Charah Solutions Inc. filed SEC Form 8-K: Entry into a Material Definitive Agreement, Completion of Acquisition or Disposition of Assets, Material Modification to Rights of Security Holders, Changes in Control of Registrant, Leadership Update, Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year, Financial Statements and Exhibits

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Term Loan Amendment

 

On July 13, 2023, the Company entered into Amendment No. 3 to Term Loan Agreement (the “Term Loan Amendment”) by and among Gibbons Creek Environmental Redevelopment Group, LLC, a Texas limited liability company (the “Borrower”), the Company, Charah, LLC, a Kentucky limited liability company (“Charah, LLC”), certain subsidiaries of the Company, as guarantors, and Charah Preferred Stock Aggregator, LP, a Delaware limited partnership, as lender (the “Lender”), which amends that certain Term Loan Agreement, dated as of August 15, 2022, by and among the Borrower, the Company, Charah, LLC, certain subsidiaries of the Company party thereto and the Lender (the “Term Loan Agreement”). The Term Loan Amendment, among other things, (i) amends the mandatory prepayment provisions set forth in the Term Loan Agreement with respect to certain asset sale proceeds as further set forth therein, (ii) amends the Term Loan Agreement to provide that the consummation of the Merger will not result in a Change of Control (as defined in the Term Loan Agreement), (iii) amends the stated maturity date of the Term Loan Agreement to be December 31, 2025 and (iv) makes certain other amendments to the Term Loan Agreement as further set forth therein.

The foregoing description is qualified in its entirety by reference to (i) the other items of this Current Report on Form 8-K and (ii)  the Term Loan Amendment, a copy of which is filed as Exhibit 1.1 to this Current Report on Form 8-K, each of which is incorporated by reference herein.

 

On July 13, 2023, pursuant to the terms and conditions of the Merger Agreement, the Merger was consummated.

 

 

Pursuant to the terms of the Merger Agreement, at the Effective Time, (1) each outstanding restricted stock unit (“RSU”) granted pursuant to the Charah Solutions, Inc. 2018 Omnibus Incentive Plan (the “Equity Incentive Plan”) immediately and fully vested and was cancelled and converted into the right to receive an amount equal to the product of the Common Per Share Merger Consideration and the number of shares of Company common stock  underlying such RSU (including any shares of Company common stock in respect of dividend equivalent units credited thereon), such amount to be paid in cash, less any required withholding taxes and without interest, to the holder of such RSU no later than the first payroll date that occurs more than two business days following the Effective Time (subject to any delay in payment required by Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”)), and (2) each outstanding performance share unit (“PSU”) granted pursuant to the Equity Incentive Plan immediately vested at the target level of performance and was cancelled and converted into the right to receive an amount equal to the product of the Common Per Share Merger Consideration and the number of shares of Company common stock underlying such PSU (including any shares of Company common stock in respect of dividend equivalent units credited thereon), such amount to be paid in cash, less any required withholding taxes and without interest, to the holder of such PSU no later than the first payroll date that occurs more than two business days following the Effective Time (subject to any delay in payment required by Section 409A of the Code).

 

The foregoing description is qualified in its entirety by reference to (i) the other items of this Current Report on Form 8-K and (ii) the Merger Agreement, each of which is incorporated by reference herein.

 

 

As a result of the Merger, each issued and outstanding share of Company common stock was cancelled and each holder of Company common stock ceased to have any rights as a stockholder of the Company other than the right to receive the Common Per Share Merger Consideration as set forth in the Merger Agreement.

 

The information set forth in Item 2.01 and Item 5.01 of this Current Report on Form 8-K is incorporated by reference herein.

 

 

Pursuant to the terms of the Merger Agreement, at the Effective Time, the Company became a wholly owned subsidiary of Parent and, accordingly, a change in control of the Company occurred. The information set forth in Item 2.01, Item 3.03 and 5.02 of this Current Report on Form 8-K is incorporated by reference herein.

 

 

Effective as of, and immediately following, the Effective Time, in accordance with the Merger Agreement, Robert Decensi, Jonathan Batarseh, Jack A. Blossman, Jr., Mignon Clyburn, Robert C. Flexon, Timothy J. Poché, Timothy Alan Simon, Mark Spender and L.W. Varner, Jr. ceased serving as directors of the Company and members of their respective committees, and Sara Graziano and Christopher Smith became directors of the Company, in each case until their successors are duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the amended and restated certificate of incorporation and amended and restated bylaws of the Company.

 

Effective as of, and immediately following the Effective Time, in accordance with the Merger Agreement, the following persons no longer hold a position as an officer of the Company: Mr. Batarseh as President and Chief Executive Officer and Mr. Skidmore as Chief Financial Officer and Treasurer, while the following persons became officers of the Company: Ms. Graziano as President and Mr. Smith as Secretary and Treasurer.

 

Ms. Graziano, age 40, serves as Partner and as Chair of the Investment Committee at SER Capital Partners (“SER”). Ms. Graziano has 20 years of experience in the energy storage, power, renewable and environmental sectors. Ms. Graziano joined SER in December of 2019 and is responsible for investment origination, execution, and portfolio management. From October of 2016 through June of 2019, Ms. Graziano was a Senior Vice President of Corporate Development and Strategy at Vistra Energy Corp. (NYSE: VST), where she was responsible for strategy formation and strategic projects, mergers and acquisitions, project development and market analytics.

 

 

 

As a result of the Merger, a change of control of the Company occurred, and the Company is now a wholly owned subsidiary of Acquisition Parent 0423 Inc., which is controlled by SER. On July 13, 2023, Acquisition Sub April 2023 Inc. amended and restated its certificate of incorporation to change its name to “Charah Solutions, Inc.” pursuant to the Merger Agreement whereby the Company continues as the surviving corporation in the Merger. Effective that same date, the Company amended and restated its bylaws to reflect the name change.

 

Pursuant to the terms of the Merger Agreement, at the Effective Time, the amended and restated certificate of incorporation and amended and restated bylaws, attached as Exhibit 3.1 and Exhibit 3.2, respectively, to this Current Report on Form 8-K and incorporated herein by reference, became the amended and restated certificate of incorporation and amended and restated bylaws of the Company.

 

 

 

(d) Exhibits. The following exhibits are filed herewith: