Note 15: Subsequent Events

On December 8, 2017, WMIH filed a certificate of amendment, the Series B Amendment, to its Amended and Restated Certificate of Incorporation (the “Existing Charter” and, as amended by the Series B Amendment, the “Amended Charter”). The Series B Amendment became effective at 12:00 a.m., New York City time, on January 5, 2018.

The Series B 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, amended certain terms of WMIH’s issued and outstanding 3.00% Series B Convertible Preferred Stock, par value $0.00001 per share, to, among other things:

	•		extend the Series B 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 Series B Amendment);
	•		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 WMIH’s common stock, par value $0.00001 per share;
	•		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 WMIH’s Board of Directors;
	•		provide for a 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
	•		provided for a special stub dividend payable which was declared and paid by WMIH’s 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.

The foregoing description of the Series B Amendment does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Series B Amendment, which is included as Exhibit 3.1 of Form 8-K filed December 11, 2017 and which is incorporated herein by reference.

On January 18, 2018, WMIH filed a certificate of dissolution of WMIIC with the office of the Delaware secretary of state. The dissolution of WMIIC was effective immediately upon the filing of such certificate.

On January 31, 2018, WMIH and the WMI Liquidating Trust entered into Amendment No. 4 to the Transition Services Agreement which is included as Exhibit 10.1 of Form 8-K filed February 1, 2018 and which is incorporated herein by reference. This amendment updates the services provided by the Trust to WMIH and the rates charged for these services.

On February 2, 2018, the reinsurance agreement between WMMRC and RMIC was terminated in accordance with the provisions of the agreement and the remaining balance in the related trust account, approximately $230 thousand, was transferred to WMMRC on February 5, 2018.

On February 12, 2018, WMIH, Nationstar Mortgage Holdings Inc., a Delaware corporation that is currently listed on the New York Stock Exchange under the ticker “NSM” (“Nationstar”), and Wand Merger Corporation, a Delaware corporation and a wholly-owned subsidiary of WMIH (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which, subject to the satisfaction or waiver of the conditions set forth therein, Merger Sub will merge with and into Nationstar (the “Nationstar Transaction” or the “Merger”), with Nationstar continuing as the surviving corporation and a wholly-owned subsidiary of WMIH. Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the “Effective Time”) and as a result of the Merger, each share of Nationstar’s common stock issued and outstanding immediately prior to the Effective Time (other than shares owned, directly or indirectly, by Nationstar, WMIH or Merger Sub or by any Nationstar stockholder who properly exercises and perfects appraisal of his, her or its shares under Delaware law) will be converted into the right to receive, at the election of the holder of such share, (i) $18.00 per share in cash, without interest, or (ii) 12.7793 shares of validly issued, fully paid and nonassessable shares of WMIH common stock, par value $0.00001 per share (“WMIH Common Stock”), subject in each case to pro rata cutbacks to the extent cash or stock is oversubscribed (the “Merger Consideration”). The aggregate amount of cash to be paid as Merger Consideration in the Merger is approximately $1.2 billion. WMIH currently plans to fund the cash component of the Merger Consideration, the repayment of approximately $1.9 billion of outstanding senior unsecured notes of Nationstar and its subsidiaries, and the payment of fees and expenses related to the Merger through a combination of escrowed funds, cash on hand, proceeds from the issuance of debt securities, and borrowings under credit facilities. WMIH has obtained $2.75 billion in debt commitments from certain lenders in connection with its financing plan, which commitment is subject to customary terms and conditions. Upon the closing of the Nationstar Transaction, all of the outstanding Series B Preferred Stock will be mandatorily converted into WMIH Common Stock at a price of $1.35 per share, and holders of Series B Preferred Stock will be entitled to a special, one-time distribution of WMIH Common Stock and accrued and unpaid dividends payable in WMIH Common Stock. For more information on the terms of the transaction, including fees to be paid to related parties, please see the Form 8-K filed with the SEC on February 14, 2018.

On February 13, 2018, the aggregate excess of loss reinsurance agreement between WMMRC and GMIC was terminated in accordance with the provisions of the agreement. The underlying trust and the related quota share agreement remains in place. In connection with this event, on February 16, 2018, WMMRC received approval from the Hawaii Insurance Division to request the transfer of $4.2 million from the GMIC trust account to WMMRC. As of the date of this report this transfer of assets has not occurred.