all or substantially all of the properties and assets of the Issuer and its restricted subsidiaries; (vi) enter into certain transactions with affiliates; (vii) sell or transfer certain assets; (viii) voluntarily prepay, repurchase, redeem or otherwise defease certain unsecured indebtedness; and (ix) agree to certain restrictions on the ability of restricted subsidiaries to make certain payments to the Issuer and other restricted subsidiaries. These covenants are subject to a number of important conditions, qualifications, limitations and exceptions that are described in the Indenture. The Indenture provides for customary events of default (subject in certain cases to grace and cure periods), including with respect to payment defaults, failure to pay certain judgments and certain events of bankruptcy and insolvency. These events of default are subject to a number of important conditions, qualifications, limitations and exceptions that are described in the Indenture. The foregoing summary of the Indenture does not purport to be complete and is qualified in its entirety by reference to the complete terms of the Indenture, which is filed as Exhibit 4.1 hereto, and the form of Notes, which is filed as Exhibit 4.2 hereto, each of which is incorporated by reference into this Item 1.01.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information included in Item 1.01 of this Current Report is incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits:
Exhibit Number Description 4.1 Senior Secured Notes Indenture, dated as of
WeWork Companies LLC ,WW Co-Obligor Inc. , the
guarantors party thereto and
U.S. Bank Trust Company, National Association , as
trustee and collateral
agent.
4.2 Form of Senior Secured Notes due 2025 (included as Exhibit A to Exhibit
4.1).
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
Cautionary Note Regarding Forward-Looking Statements
This Current Report on Form 8-K discusses management's current intentions and expectations for the future, including with respect to the Company's expected cash, commitments and access to liquidity, which are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Actual results may differ due to various factors, including those discussed in the Company's latest Annual Report on Form 10-K and subsequent filings with theSecurities and Exchange Commission , and additional procedures the Company will undertake to finalize its results as of and forDecember 31, 2022 that could result in changes to the Company's estimates described herein. For additional information, please see the Company's filings with theSecurities and Exchange Commission . Investors should not place undue reliance on forward-looking statements, which speak only as of the date of this Current Report on Form 8-K. Except as is required by law, the Company expressly disclaims any obligation to publicly release any revisions to forward-looking statements to reflect events after the date of this Current Report on Form 8-K.
--------------------------------------------------------------------------------
© Edgar Online, source
