Montague Law | Free Legal Form Template
TOKEN WARRANT (this “Warrant”), dated as of [DATE] (the “Issuance Date”), is entered into by and between [COMPANY NAME], a [STATE] limited liability company (the “Company”), and [HOLDER NAME] (the “Holder”).
This Warrant is being issued in connection with, and as additional consideration for, that certain Simple Agreement for Future Equity (the “SAFE”), dated on or about the date hereof, by and between the Company and the Holder, pursuant to which the Holder has agreed to provide certain funds to the Company in exchange for the right to receive equity of the Company upon the occurrence of certain events described therein. The Company and the Holder are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”
WHEREAS, the Company is developing, or intends to develop, a decentralized protocol, blockchain-based network, or distributed ledger technology platform (the “Protocol”) and, in connection therewith, may create and distribute digital cryptographic tokens that are designed to have utility within or be integral to the operation of the Protocol (the “Tokens”);
WHEREAS, the Company desires to grant the Holder the right to receive certain Tokens, subject to and contingent upon the occurrence of a Token Generation Event (as defined below), and the Holder desires to receive such right, each on the terms and subject to the conditions set forth in this Warrant;
WHEREAS, the issuance of this Warrant and the underlying Token rights are intended to align the interests of the Holder with those of the Company and to incentivize the Holder’s ongoing support of the Company’s development and commercialization of the Protocol; and
WHEREAS, this Warrant is being issued in reliance upon applicable exemptions from registration under the Securities Act of 1933, as amended (the “Securities Act”), and applicable state securities laws.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows.
As used in this Warrant, the following terms shall have the meanings set forth below. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the SAFE.
“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with such Person. For purposes of this definition, “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise.
“Applicable Law” means, with respect to any Person, all provisions of laws, statutes, ordinances, rules, regulations, permits, certificates, judgments, decisions, decrees, or orders of any governmental authority applicable to such Person or any of its assets or properties, including, without limitation, all applicable common law, and all applicable provisions of (a) the Securities Act and the rules and regulations promulgated thereunder, (b) the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, (c) applicable state securities or “blue sky” laws, and (d) applicable anti-money laundering, sanctions, and counter-terrorist financing laws and regulations.
“Business Day” means any day other than a Saturday, Sunday, or any day on which banking institutions in the State of [STATE] are authorized or required by Applicable Law to close.
“Company” has the meaning set forth in the Preamble.
“Conversion Rate” means the rate at which the Purchase Amount is converted into Tokens, calculated as the Purchase Amount divided by the Token Price, subject to adjustment as provided in Section 3.3.
“Exercise Notice” means a written notice delivered by the Holder to the Company in substantially the form attached hereto as Exhibit A, indicating the Holder’s election to exercise this Warrant in whole or in part in accordance with Article IV.
“Exercise Period” means the period commencing on the date of a Token Generation Event and ending on the earlier of (a) the date that is five (5) years following the Issuance Date and (b) the Termination Date.
“Exercise Price” means the price per Token at which this Warrant may be exercised, which shall be equal to the Token Price established in connection with the Token Generation Event, or such other price as may be agreed upon by the Parties in writing prior to the Token Generation Event.
“Holder” has the meaning set forth in the Preamble, and includes any Permitted Transferee to whom this Warrant has been validly transferred in accordance with Article X.
“KYC/AML” means know-your-customer and anti-money laundering compliance procedures and requirements under Applicable Law, including, without limitation, the Bank Secrecy Act, the USA PATRIOT Act, and regulations promulgated by the Financial Crimes Enforcement Network (FinCEN), the Office of Foreign Assets Control (OFAC), and any analogous non-U.S. regulatory authority.
“Lockup Period” means the period during which Tokens delivered to the Holder pursuant to this Warrant are subject to transfer restrictions as set forth in Section 6.2.
“Network Launch” means the date on which the Protocol is deployed on a public blockchain mainnet and is operational and accessible by end users for its intended purpose, as determined in good faith by the Company’s board of directors or comparable governing body (the “Board”).
“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.
“Permitted Transferee” means (a) any Affiliate of the Holder, (b) any trust for the benefit of the Holder or the Holder’s immediate family members, (c) any individual retirement account or other tax-advantaged retirement vehicle for the benefit of the Holder, or (d) any other Person approved in writing by the Company, such approval not to be unreasonably withheld, conditioned, or delayed.
“Person” means any individual, corporation, partnership, limited liability company, trust, unincorporated organization, governmental authority, or any other entity or body.
“Protocol” has the meaning set forth in the Recitals.
“Purchase Amount” means the aggregate amount paid or payable by the Holder under the SAFE, or such other amount as the Parties may designate in Schedule A hereto.
“Restricted Jurisdiction” means any jurisdiction that is the subject of comprehensive economic or trade sanctions administered or enforced by OFAC, the United Nations Security Council, the European Union, His Majesty’s Treasury of the United Kingdom, or any other relevant sanctions authority, including, as of the Issuance Date, Cuba, Iran, North Korea, Syria, the Crimea, Donetsk, and Luhansk regions of Ukraine, and any other jurisdiction designated by the Company in its sole discretion as a restricted jurisdiction.
“SAFE” has the meaning set forth in the Recitals.
“Smart Contract” means a self-executing computer program deployed on a public blockchain that automatically enforces and executes the terms of an agreement or protocol, including, without limitation, any smart contract used by the Company to effect the lockup, vesting, or distribution of Tokens.
“Token” or “Tokens” means the digital cryptographic tokens created or to be created by or on behalf of the Company (or any Affiliate or foundation established by the Company for such purpose) in connection with the Protocol, which tokens are designed to have utility within or be integral to the operation of the Protocol. For the avoidance of doubt, the term “Tokens” refers to the specific tokens associated with the Protocol and does not include any other digital assets, cryptocurrencies, or tokens.
“Token Allocation” means the number of Tokens to which the Holder is entitled upon exercise of this Warrant, as determined in accordance with Section 3.2 and subject to adjustment as provided in Section 3.3.
“Token Generation Event” or “TGE” means the initial creation, minting, or generation of Tokens by or on behalf of the Company (or any Affiliate, foundation, or other entity established by or at the direction of the Company for such purpose), whether in connection with the Network Launch or otherwise, in each case as determined in good faith by the Board.
“Token Price” means the price per Token established by the Company in connection with the Token Generation Event, whether through a public sale, private placement, listing on a digital asset exchange, or other pricing mechanism, as determined in good faith by the Board.
“Wallet Address” means a valid blockchain address designated by the Holder in accordance with Section 6.1 for the receipt and custody of Tokens delivered pursuant to this Warrant.
“Warrant” has the meaning set forth in the Preamble.
The recitals set forth in the Preamble are hereby incorporated into and made a part of this Warrant. Each Party acknowledges and agrees that the recitals are true, correct, and complete in all material respects as of the Issuance Date.
The Holder acknowledges that the Company’s plans with respect to the Protocol, the Tokens, and the timing and occurrence of a Token Generation Event are subject to change, and that no assurance can be given that a Token Generation Event will occur or that the Tokens will be created, distributed, or listed on any digital asset exchange. The Holder further acknowledges that the Company is under no obligation to pursue, complete, or maintain the Protocol or to conduct a Token Generation Event, and the Company reserves the right, in its sole and absolute discretion, to modify, suspend, or abandon the development of the Protocol or the creation and distribution of Tokens at any time.
The Company acknowledges that the Holder is entering into the SAFE and accepting this Warrant in reliance upon, among other things, the Company’s stated intention to develop the Protocol and to conduct a Token Generation Event, and the Company agrees to provide the Holder with the notices and information set forth in this Warrant in connection therewith.
3.1 Grant. Subject to the terms and conditions of this Warrant, the Company hereby grants to the Holder the right (but not the obligation) to receive, upon exercise of this Warrant following a Token Generation Event, such number of Tokens as equals the Token Allocation, in exchange for payment of the aggregate Exercise Price therefor, or through the net exercise mechanism set forth in Section 4.4.
3.2 Token Allocation Calculation. The Token Allocation shall be determined as follows: the Purchase Amount shall be divided by the Token Price to yield the number of Tokens to which the Holder is entitled (the “Base Allocation”). In the event that the Company offers Tokens to third-party purchasers at a price per Token that is lower than the Token Price applicable to the Holder under this Warrant (a “Discount Event”), the Token Allocation shall be recalculated using such lower price, provided that such Discount Event occurs within twelve (12) months following the Token Generation Event. The Company shall set forth the Token Allocation calculation methodology, including the applicable Token Price and any discount or bonus applicable to the Holder, in Schedule A attached hereto, which Schedule A may be completed or amended by mutual written agreement of the Parties prior to the Token Generation Event.
3.3 Anti-Dilution Protection. (a) If, at any time after the Token Generation Event and prior to the delivery of all Tokens to the Holder pursuant to this Warrant, the Company (or any entity acting on its behalf) issues, sells, or grants additional Tokens or rights to acquire Tokens at a price per Token that is less than the Token Price applicable to the Holder under this Warrant (a “Dilutive Issuance”), then the Token Allocation shall be proportionately adjusted such that the Holder receives additional Tokens sufficient to maintain the Holder’s pro rata percentage of the total Token supply as of the date of the Dilutive Issuance, calculated on a fully diluted basis. (b) The anti-dilution adjustment described in this Section 3.3 shall not apply to Tokens issued or issuable (i) as compensation to employees, consultants, advisors, or service providers of the Company pursuant to a plan or arrangement approved by the Board, (ii) in connection with strategic partnerships, grants, or ecosystem development initiatives approved by the Board, (iii) to validators, miners, stakers, or other network participants in connection with the operation of the Protocol, or (iv) in connection with any token swap, migration, or similar reorganization of the Token supply that does not result in a net increase in the aggregate Token supply.
3.4 No Equity Interest. This Warrant represents only the right to receive Tokens upon the occurrence of a Token Generation Event and the exercise of this Warrant in accordance with its terms. This Warrant does not confer upon the Holder any equity ownership interest in the Company, any right to vote or consent on any matter submitted to the Company’s equity holders, any right to receive dividends or other distributions from the Company, or any other rights or privileges of an equity holder of the Company. The rights of the Holder under this Warrant are separate from and in addition to any rights the Holder may have under the SAFE or any other agreement with the Company.
4.1 Exercise Period. This Warrant may be exercised by the Holder, in whole or in part, at any time and from time to time during the Exercise Period, subject to the terms and conditions set forth in this Article IV. This Warrant shall expire and be of no further force or effect upon the expiration of the Exercise Period, and any portion of the Token Allocation that has not been exercised as of the expiration of the Exercise Period shall be forfeited by the Holder without any further action by either Party.
4.2 Voluntary Exercise. The Holder may exercise this Warrant, in whole or in part, by delivering to the Company a duly completed and executed Exercise Notice, together with payment in full of the aggregate Exercise Price for the number of Tokens specified in such Exercise Notice. Payment of the aggregate Exercise Price may be made (a) by wire transfer of immediately available funds to an account designated by the Company, (b) by delivery of such cryptocurrency or digital assets as the Company may specify, to a wallet address designated by the Company, or (c) by any other method of payment approved by the Company in writing. The date on which the Company receives both the Exercise Notice and payment in full of the aggregate Exercise Price shall be the “Exercise Date.”
4.3 Automatic Exercise. In the event that the Holder has not exercised this Warrant in full prior to the date that is thirty (30) days before the expiration of the Exercise Period, and provided that a Token Generation Event has occurred, this Warrant shall be automatically exercised through the net exercise mechanism set forth in Section 4.4 with respect to the entire unexercised portion of the Token Allocation, without any further action required on the part of the Holder (the “Automatic Exercise”). The Company shall provide the Holder with written notice of the Automatic Exercise no later than fifteen (15) days prior to the date of such Automatic Exercise.
4.4 Net Exercise. In lieu of paying the aggregate Exercise Price in cash or other consideration as provided in Section 4.2, the Holder may elect (or, in the case of an Automatic Exercise, shall be deemed to have elected) to receive a net number of Tokens equal to (a) the Token Allocation (or the portion thereof being exercised) minus (b) such number of Tokens as have a value, at the then-current fair market value per Token as determined in good faith by the Board, equal to the aggregate Exercise Price for the Tokens being acquired. For the avoidance of doubt, if the fair market value per Token on the Exercise Date is less than or equal to the Exercise Price, the net exercise shall result in no Tokens being delivered to the Holder, and the Holder shall have no claim against the Company in respect thereof.
4.5 Partial Exercise. The Holder may exercise this Warrant in part by specifying in the Exercise Notice the number of Tokens with respect to which this Warrant is being exercised. In the event of a partial exercise, this Warrant shall remain in full force and effect with respect to the unexercised portion of the Token Allocation, and all references herein to the Token Allocation shall be deemed to refer to the remaining unexercised Token Allocation following any partial exercise.
4.6 Fractional Tokens. No fractional Tokens shall be issued or delivered upon the exercise of this Warrant. In lieu of any fractional Token to which the Holder would otherwise be entitled, the Company shall, at its election, either (a) round the number of Tokens deliverable to the nearest whole Token or (b) pay to the Holder an amount in cash or cryptocurrency equal to the fair market value of such fractional Token as determined in good faith by the Board.
5.1 No Obligation to Conduct TGE. The Holder acknowledges and agrees that the Company is under no obligation to conduct a Token Generation Event, and the Company makes no representation or warranty that a Token Generation Event will occur. The decision to conduct a Token Generation Event, including the timing, structure, pricing, and terms thereof, shall be in the sole and absolute discretion of the Board. The failure or decision of the Company not to conduct a Token Generation Event shall not constitute a breach of this Warrant or give rise to any liability of the Company to the Holder.
5.2 Notice of Token Generation Event. Promptly following the Company’s determination to conduct a Token Generation Event, and in any event no later than thirty (30) days prior to the anticipated date of the Token Generation Event, the Company shall provide the Holder with written notice (the “TGE Notice”) setting forth (a) the anticipated date of the Token Generation Event, (b) the total Token supply to be created, (c) the Token Price, (d) the Token Allocation applicable to the Holder, (e) the terms and conditions of any lockup or vesting schedule applicable to the Holder’s Tokens, (f) the procedures for designating a Wallet Address and exercising this Warrant, and (g) such other information as the Company deems appropriate or as may be reasonably requested by the Holder.
5.3 Company Obligations Upon TGE. Upon the occurrence of a Token Generation Event, the Company shall (a) reserve and set aside a number of Tokens equal to the Token Allocation for delivery to the Holder upon exercise of this Warrant, (b) ensure that the Tokens to be delivered to the Holder are free and clear of all liens, claims, and encumbrances (other than restrictions on transfer imposed by this Warrant, Applicable Law, or the terms of any lockup arrangement), and (c) take all actions reasonably necessary to effect the delivery of Tokens to the Holder in accordance with the terms of this Warrant, including, without limitation, deploying or causing to be deployed any Smart Contract necessary to implement the lockup schedule set forth in Section 6.2.
5.4 Successor Tokens. In the event that the Company creates or causes to be created successor tokens, replacement tokens, or tokens on a different blockchain or protocol in substitution for or in replacement of the original Tokens (a “Token Migration”), the Holder’s rights under this Warrant shall apply to such successor or replacement tokens on substantially equivalent terms, and the Company shall provide the Holder with no less than thirty (30) days’ prior written notice of any Token Migration, together with such information as is reasonably necessary for the Holder to understand the nature and impact of the Token Migration on the Holder’s rights under this Warrant.
6.1 Wallet Address Designation. Prior to the delivery of any Tokens pursuant to this Warrant, the Holder shall designate a valid Wallet Address by providing written notice to the Company in the form specified by the Company. The Holder acknowledges and agrees that (a) the Holder is solely responsible for providing a correct and valid Wallet Address, (b) the Company shall have no liability for any loss of Tokens resulting from the Holder’s failure to provide a correct and valid Wallet Address, (c) the Company may require the Holder to demonstrate control of the designated Wallet Address prior to delivery, and (d) the Company may refuse to deliver Tokens to any Wallet Address that the Company reasonably determines is associated with a Restricted Jurisdiction, a sanctioned Person, or any illegal or unauthorized activity.
6.2 Lockup Schedule. Tokens delivered to the Holder upon exercise of this Warrant shall be subject to the following lockup and release schedule (the “Lockup Schedule”): (a) one hundred percent (100%) of the Tokens delivered to the Holder shall be locked and non-transferable for a period of twelve (12) months following the date of delivery of such Tokens (the “Cliff Period”); (b) following the expiration of the Cliff Period, the Tokens shall be released and become transferable in equal monthly installments over a period of twenty-four (24) months, such that one twenty-fourth (1/24th) of the total Token Allocation shall become transferable on each monthly anniversary of the expiration of the Cliff Period (each such date, a “Release Date”); and (c) upon the final Release Date, all remaining locked Tokens shall become fully transferable. The specific Lockup Schedule applicable to the Holder may be modified by mutual written agreement of the Parties and set forth in Schedule B attached hereto.
6.3 Smart Contract Lockup. The Company may, in its sole discretion, implement the Lockup Schedule through a Smart Contract deployed on the applicable blockchain. In such event, the Holder acknowledges and agrees that (a) the terms of the Smart Contract shall govern the release and transferability of the Tokens to the extent consistent with the terms of this Warrant, (b) the Company shall not be liable for any delay, error, or malfunction of the Smart Contract to the extent such delay, error, or malfunction is caused by factors outside the Company’s reasonable control, including, without limitation, network congestion, protocol changes, or third-party actions, and (c) in the event of any conflict between the terms of this Warrant and the terms of the Smart Contract, the terms of this Warrant shall control, and the Company shall use commercially reasonable efforts to modify or replace the Smart Contract to conform with the terms of this Warrant.
6.4 Acceleration of Lockup. Notwithstanding the Lockup Schedule, all locked Tokens shall immediately become fully transferable (“Accelerated Release”) upon the occurrence of any of the following events: (a) a Change of Control of the Company (as defined in the SAFE or, if not defined therein, as defined below), (b) the dissolution, liquidation, or winding up of the Company’s affairs, or (c) a material breach by the Company of its obligations under this Warrant that remains uncured for a period of thirty (30) days following written notice thereof from the Holder. For purposes of this Section 6.4, a “Change of Control” means (i) the acquisition by any Person or group of Persons of more than fifty percent (50%) of the voting power of the Company, (ii) a merger, consolidation, or similar transaction in which the Company’s equity holders immediately prior to such transaction hold less than fifty percent (50%) of the voting power of the surviving entity, or (iii) a sale of all or substantially all of the Company’s assets.
6.5 Delivery Mechanics. Within thirty (30) days following the Exercise Date (or, in the case of an Automatic Exercise, within thirty (30) days following the date of Automatic Exercise), the Company shall deliver or cause to be delivered to the Holder’s designated Wallet Address the Tokens to which the Holder is entitled, subject to the Lockup Schedule. Delivery of Tokens shall be deemed complete upon confirmation of the transaction on the applicable blockchain. The Company shall bear all gas fees, transaction costs, or other network fees associated with the initial delivery of Tokens to the Holder’s Wallet Address; provided, however, that the Holder shall be responsible for any fees associated with subsequent transfers or transactions involving such Tokens.
The Company hereby represents and warrants to the Holder, as of the Issuance Date and as of each Exercise Date, as follows:
7.1 Organization and Good Standing. The Company is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of [STATE], and has the requisite power and authority to own, lease, and operate its properties and to carry on its business as presently conducted and as proposed to be conducted.
7.2 Authorization and Enforceability. The execution, delivery, and performance of this Warrant by the Company have been duly authorized by all necessary action on the part of the Company, including, without limitation, approval by the Board and, to the extent required, the Company’s equity holders. This Warrant constitutes a legal, valid, and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting creditors’ rights generally and by general principles of equity.
7.3 No Conflicts. The execution, delivery, and performance of this Warrant by the Company do not and will not (a) violate or conflict with the Company’s certificate of formation, operating agreement, or other organizational documents, (b) violate or conflict with any Applicable Law, (c) result in a breach of, constitute a default under, or give rise to any right of termination, acceleration, or cancellation under any material agreement, contract, or instrument to which the Company is a party or by which the Company or any of its properties or assets are bound, or (d) result in the creation or imposition of any lien, charge, or encumbrance upon any of the Company’s properties or assets.
7.4 Token Economics Disclosure. To the extent that the Company has developed or adopted a tokenomics model, whitepaper, or similar document describing the proposed Token supply, distribution, allocation, and economics (collectively, “Token Economics”), the Company has made such Token Economics available to the Holder or will make such Token Economics available to the Holder promptly following the development thereof. The Company acknowledges that the Holder is relying, in part, on the Token Economics in entering into this Warrant, and agrees to provide the Holder with written notice of any material changes to the Token Economics within thirty (30) days of such changes.
7.5 Regulatory Compliance Efforts. The Company has taken, and will continue to take, commercially reasonable steps to comply with all Applicable Law in connection with the development of the Protocol, the creation and distribution of the Tokens, and the conduct of a Token Generation Event, including, without limitation, engaging qualified legal counsel to advise the Company on securities law, tax, and regulatory matters applicable to the Tokens. The Company does not represent or warrant that the Tokens will not be deemed “securities” under Applicable Law, and the Company reserves the right to structure the Token Generation Event and the distribution of Tokens in such manner as it determines, in consultation with its legal counsel, to be in compliance with Applicable Law.
7.6 Capitalization. The Company has provided or will provide to the Holder a true, correct, and complete capitalization table of the Company as of the Issuance Date, including all outstanding equity interests, options, warrants, convertible instruments (including the SAFE), and token warrants. The Company shall notify the Holder of any material changes to the Company’s capitalization within thirty (30) days of such changes.
The Holder hereby represents and warrants to the Company, as of the Issuance Date and as of each Exercise Date, as follows:
8.1 Accredited Investor Status. The Holder is an “accredited investor” as defined in Rule 501 of Regulation D promulgated under the Securities Act. The Holder has such knowledge, sophistication, and experience in financial, tax, and business matters, and in particular with respect to digital assets, blockchain technology, and cryptographic tokens, as to be capable of evaluating the merits and risks of an investment in this Warrant and the Tokens, and of protecting the Holder’s own interests in connection with such investment.
8.2 Investment Intent. The Holder is acquiring this Warrant and will acquire the Tokens for the Holder’s own account, for investment purposes only, and not with a view to, or in connection with, any distribution, resale, or other disposition thereof in violation of the Securities Act or any other Applicable Law. The Holder acknowledges that this Warrant and the Tokens have not been registered under the Securities Act or the securities laws of any state, and that this Warrant and the Tokens may not be sold, transferred, or otherwise disposed of except in compliance with the registration requirements of the Securities Act and applicable state securities laws, or pursuant to an applicable exemption therefrom.
8.3 Risk Acknowledgment. The Holder acknowledges and understands the following risks associated with this Warrant and the Tokens, and agrees that the Company shall have no liability in respect thereof: (a) the value of Tokens is inherently volatile and speculative, and the Tokens may have no value whatsoever; (b) the regulatory environment for digital assets, blockchain technology, and cryptographic tokens is uncertain and evolving, and future regulatory actions or requirements may adversely affect the value, transferability, or utility of the Tokens; (c) there is no guarantee that a Token Generation Event will occur, that the Protocol will be successfully developed or launched, or that the Tokens will have any utility, functionality, or value; (d) the Holder may lose the entire value of the Holder’s investment in this Warrant and the Tokens; (e) digital assets are subject to risks of theft, loss, hacking, and technological failure, and the Company shall not be liable for any loss of Tokens resulting from any such event; and (f) the tax treatment of Tokens and token warrants is uncertain and may be subject to adverse tax consequences.
8.4 No Guarantee of Value. The Holder acknowledges that the Company has not made any representation or warranty regarding the future value, price, utility, or market for the Tokens. The Holder understands that the Tokens may never be listed on any digital asset exchange, that there may never be a liquid market for the Tokens, and that the Holder may be unable to sell or transfer the Tokens at any price. The Holder has not relied on any statement, representation, or warranty by the Company, its officers, directors, employees, agents, or advisors regarding the potential value or appreciation of the Tokens.
8.5 Independent Investigation. The Holder has conducted the Holder’s own independent investigation and analysis of the Company, the Protocol, the Tokens, and the transactions contemplated by this Warrant. The Holder has had the opportunity to ask questions of and receive answers from the Company regarding the Company’s business, the Protocol, the Tokens, and the terms and conditions of this Warrant, and has obtained such additional information as the Holder has deemed necessary or advisable in connection with the Holder’s decision to enter into this Warrant. The Holder is not relying on any advice or recommendation of the Company in making the Holder’s investment decision.
8.6 Compliance with Laws. The Holder is not (a) a Person or entity named on any sanctions list administered by OFAC, the United Nations Security Council, the European Union, or any other applicable sanctions authority, (b) a Person or entity organized, domiciled, or resident in a Restricted Jurisdiction, (c) a Person or entity owned or controlled by, or acting on behalf of, any Person or entity described in clauses (a) or (b), or (d) otherwise prohibited from receiving Tokens under Applicable Law. The Holder will comply with all Applicable Law in connection with the Holder’s acquisition, holding, and disposition of this Warrant and the Tokens.
9.1 Securities Law Compliance. The Parties acknowledge that the treatment of this Warrant and the Tokens under federal and state securities laws is uncertain and subject to evolving legal and regulatory interpretation. The Company intends to structure the Token Generation Event and the distribution of Tokens in a manner that complies with Applicable Law, including, without limitation, applicable exemptions from registration under the Securities Act. The Holder agrees to cooperate with the Company’s compliance efforts and to provide such information and documentation as the Company may reasonably request in connection therewith.
9.2 KYC/AML Obligations. The Holder acknowledges and agrees that the Company may require the Holder to complete KYC/AML procedures as a condition to the issuance of this Warrant, the exercise of this Warrant, or the delivery of Tokens. The Holder shall promptly provide to the Company such information and documentation as the Company may reasonably request to verify the Holder’s identity, source of funds, and compliance with Applicable Law, including, without limitation, government-issued identification, proof of address, and source of funds documentation. The Company shall have the right to delay or withhold the delivery of Tokens pending the satisfactory completion of KYC/AML procedures, and the Company shall not be liable to the Holder for any damages or losses arising from such delay.
9.3 Restricted Jurisdictions. The Holder represents and warrants that the Holder is not located in, organized under the laws of, or a resident or citizen of any Restricted Jurisdiction. The Holder agrees that the Holder shall not transfer this Warrant or any Tokens to any Person that is located in, organized under the laws of, or a resident or citizen of any Restricted Jurisdiction, or to any Person that is named on any sanctions list administered by OFAC or any other applicable sanctions authority. The Company shall have the right to freeze, recall, or otherwise restrict the Holder’s access to Tokens if the Company determines, in its reasonable discretion, that the Holder or any transferee of Tokens is located in a Restricted Jurisdiction or is otherwise subject to sanctions or restrictions under Applicable Law.
9.4 No Registration of Tokens. The Holder acknowledges and agrees that the Tokens have not been and may not be registered under the Securities Act or the securities laws of any state or foreign jurisdiction, and that the Company has no obligation to register the Tokens. The Holder acknowledges that the Tokens may be subject to restrictions on transfer under Applicable Law, in addition to the transfer restrictions set forth in this Warrant, and agrees to comply with all such restrictions.
9.5 Regulatory Uncertainty. The Holder acknowledges that the regulatory landscape for digital assets, blockchain technology, and cryptographic tokens is rapidly evolving and uncertain, and that future laws, regulations, or governmental actions could materially and adversely affect the legality, value, transferability, utility, or tax treatment of the Tokens. The Company shall not be liable to the Holder for any losses, damages, or adverse consequences resulting from changes in Applicable Law or regulatory enforcement actions affecting the Tokens, the Protocol, or the Company’s business.
9.6 Cooperation. Each Party agrees to cooperate with the other Party in connection with any regulatory inquiry, investigation, or proceeding relating to this Warrant, the Tokens, or the Token Generation Event. The Holder agrees to provide such information and documentation as the Company may reasonably request in connection with any regulatory filing, report, or submission required by Applicable Law. The Company agrees to provide the Holder with prompt written notice of any regulatory inquiry, investigation, or proceeding that the Company reasonably believes could materially affect the Holder’s rights under this Warrant.
10.1 Restrictions on Transfer of Warrant. The Holder may not sell, assign, transfer, pledge, hypothecate, or otherwise dispose of this Warrant or any interest herein, in whole or in part, without the prior written consent of the Company, except to a Permitted Transferee in accordance with Section 10.2. Any attempted transfer in violation of this Section 10.1 shall be null and void and of no force or effect, and the Company shall not be required to recognize or give effect to any such transfer.
10.2 Permitted Transfers. The Holder may transfer this Warrant, in whole (but not in part), to a Permitted Transferee, provided that (a) the Holder provides the Company with at least fifteen (15) Business Days’ prior written notice of the proposed transfer, including the identity and contact information of the proposed Permitted Transferee, (b) the proposed Permitted Transferee executes a written instrument, in form and substance satisfactory to the Company, agreeing to be bound by all of the terms and conditions of this Warrant, including, without limitation, the representations, warranties, and covenants of the Holder set forth herein, (c) the proposed Permitted Transferee completes all KYC/AML procedures required by the Company, and (d) the transfer complies with all Applicable Law, including, without limitation, applicable securities laws.
10.3 Right of First Refusal. In the event that the Holder desires to transfer this Warrant to any Person other than a Permitted Transferee (a “Proposed Transfer”), the Holder shall first offer the Company the right to acquire this Warrant on the same terms and conditions as the Proposed Transfer, by delivering to the Company a written notice (the “Transfer Notice”) specifying the identity of the proposed transferee, the proposed transfer price, and all other material terms and conditions of the Proposed Transfer. The Company shall have thirty (30) days following receipt of the Transfer Notice (the “ROFR Period”) to elect to acquire this Warrant on the terms set forth in the Transfer Notice, by delivering written notice of such election to the Holder. If the Company does not elect to acquire this Warrant within the ROFR Period, the Holder may consummate the Proposed Transfer on terms no more favorable to the proposed transferee than those set forth in the Transfer Notice, subject to compliance with all Applicable Law and the proposed transferee’s execution of a written instrument agreeing to be bound by the terms of this Warrant.
10.4 Legend Requirements. This Warrant and any certificate or instrument evidencing the Tokens shall bear a legend substantially in the following form: “THIS WARRANT [THESE TOKENS] [HAS/HAVE] NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THIS WARRANT [THESE TOKENS] MAY NOT BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, OR PURSUANT TO AN APPLICABLE EXEMPTION THEREFROM, AND SUBJECT TO THE TRANSFER RESTRICTIONS SET FORTH IN THE TOKEN WARRANT PURSUANT TO WHICH THIS WARRANT [THESE TOKENS] [WAS/WERE] ISSUED.”
10.5 Transfer of Tokens. Tokens delivered to the Holder pursuant to this Warrant shall be subject to the transfer restrictions set forth in this Article X, in addition to the Lockup Schedule set forth in Section 6.2 and any restrictions imposed by Applicable Law. The Holder acknowledges that the Company may implement transfer restrictions through a Smart Contract or other technological means, and agrees to cooperate with the Company’s implementation thereof.
11.1 Expiration. This Warrant shall expire and be of no further force or effect on the fifth (5th) anniversary of the Issuance Date (the “Expiration Date”), unless earlier terminated in accordance with this Article XI. Any portion of the Token Allocation that has not been exercised as of the Expiration Date shall be automatically forfeited by the Holder without any further action by either Party and without any obligation of the Company to pay any consideration to the Holder in respect thereof.
11.2 Termination Events. This Warrant may be terminated prior to the Expiration Date upon the occurrence of any of the following events (each, a “Termination Event”): (a) a material breach by either Party of its representations, warranties, or obligations under this Warrant, which breach remains uncured for a period of sixty (60) days following written notice thereof from the non-breaching Party; (b) the filing of a voluntary or involuntary petition for bankruptcy, insolvency, or reorganization by or against the Company, or the appointment of a receiver, trustee, or liquidator for the Company or a substantial part of its assets, which petition is not dismissed within ninety (90) days; (c) a final, non-appealable determination by a court of competent jurisdiction or regulatory authority that this Warrant, the Tokens, or the Token Generation Event violates Applicable Law in a manner that cannot be cured or remediated; (d) mutual written agreement of the Parties; or (e) if no Token Generation Event has occurred within forty-eight (48) months following the Issuance Date, either Party may terminate this Warrant upon sixty (60) days’ prior written notice to the other Party.
11.3 Effect of Termination. Upon the termination of this Warrant pursuant to Section 11.2, the rights and obligations of the Parties under this Warrant shall cease and terminate, except that (a) the rights and obligations of the Parties under Articles VIII (Representations and Warranties of the Holder), IX (Regulatory Matters), XII (Tax Matters), XIII (Governing Law and Dispute Resolution), and XV (General Provisions) shall survive the termination of this Warrant, (b) any rights or obligations that have accrued prior to the date of termination shall survive, (c) the Holder shall retain any Tokens that have been delivered to the Holder prior to the date of termination, subject to the Lockup Schedule and transfer restrictions set forth herein, and (d) neither Party shall be released from any liability for any breach of this Warrant occurring prior to the date of termination.
11.4 Return of Confidential Information. Upon the termination of this Warrant, each Party shall promptly return or destroy all confidential or proprietary information of the other Party that was provided in connection with this Warrant, except as required to be retained by Applicable Law or as necessary for the exercise of any surviving rights or obligations hereunder.
12.1 Tax Treatment Uncertainty. The Parties acknowledge that the U.S. federal, state, and local income tax treatment of this Warrant, the Tokens, and the transactions contemplated hereby is uncertain and evolving. Neither Party makes any representation or warranty to the other Party regarding the tax treatment of this Warrant or the Tokens, and each Party acknowledges that the other Party has not provided and is not providing any tax advice in connection with this Warrant.
12.2 No Tax Advice. The Holder acknowledges that neither the Company nor any of its officers, directors, employees, agents, or advisors has provided the Holder with any tax advice in connection with this Warrant, the Tokens, or the transactions contemplated hereby. The Holder is solely responsible for determining the tax consequences of the Holder’s acquisition, holding, exercise, and disposition of this Warrant and the Tokens, and the Holder has been advised to consult with the Holder’s own tax advisor regarding such matters.
12.3 Withholding Rights. The Company shall be entitled to deduct and withhold from any Tokens or other consideration deliverable to the Holder pursuant to this Warrant such amounts as may be required to be deducted or withheld under Applicable Law, including, without limitation, any applicable income, withholding, or employment taxes. To the extent that any amounts are so deducted or withheld, such amounts shall be treated for all purposes under this Warrant as having been delivered to the Holder. The Company may satisfy any withholding obligation by withholding a number of Tokens having a fair market value equal to the amount required to be withheld, as determined in good faith by the Board. The Company shall provide the Holder with written notice of any withholding at least ten (10) Business Days prior to effecting such withholding, to the extent practicable.
12.4 Holder Tax Responsibility. The Holder shall be solely responsible for and shall timely pay all taxes (including, without limitation, income taxes, capital gains taxes, self-employment taxes, and any other taxes) arising from or in connection with the Holder’s acquisition, holding, exercise, or disposition of this Warrant and the Tokens. The Holder agrees to indemnify and hold harmless the Company and its officers, directors, employees, and agents from and against any and all taxes, penalties, interest, and related costs that the Company may be required to pay as a result of the Holder’s failure to timely pay any such taxes.
12.5 Tax Reporting. Each Party shall be responsible for its own tax reporting obligations in connection with this Warrant and the Tokens. The Company may issue such tax forms, statements, or reports as it determines, in consultation with its tax advisors, to be required by Applicable Law, including, without limitation, IRS Forms 1099, W-2, or such other forms as may be applicable. The Holder agrees to provide the Company with such information as the Company may reasonably request in connection with the Company’s tax reporting obligations, including, without limitation, the Holder’s taxpayer identification number and any required certifications or withholding forms.
12.6 Token-Specific Tax Issues. The Holder acknowledges that the receipt, holding, and disposition of Tokens may give rise to unique and uncertain tax consequences, including, without limitation, the potential characterization of Tokens as property, currency, or a security for tax purposes; the potential application of constructive receipt, mark-to-market, or other tax doctrines; the potential imposition of taxes upon the receipt of Tokens subject to a lockup or vesting schedule (including the potential applicability of Section 83 of the Internal Revenue Code of 1986, as amended); and the potential tax consequences of hard forks, airdrops, staking rewards, or other blockchain-related events. The Holder assumes all risk associated with such uncertain tax treatment.
13.1 Governing Law. This Warrant and any dispute arising out of or relating to this Warrant, including, without limitation, any dispute regarding the formation, interpretation, breach, or termination of this Warrant, shall be governed by, and construed and enforced in accordance with, the laws of the State of [STATE], without regard to the conflict of laws principles thereof that would cause the application of the laws of any other jurisdiction.
13.2 Mandatory Arbitration. Any dispute, controversy, or claim arising out of or relating to this Warrant, or the breach, termination, or invalidity thereof (each, a “Dispute”), shall be finally settled by binding arbitration administered by the American Arbitration Association (the “AAA”) in accordance with its Commercial Arbitration Rules and Mediation Procedures then in effect (the “AAA Rules”), as modified by this Section 13.2. The arbitration shall be conducted by a single arbitrator selected in accordance with the AAA Rules, who shall have experience in commercial transactions and, to the extent practicable, familiarity with digital assets and blockchain technology. The seat of the arbitration shall be in [STATE]. The language of the arbitration shall be English.
13.3 Arbitration Procedures. The arbitrator shall have the authority to grant any remedy or relief that would be available in a court of competent jurisdiction, including, without limitation, specific performance, injunctive relief, and monetary damages. The arbitrator’s award shall be final and binding on the Parties and may be entered as a judgment in any court of competent jurisdiction. The arbitrator shall issue a reasoned written decision setting forth the findings of fact and conclusions of law upon which the award is based. The arbitration proceedings and the arbitrator’s award shall be kept confidential by the Parties, except to the extent disclosure is required by Applicable Law or necessary to confirm, vacate, or enforce the award.
13.4 Prevailing Party Attorneys’ Fees. In any arbitration or judicial proceeding arising out of or relating to this Warrant, the prevailing Party (as determined by the arbitrator or the court, as applicable) shall be entitled to recover from the non-prevailing Party its reasonable attorneys’ fees, costs, and expenses (including expert witness fees and costs of arbitration) incurred in connection with such proceeding.
13.5 Injunctive Relief. Notwithstanding Section 13.2, each Party acknowledges that a breach of certain provisions of this Warrant (including, without limitation, the transfer restrictions set forth in Article X and any confidentiality obligations) may cause irreparable harm to the other Party that cannot be adequately compensated by monetary damages alone. Accordingly, each Party agrees that the other Party shall be entitled to seek temporary, preliminary, and permanent injunctive relief, specific performance, and other equitable remedies from any court of competent jurisdiction, without the necessity of proving actual damages or posting any bond or security, in addition to any other remedies available at law or in equity. The seeking of such equitable relief shall not constitute a waiver of the right to arbitrate any Dispute under Section 13.2.
13.6 Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS WARRANT.
14.1 Notice Requirements. All notices, requests, demands, consents, and other communications required or permitted to be given under this Warrant (each, a “Notice”) shall be in writing and shall be delivered to the applicable Party at the address set forth on the signature page hereto, or at such other address as the applicable Party may designate by Notice to the other Party in accordance with this Section 14.1.
14.2 Methods of Delivery. Notices shall be delivered by one or more of the following methods: (a) personal delivery, (b) nationally recognized overnight courier service (with tracking capability), (c) electronic mail (with confirmation of receipt requested), or (d) certified or registered mail, postage prepaid, return receipt requested. The Company may also deliver Notices through any secure electronic communication platform or portal designated by the Company and communicated to the Holder in writing.
14.3 Effectiveness of Notice. Notices shall be deemed to have been duly given and received (a) if delivered by personal delivery, on the date of delivery, (b) if delivered by nationally recognized overnight courier service, on the next Business Day following the date of deposit with such courier, (c) if delivered by electronic mail, on the date of transmission if transmitted before 5:00 p.m. local time of the recipient on a Business Day, and otherwise on the next Business Day following the date of transmission, provided that no automated “bounce back” or error message is received by the sender, or (d) if delivered by certified or registered mail, on the third (3rd) Business Day following the date of mailing. In the event of any conflict between methods of delivery, the earliest effective Notice shall control.
14.4 Change of Address. Each Party shall promptly notify the other Party in writing of any change in the Party’s address or contact information for purposes of this Section 14. Until such notice is received, Notices delivered to the address set forth on the signature page hereto (or the most recent address provided in accordance with this Section 14.4) shall be deemed effective.
15.1 No Intellectual Property Rights. Nothing in this Warrant shall be construed as granting the Holder any license, right, title, or interest in or to any intellectual property of the Company, including, without limitation, any patents, trademarks, copyrights, trade secrets, or other proprietary rights relating to the Protocol, the Tokens, or the Company’s business. The Holder’s rights under this Warrant are limited to the right to receive Tokens upon the exercise of this Warrant in accordance with its terms.
15.2 Protocol Governance. The Holder acknowledges that the Company may, in its sole discretion, establish a foundation, decentralized autonomous organization, or other governance structure for the Protocol (a “Governance Entity”), and may transfer the development, management, or operation of the Protocol or the Tokens to such Governance Entity. In such event, the Company’s obligations under this Warrant with respect to the creation and delivery of Tokens may be performed by the Governance Entity, and the Company shall cause the Governance Entity to assume and perform such obligations. The Company shall provide the Holder with written notice of any such transfer within thirty (30) days thereof.
15.3 Forks and Airdrops. In the event of a hard fork, airdrop, or similar event affecting the blockchain on which the Tokens are issued, the Holder shall be entitled to receive any forked tokens, airdropped tokens, or other digital assets distributed to holders of the Tokens, subject to the Lockup Schedule and transfer restrictions set forth in this Warrant, to the extent that the Company has control over the distribution of such tokens or digital assets. The Company shall use commercially reasonable efforts to facilitate the Holder’s receipt of such tokens or digital assets, but shall have no liability for any failure to deliver such tokens or digital assets that results from circumstances beyond the Company’s reasonable control.
16.1 Confidential Information. Each Party acknowledges that, in connection with this Warrant, such Party may receive or have access to confidential or proprietary information of the other Party, including, without limitation, information relating to the Company’s business plans, financial condition, Token Economics, technical specifications, and strategic plans (collectively, “Confidential Information”). Each Party agrees to hold all Confidential Information of the other Party in strict confidence and not to disclose, publish, or otherwise disseminate any Confidential Information to any third party, except (a) to such Party’s officers, directors, employees, agents, advisors, and representatives who have a need to know and who are bound by confidentiality obligations at least as protective as those set forth in this Section 16.1, (b) as required by Applicable Law, judicial process, or regulatory requirement (provided that the disclosing Party provides the other Party with prompt written notice of such requirement, to the extent permitted by Applicable Law), or (c) with the prior written consent of the other Party.
16.2 Exceptions. The obligations of confidentiality set forth in Section 16.1 shall not apply to information that (a) is or becomes generally available to the public other than as a result of a breach of this Warrant, (b) was known to the receiving Party prior to its disclosure by the disclosing Party, as demonstrated by written records, (c) becomes available to the receiving Party from a third party that is not, to the receiving Party’s knowledge, bound by any confidentiality obligation with respect to such information, or (d) is independently developed by the receiving Party without reference to the Confidential Information of the disclosing Party.
17.1 Indemnification by the Company. The Company shall indemnify, defend, and hold harmless the Holder and the Holder’s officers, directors, employees, agents, successors, and assigns (each, a “Holder Indemnified Party”) from and against any and all losses, damages, liabilities, claims, demands, actions, causes of action, costs, and expenses (including reasonable attorneys’ fees and expenses) (collectively, “Losses”) arising out of or resulting from (a) any breach by the Company of any representation, warranty, covenant, or obligation of the Company under this Warrant, (b) any fraud, willful misconduct, or gross negligence of the Company in connection with this Warrant, or (c) any third-party claim arising directly from the Company’s creation, distribution, or management of the Tokens, to the extent such claim is not caused by or attributable to the acts or omissions of any Holder Indemnified Party.
17.2 Indemnification by the Holder. The Holder shall indemnify, defend, and hold harmless the Company and its officers, directors, employees, agents, successors, and assigns (each, a “Company Indemnified Party”) from and against any and all Losses arising out of or resulting from (a) any breach by the Holder of any representation, warranty, covenant, or obligation of the Holder under this Warrant, (b) any fraud, willful misconduct, or gross negligence of the Holder in connection with this Warrant, (c) any transfer of this Warrant or the Tokens by the Holder in violation of this Warrant or Applicable Law, or (d) any taxes, penalties, interest, or related costs imposed on the Company as a result of the Holder’s failure to timely pay any taxes arising from the Holder’s acquisition, holding, or disposition of this Warrant or the Tokens.
17.3 Indemnification Procedures. A Party seeking indemnification under this Article XVII (the “Indemnified Party”) shall promptly notify the indemnifying Party (the “Indemnifying Party”) in writing of any claim or action giving rise to a right of indemnification hereunder. The failure to provide timely notice shall not relieve the Indemnifying Party of its indemnification obligations, except to the extent that the Indemnifying Party is materially prejudiced by such failure. The Indemnifying Party shall have the right to assume the defense of any such claim or action at its own expense, with counsel reasonably satisfactory to the Indemnified Party. The Indemnified Party shall cooperate with the Indemnifying Party in the defense of any such claim or action and shall have the right to participate in the defense at its own expense.
17.4 Limitation of Liability. EXCEPT FOR CLAIMS ARISING FROM FRAUD, WILLFUL MISCONDUCT, OR BREACH OF THE CONFIDENTIALITY OR TRANSFER RESTRICTION PROVISIONS OF THIS WARRANT, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, PUNITIVE, OR EXEMPLARY DAMAGES, INCLUDING, WITHOUT LIMITATION, LOST PROFITS, LOST REVENUE, LOSS OF DATA, OR DIMINUTION IN VALUE, ARISING OUT OF OR RELATING TO THIS WARRANT, REGARDLESS OF THE THEORY OF LIABILITY (WHETHER CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE) AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
18.1 Entire Agreement. This Warrant, together with the SAFE, the Schedules and Exhibits attached hereto, and any other agreements or instruments expressly referenced herein, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, and discussions, whether oral or written, between the Parties with respect to the subject matter hereof. No Party shall be bound by or charged with any oral or written agreements, representations, warranties, statements, promises, information, arrangements, or understandings not specifically set forth or referred to in this Warrant.
18.2 Amendments. This Warrant may not be amended, modified, or supplemented except by a written instrument duly executed by both Parties. No oral amendment, modification, or waiver of any provision of this Warrant shall be effective. Any amendment to the Lockup Schedule, Token Allocation, Exercise Price, or other material economic term of this Warrant shall require the express written consent of both Parties.
18.3 Severability. If any provision of this Warrant is held to be illegal, invalid, or unenforceable under present or future Applicable Law, (a) such provision shall be fully severable, (b) this Warrant shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a part hereof, (c) the remaining provisions of this Warrant shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance from this Warrant, and (d) in lieu of such illegal, invalid, or unenforceable provision, there shall be added automatically as a part of this Warrant a legal, valid, and enforceable provision as similar in terms and economic effect to such illegal, invalid, or unenforceable provision as may be possible.
18.4 Waiver. No waiver of any provision of this Warrant shall be effective unless set forth in a written instrument signed by the Party waiving such provision. No waiver by either Party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. No failure or delay by either Party in exercising any right, power, or remedy under this Warrant shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power, or remedy.
18.5 Counterparts and Electronic Signatures. This Warrant may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via electronic mail (including portable document format (.pdf) or any electronic signature complying with the U.S. federal ESIGN Act of 2000 or the Uniform Electronic Transactions Act) or other electronic transmission method, and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
18.6 No Third-Party Beneficiaries. Except as expressly provided in Article XVII with respect to indemnified parties, this Warrant is for the sole benefit of the Parties and their respective successors and permitted assigns, and nothing in this Warrant, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit, or remedy of any nature whatsoever under or by reason of this Warrant.
18.7 Further Assurances. Each Party shall, from time to time, execute and deliver, or cause to be executed and delivered, such additional instruments, documents, conveyances, or assurances, and take such further actions, as may be reasonably required to carry out the provisions of this Warrant and give effect to the transactions contemplated hereby.
18.8 Relationship of Parties. The relationship between the Company and the Holder is that of issuer and warrant holder. Nothing in this Warrant shall be construed to create a partnership, joint venture, agency, employment, fiduciary, or other relationship between the Parties. Neither Party shall have the authority to bind the other Party or to incur any obligation on behalf of the other Party.
18.9 Assignment. The Company may assign its rights and obligations under this Warrant, in whole or in part, to any successor entity in connection with a merger, consolidation, reorganization, or sale of all or substantially all of the Company’s assets, provided that the successor entity assumes all of the Company’s obligations under this Warrant in writing. The Holder may not assign this Warrant except in accordance with Article X.
18.10 Headings. The headings and subheadings of the articles and sections of this Warrant are inserted for convenience of reference only and shall not affect the meaning, interpretation, or construction of this Warrant.
18.11 Construction. The Parties have participated jointly in the negotiation and drafting of this Warrant. In the event an ambiguity or question of intent or interpretation arises, this Warrant shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provisions of this Warrant. The terms “herein,” “hereof,” “hereunder,” and words of similar import refer to this Warrant as a whole and not to any particular provision. The term “including” means “including, without limitation.” References to articles, sections, schedules, and exhibits are to the articles, sections, schedules, and exhibits of this Warrant unless otherwise specified.
IN WITNESS WHEREOF, the Parties have executed this Token Warrant as of the date first written above.
COMPANY: [COMPANY NAME], a [STATE] limited liability company. By: ___________________________ Name: ___________________________ Title: ___________________________ Address: ___________________________ Email: ___________________________
HOLDER: [HOLDER NAME]. By: ___________________________ Name: ___________________________ Title (if applicable): ___________________________ Address: ___________________________ Email: ___________________________
This Schedule A sets forth the Token Allocation, Purchase Amount, Token Price, and Exercise Price applicable to the Holder’s Warrant. This Schedule A may be completed or amended by mutual written agreement of the Parties prior to the Token Generation Event.
Purchase Amount: $[AMOUNT]. Token Price: $[PRICE PER TOKEN] (to be determined in connection with the Token Generation Event). Token Allocation: [NUMBER] Tokens (calculated as the Purchase Amount divided by the Token Price, subject to adjustment as provided in Section 3.3 of the Warrant). Exercise Price: $[EXERCISE PRICE] per Token (if applicable; $0.00 for net-exercise-only warrants). Discount (if applicable): [PERCENTAGE]% discount to the Token Price applicable to the Holder.
This Schedule B sets forth the Lockup Schedule applicable to Tokens delivered to the Holder upon exercise of the Warrant, as referenced in Section 6.2 of the Warrant. This Schedule B may be modified by mutual written agreement of the Parties.
Cliff Period: Twelve (12) months from the date of Token delivery, during which one hundred percent (100%) of the delivered Tokens shall be locked and non-transferable. Vesting Period: Twenty-four (24) months following the expiration of the Cliff Period, during which the Tokens shall vest and become transferable in equal monthly installments of one twenty-fourth (1/24th) of the total Token Allocation on each monthly anniversary of the end of the Cliff Period. Full Vesting Date: Thirty-six (36) months from the date of Token delivery. Acceleration Events: As set forth in Section 6.4 of the Warrant (Change of Control, dissolution/liquidation, or uncured material breach by the Company).
EXERCISE NOTICE. To: [COMPANY NAME]. Date: ___________________________
Reference is made to that certain Token Warrant, dated [DATE] (the “Warrant”), by and between [COMPANY NAME] (the “Company”) and the undersigned (the “Holder”). Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Warrant.
The Holder hereby irrevocably elects to exercise the Warrant with respect to [ALL / ___________] of the Token Allocation, representing [NUMBER] Tokens, pursuant to Article IV of the Warrant.
Method of Exercise (check one): [ ] Cash Exercise: The Holder hereby tenders payment in the amount of $[AMOUNT], representing the aggregate Exercise Price for the Tokens being acquired. [ ] Net Exercise: The Holder hereby elects a net exercise pursuant to Section 4.4 of the Warrant.
The Holder designates the following Wallet Address for the delivery of Tokens: Wallet Address: ___________________________ Blockchain/Network: ___________________________
The Holder hereby confirms that all representations and warranties of the Holder set forth in the Warrant are true and correct as of the date hereof. The Holder acknowledges that the Tokens are subject to the Lockup Schedule and transfer restrictions set forth in the Warrant.
HOLDER: [HOLDER NAME]. By: ___________________________ Name: ___________________________ Title (if applicable): ___________________________
This template is provided for informational purposes only and does not constitute legal advice. Consult a qualified attorney before using this document.