UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 25, 2024 |
PureCycle Technologies, Inc.
(Exact name of Registrant as Specified in Its Charter)
Delaware |
001-40234 |
86-2293091 |
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(State or Other Jurisdiction |
(Commission File Number) |
(IRS Employer |
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5950 Hazeltine National Drive, Suite 300 |
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Orlando, Florida |
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32822 |
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(Address of Principal Executive Offices) |
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(Zip Code) |
Registrant’s Telephone Number, Including Area Code: 877 648-3565 |
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
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Trading |
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Common Stock, par value $0.001 per share |
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PCT |
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The Nasdaq Stock Market LLC |
Warrants, each exercisable for one share of common stock, $0.001 par value per share, at an exercise price of $11.50 per share |
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PCTTW |
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The Nasdaq Stock Market LLC |
Units, each consisting of one share of common stock, $0.001 par value per share, and three quarters of one warrant |
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PCTTU |
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The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
On October 7, 2020, the Southern Ohio Port Authority (“SOPA”) issued certain revenue Bonds (as defined below) pursuant to an Indenture of Trust dated as of October 1, 2020 (as amended, restated, supplemented or otherwise modified from time to time, the “Indenture”), between SOPA and UMB Bank, N.A., as Trustee (“Trustee”), and loaned the proceeds from their sale to PureCycle: Ohio LLC (“PCO”), an Ohio limited liability company and indirect wholly-owned subsidiary of PureCycle Technologies, Inc. (the “Company”), pursuant to a Loan Agreement dated as of October 1, 2020, between SOPA and PCO (as amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”) to be used to, among other things, acquire, construct and equip the Company’s first commercial-scale recycling facility in Lawrence County, Ohio (the “Ironton Facility”). Capitalized terms used but not defined herein have the meanings ascribed thereto in the Indenture.
The Revenue Bonds were offered in three series, including (i) Exempt Facility Revenue Bonds (PureCycle Project), Tax-Exempt Series 2020A (“Series 2020A Bonds”); (ii) Subordinate Exempt Facility Revenue Bonds (PureCycle Project), Tax-Exempt Series 2020B (“Series 2020B Bonds”); and (iii) Subordinated Exempt Facility Revenue Bonds (PureCycle Project), Taxable Series 2020C (“Series 2020C Bonds” and, together with the Series 2020A Bonds and the Series 2020B Bonds, the “Bonds”).
All of the Bonds are Outstanding under the Indenture. PureCycle Technologies LLC, a Delaware limited liability company (the “Guarantor”), purchased $246,750,000 in aggregate principal amount of Bonds Outstanding under the Indenture on March 5, 2024, of which $216,750,000 in aggregate principal amount are Series 2020A Bonds, and continues to hold all of those purchased Bonds such that the Guarantor comprises the Majority Holders.
On March 25, 2024, SOPA, as Issuer, PCO, the Guarantor, PCTO Holdco LLC, a Delaware limited liability company and affiliate of PCO (the pledgor under the Equity Pledge and Security Agreement) and the Trustee entered into the Fourth Supplemental Indenture (the “Fourth Supplemental Indenture”) which amended certain provisions of the Indenture, the Loan Agreement and that certain Amended and Restated Guaranty of Completion, entered into as of May 11, 2021, and effective as of October 7, 2020 (the “Guaranty”), by instructing the Trustee to release $22,135,956.99 from the Senior Bonds Debt Service Reserve Fund and $3,261,291.24 from the Repair and Replacement Fund, in each case, to PCO. In addition, the Fourth Supplemental Indenture provides that the Senior Bonds Debt Service Reserve Requirement, the Subordinate Bonds Debt Service Reserve Requirement, and the Repair and Replacement Fund Requirement shall each be reduced to $0, respectively, and that certain provisions of the Indenture and/or the Loan Agreement, as applicable, relating to the funding and maintenance of the Senior Bonds Debt Service Reserve Fund, the Subordinate Bonds Debt Service Reserve Fund, and the Repair and Replacement Fund, will be suspended until the effectiveness of an amendment to the Indenture, the Loan Agreement and/or other applicable Financing Documents provides otherwise in accordance with the terms of the Indenture, the Loan Agreement and such other applicable Financing Documents.
The foregoing description of the Fourth Supplemental Indenture is not complete and is qualified in its entirety by reference to the full text of the Fourth Supplemental Indenture, which is attached hereto as Exhibit 10.1.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information contained under 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 Number |
Description of Exhibit |
10.1 |
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104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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PureCycle Technologies, Inc. |
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Date: |
March 25, 2024 |
By: |
/s/ Jaime Vasquez |
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Jaime Vasquez, Chief Financial Officer |
Exhibit 10.1
FOURTH SUPPLEMENTAL INDENTURE
This FOURTH SUPPLEMENTAL INDENTURE, dated as of March 25, 2024 (this “Fourth Supplemental Indenture”), is entered into by and among SOUTHERN OHIO PORT AUTHORITY, a port authority and a body corporate and politic duly organized under the laws of the State of Ohio (the “Issuer”), PURECYCLE: OHIO LLC, a limited liability company organized and existing under the laws of the State of Ohio (the “Company”), PURECYCLE TECHNOLOGIES LLC, a Delaware limited liability company (the “Guarantor”), PCTO HOLDCO LLC, a Delaware limited liability company (the “Pledgor”; and together with the Company and the Guarantor, the “Company Parties”), and UMB BANK, N.A., a national banking association duly organized, existing and authorized to accept and execute trusts of the character herein set out under the laws of the United States and having a corporate trust office in Minneapolis, Minnesota, as trustee (the “Trustee”). All capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Indenture (as defined below).
WITNESSETH:
WHEREAS, the Issuer and the Trustee are party to that certain Indenture of Trust, dated as of October 1, 2020 (as amended, restated, supplemented or otherwise modified from time to time, the “Indenture”), pursuant to which the Issuer has issued its $219,550,000 Exempt Facility Revenue Bonds (PureCycle Project), Tax-Exempt Series 2020A (the “Series 2020A Bonds” or the “Senior Bonds”), its $20,000,000 Subordinate Exempt Facility Revenue Bonds (PureCycle Project), Tax-Exempt Series 2020B (the “Series 2020B Bonds” and, together with the Series 2020A Bonds, the “Tax-Exempt Bonds”), and its $10,000,000 Subordinate Exempt Facility Revenue Bonds (PureCycle Project), Taxable Series 2020C (the “Series 2020C Bonds” and, together with the Series 2020B Bonds, the “Subordinate Bonds” and, the Series 2020C Bonds collectively with the Series 2020A Bonds and Series 2020B Bonds, the “Bonds”);
WHEREAS, the Issuer and the Company are party to that certain Loan Agreement, dated as of October 1, 2020 (as amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”), pursuant to which the proceeds derived from the issuance and sale of the Bonds have been loaned to the Company in order to, among other things, assist the Company in financing the acquisition, construction, equipping and installation of a portion of a plastics recycling facility located in Lawrence County, Ohio;
WHEREAS, the Guarantor is party to that certain Amended and Restated Guaranty of Completion, entered into as of May 11, 2021, and effective as of October 7, 2020 (as amended, restated, supplemented or otherwise modified from time to time, the “Guaranty”), pursuant to which the Guarantor has provided a guaranty with respect to the Obligations (as defined in the Guaranty) of the Company on the terms set forth therein, in favor of the Trustee;
WHEREAS, the Pledgor is party to that certain Equity Pledge and Security Agreement, dated as of October 7, 2020 (as amended, restated, supplemented or otherwise modified from time to time, the “Equity Pledge and Security Agreement”), pursuant to which the Pledgor has secured the Company’s obligations under the Financing Documents and Bond Documents by, among other things, pledging the Pledged Interests (as defined in the Equity Pledge and Security Agreement) to the Trustee on the terms set forth therein;
WHEREAS, the Issuer, the Company, the Guarantor, the Pledgor, and the Trustee are party to that certain Limited Waiver and First Supplemental Indenture, dated as of March 15, 2023 (as amended, restated, supplemented or otherwise modified from time to time, the “Limited Waiver and First Supplemental Indenture”);
WHEREAS, the Issuer, the Company, the Guarantor, the Pledgor, and the Trustee are party to that certain Limited Waiver and Second Supplemental Indenture, dated as of November 8, 2023 (as amended, restated, supplemented or otherwise modified from time to time, the “Limited Waiver and Second Supplemental Indenture”);
WHEREAS, the Issuer, the Company, the Guarantor, the Pledgor, and the Trustee are party to that certain Third Supplemental Indenture, dated as of March 5, 2024 (as amended, restated, supplemented or otherwise modified from time to time, the “Third Supplemental Indenture”);
WHEREAS, pursuant to the terms of that certain Purchase Agreement and Consent, dated as of March 5, 2024 (the “Purchase Agreement”), by and among the Company, the Guarantor, and each of the other signatories thereto, the Guarantor purchased, and as of the date hereof is the Holder of, (i) all of the Outstanding Subordinate Bonds, and (ii) $216,750,000 in aggregate principal amount of the Outstanding Senior Bonds, with the effect that, as of the date hereof the Guarantor is the Holder of a majority in aggregate principal amount of the Senior Bonds Outstanding and, therefore, constitutes the Majority Holders;
WHEREAS, the Company has requested that the Trustee, at the direction of the Majority Holders, amend certain provisions of the Indenture and other Financing Documents as described herein;
WHEREAS, pursuant to such request, the Guarantor, in its capacity as Majority Holders, has agreed to amend certain provisions of the Indenture and other Financing Documents, subject to the terms and conditions set forth herein, and has directed the Trustee to execute this Fourth Supplemental Indenture pursuant to that certain Direction and Indemnity, dated as of March 25, 2024(the “Direction and Indemnity”); and
WHEREAS, at the request of the Company, by passage on March 18, 2024 of Resolution No. 2024- by its Board of Directors (the “Amending Resolution”), the Issuer has approved the substantial form of the Fourth Supplemental Indenture and authorized its execution and delivery.
NOW, THEREFORE, in consideration of the foregoing recitals, mutual agreements contained herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
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““Cash” or “cash” means (i) such coin or currency of the United States of America as at the time shall be legal tender for payment of all public and private debts, and, except when used in ARTICLE VII of the Indenture, (ii) Cash Equivalents.”
“Cash Equivalents” or “cash equivalents” means:
(1) marketable, direct obligations of the United States of America, its agencies and instrumentalities maturing within 365 days of the date of purchase;
(2) commercial paper and other short-term obligations of business savings accounts issued by corporations, each of which shall have a combined net worth of at least $100,000,000 and each of which conducts a substantial part of its business in the United States of America, maturing within 270 days from the date of original issue thereof, and whose issuer is, at the time of purchase, rated “P-2” or better by Moody’s or “A-2” or better by S&P;
(3) repurchase agreements, bankers’ acceptances and domestic and Eurodollar certificates of deposit maturing within 365 days of the date of purchase which are issued by, or time deposits maintained with
(a) a United States national or state bank (or any domestic branch of a foreign bank) subject to supervision and examination by federal or state banking or depository institution authorities and having capital, surplus and undivided profits totaling more than $100,000,000 and rated “A” or better by Moody’s or S&P,
(b) a broker/dealer (acting as principal) registered as a broker or a dealer under Section 15 of the Exchange Act the unsecured short-term debt obligations of which are rated “P-1” by Moody’s and at least “A-1” by S&P at the date of purchase, or
(c) an unrated broker/dealer, acting as principal, that is a wholly owned subsidiary of a non-bank or bank holding company, the unsecured short-term debt obligations of which are rated “P-1” by Moody’s and at least “A-1” by S&P at the date of purchase; and
(4) money market funds having a rating from Moody’s and S&P in the highest investment category granted thereby.”
“Fourth Supplemental Indenture” means the Fourth Supplemental Indenture, dated as of March 25, 2024, by and among the Issuer, the Company, the Guarantor, the Pledgor, and the Trustee, as amended, restated, supplemented or otherwise modified from time to time.”
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“Limited Waiver and First Supplemental Indenture” means the Limited Waiver and First Supplemental Indenture, dated as of March 15, 2023, by and among the Issuer, the Company, the Guarantor, the Pledgor, and the Trustee, as amended, restated, supplemented or otherwise modified from time to time.”
“Limited Waiver and Second Supplemental Indenture” means the Limited Waiver and Second Supplemental Indenture, dated as of November 8, 2023, by and among the Issuer, the Company, the Guarantor, the Pledgor, and the Trustee, as amended, restated, supplemented or otherwise modified from time to time.”
“Third Supplemental Indenture” means the Third Supplemental Indenture, dated as of March 5, 2024, by and among the Issuer, the Company, the Guarantor, the Pledgor, and the Trustee, as amended, restated, supplemented or otherwise modified from time to time.””
“Notwithstanding the aforesaid computation, as of the date of the Fourth Supplemental Indenture and continuing thereafter until the effectiveness of an amendment to the Indenture providing otherwise in accordance with the terms of the Indenture, the Senior Bonds Debt Service Reserve Requirement shall be -$0-.”
“Notwithstanding the aforesaid computation, as of the date of the Fourth Supplemental Indenture and continuing thereafter until the effectiveness of an amendment to the Indenture providing otherwise in accordance with the terms of the Indenture, the Subordinate Bonds Debt Service Reserve Requirement shall be -$0-.”
(c) Notwithstanding anything to the contrary in the Indenture, the Loan Agreement or any other Financing Document or Bond Document, the operation of Section 4.13 of the Indenture (other than the last sentence of Section 4.13(g)) is hereby suspended until the effectiveness of an amendment to the Indenture and/or other applicable Financing Documents providing otherwise in accordance with the terms of the Indenture and other applicable Financing Documents.
(d) Notwithstanding anything to the contrary in the Indenture, the Loan Agreement or any other Financing Document or Bond Document, the operation of Sections 4.17(a), 4.17(b), 4.17(d), and 4.17(e) of the Indenture is hereby suspended until the effectiveness of an amendment to the Indenture and/or other applicable Financing Documents providing otherwise in accordance with the terms of the Indenture and other applicable Financing Documents.
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“Section 2.8 [Reserved].”
“The Repair and Replacement Fund Requirement shall be $-0-.”
“Not later than January 31, 2021, the Guarantor shall deposit $50,000,000 (the “Liquidity Reserve Amount”) in a segregated account of the Guarantor to be used by the Trustee to secure Guarantor’s obligations hereunder (the “Liquidity Reserve Escrow Fund”). In the event that the Company or an affiliate of the Company purchases Bonds Outstanding from time to time (other than, for the avoidance of doubt, any Bonds purchased from the Company or an affiliate thereof), a percentage of funds in the Liquidity Reserve Escrow Fund at such time that is proportionate to the aggregate principal amount of Bonds Outstanding being so purchased by the Company or an affiliate at such time may be released at such time; provided, that any such funds so released shall be applied to the payment of a portion of the purchase price of such purchased Bonds.
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The Liquidity Reserve Escrow Fund shall remain in existence until the conditions in Section 4.11(a) hereof have been met, whereupon the balance in the Liquidity Reserve Escrow Fund shall be returned to the Guarantor, except that if all deposits in the Liquidity Reserve Escrow Fund have been released pursuant to the terms of the Indenture, then the Liquidity Reserve Escrow Agreement shall be terminated, and any obligation of the Company or the Guarantor stated in the Financing Documents with respect to the Liquidity Reserve Escrow Agreement or the Liquidity Reserve Escrow Fund shall have no force and effect.”
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(d) All of the representations and warranties of the Company Parties under this Fourth Supplemental Indenture and the other Financing Documents and Bond Documents (after giving effect to this Fourth Supplemental Indenture) are true and correct in all material respects (without duplication of any materiality qualifier contained herein or therein, as applicable), and there exists no Default or Event of Default, in each case after giving effect to this Fourth Supplemental Indenture.
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(h) The Issuer has no knowledge of (i) any existing Event of Default under the Indenture, or (ii) any event, fact or circumstance that, with the passage of time, the giving of notice or both, could constitute an Event of Default under the Indenture.
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(Signature Pages Follow)
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IN WITNESS WHEREOF, the parties hereto have caused this Fourth Supplemental Indenture to be duly executed and delivered by their duly authorized officers as of the day and year first above written.
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ISSUER: |
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SOUTHERN OHIO PORT AUTHORITY By: /s/ Robert Horton
COMPANY: PURECYCLE: OHIO LLC By: /s/ Brad S. Kalter
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GUARANTOR: PURECYCLE TECHNOLOGIES LLC By: /s/ Brad S. Kalter
PLEDGOR: PCTO HOLDCO LLC By: /s/ Brad S. Kalter
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[Signature Page to Fourth Supplemental Indenture]
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TRUSTEE: |
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UMB BANK, N.A., as Trustee By: /s/ Michael G. Slade |
[Signature Page to Fourth Supplemental Indenture]