Exhibit 10.1

WMI HOLDINGS CORP.

600,000 shares of 3.00% Series B Convertible Preferred Stock

Par value $0.00001 and liquidation preference $1,000 per share

Purchase Agreement

December 19, 2014

Citigroup Global Markets Inc.

KKR Capital Markets LLC

c/o Citigroup Global Markets Inc.

388 Greenwich Street

New York, New York 10013

Ladies and Gentlemen:

WMI Holdings Corp., a corporation organized under the laws of Washington (the
“Company”), proposes to issue and sell to the several initial purchasers listed
in Schedule I hereto (the “Initial Purchasers”), 600,000 shares of 3.00% Series
B Convertible Preferred Stock, par value $0.00001 and liquidation preference
$1,000 per share (the “Securities”), subject to reduction as provided in
Section 2 hereof. The Securities are mandatorily convertible into shares of
Common Stock, par value $0.00001 per share (the “Common Stock”), of the Company
at the conversion price set forth in Schedule III hereto. The terms of the
Securities will be set forth in a certificate of designation (the “Certificate
of Designation”), to be dated as of the Closing Date (as defined below). The
Securities and the Common Stock issuable upon mandatory conversion of the
Securities will have the benefit of a registration rights agreement (the
“Registration Rights Agreement”), to be dated as of the Closing Date, between
the Company and the Initial Purchasers, pursuant to which the Company will agree
to use reasonable efforts to file and cause to be declared effective under the
Act a shelf registration statement for the resale of each of the Securities and
the Common Stock, subject to the terms and conditions therein specified. The use
of the neuter in this Agreement shall include the feminine and masculine
wherever appropriate. Certain terms used herein are defined in Section 22
hereof.

The sale of the Securities to the Initial Purchasers will be made without
registration of the Securities or the Common Stock issuable upon mandatory
conversion thereof under the Act in reliance upon exemptions from the
registration requirements of the Act.

In connection with the sale of the Securities, the Company has prepared a
preliminary offering memorandum, dated December 12, 2014 (as amended or
supplemented at the date thereof, including any and all exhibits thereto and any
information incorporated by reference therein, the “Preliminary Memorandum”), a
final term sheet, dated December 19, 2014, in the form approved by you and
attached as Schedule III hereto (the “Term Sheet”) and a final offering
memorandum, dated December 19, 2014 (as amended or supplemented at the

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Execution Time, including any and all exhibits thereto and any information
incorporated by reference therein, the “Final Memorandum”). Each of the
Preliminary Memorandum and the Final Memorandum sets forth certain information
concerning the Company, the Securities and the Common Stock issuable upon
mandatory conversion thereof. The Company hereby confirms that it has authorized
the use of the Disclosure Package, the Preliminary Memorandum and the Final
Memorandum, and any amendment or supplement thereto, in connection with the
offer and sale of the Securities by the Initial Purchasers. Unless stated to the
contrary, any references herein to the terms “amend”, “amendment” or
“supplement” with respect to the Final Memorandum shall be deemed to refer to
and include any information filed under the Exchange Act subsequent to the
Execution Time that is incorporated by reference therein.

1. Representations and Warranties. The Company represents and warrants to, and
agrees with, each Initial Purchaser as set forth below in this Section 1.

(a) The Preliminary Memorandum, at the date thereof, did not contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. At the Execution Time, on the Closing Date and on any
settlement date, the Final Memorandum did not and will not (and any amendment or
supplement thereto, at the date thereof, at the Closing Date and on any
settlement date, will not) contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided,
however, that the Company makes no representation or warranty as to the
information contained in or omitted from the Preliminary Memorandum or the Final
Memorandum, or any amendment or supplement thereto, in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf
of the Initial Purchasers specifically for inclusion therein, it being
understood and agreed that the only such information furnished by or on behalf
of the Initial Purchasers consists of the information described as such in
Section 8(b) hereof.

(b) As of the Execution Time, (i) (a) the Disclosure Package and (b) any form of
general solicitation or general advertising (within the meaning of Regulation D)
(each, a “General Solicitation”) by the Company, its Affiliates or any person
acting on its or their behalf, when taken together as a whole with the
Disclosure Package, does not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The preceding sentence does not apply to statements in or omissions
from the Disclosure Package based upon and in conformity with written
information furnished to the Company by the Initial Purchasers specifically for
use therein, it being understood and agreed that the only such information
furnished by or on behalf of the Initial Purchasers consists of the information
described as such in Section 8(b) hereof.

(c) None of the Company, its Affiliates, or any person acting on its or their
behalf has directly or indirectly, made offers or sales of any security, or
solicited offers to buy, any security under circumstances that would require the
registration of the Securities or the Common Stock issuable upon mandatory
conversion thereof under the Act, other than as contemplated by the Registration
Rights Agreement.

 

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(d) None of the Company, its Affiliates, or any person acting on its or their
behalf has engaged in any General Solicitation or used any electronic road show
in connection with any offer or sale of the Securities or the Common Stock
issuable upon mandatory conversion thereof, other than any electronic road show
or General Solicitation in respect of which the Initial Purchasers have given
their prior consent; provided that the prior consent of the Initial Purchasers
shall be deemed to have been given in respect of the General Solicitation
included in Schedule IV hereto.

(e) The Securities satisfy the eligibility requirements of Rule 144A(d)(3) under
the Act.

(f) Assuming the accuracy of the representations of each Initial Purchaser in
Section 4 hereof, no registration under the Act of the Securities or the Common
Stock issuable upon mandatory conversion thereof is required for the offer and
sale of the Securities to or by the Initial Purchasers in the manner
contemplated herein, in the Disclosure Package and the Final Memorandum.

(g) The Company is not, and after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof as described in the
Disclosure Package and the Final Memorandum will not be, an “investment company”
as defined in the Investment Company Act.

(h) The Company is subject to and in full compliance with the reporting
requirements of Section 13 or Section 15(d) of the Exchange Act.

(i) The Company has not paid or agreed to pay to any person any compensation for
soliciting another to purchase any securities of the Company (except as
contemplated in this Agreement).

(j) The Company has not taken, directly or indirectly, any action designed to or
that has constituted or that might reasonably be expected to cause or result,
under the Exchange Act or otherwise, in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities.

(k) Each of the Company and its subsidiaries has been duly incorporated and is
validly existing as a corporation under the laws of the jurisdiction in which it
is chartered or organized with full corporate power and authority to own or
lease, as the case may be, and to operate its properties and conduct its
business as described in the Disclosure Package and the Final Memorandum, and is
duly qualified to do business as a foreign corporation and is in good standing
under the laws of each jurisdiction that requires such qualification, except
where the failure to be duly qualified or in good standing would not
individually or in the aggregate have a material adverse effect on the condition
(financial or otherwise, including the Company’s net operating loss tax
benefits), prospects (including prospective acquisitions), earnings, business or
properties of the Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, or on the
performance by the Company of its obligations under this Agreement, the
Certificate of Designation or the Registration Rights Agreement (a “Material
Adverse Effect”).

 

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(l) All the outstanding shares of capital stock of the Company and each
subsidiary have been duly authorized and validly issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Disclosure Package and
the Final Memorandum, all outstanding shares of capital stock of the
subsidiaries are owned by the Company either directly or through wholly owned
subsidiaries free and clear of any security interest, claim, lien or
encumbrance.

(m) The Securities have been duly authorized, and, upon payment and delivery in
accordance with this Agreement, will be validly issued, fully paid and
nonassessable, will conform to the description thereof contained in the
Disclosure Package, will be issued in compliance with federal and state
securities laws, will be free of statutory and contractual preemptive rights,
rights of first refusal and similar rights and will be mandatorily convertible
into Common Stock in accordance with their terms.

(n) The Company’s authorized equity capitalization is as set forth in the
Disclosure Package and the Final Memorandum; the capital stock of the Company
conforms to the description thereof contained in the Disclosure Package and the
Final Memorandum; the outstanding shares of Common Stock have been duly
authorized and validly issued and are fully paid and nonassessable; except to
the extent that on the Closing Date the Company will not have sufficient a
sufficient number of authorized Common Stock to effect a full mandatory
conversion of the Securities, as set forth in the Disclosure Package and the
Final Memorandum (the “Common Stock Limitation”), the shares of Common Stock
initially issuable upon mandatory conversion of the Securities have been duly
authorized and, when issued upon conversion of the Securities against payment of
the conversion price, will be validly issued, fully paid and nonassessable;
except to the extent of the Common Stock Limitation, the Board of Directors of
the Company has duly and validly adopted resolutions reserving such shares of
Common Stock for issuance upon mandatory conversion of the Securities; except as
set forth in the Disclosure Package and the Final Memorandum, the holders of
outstanding shares of capital stock of the Company are not entitled to
preemptive or other rights to subscribe for the Securities or the shares of
Common Stock issuable upon mandatory conversion thereof; and, except as set
forth in the Disclosure Package and the Final Memorandum, no options, warrants
or other rights to purchase, agreements or other obligations to issue, or rights
to convert any obligations into or exchange any securities for, shares of
capital stock of or ownership interests in the Company are outstanding.

(o) The statements in the Preliminary Memorandum and the Final Memorandum under
the headings “Material U.S. Federal Income Tax Considerations,” “Description of
Capital Stock” and “Description of the Series B Preferred Stock fairly summarize
the matters therein described.

(p) This Agreement has been duly authorized, executed and delivered by the
Company; each of the Certificate of Designation and the Registration Rights
Agreement shall have been duly authorized on or prior to the Closing Date, and,
in the case of the Registration Rights Agreement, when executed and delivered by
the Company or, in the case of the Certificate of Designation, when adopted by
the Company’s board of directors as part of the Company’s articles of
incorporation, on the Closing Date, and, in the case of the Registration Rights
Agreement, assuming due authorization, execution and delivery thereof by the
Initial

 

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Purchasers, will constitute a legal, valid, binding instrument enforceable
against the Company in accordance with its terms (subject, as to the enforcement
of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium,
fraudulent conveyance or other laws affecting creditors’ rights generally from
time to time in effect and to general principles of equity).

(q) No consent, approval, authorization, filing with or order of any court or
governmental agency or body is required (except as may be required as a result
of the identity or status of the Initial Purchasers and assuming compliance with
the limitations and restrictions contained under the heading “Transfer
Restrictions” in the Preliminary Memorandum and the Final Memorandum) in
connection with the transactions contemplated herein, in the Certificate of
Designation or in the Registration Rights Agreement, except (i) such as may be
required under the blue sky laws of any jurisdiction in which the Securities are
offered and sold, (ii) in the case of the Registration Rights Agreement, such as
will be obtained under the Act and (iii) as set forth in the Disclosure Package
and the Final Memorandum.

(r) Subject to the Common Stock Limitation, none of the execution and delivery
of the Certificate of Designation, this Agreement or the Registration Rights
Agreement by the Company, the issuance and sale of the Securities or the
issuance of the Common Stock upon mandatory conversion thereof, or the
consummation by the Company of any other of the transactions herein or therein
contemplated, or the fulfillment by the Company of the terms hereof or thereof
will conflict with, result in a breach or violation of, or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any of
its subsidiaries pursuant to, (i) the charter or by-laws or comparable
constituting documents of the Company or any of its subsidiaries; (ii) the terms
of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to
which the Company or any of its subsidiaries is a party or bound or to which its
or their property is subject; or (iii) any statute, law, rule, regulation,
judgment, order or decree of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over the
Company or any of its subsidiaries or any of its or their properties, except, in
the case of clauses (ii) and (iii), where such conflict, breach, violation or
imposition would not, individually or in the aggregate, have a Material Adverse
Effect.

(s) The consolidated historical financial statements and schedules of the
Company and its consolidated subsidiaries included or incorporated by reference
in the Disclosure Package and the Final Memorandum present fairly in all
material respects the financial condition, results of operations and cash flows
of the Company as of the dates and for the periods indicated, comply as to form
with the applicable accounting requirements of Regulation S-X and have been
prepared in conformity with generally accepted accounting principles in the
United States applied on a consistent basis throughout the periods presented
(except as otherwise noted therein, including changes resulting from the
Company’s adoption of “fresh-start” accounting principles effective March 19,
2012).

(t) No action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of its
subsidiaries or its or their property is pending or, to the best knowledge of
the Company, threatened that would individually or in the aggregate have a
Material Adverse Effect, except as set forth in or contemplated in the
Disclosure Package and the Final Memorandum (exclusive of any amendment or
supplement thereto).

 

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(u) Each of the Company and its subsidiaries owns or leases all such properties
as are necessary to the conduct of its operations as presently conducted.

(v) Neither the Company nor any of its subsidiaries is in violation or default
of (i) any provision of its charter or by-laws or comparable constituting
documents; (ii) the terms of any indenture, contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which it is a party or bound or to which its property
is subject; or (iii) any statute, law, rule, regulation, judgment, order or
decree applicable to the Company or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company or such subsidiary or any of its
properties, as applicable except, in the case of clauses (ii) and (iii) where
such violation or default would not individually or in the aggregate, have a
Material Adverse Effect.

(w) Burr Pilger Mayer, Inc., who have certified certain financial statements of
the Company and its consolidated subsidiaries and delivered their report with
respect to the audited consolidated financial statements and schedules included
or incorporated by reference in the Disclosure Package and the Final Memorandum,
are independent public accountants with respect to the Company, as required by
the Exchange Act and the rules and regulations thereunder and the rules and
regulations of the Public Company Accounting Oversight Board.

(x) There are no stamp or other issuance or transfer taxes or duties or other
similar fees or charges required to be paid in connection with the execution and
delivery of this Agreement or the issuance or sale of the Securities or upon the
issuance of Common Stock upon the mandatory conversion thereof.

(y) The Company has filed all applicable tax returns that are required to be
filed or has requested extensions thereof (except in any case in which the
failure so to file would not have a Material Adverse Effect and except as set
forth in or contemplated in the Disclosure Package and the Final Memorandum
(exclusive of any amendment or supplement thereto)) and has paid all taxes
required to be paid by it and any other assessment, fine or penalty levied
against it, to the extent that any of the foregoing is due and payable, except
for any such assessment, fine or penalty that is currently being contested in
good faith or as would not have a Material Adverse Effect and except as set
forth in or contemplated in the Disclosure Package and the Final Memorandum
(exclusive of any amendment or supplement thereto). The Company has not been
subject to any federal or state tax audit in the past three years.

(z) To the knowledge of the Company, no labor problem or dispute with the
employees of the Company or any of its subsidiaries exists or is threatened or
imminent.

(aa) No subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary’s capital stock, from repaying to the Company
any loans or advances to such subsidiary from the Company or from transferring
any of such subsidiary’s property or assets to

 

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the Company or any other subsidiary of the Company, except as described in or
contemplated in the Disclosure Package and the Final Memorandum (exclusive of
any amendment or supplement thereto).

(bb) The Company and its subsidiaries possess all licenses, certificates,
permits and other authorizations issued by all applicable authorities necessary
to conduct their respective businesses except as would not be reasonably
expected to have a Material Adverse Effect, and neither the Company nor any of
its subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or permit
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a Material Adverse Effect, except as set forth in
or contemplated in the Disclosure Package and the Final Memorandum (exclusive of
any amendment or supplement thereto).

(cc) The Company and each of its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management’s general or
specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles in the United States and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with management’s general
or specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. The Company and its subsidiaries’
internal controls over financial reporting are effective and the Company and its
subsidiaries are not aware of any material weakness in their internal control
over financial reporting.

(dd) The Company and its subsidiaries maintain “disclosure controls and
procedures” (as such term is defined in Rule 13a-15(e) under the Exchange Act);
such disclosure controls and procedures are effective.

(ee) WM Mortgage Reinsurance Company, Inc. is the only “significant subsidiary”
of the Company (as defined in Rule 1-02 of Regulation S-X).

(ff) Neither the Company nor any of its subsidiaries nor, to the knowledge of
the Company, any director, officer, agent, employee or affiliate of the Company
or any of its subsidiaries is aware of or has taken any action, directly or
indirectly, that would result in a violation by such persons of the Foreign
Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder or the U.K. Bribery Act 2010 or similar law of any other relevant
jurisdiction; and neither the Company nor any of its subsidiaries nor, to the
knowledge of the Company, any director, officer, agent, employee or affiliate of
the Company or any of its subsidiaries is aware of or has taken any action,
directly or indirectly, that would result in a sanction for violation by such
persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules
and regulations thereunder or the U.K. Bribery Act 2010 or similar law of any
other relevant jurisdiction; and prohibition of noncompliance therewith is
covered by the codes of conduct or other procedures instituted and maintained by
the Company and its subsidiaries.

(gg) The operations of the Company and its subsidiaries are and have been
conducted at all times in compliance with applicable financial recordkeeping and
reporting

 

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requirements and money laundering statutes and the rules and regulations
thereunder and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively, the “Money
Laundering Laws”) and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
or any of its subsidiaries with respect to the Money Laundering Laws is pending
or, to the best knowledge of the Company, threatened.

(hh) Neither the Company nor any of its subsidiaries nor, to the knowledge of
the Company, any director, officer, agent, employee or affiliate of the Company
or any of its subsidiaries (i) is currently subject to any sanctions
administered or imposed by the United States (including any administered or
enforced by the Office of Foreign Assets Control of the U.S. Treasury
Department, the U.S. Department of State, or the Bureau of Industry and Security
of the U.S. Department of Commerce), the United Nations Security Council, the
European Union, or the United Kingdom (including sanctions administered or
controlled by Her Majesty’s Treasury) (collectively, “Sanctions” and such
persons, “Sanction Persons”) or (ii) will, directly or indirectly, use the
proceeds of this offering, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person in any manner
that will result in a violation of any economic Sanctions by, or would result in
the imposition of Sanctions against, any person (including any person
participating in the offering, whether as underwriter, advisor, investor or
otherwise).

(ii) Neither the Company nor any of its subsidiaries nor, to the knowledge of
the Company, any director, officer, agent, employee or affiliate of the Company
or any of its subsidiaries, is a person that is, or is 50% or more owned or
otherwise controlled by a person that is: (i) the subject of any Sanctions; or
(ii) located, organized or resident in a country or territory that is, or whose
government is, the subject of Sanctions that broadly prohibit dealings with that
country or territory (currently, Cuba, Iran, North Korea, Sudan, and Syria)
(collectively, “Sanctioned Countries” and each, a “Sanctioned Country”).

(jj) Except as has been disclosed to the Initial Purchasers or is not material
to the analysis under any Sanctions, neither the Company nor any of its
subsidiaries has engaged in any dealings or transactions with or for the benefit
of a Sanctioned Person, or with or in a Sanctioned Country, in the preceding 3
years, nor does the Company or any of its subsidiaries have any plans to
increase its dealings or transactions with Sanctioned Persons, or with or in
Sanctioned Countries.

(kk) There is and has been no failure on the part of the Company and any of the
Company’s directors or officers, in their capacities as such, to comply with any
provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations
promulgated in connection therewith (the “Sarbanes-Oxley Act”), including
Section 402 related to loans and Sections 302 and 906 related to certifications.

(ll) No material relationship, direct or indirect, exists between or among the
Company, on the one hand, and the directors, officers, stockholders, customers
or suppliers of the Company, on the other hand, that is not described in the
Disclosure Package and the Final Memorandum.

 

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Any certificate signed by any officer of the Company and delivered to the
Initial Purchasers or counsel for the Initial Purchasers in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each Initial Purchaser.

2. Purchase and Sale; Fees. Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth, the Company agrees to
sell to each Initial Purchaser, and each Initial Purchaser agrees, severally and
not jointly, to purchase from the Company, at a purchase price of $1,000 per
share, the number of shares of Securities set forth opposite such Initial
Purchaser’s name in Schedule I hereto; provided that prior to the Closing Date,
if the Company’s board of directors (or any committee thereof) in its sole
discretion, on behalf of the Company, determines that ownership of Securities by
any prospective holder acquiring Securities in this offering (1) would violate
the ownership limitations contained in the Company’s articles of incorporation
or (2) would result in an increased risk of adverse tax or legal consequences to
the Company, any of its subsidiaries or any of its shareholders, then the
Company (directly or indirectly through the Initial Purchasers) will have the
option to unilaterally decrease (x) the number of shares of Securities the
Company will sell to each Initial Purchaser and/or (y) the allocation of shares
of Securities allocated to any such prospective holder acquiring Securities in
this offering, in each case to the extent the Company’s board of directors
determines such decrease is necessary to prevent such violation or avoid or cure
such adverse consequences.

The Company will also pay to the Initial Purchasers the fees set forth in
Schedule II hereto.

3. Delivery and Payment. Delivery of and payment for the Securities shall be
made at 10:00 A.M., New York City time, on January 5, 2015, or at such time on
such later date not more than three Business Days after the foregoing date as
the Initial Purchasers shall designate, which date and time may be postponed by
agreement between the Initial Purchasers and the Company or as provided in
Section 9 hereof (such date and time of delivery and payment for the Securities
being herein called the “Closing Date”). Delivery of the Securities shall be
made to the Initial Purchasers for the respective accounts of the several
Initial Purchasers against payment by the several Initial Purchasers through the
Initial Purchasers of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same-day funds to the account specified by
the Company. Delivery of the Securities shall be made through the facilities of
The Depository Trust Company unless the Initial Purchasers shall otherwise
instruct.

4. Offering by Initial Purchasers. (a) Each Initial Purchaser acknowledges that
the Securities and the Common Stock issuable upon mandatory conversion thereof
have not been and will not be registered under the Act and may not be offered or
sold within the United States except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Act.

 

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(b) Each Initial Purchaser, severally and not jointly, represents and warrants
to and agrees with the Company that:

(i) it has not offered or sold, and will not offer or sell, any Securities
within the United States as part of their distribution at any time except in the
case of sales to those it reasonably believes to be “qualified institutional
buyers” as permitted by in Rule 144A under the Act;

(ii) neither it nor any person acting on its behalf has made or will make offers
or sales of the Securities in the United States by means of General
Solicitation, other than any General Solicitation included in Schedule IV
hereto;

(iii) in connection with each sale pursuant to Section 4(b)(i), it has taken or
will take reasonable steps to ensure that the purchaser of such Securities is
aware that such sale may be made in reliance on Rule 144A; and

(iv) it is an “accredited investor” (as defined in Rule 501(a) of Regulation D).

5. Agreements. The Company agrees with each Initial Purchaser that:

(a) The Company will furnish to each Initial Purchaser and to counsel for the
Initial Purchasers, without charge, during the period referred to in
Section 5(c) below, as many copies of the materials contained in the Disclosure
Package and the Final Memorandum and any amendments and supplements thereto as
they may reasonably request.

(b) The Company will not amend or supplement the Disclosure Package or the Final
Memorandum, other than by filing documents under the Exchange Act that are
incorporated by reference therein, without the prior written consent of the
Initial Purchasers (not to be unreasonably withheld or delayed); provided,
however, that prior to the completion of the distribution of the Securities by
the Initial Purchasers (as determined by the Initial Purchasers), the Company
will not file any document under the Exchange Act that is incorporated by
reference in the Disclosure Package or the Final Memorandum unless, prior to
such proposed filing, the Company has furnished the Initial Purchasers with a
copy of such document for their review and the Initial Purchasers have not
reasonably objected to the filing of such document. The Company will promptly
advise the Initial Purchasers when any document filed under the Exchange Act
that is incorporated by reference in the Disclosure Package or the Final
Memorandum shall have been filed with the Commission.

(c) If at any time prior to the completion of the sale of the Securities by the
Initial Purchasers (as determined by the Initial Purchasers), any event occurs
as a result of which the Disclosure Package, any General Solicitation, or the
Final Memorandum, as then amended or supplemented, would include any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made or the circumstances then prevailing, not misleading, or if it should
be necessary to amend or supplement the Disclosure Package or the Final
Memorandum to comply with applicable law, the Company will promptly (i) notify
the Initial Purchasers of any such event; (ii) subject to the requirements of
Section 5(b), prepare an amendment or supplement that will correct such
statement or omission or effect such compliance; and (iii) supply any
supplemented or amended Disclosure Package or Final Memorandum to the several
Initial Purchasers and counsel for the Initial Purchasers without charge in such
quantities as they may reasonably request.

 

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(d) Without the prior written consent of the Initial Purchasers, any time prior
to the completion of the sale of the Securities by the Initial Purchasers (as
determined by the Initial Purchasers), the Company has not given and will not
give to any prospective purchaser of the Securities any written information
concerning the offering of the Securities other than materials contained in the
Disclosure Package, the Final Memorandum or any other offering materials
prepared by or with the prior written consent of the Initial Purchasers.

(e) The Company will arrange, if necessary, for the qualification of the
Securities for sale by the Initial Purchasers under the laws of such
jurisdictions as the Initial Purchasers may designate and will maintain such
qualifications in effect so long as required for the sale of the Securities;
provided that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to take any
action that would subject it to service of process in suits, other than those
arising out of the offering or sale of the Securities, in any jurisdiction where
it is not now so subject. The Company will promptly advise the Initial
Purchasers of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose.

(f) None of the Company, its Affiliates, or any person acting on its or their
behalf will, directly or indirectly, make offers or sales of any security, or
solicit offers to buy any security, under circumstances that would require the
registration of the Securities or Common Stock issuable upon mandatory
conversion thereof under the Act.

(g) Any information provided by the Company, its Affiliates or any person acting
on its or their behalf to publishers of publicly available databases about the
terms of the Securities shall include a statement that the Securities have not
been registered under the Act and are subject to restrictions under Rule 144A
under the Act;

(h) None of the Company, its Affiliates, or any person acting on its or their
behalf will engage in any General Solicitation, other than any General
Solicitation in respect of which the Initial Purchasers have given their prior
written consent; provided that the prior written consent of the Initial
Purchasers shall be deemed to have been given in respect of the General
Solicitation included in Schedule IV hereto in connection with any offer or sale
of the Securities in the United States.

(i) For so long as any of the Securities or the Common Stock issuable upon the
conversion thereof are “restricted securities” within the meaning of Rule
144(a)(3) under the Act, the Company will, during any period in which it is not
subject to and in compliance with Section 13 or 15(d) of the Exchange Act,
provide to each holder of such restricted securities and to each prospective
purchaser (as designated by such holder) of such restricted securities, upon the
request of such holder or prospective purchaser, any information required to be
provided by Rule 144A(d)(4) under the Act. This covenant is intended to be for
the benefit of the holders, and the prospective purchasers designated by such
holders, from time to time of such restricted securities.

 

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(j) The Company will cooperate with the Initial Purchasers and use its best
efforts to permit the Securities to be eligible for clearance and settlement
through The Depository Trust Company.

(k) Before the Common Stock Limitation is remedied, the Company will reserve and
keep available at all times, free of pre-emptive rights, all of shares of its
Common Stock not otherwise reserved on the on the date hereof for issuance upon
the mandatory conversion of the Securities; after the Common Stock Limitation is
remedied, the Company will reserve and keep available at all times, free of
pre-emptive rights, the full number of shares of Common Stock issuable upon
mandatory conversion of the Securities.

(l) Each of the Securities and the shares of Common Stock issuable upon
conversion thereof will bear, to the extent applicable, the legend contained in
“Transfer Restrictions” in the Preliminary Memorandum and the Final Offering
Memorandum for the time period and upon the other terms stated therein.

(m) The Company will not for a period of 180 days following the Execution Time,
without the prior written consent of Citigroup Global Markets Inc. and KKR
Capital Markets LLC, directly or indirectly, offer, sell, contract to sell,
pledge, otherwise dispose of, enter into any transaction which is designed to,
or might reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the Company of, file (or participate in the filing of) a
registration statement with the Commission (for the avoidance of doubt, other
than pursuant to the Registration Rights Agreement) in respect of, or establish
or increase a put equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the Exchange Act in respect of, any
shares of capital stock of the Company or any securities convertible into, or
exercisable or exchangeable for, shares of capital stock of the Company (other
than the Securities), or publicly announce an intention to effect any such
transaction; provided, however, that the Company may issue and sell Common Stock
or securities convertible into or exchangeable for Common Stock pursuant to any
employee stock option plan, stock ownership plan or dividend reinvestment plan
of the Company described in the Disclosure Package and the Final Memorandum and
in effect at the Execution Time, and the Company may issue Common Stock issuable
upon the conversion of securities or the exercise of warrants outstanding at the
Execution Time and described in the Disclosure Package and the Final Memorandum.

(n) The Company will not take, directly or indirectly, any action designed to or
that has constituted, or that might reasonably be expected to cause or result,
under the Exchange Act or otherwise, in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities.

(o) Between the date hereof and the Closing Date, the Company will not do or
authorize any act or thing that would result in an adjustment of the conversion
price of the Securities.

(p) The Company will comply with all applicable securities and other laws, rules
and regulations, including, without limitation, the Sarbanes-Oxley Act, and use
its best efforts to cause the Company’s directors and officers, in their
capacities as such, to comply with such laws, rules and regulations, including,
without limitation, the provisions of the Sarbanes-Oxley Act.

 

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(q) The Company will use its reasonable efforts to apply the net proceeds from
the sale of the Securities in the manner such proceeds are expected to be
applied as described in the Disclosure Package and the Final Memorandum under
the heading “Use of Proceeds.”

(r) The Company will use its reasonable efforts to list the Common Stock on a
national securities exchange after becoming eligible to do so.

(s) The Company agrees to pay the costs and expenses relating to the following
matters: (i) the preparation of the Certificate of Designation and the
Registration Rights Agreement, the issuance of the Securities, the fees of the
transfer agent and the issuance of the Common Stock upon mandatory conversion of
the Securities; (ii) the preparation, printing or reproduction of the materials
contained in the Disclosure Package and the Final Memorandum and each amendment
or supplement to either of them; (iii) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for counting and
packaging) of such copies of the materials contained in the Disclosure Package
and the Final Memorandum, and all amendments or supplements to either of them,
as may, in each case, be reasonably requested for use in connection with the
offering and sale of the Securities; (iv) the preparation, printing,
authentication, issuance and delivery of the Securities; (v) any stamp or
transfer taxes in connection with the original issuance and sale of the
Securities; (vi) the printing (or reproduction) and delivery of this Agreement,
any blue sky memorandum and all other agreements or documents printed (or
reproduced) and delivered in connection with the offering of the Securities;
(vii) any registration or qualification of the Securities for offer and sale
under the securities or blue sky laws of the several states (including filing
fees and the reasonable fees and expenses of counsel for the Initial Purchasers
relating to such registration and qualification); (viii) the transportation and
other expenses incurred by Company representatives in connection with
presentations to prospective purchasers of the Securities; (ix) the fees and
expenses of the Company’s accountants and the fees and expenses of counsel
(including local and special counsel) for the Company; and (x) all other costs
and expenses incident to the performance by the Company of its obligations
hereunder.

6. Conditions to the Obligations of the Initial Purchasers. The obligations of
the Initial Purchasers to purchase the Securities shall be subject to the
accuracy of the representations and warranties of the Company contained herein
at the Execution Time and the Closing Date, to the accuracy of the statements of
the Company made in any certificates pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder and to the following
additional conditions:

(a) The Company shall have requested and caused Akin Gump Strauss Hauer & Feld
LLP, counsel for the Company, to furnish to the Initial Purchasers its opinion,
dated the Closing Date and addressed to the Initial Purchasers, in form and
substance reasonably satisfactory to the Initial Purchasers.

(b) The Company shall have requested and caused Lane Powell PC, Washington
counsel for the Company, to furnish to the Initial Purchasers its opinion, dated
the Closing Date and addressed to the Initial Purchasers, in form and substance
reasonably satisfactory to the Initial Purchasers.

 

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(c) The Initial Purchasers shall have received from Simpson Thacher & Bartlett
LLP, counsel for the Initial Purchasers, such opinion or opinions, dated the
Closing Date and addressed to the Initial Purchasers, with respect to such
matters as the Initial Purchasers may reasonably require, and the Company shall
have furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.

(d) The Company shall have furnished to the Initial Purchasers a certificate of
the Company, signed by (x) the President and (y) the principal financial or
accounting officer of the Company, in their respective capacities as such, dated
the Closing Date, to the effect that the signers of such certificate have
carefully examined the Disclosure Package and the Final Memorandum and any
amendments or supplements thereto, and this Agreement and that to their
knowledge after reasonable investigation:

(i) the representations and warranties of the Company in this Agreement are true
and correct on and as of the Closing Date with the same effect as if made on the
Closing Date, and the Company has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date;

(ii) they have examined the Disclosure Package and the Final Memorandum, and, in
their opinion, (A) (1) the Final Memorandum, as of its date and on the Closing
Date, and (2) the Disclosure Package, as of the Execution Time, did not and do
not contain any untrue statement of a material fact and did not and do not omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and (B) since the Execution Time, no event has occurred
that should have been set forth in a supplement or amendment to the Final
Memorandum that has not been so set forth; and

(iii) since the date of the most recent financial statements included or
incorporated by reference in the Disclosure Package and the Final Memorandum
(exclusive of any amendment or supplement thereto), there has been no material
adverse change in the condition (financial or otherwise, including the Company’s
net operating loss tax benefits), prospects, earnings, business or properties of
the Company and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated in the Disclosure Package and the Final Memorandum (exclusive of
any amendment or supplement thereto).

(e) At the Execution Time and at the Closing Date, the Company shall have
requested and caused Burr Pilger Mayer, Inc. to furnish to the Initial
Purchasers letters, dated respectively as of the Execution Time and as of the
Closing Date, in form and substance satisfactory to the Initial Purchasers and
containing statements and information of the type customarily included in
accountants’ “comfort letters” to initial purchasers with respect to the

 

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financial statements and certain financial information contained or incorporated
by reference in the Disclosure Package and the Final Memorandum; provided, that
the letter delivered on the Closing Date shall use a “cut-off” date no more than
three business days prior to such Closing Date.

(f) Subsequent to the Execution Time or, if earlier, the dates as of which
information is given in the Disclosure Package (exclusive of any amendment or
supplement thereto) and the Final Memorandum (exclusive of any amendment or
supplement thereto), there shall not have been (i) any change or decrease to any
of the balance sheet items or income statement items described in paragraph 8 of
the comfort letter delivered on the Execution Date referred to in paragraph
(e) of this Section 6; or (ii) any change, or any development involving a
prospective change, in or affecting the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its subsidiaries
taken as a whole, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the Disclosure
Package and the Final Memorandum (exclusive of any amendment or supplement
thereto), the effect of which, in any case referred to in clause (i) or
(ii) above, is, in the sole judgment of the Initial Purchasers, so material and
adverse as to make it impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated in the Disclosure Package and the
Final Memorandum (exclusive of any amendment or supplement thereto).

(g) The Securities shall be eligible for clearance and settlement through The
Depository Trust Company.

(h) Prior to the Execution Time, the Company shall have furnished to the Initial
Purchasers lock-up letters substantially in the form of Exhibit A hereto from
each director of the Company addressed to the Initial Purchasers.

(i) The Initial Purchasers shall have received a letter from KKR Management
Holdings L.P. and KKR Fund Holdings L.P. in form and substance set forth in
Exhibit B.

(j) The Company shall have executed, delivered and filed with the Secretary of
State of the State of Washington the Certificate of Designation.

(k) The Company shall have executed and delivered the Registration Rights
Agreement, in form and substance reasonably satisfactory to the Initial
Purchasers.

(l) No action shall have been taken and no statute, rule, regulation or order
shall have been enacted, adopted or issued by any federal, state or foreign
governmental or regulatory authority that would, as of the Closing Date, prevent
the issuance or sale of the Securities; and no injunction or order of any
federal, state or foreign court shall have been issued that would, as of the
Closing Date, prevent the issuance or sale of the Securities.

(m) The Initial Purchasers shall have received on and as of the Closing Date,
satisfactory evidence of the due qualification to do business of the Company in
its jurisdiction of organization, in writing or any standard form of
telecommunication from the appropriate governmental authorities of such
jurisdiction.

 

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If any of the conditions specified in this Section 6 shall not have been
fulfilled when and as provided in this Agreement, or if any of the opinions and
certificates mentioned above or elsewhere in this Agreement shall not be
reasonably satisfactory in form and substance to the Initial Purchasers and
counsel for the Initial Purchasers, this Agreement and all obligations of the
Initial Purchasers hereunder may be cancelled at, or at any time prior to, the
Closing Date by the Initial Purchasers. Notice of such cancellation shall be
given to the Company in writing or by telephone or facsimile confirmed in
writing.

The documents required to be delivered by this Section 6 will be delivered to
counsel for the Initial Purchasers.

7. Reimbursement of Expenses. If the sale of the Securities provided for herein
is not consummated because any condition to the obligations of the Initial
Purchasers set forth in Section 6 hereof is not satisfied, because of any
termination pursuant to Section 10 hereof or because of any refusal, inability
or failure on the part of the Company to perform any agreement herein or comply
with any provision hereof other than by reason of a default by any of the
Initial Purchasers, the Company will reimburse the Initial Purchasers severally
through Citigroup on demand for all reasonable expenses (including reasonable
fees and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities.

8. Indemnification and Contribution. (a) The Company agrees to indemnify and
hold harmless each Initial Purchaser, the directors, officers, employees,
Affiliates and agents of each Initial Purchaser and each person who controls any
Initial Purchaser within the meaning of either the Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Act, the Exchange Act or
other U.S. federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Preliminary Memorandum, the
Final Memorandum, any Issuer Written Information, any General Solicitation, or
any other written information used by the Company in connection with the offer
or sale of the Securities, or in any amendment or supplement thereto or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, and agrees to reimburse each such indemnified party, as incurred,
for any legal or other expenses reasonably incurred by it in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made in the Preliminary Memorandum, the Final Memorandum, or in
any amendment thereof or supplement thereto, in reliance upon and in conformity
with written information furnished to the Company by or on behalf the Initial
Purchasers specifically for inclusion therein. This indemnity agreement will be
in addition to any liability that the Company may otherwise have.

(b) Each Initial Purchaser severally, and not jointly, agrees to indemnify and
hold harmless the Company, each of its directors, officers, employees,
Affiliates and agents, and each

 

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person who controls the Company within the meaning of either the Act or the
Exchange Act, to the same extent as the foregoing indemnity to each Initial
Purchaser, but only with reference to written information relating to such
Initial Purchaser furnished to the Company by or on behalf of the Initial
Purchasers specifically for inclusion in the Preliminary Memorandum, the Final
Memorandum or in any amendment or supplement thereto. This indemnity agreement
will be in addition to any liability that any Initial Purchaser may otherwise
have. The Company acknowledges that the statements set forth in the last
paragraph of the cover page (regarding delivery of the Securities) in the
Preliminary Memorandum and the Final Memorandum constitute the only information
furnished in writing by or on behalf of the Initial Purchasers for inclusion in
the Preliminary Memorandum, the Final Memorandum or in any amendment or
supplement thereto.

(c) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or
(b) above. The indemnifying party shall be entitled to appoint counsel
(including local counsel) of the indemnifying party’s choice at the indemnifying
party’s expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel,
other than local counsel if not appointed by the indemnifying party, retained by
the indemnified party or parties except as set forth below); provided, however,
that such counsel shall be reasonably satisfactory to the indemnified party.
Notwithstanding the indemnifying party’s election to appoint counsel (including
local counsel) to represent the indemnified party in an action, the indemnified
party shall have the right to employ separate counsel (including local counsel),
and the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest; (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties that are different
from or additional to those available to the indemnifying party; (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action; or (iv) the indemnifying
party shall authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. The indemnifying party shall not, in
connection with any proceeding or related proceeding in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any of local counsel) for all indemnified parties. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent: (i) includes an unconditional
release of each

 

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indemnified party from all liability arising out of such claim, action, suit or
proceeding and (ii) does not include an admission of fault. The indemnifying
party shall not be liable for any settlement of any proceeding effected without
its written consent (such consent not to be unreasonably withheld); provided
that, if at any time an indemnified party shall have requested in writing an
indemnifying party to reimburse the indemnified party for reasonable fees and
expenses of counsel as contemplated by Sections 8(a) or 8(b) hereof, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 90 days after receipt by such indemnifying party of the
aforesaid written request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such written request or
disputed in good faith the indemnified party’s entitlement to such reimbursement
prior to the date of such settlement.

(d) In the event that the indemnity provided in paragraph (a) or (b) of this
Section 8 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, the Company and the Initial Purchasers severally agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending any loss, claim, damage, liability or action) (collectively “Losses”)
to which the Company and one or more of the Initial Purchasers may be subject in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and by the Initial Purchasers on the other from the
offering of the Securities. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Company and the Initial
Purchasers severally shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company on the one hand and the Initial Purchasers on the other in connection
with the statements or omissions that resulted in such Losses, as well as any
other relevant equitable considerations. Benefits received by the Company shall
be deemed to be equal to the total net proceeds from the offering (before
deducting expenses) received by it, and benefits received by the Initial
Purchasers shall be deemed to be equal to the total fees, purchase discounts and
commissions received by them. Relative fault shall be determined by reference
to, among other things, whether any untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information provided by the Company on the one hand or the Initial
Purchasers on the other, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The Company and the Initial Purchasers agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation that does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), in no event shall any Initial Purchaser be required to
contribute any amount in excess of the amount by which the total fees, purchase
discounts and commissions received by such Initial Purchaser with respect to the
offering of the Securities exceeds the amount of any damages that such Initial
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person who controls an
Initial Purchaser within the meaning of either the Act or the Exchange Act and
each director, officer, employee, Affiliate and agent of an Initial Purchaser
shall have the same rights to contribution as such Initial Purchaser, and each
person who controls the Company

 

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within the meaning of either the Act or the Exchange Act and each officer and
director of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
paragraph (d).

9. Default by an Initial Purchaser. If one of the Initial Purchasers shall fail
to purchase and pay for any of the Securities agreed to be purchased by such
Initial Purchaser hereunder and such failure to purchase shall constitute a
default in the performance of its or their obligations under this Agreement, the
remaining Initial Purchaser shall have the right to purchase all, but shall not
be under any obligation to purchase any, of the Securities, and if such
nondefaulting Initial Purchaser does not purchase all the Securities, this
Agreement will terminate without liability to the nondefaulting Initial
Purchaser or the Company. In the event of a default by one of the Initial
Purchasers as set forth in this Section 9, the Closing Date shall be postponed
for such period, not exceeding five Business Days, as the nondefaulting Initial
Purchaser shall determine in order that the required changes in the Final
Memorandum or in any other documents or arrangements may be effected. Nothing
contained in this Agreement shall relieve any defaulting Initial Purchaser of
its liability, if any, to the Company or any nondefaulting Initial Purchaser for
damages occasioned by its default hereunder.

10. Termination. This Agreement shall be subject to termination in the absolute
discretion of the Initial Purchasers, by notice given to the Company prior to
delivery of, and payment for, the Securities, if at any time prior to such
delivery and payment (i) trading in the Company’s Common Stock shall have been
suspended by the Commission or the OTCQB or trading in securities generally on
the New York Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on any such exchanges; (ii) a banking
moratorium shall have been declared either by U.S. federal, New York State or
Washington State authorities; (iii) there shall have occurred a material
disruption in commercial banking or securities settlement or clearance services;
or (iv) there shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war or other
calamity or crisis the effect of which on financial markets is such as to make
it, in the sole judgment of the Initial Purchasers, impractical or inadvisable
to proceed with the offering or delivery of the Securities as contemplated in
the Disclosure Package and the Final Memorandum (exclusive of any amendment or
supplement thereto).

11. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of the Company or
its officers and of the Initial Purchasers set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of the Initial Purchasers or the Company or any of the
indemnified persons referred to in Section 8 hereof, and will survive delivery
of and payment for the Securities. The provisions of Sections 7 and 8 hereof
shall survive the termination or cancellation of this Agreement.

12. Notices. All communications hereunder will be in writing and effective only
on receipt, and, if sent to the Initial Purchasers, will be mailed, delivered or
telefaxed to the Citigroup General Counsel (fax no.: (212) 816-7912) and
confirmed to Citigroup at 388 Greenwich Street, New York, New York 10013,
Attention: General Counsel; or, if sent to the Company, will be mailed,
delivered or telefaxed to the Interim Chief Executive Officer (email:
chad.smith@wamuinc.net) and confirmed to it at 1201 Third Avenue, Suite 3000,
Seattle, Washington 98101, Attention: Chief Executive Officer.

 

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13. Successors. This Agreement will inure to the benefit of and be binding upon
the parties hereto and their respective successors and the indemnified persons
referred to in Section 8 hereof and their respective successors, and, except as
expressly set forth in Section 5(j) hereof, no other person will have any right
or obligation hereunder.

14. Jurisdiction. The Company agrees that any suit, action or proceeding against
the Company brought by any Initial Purchaser, the directors, officers, employees
and agents of any Initial Purchaser, or by any person who controls any Initial
Purchaser, arising out of or based upon this Agreement or the transactions
contemplated hereby may be instituted in any State or U.S. federal court in The
City of New York and County of New York, and waives any objection which it may
now or hereafter have to the laying of venue of any such proceeding, and
irrevocably submits to the non-exclusive jurisdiction of such courts in any
suit, action or proceeding.

15. Internet Document Service. The Company hereby agrees that Citigroup may
provide copies of the Preliminary Memorandum and Final Memorandum and any other
agreement or document relating to the offer and sale of the Securities,
including, without limitation, the Registration Rights Agreement and the
Certificate of Designation, to Xtract Research LLC (“Xtract”) following the
Closing Date for inclusion in an online research service sponsored by Xtract,
access to which is restricted to “qualified institutional buyers” (as defined in
Rule 144A under the Act).

16. Integration. This Agreement supersedes all prior agreements and
understandings (whether written or oral) between the Company and the Initial
Purchasers, or any of them, with respect to the subject matter hereof.

17. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.

18. Waiver of Jury Trial. The Company hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any
legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.

19. No Fiduciary Duty. The Company hereby acknowledges that (a) the purchase and
sale of the Securities pursuant to this Agreement is an arm’s-length commercial
transaction between the Company, on the one hand, and the Initial Purchasers and
any Affiliate through which it may be acting, on the other, (b) the Initial
Purchasers are acting as principal and not as an agent or fiduciary of the
Company and (c) the Company’s engagement of the Initial Purchasers in connection
with the offering and the process leading up to the offering is as independent
contractors and not in any other capacity. Furthermore, the Company agrees that
it is solely responsible for making its own judgments in connection with the
offering (irrespective of whether any of the Initial Purchasers has advised or
is currently advising the Company on related or other matters). The Company
agrees that it will not claim that the Initial Purchasers have rendered advisory
services of any nature or respect, or owe an agency, fiduciary or similar duty
to the Company in connection with such transaction or the process leading
thereto.

 

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20. Counterparts. This Agreement may be signed in one or more counterparts, each
of which shall constitute an original and all of which together shall constitute
one and the same agreement.

21. Headings. The section headings used herein are for convenience only and
shall not affect the construction hereof.

22. Definitions. The terms that follow, when used in this Agreement, shall have
the meanings indicated.

“Act” shall mean the U.S. Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.

“Affiliate” shall have the meaning specified in Rule 501(b) of Regulation D.

“Business Day” shall mean any day other than a Saturday, a Sunday or a legal
holiday or a day on which banking institutions or trust companies are authorized
or obligated by law to close in The City of New York.

“Citigroup” shall mean Citigroup Global Markets Inc.

“Commission” shall mean the Securities and Exchange Commission.

“Disclosure Package” shall mean (i) the Preliminary Memorandum, as amended or
supplemented at the Execution Time, (ii) the Term Sheet in the form attached as
Schedule III hereto and (iii) any Issuer Written Information.

“Exchange Act” shall mean the U.S. Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.

“Execution Time” shall mean the date and time that this Agreement is executed
and delivered by the parties hereto.

“Investment Company Act” shall mean the U.S. Investment Company Act of 1940, as
amended, and the rules and regulations of the Commission promulgated thereunder.

“Issuer Written Information” shall mean any writings in addition to the
Preliminary Memorandum that the parties expressly agree in writing to treat as
part of the Disclosure Package.

“Regulation D” shall mean Regulation D under the Act.

“Regulation S-X” shall mean Regulation S-X under the Act.

 

21

--------------------------------------------------------------------------------

If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement between the
Company and the several Initial Purchasers.

 

Very truly yours, WMI Holdings Corp. By:  

/s/ Charles Edward Smith

  Name: Charles Edward Smith  

Title:   President, Interim Chief Executive Officer,

            Interim Chief Legal Officer and Secretary

 

The foregoing Agreement is hereby confirmed and accepted as of the date first
above written. Citigroup Global Markets Inc. By:  

/s/ Christian Anderson

  Name: Christian Anderson   Title:   Managing Director KKR Capital Markets LLC
By:  

/s/ Peter M. Glaser

  Name: Peter M. Glaser   Title:   Authorized Signatory

[Signature Page to Purchase Agreement]

--------------------------------------------------------------------------------

SCHEDULE I

 

Initial Purchasers

   Number of
Shares of Series
B Convertible
Preferred Stock  

Citigroup Global Markets Inc.

     200,000   

KKR Capital Markets LLC

     400,000      

 

 

 

Total

     600,000   

 

Sch. I

--------------------------------------------------------------------------------

SCHEDULE III

 

PRICING TERM SHEET    CONFIDENTIAL

600,000 Shares

WMI Holdings Corp.

3.00% Series B Convertible Preferred Stock

December 19, 2014

 

 

Pricing Term Sheet dated December 19, 2014 to Preliminary Offering Memorandum
dated December 12, 2014 (the “Preliminary Offering Memorandum”) of WMI Holdings
Corp.

The information in this Pricing Term Sheet supplements the Preliminary Offering
Memorandum and supersedes the information in the Preliminary Offering Memorandum
to the extent it is inconsistent with the information in the Preliminary
Offering Memorandum.

This Pricing Term Sheet is otherwise qualified in its entirety by reference to
the Preliminary Offering Memorandum. Capitalized terms used but not defined in
this Pricing Term Sheet have the respective meanings ascribed to them in the
Preliminary Offering Memorandum.

 

Issuer:    WMI Holdings Corp., a Washington corporation. Securities Offered:   

600,000 shares of 3.00% Series B Convertible Preferred Stock (the “Series B
Preferred Stock”), subject to adjustment as described in “—Restrictions on
Acquisitions of our Stock.”

 

Affiliates of KKR have agreed to purchase 200,000 shares of Series B Preferred
Stock.

Liquidation Preference:    $1,000 per share plus accrued and unpaid dividends,
if any, whether or not declared. Initial Offering Price:    $1,000 per share.
Gross Proceeds:    $600.0 million. Net Proceeds:    $568.7 million, after
deducting the initial purchasers’ fees and estimated offering expenses. This
amount reflects the full amount of the initial purchasers’ fees; however, a
significant portion of the initial purchasers’ fees are conditional and payable
after the Issue Date. Regular Dividend Rate:    3.00%, on a cumulative basis,
when, as and if declared by our Board of Directors, out of funds lawfully
available for payment. Regular Dividend Payment Dates:    March 15, June 15,
September 15 and December 15, commencing March 15, 2015. Regular Dividend Record
Dates:    March 1, June 1, September 1 and December 1, commencing on March 1,
2015. Amount of First Regular Dividend:    $5.83 per share (if declared,
assuming the Series B Preferred Stock is issued on the Issue Date).
Participating Dividends:    Without the written consent of holders of a majority
in aggregate liquidation preference of the Series B Preferred Stock, we shall
not declare or pay any dividends on our Common Stock (whether payable in cash,
securities or other

 

Sch. III-1

--------------------------------------------------------------------------------

  

property or assets), unless the holders of the shares of Series B Preferred
Stock then outstanding shall simultaneously receive participating dividends as
if the shares of Series B Preferred Stock had been converted into shares of our
Common Stock using the then applicable Initial Conversion Price immediately
preceding the record date for determining the shareholders eligible to receive
such Common Stock dividends.

 

We do not anticipate paying any cash dividends on our Common Stock at this time
or for the foreseeable future.

Mandatory Conversion:   

On each date we close any Acquisition (as defined in “—Acquisition and Qualified
Acquisition”), the number of outstanding shares of Series B Preferred Stock
having an aggregate liquidation preference equal to the net proceeds of this
offering utilized in such Acquisition, on a pro rata basis, will automatically
convert into a number of shares of our Common Stock equal to the $1,000
liquidation preference amount divided by a conversion price equal to the lesser
of:

 

•   $2.25 per share of Common Stock (the “Initial Conversion Price”); and

 

•   the arithmetic average of daily volume weighted average prices of our Common
Stock during the 20 trading day period ending on the trading day immediately
preceding the public announcement by us that we have entered into a definitive
agreement for such Acquisition, subject to a floor of $1.75 per share of our
Common Stock (the “Floor Price”).

 

In addition, on the date we close a Qualified Acquisition (as defined in
“—Acquisition and Qualified Acquisition”), each outstanding share of Series B
Preferred Stock will automatically convert into a number of shares of our Common
Stock equal to the $1,000 liquidation preference amount divided by the
applicable conversion price described above.

 

Each date we close an Acquisition (including a Qualified Acquisition) will be a
“Mandatory Conversion Date.”

 

The Initial Conversion Price and the Floor Price will be subject to customary
anti-dilution adjustments for stock splits, stock recombination, or tender or
exchange offers for our Common Stock by us. See “Description of the Series B
Preferred Stock—Mandatory Conversion—Conversion Price Adjustments” in the
Preliminary Offering Memorandum.

 

In addition to the shares of our Common Stock issuable upon mandatory
conversion, holders of the Series B Preferred Stock will have the right to
receive on each Mandatory Conversion Date in cash any accrued and unpaid
dividends on the shares of the Series B Preferred Stock to be converted on such
Mandatory Conversion Date as of such Mandatory Conversion Date, whether or not
declared (other than previously declared dividends payable to holders of record
as of a prior date), to the extent we are lawfully permitted to pay such
dividends at such time. To the extent that such dividends cannot be lawfully
paid at such time, the amount of such dividends that cannot be so paid shall be
added to the $1,000 per share liquidation preference of the Series B Preferred
Stock in the calculation of the number of the shares of Common Stock to be
received in the mandatory conversion (it being understood that no fractional
shares of Common Stock shall be issued and there shall be no payment with regard
to fractional shares); provided, however, that in the event

 

Sch. III-2

--------------------------------------------------------------------------------

   the receipt of additional shares of Common Stock in lieu of such dividends
would cause such holder to become a Substantial Holder, then pursuant to Article
VI of the Articles the number of additional shares of Common Stock received in
lieu of such dividends shall be reduced to the extent necessary such that upon
receipt of such shares such holder would not become a Substantial Holder
(resulting in such holder receiving less than the full value of the dividends it
was otherwise entitled to receive). In connection with the foregoing proviso,
purchasers of the Series B Preferred Stock that engage in activities related to
our stock, such as acquiring additional shares of our Common Stock in the public
market, may adversely affect their ability to receive additional shares of our
Common Stock in lieu of cash dividends upon a mandatory conversion. Acquisition
and Qualified Acquisition:   

“Acquisition” means any acquisition by us or any of our direct or indirect
wholly-owned subsidiaries, in a single transaction or a series of transactions,
whether by purchase, merger or otherwise, of all or substantially all of the
assets of, all the equity interests in, or a business line, unit or division of,
any person.

 

“Qualified Acquisition” means an Acquisition that taken together with prior
Acquisitions (if any) collectively utilize aggregate net proceeds of this
offering of $450.0 million.

Only Partial Conversion Before Reincorporation:    Prior to consummating the
Reincorporation, we will not have a number of authorized shares of our Common
Stock sufficient to effect a mandatory conversion upon the occurrence of a
Qualified Acquisition and may not have a number of authorized shares of our
Common Stock sufficient to effect a mandatory conversion upon the occurrence of
any Acquisition. If upon the applicable Mandatory Conversion Date we do not have
a number of authorized shares of our Common Stock sufficient to effect the
mandatory conversion of all shares of Series B Preferred Stock to be converted
on such Mandatory Conversion Date, such shares of Series B Preferred Stock will
automatically convert, to the fullest extent possible, into all authorized
shares of our Common Stock available for issuance, on a pro rata basis using the
applicable conversion price on such Mandatory Conversion Date. Shares of Series
B Preferred Stock that are not converted will remain outstanding and will
continue to be entitled to all the rights and preferences of the Series B
Preferred Stock. See “Description of the Series B Preferred Stock—Mandatory
Conversion—Mandatory Conversion Prior to the Reincorporation” and “Risk
Factors—Risks Related to Our Series B Preferred Stock—We may not consummate the
Reincorporation” in the Preliminary Offering Memorandum. Mandatory Redemption
Date:   

January 5, 2018, unless extended as described in the immediately succeeding
paragraph.

 

If, prior to the Mandatory Redemption Date, we have publicly announced that we
have entered into a definitive agreement for an Acquisition, the Mandatory
Redemption Date shall be extended to the earlier to occur of:

 

•   July 5, 2018;

 

•   the day immediately following (x) the date such definitive agreement is
terminated or (y) the date such Acquisition is closed.

 

We shall pay the Mandatory Redemption Price, if applicable, out of funds
lawfully available for payment.

 

Sch. III-3

--------------------------------------------------------------------------------

Repurchase at the Option of Holders upon a Put Event:   

If any Put Event occurs at any time when shares of Series B Preferred Stock are
outstanding, each holder of Series B Preferred Stock shall have the right, at
such holder’s option, to require us to repurchase for cash, out of funds
lawfully available for payment, all, or fewer than all, of such holder’s Series
B Preferred Stock.

 

In the case of a Put Event that is:

 

•   a Change of Control, the Put Event repurchase price shall equal $1,750 per
share of Series B Preferred Stock, plus accrued and unpaid dividends, if any,
whether or not declared; and

 

•   a Post-Closing Covenant Default, the Put Event repurchase price shall equal
$1,000 per share of Series B Preferred Stock, plus accrued and unpaid dividends,
if any, whether or not declared.

Restrictions on Acquisitions of our Stock:   

In order to preserve the tax treatment of our net operating loss carryforwards
under the Internal Revenue Code, our Articles restrict the amount of our stock
(including any other instrument treated as stock for purposes of Section 382)
that a person may acquire. See “Summary—The Offering—Restrictions on
Acquisitions of our Stock” in the Preliminary Offering Memorandum.

 

Each purchaser of the Series B Preferred Stock in this offering will be required
to sign a letter (provided separately) pursuant to which it will make certain
representations and warranties related to its ownership of our stock to ensure
compliance with the restrictions in our Articles.

 

In connection with the Investor Rights Agreement and Investment Agreement,
affiliates of KKR have received approval from our Board of Directors to become a
Substantial Holder and, once a Substantial Holder, further increase their
percentage stock ownership in us. See “Certain Relationship and Related Party
Transactions—Relationship with KKR” in the Preliminary Offering Memorandum. As a
result, such affiliates of KKR are not subject to the ownership restrictions
under Article VI of the Articles with respect to the shares of Series B
Preferred Stock acquired pursuant to this offering or with respect to their
other security ownership interests described in “Security Ownership of Certain
Beneficial Owners and Management” in the Preliminary Offering Memorandum or
acquired in the future pursuant to the Investor Rights Agreement.

Reincorporation Voting:   

In connection with this offering, we are requesting that certain current holders
of our common stock that may also be purchasing shares of Series B Preferred
Stock in this offering execute a voting agreement pursuant to which such
stockholders will agree to vote all their shares of our common stock and Series
B Preferred Stock (on an as converted basis) that they hold on the record date
for such vote in favor of the Reincorporation.

 

Contrary to the Preliminary Offering Memorandum, the certificate of designation
for the Series B Preferred Stock will not include a provision that the shares of
Series B Preferred Stock shall be automatically voted together with the shares
of Series A Preferred Stock for the purpose of voting in favor of the
Reincorporation.

 

Holders of the Series B Preferred Stock will vote together (on an as converted
basis as described in the Preliminary Offering Memorandum) in the same class
with holders of our Series A Preferred Stock (on an as converted basis as
provided in the certificate of designation for the Series A Preferred Stock) and
Common Stock.

 

Sch. III-4

--------------------------------------------------------------------------------

Affiliates of KKR’s Ownership of our Common Stock upon Exercise of Warrants, and
Conversion of Series A Preferred Stock and Series B Preferred Stock:   
160,354,518 shares of Common Stock (29.7%). KKR Voting Agreement:    In
connection with this offering, KKR Fund, a KKR affiliate, will execute a voting
agreement with us pursuant to which KKR Fund will agree to vote all shares of
Series A Preferred Stock, Series B Preferred Stock and Common Stock that it
holds on the record date for such vote in favor of the Reincorporation. Pricing
Date:    December 19, 2014. Trade Date:    December 19, 2014 Issue Date:   

January 5, 2015.

 

Under Rule 15c6-1 under the Exchange Act, trades in the secondary market
generally are required to settle in three business days unless the parties to
any such trade expressly agree otherwise. Accordingly, purchasers who wish to
trade the Series B Preferred Stock prior to December 30, 2014 will be required,
by virtue of the fact that the Series B Preferred Stock initially will settle in
T+9, to specify an alternative settlement cycle at the time of any such trade to
prevent failed settlement. Purchasers of the Series B Preferred Stock who wish
to trade the Series B Preferred Stock prior to December 30, 2014 should consult
their own advisors.

Use of Proceeds:    We intend that the net proceeds of this offering will be
deposited into an escrow account and initially invested in United States
“government securities” with the meaning of Section 2(a)(16) of the Investment
Company Act of 1940, as amended (the “Investment Company Act”) having a maturity
of 180 days or less, in money market funds meeting certain conditions under Rule
2a-7 promulgated under the Investment Company Act or cash items. These net
proceeds will be released from escrow to us in amounts to finance our efforts to
explore and fund, in whole or in part, acquisitions whether completed or not,
including reasonable attorney fees and expenses, accounting expenses, due
diligence and financial advisor fees and expenses. CUSIP/ISIN:   

CUSIP: 92936P 209

ISIN: US92936P2092

Registration Rights:   

We have agreed for the benefit of holders of the Series B Preferred Stock and
holders of the Common Stock issuable upon mandatory conversion of the Series B
Preferred Stock that, subject to certain conditions, we will use our reasonable
efforts to:

 

•   file a shelf registration statement covering resales of our Common Stock
issuable upon mandatory conversion of the Series B Preferred Stock pursuant to
Rule 415 under the Securities Act no later than six months after the Issue Date,
to the extent such shares of Common Stock are not freely tradable;

 

•   file a shelf registration statement covering resales of our Series B
Preferred Stock pursuant to Rule 415 under the Securities Act no later than one
year after the Issue Date, to the extent such shares of Preferred Stock are not
freely tradable; and

 

•   cause each of these shelf registration statements to be declared effective
under the Securities Act.

 

Sch. III-5

--------------------------------------------------------------------------------

Listing:   

Our Common Stock is currently listed on the OTCQB under the symbol “WMIH.”

 

We have agreed to use our reasonable efforts to list our Common Stock on a
national securities exchange after becoming eligible to do so and upon approval
of the Board of Directors, but there can be no assurance of whether or at what
time such listing will occur.

 

We do not intend to list the Series B Preferred Stock on any securities

exchange.

Transfer Restrictions:    Due to the nature of our operations, the exemption
under Rule 144 under the Securities Act may not be available for offers and
sales of the Series B Preferred Stock or our Common Stock issuable upon
mandatory conversion thereof. See “Transfer Restrictions” in the Preliminary
Offering Memorandum. No ERISA Plan Assets:    By acquiring the Series B
Preferred Stock, holders will be deemed to have represented and warranted that
no portion of the assets used by the holder to acquire or hold any interest in
the Series B Preferred Stock and, until such time as it is no longer restricted
from transfer, the Common Stock issuable upon conversion of the Series B
Preferred Stock, constitute or will constitute the assets of certain ERISA
plans. See “Certain ERISA and Other Considerations” and “Transfer Restrictions”
in the Preliminary Offering Memorandum. Joint Book-Running Managers:   

Citigroup

KKR

The Series B Preferred Stock and the Common Stock issuable upon mandatory
conversion of the Series B Preferred Stock have not been registered under the
Securities Act or the securities laws of any other jurisdiction, and may not be
offered or sold within the United States or to, or for the account or benefit
of, U.S. persons except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act. Accordingly,
the Series B Preferred Stock and the Common Stock issuable upon mandatory
conversion of the Series B Preferred Stock are being offered and sold only to
“qualified institutional buyers” (as defined in Rule 144A under the Securities
Act) in accordance with Rule 144A. For details about eligible offers, deemed
representations and agreements by investors and transfer restrictions, see
“Transfer Restrictions” in the Preliminary Offering Memorandum.

This material is confidential and is for your information only and is not
intended to be used by anyone other than you. This information does not purport
to be a complete description of the Series B Preferred Stock or the offering.
Please refer to the Preliminary Offering Memorandum for a complete description.

This communication is being distributed solely to qualified institutional
buyers, as defined in Rule 144A under the Securities Act.

This communication does not constitute an offer to sell or the solicitation of
an offer to buy any securities in any jurisdiction to any person to whom it is
unlawful to make such offer or solicitation in such jurisdiction.

Any disclaimer or other notice that may appear below is not applicable to this
communication and should be disregarded. Such disclaimer or notice was
automatically generated as a result of this communication being sent by
Bloomberg or another email system.

 

Sch. III-6

--------------------------------------------------------------------------------

SCHEDULE IV

Schedule of Written General Solicitation Materials

None.

 

Sch. IV-1

--------------------------------------------------------------------------------

EXHIBIT A

December 19, 2014

Citigroup Global Markets Inc.

KKR Capital Markets LLC

c/o Citigroup Global Markets Inc.

388 Greenwich Street

New York, New York 10013

Ladies and Gentlemen:

This letter is being delivered to you in connection with a proposed Purchase
Agreement (the “Purchase Agreement”) between WMI Holdings Corp., a Washington
corporation (the “Company”), and each of you as Initial Purchasers, relating to
an offering of 600,000 shares of 3.00% Series B Convertible Preferred Stock,
which will be convertible into common stock, $0.00001 par value (the “Common
Stock”), of the Company.

In order to induce you to enter into the Purchase Agreement, the undersigned
will not, without the prior written consent of Citigroup Global Markets Inc. and
KKR Capital Markets LLC, directly or indirectly, offer, sell, contract to sell,
pledge or otherwise dispose of, enter into any transaction which is designed to,
or might reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the undersigned of, file (or participate in the filing of) a
registration statement with the U.S. Securities and Exchange Commission in
respect of (for the avoidance of doubt, other than pursuant to the Registration
Rights Agreement (as defined in the Purchase Agreement)), or establish or
increase a put equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the Securities Exchange Act of
1934, as amended, and the rules and regulations of the U.S. Securities and
Exchange Commission promulgated thereunder (the “Exchange Act”) in respect of,
any shares of capital stock of the Company or any securities convertible into,
or exercisable or exchangeable for such capital stock, or publicly announce an
intention to effect any such transaction, for a period (the “Lock-up Period”) of
the earlier of (x) 180 days after the date of the Purchase Agreement and (y) the
date on which the undersigned ceases to serve as a director on the Company’s
Board of Directors.

The preceding paragraph shall not apply to (A) bona fide gifts or gifts as a
result of the operation of law or testate or intestate succession, (B) transfers
by the undersigned to a trust, partnership, limited liability company or other
entity, all of the beneficial interests of which are held, directly or
indirectly, by the undersigned or his or her spouse or children or (C) other
dispositions of such securities not for value, in each case that are made
exclusively between and among the undersigned or members of the undersigned’s
family, or affiliates of the undersigned; provided, however, that it shall be a
condition to any such transfer that (i) the transferee/donee executes a lock-up
letter substantially in the form of this letter (including, without limitation,
the restrictions set forth in the preceding paragraph) (ii) no filing by any
party (donor, donee, transferor or transferee) under the Exchange Act, shall be
required or shall be voluntarily made in connection with such transfer or
distribution (other than a filing on a Form 5, Schedule 13D or Schedule 13G (or
13D-A or 13G-A) made after the expiration of the Lock-up Period referred to
above), (iii) each

 

Ex. A-1

--------------------------------------------------------------------------------

party (donor, donee, transferor or transferee) shall not be required by law
(including without limitation the disclosure requirements of the Securities Act
of 1933, as amended, and the Exchange Act) to make, and shall agree to not
voluntarily make, any public announcement of the transfer or disposition and
(iv) the undersigned notifies Citigroup Global Markets Inc. and KKR Capital
Markets LLC in writing at least two business days prior to the proposed transfer
or disposition.

If for any reason the Purchase Agreement shall be terminated prior to the
Closing Date (as defined in the Purchase Agreement), the agreement set forth
above shall likewise be terminated.

 

Very truly yours, By:  

 

  Name:   Title:

 

Ex. A-2

--------------------------------------------------------------------------------

EXHIBIT B

KKR MANAGEMENT HOLDINGS L.P.

9 West 57th Street, Suite 4200

New York, NY 10019

KKR FUND HOLDINGS L.P.

9 West 57th Street, Suite 4200

New York, NY 10019

December 19, 2014

WMI Holdings Corp.

1201 Third Avenue, Suite 3000

Seattle, Washington 98101

Re: Exercise and Transfer of Warrants

Ladies and Gentlemen:

 

  1. This letter agreement is made as of December 19, 2014, by and among KKR
Management Holdings L.P. (the “Warrantholder”), KKR Fund Holdings L.P. (the
“Preferred Stockholder”) and WMI Holdings Corp. (“WMI”).

 

  2. Reference is hereby made to that certain proposed issuance of Series B
Convertible Preferred Stock of WMI (the “Series B Issuance”), pursuant to which
WMI intends to offer and sell 600,000 shares of Series B Convertible Preferred
Stock (the “Series B Preferred Stock”). In connection with the Series B
Issuance, the Preferred Stockholder, or an affiliate thereof, has agreed to
purchase 200,000 shares of the Series B Preferred Stock (the “Anchor
Investment”).

 

  3. Pursuant to that certain Investment Agreement, dated as of January 30,
2014, by and among WMI, the Preferred Stockholder and the Warrantholder, (i) the
Preferred Stockholder acquired 1,000,000 shares of the Series A Convertible
Preferred Stock (collectively, the “Series A Preferred Stock”) and (ii) the
Warrantholder acquired certain warrants to purchase, in the aggregate,
61.4 million shares of the common stock of WMI (collectively, the “Warrants”).

 

  4. Upon consummation of the Anchor Investment, each of the Warrantholder and
the Preferred Stockholder, as applicable, hereby agrees that it shall not
(i) convert any or all of its Series A Preferred Stock, (ii) exercise its right
to acquire common stock of WMI, in whole or in part, under the Warrants or
(iii) offer, sell, assign, transfer, or otherwise dispose of any of the Series A
Preferred Stock or Warrants, except as to an Affiliate (as defined in that
certain Investor Rights Agreement, dated as of January 20, 2014, by and among
WMI, the Preferred Stockholder and any other parties thereto), in either case
until on or after March 20, 2015.

 

Ex. B-1

--------------------------------------------------------------------------------

  5. This letter agreement shall remain effective until the earlier to occur of
(i) March 20, 2015 and (ii) termination of this letter agreement in a writing
executed by the Warrantholder, the Preferred Stockholder and WMI.

 

  6. This letter agreement shall be deemed to be made and in all respects shall
be interpreted, construed and governed by and in accordance with the laws of the
State of New York. The parties hereby irrevocably submit to the jurisdiction of
the courts of the State of New York and the federal courts of the United States
of America located in the State of New York solely for the purposes of any suit,
action or other proceeding between any of the parties hereto arising out of this
letter agreement or any transaction contemplated hereby, and hereby waive, and
agree to assert, as a defense in any action, suit or proceeding for the
interpretation or enforcement hereof, that it is not subject thereto or that
such action, suit or proceeding may not be brought or is not maintainable in
said courts or that the venue thereof may not be appropriate or that this letter
agreement may not be enforced in or by such courts, and the parties hereto
irrevocably agree that all claims with respect to such action or proceeding
shall be heard and determined in such New York state or federal court. The
parties hereby consent to and grant any such court jurisdiction over the person
of such parties and over the subject matter of such dispute and agree that
mailing of process or other papers in connection with any such action or
proceeding in the manner provided in Paragraph 8 below or in such other manner
as may be permitted by law, shall be valid and sufficient service thereof. EACH
OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS LETTER AGREEMENT
OR TH E TRANSACTIONS CONTEMPLATED HEREBY.

 

  7. Except as otherwise provided herein and subject to Paragraph 11 below, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, permitted assigns, heirs, executors and administrators of the
parties hereto.

 

  8. Any notice, request, instruction or other document to be given hereunder by
any party to the other will be in writing and will be deemed to have been duly
given (a) on the date of delivery if delivered personally or by telecopy or
facsimile, upon confirmation of receipt, (b) on the first business day following
the date of dispatch if delivered by a recognized next-day courier service, or
(c) on the third business day following the date of mailing if delivered by
registered or certified mail, return receipt requested, postage prepaid. All
notices hereunder shall be delivered as set forth below, or pursuant to such
other instructions as may be designated in writing by the party to receive such
notice.

If to Warrantholder or Preferred Stockholder, to:

c/o Kohlberg Kravis Roberts & Co. L.P.

9 West 57th Street

Suite 4200

New York, New York 10019

Attn: David Sorkin

Fax: (212) 750-0003

 

Ex. B-2

--------------------------------------------------------------------------------

with a copy to (which copy alone shall not constitute notice):

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Attn: Gary I. Horowitz, Esq.

Telephone: (212) 455-2000

Fax: (212) 455-2502

If to WMI, to:

WMI Holdings, Inc.

1201 Third Avenue, Suite 3000

Seattle, WA 98101

Attn: Chad Smith

Telephone: (206) 432-8731

Fax: (206) 432-8877

with a copy to (which copy alone shall not constitute notice):

Akin Gump Strauss Hauer & Feld LLP

One Bryant Park

New York, NY 10036

Attn: Kerry E. Berchem, Esq.

Telephone: (212) 871-1095

Fax: (212) 872-1002

 

  9. The parties hereto acknowledge and agree that irreparable damage to the
other party would occur in the event that any of the provisions of this letter
agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that each party shall be entitled
to an injunction, injunctions or other equitable relief, without the necessity
of posting a bond, to prevent or cure breaches of the provisions of this letter
agreement and to enforce specifically the terms and provisions hereof, this
being in addition to any other remedy to which the parties may be entitled by
law or equity.

 

  10. Nothing in this letter agreement, expressed or implied, is intended to
confer upon any person, other than the parties hereto or their respective
successors, any rights, remedies, obligations or liabilities under or by reason
of this letter agreement.

 

  11. This letter agreement shall not be assignable by any party hereto without
the prior written consent of the other parties.

 

  12. This letter agreement may be executed in any number of counterparts, each
of which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument. This
letter agreement may be executed by facsimile signature(s).

 

Ex. B-3

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  13. In the event that any provision of this letter agreement becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this letter agreement shall continue in full force and effect without said
provision; provided that no such severability shall be effective if it
materially changes the economic benefit of this letter agreement to any party.

 

Ex. B-4

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KKR MANAGEMENT HOLDINGS L.P. By:   KKR Management Holdings Corp., its general
partner By:  

 

  Name:   Title: KKR FUND HOLDINGS L.P. By:   KKR Group Holdings L.P., its
general partner By:   KKR Group Limited, its general partner By:  

 

  Name:   Title:

 

ACKNOWLEDGED BY: WMI Holdings Corp. By:  

 

  Name:   Title: