KINGSWAY FINANCIAL SERVICES INC. (TSE:KFS) Files An 8-K Entry into a Material Definitive Agreement
ITEM 1.01 Entry into a Material Definitive Agreement.
On November 9, 2016, Kingsway Financial Services Inc. (the
Company) entered into separate Stock Purchase Agreements
(collectively, the Purchase Agreements) with GrizzlyRock
Institutional Value Partners, LP (GrizzlyRock), W.H.I. Growth
Fund Q.P., L.P., a related party of GrizzlyRock (WHI and,
together with GrizzlyRock, the Grizzly Investors), and Yorkmont
Capital Partners, LP (Yorkmont, and collectively with the Grizzly
Investors, the Investors) for the private placement (the Private
Placement) of 1,615,384 shares of the Companys common stock, no
par value per share (Common Stock), at a purchase price of
US$6.50 per share with gross proceeds to the Company of
US$10,499,996.
Company) entered into separate Stock Purchase Agreements
(collectively, the Purchase Agreements) with GrizzlyRock
Institutional Value Partners, LP (GrizzlyRock), W.H.I. Growth
Fund Q.P., L.P., a related party of GrizzlyRock (WHI and,
together with GrizzlyRock, the Grizzly Investors), and Yorkmont
Capital Partners, LP (Yorkmont, and collectively with the Grizzly
Investors, the Investors) for the private placement (the Private
Placement) of 1,615,384 shares of the Companys common stock, no
par value per share (Common Stock), at a purchase price of
US$6.50 per share with gross proceeds to the Company of
US$10,499,996.
No brokerage, finders, placement agent or investment banking fees
or commissions are payable by the Company in connection with the
Private Placement.
or commissions are payable by the Company in connection with the
Private Placement.
The Private Placement closed on November 16, 2016, at which time
the Company entered into (i) Registration Rights Agreements with
the Investors (collectively, the Registration Rights Agreements),
to which the Company has granted to the Investors certain
registration rights with respect to the resale of the Common
Stock purchased in the Private Placement, and (ii) Right of First
Offer Agreements with the Grizzly Investors (the ROFO Agreements)
whereby the Company has provided a right of first offer for
GrizzlyRock, WHI and their affiliates to co-invest alongside the
Company in certain qualifying investment opportunities that are
sponsored by the Company.
the Company entered into (i) Registration Rights Agreements with
the Investors (collectively, the Registration Rights Agreements),
to which the Company has granted to the Investors certain
registration rights with respect to the resale of the Common
Stock purchased in the Private Placement, and (ii) Right of First
Offer Agreements with the Grizzly Investors (the ROFO Agreements)
whereby the Company has provided a right of first offer for
GrizzlyRock, WHI and their affiliates to co-invest alongside the
Company in certain qualifying investment opportunities that are
sponsored by the Company.
Stock Purchase Agreements
to the Stock Purchase Agreement with GrizzlyRock (the GrizzlyRock
Purchase Agreement), among other things, GrizzlyRock agreed to
purchase 265,000 shares of Common Stock from the Company for a
purchase price of $1,722,500. to the Stock Purchase Agreement
with WHI (the WHI Purchase Agreement and, together with the
GrizzlyRock Purchase Agreement, the Grizzly Purchase Agreements),
among other things, WHI agreed to purchase 581,154 shares of
Common Stock from the Company for a purchase price of $3,777,501.
At the closing of the Grizzly Purchase Agreements, the Company,
GrizzlyRock and WHI entered into a Registration Rights Agreement
(the Grizzly Registration Rights Agreement) and the ROFO
Agreements.
Purchase Agreement), among other things, GrizzlyRock agreed to
purchase 265,000 shares of Common Stock from the Company for a
purchase price of $1,722,500. to the Stock Purchase Agreement
with WHI (the WHI Purchase Agreement and, together with the
GrizzlyRock Purchase Agreement, the Grizzly Purchase Agreements),
among other things, WHI agreed to purchase 581,154 shares of
Common Stock from the Company for a purchase price of $3,777,501.
At the closing of the Grizzly Purchase Agreements, the Company,
GrizzlyRock and WHI entered into a Registration Rights Agreement
(the Grizzly Registration Rights Agreement) and the ROFO
Agreements.
to the Stock Purchase Agreement with Yorkmont (the Yorkmont
Purchase Agreement), among other things, Yorkmont agreed to
purchase 769,230 shares of Common Stock from the Company for a
purchase price of $4,999,995. At the closing of the Yorkmont
Purchase Agreement, the Company and Yorkmont entered into a
Registration Rights Agreement (the Yorkmont Registration Rights
Agreement).
Purchase Agreement), among other things, Yorkmont agreed to
purchase 769,230 shares of Common Stock from the Company for a
purchase price of $4,999,995. At the closing of the Yorkmont
Purchase Agreement, the Company and Yorkmont entered into a
Registration Rights Agreement (the Yorkmont Registration Rights
Agreement).
The Purchase Agreements contain representations and warranties by
the Company and the Investors, including, among others, with
respect to corporate organization, capitalization, corporate
authority, assets and liabilities, real property, tax matters and
compliance with applicable laws.
the Company and the Investors, including, among others, with
respect to corporate organization, capitalization, corporate
authority, assets and liabilities, real property, tax matters and
compliance with applicable laws.
Registration Rights Agreements
to the Grizzly Registration Rights Agreement entered into at the
closing, the Company has provided the Grizzly Investors certain
demand registration rights such that, at any time during the one
year period after the closing, the Grizzly Investors may request
that the Company file a registration statement to register the
Common Stock issued to the Grizzly Purchase Agreements for resale
under the Securities Act of 1933, as amended (the Securities
Act), subject to the terms and conditions contained in the
Grizzly Registration Rights Agreements.
closing, the Company has provided the Grizzly Investors certain
demand registration rights such that, at any time during the one
year period after the closing, the Grizzly Investors may request
that the Company file a registration statement to register the
Common Stock issued to the Grizzly Purchase Agreements for resale
under the Securities Act of 1933, as amended (the Securities
Act), subject to the terms and conditions contained in the
Grizzly Registration Rights Agreements.
to the Yorkmont Registration Rights Agreement entered into at the
closing, the Company has provided the Yorkmont certain demand
registration rights such that, at any time during the one year
period after the closing, Yorkmont may request that the Company
file a registration statement to register the Common Stock issued
to the Yorkmont Purchase Agreement for resale under the
Securities Act, subject to the terms and conditions contained in
the Yorkmont Registration Rights Agreement.
closing, the Company has provided the Yorkmont certain demand
registration rights such that, at any time during the one year
period after the closing, Yorkmont may request that the Company
file a registration statement to register the Common Stock issued
to the Yorkmont Purchase Agreement for resale under the
Securities Act, subject to the terms and conditions contained in
the Yorkmont Registration Rights Agreement.
The Registration Rights Agreements also provide certain piggyback
registration rights permitting the Investors to include their
Common Stock in registration statements initiated by the Company
or stockholders other than the Investors.
registration rights permitting the Investors to include their
Common Stock in registration statements initiated by the Company
or stockholders other than the Investors.
ROFO Agreements
to the two ROFO Agreements entered into at the closing, the
Company has provided the Grizzly Investors with a right of first
offer to co-invest alongside the Company in certain qualifying
investment opportunities that are sponsored by the Company. The
ROFO Agreements have a term of five years but will terminate
earlier if the GrizzlyRock Investors and their affiliates cease
to own at least 211,538 shares of the Companys Common Stock.
Company has provided the Grizzly Investors with a right of first
offer to co-invest alongside the Company in certain qualifying
investment opportunities that are sponsored by the Company. The
ROFO Agreements have a term of five years but will terminate
earlier if the GrizzlyRock Investors and their affiliates cease
to own at least 211,538 shares of the Companys Common Stock.
The foregoing description of the Purchase Agreements,
Registration Rights Agreements and ROFO Agreements and the
transactions contemplated thereby does not purport to be complete
and is qualified in its entirety by the full text of the Purchase
Agreements, Registration Rights Agreements and ROFO Agreements,
copies of which are attached hereto as Exhibits 10.1, 10.2, 10.3,
10.4, 10.5 10.6 and 10.7 respectively, to this Current Report on
Form 8-K.
Registration Rights Agreements and ROFO Agreements and the
transactions contemplated thereby does not purport to be complete
and is qualified in its entirety by the full text of the Purchase
Agreements, Registration Rights Agreements and ROFO Agreements,
copies of which are attached hereto as Exhibits 10.1, 10.2, 10.3,
10.4, 10.5 10.6 and 10.7 respectively, to this Current Report on
Form 8-K.
ITEM 3.02 Unregistered Sales of Equity Securities.
The information set forth under Item 1.01 is incorporated herein
by reference.>>The offer and sale of the Common Stock in
the Private Placement were made in reliance on the exemption from
registration under Section 4(a)(2) of the Securities Act and/or
Rule 506 of Regulation D promulgated under the Securities Act.
by reference.>>The offer and sale of the Common Stock in
the Private Placement were made in reliance on the exemption from
registration under Section 4(a)(2) of the Securities Act and/or
Rule 506 of Regulation D promulgated under the Securities Act.
Item 9.01 Financial Statements and Exhibits.
>(d) Exhibits.
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Exhibit Number
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Exhibit Description
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10.1
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Stock Purchase Agreement, dated as of November 9, 2016
by and between the Company and GrizzlyRock Institutional Value Partners, LP. |
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10.2
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Stock Purchase Agreement, dated as of November 9, 2016
by and between the Company and W.H.I. Growth Fund Q.P., L.P. |
|
10.3
|
Stock Purchase Agreement, dated as of November 9, 2016
by and between the Company and Yorkmont Capital Partners, LP. |
|
10.4
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Registration Rights Agreement, dated as of November 16,
2016 by and among the Company, GrizzlyRock Institutional Value Partners, LP and W.H.I. Growth Fund Q.P., L.P. |
|
10.5
|
Registration Rights Agreement, dated as of November 16,
2016 by and between the Company and Yorkmont Capital Partners, LP. |
|
10.6
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Right of First Offer Agreement, dated as of November
16, 2016 by and between the Company and GrizzlyRock Institutional Value Partners, LP. |
|
10.7
|
Right of First Offer Agreement, dated as of November
16, 2016 by and between the Company and W.H.I. Growth Fund Q.P., L.P. |
About KINGSWAY FINANCIAL SERVICES INC. (TSE:KFS)
Kingsway Financial Services Inc. is a holding company. The Company operates as a merchant bank primarily engaged, through its subsidiaries, in the property and casualty insurance business. The Company operates through Insurance Underwriting segment. Its Insurance Underwriting segment provides non-standard automobile insurance to individuals who do not meet the criteria for coverage by standard automobile insurers. The Insurance Underwriting segment markets automobile insurance products that provide coverage in three areas: liability, accident benefits and physical damage. The Insurance Underwriting’s products and services are marketed through over 3,700 independent agencies. The Company’s property and casualty insurance business operations are conducted through its subsidiaries, such as Mendota Insurance Company (Mendota), Mendakota Insurance Company (Mendakota), Mendakota Casualty Company (MCC), Kingsway Amigo Insurance Company (Amigo) and Kingsway Reinsurance Corporation. KINGSWAY FINANCIAL SERVICES INC. (TSE:KFS) Recent Trading Information
KINGSWAY FINANCIAL SERVICES INC. (TSE:KFS) closed its last trading session 00.00 at 7.60 with 100 shares trading hands.
