Item 1.01
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Entry into a Material Definitive Agreement.
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Charter Amendment
On December 8, 2017, WMIH Corp. (the
Company
) filed a certificate of amendment (the
Charter
Amendment
) to its Amended and Restated Certificate of Incorporation (the
Existing Charter
and, as amended by the Charter Amendment, the
Amended Charter
). The Charter Amendment becomes
effective at 12:00 a.m., New York City time, on January 5, 2018 (the
Amendment Effective Time
), unless a Qualified Acquisition (as defined in the Existing Charter) has occurred prior to such time, in which case, the
Amended Charter will have no force or effect.
The Charter Amendment, which was approved by the holders of 308,731, or approximately 51%,
of the 600,000 issued and outstanding shares of Series B Preferred Stock, amends certain terms of the Companys issued and outstanding 3.00% Series B Convertible Preferred Stock, par value $0.00001 per share (the
Series B Preferred
Stock
), to, among other things:
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extend the Mandatory Redemption Date (as defined in the Existing Charter) from January 5, 2018 to October 5, 2019 (subject to a six month extension in accordance with the terms of the Charter Amendment);
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amend the Conversion Price (as defined in the Existing Charter) relating to a Mandatory Conversion (as defined in the Existing Charter) of the Series B Preferred Stock to $1.35 per share of the Companys common
stock, par value $0.00001 per share (the
Common Stock
);
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change the quarterly 3.00% dividend payable in cash to a semi-annual 5.00% dividend payable in Common Stock (the
Regular Dividend
) if, as and when declared by the Companys Board of
Directors;
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provide for a special distribution (the
Special Distribution
) of 19.04762 shares of Common Stock per share of Series B Preferred Stock upon the closing of any Acquisition (as defined in the
Amended Charter); and
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provide for a special stub dividend payable if, as and when declared by the Companys Board of Directors in cash for dividends accruing on the Series B Preferred Stock payable in arrears for the period
December 15, 2017 to January 4, 2018.
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The foregoing description of the Charter Amendment does not purport to be
complete and is subject to, and qualified in its entirety by reference to, the full text of the Charter Amendment, which is included as Exhibit 3.1 and is incorporated herein by reference.
RRA Amendment
In connection with the
Charter Amendment, prior to the Amendment Effective Time, the Company has agreed to enter into a first amendment (the
RRA Amendment
) to that certain Registration Rights Agreement, dated January 5, 2015, among the
Company, Citigroup Global Markets Inc. (
Citi
), and KKR Capital Markets LLC (
KCM
), which is an affiliate of KKR Fund Holdings L.P. (
KKR Fund
) and KKR Wand Investors L.P.
(
KKR Wand
) (the
Existing Registration Rights Agreement
and, as will be amended by the RRA Amendment, the
Registration Rights Agreement
), pursuant to which the Company will
agree to use reasonable efforts to file a shelf registration statement (or, as permitted, an amendment to any existing shelf registration statement) with the Securities and Exchange Commission (
SEC
) as promptly as
practicable after the Amendment Effective Time, but no later than June 15, 2018, with respect to (i) resales of the shares of the Series B Preferred Stock that are Transfer Restricted Securities (as defined in the Registration Rights
Agreement) and (ii) resales of the shares of Common Stock that are Transfer Restricted Securities and (a) issuable upon the conversion of shares of the Series B Preferred Stock, (b) issuable as a Regular Dividend and (c) issuable
as a Special Distribution.
The foregoing description of the RRA Agreement does not purport to be complete and is subject to, and
qualified in its entirety by reference to, the full text of the form of RRA Agreement, which is included as Exhibit 10.1 and is incorporated herein by reference.
Escrow Amendment
In connection with the
Charter Amendment, prior to the Amendment Effective Time, the Company has agreed to enter into an amendment (the
Escrow Amendment
) to that certain Escrow Agreement, dated as of January 5, 2015, by and between the
Company and Citibank, N.A., as escrow agent (as amended on November 12, 2015, the
Existing Escrow Agreement
and, as will be further amended by the Escrow Amendment, the
Escrow Agreement
). The
Escrow Amendment will amend and restate certain annexes to the Existing Escrow Agreement to reflect changes consistent with the Charter Amendment and will include a new exhibit that extends the timing of payment and reduces the aggregate amount of
fees payable to Citi and KCM.
The foregoing description of the Escrow Amendment does not purport to be complete and is subject
to, and qualified in its entirety by reference to, the full text of the form of Escrow Amendment, which is included as Exhibit 10.3 and is incorporated herein by reference.
Letter Agreement
In connection with the
Charter Amendment, the Company entered into a Letter Agreement dated as of December 8, 2017 (the
Letter Agreement
) with KKR Fund, a holder of the Companys outstanding Series A Convertible Preferred Stock, par
value $0.00001 per share (the
Series A Preferred Stock
), and Warrants to purchase the Companys Common Stock (the
Warrants
), and KKR Wand, a holder of shares of the Companys Series B
Preferred Stock, pursuant to which for the period commencing on December 8, 2017 and ending on the date that is eighteen (18) months following the Amendment Effective Time, or July 5, 2019, for so long as KKR Fund has not transferred
any, and together with the affiliates of KKR Fund (
KKR Affiliates
), continues to beneficially own (with the unencumbered right to vote) all, of the Series A Preferred Stock it owns as of December 8, 2017, (2) KKR Fund
has not transferred any, and together with the KKR Affiliates continues to beneficially own (with the unencumbered right to vote) all, Warrants it owns as of December 8, 2017 or any of the Common Stock issuable upon the exercise thereof, and
(3) KKR Wand has not transferred, in the aggregate, more than, and together with the KKR Affiliates continues to beneficially own (with the unencumbered right to vote) at least, 50% of the Series B Preferred Stock it owns as of December 8,
2017, the Company has agreed that it will not enter into a definitive agreement with respect to any Acquisition without the prior written consent of KKR Fund; provided, however, that if KKR Fund does not give written notice to the Company of its
approval of, or objection to, a proposed Acquisition within five (5) business days of having received notice of the material definitive terms of such Acquisition, then KKR Fund is deemed to have approved such Acquisition and the Company may
pursue such Acquisition.
The foregoing description of the Letter Agreement does not purport to be complete and is subject to, and
qualified in its entirety by reference to, the full text of the Letter Agreement, which is included as Exhibit 10.3 and is incorporated herein by reference.