Item 1.01 Entry into a Material Definitive Agreement.
Explanatory Note
As previously disclosed on
• AHL issued, onFebruary 28, 2020 (the "Closing Date"), 35,534,942 Class A common shares of AHL ("AHL Class A Common Shares") to certain subsidiaries of theApollo Operating Group in exchange for (i) issuance by theApollo Operating Group of 29,154,519 non-voting equity interests of theApollo Operating Group (the "AOG Units") to AHL and (ii)$350 million in cash ("Share Issuance"); • AHL has granted to AGM the right to purchase additional AHL Class A Common Shares from the Closing Date until 180 days thereafter to the extent the issued and outstanding AHL Class A Common Shares beneficially owned by Apollo and certain of its related parties and employees (collectively, the "Apollo Parties") (inclusive of AHL Class A Common Shares over which any such persons have a valid proxy) do not equal at least 35% of the issued and outstanding AHL Class A Common Shares, on a fully diluted basis; • A representative of theApollo Operating Group will have the right to purchase up to that number of AHL Class A Common Shares that would increase by up to 5% the percentage of the issued and outstanding AHL Class A Common Shares beneficially owned by the Apollo Parties (inclusive of AHL Class A Common Shares over which any such persons have a valid proxy), calculated on a fully diluted basis; • AHL has amended and restated its Twelfth Amended and Restated Bye-laws of AHL to, among other items, eliminate AHL's current multi-class share structure ("Multi-Class Share Elimination"). In connection with the Multi-Class Share Elimination, (i) all of the Class B common shares of AHL would be converted into an equal number of AHL Class A Common Shares on a one-for-one basis and (ii) all of the Class M common shares of AHL would be converted into a combination of AHL Class A Common Shares and warrants to purchase AHL Class A Common Shares.
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Liquidity Agreement
In connection with the consummation of the Share Issuance and the Multi-Class
Share Elimination, AGM has also entered into a Liquidity Agreement, dated as of
the Closing Date, with AHL (the "Liquidity Agreement"), pursuant to which, once
each quarter, AHL is entitled to request to sell a number of AOG Units or
request AGM to sell a number of AGM Class A common stock ("AGM Common Stock") or
AOG Units representing at least
• a transaction whereby AGM purchases AOG Units from AHL at a price agreed upon, in good faith, by AGM and AHL (a "Purchase Transaction"); • if AHL and AGM do not agree to consummate a Purchase Transaction, AGM will use its best efforts to consummate a public offering of AGM Class A Common Stock, the proceeds (net of certain commissions, fees and expenses consistent with customary and prevailing market practices for similar offerings) of which will be used to fund the purchase of AOG Units from AHL (a "Registered Sale"); • if AGM notifies AHL that it cannot consummate a Registered Sale, upon AHL's request, AGM will use its best efforts to consummate a sale of AGM Class A Common Stock pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), the proceeds (net of certain commissions, fees and expenses consistent with customary and prevailing market practices for similar offerings) of which will be used to fund the purchase of AOG Units from AHL (a "Private Placement," and collectively with a Purchase Transaction and a Registered Sale, a "Sale Transaction"); or • if AGM elects (in its sole discretion) not to consummate a Sale Transaction, AHL will be permitted to sell AOG Units in one or more transactions that are exempt from the registration requirements of the Securities Act, subject to certain restrictions (an "AOG Transaction").
For purposes of this description, "Cash Amount" means (i) in the case of a Registered Sale, the cash proceeds that AGM receives upon the consummation of a Registered Sale after deducting a capped amount of documented commissions, fees and expenses, (ii) in the case of a Purchase Transaction, the cash proceeds to which AGM and AHL agree, (iii) in the case of a Private Placement, the cash proceeds that AGM receives upon the consummation of a Private Placement after deducting a capped amount of documented commissions, fees and expenses and (iv) in the case of an AOG Transaction, the cash proceeds to which the purchaser and AHL agree. Each of the Purchase Transaction, Private Placement, Registered Sale and AOG Transaction are subject to the terms and conditions set forth in the Liquidity Agreement.
In the event that an AOG Transaction is consummated, the buyer of such AOG Units will be prohibited from exchanging such AOG Units into AGM Common Stock for at least 30 days after such purchase. AHL is prohibited from consummating an AOG Transaction with any purchaser (i) who would, after giving effect to such transfer, own more than 3.5% of the issued and outstanding AGM Common Stock (on a fully-diluted basis) or (ii) who is a "bad actor" (as defined in Regulation D of the Act) or otherwise a prohibited transferee, as described in the Liquidity Agreement.
AHL's liquidity rights are subject to certain other limitations and obligations, including that, in a Registered Sale or a Private Placement, AGM will not be required to sell any AGM Common Stock at a price that is less than 90% of the volume-weighted average price of AGM Common Stock for the 10 consecutive business days prior to the day AHL submits a notice for sale of AOG Units.
The Liquidity Agreement also provides that AHL is prohibited from transferring its AOG Units other than to an affiliate or pursuant to the options set forth above. AGM has the right not to consummate a Registered Sale or a Private Placement if the recipient of the shares of AGM Common
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Stock would receive more than 2.0% of the outstanding and issued shares of AGM Common Stock. Additionally, AGM has the right not to consummate an AOG Transaction if the recipient would, following such AOG Transaction, be the beneficial owner of greater than 3.5% of the AOG Units.
The foregoing descriptions are qualified in their entirety by reference to the full text of the Liquidity Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K.
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Item 7.01 Regulation FD Disclosure
On
The information being furnished in this Item 7.01 "Regulation FD Disclosure" of Form 8-K, including Exhibit 99.1, shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that Section, nor shall it be incorporated by reference into a filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits Exhibit Number Description 10.1 Liquidity Agreement, datedFebruary 28, 2020 99.1 Joint Press Release, datedMarch 2, 2020 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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