Document:

guarantyofcompletion-ex4

 Execution Version        AMENDED AND RESTATED GUARANTY OF COMPLETION  THIS AMENDED AND RESTATED GUARANTY OF COMPLETION (this “A&R  Completion Guaranty”), made and entered into as of May 11, 2021 and effective as of October  7, 2020 (“Effective Date”), amends and restates that certain Guaranty of Completion made and  entered into on October 7, 2020 (the “Completion Guaranty”), by PureCycle Technologies LLC,  a Delaware limited liability company (the “Guarantor”), in favor of UMB Bank, N.A., a national  banking association, as trustee (the “Trustee”).  W I T N E SS E T H:  WHEREAS, the Southern Ohio Port Authority (the “Issuer”), has issued its $219,550,000  Exempt Facility Revenue Bonds (PureCycle Project), Tax-Exempt Series 2020A (the “Senior  Bonds”), its $20,000,000 Subordinate Exempt Facility Revenue Bonds (PureCycle Project), Tax- Exempt Series 2020B and its $10,000,000 Subordinate Exempt Facility Revenue Bonds  (PureCycle Project), Taxable Series 2020C (collectively, the “Bonds”); and  WHEREAS, the Bonds were issued on the Effective Date under and pursuant to an  Indenture of Trust, dated as of October 1, 2020, by and between the Issuer and Trustee (the  “Indenture”); and  WHEREAS, the proceeds derived from the issuance and sale of the Bonds are to be loaned  to PureCycle: Ohio LLC (the “Borrower”), in order to assist the Borrower in financing the  acquisition, construction, equipping and installation of a portion of a plastics recycling facility to  be located in Lawrence County, Ohio (the “Project”), under a Loan Agreement, dated as of  October 1, 2020, between the Issuer and the Borrower (the “Loan Agreement”); and  WHEREAS, the Guarantor entered into the Completion Guaranty to enhance the  marketability of the Bonds and as an inducement to the purchase of the Bonds by the initial  purchasers of the Bonds and any other persons who may at any time become owners of the Bonds;  and  WHEREAS, the Borrower entered into that certain First Amended and Restated Feedstock  Supply Agreement effective as of September 1, 2020, between Borrower and   , a Delaware limited liability company (“Supplier 4”) (as the same may be amended,  restated, modified or otherwise supplemented from time to time, the “Supplier 4 FSA”), and  which has been collaterally assigned by Borrower to the Trustee and constitutes the Assigned  Agreement as defined in that certain Consent and Agreement dated as of ___________, 2021,  between the Borrower, as Assignor, Supplier 4, as Consenting Party, and the Trustee (as amended,  restated or otherwise supplemented from time to time, the “FSA Consent”); and  WHEREAS, the Guarantor entered into that certain Supply and Distribution Agreement  effective as of December 4, 2017, between Guarantor and , a Delaware  limited liability company “Offtaker 2”), which agreement was assigned by Guarantor to  Borrower, and subsequently amended by an Amended and Restated First Amendment effective as  of November 8, 2019, between Borrower and Offtaker 2  (as the same may be amended, restated,  modified or otherwise supplemented from time to time, the “Offtaker 2 Agreement”), and which  

 

2      has been collaterally assigned by Borrower to the Trustee and constitutes the Assigned Agreement  as defined in that certain Consent and Agreement dated as of ___________, 2021, between the  Borrower, as Assignor, Offtaker 2, as Consenting Party, and the Trustee (as amended, restated or  otherwise supplemented from time to time, the “Offtaker 2 Consent”); and  WHEREAS, the Borrower entered into that certain Master Product Offtake Agreement  effective as of May 23, 2019, between the Borrower and  (“Offtaker  3”), as amended by a First Amendment to the Master Product Offtake Agreement dated as of  October 1, 2020  (as the same may be amended, restated, modified or otherwise supplemented  from time to time, the “Offtaker 3 Agreement”), and which has been collaterally assigned by  Borrower to the Trustee and constitutes the Agreement referred to in that certain Consent  Agreement effective as of March 19, 2021, between the Borrower and Offtaker 3 (as amended,  restated or otherwise supplemented from time to time, the “Offtaker 3 Consent”); and  WHEREAS, the Borrower has requested that the Holders of the Senior Bonds consent to  the delivery by the Borrower and the acceptance by the Trustee of the FSA Consent, the Offtaker  2 Consent and the Offtaker 3 Consent notwithstanding that such agreements do not satisfy the  requirements therefor set forth in the Loan Agreement; and  WHEREAS, the Holders of a majority in aggregate principal amount of the Senior Bonds  have consented to the Borrower’s delivery and the Trustee’s acceptance of the FSA Consent, the  Offtaker 2 Consent and the Offtaker 3 Consent in exchange for the amendments to the Completion  Guaranty set forth in this A&R Completion Guaranty; and  WHEREAS, the parties desire to amend and restate the Completion Guaranty as provided  in this A&R Completion Guaranty;  NOW THEREFORE, in consideration of the premises and for other good and valuable  consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto,  the Guarantor, intending to be legally bound, does hereby covenant and agree as follows:  ARTICLE I    DEFINITIONS AND USE OF PHRASES  Section 1.01 Definitions.  As used in this A&R Completion Guaranty, the following terms and phrases shall have the  following meanings:  “Bondowners,” “Bondholders,” “Holders” or “Owners” means, at the time or times of  determination, the persons who are registered owners of Bonds under the terms of the Indenture.  “Guarantor’s Address” means the address which the Guarantor designates for the  delivery of notices hereunder.  Until changed by notice from the Guarantor to the Trustee, the  Guarantor’s Address shall be:  

 

3      PureCycle Technologies LLC  5950 Hazeltine National Drive, Suite 650  Orlando, FL 32822  Attention: Brad S. Kalter, Esq., General Counsel and Corporate  Secretary  Telephone: (404) 606-3920  Email: bkalter@purecycletech.com    “Note or Notes” means the Series 2020A Promissory Note in the aggregate principal  amount of $219,550,000, the Series 2020B Subordinate Promissory Note in the aggregate principal  amount of $20,000,000, and the Series 2020C Subordinate Promissory Note in the aggregate  principal amount of $10,000,000, each dated as of the date hereof and each given by the Borrower  in favor of the Issuer and assigned to the Trustee in respect of the Bonds.   “Outstanding,” when used with reference to Bonds, has the meaning assigned thereto in  the Indenture.  “Trustee’s Address” means the address or office which the Trustee designates for the  delivery of notices or payments hereunder or under the Indenture. Until changed by notice from  the Trustee to the Guarantor, the Trustee’s Address is:  UMB Bank, N.A.  Corporate Trust & Escrow Services  120 South Sixth Street, Suite 1400  Minneapolis, MN 55402  Attn:  Katie Carlson  Facsimile No.: 612-337-7039  Section 1.02 Use of Phrases; Rules of Construction.  The following provisions shall be applied wherever appropriate herein:  “Herein,” “hereby,” “hereunder,” “hereof” and other equivalent words refer to this  Guaranty Agreement as an entirety and not solely to the particular portion of this Guaranty  Agreement in which any such word is used.  The definitions set forth in Section 1.01 hereof shall be deemed applicable whether the  words defined are herein used in the singular or the plural.  Wherever used herein, any pronoun or pronouns shall be deemed to include both the  singular and plural and to cover all genders.  Unless otherwise provided, any determinations or reports hereunder which require the  application of accounting concepts or principles shall be made in accordance with generally  accepted accounting principles.  

 

4      ARTICLE II    REPRESENTATIONS OF GUARANTOR  Section 2.01 Benefit to Guarantor.  The Guarantor represents that the financing represented by the Bonds is expected to result  in financial and other valuable benefits to the Guarantor and constitutes good, sufficient and  valuable consideration for the assumption by the Guarantor of its obligations hereunder.  Section 2.02 Financial Condition of Borrower.  The Guarantor has made an independent investigation and evaluation of the financial  condition of the Borrower and has not relied (and will not rely) on any information or evaluation  provided by the Issuer, the Trustee or the Bondowners regarding such condition or value.  Section 2.03 Absence of Conflicting Agreements.  The Guarantor represents that the execution and delivery of this A&R Completion  Guaranty will not conflict with or constitute a breach of or default under any indenture, loan  agreement or instrument or agreement to which Guarantor is a party or by which Guarantor is  bound.  Section 2.04 Absence of Litigation.  The Guarantor represents that it not a party to any litigation or administrative proceeding,  nor so far as is known by the Guarantor is any litigation or administrative proceeding threatened  against it, which in either case would, if adversely determined, cause any material adverse change  in Guarantor’s financial condition, the conduct of its business or its ability to perform Guarantor’s  obligations under this A&R Completion Guaranty.  Section 2.05 Enforceability.  The Guarantor represents and warrants that this A&R Completion Guaranty constitutes the  legal, valid and binding obligation of the Guarantor enforceable against the Guarantor in  accordance with its terms, except that such enforceability may be limited by bankruptcy or similar  laws affecting the enforceability of creditors’ rights generally. The Guarantor is duly authorized  to enter into this agreement and has duly authorized the execution and delivery of this A&R  Completion Guaranty.  Section 2.06 Date and Survival of Representations.  The representations of the Guarantor made in this Article II are made as of the Effective  Date and all such representations shall survive the execution and delivery of this A&R Completion  Guaranty.  

 

5      ARTICLE III    AGREEMENTS  Section 3.01 Guaranty of Obligations.  The Guarantor hereby unconditionally guarantees to the Trustee, for the benefit of the  Bondowners, the following (the “Obligations”): (i) the full and complete performance by the  Borrower of all the Borrower’s obligations with respect to the design, permitting, installation,  construction and completion of the Project, including without limitation all changes orders, cost  overruns and Capital Additions (as defined in the Indenture) not contemplated in the original  general design and scope of the Facility (as defined in the Indenture) but which are necessary for  the Project to achieve its name plate performance of 107.6 million pounds of ultra-pure recycled  polypropylene (“UPRP”) per year, subject to the terms and conditions of the Loan Agreement, (ii)  the payment of all Project Costs (as defined in the Loan Agreement) required for or incurred prior  to completion of the Project as described in subsection (i) above, as and when such payment shall  become due, (iii) the payment by the Trustee, whether at own its discretion or at the direction of  the Holders of the Senior Bonds, of amounts necessary to cure any defaults under the FSA Consent,  the Offtaker 2 Consent and/or the Offtaker 3 Consent, and (iv) subject to the requirements of  Section 3.10(a) and Section 4.11(c) hereof, upon the occurrence of an Event of Default (as defined  in the Indenture), if the Trustee takes control of the Liquidity Reserve Escrow Fund (as defined  herein) held under the Liquidity Reserve Escrow Agreement (as defined herein), funds in the  Liquidity Reserve Escrow Fund may be used for any purpose  set forth in Section 4.11(c) hereof.   Without limiting the generality of the foregoing, the Guarantor guarantees that, subject to the terms  and conditions of the Loan Agreement: Construction of the Project by the Completion Date (as  defined in the Loan Agreement) will be undertaken and completed in accordance with the terms  and conditions of the Loan Agreement and in accordance with the Plans and Specifications (as  defined in the Loan Agreement) and Construction Budget (as defined in the Loan Agreement) for  the Project;  (b) the Project will be constructed and completed free and clear of any liens (other than  liens granted to the Trustee under the Indenture and Permitted Liens (as defined in the Indenture)),  which will be deemed to have occurred only upon the expiration of the applicable statutory periods  of the State of Ohio within which valid construction, mechanics or materialmen liens may be  recorded and served by reason of the design, supply or construction of the Project with any such  liens that have been filed having been released, discharged of record, or bonded or, alternatively,  the Trustee’s receipt of valid, unconditional final lien releases thereof from all persons entitled to  record such liens;   (c) all costs of design, permitting, installation, construction and completion of the  Project, including any and all (i) Change Orders (as defined in the Indenture), (ii) cost overruns  and (iii) any Capital Additions necessary for the Facility to achieve its name plate performance of  107.6 million pounds of UPRP per year will be paid when due;   (d) all claims, liabilities, losses and damages (including without limitation liquidated  damages) owed by Borrower to each counterparty under the Construction Contract and Equipment  Contract (as defined in the Indenture); and  

 

6      (e) all claims, liabilities, losses and damages (including without limitation liquidated  damages) owed by Borrower to Supplier 4, Offtaker 2 and/or Offtaker 3 under the Supplier 4 FSA,  the Offtaker 2 Agreement and/or the Offtaker 3 Agreement, respectively, if, as and to the extent  the Trustee, at its own discretion or as the Holders of the Senior Bonds may direct.  Section 3.02 Obligations of the Guarantor Upon Default By the Borrower.  (a) If (1) construction of the Project is not commenced and completed as required  pursuant to the Loan Agreement and constructed in the manner required by the Loan Agreement,  (2) construction of the Project should be abandoned by Borrower prior to completion, or (3) any  Event of Default under the Loan Agreement should otherwise exist with respect to the payment by  Borrower for any costs relating to the construction of the Project, Guarantor will, within thirty (30)  days after written notice of the Trustee: (a) diligently proceed to complete construction of the  Project and, in connection therewith, Trustee shall, subject to the requirements of the Indenture  and the Loan Agreement, disburse funds to the Guarantor pursuant to the terms of the Loan  Agreement; provided, however, that prior to any such disbursement after the Guarantor  commences performance of the Obligations, the Guarantor shall cure, or cause to be cured, all  existing Events of Default under the Loan Agreement with respect to the construction of the  Project, or in the payment for costs relating to the construction of the Project and shall certify in  writing to the Trustee that all such Events of Default have been cured; (b) fully pay and discharge  all claims of third parties for services furnished in connection with the construction of the Project;  and (c) release and discharge or bond all claims of construction liens and equitable liens that may  arise in connection with the of the Project.  Notwithstanding the foregoing, the Guarantor reserves  its rights to contest in good faith any claims of any third party in the same respects the Borrower  has the ability to contest claims of such third party as set forth in any contract with such third party  or elsewhere.  (b) If Borrower or Guarantor fails to make payment to Supplier 4 as required by the  Supplier 4 FSA or otherwise perform its obligations thereunder, the Trustee may, at its own  discretion or as the Holders of the Senior Bonds may direct, cure the default of Borrower by  disbursement from the Liquidity Reserve Escrow Fund described and defined in Section 3.10  hereof to Supplier 4 of funds in the amount necessary to cure such default .  Notwithstanding the  foregoing, the Guarantor reserves its rights to contest in good faith any claims of any third party  in the same respects the Borrower has the ability to contest claims of such third party as set forth  in any contract with such third party or elsewhere.  (c) If Borrower or Guarantor fails to make payment to Offtaker 2 as required by the  Offtaker 2 Agreement or otherwise perform its obligations thereunder, the Trustee may, at its own  discretion or as the Holders of the Senior Bonds may direct, cure the default of Borrower by  disbursement from the Liquidity Reserve Escrow Fund to Offtaker 2 of funds in the amount  necessary to cure such default.  Notwithstanding the foregoing, the Guarantor reserves its rights to  contest in good faith any claims of any third party in the same respects the Borrower has the ability  to contest claims of such third party as set forth in any contract with such third party or elsewhere.  (d)  If Borrower or Guarantor fails to make payment to Offtaker 3 as required by the  Offtaker 3 Agreement or otherwise perform its obligations thereunder, the Trustee may, at its own  discretion or as the Holders of the Senior Bonds may direct, cure the default of Borrower by  

 

7      disbursement from the Liquidity Reserve Escrow Fund to Offtaker 3 of funds in the amount  necessary to cure such default.  Notwithstanding the foregoing, the Guarantor reserves its rights to  contest in good faith any claims of any third party in the same respects the Borrower has the ability  to contest claims of such third party as set forth in any contract with such third party or elsewhere.     Section 3.03 Remedies.  If the Guarantor fails promptly to commence performance of the Obligations under this  Guaranty within ten (10) days after receipt of written notice from the Trustee requiring same, the  Trustee will have the following remedies in addition to all other remedies available to the Trustee  under this A&R Completion Guaranty, the Loan Agreement, the Indenture or applicable law:  (a) The Trustee shall be entitled to proceed to perform, or engage a third party to  perform, on behalf of the Guarantor all or any part of the Obligations and the Guarantor will, upon  demand and whether or not construction is actually completed, pay to the Trustee, at any time and  from time to time, all costs incurred by the Trustee, in performing such Obligations, together with  interest thereon at the rate of interest of eight percent (8%) per annum; and   (b) The Trustee may bring any action at law or in equity or both to compel the  Guarantor to perform its obligations under this A&R Completion Guaranty, and may collect in any  such action compensation for all costs incurred by the Trustee in exercising such rights provided,  however, that the Guarantor shall not be liable for any consequential, punitive or exemplary  damages under this A&R Completion Guaranty.  Section 3.04 Guarantee is Absolute and Unconditional.  The obligations of the Guarantor under this A&R Completion Guaranty shall be absolute,  irrevocable and unconditional; the Guarantor unconditionally and irrevocably waives each and  every defense which, under principles of guarantee and suretyship law, would otherwise operate  to impair or diminish such obligations.  The obligations of the Guarantor hereunder shall not be affected, modified or impaired  upon the happening from time to time of any event, including without limitation any of the  following, whether or not with notice to, or the consent of, the Guarantor:  (a) the compromise, settlement, release or termination of any or all of the obligations,  covenants or agreements of the Issuer or the Borrower under the Indenture, any Bond, the Loan  Agreement, any Note or any agreement providing security for the foregoing;  (b) the failure to give notice to the Guarantor of the occurrence of an event of default  under the terms and provisions of this A&R Completion Guaranty, the Indenture or the Loan  Agreement;  (c) the waiver by the Trustee or the Issuer of the payment, performance or observance  by the Issuer, the Borrower or the Guarantor of any of the obligations, covenants or agreements of  

 

8      any of them contained in the Indenture, any Bond, the Loan Agreement, any Note, any agreement  providing security for the foregoing, or this A&R Completion Guaranty;  (d) the extension of the time for payment of any principal of, premium, if any, or  interest on any Notes or any Bonds or of the time for performance of any other obligations,  covenants or agreements under or arising out of the Indenture, the Bonds, the Loan Agreement,  the Notes, any agreement providing security for the foregoing or this or any other guarantee of the  Bonds or the Notes or the extension or the renewal of any thereof;  (e) the modification or amendment (whether material or otherwise) of any obligation,  covenant or agreement set forth in the Indenture, the Bonds, the Loan Agreement, the Notes or any  agreement providing security for the foregoing;  (f) the taking or the omission of any of the actions referred to in the Indenture, the  Bonds, the Loan Agreement, the Notes or any agreement providing security for the foregoing;  (g) any failure, omission, delay or lack of diligence on the part of the Issuer or the  Trustee to enforce, assert or exercise any right, power or remedy conferred on the Issuer or the  Trustee in the Indenture, the Bonds, the Loan Agreement, the Notes, any agreement providing  security for the foregoing, this A&R Completion Guaranty or the Guarantor, or any other act or  acts on the part of the Issuer, Trustee or any of the owners from time to time of the Bonds;  (h) to the extent permitted by law, the release or discharge of the Guarantor from the  performance or observance of any obligation, covenant or agreement contained in this A&R  Completion Guaranty by operation of law; and  (i) the default or failure of the Guarantor fully to perform any of its obligations set  forth in this A&R Completion Guaranty.  Section 3.05 No Setoff, Etc.  No set off, counterclaim, reduction or diminution of an obligation, or any defense of any  kind or nature which the Guarantor has or may have against the Issuer, the Trustee or any  Bondowner shall be available hereunder to the Guarantor against the Issuer, the Trustee or any  Bondowner.  Section 3.06 Waiver.  The obligations of the Guarantor hereunder shall arise absolutely, irrevocably and  unconditionally when the Bonds shall have been issued, sold and delivered.  The Guarantor hereby  expressly and unconditionally waives each of the following (which waivers the Guarantor  represents are knowingly, willingly and voluntarily given):  (a) notice from the Trustee and the owners from time to time of any of the Bonds of  their acceptance and reliance on this A&R Completion Guaranty;  (b) any subrogation to the rights of the Issuer, the Trustee or any Bondowner against  the Borrower and any other claim against the Issuer, the Trustee or any Bondowner that arises as  

 

9      a result of payments made by the Guarantor pursuant to this A&R Completion Guaranty, until the  entire principal of and interest on the Notes and the Bonds shall have been paid and are not subject  to any right of recovery and all of the other outstanding Obligations have been satisfied;  (c) any claim for contribution against any co-guarantor until the entire principal of and  interest on the Bonds shall have been paid and are not subject to any right of recovery and all of  the other outstanding monetary Obligations have been satisfied;  (d) any and all right to trial by jury in any action or proceeding relating to this Guaranty  Agreement, or any document delivered hereunder or in connection herewith, or any transaction  arising from or connected to any of the foregoing; and  (e) any right the Guarantor may now or hereafter have to claim or recover from the  Trustee, the Issuer or the Bondowners any consequential, exemplary or punitive damages.  Section 3.07 Expenses.  The Guarantor agrees to pay all costs, expenses and fees, including all reasonable  attorneys’ fees, which may be incurred by the Trustee in enforcing or attempting to enforce this  A&R Completion Guaranty following any default by Guarantor hereunder, whether the same shall  be enforced by suit or otherwise.  Section 3.08 Benefit.  This A&R Completion Guaranty is entered into by the Guarantor for the benefit of Trustee  and the owners from time to time of the Bonds and any successor trustee or trustees under the  Indenture, all of whom shall be entitled to enforce performance and observance of this A&R  Completion Guaranty to the same extent provided for enforcement of remedies under the  Indenture.  Section 3.09 Financing of Other Projects.  The Guarantor will not (a) finance, develop or construct,  (b) participate in the financing,  development or construction of, or (c) consent to the financing, development or construction by  Borrower or any other entity owned directly or indirectly by the Guarantor of any plastics recycling  facilities within a 250-mile radius of the Project until the Bonds are paid in full; provided, however,  the Guarantor may participate in the financing, development or construction of an expansion  and/or addition to the Project.  Section 3.10 Establishment of Liquidity Reserve Escrow Fund; Security Interest in  Liquidity Reserve Escrow Fund.  (a) 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 solely by the  Trustee to secure the Guarantor’s obligations hereunder (the “Liquidity Reserve Escrow Fund”),  which funds shall be disbursed only for the purposes set forth (i) in clause (c) below until the  conditions set forth in Section 4.11(a) hereof have been met, and (ii) in Section 3.01(d) and/or  3.02(b), 3.02(c) or 3.02(d) hereof until the conditions set forth in Section 4.11(b) have been  

 

10      satisfied; provided, however, that so long as any Senior Bonds remain Outstanding, the Liquidity  Reserve Escrow Agreement shall remain in effect and the Guarantor shall retain on deposit in the  Liquidity Reserve Escrow Fund the reduced amount of $25,000,000 (the “Reduced Liquidity  Reserve Amount”).   Upon the occurrence of an Event of Default (as defined in the Indenture)  and the decision by the Trustee to take control of the Liquidity Reserve Escrow Fund under the  Liquidity Reserve Escrow Agreement, the Trustee may apply any and all funds then on deposit in  the Liquidity Reserve Escrow Fund for any purpose permitted under the Indenture, including the  payment of debt service on the Senior Bonds as and at the direction of the Majority Holders;  provided, the Guarantor shall not be obligated to replenish the Reduced Liquidity Reserve Amount.   When there are no Senior Bonds Outstanding, the Guarantor shall no longer have any obligation  to maintain the Reduced Liquidity Reserve Amount in the Liquidity Reserve Escrow Fund held  under the Liquidity Reserve Escrow Agreement, the Liquidity Reserve Escrow Agreement will  terminate, and the balance on deposit shall be returned to Guarantor.   (b) Guarantor hereby pledges, assigns and grants to the Trustee, for the benefit of itself  and the Holders of the Bonds, a security interest in all of its right, title and interest in, to and under  the Liquidity Reserve Escrow Fund.  Guarantor shall, simultaneously with the deposit of funds in  the Liquidity Reserve Escrow Fund, execute an Escrow Agreement, in the form set forth in Exhibit  A attached hereto  (the “Liquidity Reserve Escrow Agreement”), by and among the Guarantor,  the Trustee and U.S. Bank National Association (the “Deposit Bank”).  The Deposit Bank shall  disburse all funds on deposit in the Liquidity Reserve Escrow Fund at the sole direction of the  Trustee as set forth in Sections 3.10(a), 3.10(c) and 3.10(d).  Under the Liquidity Reserve Escrow  Agreement, Guarantor shall provide written investment instructions to the Trustee for the  investment of funds and financial assets under the Liquidity Reserve Escrow Agreement.  The  Trustee shall not be responsible, and Guarantor shall indemnify and hold harmless the Trustee, for  any losses, claims, damages, costs, break-fees and any other expenses arising out or associated  with the Trustee following such direction and instruction.  (c) Upon written notice from the Trustee to the Deposit Bank and the Guarantor  pursuant to Section 2.13 of the Loan Agreement that the contingency funds on deposit in the  Project Fund are less than $21,153,011, the Deposit Bank shall transfer to the Trustee, within three  (3) Business Days by wire transfer in immediately available funds, an amount sufficient to  replenish such contingency funds to not less than $21,153,011. Such funds shall be deposited into  the Equity Account of the Project Fund.  (d) Until the conditions set forth in Section 4.11(b) have been satisfied in full, upon  written notice from the Trustee to the Deposit Bank and the Guarantor that the Trustee will attempt  to cure a default by the Borrower under Sections 3.02(b), 3.02(c) and/or 3.02(d) hereof and the  amount required for such cure, the Deposit Bank shall transfer such stated amount to or at the  direction of the Trustee, within three (3) Business Days by wire transfer in immediately available  funds, and the Guarantor, within three (3) Business Days following the date of such notice, shall  deposit to the Liquidity Reserve Escrow Fund in immediately available funds an amount sufficient  to replenish the Liquidity Reserve Escrow Fund to the Liquidity Reserve Amount.  

 

11      Section 3.11 Additional Guarantor Covenants.  (a) Unless the Guarantor has provided written evidence to the Trustee that it has  $100,000,000 (including the Liquidity Reserve Amount) of equity to support its obligations  hereunder, the Guarantor shall not contribute equity to any additional project in an amount greater  than thirty percent (30%) of total project costs of such additional project.  (b) Guarantor shall:  (1) provide written evidence to the Trustee that the Guarantor has obtained and  maintains thereafter at least $75,000,000 (including the Liquidity Reserve  Amount) of cash on its balance sheet no later than July 31, 2021 or deliver  an irrevocable direct-pay letter of credit, for the benefit of the Trustee and  for the account of the Guarantor, in a stated amount equal to such amount,  which provides the Trustee with the right to draw upon the same to fund the  Guarantor’s obligations hereunder; and  (2) provide written evidence to the Trustee that the Guarantor has obtained and  maintains thereafter at least $100,000,000 (including the Liquidity Reserve  Amount) of cash on its balance sheet no later than January 31, 2022 or  deliver an irrevocable direct-pay letter of credit, for the benefit of the  Trustee and for the account of the Guarantor, in a stated amount equal to  such amount, which provides the Trustee with the right to draw upon the  same to fund the Guarantor’s obligations hereunder.  (c) The Guarantor shall either (x) raise additional equity in an amount not less than  $250,000,000 by January 31, 2021 and provide written evidence of the same to the Trustee by no  later than January 31, 2021 or (y) if it has not raised such additional equity, then:  (1) Guarantor shall deposit an amount equal to the difference between  $250,000,000 and the amount of equity actually raised by PureCycle less  the Liquidity Reserve, in twelve (12) equal monthly amounts, into a  Guarantor held account (such account shall not be required to be subject to  the Liquidity Reserve Escrow Agreement), and provide the Trustee written  evidence of such deposits, monthly, not later than the last day of each  month, commencing on February 28, 2021, until a total of $200,000,000 has  been deposited in such account; and  (d) The Guarantor shall not use any of the initial $250 million of equity raised after the  date hereof for any future projects of the Guarantor or its affiliates at a level greater than 30% of  the total project cost prior to the date this Guaranty terminates.  

 

12      ARTICLE IV    MISCELLANEOUS  Section 4.03 Amendments.  This A&R Completion Guaranty shall not be effectively amended, modified or altered until  such modification, alteration or amendment is reduced to writing and executed by both parties  hereto.  Section 4.04 Successors.  Except as limited or conditioned by the express provisions hereof, the provisions of this  A&R Completion Guaranty shall inure to the benefit of and be binding upon the successors and  assigns of the parties hereto.  Section 4.05 Governing Law.  The laws of the State of Ohio shall govern this A&R Completion Guaranty.  Section 4.06 Jurisdiction.  The Guarantor hereby consents to the jurisdiction of any state or federal court situated in  the State of Ohio, and waives any objection based on lack of personal jurisdiction, improper venue  or forum non conveniens, with regard to any actions, claims, disputes or proceedings relating to  this A&R Completion Guaranty, or any document delivered hereunder or in connection herewith,  or any transaction arising from or connected to any of the foregoing.  Nothing herein shall affect  the rights of the Trustee, the Issuer or the Bondowners to serve process in any manner permitted  by law, or limit the rights of the Trustee, the Issuer or the Bondowners to bring legal proceedings  against the Guarantor or its property or assets in the competent courts of any other jurisdiction or  jurisdictions.  Section 4.07 Captions.  The captions or headings in this A&R Completion Guaranty are for convenience only and  in no way define, limit or describe the scope or intent of any of the provisions of this A&R  Completion Guaranty.  Section 4.08 Counterparts.  This A&R Completion Guaranty may be signed in any number of counterparts with the  same effect as if the signatures thereto and hereto were on the same instrument.  Section 4.09 Notices.  All notices, certificates or other communications hereunder shall be sufficiently given and  shall be deemed given when hand delivered or when mailed by certified or registered mail, postage  prepaid, or by prepaid telegram addressed as follows: (i) if to the Trustee, at the Trustee’s Address  

 

13      as provided in Article I hereof, and (ii) if to the Guarantor, at the Guarantor’s Address as provided  in Article I hereof.  A duplicate copy of each notice, certificate or other communication given hereunder by  either the Trustee or the Guarantor shall also be concurrently given to the Borrower at the  “Borrower’s Address,” to the Issuer at the “Issuer’s Address,” both as specified in Section 1.01 of  the Indenture and to each Bondowner at its address set forth in the registration books maintained  by the Bond Registrar.  Section 4.10 Severability.  This A&R Completion Guaranty constitutes the entire agreement between the Trustee and  Guarantor with respect to the subject matter hereof, superseding all previous communications and  negotiations, and no representation, understanding, promise or condition concerning the subject  matter hereof shall be binding upon Trustee unless expressed herein.  If any provisions of this  A&R Completion Guaranty shall be held or deemed to be or shall, in fact, be inoperative or  unenforceable as applied in any particular case in any jurisdiction or jurisdictions or in all  jurisdictions, or in all cases because it conflicts with any other provision or provisions hereof or  any constitution or statute or rule of public policy, or for any other reason, such circumstance shall  not have the effect of rendering the provision in question inoperative or unenforceable in any other  case or circumstance, or of rendering any other provision or provisions herein contained invalid,  inoperative, or unenforceable to any extent whatever.  The invalidity of any one or more phrases,  sentences, clauses or Sections in this A&R Completion Guaranty contained, shall not affect the  remaining portions of this A&R Completion Guaranty, or any part thereof.  Section 4.11 Termination.  (a) Subject to Section 4.11(b), Guarantor shall be released from its Obligations under  Section 3.02(a) hereof only upon the (A) the completion of all Obligations set forth in Section 3.01  hereof; (B) the expiration of the twelfth (12th) month following the completion of thirty (30)  consecutive days of full name plate operations of the Project following completion; and (C) the  satisfaction in all respects of the distribution test set forth in Section 2.4(b)(viii) of the Loan  Agreement.    (b) Guarantor’s obligation to maintain the Liquidity Reserve Amount on deposit in the  Liquidity Reserve Escrow Fund shall remain in effect until the conditions set forth in Section  4.11(a) and the additional following conditions have been satisfied in full:   (1) the expiration of the Supplier 4 FSA and the transmittal by Borrower to the  Trustee of one or more fully executed feedstock supply agreements with  related Consent and Agreements substantially in the form of Exhibit L  (“Exhibit L”) to the Security Agreement dated as of October 7, 2020,  between the Borrower and the Trustee (the “Security Agreement”), or one  or more fully executed amendments to feedstock supply agreements  previously provided to the Trustee with Consent and Agreements  conforming to Exhibit L, or a combination of the foregoing, providing for  the supply of at least the minimum and maximum volumes of feedstock  

 

14      meeting substantially similar specifications as Supplier 4 had committed to  supply to Borrower under the Supplier 4 FSA and under terms of purchase  no less favorable to Borrower than such terms set forth in the Supplier 4  FSA;   (2) the expiration of the Offtaker 2 Agreement and the transmittal by Borrower  to the Trustee of  one or more fully executed offtake agreements with related  Consent and Agreements substantially in the form of Exhibit L, or one or  more fully executed amendments to offtake agreements previously provided  to the Trustee with Consent and Agreements conforming to Exhibit L, or a  combination of the foregoing, providing in the aggregate for the purchase  of the minimum and maximum volumes of offtake meeting substantially  similar specifications as Offtaker 2 had committed to purchase from  Borrower under the Offtaker 2 Agreement and under terms of purchase no  less favorable to the Borrower than such terms set forth in Offtaker 2  Agreement; and   (3) the expiration of the Offtaker 3 Agreement and the transmittal by Borrower  to the Trustee of one or more fully executed offtake agreements with related  Consent and Agreements substantially in the form of Exhibit L, or one or  more fully executed amendments to offtake agreements previously provided  to the Trustee with Consent and Agreements conforming to Exhibit L, or a  combination of the foregoing, providing in the aggregate for the purchase  of the minimum and maximum volumes of offtake meeting substantially  similar specifications as Offtaker 3 had committed to purchase from  Borrower under the Offtaker 3 Agreement and under terms of purchase no  less favorable to the Borrower than such terms set forth in Offtaker 3  Agreement.    In addition, Borrower may meet the requirements of Section 4.11(b)(1) above by providing to the  Trustee one or more executed option agreements between the Borrower and one or more  counterparties, together with a Consent and Agreement for each such agreement substantially in  the form of Exhibit L, which agreement(s)  provide in the aggregate for the supply to the Borrower  of at least the minimum and maximum volumes of feedstock that Borrower must obtain in the  event of an expiration or termination of the Supplier 4 FSA meeting substantially similar  specifications as Supplier 4 had committed to supply to Borrower under the Supplier 4 FSA and  under terms of purchase no less favorable to Borrower than such terms set forth in the Supplier 4  FSA.  The Borrower may meet the requirements of Section 4.11(b)(2) and Section 4.11(b)(3)  above by providing to the Trustee one or more executed option agreements between the Borrower  and one or more counterparties, together with a Consent and Agreement for each such agreement  substantially in the form of Exhibit L, which agreements provide in the agreement for the purchase  of the minimum and maximum offtake volumes that become available in the event of an expiration  or termination of Offtake Agreement 2 or Offtake Agreement 3 on terms of purchase no less  favorable to the Borrower than as set forth in the Offtaker 2 Agreement and the Offtaker 3  Agreement, respectively.  When replacement feedstock supply or offtake agreements are provided  to the Trustee by any of the aforesaid means, the requirement of Guarantor to maintain the  

 

15      Liquidity Reserve Amount shall be reduced by the applicable amount(s) set forth below, which  amount(s) evidence the intent of the parties of the amount of value of the entire supply represented  by the Supplier 4 FSA and the entire offtake represented by the Offtaker 2 Agreement and the  Offtaker 3 Agreement, respectively:  Supplier 4 FSA:  $2.75 million;  Offtaker 2 Agreement: $7.75 million; and  Offtaker 3 Agreement: $14.50 million.   (c) When all of the conditions of clauses (a) and (b) of this Section 4.11 have been met,  but so long as any Senior Bonds remain Outstanding, the Liquidity Reserve Escrow Agreement  shall remain in place as provided herein but the Liquidity Reserve Amount shall be reduced to the  Reduced Liquidity Reserve Amount, and the Guarantor shall no longer be required to replenish  the Reduced Liquidity Reserve Amount if and when disbursements are subsequently made  therefrom.  Upon the occurrence of an Event of Default (as defined in the Indenture), if the Trustee  takes control of the Liquidity Reserve Escrow Fund, funds in the Liquidity Reserve Escrow Fund  may be used for any purpose, including the payment of debt service on the Senior Bonds, as may  be determined by the Trustee or as may be directed by the Holders of a majority in aggregate  principal amount of the Senior Bonds Outstanding.    (d) When the conditions precedent set forth in Section 4.11(a) and Section 4.11(b) have  been satisfied and there are no longer any Senior Bonds then Outstanding, then (i) the Guarantor  shall no longer have any obligation to maintain the Reduced Liquidity Reserve Amount in the  Liquidity Reserve Escrow Fund held under the Liquidity Reserve Escrow Agreement, (ii) this  Agreement and the Liquidity Reserve Escrow Agreement will terminate, and (iii) the balance on  deposit in the Liquidity Reserve Escrow Fund shall be returned to Guarantor.  (e) The foregoing provision notwithstanding, Section 3.09 of this A&R Completion  Guaranty shall survive termination of this Agreement and shall remain in full force and effect until  the Bonds are paid in full.  Section 4.12 Specific Performance.  Guarantor acknowledges and agrees that it may be impossible to measure accurately the  damages to the Trustee or the Holders of the Bonds resulting from a breach of Guarantor’s  covenant to discharge or perform the Obligations, that such a breach will cause irreparable injury  to the Trustee and that the Trustee may not have an adequate remedy at law in respect of such  breach. As a consequence, Guarantor agrees that such covenant shall be specifically enforceable  against Guarantor.  Guarantor hereby waives and agrees not to assert in any action for specific  performance of such covenant any defense that specific performance is not an available remedy.  Section 4.13 Rights and Protections of Trustee.  This A&R Completion Guaranty is for the benefit of the Trustee.  The Trustee shall be  entitled to all of the same rights, benefits, privileges, immunities, disclaimers, exculpations,  

 

16      indemnitees and protections with respect to any action or omission as Trustee hereunder as are set  forth in the Indenture with respect to actions or omissions of the Trustee thereunder, and this A&R  Completion Guaranty shall secure all obligations and liabilities owing to the Trustee, as Trustee  under the Indenture.  Trustee may rely (and shall be fully protected in so relying) on the direction  of the Majority Holders with respect to any action taken or the exercise of any right, remedy or  discretion or the giving of any consent or approval as Trustee under this A&R Completion  Guaranty, and the Trustee may refrain from giving any consent, approval, or direction, from  making any demand, or from taking any other action or exercising any remedy, unless and until  directed to do so by the Majority Holders and receipt of indemnification satisfactory to it as and to  the extent provided under the Indenture.  [The remainder of this page is left blank intentionally.]    

 

 

 

         EXHIBIT A  Escrow Agreementpctsideletterex1010q1202

  Certain identified information has been excluded from this exhibit because it is both (i) not  material and (ii) is the type of information that the registrant treats as private or confidential.  [     ] indicates that information has been redacted.       THE PROCTER & GAMBLE COMPANY  One Procter & Gamble Plaza  Cincinnati, OH 45202  12 February 2021    PureCycle Technologies LLC  Building 100, Suite 151  Orlando, FL 32817    Re:  Samples and Services  Reference is made to the Amended and Restated Patent License Agreement  (the “TRANSACTION AGREEMENT”), dated as of July 28, 2020 between The Procter  & Gamble Company (“P&G”) and PureCycle Technologies LLC (“PCT”) and the  CONSULTING AGREEMENT dated October 19, 2020 between the same PARTIES (the  “CONSULTING AGREEMENT”).  This letter agreement (this “SIDE LETTER”) is being entered into by P&G and  PCT to document certain agreements relating to, among other things, samples  manufactured by PCT and R&D resources provided by P&G to PCT.     Accordingly, in consideration of the mutual obligations and promises contained  herein and in the TRANSACTION AGREEMENT and CONSULTING AGREEMENT (the  sufficiency of which the parties hereby acknowledge), the PARTIES agree as follows:  1. Defined Terms.  Capitalized terms used in this SIDE LETTER and not  otherwise defined in this will have the meanings ascribed in the TRANSACTION  AGREEMENT and the CONSULTING AGREEMENT.  2. Licensed Product Sample.  PCT will provide P&G with the LICENSED  PRODUCT of Section 6.1 of the TRANSACTION AGREEMENT [  ] to P&G  according to the amount and timing in Table 2, below.  Such LICENSED PRODUCT will  be considered [  ] when received by P&G.  PCT will send no more than 10  pounds to any THIRD PARTY until the entire month’s amount has been received by  P&G.  Table 2  Shipment Timing by Month      LICENSED PRODUCT  in Pounds   [  ]  

 

     Shipped in 2020, Cumulative  Shipping week of 1-18-21 [  ]  February [  ]  March [ ]  April [  ]  May [  ]  June [  ]  Total through June 2021 [  ]  July [  ]  August [  ]  Total through August 2021 [  ]    3. Additional Services.  In addition to the services provided in the  CONSULTING AGREEMENT and for a period of six months after the EFFECTIVE  DATE (as defined below), P&G will assist PCT with additional R&D support, as  requested by PCT, related to [    ] located in Ironton, OH.  In consideration for such services, PCT  will pay P&G $250,000 no later than 10 days after EFFECTIVE DATE, $125,000 no  later than 3 months after the EFFECTIVE DATE and $125,000 no later than 6 months  after the EFFECTIVE DATE.  Any CONSULTANT INVENTIONS or IMPROVEMENTS  will be governed by the Section 6 of the CONSULTING AGREEMENT.  4. [  ] Know-How.  The PARTIES recognize that there may be  additional know-how generated between the PARTIES relating to [    ].  Either PARTY may freely use this know-how within its  business or with THIRD PARTIES, provided such THIRD PARTY is under the same  duty of confidentiality to the PARTIES.  5. Amendment; No Further Effect.  To the extent required, this SIDE  LETTER will be deemed to be an amendment to the TRANSACTION AGREEMENT  pursuant to Section 20.8 of the TRANSACTION AGREEMENT and Section 7.7 of the  CONSULTING AGREEMENT.  Except as expressly set forth herein, this SIDE LETTER  does not, by implication or otherwise, alter, modify, amend or in any way affect any of  the terms, conditions, obligations, covenants or agreements contained in the  TRANSACTION AGREEMENT or the CONSULTING AGREEMENT.  6. Effective Date. This SIDE LETTER shall be effective as of January 1,  2021 (the “EFFECTIVE DATE”).   

 

         7. Governing Law; Jurisdiction.  All matters arising under or related to this  SIDE LETTER are governed by applicable law as provided in the TRANSACTION  AGREEMENT and the CONSULTING AGREEMENT.  8. Conflict of Terms.  If there is a conflict of terms between the  TRANSACTION AGREEMENT and the CONSULTING AGREEMENT, the  TRANSACTION AGREEMENT governs.  9. Counterparts.  This SIDE LETTER may be executed in multiple  counterparts (any one of which need not contain the signatures of more than one  PARTY), each of which will be deemed to be an original but all of which taken together  will constitute one and the same agreement.  This SIDE LETTER, to the extent signed  and delivered by means of a facsimile machine or other electronic transmission, will be  treated in all manner and respects as an original agreement and will be considered to  have the same binding legal effects as if it were the original signed version thereof  delivered in person.    [Signature page follows.]    

 

     IN WITNESS WHEREOF, the parties have caused this SIDE LETTER to be  executed as of the day and year first written above (the “EFFECTIVE DATE”).      Sincerely,    THE PROCTER & GAMBLE COMPANY        By:  /s/ Brian Fitzgerald     Name:  Brian Fitzgerald    Title:     SVP-Global Business Development    Accepted and agreed:  PURECYCLE TECHNOLOGIES, LLC        By:   /s/ Michael Otworth     Name:  Mike Otworth    Title:  CEO

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