Item 1.01 Entry Into a Material Definitive Agreement.
Distribution Agency Agreement
On December 17, 2021, Tellurian Inc., a Delaware corporation (the "Company"),
entered into a Distribution Agency Agreement (the "Distribution Agreement") with
T.R. Winston & Company, LLC ("T.R. Winston"). Pursuant to the terms of the
Distribution Agreement, the Company may sell shares of its common stock, $0.01
par value per share, from time to time on the NYSE American or any other market
for the common stock in the United States, T.R. Winston acting as agent, for
aggregate sales proceeds of up to $200,000,000 (the "Equity Offering").
Under the Distribution Agreement, the Company will set the parameters for the
sale of shares, including the number of shares to be issued, the time period
during which sales are requested to be made, any limitation on the number of
shares that may be sold in any one trading day, and any minimum price below
which sales may not be made.
Subject to the terms and conditions of the Distribution Agreement, T.R. Winston
may sell the shares by any method permitted by law deemed to be an "at the
market" offering as defined in Rule 415 under the Securities Act of 1933, as
amended (the "Securities Act"), including sales made directly on the NYSE
American, on any other existing trading market for the shares, or to or through
a market maker. T.R. Winston may also sell the shares by other methods permitted
by law, including in a privately negotiated transaction with the prior consent
of the Company.
The Distribution Agreement provides that T.R. Winston will be entitled to
compensation at a fixed commission rate equal to 3.0% of the gross sales price
per share sold through it as the Company's agent under the Distribution
Agreement.
The Company has no obligation to sell any shares under the Distribution
Agreement, and the Company or T.R. Winston may suspend the Equity Offering
subject to certain conditions. The Company has agreed in the Distribution
Agreement to provide indemnification and contribution to T.R. Winston against
certain liabilities, including liabilities under the Securities Act.
The shares will be issued pursuant to the Company's shelf registration statement
on Form S-3ASR (File No. 333-235793) filed on January 3, 2020 with the
Securities and Exchange Commission (the "SEC"), as amended by Post-effective
Amendment No. 1 on April 28, 2020 (the "Registration Statement"). The Company
filed a prospectus supplement, dated December 17, 2021, with the SEC in
connection with the Equity Offering pursuant to the Distribution Agreement.
The foregoing description of the Distribution Agreement is not complete and is
qualified in its entirety by reference to the full text of the Distribution
Agreement, a copy of which is filed as Exhibit 1.1 to this Current Report on
Form 8-K and is incorporated herein by reference. The legal opinion of Davis
Graham & Stubbs LLP relating to the legality of the shares of common stock being
offered pursuant to the Distribution Agreement is filed as Exhibit 5.1 to this
Current Report on Form 8-K.
The representations, warranties and covenants contained in the Distribution
Agreement were made solely for purposes of the agreement and as of a specific
date, were solely for the benefit of the parties to the agreement and may be
subject to standards of materiality applicable to the contracting parties that
differ from those applicable to security holders. Security holders should not
rely on the representations, warranties, and covenants or any descriptions
thereof as characterizations of the actual state of facts or condition of the
Company.
At Market Issuance Sales Agreement
Also on December 17, 2021, the Company entered into an At Market Issuance Sales
Agreement (the "Sales Agreement") with B. Riley Securities, Inc. ("B. Riley")
under which the Company may offer and sell, from time to time, up to an
aggregate principal amount of $200,000,000 of the Company's 8.25% Senior Notes
due 2028 (the "Notes") to or through B. Riley, as principal or agent (the "Notes
Offering"). The Notes are additional notes issued under the Company's indenture,
first supplemental indenture and second supplemental indenture (collectively,
the "indenture"), pursuant to which the Company previously issued $56,500,000
aggregate principal amount of Notes on November 10, 2021 and December 7, 2021
(the "Initial Notes"). The Notes will have the same terms as (except for the
price to public, the issue date and, if applicable, the initial interest accrual
date and the initial interest payment date), form a single series of debt
securities with and have the same CUSIP number and be fungible with, the Initial
Notes immediately upon issuance, including for purposes of notices, consents,
waivers, amendments and any other action permitted under the indenture.
Notes offered and sold under the Sales Agreement will be offered and sold under
the Registration Statement. The Company filed a prospectus supplement, dated
December 17, 2021, with the SEC in connection with the Notes Offering pursuant
to the Sales Agreement.
The Notes may be offered and sold through B. Riley over a period of time and
from time to time by any method permitted by law, including sales made directly
on the NYSE American, on any other existing trading market for the Notes or to
or through a market maker. B. Riley is not required to sell any specific
aggregate principal amount of Notes but will act as the Company's sales agent
using commercially reasonable efforts consistent with its normal trading and
sales practices, on mutually agreed terms between B. Riley and the Company.
Under the Sales agreement, B. Riley will be entitled to compensation of up to
3.0% of the gross sales price of all Notes sold through it as the Company's
agent. The amount of net proceeds the Company will receive from the Notes
Offering, if any, will depend upon the actual aggregate principal amount of
Notes sold and the market price at which such Notes are sold. Because there is
no minimum offering amount required as a condition to close the Notes Offering,
the actual total public offering amount, commissions and net proceeds to the
Company, if any, are not determinable at this time.
The Sales Agreement contains customary representations, warranties and covenants
of the Company, indemnification obligations of the Company and B. Riley,
including for liabilities under the Securities Act, other obligations of the
parties and termination provisions.
Interest on the Notes will be paid quarterly in arrears on January 31, April 30,
July 31 and October 31 of each year and at maturity. Interest on the Notes will
accrue from the most recent interest payment date immediately preceding the
respective dates of issuance of the Notes, except that Notes purchased after the
applicable record date, but prior to the interest payment date immediately
following such record date (or if settlement of a purchase of Notes otherwise
occurs after such record date but prior to the interest payment date immediately
following such record date), will not begin to accrue interest until the
interest payment date immediately following such record date. The Notes will
mature on November 30, 2028. The Company may redeem the Notes for cash in whole
or in part at any time at its option (i) on or after November 30, 2023 and prior
to November 30, 2024, at a price equal to $25.75 per note, plus accrued and
unpaid interest to, but excluding, the date of redemption, (ii) on or after
November 30, 2024 and prior to November 30, 2025, at a price equal to $25.50 per
note, plus accrued and unpaid interest to, but excluding, the date of
redemption, (iii) on or after November 30, 2025 and prior to November 30, 2026,
at a price equal to $25.25 per note, plus accrued and unpaid interest to, but
excluding, the date of redemption, and (iv) on or after November 30, 2026 and
prior to maturity, at a price equal to 100% of their principal amount, plus
accrued and unpaid interest to, but excluding, the date of redemption. In
addition, the Company may redeem the Notes, in whole or in part, at any time
before November 30, 2023 at a redemption price equal to 100% of the principal
amount of the Notes plus an applicable make-whole premium. The Notes will be
issued in denominations of $25 and in integral multiples thereof.
The Notes will be senior unsecured obligations of the Company and will rank
equal in right of payment with all of the Company's existing and future senior
unsecured and unsubordinated indebtedness. The Notes will be effectively
subordinated in right of payment to all of the Company's existing and future
secured indebtedness, and the Notes will be structurally subordinated to all
existing and future indebtedness (including trade payables) of the Company's
subsidiaries.
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The foregoing description of the Sales Agreement is not complete and is
qualified in its entirety by reference to the full text of the Sales Agreement,
a copy of which is filed as Exhibit 1.2 to this Current Report on Form 8-K and
is incorporated herein by reference. The legal opinion of Davis Graham & Stubbs
LLP relating to the legality of the Notes being offered pursuant to the Sales
Agreement is filed as Exhibit 5.2 to this Current Report on Form 8-K.
The representations, warranties and covenants contained in the Sales Agreement
were made solely for purposes of the agreement and as of a specific date, were
solely for the benefit of the parties to the agreement and may be subject to
standards of materiality applicable to the contracting parties that differ from
those applicable to security holders. Security holders should not rely on the
. . .
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth under "At Market Issuance Sales Agreement" in
Item 1.01 of this Current Report on Form 8-K is incorporated herein by
reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
1.1‡ Distribution Agency Agreement, dated as of December 17, 2021, by and
between Tellurian Inc. and T.R. Winston & Company, LLC
1.2‡ At Market Issuance Sales Agreement, dated as of December 17, 2021, by
and between Tellurian Inc. and B. Riley Securities, Inc.
5.1 Opinion of Davis Graham & Stubbs LLP
5.2 Opinion of Davis Graham & Stubbs LLP
23.1 Consent of Davis Graham & Stubbs LLP (included in Exhibit 5.1)
23.2 Consent of Davis Graham & Stubbs LLP (included in Exhibit 5.2)
104 Cover Page Interactive Data File - the cover page XBRL tags are
embedded within the Inline XBRL document (included as Exhibit 101)
‡ Certain schedules or similar attachments to this exhibit have been omitted in
accordance with Item 601(a)(5) of Regulation S-K. The registrant hereby agrees
to furnish supplementally to the Securities and Exchange Commission upon
request a copy of any omitted schedule or attachment to this exhibit.
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