Terms and Conditions for Token Sales and Purchases

Version 1.0 — March 29, 2024

Preambles

Carrot Fndn, a Swiss foundation in the sense of Article 80 et seqq. Swiss Civil Code with its registered seat in Zug ("Foundation") has developed and deployed the Carrot blockchain-based network ("Network") that allows the off-chain and on-chain recording of circular economy actions taken by raw material providers, packers, fillers, producers, waste generators, bin custodians, haulers, processors, recyclers, raw material buyers, network integrators, methodology authors, methodology developers, auditors, NGOs, among others ("Users"). The circular economy actions are recorded off-chain by Carrot Network Integrators ("INTs") before being submitted and recorded on the Network via APIs. Waste resources ("MassIDs") and/or products ("ProductIDs") are codified as unique identifiers that can record the chain of custody of materials and/or products and thereby the responsibility over them. The circular economy actions recorded and tracked through MassIDs and ProductIDs serve as the basis for real-world activity verification and certification of environmental contributions and the issuance of non-fungible Tokenized Recycling Credits ("TRC") as well as non-fungible Tokenized Carbon Credits ("TCC") by the Foundation ("Project") which, when purchased, distribute token rewards to environmental contributors recorded in the chain of custody. Retired TRCs and TCCs can be utilized to report the environmental and social claims that were realized through the circular economy actions ("Environmental & Social Claims").

The Foundation generates the TRC and TCC ("Tokens"), as further described below, and offers them for sale to you and other individuals and entities ("Buyers") in a continuous public sale ("Token Sale") under the following terms and conditions ("Token Purchase Terms").

By accepting these Token Purchase Terms and transferring the Purchase value as defined below, you, as the buyer, enter into a legally binding token sale agreement with the Foundation. As a buyer, you are responsible for complying with applicable laws and regulations, in particular, but not limited to, the regulations governing the receipt, holding, and sale of Tokens.

These Token Purchase Terms are subject to the general Terms and Conditions of the Foundation.

1. Purchase and Allocation of Tokens

By participating in the Token Sale, the Buyer purchases Tokens from the Foundation, and the Foundation sells Tokens to the Buyer.

Subject to the acceptance of these Terms and the transfer of the purchase value as indicated in the purchase process (Token Purchase Terms and the successful passing of the Foundation's KYC process), the Foundation undertakes to allocate to the Buyer the corresponding Tokens and deliver said Tokens within 180 days after receiving the proceeds, or by a mutually agreed upon date determined in a separate contract.

The Buyer may transfer the purchase value to the foundation in two ways.

1.1 Direct Purchase

The Buyer may conduct a direct purchase of the non-fungible token ("NFT") (i.e., TRCs or TCCs) using USDC or another stablecoin token. The purchase delivers the NFT to the Buyer and distributes a portion of stablecoins utilized as rewards to each Participant recorded in the chain of custody. Third-party services may be utilized to facilitate this transaction, including the use of credit cards and other financial services.

1.2 Funds Transfer

The Buyer may transfer the funds by wire to the foundation's bank account or by sending stablecoins (e.g., USDC) to its digital wallet. Given the added complexity of this process, additional fees may be charged, and the delivery date may be significantly delayed, which is the reason why a longer period for delivery is requested and will be negotiated with the token Buyers.

2. Technical Description of the Token

The Tokens (TRC and TCC) are unique blockchain-based digital information units built using the ERC-721 Non-Fungible Token standard that have their transactions recorded on the Ethereum blockchain. TRCs are associated with unique MassIDs that contain material mass type and weight, along with the corresponding circular economy actions and its chain of custody. TCCs represent the measured, verified and reported greenhouse gas emissions that were avoided, captured or removed from a unique set of MassIDs. The circular economy information contained in the Tokens depends on the specific Token, but comprises at least the information mentioned in Section 2.1.

2.1 Functionality of the Tokens

The Tokens have the following functions:

2.2 Evidence Function

TRCs correspond to one or more unique MassID which serve as evidence that a certain number of metric tons of a certain type of waste in a specific area has arrived at an appropriate recycling or reuse center and/or been recycled or reused (e.g., 1 metric ton of aluminum has been recycled in the state of Sao Paulo, Brazil); or

TCCs correspond to one or more unique MassIDs that serve as evidence that a certain number of metric tons of CO2 equivalent emissions have been avoided, captured, or removed through recycling, reuse, or other verifiable activities in a specific location (e.g., 1 metric ton of CO2e has been avoided in the state of Sao Paulo, Brazil, due to the composting of organic waste when compared to the baseline of sending waste to a landfill).

Retirement Function

Token holders can retire their Tokens subject to paying the retirement fee as further described in Section 2.4. The Retirement renders the Tokens non-transferable, establishing permanent ownership over the Token and the underlying Environmental and Social Claims realized through the measurement, reporting, and verification process as determined by a Carrot Network-approved methodology ("Methodologies").

The Foundation remains free to change the name, symbol, and collection of future Tokens issued at any time and at its sole and free discretion.

2.3 No Redemption; No Ownership, Revenue or Participation Rights

Tokens do not give any (partial or full) claim for redemption. In particular, holders of TRCs and TCCs do not receive anything in return for the retirement of their Tokens other than the claim of their ownership of the Token itself and what it represents.

Tokens are not designed to be used as a means of payment.

Tokens do not represent or constitute any ownership rights, stakes, shares, security, or equivalent rights, nor any rights to receive future revenues, shares, or any other form of participation or governance rights in or relating to the Network and/or the Foundation. The Tokens do not create or confer any enforceable contractual or other obligations against any party, including the other Users, the Foundation, as well as its employees, contractors, and/or founders.

The Buyer has no license right and no right to any intellectual property rights, equivalent rights, or any other form of participation in or relating to the Network and/or the Foundation.

2.4 Retirement

A Token retirement fee can be charged when a Token Owner retires, or burns, the TRC or TCC himself/herself/itself for permanent ownership ("Direct-Burn"). The Direct Burn fee is embedded in the Token.

A Burn-As-A-Service ("BAAS") retirement fee can be charged on a one-time basis when a Token Buyer needs assistance in purchasing and retiring specific TRCs or TCCs, such as from a MassIDs from a specific location. The BAAS fee may be embedded in the Token or charged separately, and it may be changed at any time in order to ensure adequate services are delivered.

Registry data storage ("Registry Storage") fees can be charged following Token retirement to cover costs of storing data on a public database.

Additional Registry Services ("Registry Services") may be offered by Carrot Fndn and contracted by the owner of the retired Tokens.

3. Know Your Customer/Business ("KYC")

Buyers must provide individual identification information, such as their full name, mobile number, birthdate, email address, wallet address to which Rewards will be sent, residential address, document showing proof of residential address, nationalities, government ID for each nationality, and documents showing proof of government ID, including proof of possession, such as a photo of the person holding the ID.

In the case of a company, the legal representative must, in addition to providing individual identification information, provide documents showing proof of legal representation, a corporate email, the legal name of the corporation, the Tax ID of the company, and a document showing proof of Tax ID as well as any other information as may be reasonably requested from time to time by the Foundation, in order to complete the Foundation's examination ("KYC-Check"). Users and INTs must provide true, accurate, current, and complete information and must promptly update the Foundation electronically with any data changes.

Know Your Customer and Know Your Business checks may be conducted by the Carrot Network itself or by third parties on behalf of the Carrot Network.

4. Taxation

All taxes (including VAT, if any), charges, levies, assessments, and other fees of any kind imposed on the receipt or import of Tokens by the Buyer shall be the responsibility of, and for the account of, the Buyer.

5. Third-Party Fees

Any third-party fees, including transaction fees, not-related specifically to the acquisition of a given Token are not the responsibility of the Carrot Fndn and are the full responsibility of the token Buyer including, but not limited to, the purchase of stablecoins to be used for the purchase of Tokens, on-ramping and off-ramping, KYC and AML fees, wallet management fees, gas fees, exchange fees relating to Token swaps, wrapping smart contract fees, liquidity pool fees, etc.

6. Risks

The Buyer understands and accepts the risks connected to Tokens. In particular, but not exhaustively, the Buyer understands the inherent risks listed hereinafter. By accepting these Terms, the Buyer expressly acknowledges and assumes these risks.

6.1 Risk of Software Weaknesses

The Buyer understands and accepts that the Network and the underlying infrastructure are young technologies, which is why there is no warranty that the process for receiving, using, and owning Tokens will be uninterrupted or error-free. The Buyer further understands and accepts that there is an inherent risk that the Network and the underlying technologies contain weaknesses, vulnerabilities, or bugs, causing, inter alia, the complete loss of the Tokens.

The Buyer particularly understands and accepts that the Network is as of its deployment immutable and that, consequently, it may be difficult or impossible to correct recorded errors or cure software weaknesses.

6.2 Regulatory Risk

The Buyer understands and accepts that blockchain technology allows for new forms of interaction. There is a possibility that certain jurisdictions will apply existing regulations or introduce new regulations addressing blockchain technology-based applications in a way that may be contrary to the current setup and which may, inter alia, result in substantial modifications to the Network, including the termination of the Project and the loss of the Tokens or their functionality for the Buyer.

The Buyer understands and accepts that even if Tokens do not create or confer any contractual or other obligations against any party (including the Foundation as well as its employees, contractors, and/or founders), certain regulators may nevertheless qualify Tokens as securities or other financial instruments under their applicable law. It remains the Buyer's responsibility to comply with any laws and regulations applicable to the Buyer when holding or transferring the Tokens.

The Buyer understands and accepts that no securities or other regulatory authority has expressed an opinion about the status of Tokens, and it is a criminal offense under the laws of some jurisdictions to claim otherwise;

The Buyer understands and accepts that the transactions contemplated in these Terms have not been reviewed by, passed on, or submitted to any regulatory agency or self-regulatory organization. As a result, the Buyer will not be afforded the full set of protections provided to the clients and customers of such entities under any applicable laws, and

The Buyer understands and accepts that if the Tokens are deemed to be securities in one or more jurisdictions, or if these Terms or the issuance of the Tokens constitute a non-exempt forward contract, or if the Foundation or its affiliates are required to register with a regulatory agency, the Tokens and the Foundation could be subject to significant additional regulation, including restrictions on transferability and resale or operational activity. This could lead to significant changes with respect to Tokens, how Tokens are structured, how they are purchased and sold, and other issues, and would greatly increase the Foundation's costs in creating and facilitating transactions in Tokens. Such regulation could lead to the Tokens losing functionality and/or depreciating partially or fully in value, subject the Foundation and its affiliates, directors, and officers to potential penalties, including federal civil and criminal penalties, or make the Tokens illegal or impossible to use, buy, or sell in the United States and other jurisdictions. Further, a regulator could take action against the Foundation or its affiliates if it views Tokens as an unregistered offering of securities or the Foundation's operations otherwise as a violation of existing law. Any of these outcomes would negatively affect the value and functionality of the Tokens and/or could cause the Foundation to cease operations.

6.3 Risk of Abandonment / Lack of Success

The Buyer understands and accepts that the further development of the Project may be abandoned for a number of reasons, including, but not limited to, lack of interest from the public, lack of funding, incapacitation of key developers and project members, force majeure (including pandemics) or lack of commercial success or prospects. The Buyer therefore understands that there are no assurances that the Buyer will be able to retire his Tokens.

6.4 Risk of Private Key Loss

Tokens allocated to a particular address can only be accessed with the private key associated with that address. The Buyer understands and accepts that if its private key file or wallet password were lost or stolen, the allocated Tokens associated with the Buyer's address or password would be unrecoverable and would be permanently lost. The Foundation has no control over the Tokens; therefore, the Buyer shall have no recourse to seek any refunds, recovery, or replacements from the Foundation in the event that the Tokens are lost or stolen.

6.5 Risk of Theft

The Buyer understands and accepts that the Network and/or the underlying infrastructure, other involved software, other technology components, and/or platforms may be exposed to attacks by hackers or other individuals that could result in theft or loss of the Tokens.

6.6 Risk of Network Attacks and Forks

The Buyer understands and accepts that, as with other blockchain-based tokens, the Network and/or the underlying infrastructure could be susceptible to consensus-related attacks, including but not limited to double-spend attacks, majority validation power attacks, censorship attacks, and byzantine behavior in the consensus algorithm, or be subject to forks. Any successful attack or fork presents a risk to the Network, the expected proper execution and sequencing of Token transactions, the expected proper execution and sequencing of contract computations, as well as the token balances in the wallet of the Buyer.

6.7 Limitation of Liability

PLEASE READ THIS SECTION CAREFULLY. THESE PROVISIONS LIMIT THE SCOPE OF THE FOUNDATION'S LIABILITY IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THESE TERMS.

The Parties limit the liability of both Parties under these Terms under any title to damages caused by fraud, wilful misconduct, or gross negligence. To the fullest extent permitted by any applicable law, in no event will the aggregate liability of the Buyer or the Foundation exceed, as the case may be, the amount of the Purchase Price.

The Buyer acknowledges and agrees that, to the fullest extent permitted by any applicable law and subject to paragraph 25, the Foundation or any of its employees, contractors and/or founders are not liable, and the Buyer agrees not to hold them liable, for any and all damages (including direct, indirect, incidental, and/or consequential damages, loss of profits, goodwill or data), regulatory implications, tax or other liability or injury whatsoever caused by or related to the use of, or the inability to use the Network, the allocation, ownership or use of Tokens or in connection with these Terms or any transaction contemplated in these Terms under any cause or action whatsoever of any kind in any jurisdiction.

The Foundation provides no warranties or guarantees regarding the availability, reliability, accuracy, or quality of the Tokens. The Tokens are provided on an "as is" basis, without any express or implied warranties of any kind.

7. General Representations and Warranties of the Buyer

The Buyer represents and warrants to the Foundation the following and acknowledges that the Foundation is relying on these representations and warranties:

a) The Buyer is duly organized, validly existing and in good standing under the laws of the country in which he is incorporated and has all requisite power and authority to execute, issue and deliver this Agreement, and to carry out and perform its obligations under this Agreement and any related agreements;

b) The Buyer is not listed, or associated with any person or entity listed, on any of the US Department of Commerce's Denied Persons or Entity List, the US Department of Treasury's Specially Designated Nationals or Blocked Persons Lists, the US Department of State's Debarred Parties List, the EU Consolidated List of Persons, Groups and Entities Subject to EU Financial Sanctions, or the Swiss SECO's Overall List of Sanctioned Individuals, Entities and Organizations, and neither the Buyer nor any of its affiliates, officers or directors is a resident of a country or territory that has been designated as non-cooperative with international anti-money laundering principles or procedures by an intergovernmental group or organization, such as the Financial Action Task Force on money laundering;

c) The Buyer confirms not to be resident of, citizen of or located in a geographic area that is subject to UN-, US-, EU-, Swiss or any other sovereign country sanctions or embargoes;

d) The Buyer is not domiciled in or organized under the laws of any country, whose legislation conflicts with the present allocation of the Tokens and/or the purpose of the Foundation in general;

e) The Buyer understands and agrees that it is not entitled to sell, donate, pledge or transfer in any other way the Tokens to persons as defined in lit. b) – d) above;

f) Any funds used for the transfer of the Purchase Price are: (a) good, clean, clear and are of non-criminal origin; (b) completely free and clear of any liens or encumbrances of any kind of any rights of third-party interests; and (c) have no origins that may be connected to any breach of money laundering regulations whatsoever, as defined in the jurisdiction of origin, or internationally;

g) The Buyer understands that no public market may exist for the Tokens, and that the Foundation has made no assurances that a public market will ever exist for the Tokens;

h) The Buyer has such knowledge and experience in financial and business matters that the Buyer is capable of evaluating the merits and risks of participating in the Token Sale respectively, of such investment and being allocated the Tokens, is able to incur a complete loss of such investment without impairing the Buyer's financial condition and is able to bear the economic risk of such investment for an indefinite period of time;

i) The Buyer has a deep understanding of the functionality, usage, storage, transmission mechanisms and intricacies associated with cryptographic tokens, like BTC and ETH, and blockchain-based software systems;

j) The Buyer understands that the Token Sale does not involve the purchase of shares, securities exchangeable into shares or any equivalent in any existing or future public or private company, corporation or other entity in any jurisdiction;

k) The Buyer has been advised that the Tokens to be allocated to the Buyer hereunder may, in certain jurisdictions, be considered a security and that the Tokens issuable hereunder may not be resold except in compliance with applicable securities laws. Consequently, Buyer understands that Buyer must bear the economic risks of its purchase under these Terms or possible future receipt of Tokens for an indefinite period of time;

l) All information provided by the Buyer within any registration process linked to this purchase is true and accurate and the Buyer does not act on behalf of any third-party;

m) The Buyer is legally permitted to receive, hold and make use of Tokens in its jurisdiction and is not obtaining or using Tokens for any illegal purposes;

n) The Buyer is purchasing the Tokens to make use of their functionality. In particular, the Buyer is not purchasing the Tokens for the purpose of speculative investment;

o) The Buyer will indicate to the Foundation an address for the allocation of the Tokens prior to the allocation of the Tokens. The Buyer understands and accepts that indicating a false address or an address that does not technically support the Tokens may result in the Buyer failing to gain access to its Tokens. The Buyer further understands that it remains in its sole responsibility to safeguard the private key file related to said address and that in case the Buyer loses access to the address (or wallet), the Tokens would be unrecoverable and permanently lost;

p) The Buyer confirms that the Buyer's address belongs to the Buyer and is under his sole control. Buyer understands that as part of the Token allocation process, he may be requested by the Foundation or a Service Provider to evidence control over the Buyer's address and that, lacking such proof, the Token allocation may not be conducted.

q) The Buyer understands that it has no right against any party to request any refund of the Purchase Price under any circumstance.

r) THE BUYER HEREBY WAIVES THE RIGHT TO PARTICIPATE IN ANY CLASS-ACTION LAWSUIT OR CLASS-WIDE ARBITRATION AGAINST ANY ENTITY OR INDIVIDUAL INVOLVED IN THE ALLOCATION OF TOKENS AND WITH THE OPERATION OF THE NETWORK;

s) The Buyer understands and expressly accepts that there is no warranty whatsoever on the Tokens and/or the success of the Project, expressed or implied, to the extent permitted by law, and that the Tokens to be created and obtained are at the sole risk of the Buyer on an "as is" and "under development" basis and without, to the extent permitted by law, any warranties of any kind, including, but not limited to, warranties of title or implied warranties, merchantability or fitness for a particular purpose;

t) The Buyer understands and accepts that it has not relied on any representations or warranties made by the Foundation or any other person outside of those made in these Terms, including but not limited to, conversations of any kind, whether through oral or electronic communication, or any presentation, technical paper, white paper, marketing materials, social media content or website posting;

u) The Buyer understands that the value of Tokens over time (if any) may experience extreme volatility or depreciate in full;

v) The Buyer understands that it bears the sole responsibility to determine if the transfer of the Purchase Price, the allocation, use or ownership of Tokens, the potential appreciation or depreciation in the value of Tokens over time (if any), the sale and purchase of Tokens and/or any other action or transaction related to the Network have tax implications.

8. Representations, Warranties, and Acknowledgments of the Foundation

The Foundation represents and warrants to the Buyer the following, and acknowledges that the Buyer is relying on these representations and warranties:

a) The Foundation is a foundation duly organized, validly existing and in good standing under the laws of Switzerland and has all requisite corporate power and authority to carry on its statutory purpose and operation as now conducted and as presently proposed to be conducted.

b) The execution, delivery, and performance of these Terms will – to the best knowledge of the Foundation – not result in any violation of, be in a material conflict with, or constitute a material default under (i) any provision of the Foundation's organizational documents; (ii) any provision of any permit, judgment, decree, contract or order to which the Foundation is a party.

c) The execution, delivery, and performance under these Terms require no approval or other action from any person other than the Foundation.

9. Warranty Disclaimer

The Tokens are sold on an "as is" and "as available" basis without warranties of any kind. To the fullest extent permitted by applicable law, the Foundation expressly disclaims all implied warranties as to the Tokens and/or the Network, including, without limitation, implied warranties of merchantability, fitness for a particular purpose, title, and non-infringement. The Foundation does in particular not warrant that the Tokens are reliable, current, or error-free, meet the Buyer's requirements, or that defects in the Tokens and/or the Network will be corrected; and (iii) the Foundation cannot and does not warrant that the Tokens, the Network, or the delivery mechanism for Tokens are free of viruses or other harmful components.

Some jurisdictions do not allow the exclusion of certain warranties or disclaimers of implied terms in contracts with consumers, so some or all of the exclusions of warranties and disclaimers in this Section may not apply to the Buyer. In such a case, it will be so held to the minimum extent required by law, and all other terms, clauses, and provisions of this Agreement will remain valid and enforceable.

10. Miscellaneous

10.1 Independent Contractors

These Terms do not create a principal or agent, employer or employee partnership, joint venture, or any other relationship except that of independent contractors between the Parties. Nothing contained herein shall be construed to create or imply a joint venture, principal and agent, employer or employee, partnership, or any other relationship except that of independent contractors between the Parties, and neither Party shall have any right, power, or authority to create any obligation, express or implied, on behalf of the other in connection with the performance hereunder.

10.2 Assignments and Transfers

These Terms, including any rights and obligations contained herein, and in particular the right to being allocated Tokens as described herein, cannot be assigned or transferred by the Buyer in whole or in part without the prior written consent of the other Party, such consent to be given at the sole and exclusive discretion of the other Party and only in compliance with applicable laws and regulations, including without limitation the Securities and Exchange Act and regulations promulgated thereunder. Any assignment or transfer that does not conform with the terms of this provision shall be void.

10.3 Severability

If any provision of these Terms should be invalid in any jurisdiction under applicable law, the legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby. In such an event, the Parties commit themselves to compose a legally valid replacement rule that approaches the invalid provision as closely as possible within the economic intent of these Terms. These Terms will be interpreted as though the invalid clause had been omitted from the outset.

10.4 No Waiver

If any Party waives the enforcement or exercise of its contractual right in a particular case, this may not be considered a general waiver of the respective right, any other contractual right, or the exercise and enforcement thereof.

10.5 Governing Law and Jurisdiction

These Terms and all claims relating to or arising out of them, or the breach thereof, whether in contract, tort, or otherwise, shall be governed by Swiss Law, excluding Swiss choice-of-law principles. The United Nations Convention for the International Sales of Goods ("Vienna Sales Convention") is excluded.

Any dispute, controversy, or claim arising out of or in relation to, these Terms, including the validity, invalidity, breach, or termination thereof, shall be resolved by the ordinary courts in Zug, Switzerland.