Updated March 2024
NORI CARBON REGENERATIVE TONNE AGREEMENT
This Nori Carbon Regenerative Tonne Agreement (this “RT Agreement”), is effective as of ___________ (the “Effective Date”), by and between ____________________ (the “Supplier”), and Nori Inc., a Washington corporation (“Nori”). Each of Supplier and Nori may be referred to herein as, a “Party,” and collectively, the “Parties.”
RECITALS
WHEREAS, Supplier owns and/or operates a farm that practices farming techniques which are intended to remove carbon dioxide from the environment with the result being, among other things, that Supplier reduces carbon dioxide in the atmosphere in a measurable and quantifiable way (the “Project”).
WHEREAS, Nori has created an online blockchain marketplace in which approved buyers and sellers of Nori Carbon Regenerative Tonnes (“RTs”) can come together to buy and sell RTs in a verifiable and transparent way at a price determined by the market (the “Marketplace”).
WHEREAS, Nori has analyzed the Project and created an estimate of the number of RTs the Project has produced and could produce over various time periods (the “RT Projection”).
WHEREAS, the Parties desire to enter into this RT Agreement to set forth the terms and conditions upon which: (i) Supplier will register the Project on the Marketplace as a source of RTs, and in connection with that Supplier will be obligated to, among other things, maintain certain records and reports, agree to certain carbon stock retention commitments, and agree to offer for sale certain volumes of received RTs on the Marketplace; and (ii) Nori will operate the Marketplace which includes, among other things, Nori’s commitment to issue RTs to Supplier upon Nori’s receipt of a third-party verification report confirming that Supplier’s reported data are reasonably accurate and replicable, and Nori’s obligation to list Supplier’s RTs on the Marketplace, all for the purpose of effectively operating the Marketplace to the end of reducing carbon emissions into the environment (the “Purpose”).
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency is hereby acknowledged, the Parties hereby agree as follows:
THE AGREEMENT
Supplier Obligations. In order for the Parties to achieve the Purpose, the Supplier covenants to Nori that it shall timely perform the following tasks and complete the following obligations:
Register the Project. The Supplier will register the Project on the Marketplace by completing the registration process set forth on Nori’s website, and Nori retains the right to accept or reject such registration in its sole discretion. Until the Supplier has completed such a registration process, and Nori has approved the Supplier’s registration, Nori has no obligations to the Supplier under this RT Agreement.
Annual Project Data Submission: Methodology Report.
On or before the one-year anniversary of the Effective Date or March 31, whichever is earlier, and every year thereafter until the Carbon Retention Period (as defined in Section 1.i below) has expired, Supplier shall submit to Nori the Project’s operating and practice data (“Annual Project Data”) of the type, in the form, and in compliance with that certain Nori Croplands Methodology provided by Nori to Supplier (the “Applicable Methodology”). In the event Supplier’s submission of the Annual Project Data does not comply with the Applicable Methodology, Nori retains the right to reject such Annual Project Data and in such event Nori’s obligations under this RT Agreement are suspended until Nori accepts the Annual Project Data, in its reasonable determination.
Supplier represents and warrants to Nori that it has read and understood the terms and conditions of the Applicable Methodology.
Nori may update and revise the Applicable Methodology report during the Carbon Retention Period (as revised, the “New Methodology”). In such an event, the Supplier shall have the option, but not the obligation, to adopt the practices and adhere to the requirements of such New Methodology. In the event Supplier chooses to follow the New Methodology, which is in its discretion, Supplier shall promptly communicate to Nori in writing of its decision to follow the New Methodology, and Nori will make necessary and appropriate changes to the Supplier’s Annual Project Data template, after the date of such notice, so that the New Methodology applies to the Project.
In addition to the requirements in connection with the Applicable Methodology set forth above, the Supplier shall materially comply with other record-keeping requirements, reporting requirements, and the other procedures set forth in the Applicable Methodology or the New Methodology Report, as applicable.
Greenhouse Gas Inventory Tool Platform. Supplier acknowledges and agrees that changes in carbon removal quantification might occur due to updates to the Greenhouse Gas Inventory Tool, a commercial implementation of the United States Department of Agriculture Blue Book Standards (“GGIT”) , the Daycent Model, or other models that feed into the GGIT (collectively the, “Quantification Updates”). In the event of a Quantification Update, Nori will communicate such Quantification Updates to the Supplier in writing, and the Supplier shall accept and comply with such Quantification Updates when, as, and if such Quantification Updates are activated.
Project Data Verifier. In order for Nori to issue Supplier’s RTs, and for Nori to sell RTs on the Marketplace, the Supplier shall, by the third anniversary, sixth anniversary, ninth anniversary of the Effective Date, submit to Nori an interim verifier report providing reasonable assurance that the Supplier’s Annual Project Data reasonably represents the practice and operating history for the lands that comprise the Project (the “Interim Verification Report”). The Interim Verification Report shall be conducted and prepared by an independent third-party, which third-party is listed as an approved verifier on Nori’s website. The Supplier shall be responsible for all costs associated with the Interim Verification Report.
Maintain Eligibility Requirements. The Supplier shall not take any action, or fail to take any action, that would reasonably be determined to destroy, compromise, or otherwise interfere with the Project’s ability to satisfy the eligibility requirements set forth in the Methodology Report or New Methodology Report, as applicable.
Exclusivity. Until Supplier retires an RT that has not sold on the Marketplace, Supplier shall not, directly or indirectly, sell or offer to sell to any third-party the carbon removing capabilities of its Project which underlie any RTs that the Supplier offers for sale on the Marketplace (the “Project’s Carbon Removing Assets”). In the event the Supplier breaches this Section and not limiting any other remedies available to it under contract or law, Nori will recover from Supplier, Nori’s cost of acquiring and retiring other RTs to preserve the Project’s Carbon Removing Asset value of any RTs that were sold before the breach. Notwithstanding the foregoing, the Supplier is permitted to sell or offer to sell any rights or services that incidentally arise from, but are not directly related to, the Project’s Carbon Removing Assets such as water retention, reduced emissions, avoided emissions, and similar rights and services.
Communication Events. The Supplier shall promptly notify Nori, in writing, of the occurrence of any of the following events: (i) the sale of or change in voting control of the Project; (ii) a change in the representatives of the Supplier or Project owners in the Marketplace or otherwise; and (ii) a change to the Supplier’s primary contact with Nori.
Future RT Agreement. In the event Nori intends to issue RTs into Supplier’s account pursuant to the terms of this RT Agreement, Supplier will enter into a new RT Agreement with Nori upon each such issuance, which agreement, at minimum will, set forth the number of RTs issued to Supplier, the year issued, the Initial Price (as defined below), the Project name, the Project identification, the Project location, and the Applicable Methodology Report at the time of execution.
Non-Compliance with Carbon Retention Period, Data Reporting and Verification Obligations. The Supplier covenants to Nori that it will use its best efforts to comply with the Carbon Retention Period. In the event the Supplier does not comply with the Carbon Retention Period (“Non-Compliance”), Nori will have the opportunity to cure such Non-Compliance and the Supplier hereby agrees to indemnify and defend Nori for the expense of such cure. Provided, however, the Supplier will not incur any liability for Non-Compliance if such Non-Compliance is caused by a Force Majeure Event (as defined below) and the Supplier made commercially reasonable efforts to retain the carbon represented by an RT in a terrestrial reserve or otherwise took actions to limit the effect of such Force Majeure Event (as determined by Nori in good faith). As used herein, “Force Majeure Event” means acts of God, acts of government, floods, fires, earthquakes, explosions, civil unrest, civil or military authority, acts of terror, war, riots, civil disturbances, insurrections, accidents, strikes, or public health emergency of national concern.
Nori Obligations. In order for the Parties to achieve the Purpose, Nori covenants to the Supplier that it shall timely perform the following tasks and complete the following obligations:
Maintaining Project Registration. Nori shall use commercially reasonable efforts to establish and maintain the Project’s registration on the Marketplace which includes, but is not limited to, publishing on the Marketplace a summary of the Project, the Project’s RT generation potential, an updated report of the Project’s RT total issuance, and the conclusions of the Interim Verifier Report and/or Final Report.
Issue RTs; RT Agreement. Upon Nori’s receipt of and acceptance of an Verifier Report, Nori shall create and generate RTs and issue RTs into Supplier’s account, in accordance with the terms of the Applicable Methodology Report or New Methodology, as applicable, In the event Nori issues RTs into Supplier’s account, Nori will enter into a RT Agreement with the Supplier.
Sales. Nori will make commercially reasonable efforts to display, advertise, and sell Supplier’s RTs on the Marketplace in accordance with the terms and conditions set forth in Section 3 below.
RT Sales. In the event Nori issues the Supplier RTs pursuant to this RT Agreement, or any other agreement between Nori and the Supplier (or an affiliate of the Supplier), the Supplier hereby grants Nori the exclusive right to advertise, and sell on the Marketplace all RTs issued pursuant to an RT Agreement subject to the following terms and conditions:
Ownership. The Supplier will continue to own all right, title, and interest, in and to the RTs until Nori sells them on the Marketplace;
Initial Price. The initial price Nori may sell all RTs on the Marketplace is the sales price for the RT as set forth in the RT Agreement (the “Initial Price”) as described in Exhibit A.
Payment Terms. Nori will promptly transfer to the Supplier any payment Nori receives for the sale of RTs, to be payable to Supplier in USD, USD Coin (“USDC”), such other stablecoin chosen by Nori or NORI Token (“Token”), in each case as determined in Nori’s sole discretion.
RT Projection. Supplier acknowledges and agrees that the RT Projection is just an estimate, and Nori does not represent or warrant to the Supplier that it will issue RTs to the Supplier in conformance with the RT Projection.
Transaction Fee. Nori will charge a transaction fee of its choosing on the final price of RT upon RT Retirement or, if the RT is retired unsold, on the initial price as listed in Appendix A of this Agreement (the “Transaction Fee”). Nori may change the Transaction Fee or structure at Nori’s sole discretion, without notice. For the purpose of clarity, changes in the Transaction Fee shall have no impact on the Initial Price that Nori must remit to the Supplier for RTs that are sold in the Nori Marketplace.
Supplier Non-Compliance. Notwithstanding the foregoing Nori retains the right, but not the obligation, to:
Use USD, USDC or the Token as the cure for any Non-Compliance with this Agreement, as described in Section 1.i.
Project Invalidation. In the event of a Project Invalidation (as defined in the Methodology), the Supplier will either: (i) forfeit any USD, USDC or Tokens from Supplier’s account in an amount equal to the replacement value of the RTs generated by the invalidated Project up to the time of Project Invalidation; or (ii) acquire and retire, at its own expense, an equivalent volume of RTs, or a combination of (i) and (ii) above, in order to cover Nori’s cost of replacing RTs issued to the Project subject to the Project Invalidation.
Expenses and Taxes. Each Party is solely responsible for all expenses incurred in fulfilling its obligations under this RT Agreement. The Supplier is solely responsible for all income and other taxes related to the payments made to it by Nori pursuant to this RT Agreement or any related agreement.
Feedback. Any suggestions, comments, or other feedback provided by the Supplier to Nori in connection with the Marketplace, Nori, the Methodology, or the subject matter of this RT Agreement (collectively, “Feedback”) is and will be treated as Nori’s confidential and proprietary information, and Nori will be free to use such Feedback in any manner it sees fit, entirely without obligations to the Supplier or restrictions of any kind.
Term & Termination.
Term. This Agreement shall remain in full force and effect for a period of 10-years from the Effective Date, unless earlier terminated pursuant to Section 7.b. below.
Termination for Cause. If either Party fails to comply with or perform when due any material term or condition of this RT Agreement, the other Party shall notify the defaulting Party in writing of the default (a “Default Notice”). The Default Notice shall specify in reasonable detail the specific nature of the default. If the defaulting Party fails to cure the default within thirty (30) days of the Default Notice, the non-defaulting Party may declare by written notice to the defaulting Party that this RT Agreement is terminated.
Effect of Termination. Upon termination as provided for in this Section 7: (i) the Parties obligations under this Agreement are terminated, except that Nori will pay the Supplier any amounts due and owing for RTs sold on the Marketplace prior to termination; (ii) all other agreements between Nori and the Supplier are terminated; and (iii) Nori will furnish to the Supplier reasonable documentation of the Supplier’s transaction activity on the Marketplace and copies of third-party reports and similar documents regarding the Project.
Data Use & Ownership. The Supplier authorizes Nori to use, process, and transmit Supplier’s Data (as defined below) in order fulfill its obligations under this RT Agreement. The Supplier owns all right, title, and interest in and to the Supplier Data; provided, however, the Supplier hereby authorizes Nori to use, without further consideration, Supplier’s Data in a de identified aggregated form for the purpose of developing and improving the Marketplace and Nori’s other products and services. Nori covenants to the Supplier that it will keep all Supplier Data confidential. As used herein, “Supplier’s Data” means any/all operating data used by Nori to quantify RTs, including but not limited to: tillage practices, planting and harvesting dates, crop rotations and yields, fertilizer use rates, on-farm energy use.
Representations, Warranties, and Covenants of the Parties. Each Party hereby represents, warrants, and covenants to the other Party that: (i) it has the full right, power, legal capacity and authority to enter into and perform its obligations under this RT Agreement; (ii) this RT Agreement constitutes valid and legally binding obligations, enforceable against it in accordance with its terms, except to the extent enforcement is affected by laws pertaining to bankruptcy, reorganization, insolvency, creditors’ rights, and similar laws; and (iii) it will comply with all applicable laws and regulations in its performance under this RT Agreement.
DISCLAIMER OF WARRANTIES. NORI DOES NOT WARRANT THAT THE MARKETPLACE WILL BE UNINTERRUPTED OR ERROR FREE OR MEET THE SUPPLIER’S REQUIREMENTS; NOR DOES IT MAKE ANY WARRANTY AS TO THE RESULTS THAT MAY BE OBTAINED FROM ENTERING INTO THIS AGREEMENT, USE OF THE MARKETPLACE, SALE OF A RT, OR ANY OTHER MATTER RELATED TO THE REMOVAL OF CARBON FROM THE ATMOSPHERE. THE MARKETPLACE AND NORI’S SERVICES PROVIDED HEREUNDER ARE PROVIDED “AS IS” AND, EXCEPT AS EXPRESSLY PROVIDED HEREIN, NORI DISCLAIMS ALL IMPLIED WARRANTIES INCLUDING, BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
Indemnification.
Indemnity. Each Party (the “Indemnifying Party”) agrees to defend, hold harmless, and indemnify the other Party, its affiliates and their respective directors, officers, employees, agents, and assigns (the “Indemnified Parties”), from and against any and all claims, suits, actions, demands, and proceedings of any kind threatened, asserted or filed against an Indemnified Party by any third Party (collectively "Claims"), and any damages, losses, expenses, liabilities or costs of any kind, (including but not limited to reasonable attorneys' fees, witness fees and court costs) incurred in connection with such Claims, caused by: (i) the Indemnifying Party’s breach of a representation or warranty set forth herein in Section 8 hereof; or (i) the Indemnifying Party’s performance of its obligations hereunder.
Procedure. The Indemnified Parties will have the right to approve the counsel selected by the Indemnifying Party for defense of the Claims. The Indemnified Parties will provide the Indemnifying Party reasonably prompt written notice of any such Claims and provide the Indemnifying Party with reasonable information and assistance, at the Indemnifying Party’s expense, to help the Indemnifying Party to defend such Claims. The Indemnifying Party will not have any right, without the Indemnified Party’s written consent, to settle any such Claim if such settlement contains a stipulation to or admission or acknowledgment of, any liability or wrongdoing on the part of Indemnified Party or its affiliates or otherwise requires the Indemnified Party or its affiliates to take or refrain from taking any material action.
Limitation of Liability. IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR CONSEQUENTIAL, SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE OR EXEMPLARY DAMAGES, COSTS, EXPENSES, OR LOSSES (INCLUDING WITHOUT LIMITATION, LOST PROFITS AND OPPORTUNITY COSTS) ARISING OUT OF OR RELATED TO THIS AGREEMENT. EXCEPT FOR INDEMNIFICATION OBLIGATIONS SET FORTH HEREIN, TO THE FULLEST EXTENT ALLOWED BY APPLICABLE LAW, EACH PARTY’S LIABILITY TO THE OTHER PARTY FOR DIRECT DAMAGES WILL BE LIMITED TO $100. THE PROVISIONS OF THIS SECTION SHALL APPLY REGARDLESS OF THE FORM OF ACTION, DAMAGE, CLAIM, LIABILITY, COST, EXPENSE, OR LOSS, WHETHER IN CONTRACT, STATUTE, TORT OR EXTRA-CONTRACTUAL LIABILITY OR OTHERWISE.
Dispute Resolution. The Parties will attempt to settle all disputes arising under this RT Agreement through informal means for a thirty (30) day period. In the event the Parties are unable to resolve a dispute, the Parties shall submit the dispute to binding and confidential arbitration. The Parties agree on the following procedures and limitations of the arbitration process:
The Party invoking the right to arbitration shall, no less than thirty (30) days prior to commencing arbitration proceedings, give written notice to the other Party of the precise nature of the dispute. If the dispute remains unresolved, it shall be submitted to arbitration in accordance with the rules of the American Arbitration Association or another national alternative dispute resolution association acceptable to both Parties (“AAA”).
Any arbitration proceeding under this RT Agreement shall be conducted in a neutral location mutually agreeable by the Parties before one arbitrator.
The arbitrator is not authorized to award consequential, special, punitive or exemplary damages. The Parties shall share equally the expenses of arbitration, except as otherwise ordered by the arbitrator.
EACH OF THE PARTIES HEREBY UNCONDITIONALLY WAIVES ANY RIGHT TO A JURY TRIAL WITH RESPECT TO AND IN ANY ACTION, PROCEEDING, CLAIM, COUNTERCLAIM, DEMAND, DISPUTE OR OTHER MATTER ARISING OUT OF THIS AGREEMENT.
Nothing herein shall limit the ability of either Party to seek temporary or preliminary injunctive relief against the other, in a court of competent jurisdiction, without prejudice to the arbitration process.
Relationship of the Parties. The relationship created by this RT Agreement is one of independent contractors, and nothing in this RT Agreement constitutes the Parties as joint venturers, partners, employees, or agents of each other. Neither Party has authority to create any obligations for the other.
Survival. Section 1.b. and Sections 6-16 shall survive termination of this RT Agreement.
Miscellaneous.
Governing Law. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the Parties hereto shall be governed, construed, and interpreted in accordance with the laws of the State of Washington, without giving effect to principles of conflicts of law.
Entire Agreement; Amendment. Except as expressly set forth herein, this RT Agreement and the documents referenced herein sets forth the entire agreement and understanding of the Parties relating to the subject matter herein and supersedes all prior agreements between them. No modification of or amendment to this RT Agreement, nor any waiver of any rights under this RT Agreement, shall be effective unless in writing signed by the Parties.
Notices. Any notice required or permitted by this RT Agreement shall be in writing and shall be deemed sufficient when: (i) delivered personally or seventy-two (72) hours after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, and addressed to the Party to be notified at such Party’s address as set forth below or as subsequently modified by written notice; or (ii) emailed with confirmed receipt.
Counterparts. This Agreement may be executed in several counterparts, all of which taken together shall constitute one instrument. A signed copy of this RT Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this RT Agreement.
Expenses. All fees and expenses (including all fees and expenses of legal counsel, accountants, and actuaries) incurred by each Party in connection with the execution and delivery of this RT Agreement shall be borne by that Party. In the event that any suit, action, or arbitration is instituted to enforce any provision of this RT Agreement, the substantially prevailing Party in such dispute shall be entitled to recover all fees, costs, and expenses of enforcing its rights, including without limitation reasonable attorneys’ fees and expenses, including any fees and costs incurred in any appeal.
Further Assurances. Each of the Parties hereto shall, upon the request of the other, execute, acknowledge and deliver any other documents or instruments that may be reasonably required to effect the intent of this RT Agreement.
Assignment. The Primary Contact may assign its rights or obligations under this RT Agreement to any other Party with the prior written consent of Nori. Any assignment in violation of this section shall be void and of no force or effect.
(signature page follows)
The Parties have executed this Nori Carbon Regenerative Tonne Agreement as of the Effective Date.
“NORI”:
NORI INC.
By:
Name:
Title:
Address: 2208 NW Market St.
Suite 403
Seattle, WA 98107
“SUPPLIER”:
By:
Name:
Title:
Address:
EXHIBIT A
RT Issuance and Sale Price