PureCycle Technologies Inc

Rule 10b5-1 Trading Plans

None of the Company’s directors or officers adopted, modified, orterminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K, during the Company’s fiscal quarter ended March 31, 2024.

Entry into a Material Definitive Agreement

On May 7, 2024, PCT LLC entered into an agreement with Pure Plastic LLC (“Pure Plastic”), a Delaware limited liability company, whereby Pure Plastic will purchase approximately $94.3 million in aggregate par amount of Bonds owned by PCT LLC (the “Purchased Bonds”), including (i) a portion of the Series 2020A Bonds, (ii) all of the Series 2020B Bonds, and (iii) all of the Series 2020C Bonds, at a purchase price of $800 per $1,000 principal amount of the Purchased Bonds (the “Pure Plastic Purchase Agreement”). Affiliates of Pure Plastic are greater than 5% beneficial owners of the Company.

As total consideration for the Purchased Bonds, the aggregate amount of principal outstanding, together with accrued but unpaid interest thereon, of approximately $45.5 million under the Term Loan Facility will be deemed to be prepaid in full and PCT LLC will receive $30 million in cash, as further provided for in the Payoff and Release Letter (as defined below).

The closing of the transactions contemplated by the Pure Plastic Purchase Agreement will occur in three tranches, with each tranche subject to the satisfaction of certain conditions.

The Pure Plastic Purchase Agreement requires PCT LLC to make best efforts to:

•

Obtain SOPA’s authorization, on or before June 5, 2024, to enter into a fifth supplemental indenture (“Fifth Supplemental Indenture”) and direct the Trustee to execute and deliver the same. The Fifth Supplemental Indenture will amend the definition of “Majority Holders” in Section 1.01 of the Indenture to require a supermajority of the Holders to take various actions.

•

Obtain SOPA’s authorization, no later than September 30, 2024, to enter into a sixth supplemental indenture (“Sixth Supplemental Indenture”) and direct the Trustee to execute and deliver the same. The Sixth Supplemental Indenture will revise the Indenture and the Loan Agreement and any other Financing Document as may be necessary in order to implement the following:

o

The definition of "Outside Completion Date" in Section 1.01 of the Indenture shall be amended to December 31, 2026.

o

Include in the Loan Agreement, covenants to meet the stated Senior Parity Coverage Requirement and the stated Overall Coverage Requirement, beginning with the fiscal year ended December 31, 2026.

o

Include in the Loan Agreement, a revision to the covenant to provide year-end financial statements, such that (a) the requirement shall apply only to PCT LLC and not to PCO, and (b) such financial statements may be provided on a consolidated basis with the Company.

o

Include in the Indenture and in the Loan Agreement customary events of default related to failure to perform financial covenants.

Pursuant to the Payoff and Release Letter, by and among the Company, the Credit Facility Guarantors (as defined in the Pure Plastic Purchase Agreement) and Pure Plastic (the “Payoff and Release Letter”), which is to be entered into as of the Initial Closing Date (as defined in the Pure Plastic Purchase Agreement), the Company is required to pay a 12% prepayment premium on the outstanding principal and interest paid in order to prepay the Term Loan Facility (the “Prepayment Premium”) plus certain expenses. The Company will issue warrants (“Series B Warrants”) to Pure Plastic pursuant to a Series B Warrant Agreement to satisfy the Prepayment Premium (the “Series B Warrant Agreement”). The Series B Warrants entitle Pure Plastic to purchase approximately 3.1 million shares of the Company's Common Stock at a price of $11.50 per share any time on or after November 6, 2024. The Series B Warrants will expire on December 1, 2030. The Company will pay the expenses in cash.

The Payoff and Release Letter also provides that if the Term Loan Facility is not paid off by a certain date, the Payoff Amount (as defined therein) will be increased by a specific amount on a daily basis. The Payoff and Release Letter will terminate and be of no force or effect if the Payoff Date (as defined therein) does not occur by 5:00 p.m. (Eastern Time) on May 17, 2024.

Lastly, the Payoff and Release Letter provides that all of the Obligations (as defined therein) under the Term Loan Facility shall be deemed paid and satisfied in full upon the satisfaction of certain conditions and, furthermore, upon the satisfaction of such conditions, all liens securing the Obligations shall be deemed to be fully released and discharged.

The foregoing descriptions of the Pure Plastic Purchase Agreement, the Fifth Supplemental Indenture (which is included as Exhibit D to the Pure Plastic Purchase Agreement), the Payoff and Release Letter, and the Series B Warrant Agreement (which is included as Exhibit B to the Payoff and Release Letter) and are not complete and are qualified in their entirety by reference to the full text of the agreements or the “form of” the agreements, which are attached hereto as Exhibits 10.6, 10.7, 10.8, and 10.9 and incorporated herein by reference.

Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

The information contained under the section above entitled “Entry into a Material Definitive Agreement” is incorporated here by reference. Upon the occurrence of an Event of Default (as defined in the Indenture), the amount outstanding under the Bonds may be accelerated. Refer to Note 3 (“Notes Payable and Debt Instruments”) to the Notes to the Interim Condensed Consolidated Financial Statements appearing elsewhere in this Quarterly Report on Form 10-Q for additional information regarding the material terms of the Bonds.

Unregistered Sales of Equity Securities

The information contained under the section above entitled “Entry into a Material Definitive Agreement” is incorporated here by reference. The Company offered and sold the Purchased Bonds and the Series B Warrants to Pure Plastic in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and Regulation D thereunder. Pure Plastic represented that it is an “accredited investor” within the meaning of Regulation D under the Securities Act and that it acquired the securities for investment purposes, and not with a current view to, or for resale in connection with, any distribution, resale, pledging, fractionalization, subdivision or other disposition thereof. The securities are not registered under the Securities Act and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act and any applicable state securities laws.