PLEASE NOTE THAT U.S. PERSONS (WHICH, FOR PURPOSES OF THIS AGREEMENT, DOES NOT INCLUDE ACCREDITED INVESTORS PARTICIPATING IN THE TOKEN SALE PURSUANT TO A SEPARATE TOKEN PURCHASE AGREEMENT) MAY NOT PARTICIPATE IN THE TOKEN SALE. IF YOU ARE A NON-U.S. PURCHASER, YOU MAY ONLY PARTICIPATE IF YOU ARE OUTSIDE OF THE UNITED STATES AT THE TIME OF THE PURCHASE.
TOKEN PURCHASE AGREEMENT
Last updated: March 19, 2018
This Token Purchase Agreement (this “Agreement”) contains the terms and conditions that govern your purchase of certain Ethereum-based ERC20-compatible XYO tokens (“XYO” or “Tokens”) during the XYO Token Generation Event (the “Token Sale Period”) from XY – The Findables Company, a Delaware corporation (the “Company”, “we” or “us”), and is an agreement between you or the entity that you represent (“Buyer” or “you”) and the Company. Buyer and the Company are herein referred to individually as a “Party” and collectively, as the “Parties.”
This Agreement takes effect when we receive payment from you in full for your Tokens. By purchasing Tokens from us during the Token Sale Period, you will be bound by this Agreement and all terms incorporated by reference.
NOW, THEREFORE, in consideration of the mutual representations, warranties and agreements contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Buyer agree as follows:
IMPORTANT INFORMATION: PLEASE READ THIS AGREEMENT CAREFULLY AND IN ITS ENTIRETY.
Buyer acknowledges, understands and agrees:
PURCHASE OF TOKENS ARE NON-REFUNDABLE AND CANNOT BE CANCELLED.
BUYER MAY LOSE ALL AMOUNTS PAID.
TOKENS MAY HAVE NO VALUE.
THE COMPANY RESERVES THE RIGHT TO REFUSE OR CANCEL ANY TOKEN PURCHASE REQUESTS AT ANY TIME IN ITS SOLE DISCRETION.
PEOPLE WHO PURCHASE EARLIER THAN YOU MAY RECEIVE MORE TOKENS FOR THE AMOUNT PAID.
PLEASE READ CAREFULLY AND IN THEIR ENTIRETY THE RISKS SET FORTH IN EXHIBIT A.
SECTION 10.01 OF THIS AGREEMENT INCLUDES PRE-DISPUTE RESOLUTION, A BINDING ARBITRATION CLAUSE AND CLASS ACTION WAIVER, WHICH, IF APPLICABLE TO YOU, AFFECT YOUR LEGAL RIGHTS.
ACCEPTANCE OF AGREEMENT; PURPOSE OF TOKENS; CANCELLATION
Buyer’s purchase of Tokens from the Company during the Token Sale Period is final, and there are no refunds or cancellations except as may be required by applicable law or regulation. The Company reserves the right to refuse or cancel Token purchase requests at any time in its sole discretion.
The Company shall allocate and distribute the Tokens (the “Token Distribution”) to buyers thereof in a manner consistent with the procedures and other instructions provided by the Company on the Website from time to time. Buyer shall follow the procedures set forth by the Company on the Website for purchasing Tokens. As a condition precedent to any sale by the Company of any Tokens, Buyer must have a wallet or other storage mechanism (“Wallet”) that supports the ERC20 token standard in order to receive any Tokens you purchase from the Company and Buyer must provide an accurate digital wallet address to the Company (the “Token Receipt Address”). The Company reserves the right to prescribe additional guidance regarding specific requirements with respect to a storage mechanism for the Tokens. We are not responsible for any delays, losses, costs, non-delivery of refunds or of Tokens, or other issues arising from your failing to provide a Token Receipt Address, or providing an inaccurate or incomplete Token Receipt Address. You acknowledge and understand the procedures set forth on the Website for purchasing Tokens, and that failure to use the Website and follow such procedures will result in your failure to receive Tokens and you will lose some or all of the amounts paid for the Tokens.
Buyer hereby consents to the participation of the Company’s and its affiliates’ and predecessors’ past, present and future employees, officers, directors, contractors, advisors, consultants, equityholders, suppliers, vendors and service providers in the purchase of Tokens, including people who may work on the development and implementation of the Network or who may work for the Company’s future businesses that the Company may establish with a portion of the proceeds from the Token Distribution.
NO OTHER RIGHTS CREATED
The purchase of Tokens: (a) shall not provide Buyer with rights of any form with respect to the Company or its revenues or assets, including, but not limited to, any voting, distribution, redemption, liquidation, proprietary (including all forms of intellectual property), or other financial or legal rights; (b) shall not be deemed to be a loan to the Company; and (c) shall not provide Buyer with any ownership or other interest in the Company.
The Company shall retain all right, title and interest in all of the Company’s intellectual property, including, without limitation, inventions, ideas, concepts, code, discoveries, processes, marks, methods, software, compositions, formulae, techniques, information and data, whether or not patentable, copyrightable or protectable in trademark, and any trademarks, copyright or patents based thereon. Buyer shall not use any of the Company’s intellectual property for any reason without the Company’s prior written consent.
SECURITY AND DATA; TAXES AND FEES
The purchase price that you pay for Tokens is exclusive of all applicable taxes. You are responsible for determining what, if any, taxes apply to your purchase of Tokens, including, for example, sales, use, value added, and similar taxes. It is also your responsibility to withhold, collect, report and remit the correct taxes to the applicable tax authorities. You shall be solely responsible for compliance with any tax obligations arising from the purchase or receipt of Tokens. The Company is not responsible for withholding, collecting, reporting or remitting any sales, use, value added or similar tax arising from Buyer’s purchase of Tokens. The Company shall bear no liability or responsibility with respect to any tax obligation of Buyer in respect of the purchase and receipt of any Tokens.
REPRESENTATIONS AND WARRANTIES
Buyer represents and warrants to the Company that as of the Effective Date:
ACKNOWLEDGEMENT AND ASSUMPTION OF RISKS
Buyer hereby acknowledges and agrees that there are risks associated with purchasing Tokens, holding Tokens and using Tokens for providing or receiving Services via the Network, as disclosed and explained in Exhibit A. BY PURCHASING TOKENS, YOU EXPRESSLY ACKNOWLEDGE AND ASSUME THESE RISKS.
LIMITATION OF LIABILITY
To the fullest extent permitted by applicable law, you release the Company and the other Company Parties from responsibility, liability, claims, demands and/or damages (actual and consequential) of every kind and nature, known and unknown (including, but not limited to, claims of negligence) arising out of or related to disputes between you and the acts or omissions of third parties. You expressly waive any and all rights which you may have under California Civil Code § 1542, as well as any other statute or common law principles that would otherwise limit the coverage of this release to include only those claims which you may know or suspect to exist in your favor at the time of agreement to this release. California Civil Code Section 1542 reads as follows:
A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.
DISPUTE RESOLUTION; ARBITRATION; GOVERNING LAW AND VENUE
PLEASE READ THE FOLLOWING SECTION CAREFULLY BECAUSE IT REQUIRES YOU TO ARBITRATE CERTAIN DISPUTES AND CLAIMS WITH THE COMPANY AND LIMITS THE MANNER IN WHICH YOU CAN SEEK RELIEF FROM US.
This Agreement will be governed by and construed and enforced in accordance with the laws of the State of Delaware, without regard to conflict of law rules or principles (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any other jurisdiction. Any Dispute between the Parties arising out of or relating to this Agreement that is not subject to arbitration or cannot be heard in small claims court will be resolved and filed only in the state or federal courts of the State of California and the United States, respectively, sitting in San Diego County, California. Buyer hereby irrevocably and unconditionally consents and submits to the exclusive jurisdiction of such courts over any suit, action or proceeding arising out of this Agreement.
Buyer shall not assign this Agreement without the prior written consent of the Company. Any assignment or transfer in violation of this Section 11.01 shall be null and void. The Company may assign this Agreement to an affiliate or successor. Subject to the foregoing, this Agreement, and the rights and obligations of the Parties hereunder, shall be binding upon and shall inure to the benefit of their respective successors, assigns, heirs, executors, administrators and legal representatives.
This Agreement, including the Exhibit(s) attached hereto and the materials incorporated herein by reference, constitutes the entire agreement between the Parties and supersedes all prior or contemporaneous agreements and understandings, both written and oral, between the Parties with respect to the subject matter hereof, including, without limitation, any public or other statements or presentations made by the Company about the Tokens or the Network.
If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid, inoperative or unenforceable for any reason, the provision shall be modified to make it valid, and, to the extent possible, effectuate the original intent of the Parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.
The Company may modify this Agreement at any time by posting a revised version on the Website, available at https://xyo.network/. The modified terms shall become effective upon posting. It is Buyer’s responsibility to check the Website regularly for modifications to this Agreement. If we make changes, we will update the “Last Updated” date above.
The failure by the Company to exercise or enforce any right or provision of this Agreement shall not constitute a present or future waiver of such right or provision, nor limit the Company’s right to enforce such right or provision at a later time. All waivers by the Company must be unequivocal and in writing to be effective.
Nothing in this Agreement and no action taken by the Parties shall constitute, or be deemed to constitute, a partnership, association, joint venture, or other co-operative entity between the Parties. Nothing in this Agreement and no action taken by the Parties pursuant to this Agreement shall constitute, or be deemed to constitute, either Party the agent of the other Party for any purpose. No Party has, pursuant to this Agreement, any authority or power to bind or to contract in the name of the other Party. Except as otherwise provided herein, this Agreement is intended solely for the benefit of Buyer and the Company and is not intended to confer any third-party beneficiary rights upon any other person or entity.
Buyer agrees and acknowledges that all agreements, notices, disclosures and other communications that the Company provides Buyer pursuant to this Agreement or in connection with or related to Buyer’s purchase of Tokens, including this Agreement, may be provided by the Company, in its sole discretion, to Buyer, in electronic form.
In connection with this Agreement, Buyer will comply with all applicable import, re-import, export and re-export control and laws, regulations, guidance and programs, including the Export Administration Regulations and the International Traffic in Arms Regulations and country or individual-specific economic sanctions programs implemented by the Office of Foreign Assets Control. You are solely responsible for compliance related to your use of Tokens.
* * *
1. Risk of Losing Access to Tokens Due to Loss of Credentials: Buyer’s Tokens will be distributed directly by the Company to Buyer’s Wallet at the Token Receiving Address. The Buyer’s Wallet can only be accessed with login credentials selected by Buyer. The loss of Buyer’s Wallet login credentials will result in the loss of Tokens. Best practices dictate that Buyers safely store credentials in one or more backup locations geographically separated from the working location.
2. Risks Associated with the Ethereum Protocol: The Tokens and the Network are based on the Ethereum protocol. As such, any malfunction, unintended function, unexpected functioning of or attack on the Ethereum protocol may cause the Network or the Tokens to malfunction or function in an unexpected or unintended manner. ETH, the native unit of account of the Ethereum protocol, may itself lose value in ways similar to the Tokens, and also other ways.
3. Risks Associated with Buyer Credentials: Any third party that gains access to or learns of Buyer’s login credentials or private keys with respect to Buyer’s Wallet may be able to dispose of Buyer’s Tokens. To minimize this risk, Buyer should guard against unauthorized access to their electronic devices. Best practices dictate that you safely store private keys in one or more backup locations geographically separated from the working location. In addition, you are responsible for giving us the correct Token Receipt Address to send you your Tokens. If you give us the incorrect Token Receipt Address to send your Tokens to, we are not responsible for any loss of Tokens that may occur.
4. Risk of Unfavorable Regulatory Action in One or More Jurisdictions: Blockchain technologies and token sales have been the subject of scrutiny by various regulatory bodies around the world. The functioning of the Network and the Tokens could be impacted by one or more regulatory inquiries or actions, including the licensing of or restrictions on the use, sale or possession of digital tokens like XYO, which could impede, limit or end the improvement of the Network and increase legal costs.
5. Risk of Alternative, Unofficial Networks: Following the Token Sale and the initial version of the Network, it is possible that alternative networks could be established that attempt to facilitate services that are materially similar to the Network’s Services. The official Network may compete with these alternative networks, which could potentially negatively impact the Network and XYO, including the utility of the Tokens for obtaining Services.
6. Risk of Insufficient Interest in the Network: It is possible that the Network will not be used by a large number of businesses, individuals and other organizations and that there will be limited public interest in the creation and development of the XYO ecosystem. Such a lack of interest could negatively impact XYO and the Network.
7. Risk that the Network, as Developed, Will Not Meet the Expectations of the Company or Buyer: The Network may undergo significant changes before and after its release. Moreover, we have no control over how other participants will use the Network, what products or services will be offered via the Network by third parties, or how third-party products and services will utilize the Tokens (if at all). This could create the risk that Tokens or the Network, as further developed and maintained, may not meet your expectations at the time of purchase, for any number of reasons including mistaken assumptions or analysis, a change in the design and implementation plans, and execution of the Network. Furthermore, despite our good faith efforts to develop, complete, and use the Network, it is still possible that the Network will experience malfunctions or otherwise fail to be adequately developed or maintained, which may negatively impact the Network and Tokens, and your Tokens may become useless due to technical, commercial, regulatory or any other reasons.
8. Risk of Unfavorable Fluctuation of ETH and Other Currency Value: The Company team intends to use the proceeds from selling XYO to fund the maintenance and continued improvement of the Network, as described further in the White Paper. The proceeds of the Token Sale will be collected in cryptographic currency. If the value of the cryptographic currency fluctuates unfavorably during or after the Token Sale Period, the Company team may not be able to fund continued improvements, or may not be able to maintain the Network, in the manner that it intended.
9. Risks from Taxation: The tax characterization of XYO is uncertain. You must seek your own tax advice in connection with purchasing XYO, which may result in adverse tax consequences to you, including withholding taxes, income taxes and tax reporting requirements.
10. Risk of Theft and Hacking: Hackers or other groups or organizations or countries may attempt to interfere with the Network or the availability of XYO in any number of ways, including service attacks, Sybil attacks, spoofing, smurfing malware attacks or consensus based attacks, or phishing, or other novel methods that may or may not be known to steal Tokens.
11. Risk of Inability to Satisfy Data Protection, Security, Privacy and Other Government- and Industry-Specific Requirements: There are a number of data protection, security, privacy and other government- and industry-specific requirements, including those that require companies to notify individuals of data security incidents involving certain types of personal data. Security compromises could harm the Network’s reputation, erode user confidence in the effectiveness of its security measures, negatively impact its ability to attract new users, or cause existing users to stop using the Network.
12. Risk of Weaknesses or Exploitable Breakthroughs in the Field of Cryptography: Advances in cryptography, or technical advances such as the development of quantum computers, could present risks to cryptographic tokens and the Network, which could result in the theft or loss of XYO.
13. Risk of XYO Mining Attacks: As with other decentralized cryptographic tokens and cryptocurrencies, the blockchain used for the Network is susceptible to mining attacks, including double-spend attacks, majority mining power attacks, selfish-mining attacks and race condition attacks. Any successful attacks present a risk to the Network, XYO and expected proper execution and sequencing of Ethereum contract computations. Despite the efforts of the Company’s team, the risk of known or novel mining attacks exists. Certain risks of attacks to our Network are outlined in detail in our XYO Network Security Paper: https://docs.xyo.network/XYO-Red-Paper.pdf.
14. Risk of Lack of Adoption or Use of the Network: While XYO should not be viewed as an investment, it may have value over time. That value may be limited or non-existent if the Network lacks use and adoption. If this becomes the case, there may be few or no markets following the launch of the platform, potentially having an adverse impact on XYO.
15. Risk of an Illiquid Market for XYO: XYO is for use with the Network, and is not refundable. The Company is not aware of any marketplace for XYO, and there may never be any such marketplace for XYO. There are currently no exchanges upon which XYO would trade. If ever exchanges do develop, they will likely be relatively new and subject to poorly understood regulatory oversight. They may therefore be more exposed to fraud and failure than established, regulated exchanges for other products and have a negative impact on XYO.
16. Risk of Uninsured Losses: Unlike bank accounts or accounts at some other financial institutions, funds held using the Network or Ethereum network are generally uninsured. In the event of any loss, there is no public insurer, such as the FDIC, or private insurer to offer recourse to the purchaser.
17. Risk of Dissolution of the Company: It is possible that, due to any number of reasons, including an unfavorable fluctuation in the value of cryptocurrencies, development issues with the Network, the failure of business relationships or competing intellectual property claims, the Company may no longer be viable as a business or otherwise and may dissolve.
18. Risk of Malfunction in the Network: It is possible that the Network malfunctions in an unfavorable way, including one that results in the loss of XYO.
19. Risks Arising from Lack of Governance Rights: Because Tokens confer no governance rights of any kind with respect to the Network or the Company, all decisions involving the Company’s products or Services via the Network or the Company itself will be made by the Company at its sole discretion, including, but not limited to, decisions to discontinue its products or Services via the Network, to create and sell more Tokens for use via the Network, or to sell or liquidate the Company. These decisions could adversely affect the Network and the utility of any Tokens you own, including their utility for obtaining Services.
20. Unanticipated Risks: Cryptographic tokens are a new and untested technology. In addition to the risks discussed in the White Paper and this Agreement, there are risks that the Company’s team cannot anticipate. Further risks may materialize as unanticipated combinations or variations of the discussed risks or the emergence of new risks.
Please keep in mind that XY Tokens do NOT represent an equity but are utility tokens for the XYO Location Network, which are necessary if one intends to use the XY Oracle Network in their Ethereum Smart Contracts.
YOU SHOULD READ THE OFFERING CIRCULAR BEFORE MAKING ANY INVESTMENT.
OFFERING DOCUMENTATION CAN BE FOUND AT www.xy.company/offering
IF YOU ARE INTERESTED IN PURCHASING TOKENS IN THE XYO NETWORK, PLEASE USE THE LINKS ON THIS PAGE.