13D Filing: Elliott Associates, L.P. and Affinion Group Holdings Inc. (AFGR)

Item 6.

Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

Pursuant to the Investor Purchase Agreement, on May 10, 2017, the Reporting Persons acquired Warrants (the “Warrants”) to acquire up to 1,956,345 shares of Common Stock at an exercise price equal to $0.01 (527,458 shares of which are currently exercisable and included in Item 5 above). However, the Reporting Persons are prevented from exercising the Warrants to the extent that after giving effect to such exercise, the Reporting Persons would beneficially own in excess of 9.9% of the shares of Common Stock outstanding immediately after giving effect to such exercise to the extent doing so would require the consent of, or notice to, a governmental authority, and such consent or notice has not yet been properly filed, including the ND Insurance Commissioner.

In connection with the Investor Purchase Agreement, on May 10, 2017, the Issuer entered into a Warrant Agreement with American Stock Transfer & Trust Company, LLC, as warrant agent (the “Warrant Agreement”), setting forth the terms of the New Warrants. Pursuant to the terms of the Warrant Agreement, the New Warrants are immediately exercisable upon issuance and will terminate on the earlier to occur of (i) November 10, 2022 and (ii) five business days following the consummation of a sale of Affinion Holdings or other similar fundamental transaction. Each New Warrant is exercisable for one share of Common Stock at a price equal to $0.01.

The Warrants contain customary provisions for the adjustment of the number of shares of Common Stock issuable upon exercise in the event of the occurrence of any organic dilutive (or anti-dilutive) events, including, but not limited to, splits, combinations, stock dividends and similar transactions, as well as in the event of dividends or distributions in respect of Common Stock to the extent that holders of Warrants are not permitted to participate on an as-exercised basis.

Neither the Warrants, nor the Common Stock issuable upon the exercise thereof, are registered securities, and therefore are subject to restrictions on transfers under securities laws.

Holders of Warrants will be entitled to participate in dividends on an as-exercised basis. Holders will not be entitled to any other rights of holders of Common Stock until, and to the extent, they have validly exercised their Warrants.

The Warrant Agreement is incorporated by reference as Exhibit 99.2 to this Statement and the foregoing summary of the Warrant Agreement is qualified in its entirety by reference to Exhibit 99.2.

On March 31, 2017 Elliott and Elliott International entered into an Amended and Restated Registration Rights Agreement (the “Registration Rights Agreement”) in which the Issuer agreed to register certain equity securities under the Securities Act of 1933. The Registration Rights Agreement is attached as Exhibit 99.3 hereto and is incorporated herein by reference.

On May 22, 2017, the Reporting Persons entered into a Joint Filing Agreement (the “Joint Filing Agreement”) in which the parties agreed to the joint filing on behalf of each of them of statements on Schedule 13D with respect to the securities of the Issuer to the extent required by applicable law. The Joint Filing Agreement is attached as Exhibit 99.4 hereto and is incorporated herein by reference.

Except as described above in this Item 6, none of the Reporting Persons has any contracts, arrangements, understandings or relationships with respect to the securities of the Issuer.

Item 7.

Material to be Filed as Exhibits.

Exhibit 99.1 – Nominating Agreement dated as of May 10, 2017, between Affinion Group Holdings, Inc. and affiliates of Elliott Management Corporation (incorporated by reference to Exhibit 10.2 to the Issuer’s Current Report on Form 8-K filed May 12, 2017) (File No. 000-55577).

Exhibit 99.2 – Warrant Agreement, dated as of May 10, 2017, between Affinion Group Holdings, Inc. and American Stock Transfer & Trust Company, LLC (incorporated by reference to Exhibit 10.4 to Affinion Group Holdings, Inc.’s current report on Form 8-K filed with the Securities and Exchange Commission on May 12, 2017) (File No. 000-55577).