Complete the next paragraph of this contract: ARTICLE 1 DEFINITIONS 1.1 ___ 1.2 "Acceptance Notice" has the meaning set forth in Section 2.3. 1.3 "Affiliate" means, with respect to a Party, any corporation or other entity that is directly or indirectly controlling, controlled by or under the common control with such Party. For the purpose of this definition, "control" means the direct or indirect ownership of at least fifty percent (50%) of the outstanding shares or other voting rights of the subject entity to elect directors (or, in the case of an entity that is not a corporation, for the election of the corresponding managing authority), or if not meeting the preceding, any entity owned or controlled by or owning or controlling at the maximum control or ownership right permitted in the country where such entity exists. 1.4 "Alternate Producer" has the meaning set forth in Section 2.3. 1.5 "Assignment" has the meaning set forth in Section 2.4. 1.6 "Assignment Date" has the meaning set forth in Section 2.4. 1.7 "Authorized Customer" means a Loop Party customer that is a party to a Transferred Contract, solely with respect to the Product quantities covered by the Transferred Contract. 1.8 "Business Day" means any day, other than a Saturday, Sunday or legal holiday, on which banks in Montreal or South Carolina are open for the conduct of their commercial banking business. 1.9 "Considered Contract" has the meaning set forth in Section 2.2. 1.10 "Contract Eligibility Framework" means, with respect to any Proposed Contract, those criteria set forth Exhibit B. 1.11 "Eligible Contract" has the meaning set forth in Section 2.2. 1.12 "Joint Venture Company" has the meaning set forth in the Recitals. 1.13 "Joint Venture Party" means each of Joint Venture Company and each SPV. 1.14 "License Agreement" means that certain License Agreement between Loop and Joint Venture Company dated as of the Effective Date, as amended, modified or supplemented from time to time (including, for the avoidance of doubt, any changes to the list of Licensed Facilities therein). 1.15 "Licensed Facilities" has the meaning set forth in the License Agreement. ___ Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -2-
1.16 "Licensed Products" has the meaning set forth in the License Agreement. 1.17 "Licensed Subject Matter" has the meaning set forth in the License Agreement. 1.18 "LLC Agreement" means the Limited Liability Company Agreement of the Joint Venture Company between Loop Innovations and IVH, as amended, modified or supplemented from time to time. 1.19 "Loop Sales Contract" means a contract between a Loop Party and a third-party customer for the Loop Party's sale to the customer, and the customer's purchase from the Loop Party, of a specified quantity of Loop-branded Products produced using Licensed Subject Matter. 1.20 "Marketing and Sale Restriction" has the meaning set forth in Section 2.7. 1.21 "Products" means recycled or upcycled PET resins. 1.22 "Proposed Contract" has the meaning set forth in Section 2.2. 1.23 "Proposed Contract Notice" has the meaning set forth in Section 2.2. 1.24 "Rejection Notice" has the meaning set forth in Section 2.3. 1.25 "Review Period" has the meaning set forth in Section 2.3. 1.26 "SPV" means each Subsidiary of Joint Venture Company which operates a Licensed Facility. 1.27 "Subsidiary" means, with respect to a Party, any Affiliate of the Party that is directly or indirectly controlled by the Party (with "control" having the meaning provided in Section 2). 1.28 "Transferred Contract" means any Proposed Contract that is accepted or deemed accepted as a Transferred Contract pursuant to Section 2.3. ARTICLE 2 PRODUCT SALES 2.1 Loop Sales Contracts. As between the Parties, subject to Section 2.7, Loop shall have the sole and exclusive right to enter into agreements for the sale of Loop-branded Products or any Products produced using Licensed Subject Matter, and the exclusive right to set the price and quantity to be supplied under each Loop Sales Contract and other terms and conditions as determined by Loop in its commercially reasonable discretion. ___ Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -3-
2.2 Proposed Contracts and Proposed Contract Notice. Loop shall give Joint Venture Company prompt written notice, in the form of Exhibit A attached to this Agreement, ___ and (b) pursuant to which Loop offers to assign all of its rights and obligations under such Loop Sales Contract to Joint Venture Company (each such notice, a "Proposed Contract Notice"). Along with each Proposed Contract Notice, Loop shall deliver to Joint Venture Company a complete copy of the executed Loop Sales Contract (the "Proposed Contract"). The Proposed Contract Notice shall contain information necessary to establish whether the Proposed Contract meets the criteria set forth in the Contract Eligibility Framework. Each such Proposed Contract that (i) meets the criteria set forth in the Contract Eligibility Framework and (ii) contains no other terms or conditions other than those set forth in the Contract Eligibility Framework or any form of Loop Sales Contract mutually agreed in writing to be acceptable by the Parties, shall be an "Eligible Contract." Each such Proposed Contract that does not qualify as an Eligible Contract shall be a "Considered Contract." 2.3 Acceptance of Proposed Contracts. All Eligible Contracts shall be deemed accepted by the Joint Venture Company and become a Transferred Contract on the date Loop delivers the Proposed Contract Notice for such Eligible Contract to the Joint Venture Company. In the event that the Proposed Contract Notice is a Considered Contract, the Joint Venture Company will have the right to review and determine whether to accept or reject the Considered Contract within ten (10) days following Joint Venture Company's receipt of the Proposed Contract Notice (the "Review Period"). Joint Venture Company shall provide Loop with a written acceptance or rejection of each Considered Contract ("Acceptance Notice" or "Rejection Notice," as applicable) within the Review Period, which acceptance or rejection shall be in Joint Venture Company's sole discretion. If Joint Venture Company does not provide an Acceptance Notice or Rejection Notice to Loop within the Review Period, the Considered Contract will be deemed rejected by Joint Venture Company. Loop shall be entitled to present any rejected Considered Contract (whether deemed rejected or by receipt of a Rejection Notice) to an Alternate Producer on the same terms and conditions as those presented to Joint Venture Company. If Joint Venture Company provides an Acceptance Notice to Loop with respect to a Considered Contract during the Review Period, that Considered Contract shall become a Transferred Contract on the date Joint Venture Company provides that Acceptance Notice. 2.4 Assignment of Transferred Contracts. Promptly after the date a Proposed Contract becomes a Transferred Contract (the "Assignment Date"), Loop and Joint Venture Company shall execute and deliver an assignment and assumption agreement substantially in the form of Exhibit C attached to this Agreement ("Assignment") pursuant to which Loop shall assign to Joint Venture Company all of Loop's right, title, and interest in the Transferred Contract and Joint Venture Company shall assume all such rights and obligations. Without diminishing Joint Venture Company's obligations to perform under a Transferred Contract pursuant to the assignment and assumption agreement, Joint Venture Company shall cause any applicable SPV to perform all of its assumed obligations under such Transferred Contract. 2.5 Customer Interface. Joint Venture Company shall fulfill all sales of Products under all Transferred Contracts, shall invoice Authorized Customers for all sales of Products under all Transferred Contracts, and shall use commercially reasonable efforts to collect the amounts due under such invoices. At Joint Venture Company's request from time to time, Loop shall provide reasonable assistance to Joint Venture Company in such invoicing and collection process at Joint Venture Company's expense. 2.6 Product Branding. Joint Venture Company shall, and shall cause each SPV to, mark and brand all containers, packaging and related collateral for the Licensed Products in accordance with the License Agreement. ___ Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -4-
2.7 Exclusivity. Joint Venture Company shall not, and shall cause each SPV and each of their Affiliates not to, directly or indirectly, market or sell any Loop-branded Products or any Products produced using Licensed Subject Matter to any person or entity except to Authorized Customers pursuant to a Transferred Contract (the "Marketing and Sale Restriction"); provided that if at any time during the term of this Agreement, Loop has delivered Proposed Contract Notices that result in Transferred Contracts having binding purchase and supply obligations for less than ___ of the then existing actual production capacity of a Licensed Facility (taking into account Joint Venture Company's reasonable forecasts based on customer requirements, seasonal variations, and other factors) in the subsequent three months (the "___"), Joint Venture Company may market and solicit orders for Licensed Products produced in such Licensed Facility directly to customers and potential customers and enter into supply contracts for the sale of Loop-branded Products or any Products produced using Licensed Subject Matter produced in such Licensed Facility with customers without being restricted by the Marketing and Sale Restriction. If at any subsequent time during the term of this Agreement Loop gives Joint Venture Party written notice that Loop is then capable of meeting, and is prepared to meet, the ___ and provides reasonable supporting information and documentation to Joint Venture Party with such notice, then at a date selected by Joint Venture Company that is within ninety (90) days after Joint Venture Company receives such written notice, the Market and Sale Restriction and the other provisions of this Section 2.7 shall go back into force. Nothing in this Section 2.7 shall relieve Loop of any of its obligations under this Agreement. ARTICLE 3 LIMITATION OF LIABILITY 3.1 LIMITATION OF LIABILITY. IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER UNDER THIS AGREEMENT OR OTHERWISE FOR CONSEQUENTIAL, SPECIAL, INCIDENTAL, EXEMPLARY, STATUTORY, OR PUNITIVE DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT. JOINT VENTURE COMPANY'S TOTAL CUMULATIVE LIABILITY TO THE LOOP PARTIES WITH RESPECT TO A TRANSFERRED CONTRACT, IN ALL CIRCUMSTANCES AND REGARDLESS OF THE THEORY OF RECOVERY, SHALL BE LIMITED TO THE AMOUNT OF ACTUAL, DIRECT, AND DOCUMENTED DAMAGES THE APPLICABLE AUTHORIZED CUSTOMER ACTUALLY RECOVERS FROM THE LOOP PARTIES UNDER THE TRANSFERRED CONTRACT BASED SOLELY ON JOINT VENTURE COMPANY'S BREACH OF SUCH TRANSFERRED CONTRACT. JOINT VENTURE COMPANY SHALL NOT HAVE ANY LIABILITY TO ANY LOOP PARTY WITH RESPECT TO ANY ELIGIBLE CONTRACT THAT DOES NOT BECOME A TRANSFERRED CONTRACT AS PROVIDED IN SECTION 2.3. NOTWITHSTANDING THE FOREGOING, NONE OF THE FOREGOING LIMITATIONS OF LIABILITY SET FORTH IN THIS SECTION 3.1 SHALL BE AVAILABLE TO EITHER PARTY WITH RESPECT TO A BREACH OF SECTION 4, CONFIDENTIAL INFORMATION, OR FOR CLAIMS TO THE EXTENT THEY ARISE OUT OF A PARTY'S GROSS NEGLIGENCE, FRAUD, OR WILLFUL MISCONDUCT. ___ Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -5-
ARTICLE 4 CONFIDENTIAL INFORMATION 4.1 Confidential Information. The term "Confidential Information" means any information disclosed by one Party to the other (i) prior to the date of this Agreement but with respect to the subject matter of this Agreement, or (ii) pursuant to this Agreement, in each case which is in written, graphic, machine readable or other tangible form and is marked "Confidential," "Proprietary" or in some other manner to indicate its confidential nature. Confidential Information may also include oral information disclosed by one Party to the other pursuant to this Agreement, pro-vided that such information is designated as confidential at the time of disclosure and reduced to a written summary by the disclosing Party, within thirty (30) days after its oral disclosure, which is marked in a manner to indicate its confidential nature and delivered to the receiving party. 4.2 Obligation. Each Party shall treat as confidential (as set forth herein) all Confidential Information of the other Party, and shall not use such Confidential Information except as contemplated in this Agreement or as otherwise authorized in writing. Each Party shall implement reasonable procedures to prohibit the unauthorized disclo-sure or misuse of the other Party's Confidential Information and shall not intentionally disclose such Confidential Information to any third party except as may be necessary or useful in connection with the rights and obligations of such Party under this Agreement, and subject to confidentiality obligations similar to those set forth in this Article 4. Each of the Parties shall use at least the same procedures and degree of care that it uses to prevent the disclosure of its own confidential information of like importance to prevent the disclosure of Confidential Information disclosed to it by the other Party under this Agreement, but in no event less than reasonable care. 4.3 Exclusions. Notwithstanding the foregoing, Confidential Information excludes information that: (a) was publicly available at the time it was disclosed or becomes publicly available through no fault of the receiving Party; (b) was known to the receiving Party, without similar confidentiality restriction, at the time of disclosure; (c) is disclosed with the prior written approval of the disclosing Party; (d) was independently developed by the receiving Party without any use of the Confidential Information of the disclosing Party; or (e) becomes known to the receiving Party, without similar confidentiality restriction, from a source other than the disclosing Party without breach of this Agreement by the receiving Party. 4.4 Compelled Disclosure. The receiving Party may disclose the Confidential Information of disclosing Party if compelled to do so by law, a court or other authority; provided that the receiving Party shall give the disclosing Party prompt written notice so that the disclosing Party may take steps to oppose such disclosure. ___ Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -6-