Climate Beneficial™ Production Contract

This is a Climate Beneficial™ progam overview document, and Seed2Shirt-BLACKollective cotton growing programs preferred cotton practice implementation agreement. As a producer of cotton in the United States, and a self-elected member of Seed2shirt BLACKollective – Premium member. You’ve elected to participate in one of Seed2Shirt-BLACKollective ethical and sustainable cotton growing programs, you have elected to participate in: Climate Beneficial™ Verified cotton program.

The election by you’re the farmer, will participate in the: Climate Beneficial™ Verified cotton program, just one of many “Sustainable” cotton growing programs offered by Seed2Shirt – BLACKollective, does not constitute an “Agriculture Production” contract. An “Agriculture Production” contract can typically and generally, be described as: a contract between a company and an agriculture producer (grower), whereby a grower is provided specific agriculture resources: i.e. specific seeds, to grow a specific agriculture product for a “pre-determined” sell it back to the company what’s harvested.

Participation in the Climate Beneficial™ Verified cotton program, is an voluntary election by you the farmers to grow cotton within the outlined Climate Beneficial™ Verified cotton program parameters noted in: Climate Beneficial™ Verified cotton program overview section. Seed2Shirt-BLACKollective, by virtue your election to be a member at the premium level, supports our cotton growers by providing: technical assistance and support in program protocols/reporting, soil sampling and other detailed BLACKollective cotton traceability of our program, tracking of our SDG impact data of our program, full cotton analysis for value added product use, and as a global cotton merchant we actively market to sell our cotton (traditional & sustainable) cotton to our committed program partners at prices that supports fair-market at or above fair market pricing. The grower, can then elect to sell the cotton grown, in the Climate Beneficial™ Verified cotton program plots, to Seed2Shirt-BLACKollective, offering a first right of refusal for the cotton grown.

The New CBV Fact Data: Climate Beneficial ™ Verification (CBV) cotton program growing is the framework used to transform farming to be more in balance with nature and an overall benefit to the climate and your land. It includes approximately 31 practices implemented to restore, heal, and maintain nature-informed balance over time. These Practices reflect the framework scientifically developed by FiberShed and region-specific protocols developed by Seed2Shirt™.

Seed2Shirt-BLACKollective® is an "authorized" implementor of the Climate Beneficial™ Verification program developed by FiberShed. Seed2Shirt's soil scientist team has – our best understanding of how to enhance soil biology, structure, and overall soil health and a holistic, resilient farm ecosystem.  Notably, these Practices are subject to modification as scientific research and data collection evolve to demonstrate best management practices within the place-based context of your land and region.

Annually, the participating farmer will: 

• Agree to implement -Their Selected Climate Beneficial Verification™ Program Practices on Fields of Your Choice
• Have Soil Testing – According to Climate Beneficial Verification™ Regional Protocols on the Enrolled Fields
  • NOTE: Soil Testing Cost is Provided by Seed2Shirt and Conducted by Our Soil Scientist 
• Required to Provide Seed2Shirt an Annual Report at the End of Harvest Season on Practices Implemented & Synthetic Material Reductions Completed. 
• Give Seed2Shirt-BLACKollecive, First Right of Refusal, *If you elect to sell Seed2Shirt BLACKollective Cotton Grown on Enrolled Fields.

NOTE: If you elect to sell the cotton to Seed2Shirt-BLACKollecive, you will be provided BLACKollective™ Seasonal Climate Beneficial Verified Cotton™ Rate Sheet (Per LB).

Election of Selling to Seed2Shirt Can Be Done Now or By June 15th of each Year

Below is an overview list and summary of terms and the contract terms for growing Climate Beneficial ™ Verification (CBV) cotton, which the grower will be expected to do as a voluntary participant in the program.

Section	Summary of Terms
Section 1	Climate Beneficial™ Verified (“CBV”) Practices and Reporting include information about the CBV Program: List of CBV practices labor requirements farm infrastructure and data sharing requirements GROWER ACTION: For this section, please review and select the practices you’ll commit to incorporating during the 2024 Grow Season. Complete the attached practices/costing worksheet. The practices you identify will be included in the final signed version of this contract.
Section 2	Grower’s pricing indicates anticipated financial returns and standard deviation based on Grower’s internalized cost. Importantly, these are anticipated projections by the Grower and not guaranteed returns by Seed2Shirt. Before entering a cotton sale relationship/contract, you will know: The variant type The exact price per pound you will be selling your cotton for The plot or the cotton acreage you plan to implement CBV practices on (for example, you may have 100 acres and you’d like to trial implementing CBV practices on 25 acres. NOTE: We recommend you start on a trial size and then increase year to year) The total acreage of cotton you will grow (this is the total acreage not in the CBV Plot). This forecast will provide you with a price range per pound based on the variant rate of CBV-grown cotton. GROWER ACTION: Please initial where requested.
Section 3	This Section outlines post-growing details like cotton testing and sales specifics. GROWER ACTION: Please read carefully and raise any questions you may have.
Section 4	The logistics of working with Seed2Shirt outline the legal components of our relationship. Please note that this is a binding contract, and we expect both parties to uphold their agreements. GROWER ACTION: Please read carefully and raise any questions you may have.

 

understand and agree to the following from January 1, 2024, to December 31, 2024 (“2024 Grow Season”) in exchange for my participation in the CBV Program:

Climate Beneficial ™ Cotton Practices and Reporting

1. CBV Practices (the Farming Practices)

   • Climate Beneficial™ Cotton (“CBV”) growing is the framework used to transform farming to be more in balance with nature and an overall benefit to the climate and your land. It includes approximately 31 practices implemented to restore, heal, and maintain nature-informed balance over time. These Practices reflect Seed2Shirt and Fibershed’s best understanding of enhancing soil biology, structure, and overall soil health. Notably, these Practices are subject to modification as scientific research and data collection evolve to demonstrate best management practices within the place-based context of bioregions.

     Please review the Practices on the CBV Practice Selection Worksheet and select the ones you wish to implement (found attached as Schedule 1)

2. Labor Practices
   • The grower must provide Seed2Shirt coordinators with a transparent report annually that shares information regarding how the farm supports employees in ways that exceed the applicable state existing non-discrimination, wage, and overtime laws. Any information sharing regarding advancement opportunities, continuing education, leadership training, benefits packages, scholarship funds, and approaches to support with housing and or other life-supporting systems is encouraged and will help growers continue to build relationships with brands who are making equitable employment a primary value in their company.
3. Farm Infrastructure
   • In their annual report, growers will provide Seed2Shirt coordinators with information regarding any climate-smart on-farm infrastructure, including solar, wind, geothermal, and/or fuel-efficient farm equipment.
4. Annual Reporting and Upholding Practices
   • Reporting of your practice implementations will be required annually via the CBV Program Annual Report (found attached in Schedule 2) and/or your preferred format that includes the CBV Program requested annual data (the “Report”). By December 31, 2024, Grower will fill out and provide to Seed2Shirt the Grower’s preferred Report. Failure to provide the Report to Seed2Shirt or to adhere to the agreed-upon Practices may impact the per pound price premium for CBV Grown Cotton (as defined below.)

 

Pricing CBV Grown Cotton

Below acknowledges that you understand how pricing for CBV Cotton occurs. The pricing per pound is called a “price premium.” The pricing will be based on a combination of considered elements that include (1) the variant type, (2) the total acres to be enrolled in the CBV Program, (3) the true cost to implement your selected practices across the planned acres and (4) the quality of cotton, (5) use and demand by our curated buying brands/partners.

The Price Per Pound for CBV™ cotton will be released Annually on June 16th

Post-Growing Details

A. Past Seasons and Cotton Testing

B. Booking/Sale of Cotton (Applies) If you elect to sell the cotton, the BLACKollective

The BLACKollective will assign the CBV Grown Cotton to a brand for purchase—the BLACKollective acts as a cotton merchant. A separate sale contract/merchant agreement is required from the farmer for the final sale of cotton.Seed2Shirt books cotton throughout the season and harvest/post-harvest time; we have no “cotton sale by dates.”. Then, if/when cotton is booked, sold cotton moves to our brand partners following harvest season and to/through the beginning of the next harvest season. If the grower elects to sell CBV cotton to Seed2ShirtBLACKollective, Seed2Shirt has the First Right of Refusal (as defined below in Section 3(C)) to directly purchase the CBV Grown Cotton before the Grower can sell to another third party. Once CBV Grown Cotton is ready to be purchased (as determined by the mutual agreement of Seed2Shirt and Grower) and outlined in the cotton merchant sale contract and purchase order (PO), you will enter into a separate agreement with Seed2Shirt to sell the CBV Grown Cotton to the Kollective as typical for the cotton grower to cotton merchant services.

C. First Right of Refusal

During the Term of this Agreement, Grower understands and agrees that Seed2Shirt will have a first right of refusal in purchasing the CBV Grown Cotton specified in Section 2 before they can sell to another third party. This means Seed2Shirt can purchase the CBV Grown Cotton either for themselves or for a third-party Kollective brand. The grower may not otherwise sell CBV Grown Cotton designated for the CBC Program unless Seed2Shirt chooses not to exercise this First Right of Refusal.

Logistics of Working with Seed2Shirt

A. Conflicts of Interest

During the Term of this Agreement, Grower and its employees, agents, and independent contractors may not provide similar production services directly to the Seed2Shirt BLACKollective affiliated organizations—brands, including but not limited to direct sales to affiliated merchants and brands.

B. Media Release

Grower acknowledges that they will be featured as a Kollective member and CBV producer on the Seed2ShirtBLACKollective and its affiliates' websites. By signing below, the Grower grants Seed2Shirt (and its affiliates assigns or Climate Beneficial Verified) the right to use all related names, images, voices, and likenesses in still photos, slides, video, voice recorded productions, radio coverage, television coverage and/or any other media, existing now and in the future, for the purpose of promoting, advertising, and marketing Seed2Shirt BLACKollective, CBV, C4 and their respective programs and the grower. THE GROWER FURTHER AGREED TO WAIVE ALL CLAIMS AGAINST SEED2SHIRT AND AFFILIATE PARTIES FOR SUCH.

C. Disclaimer of Representations and Warranties

SEED2SHIRT DISCLAIMS ALL WARRANTIES, WHETHER EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, WITH RESPECT TO THE CBV PROGRAM OR THIS AGREEMENT, INCLUDING SPECIFICALLY ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, NON-INFRINGEMENT, AND WARRANTIES THAT MAY ARISE OUT OF COURSE OF DEALING, COURSE OF PERFORMANCE, USAGE, OR TRADE PRACTICE.

D. Limitation of Liability

TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, SEED2SHIRT WILL NOT BE LIABLE UNDER OR IN CONNECTION WITH THIS AGREEMENT FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, EXEMPLARY, SPECIAL, PUNITIVE, OR ENHANCED DAMAGES FOR ANY LOSS OF ACTUAL OR ANTICIPATED PROFITS (REGARDLESS OF HOW THESEARE CLASSIFIED AS DAMAGES), WHETHER ARISING OUT OF BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE), OR OTHERWISE (INCLUDING THE ENTRY INTO, PERFORMANCE, OR BREACH OF THIS AGREEMENT), REGARDLESS OF WHETHER SUCH DAMAGE WAS FORESEEABLE AND WHETHER THE GROWER HAS BEEN ADVISED OF THEPOSSIBILITY OF SUCH DAMAGES.

GROWER UNDERSTANDS AND AGREES THAT THE ABOVE GENERAL RELEASE SHALL EXTEND TO CLAIMS WHICH SUCH GROWER DOES NOT KNOW OR SUSPECT TO EXIST INITS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH, IF KNOWN BY IT, MAY HAVE MATERIALLY AFFECTED ITS SETTLEMENT WITH THE RELEASED PARTIES.

E. Insurance

Seed2Shirt carries ALL necessary insurances to protect the sale of all cotton sold under the BLACKollective, which covers and protects cotton in our program from loss in the following circumstances: weather, damage in transit, loss while in storage, and specification deviation; we also carry traditional Liability/E&O insurance at $100M/$300M per occurrence.

All growers are encouraged to obtain and maintain the required and necessary USDA crop insurance and risk management insurance (which protects against loss of potential income) for their cotton commodity production loss protection. If Growers need access to recommendations for this insurance, they may work with the Seed2Shirt onboarding team to obtain resources.

F. Indemnification

Indemnification refers to each party taking responsibility for their own losses that are not the direct result of the other party’s action.

Each party shall indemnify, defend, and hold harmless the other party and its officers, directors, employees, agents, affiliates, successors, and permitted assigns (each an "Indemnified Party") from and against any losses, damages, liabilities, deficiencies, claims, actions, judgments, settlements, interest, awards, penalties, fines, costs, or expenses of whatever kind, including reasonable attorneys' fees and the cost of enforcing any right to indemnification and the cost of pursuing any insurance providers, arising out of or in connection with any third-party claim, suit, action, or proceeding (each a "Third-Party Claim") relating to any actual or alleged breach by the other party of its representations, warranties, covenants, or other obligations hereunder.

G. Term

The term of this Agreement is the 2024 Grow Season defined above unless otherwise terminated as outlined below. The Grower and Seed2Shirt may renew this Agreement on an annual basis as mutually agreed upon.

H. Termination

Either party may terminate this Agreement by written notice (electronic communication) to the other party within 10 days of the following events: if (i) the other party becomes bankrupt, insolvent, liquidated, terminated, dissolution of the program or (ii) in the event the Grower experiences significant crop loss. “Significant Crop Loss” means at least 2/3rds of the CBV Grown Cotton has been irreparably damaged or lost.

I. Governing Law

This Agreement and all matters relating to this Agreement are governed by and construed in accordance with the laws of Nevada, without giving effect to any conflict of laws provisions that would require or permit the laws of a different jurisdiction.

J. Dispute Resolution

In the event there is a conflict between the parties, then the parties will enter informal negotiations for at least 5 working days to workshop the conflict. If the conflict is not resolved through informal negotiations, the parties will engage with a mutually agreed upon third-party mediator to support the resolution. Payment of the third-party mediator will be split between the Seed2Shirt and the Grower.

 

By:

Name: Tameka Peoples

Title: CEO

1. The practice implementation requirements above use the word' conventional' to describe practices such as broad-acre tillage, omission of cover crop, treated seeds, use of glyphosate-based herbicides, and synthetic chemical applications in standard use.

2 Continual Improvement is focused on the grower completing small steps toward a larger goal that will take multiple years to achieve. It includes evaluating feedback loops between decisions and their impacts. Continual improvement provides opportunities to report innovations and new leaps that have occurred in farming systems to brands. This will equate to the continued ability to enhance market incentive benefits for growers.