| Item 1.01 | Entry Into a Material Definitive Agreement |
As previously disclosed, on July 23, 2021, The New Home Company Inc., a Delaware corporation (the “Company”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Newport Holdings, LLC, a Delaware limited liability company (“Parent”) which is controlled by funds managed by affiliates of Apollo Global Management, Inc., and Newport Merger Sub, Inc., a Delaware corporation and a wholly owned, direct subsidiary of Parent (“Merger Sub”). In connection with the transactions related to the Merger Agreement, on July 26, 2021, Merger Sub launched a consent solicitation (the “Consent Solicitation”) from registered holders (“Holders”) of the Company’s 7.250% Senior Notes due 2025 (the “Notes”) to certain amendments (the “Amendments”) to the Indenture, dated as of October 28, 2020, by and among the Company, the subsidiary guarantors of the Company party thereto (the “Guarantors”) and U.S. Bank National Association as trustee, as supplemented by the First Supplemental Indenture dated as of February 24, 2021, the Second Supplemental Indenture dated as of March 9, 2021, the Officer’s Certificate dated as of February 24, 2021 and by the Global Security for the 7.250% Senior Notes due 2025, as further amended or supplemented (the “Indenture”), to eliminate the requirement to make a “Change of Control Offer” with respect to the Notes in connection with the Merger (as defined in the Merger Agreement) and to make certain other customary changes for a privately-held company to the “Change of Control” provisions in the Notes.
In connection with the Consent Solicitation, on August 3, 2021, the Company and each of the Guarantors entered into that certain Third Supplemental Indenture (the “Third Supplemental Indenture”) to the Indenture, which, when it becomes operative, will effectuate the Amendments.
The Amendments and the Third Supplemental Indenture will not become operative unless and until the satisfaction or waiver by Merger Sub of all conditions to the Consent Solicitation and Merger Sub (or its successor in the Merger) provides notice to Ipreo LLC, the information and tabulation agent for the Consent Solicitation, that it will pay the requisite consent fee, which will not occur until the Merger has been closed. If and when the Amendments become operative, all current Holders, including non-consenting Holders, will be subject to the terms of the Indenture as modified by the Third Supplemental Indenture.
The foregoing description of the Amendments and the Third Supplemental Indenture are not complete and are qualified in their entirety by reference to the Third Supplemental Indenture, a copy of which is filed as Exhibit 4.1 to this Current Report on Form 8-K (this “Report”) and incorporated herein by reference.
| Item 3.03 | Material Modification of Rights to Security Holders. |
The information set forth in Item 1.01 is incorporated by reference herein as such information relates to the Notes.
| Item 7.01 | Regulation FD Disclosure. |
On August 4, 2021, Merger Sub issued a press release announcing the receipt of the requisite consents in connection with the Consent Solicitation. A copy of the press release is attached hereto as Exhibit 99.1.
The information in this Report (including Exhibit 99.1) is furnished pursuant to Item 7.01 and shall not be deemed “filed” for purposes of the Exchange Act or otherwise subject to the liabilities of the Exchange Act. The information in this Report will not be deemed an admission as to the materiality of any information required to be disclosed solely to satisfy the requirements of Regulation FD.
On August 3, 2021, pursuant to the terms of the Merger Agreement, upon the execution of Third Supplemental Indenture, the Marketing Period (as such term is defined in the Merger Agreement) was completed.
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