KDI Project.

The Seller and the Purchaser may mutually agree, in writing, to add additional Projects.

“Carbon Credits” means all right, title and interest in, and benefits associated with, any and all voluntary or compliance-eligible carbon dioxide Emissions Reductions (ER) and any emission reduction, removal, allowance, credit, permit, offset, claim, characteristics, attribute, verified emission reduction, removal unit, howsoever entitled or designated, resulting from, attributable to or associated with the Project, which Carbon Credit shall be Verified (or otherwise confirmed as required by the Applicable Standard) and measured in units of one tonne of carbon dioxide equivalent using the global warming potentials stipulated by the Applicable Standard Body or the Intergovernmental Panel on Climate Change, as applicable and as may be evidenced by a serialized registration or certificate number; and shall include the reporting rights and benefits related to any such units including the right of a Person to report the ownership thereof in compliance with Applicable Law, if applicable, or otherwise to an international, federal or sub-national agency or any other Person, including under any present or future emissions trading program, a voluntary carbon market program, the UNFCCC, or the Paris Agreement, with a Vintage Year requirement as communicated by Climate Neutral (https://www.climateneutral.org) each year.

Relevant Definitions

“Applicable Law” means any international, federal, state, provincial, local or municipal law, regulation, code, order or other requirement or rule of law or the rules, policies, orders, regulations, judgments, rulings, decrees, injunctions, authorization, approvals or other directions or requirements of any Governmental Authority or stock exchange, including any judicial or administrative interpretation thereof and any international treaty obligation of any Governmental Authority, applicable to a Person or any of its properties, assets, business or operations.

“Applicable Standard” means (i) with respect to Gold Standard, the Gold Standard Social and Climate Impact Project, as such standards may be amended, modified or replaced from time to time, (ii) with respect to Verra, the Verified Carbon Standard, the Climate, Community and Biodiversity Standards and the Sustainable Development Verified Impact Standard, as such standards may be amended, modified or replaced from time to time, and (iii) with respect to any other Applicable Standard Body, the mandatory GHG related legislative or regulatory requirement administered by a Governmental Authority or the voluntary GHG standard, program or scheme, including a Registry and their applicable protocol(s) for the creation or use of Carbon Credits.

“Applicable Standard Body” means (i) Verra, (ii) Gold Standard, or (iii) any other governing body making final and binding determinations under an Applicable Standard selected by the Parties.

“Emission Reductions” means all existing and future legal and beneficial rights arising from the physical reduction or sequestration of greenhouse gases (GHG Reductions and GHG removal enhancements) created by the physical assets of the Project, measured in increments of one metric ton of carbon dioxide equivalent, including any right, interest, credit, entitlement, benefit, allowance, certificate or registrable right arising from or in connection with that reduction or sequestration.

“GHG” means greenhouse gases listed in Annex A to the Kyoto Protocol to the United Nations Framework Convention on Climate Change.

“GHG Reduction” means the removal, limitation, reduction, avoidance, sequestration, or mitigation of emissions of any of the six greenhouse gases listed in Annex A to the Kyoto Protocol to the United Nations Framework Convention on Climate Change.

“Gold Standard” means the Gold Standard or Gold Standard for the Global Goals, published and administered by the Gold Standard Foundation, a nonprofit corporation headquartered in Geneva, Switzerland, and any successor thereto reasonably acceptable to the Parties.

“Governmental Authority(ies)” means any domestic or foreign federal, provincial, regional, state, municipal or other government, governmental department, agency, authority or body (whether administrative, legislative, executive or otherwise), court, tribunal, commission or commissioner, bureau, minister or ministry, board or agency, or other regulatory authority, including any securities regulatory authorities or stock exchange.

“Intergovernmental Panel on Climate Change” is the United Nations body for assessing the science on climate change (IPCC — Intergovernmental Panel on Climate Change).

“Paris Agreement” means the Paris Agreement (December 13, 2015), made under the UNFCCC, Report of the Conference of the Parties (Addendum) Decision 1/CP.21, FCCC/CP/2015/10/Add.1 (January 29, 2016).

“Person” means and includes individuals, corporations, bodies corporate, limited or general partnerships, joint stock companies, limited liability companies, joint ventures, associations, companies, trusts, banks, trust companies, Governmental Authorities or any other type of organization or entity, whether or not a legal entity.

“Registry” means the body organized for the reporting, registration, and transfer of Carbon Credits.

“United Nations Framework Convention on Climate Change” or “UNFCCC” means the United Nations Framework Convention on Climate Change, May 9, 1992, S. Treaty Doc No. 102–38 (1992), 1771 U.N.T.S. 107.

“Verification” and “Verified” means a periodic independent review and after-the-fact determination by a verifier that the GHG Reductions have occurred during a specified period and otherwise meet the requirements of the Applicable Standard.

“Verra” means Verra, a nonprofit corporation registered under the laws of the District of Columbia (Washington, DC), and any successor thereto reasonably acceptable to the Parties.

“Vintage Year” means the month and calendar year or other calendar period specified by the Parties, as applicable, in which the GHG Reduction occurred.

Carbon Credits generated by the Project (“Project Credits”).

The term of the PSA shall commence on the Execution Date and shall terminate on the tenth (10^th) anniversary of the first Delivery of Project Credits with mutual agreement to renewals of five (5) years terms (“Renewal Terms”) for (2) two additional Renewal Terms.

“Execution Date” is the date on which the PSA is signed by both Parties.

The Purchaser shall pay the Seller the Net Realized Price per Project Credit.

“Margin” means thirty percent (30%) of the Realized Price.

“Marketing Fee” means half of a percent (0.5%) of the Realized Price.

“Net Realized Price” means an amount equal to the proceeds (cash only) realised by the Purchaser upon the sale of a Project Credit less the Marketing Fee less Margin and less any third-party broker or commission charges incurred and paid by the Purchaser directly related to the sale of the Project Credit.

“Realized Price” is actual price received by the Purchaser from a Third-Party Buyer (as defined below) of the Project Credit.

Where EthicStream retires any of the Project Credits on its own behalf, the Net Realized Price for such retired Project Credits should be calculated as the Average Price. “Average Price” means the average Realized Price for all Project Credits during the previous three (3) month period. If no sales of Project Credits have closed during such previous three (3) month period, the “Average Price” shall be calculated using the average offers that two independent North America brokers provide upon request.

The Seller is required to Deliver the Volume of Project Credits arising from the Project.

“Delivery” means the transfer Carbon Credits to the Purchaser in accordance with the requirements of the Applicable Standard Body in accordance with the operating rules of the Registry. Title to the Project Credits will pass to the Purchaser upon Delivery.

The Purchaser will have the exclusive right to market and sell the Volume for the Term of the PSA.

There are no restrictions on the size of trades, counterparties, minimum prices or the use of any electronic trading platform.

None of the Project Credits may be tokenized by the Purchaser.

Upon issuance, the Seller shall hold all the Project Credits in its account(s) in the relevant Registries.

The Seller will sell the Volume of Project Credits and deliver such Volume of Project Credits to the account of the Purchaser for the Purchaser to market, sell and Deliver the Volume of Project Credits to the account of the Carbon Credit buyer or retailer (“Third-Party Buyer”).

Upon receipt of payment by the Purchaser from the Third-Party Buyer, Purchaser and the Seller shall reconcile the Prepayment with the Net Realized Price.

Any positive difference between the Net Realized Price and Prepayment shall be paid by the Purchaser to the Seller within thirty (30) days.

Any negative difference between the Net Realized Price and Prepayment shall reduce the Prepayment amount.

The Purchaser must sell the Project Credits to a Third-Party Buyer within one-hundred twenty (120) days of receipt of such Project Credits (the “Sale Period”). Any Project Credits which have not been sold to a Third-Party Buyer during the Sale Period will be resold to the Seller at a the Prepayment price, with all costs associated therewith borne by the Purchaser.

Any such returned Project Credits will continue to be allocated towards the Seller’s Volume commitment.

The Parties will negotiate in good faith with each other to structure the Transaction in a Tax efficient manner which does not adversely affect any of the Parties.

“Taxes” means all taxes, surtaxes, duties, royalties, levies, imposts, tariffs, fees, assessments, reassessments, withholdings, dues, contributions and other charges and impositions of any nature, whether disputed or not, imposed, levied or charged by or on behalf of a Governmental Authority, and instalments in respect thereof, including such amounts imposed or collected on the basis of: income; profit; revenue; capital; real or personal property; payments; Deliveries or transfers of property or payments of any kind to residents or non-residents; purchases; consumption; sales; use; ad valorem; value added; stamp; gross receipts; licenses; environment; import, export of goods and services; distributions; registration of documents; occupation; labor; or equity; together with penalties, fines, additions to tax and interest thereon; and “Tax” shall have a corresponding meaning.

The Seller shall implement the Projects and:

The Purchaser agrees, on an arms length basis, to use its best efforts to maximise the Net Realized Price of the Volume of Project Credits in accordance with the terms of the PSA.

The following shall constitute Seller’s Events of Default:

If a default has occurred and is continuing, the Purchaser may seek all remedies at law or in equity.

Once the default is otherwise cured or waived, the Seller shall be deemed to have cured the default arising from such default.

“Business Day” means a day on which Federal Reserve member banks are open for business.

“Insolvency Event” means, in respect of any Person, any one or more of the following events or circumstances whereby such Person (i) becomes insolvent or generally does not or becomes unable to pay its debts or meet its liabilities as the same become due; (ii) admits in writing its inability to pay its debts generally or declares any general moratorium on its indebtedness or proposes a compromise or arrangement between it and any class of its creditors or makes a general assignment for the benefit of creditors; (iii) institutes or has instituted against it any proceeding seeking (x) to adjudicate it a bankrupt or insolvent, (y) liquidation, dissolution, winding-up, administration, reorganization, compromise, arrangement, adjustment, protection, moratorium, relief, stay of proceedings of creditors generally (or any class of creditors), or composition of it or its debts or any other relief under any Insolvency Law, or (z) the entry of an order for relief or the appointment of or the taking of possession by, a receiver, receiver-manager, administrator, custodian, monitor, trustee or other similar official for the Person or any substantial part of its respective property and, in the case of any such proceeding instituted against it (but not instituted by it) either such petition, application or proceeding continues undismissed, or unstayed and in effect, for a period of forty-five (45) days after the institution thereof, such Person fails to diligently and actively oppose such proceeding, or any of the actions sought in such proceeding (including the entry of an order for relief against it or the appointment of a receiver, receiver-manager, administrator, custodian, monitor, trustee or other similar official for it or for any substantial part of its properties and assets) occurs, or such Person files an answer admitting the material allegations of a petition or motion filed against it in any such proceeding; or (iv) takes any action, corporate or otherwise, to approve, effect, consent to or authorize any of the actions described in the foregoing paragraphs (i) through (iii) or otherwise acts in furtherance thereof or fails to act in a timely and appropriate manner in defense thereof.

“Insolvency Law” means any bankruptcy, insolvency, reorganization, liquidation, administration, conservatorship, assignment for the benefit of creditors, moratorium, rearrangement, arrangement, winding up, receivership or other debtor relief law of the Province of British Columbia, or other applicable jurisdiction from time to time in effect and affecting the rights of creditors generally including any proceeding under applicable corporate law seeking a compromise or arrangement of any debts of the corporation, or a stay of proceedings to enforce any of the claims of the corporation’s creditors.

Except to the extent required by law or as otherwise agreed by the Parties in writing, the Parties will keep confidential all business sensitive or proprietary information of the other furnished by that Party, the commercial details of all preliminary discussions and negotiations, and this Letter. Notwithstanding the preceding, neither Party is precluded from sharing information to Verification bodies, its investors, employees or advisors provided such persons are under a coextensive duty of confidentiality.

This provision shall survive termination of this Letter for a period of two (2) years.