Item 1.01 Entry into a Material Definitive Agreement
Additional Voting Agreements
In connection with the Offering, on December 19, 2014, the Company entered into usual and customary Voting Agreements (the “Additional Voting Agreements”) with certain existing significant holders of Common Stock (collectively, the “Other Holders” and each, individually, an “Other Holder”) that are expected to purchase shares of Series B Preferred Stock in the Offering, in substantially the form attached hereto as Exhibit 10.5, which is incorporated herein by reference. Pursuant to the Additional Voting Agreements, each Other Holder has agreed to vote all shares of its Series B Preferred Stock (on an as converted basis) and Common Stock that it holds on the record date for such vote in favor of the Reincorporation. Upon the closing of the Offering, KKR Fund and the Other Holders are expected to have, in the aggregate, (i) assuming the exercise of the Warrants by KKR Management, approximately 50% of the outstanding voting power of the Company and (ii) assuming the non-exercise of the Warrants by KKR Management, approximately 43% of the outstanding voting power of the Company. KKR Management has agreed it will not exercise the right to acquire Common Stock, in whole or in part, under the Warrants until on or after March 20, 2015.
Unlike the Voting Agreement with KKR Fund, the Additional Voting Agreements do not prohibit the Other Holders from transferring their Series B Preferred Stock or Common Stock to transferees who would not be subject to the Additional Voting Agreements.
The foregoing description of the Additional Voting Agreements is qualified in its entirety by the provisions of the Form of Voting Agreement, filed hereto as Exhibit 10.5 and incorporated by reference herein.
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Item 3.02 Unregistered Sales of Equity Securities
Reference is made to the information provided in Items 1.01 and 7.01 of the Original Filing, which is incorporated herein by reference.
The Company agreed to sell 600,000 shares of the Series B Preferred Stock pursuant to the Purchase Agreement, and will issue such Series B Preferred Stock to the Initial Purchasers without registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon the exemption from registration set forth in Section 4(a)(2) of the Securities Act. The Initial Purchasers will offer and sell the Series B Preferred Stock to “qualified institutional buyers” without registration under the Securities Act in reliance upon the exemption from registration set forth in Rule 144A of the Securities Act. Subject to adjustment, the aggregate number of shares of Common Stock issuable upon mandatory conversion of the Series B Preferred Stock will be (i) a minimum of 266,666,667, assuming a conversion price of $2.25 per share of Common Stock, and (ii) a maximum of 342,857,143, assuming a conversion price of $1.75 per share of Common Stock. In connection with the Offering, the Company agreed to pay to the Initial Purchasers aggregate fees of approximately $27.5 million; however, a significant portion of these fees are conditional and payable after the Issue Date.
