Exhibit 10.4
LIMITED CONSENT AND FIFTH AMENDMENT TO CREDIT AGREEMENT
This LIMITED CONSENT AND FIFTH AMENDMENT TO CREDIT AGREEMENT, dated as of May 10, 2024 (this “Amendment”), is entered into by and among (a) PURECYCLE TECHNOLOGIES, INC., a Delaware corporation (the “Borrower”), (b) PURECYCLE TECHNOLOGIES HOLDINGS CORP., a Delaware Corporation (“Holdings”), (c) PURE CYCLE TECHNOLOGIES, LLC, a Delaware limited liability company (“PureCycle LLC” and, together with Holdings, collectively, the “Guarantors”), (d) MADISON PACIFIC TRUST LIMITED, as Administrative Agent (in such capacity, the “Administrative Agent”), and (e) MADISON PACIFIC TRUST LIMITED, as Security Agent (in such capacity, the “Security Agent”).
PRELIMINARY STATEMENTS:
WHEREAS, the Borrower, the Guarantors, the Lenders, the Administrative Agent and the Security Agent are party to that certain Credit Agreement, dated as of March 15, 2023, as amended by that certain First Amendment to Credit Agreement dated as of May 8, 2023, that certain Second Amendment to Credit Agreement dated as of August 4, 2023, that Third Amendment to Credit Agreement dated as of August 21, 2023 and that Fourth Amendment to Credit Agreement dated as of March 1, 2024 (the “Credit Agreement” and, the Credit Agreement as amended and modified by this Amendment, the “Amended Credit Agreement”). Capitalized terms used herein and not otherwise defined in this Amendment shall have the same meanings as specified in the Amended Credit Agreement;
WHEREAS, prior to the date hereof, PureCycle LLC purchased Ironton Bonds in an aggregate par amount of $246,750,000 (collectively, the “Repurchased Bonds”) from certain holders thereof;
WHEREAS, PureCycle LLC desires to sell an aggregate par amount of up to $94,313,172 of the Repurchased Bonds to Pure Plastic LLC, a Delaware limited liability company (“Pure Plastic”), on the date hereof (the “Specified Disposition”) pursuant to that certain Amended and Restated Bond Purchase Agreement (the “Bond Purchase Agreement”) dated as of May 7, 2024 by and between PureCycle LLC and Pure Plastic;
WHEREAS, Section 7.05 of the Credit Agreement restricts the ability of PureCycle LLC to make the Specified Disposition;
WHEREAS, in connection with the transactions contemplated under the Bond Purchase Agreement, and in partial consideration thereof, the entire amount of outstanding Indebtedness of the Borrower and its Subsidiaries owed to Pure Plastic, as lender, under the Pure Plastic Credit Agreement will be deemed paid and satisfied in full and all security interests related thereto will be terminated as of the date hereof (collectively, the “Pure Plastic Payoff and Release”);
WHEREAS, in connection with the Pure Plastic Payoff and Release, and in lieu of that certain Prepayment Premium (as defined in the Pure Plastic Credit Agreement) that would otherwise be due and payable to Pure Plastic in cash under the Pure Plastic Credit Agreement, the Borrower desires to issue that certain Series B Warrant in favor of Pure Plastic (the “Pure Plastic Warrant”), which, among other things, permits the subscription for and purchase of up to 3,003,000 shares of common stock of the Borrower in accordance with the terms and conditions set forth therein;
WHEREAS, Section 7.06 of the Credit Agreement restricts the ability of the Borrower to issue the Specified Warrant;
WHEREAS, the Loan Parties request that the Administrative Agent, the Security Agent and the Lenders (i) consent to PureCycle LLC making the Specified Disposition, (ii) consent to the Borrower issuing the Pure Plastic Warrant and (iii) amend the Credit Agreement in certain respects; and
WHEREAS, the Lenders are willing to so (i) consent to PureCycle LLC making the Specified Disposition, (ii) consent to the Borrower issuing the Pure Plastic Warrant and (iii) amend the Credit Agreement solely on the terms and subject to conditions set forth in this Amendment and the Lenders authorize and instruct the Administrative Agent and the Security Agent to enter into this Amendment.
NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereto hereby agree as follows:
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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective authorized officers as of the date first above written.
BORROWER:
PURECYCLE TECHNOLOGIES, iNC.
By:/s/ Dustin Olson
Name: Dustin Olson
Title: Chief Executive Officer
GUARANTORS:
PURECYCLE TECHNOLOGIES HOLDINGS CORP.
By:/s/ Dustin Olson
Name: Dustin Olson
Title: Chief Executive Officer
PURECYCLE TECHNOLOGIES, LLC
By:/s/ Dustin Olson
Name: Dustin Olson
Title: Chief Executive Officer
[Signature Page to Limited Consent and Fifth Amendment to Credit Agreement]
AGENTS:
MADISON PACIFIC TRUST LIMITED, as Administrative Agent
By:/s/ Cassandra Ho
Name: Cassandra Ho
Title: Managing Director
MADISON PACIFIC TRUST LIMITED, as Security Agent
By:/s/ Cassandra Ho
Name: Cassandra Ho
Title: Managing Director
[Signature Page to Limited Consent and Fifth Amendment to Credit Agreement]
LENDERS:
SYLEBRA CAPITAL PARTNERS MASTER FUND, LTD, as a Lender
By:/s/ Matthew Whitehead
Name: Matthew Whitehead
Title: Authorized Signatory
SYLEBRA CAPITAL PARC MASTER FUND, as a Lender
By:/s/ Matthew Whitehead
Name: Matthew Whitehead
Title: Authorized Signatory
SYLEBRA CAPITAL MENLO MASTER FUND, as a Lender
By:/s/ Matthew Whitehead
Name: Matthew Whitehead
Title: Authorized Signatory
[Signature Page to Limited Consent and Fifth Amendment to Credit Agreement]
Annex A
Amended Credit Agreement