Item 1.01
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Entry into a Material Definitive Agreement.
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AV Homes Senior Notes Covenant Replacement Event Supplemental Indenture
Upon the consummation of the Merger, Taylor Morrison Communities, Inc., a Delaware corporation and indirect subsidiary of Taylor Morrison (the
Borrower) assumed all of AV Homes obligations under $400 million aggregate principal amount of 6.625% Senior Notes due 2022 (the 2022 Senior Notes), originally issued pursuant to a Senior Notes Indenture, dated as
of May 18, 2017 (as supplemented by the First Supplemental Indenture, dated as of January 11, 2018, between the Guaranteeing Subsidiary party thereto and Wilmington Trust, National Association (the Trustee), as trustee, the
2022 Senior Notes Indenture), by and among AV Homes, the guarantors party thereto and the Trustee. The Borrowers assumption of AV Homes obligations under the 2022 Senior Notes was effected by a Supplemental Indenture, dated
as of October 2, 2018 (the 2022 Senior Notes Supplemental Indenture), among the Borrower, AV Homes, the guarantors party thereto and the Trustee.
In accordance with the 2022 Senior Notes Indenture, the assumption of the 2022 Senior Notes by the Borrower resulted in certain negative
covenants that are customary for high yield debt instruments being replaced with a limitation on secured debt and a limitation on sale/leaseback transactions, in each case applicable to the Borrower and its restricted subsidiaries. The 2022 Senior
Notes will be guaranteed by the same subsidiaries of the Borrower that guarantee its revolving credit facility and its other senior notes.
The 2022 Senior Notes will mature on May 15, 2022. Interest on the 2022 Senior Notes accrues at 6.625% per annum, paid semi-annually, in
arrears, on May 15 and November 15 of each year.
The descriptions contained herein of the AV Homes Senior Notes Indenture and
the AV Homes Senior Notes Supplemental Indenture are qualified in their entirety by reference to the terms of such documents, which are attached hereto as Exhibits 4.1 and 4.2, respectively, and incorporated into this Item 1.01 by reference.
AV Homes Convertible Notes
In connection with the consummation of the Merger, AV Homes, as an indirect subsidiary of Taylor Morrison, and Wilmington Trust, National
Association (as successor by merger to Wilmington Trust FSB) (the AV Homes Convertible Notes Trustee), entered into a Seventh Supplemental Indenture (the Seventh Supplemental Indenture), dated as of October 2, 2018,
which supplements the Indenture, dated as of February 4, 2011 (the Base Indenture), by and between AV Homes and the AV Homes Convertible Notes Trustee, as supplemented by (i) the First Supplemental Indenture, dated as of
February 4, 2011, between AV Homes and the AV Homes Convertible Notes Trustee, (ii) the Second Supplemental Indenture, dated as of July 25, 2012, between AV Homes and the AV Homes Convertible Notes Trustee, and (iii) the Third
Supplemental Indenture, dated as of June 23, 2015 (the Third Supplemental Indenture), among AV Homes, the Subsidiary Guarantors listed on the signature pages thereto and the AV Homes Convertible Notes Trustee, (iv) the Fourth
Supplemental Indenture, dated as of July 17, 2015, between AV Homes and the AV Homes Convertible Notes Trustee, (v) the Fifth Supplemental Indenture, dated as of December 29, 2016, between AV Homes and the AV Homes Convertible Notes
Trustee, and (vi) the Sixth Supplemental Indenture, dated as of January 11, 2018, between AV Homes and the AV Homes Convertible Notes Trustee (as so supplemented and as supplemented by the Seventh Supplemental Indenture, the AV Homes
Convertible Notes Indenture), which governs the $80 million aggregate principal amount of AV Homes 6.00% Convertible Senior Notes due 2020 (the Convertible Notes).
Following the Merger, each holder of the Convertible Notes has the right to (i) convert its Convertible Notes into $21.50 in cash,
without any interest thereon, in respect of each share of AV Homes Common Stock into which the Convertible Notes would have otherwise been entitled to convert (including, for conversions in connection with (as defined in the Third
Supplemental Indenture) the Merger, an increased conversion rate because the Merger constitutes a Non-Stock Change of Control under the terms of the Convertible Notes), or (ii) require that AV Homes repurchase such holders
Convertible Notes, which repurchase shall be for the principal amount plus accrued and unpaid interest and settled in cash.
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