LOOP Loop Industries Inc

Item 1.01. Entry into a Material Definitive Agreement.

On April 27, 2023, Loop Industries, Inc. (the “Company” or “Loop”) entered into an agreement (the “Agreement”) by and between the Company and SK Geo Centric Co., Ltd (“SKGC”). Pursuant to the Agreement, the Company and SKGC agreed to form a new company (the “Venture Company”) headquartered in Singapore to deploy Loop’s depolymerization technology in the Asian market through one or more subsidiaries. SKGC will contribute 51% and Loop will contribute 49% of the initial equity capital of the Venture Company.

The initial board of directors of the Venture Company will be comprised of three directors appointed by SKGC and two directors appointed by Loop. SKGC will be responsible for the construction and operation of the Venture Company’s manufacturing facilities, subject to the terms of the relevant governing documents, and for facilitating debt financing for the Venture Company pursuant to the terms of the Agreement.

The Agreement provides that Loop and SKGC will use commercially reasonable efforts to cause the Venture Company to acquire from SKGC real estate located in Ulsan, South Korea for the purposes of constructing an initial rPET product plant, with such plant to be mutually designed by Loop and SKGC. The commencement of construction of the initial rPET product plant is subject to the satisfaction of obtaining the final investment decision of each of Loop and SKGC, and other customary closing conditions.

Pursuant to the Agreement, the Venture Company will enter into (i) a technology license agreement with Loop (the “Loop Technology License Agreement”), (ii) a service agreement with SKGC, and (iii) a sales and marketing agreement with Loop and SKGC, each on terms to be mutually agreed upon by the parties. Loop and SKGC will provide research and development services to the Venture Company and may enter into a joint development agreement with the Venture Company on terms to be agreed upon by the board of directors of the Venture Company.

Pursuant to the Agreement, the Venture Company will be granted the licenses under the Loop Technology License Agreement on an exclusive basis as set forth therein for a period of six years following the date on which Loop and SKGC agree to a basic design package regarding the initial rPET product plant, subject to extension or early termination under certain conditions as described in the Agreement.

Additionally, for the duration of the exclusivity period referred to in the previous paragraph, Loop granted SKGC a right of first refusal in respect of any plans to directly or indirectly develop any manufacturing facility in the United States or Canada for the manufacture of rPET products.

The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Agreement, which will be filed as an exhibit to a future periodic or current report of the Company.