Item 1.02. Termination of a Material Definitive Agreement.
On October 29, 2020, Loop Industries, Inc. (the "Company") received notice from
Coca-Cola Cross Enterprise Procurement Group ("CEPG") of CEPG's intention to
terminate the Master Terms and Conditions Supply Agreement for Loop PET plastic,
dated November 14, 2018 (the "MTC"), with such termination to be effective on
December 14, 2020 (the "Notice").
The MTC was a multi-year agreement that enabled members of CEPG ("Customers") to
enter into supply agreements with the Company for the purchase of Loop PET
plastic from the Company's as yet unfinished joint venture facility, to be
established in Spartanburg, South Carolina with Indorama Ventures PCL to
incorporate Loop™ PET plastic into its product packaging. Pursuant to the MTC,
the Company would have had an opportunity to provide and deliver certain
quantities of Loop™ PET plastic to Customers under supply agreements which
incorporated the terms of the MTC.
CEPG advised the Company that it is terminating the MTC because the Company did
not satisfy its first production milestone from the joint venture facility by
July 2020 as required by the MTC. CEPG indicated in the Notice that it is open
and interested in exploring a new framework agreement with the Company for North
America and/or Europe.
The Company previously expected the commissioning of the joint venture facility
in the third quarter of 2021. However, as previously disclosed, the Company now
expects delays in the commissioning of the joint venture facility, which has
been affected by the Covid-19 pandemic and the continued border closures and
quarantine requirements between Canada and the U.S.The Company intends to
engage with CEPG regarding the joint venture facility when it has more clarity
on the commisioning as well as for our planned Infinite Loop European project.
The foregoing description of the terms of the MTC does not purport to be
complete and is qualified in its entirety by reference to the full text of the
MTC, a copy of which was filed as Exhibit 10.1 to the Company's Current Report
on Form 8-K filed with the SEC on November 29, 2018 and is incorporated by
reference into this Item 1.02.
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