TALOS ENERGY INC. Item 1.01 Entry into a Material Definitive Agreement.
Indenture and the 2026 Notes
On
Interest and Maturity
The 2026 Notes will mature on
Optional Redemption
At any time prior to
On or after
YEAR REDEMPTION PRICE 2023 106.000 % 2024 103.000 % 2025 100.000 % Change of Control
If a Change of Control (as defined in the Indenture) occurs, each holder of 2026 Notes may require the Issuer to repurchase all or any part of that holder's 2026 Notes for cash at a price equal to 101% of the aggregate principal amount of the 2026 Notes repurchased, plus any accrued and unpaid interest on the notes repurchased (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date).
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Certain Covenants
The Indenture contains covenants that, among other things, limit the Issuer's ability and the ability of its restricted subsidiaries to: (i) incur, assume or guarantee additional indebtedness or issue certain convertible or redeemable equity securities; (ii) create liens to secure indebtedness; (iii) pay distributions on equity interests, repurchase equity securities or redeem junior lien, unsecured or subordinated indebtedness; (iv) make investments; (v) restrict distributions, loans or other asset transfers from the Issuer's restricted subsidiaries; (vi) consolidate with or merge with or into, or sell substantially all of the Issuer's properties to, another person; (vii) sell or otherwise dispose of assets, including equity interests in subsidiaries; and (viii) enter into transactions with affiliates.
Events of Default
The Indenture contains customary events of default, including, but not limited
to:
• default in any payment of interest on the 2026 Notes, when due, which
continues for 30 days;
• default in payment when due of the principal of, or premium, if any, on
the 2026 Notes when due;
• failure by the Issuer or any of its Restricted Subsidiaries (as defined
in the Indenture) to comply with certain of their respective obligations,
covenants or agreements contained in the 2026 Notes, the Indenture or the
Security Documents (as defined in the Indenture), subject to certain
notice and grace periods;
• failure of liens on Collateral with a Fair Market Value (as defined in
the Indenture) in excess of $100.0 million to be valid or enforceable for
30 days or the Issuer or the assertion by any Subsidiary Guarantor in any
pleading that any such security interest is invalid and unenforceable
and, in the case of any Subsidiary Guarantor, such assertions are not
rescinded within 30 days;
• failure by the Issuer or certain of its subsidiaries (including its
Restricted Subsidiaries) to pay indebtedness within any applicable grace
period or the acceleration of any such indebtedness if the total amount
of such indebtedness exceeds $25.0 million ;
• failure by the Issuer or any of its Restricted Subsidiaries to pay final
non-appealable judgments aggregating in excess of $25.0 million , which
judgments are not paid, discharged or stayed for a period of 60 days;
• except as permitted by the Indenture, any guarantee of the 2026 Notes is
held in any judicial proceeding to be unenforceable or invalid, or ceases
for any reason to be in full force and effect, or is denied or
disaffirmed by a Guarantor; and
• certain events of bankruptcy or insolvency described in the Indenture
with respect to the Issuer and certain of its subsidiaries (including its
Restricted Subsidiaries) that, taken as a whole, would constitute a
significant subsidiary of the Issuer.
The foregoing description of the Indenture does not purport to be complete and is qualified in its entirety by reference to the full text of the Indenture and the form of 12.00% Second-Priority Senior Secured Note due 2026, which are filed with this Current Report on Form 8-K as Exhibit 4.1 and Exhibit 4.2, respectively.
Registration Rights Agreement
On
3
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The Issuer and the Guarantors have agreed to use their commercially reasonable
efforts to cause the registration statements related to the Exchange Offer to be
deemed effective by the
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information required by Item 2.03 relating to the 2026 Notes and the Indenture is contained in Item 1.01 of this Current Report on Form 8-K above and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. Exhibit No. Description 4.1 Indenture, dated as ofJanuary 4, 2021 , among the Issuer, the Guarantors named therein andWilmington Trust, National Association , as trustee. 4.2 Form of 12.00% Second-Priority Senior Secured Note due 2026 (included as Exhibit A in Exhibit 4.1). 4.3 Registration Rights Agreement, dated as ofJanuary 4, 2021 , among the Issuer, the Guarantors named therein andJ.P. Morgan Securities LLC , as representative of the initial purchasers of the 2026 Notes. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document). 4
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