Token Sale Terms & Conditions
This “Token Sale Terms & Conditions” (the “T&Cs”) is concluded between azultec GmbH, a limited liability company (stock corporation) organized under the laws of Germany, having its seat (registered office) in Schloss Holte-Stukenbrock, Germany, registered in the commercial register (Handelsregister) of the local court (Amtsgericht) Bielefeld under HRB 43097, with business address at: Carl-Zeiss-Str. 2, 33758 Schloss Holte-Stukenbrock, Germany (hereinafter “azultec”, “us”, “we”, the “issuer”), or any legal successor of azultec, and any entity that fulfils the criteria set out in these T&Cs and accepts the terms provided herein (hereinafter “Participant”, “Token Holder”, “you”). Parties to the T&Cs are herein referred to individually as a “Party” and collectively as the “Parties”.
azultec GmbH is a provider of hardware and software solutions in the fields of water cooling, crypto mining, energy recovery, heating systems, ventilation systems, homeservers, rendering, cloud storage, deep learning and renewable energies. Furthermore, azultec GmbH researches new database and network solutions as well as energy recovery technologies and “Internet of Things” (IoT).
The Participant provides payments to azultec in connection with the Initial Token Sale (“ITS”) or commonly known as Initial Coin Offering (“ICO”) of cryptographic Tokens existent on the Ethereum blockchain that can enable usage of and interactions with certain services (“Services”) to be implemented by azultec on the azultec website or mobile applications (“Ecosystem”) after having closed the ITS. The cryptographic Tokens are hereinafter referred to as “AZU“ or “Token“.
By accessing and using our website (https://www.azultec.de, the “Website”) or participating in the ITS, Participants agree to these T&Cs. Please read the T&Cs carefully. If you do not agree to all of these terms, please do not use this Website or any information, links or content contained on this Website and do not participate in the ITS.
Version 1.1 – Last updated: March 17th, 2019
1 AZU Sale and Service Description
The azultec ITS represents a voluntary contribution towards the implementation of crypto services in the Ecosystem. These Services, the ITS and the usage of AZUs are described in the Whitepaper (as stated on the Website). For the redemption of AZUs for Services as well as for the usage of these Services the Token Usage Terms & Conditions apply (as stated on the Website and after availability of the Services in the relevant locations in the Ecosystem). The Whitepaper and the latter are herein jointly referred to as the “Accompanying Documents”.
The AZU does not grant equity stake nor profit sharing. It does not represent an ownership right or direct claim in the azultec Ecosystem, revenues, profits, law of obligations, amount reclaimed or intellectual property, either present or future. Despite azultec team’s best efforts and diligence to bring this project forward, all Participants should be aware that their contributions are not refundable and accept the inherent risk (as outlined below) of project failure at any stage of development. This implicit risk is associated with any and all uncertainty of backing technologically–focused entrepreneurial projects and can be affected by either internal or external factors that are out of the control scope of azultec. Additionally, Participants may be subject to any applicable compliance regulations (including KYC, AML and others where applicable).
The AZU can be used in the Ecosystem with a corresponding utility value and will not provide any redemption rights. We believe that AZUs do not qualify as a security or any other form of capital investment product and do not provide a Participant equity share in the legal structure of azultec.
The AZU can only be used for purchases within the azultec Ecosystem and will not be accepted by any third party. Hence, AZU do not represent any unit of account or virtual currency. azultec offers various methods of payments including fiat and cryptocurrencies. azultec may require a minimum or maximum amount for individual payment methods to manage payment costs and risks.
If you purchase AZU via Bitcoin or Ethereum on www.azultec.de, we will use the following exchange rate to derive the value in US Dollar which then is the basis for the number of AZUs assigned to you. We use the latest volume-weighted average price of Bitcoin or Ethereum respectively from the exchange Kraken at the point in time your payment transaction is received by the issuer. However, that in the event that such exchanges experience technical issues in such period that affect the accuracy of the volume-weighted average price, the Company will use its reasonable best efforts to determine the volume-weighted average price of Bitcoin and Ether for such period.
If you purchase AZU via credit card, azultec may withhold the AZUs assigned to you for up to 8 weeks before transferring them to your wallet to protect you and azultec against credit card fraud. Once Tokens are assigned to your wallet they cannot be refunded due to the design of the blockchain, so azultec would not be able to process any chargebacks. We therefore accept the inconvenience of a late AZU transfer and put the safety of your payments first.
Participants should be aware that they will be required to bear the financial risks for the participation amount for a very long period of time (up to several years). A participation of Token sales involves a high degree of risk, volatility and illiquidity. A prospective Participant should thoroughly review the information contained herein and carefully consider whether a participation of Token sales is suitable to the Participant’s financial situation and goals.
2 Scope of Terms
Unless otherwise stated herein, these T&Cs only govern your purchase of AZU from azultec during the Pre-Sale and Main Sale as defined in the Whitepaper.
Any use of AZU in connection with providing or receiving Services on the Ecosystem may be governed by other applicable terms and conditions and policies.
3 Participation requirements
If you want to buy AZUs with cryptocurrencies, you can send your Ethereum (“ETH”) or Bitcoin (“BTC”) units from any cryptocurrency wallet (such as but not limited to Kraken, Coinbase).
During the sale process you will be prompted to insert a new address of an Ethereum wallet that supports the ERC20 Token standard in order to receive any Tokens you purchase from us. We reserve the right to prescribe additional guidance regarding specific wallet requirements.
You are responsible for implementing reasonable measures for securing your wallet, vault, or other storage mechanism you use to receive and hold AZU purchased from us, including any requisite private key(s) or other credentials necessary to access such storage mechanism(s). If your private key(s) or other access credentials are lost, you may lose access to your Tokens. We are not responsible for any losses, costs, or expenses relating to lost access credentials.
We may determine, in our sole discretion, that it is necessary to obtain certain information about you in order to comply with applicable laws (e.g. KYC/AML) or regulations in connection with selling AZU to you. You agree to provide us such information promptly upon request and acknowledge that we may refuse to sell AZUs to you until you provide such requested information and we have determined that it is permissible to sell you AZUs under applicable laws or regulations.
4 Cancellation: Refusal of Purchase Requests / Refunds
All purchases of AZU from us during the Private Sale, Pre–Sale and Main Sale are final, and there are no refunds or cancellations except as set forth herein or as may be required by applicable law or regulation. We reserve the right to refuse, shift or cancel AZU purchase requests at any time in our sole discretion.
azultec may pause the AZU sale during the Pre-Sale or Main Sale periods in our sole discretion. Reasons for such a pause among others can be: material increase in Bitcoin or Ethereum price volatility (e.g. Bitcoin price crash), news that might impact the price volatility, changes in law, suspicion of systematic fraud when purchasing AZU, or significant higher load of IT systems than expected.
5 Right of Withdrawal
You have the right to withdraw from this contract within 14 days without giving any reason. The withdrawal period will expire after 14 days from the day of the conclusion of the contract.
To exercise the right of withdrawal, you must inform us (azultec GmbH Carl-Zeiss-Str. 2, 33758 Schloss Holte-Stukenbrock, email: [email protected]) of your decision to withdraw from this contract by an unequivocal statement (e.g. a letter sent by post or e-mail). You may use the attached model withdrawal form, but it is not obligatory.
To meet the withdrawal deadline, it is sufficient for you to send your communication concerning your exercise of the right of withdrawal before the withdrawal period has expired.
Effects of withdrawal
If you withdraw from this contract, we shall reimburse to you all payments received from you (with the exception of the supplementary costs resulting from your choice of payment type), without undue delay and in any event not later than 14 days from the day on which we are informed about your decision to withdraw from this contract. We will carry out such reimbursement using the same means of payment as you used for the initial transaction, unless you have expressly agreed otherwise.
Model withdrawal form
(complete and return this form only if you wish to withdraw from the contact)
33758 Schloss Holte-Stukenbrock
Phone: +49 5207 95846 500
Fax: +49 5207 95846 555
I hereby give notice that I withdraw from my contract for the provision of the following service
Name of consumer Address of consumer
Signature of consumer (only if this form is notified on paper) Date
6 Token Definition
We create an ERC20 utility Token. The Azul Tokens (AZUs) can be used to purchase crypto services within the azultec ecosystem. Once, an Azul Token has been used for a purchase we will burn these Tokens to support the future value of the Tokens.
7 Possible Migration of Tokens
AZUs are being created as ERC20 Tokens on the Ethereum protocol. We reserve the right to migrate the ERC20-based AZUs (the “Pre–existing Tokens”) to another protocol and to generate replacement Tokens on the new protocol (the “Replacement Tokens”) in the future, should we determine, in our sole discretion, that doing so is necessary or useful to the operation of the Ecosystem.
Should we decide to migrate the Tokens, we may no longer provide support for the Pre-existing Tokens relating to the Ecosystem, the Services, or any other operational matters, except with respect to the migration process. Although azultec does not at this time anticipate that it will require any Pre-existing Token holders to convert their Pre-existing Tokens to Replacement Tokens, azultec anticipates there will be significant incentives for Pre–existing Token owners to do so, since the practical utility of Pre–existing Tokens will likely diminish rapidly once the Replacement Tokens are created and in use by a significant portion of Ecosystem participants. Accordingly, by accepting these T&Cs you acknowledge and agree that in order for you to continue to participate on the Ecosystem or obtain utility from the Tokens you may need to convert the Tokens you purchase during the Token Sale to Replacement Tokens in the future.
8 Token Sale
The total AZU in circulation will be limited to the amount of Tokens sold during the sale period. With 60% being made available during the public sale period. Contributions may be made during a defined period of time (“Token Sale”). The Token Sale commences on 5th of March 2019 and ends on October 20th 2019.
The Issuer issues 2,083,333,334 (in words: two billion, eighty-three million, three hundred thirty-three thousand three hundred thirty-four) tokens in the aggregated principal amount equivalent to USD 50,000,000.00 (in words: fifty million US-Dollar) divided into tokens (the “Tokens”) in a principal amount of the equivalent to USD 0.024 (in words: zero point zero twenty-four US-Dollar) each.
Conclusion of the contract
The presentation of the Issuer’s business model, Tokens and ICO or the publication of the Whitepaper on the Issuer’s website www.azultec.de (the “Website”) does not constitute a binding offer for a Token sale participation. A Token sale participation is legally effected by way of completion and filing of an online participation form with the Issuer and acceptance of such online completion form by the Issuer (the “Participation”). The Participants waive the requirement of receipt of an acceptance declaration by the Issuer.
The Issuer will accept an online participation form of a Participant following receipt of the Participation Amount in accordance with “Participation Amount” by providing the applicable number of (still locked) Tokens to the Participant. Notwithstanding anything herein to the contrary, the acceptance of an online participation form is subject to the condition precedent that the Issuer receives a reading receipt for the Issuer’s email to the Participant confirming that the entire AML and KYC process (see KYC/AML check) for such Participant has been successfully completed (the “Condition Precedent”). The Issuer may waive this Condition Precedent in its sole discretion at any time.
During the Token Sale, the price per AZU is in United States Dollars (“USD”) $0.024, payable in:
1. Ethereum (“ETH”) at the applicable ETH price determined by the Company and specified on the azultec website (www.azultec.com); or
2. Bitcoin (“BTC”) at the applicable BTC price determined by the Company and specified on the azultec website (www.azultec.com); or
- Litecoin (“LTC”) at the applicable LTC price determined by the Company and specified on the azultec website (www.azultec.com); or
4. FIAT currency (Euro/USD)
Any claims of the Tokenholders against the Issuer under this Agreement and under the Tokens are denominated in the crypto currency Ether or Bitcoin and not in legal tender means of payments (gesetzliche Zahlungsmittel–“FIAT Currency”). No obligation of the Issuer vis-à-vis the Tokenholder shall be owed in FIAT Currency. No rights to exchange crypto currencies into FIAT Currency are provided by this Agreement neither does the Issuer provide for any exchange facility. Even in case the Participant paid in the FIAT Currency USD/Euro for the participation of the Token sales, no claim of repayment or redemption by means of FIAT Currency shall exist.
9 Token distribution
The Tokens are allocated as follows:
The sold Azul Tokens together make up 60% of the total Tokens. These will be transferred to the ICO participants.
The final allocation will be as follows:
Position 1: 60% shall be allocated to participants
Position 2: 40 % shall be allocated to the issuer
The 40% of azultec’s Tokens will be used as follows:
Position 2.1: 65% of the Tokens owned by azultec will be used as reserves, of which 50% will be frozen for 6 months, and the remaining 50% frozen for 12 months.
Position 2.2: 10% of the Tokens will be used for business negotiations.
Position 2.3: 10% of the Tokens will be given to partners and the Tokens will be frozen for 12 months.
Position 2.4: 15% of the Tokens will be given to the founders and will be frozen for 12 months.
The Issuer may need to bring up or down the number of Tokens in Position 1, Position 2, Position 2.1, Position 2.2, Position 2.3 and/or Position 2.4 to a round figure. Rounding remains at its own discretion, which might marginally change the percentages of the Positions.
10 Unlocking of provided Token
The provided Tokens will be locked and cannot be used until the Condition Precedent is satisfied.
For Tokens provided to a Participant for a Participation paid via credit card, provided Tokens will only be unlocked after 8 weeks following the end of the Participation Period subject to the credit card payment being uncontested.
Tokens provided to Participants (i) who are rejected by the Issuer, (ii) who did not satisfy the Condition Precedent, and (iii) having paid with credit card but such credit card payment being contested later will be destroyed accordingly.
Participation is possible only by the Participant visiting the Website and entering email address and by choosing a password.
Participations are carried out on the Website. The Participant will be guided through the process required for the Participation (the “Participation Process”). Submission of a completed online participation form by clicking the button “Buy” represents a binding legal offer for Participation. The Participant has to fill in the online participation form the amount of Bitcoin, Ether, Litecoin, Euro or USD that the Participant wants to invest. The Participant can view and correct entries at any time before submitting the offer by using the corrective aids provided and explained in the Participation Process.
An offer can only be submitted if the Participant accepts this Agreement by ticking the checkboxes “I hereby accept the Token Sale Terms & Conditions and therein contained risk indications.” and “I hereby confirm that I am neither a national of the countries as follows nor my place of residence or business is in the countries as follows: Iran, North Korea, Syria, Guyana, Iraq, Bosnia Herzegovina, Laos, Uganda, Vanuatu, Yemen, Ethiopia, Sri Lanka, Trinidad and Tobago, Tunisia. “
After receiving the Participation Amount, the Issuer will send an email to the Participant confirming receipt pursuant to “Transfer of Participation Amount” (the “Confirmation Email”).
The participation price per Token is USD 0.024 (in words: two point four US-Dollar Cents) (the “Participation Token Price”) minus (i) 50% discount for the first 1000 (KYC/AML) completed Participations received, starting from 5th March 2019 3pm CET until 6th March 2019 3pm CET, (ii) 45% discount for additional 1000 (KYC/AML) completed Participations received, starting from 7th March 2019 3pm CET until 8th March 2019 3pm CET, (iii) 40% discount for additional 1000 (KYC/AML) completed Participations received, starting from 9th March 2019 3pm CET until 10th March 2019 3pm CET, (iv) 35% discount for additional 1000 (KYC/AML) completed Participations received, starting from 11th March 2019 3pm CET until 12th March 2019 3pm CET, (v) 30% discount for additional 1000 (KYC/AML) completed Participations received, starting from 13th March 2019 3pm CET until 14th March 2019 3pm CET, (vi) 20% discount for Participations from 20th March 2019 3pm CET until 27th March 2019 3pm CET, (vii) 10% discount for Participations from 10th April 2019 3pm CET until 10th May 2019 3pm CET or (viii) no discount for Participations from 23rd May 2019 3pm CET until 20th October 2019 3pm CET. The participation amount transferred to the Issuer (the “Participation Amount”) in Bitcoin and Ether will be converted to USD on the basis of the exchange rate shown on www.kraken.com. The (converted, if necessary) Participation Amount will be divided by USD 0.024 (in words: two point four US-Dollar Cents) to determine the number of Tokens subscribed.
The Participant shall contribute the Participation Amount to the Issuer in the form of a contribution in cash or in kind. The contribution in cash (payments in the FIAT Currency Euro or USD) shall be payable by credit card payment (Visa or MasterCard only) by means of an unconditional bank transfer. The contribution in kind refers to the crypto currencies Bitcoin and Ether, no other crypto currencies will be accepted. Any contributions shall be made at the Participant’s own expense according to “Transfer of Participation Amount”, free of charge for the Issuer and for the Issuer’s free disposal. Any amounts deducted will not count as contribution accordingly. All kind of remittance fees either for FIAT Currency or for crypto currencies shall be borne by the Participant and not by the Issuer.
Transfer of Participation Amount
Transfer of the full Participation Amount within the meaning of “Unlocking of provided Token” has to be effected prior to the end of the current Participation Period as follows:
Transfer in Euro or USD shall be made via credit card payment (Visa or MasterCard only).
Transfer in the crypto currencies Bitcoin or Ether shall be made to the wallet displayed during or following the Participation Process.
Contributions in Bitcoin or Ether will be based on an exchange rate provided by www.kraken.com. Preliminary exchange results (Bitcoin/USD and Ether/USD) will be calculated during the Participation Process, however, the relevant conversion rate is the one at the point of time of receipt of the Participation Amount by the Issuer, not the point of time of calculation during the Participation Process.
The Participant acknowledges that he/she/it has to complete an AML/KYC check for the Participation of the Token sale which must be in form and substance satisfactory to the Issuer. KYC/AML check is carried out after completing the Participation Process by providing necessary information with regard to identification of the Participant, beneficial owner and origin of the funds, the scope and type of information depending on the type of investor and the investment volume.
The Participant is obliged to collaborate with regard to the KYC/AML check and to provide any information and document deemed necessary by the Issuer.
The Issuer may reject any Participant in its sole discretion without being obliged to disclose any reason for the rejection.
In case the automatic procedures fail, the Issuer will contact the Participant by email or other means to obtain the information and documents needed. In case the Participant does not provide the documents in the requested form and any other information requested to satisfy the KYC/AML check within 10 (ten) days which are not public holidays in Bielefeld/Germany (the “Business Days”) of the Issuer’s request, the Issuer may reject the Participant and the costs for the KYC/AML check will be at the cost of the Participant. Additionally, the Issuer has the right to partially or fully withhold the received amounts for any costs or damages incurred by the Issuer. All kind of remittance fees either for FIAT Currency or for crypto currencies shall be borne by the Participant.
In case the Participant delivers all required documents in the requested form and ally other information required within 10 (ten) Business Days from the Issuer’s request but the Issuer determined in its sole discretion that the Condition Precedent is not satisfied without giving a reason, the Participant will be refunded. Refunds will usually be made the same way as the contribution was done.
Basis of Purchase
Any purchase and sale of the Tokens shall be on the terms and conditions set forth in this Agreement.
Delivery of Tokens
Tokens will be delivered to the Participant following receipt of the Participation Amount in accordance with “Participation Amount”. The provided Tokens will be locked and cannot be used until the Condition Precedent pursuant to “Conclusion of the contract” is satisfied and the Issuer unlocked the provided Tokens accordingly.
Release from liability: Referral Program
The participant confirms to use the referral program only in correspondence to the legal regulations of financial services of their local government and the government of Germany. To participate in the referral program certain rules apply.
In detail the participant
· will only use the referral link in public mass media or social media publications to a big public audience
· will only use editorial content and not advertorial content to promote the referral program
· will not use the affiliate link to advertise individuals or companies for example on a 1 to 1 level, nor will the participant advertise other individuals or companies to start using the referral program
· will not use the referral program in a way or take any action that could be interpreted as an act of financial service or investment advisor
· will hold the issuer harmless of any legal consequences that could come from a misuse of the referral program, especially if the participant would provide financial services or promote investments directly to individuals or companies.
· confirms that the participant is aware of the legal regulations regarding the financial service regulation and will keep the law
The Issuer records the master data (name (first and last name), email address, place of residence or seat (Wohn-/Geschäftssitz/regelmäßiger Aufenthalt), financial and credit card information) of the Tokenholders as well as the number of assigned Tokens and distributions. The Tokenholder is obliged to notify the Issuer of any changes in the master data without delay. Participants may be contacted by email by the issuer regarding the purchase. Such emails will be informational only.
We are working closely with third parties (including, for example, business partners, subcontractors in technical, payment and delivery services, advertising networks, analytics providers, search information providers, credit reference agencies) who may provide us information about you such as IdentityMind API, which performs part of the Azul Token KYC/AML portion of verification for the Azul Token presale and ICO.
The issuer may further collect some data from participants regarding address verification or custom identity verification in the event the submitter insists they cannot
complete such with our IdentityMind API integration.
In this event, we take serious measures in protecting your data. We do not share this data collected with any other entities besides those of which could assist in identity verification such as IdentityMind or a substitute, in the event they are unable to ever perform at some future point. We do not use this information provided for profit, marketing or analytical purposes. For more information please contact [email protected].
The issuer only collects and process data which you have permitted us to use by agreeing to our Data Policy through participating in our ICO and interacting with our website. azultec may also request, process and store your personal data to pursue legitimate interests such as performing KYC/AML verification for our Token sale and reply to emails we receive from you.
In accordance with the General Data Protection Regulations (GDPR), azultec may in certain cases exchange your personal data with the following parties:
· Web companies and other services used by azultec to manage our KYC regulations. These will be sub processors such as IdentityMind and will always be compliant to GDPR (https://identitymindglobal.com/gdpr/eu-privacy-notice-v1/).
· Public institutions if required by law.
· If your personal data is transferred to third parties in countries outside the EU/EEA (for example a server park or another IT company) azultec will make sure that the transfer fulfils all legal requirements.
In compliance with GDPR regulations, registered users will have the following rights in relation to their personal data:
· The right to insight into your personal data in our records.
· The right to correct your personal data in our records.
· The right to have your personal data deleted from our records.
· The right to limit the processing of your personal data.
· The right to decline the processing of your personal data.
These rights could work in the following way.
You can also request to have your information deleted from our database at any time. For information related to our KYC procedure for ICO purchases, please note that the information may be required by a legal authority and deleting it may lead to the impossibility of receiving your Azul Tokens. This does not include data which we are obliged to keep for administrative, legal or security-related matters.
If you have any questions regarding our processing of your personal data, or if you disagree to the way your data is handled please contact our data protection officer [email protected].
On our website we offer, among others, payment by credit card. The provider of this payment service collects various transaction details and forwards them to the bank where you are registered. In addition to the data required for payment, they may also collect other data.
The provider then authenticates the transaction using the authentication procedure deposited with the bank for this purpose. The payment amount is then transferred from your account to our account. Neither we nor third parties have access to your account information.
11 Use of proceeds
A significant portion of the proceeds of the Offering will be used by the Company to achieve the Minimum Viable Product and subsequently to build-out a decentralized cloud storage and rendering network. azultec expects that a substantial amount of all of the proceeds of the Offering will be used by the Company to originate and subsequently to progress the development of the azultec Cube and the azultec Ecosystem.
The Company is proposing to develop an ecosystem with multiple services to include:
Any amounts that you pay for AZUs are exclusive of all applicable taxes. You are responsible for determining what, if any, taxes apply to your purchase of AZUs, 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 appropriate tax authorities. We are not responsible for withholding, collecting, reporting, or remitting any sales, use, value added, or similar tax arising from your purchase of AZUs. However, in case we are obliged to withhold tax, this will be shown separately in our invoice. We recommend consulting a local tax advisor if you are unsure about taxation in your country.
13 Acknowledgment and Assumption of Risks
You acknowledge and agree that there are risks associated with purchasing, owning, and using AZU for the provision or receipt of Services on the Ecosystem, as disclosed and explained in Annex 1. BY PURCHASING TOKENS, YOU EXPRESSLY ACKNOWLEDGE AND ASSUME THESE RISKS.
14 Representations and warranties
By purchasing AZU from us, you (the Participant) represent and warrant that:
a) You have read and understand these T&Cs (including all Annexes and Accompanying Documents):
b) You agree and acknowledge that AZU do not constitute securities in any form or any other form of capital investment product in any jurisdiction;
c) You agree and acknowledge that these T&Cs and any Accompanying Documents do not constitute a prospectus or offer document of any sort and is not intended to constitute an offer of securities or any other form of capital investment product in any jurisdiction or a solicitation for investment in securities and you are not bound to enter into any contract or binding legal commitment and no cryptocurrency or other form of payment have to be accepted on the basis of these T&Cs and any Accompanying Documents;
d) You acknowledge and agree that there are risks associated with purchasing Tokens, owning Tokens, and using Tokens for the provision or receipt of Services including (but not necessarily limited to) the risks described in the Annex 1;
e) You have sufficient understanding of technical, financial and business matters (including those that relate to the Services and Ecosystem), cryptographic Tokens, Token storage mechanisms (such as Token wallets), and blockchain technology to understand these T&Cs and any Accompanying Documents and to appreciate the risks and implications of purchasing Tokens;
f) You understand the restrictions and risks associated with the creation of Tokens as set forth herein and in the Accompanying Documents, and acknowledge and assume all such risks;
g) You have obtained sufficient information about the Tokens, the Services and the Ecosystem to make an informed decision to purchase Tokens;
h) You understand that the Tokens confer only the right to provide and receive Services on the Ecosystem, and confer no other rights of any form with respect to the Ecosystem or azultec, including, but not limited to, any ownership, distribution, redemption, liquidation, proprietary (including all forms of intellectual property), or other financial or legal rights, except as stated in these T&Cs;
i) You are purchasing AZU solely for the purpose of receiving Services, and supporting the development, testing, deployment and operation of the Ecosystem, being aware of the commercial risks associated with azultec and the Ecosystem. You are not purchasing Tokens for any other purposes, including, but not limited to, any investment, speculative or financial purpose;
j) Your purchase of Tokens complies with applicable laws and regulations in your jurisdiction, including, but not limited to, (i) legal capacity and any other threshold requirements in your jurisdiction for the purchase of the Tokens and entering into contracts with azultec, (ii) any foreign exchange or regulatory restrictions applicable to such purchase, and (iii) any governmental or other consents that may need to be obtained;
k) You will comply with any applicable tax obligations in your jurisdiction arising from your purchase of Tokens;
l) If you are purchasing Tokens on behalf of any entity, you are authorized to accept these T&Cs on such entity’s behalf and that such entity will be responsible for breach of these T&Cs by you or any other employee or agent of such entity (references to “you” in these T&Cs refer to you and such entity, jointly);
m) You are neither a citizen or permanent resident of Iran, North Korea, Syria, Guyana, Iraq, Bosnia Herzegovina, Laos, Uganda, Vanuatu, Yemen, Ethiopia, Sri Lanka, Trinidad and Tobago, Tunisia.
n) You are not a citizen or resident of a geographic area in which access to or use of the Services or the acceptance of delivery of the Tokens is prohibited by applicable law, decree, regulation, treaty, or administrative act. You agree that if your country of residence or other circumstances change such that the above representations are no longer accurate, that you will immediately cease using the Services. If you are registering to use the Services on behalf of a legal entity, you further represent and warrant that (i) such legal entity is duly organized and validly existing under the applicable laws of the jurisdiction of its organization, and (ii) you are duly authorized by such legal entity to act on its behalf;
o) You agree that the Tokens may not be resold to United States purchasers, other than as may be permitted pursuant to applicable exemptions under the U.S. Securities Act of 1933, as amended (the “Securities Act”), including pursuant to Regulation S and/or Regulation D promulgated thereunder. If you purchase Tokens in the ITS, you will be unable to resell the Tokens into the United States unless such resale is registered with the U.S. Securities and Exchange Commission or unless an applicable exemption under the Securities Act applies.
p) By participating in the referral program you accept the rules that go along with it.
15 Limitation of Liability
To the fullest extent permitted by applicable law (i) in no event will azultec or any of the company parties be liable for any indirect, special, incidental, consequential, or exemplary damages of any kind (including, but not limited to, where related to loss of revenue, income or profits, loss of use or data, or damages for business interruption) arising out of or in any way related to the sale or use of AZU or otherwise related to these terms, regardless of the form of action, whether based in contract, tort (including, but not limited to, simple negligence, whether active, passive or imputed), or any other legal or equitable theory (even if the party has been advised of the possibility of such damages and regardless of whether such damages were foreseeable), and (ii) in no event will the aggregate liability of azultec and the company parties (jointly), whether in contract, warranty, tort (including negligence, whether active, passive or imputed), or other theory, arising out of or relating to these terms or the use of or inability to use AZU, exceed the amount you pay to us for AZU.
The limitations set forth in these terms, in particular, in the previous paragraph will not limit or exclude the liability for the gross negligence, fraud or intentional, willful or reckless misconduct of the company or its representatives, nor the liability for damage from breaches of fundamental contractual obligation, injury to life, body or health by intention or negligence of the company or its representatives.
16 Disclaimers and waivers
The AZUs are not intended to constitute securities, financial instruments or any other form of capital investment product in any jurisdiction. These T&Cs and any Accompanying Documents do not constitute a prospectus or offer document of any sort and is not intended to constitute an offer of securities or any other form of capital investment product or a solicitation for investment in securities or any other form of capital investment product in any jurisdiction.
These T&Cs and any Accompanying Documents do not constitute or form part of any opinion on any advice to sell, or any solicitation of any offer by the seller of the AZU to purchase any AZU nor shall it or any part of it nor the fact of its presentation form the basis of, or be relied upon in connection with, any contract or investment decision.
No person is bound to enter into any contract or binding legal commitment in relation to the sale and purchase of the AZU and no cryptocurrency or other form of AZU is to be accepted on the basis of these T&Cs.
In the event of any inconsistencies between these T&Cs and the Whitepaper or any other Accompanying Documents, the former shall prevail.
You are not eligible to purchase any AZU in the ITS if you are a citizen or resident (tax or otherwise) of Iran, North Korea, Syria, Guyana, Iraq, Bosnia Herzegovina, Laos, Uganda, Vanuatu, Yemen, Ethiopia, Sri Lanka, Trinidad and Tobago, Tunisia. No regulatory authority has examined or approved of any of the information set out in these T&Cs. No such action has been or will be taken under the laws, regulatory requirements or rules of any jurisdiction. The publication, distribution or dissemination of these T&Cs and any Accompanying Documents do not imply that the applicable laws, regulatory requirements or rules have been complied with.
There are risks and uncertainties associated with azultec and its respective businesses and operations, the AZU, the ITS and the Services (each as referred to in these T&Cs and any Accompanying Documents). These T&Cs and any Accompanying Documents, any part thereof and any copy thereof must not be taken or transmitted to any country where distribution or dissemination of these T&Cs and any Accompanying Documents is prohibited or restricted.
I. No representations and warranties by azultec
azultec does not make or purport to make, and hereby disclaims, any representation, warranty or undertaking in any form whatsoever to any entity or person, including any representation, warranty or undertaking in relation to the truth, accuracy and completeness of any of the information set out in these T&Cs and any Accompanying Documents.
II. Cautionary note on forward-looking statements
All statements contained in these T&Cs and any Accompanying Documents, statements made in press releases or in any place accessible by the public and oral statements that may be made by azultec or their respective directors, executive officers or employees acting on behalf of azultec (as the case may be), that are not statements of historical fact, constitute “forward–looking statements”. Some of these statements can be identified by forward–looking terms such as “aim”, “target”, “anticipate”, “believe”, “could”, “estimate”, “expect”, “if”, “intend”, “may”, “plan”, “possible”, “probable”, “project”, “should”, “would”, “will” or other similar terms. However, these terms are not the exclusive means of identifying forward–looking statements. All statements regarding azultec’s financial position, business strategies, plans and prospects and the future prospects of the industry which azultec is in are forward–looking statements. These forward–looking statements, including but not limited to statements as to azultec’s revenue and profitability, prospects, future plans, other expected industry trends and other matters discussed in these T&Cs and any Accompanying Documents regarding azultec are matters that are not historical facts, but only predictions.
These forward–looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual future results, performance or achievements of azultec to be materially different from any future results, performance or achievements expected, expressed or implied by such forward-looking statements. These factors include, amongst others:
(a) changes in political, social, economic and stock or cryptocurrency market conditions, and the regulatory environment in the countries in which azultec conducts its businesses and operations;
(b) the risk that azultec may be unable or execute or implement its business strategies and future plans;
(c) changes in interest rates and exchange rates of fiat currencies and cryptocurrencies;
(d) changes in the anticipated growth strategies and expected internal growth of azultec;
(e) changes in the availability and fees of azultec in connection with their respective businesses and operations;
(f) changes in the availability and salaries of employees who are required by azultec to operate its businesses and operations;
(g) changes in preferences of customers of azultec;
(h) changes in competitive conditions under which azultec operate, and the ability of azultec to compete under such conditions;
(i) changes in the future capital needs of azultec and the availability of financing and capital to fund such needs;
(j) war or acts of international or domestic terrorism;
(k) occurrences of catastrophic events, natural disasters and acts of God that affect the businesses and/or operations of azultec;
(l) other factors beyond the control of azultec; and
(m) any risk and uncertainties associated with azultec and its businesses and operations, the AZU and the ITS (each as referred to in the T&Cs and any Accompanying Documents).
All forward–looking statements made by or attributable to azultec or persons acting on behalf of azultec are expressly qualified in their entirety by such factors. Given that risks and uncertainties that may cause the actual future results, performance or achievements of azultec to be materially different from that expected, expressed or implied by the forward–looking statements in these T&Cs and any Accompanying Documents, undue reliance must not be placed on these statements. These forward- looking statements are applicable only as of the date of this Whitepaper.
Neither azultec nor any other person represents, warrants and/or undertakes that the actual future results, performance or achievements of azultec will be as discussed in those forward–looking statements. The actual results, performance or achievements of azultec may differ materially from those anticipated in these forward–looking statements. Nothing contained in these T&Cs and any Accompanying Documents is or may be relied upon as a promise, representation or undertaking as to the future performance or policies of azultec. Further, azultec disclaims any responsibility to update any of those forward- looking statements or publicly announce any revisions to those forward–looking statements to reflect future developments, events or circumstances, even if new information becomes available or other events occur in the future.
III. Market and industry information and no consent of other persons
These T&Cs and any Accompanying Documents includes market and industry information and forecasts that have been obtained from internal surveys, reports and studies, where appropriate, as well as market research, publicly available information and industry publications. Such surveys, reports, studies, market research, publicly
available information and publications generally state that the information that they contain has been obtained from sources believed to be reliable, but there can be no assurance as to the accuracy or completeness of such included information.
Save for azultec and its respective directors, executive officers and employees, no person has provided his or her consent to the inclusion of his or her name and/or other information attributed or perceived to be attributed to such person in connection therewith in this Whitepaper and no representation, warranty or undertaking is or purported to be provided as to the accuracy or completeness of such information by such person and such persons shall not be obliged to provide any updates on the same.
While azultec has taken reasonable actions to ensure that the information is extracted accurately and in its proper context, azultec has not conducted any independent review of the information extracted from third party sources, verified the accuracy or completeness of such information or ascertained the underlying economic assumptions relied upon therein. Consequently, neither azultec nor its respective directors, executive officers and employees acting on their behalf makes any representation or warranty as to the accuracy or completeness of such information and shall not be obliged to provide any updates on the same.
IV. Terms used
To facilitate a better understanding of the AZUs being offered for purchase by azultec, and the businesses and operations of azultec, certain technical terms and abbreviations, as well as, in certain instances, their descriptions, have been used in these T&Cs and any Accompanying Documents. These descriptions and assigned meanings should not be treated as being definitive of their meanings and may not correspond to standard industry meanings or usage. Words importing the singular shall, where applicable, include the plural and vice versa and words importing the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. References to persons shall include corporations.
V. No advice
No information in these T&Cs and any Accompanying Documents should be considered to be business, legal, financial or tax advice regarding azultec, the AZU Tokens, the azultec Initial Token Sale and the azultec Wallet (each as referred to in the T&Cs and any Accompanying Documents). You should consult your own legal, financial, tax or other professional adviser regarding azultec and its respective businesses and operations, the AZU Tokens, the azultec Initial Token Sale and the azultec Wallet (each as referred to in the T&Cs and any Accompanying Documents). You should be aware that you may be required to bear the financial risk of any purchase of AZU Tokens for an indefinite period of time.
VI. No further information or update
No person has been or is authorized to give any information or representation not contained in these T&Cs and any Accompanying Documents in connection with azultec and its respective businesses and operations, the AZUs as well as the ITS and, if given, such information or representation must not be relied upon as having been authorized by or on behalf of azultec. The ITS shall not, under any circumstances, constitute a continuing representation or create any suggestion or implication that there has been no change, or development reasonably likely to involve a material change in the affairs, conditions and prospects of azultec or in any statement of fact or information contained in these T&Cs and any Accompanying Documents since the date hereof.
VII. Restrictions on distribution and dissemination
The distribution or dissemination of these T&Cs and any Accompanying Documents or any part thereof may be prohibited or restricted by the laws, regulatory requirements and rules of any jurisdiction. In the case where any restriction applies, you are to inform yourself about, and to observe, any restrictions which are applicable to your possession of these T&Cs and any Accompanying Documents or such part thereof (as the case may be) at your own expense and without liability to azultec. Persons to whom a copy of these T&Cs and any Accompanying Documents has been distributed or disseminated, provided access to or who otherwise have the T&Cs and any Accompanying Documents in their possession shall not circulate it to any other persons, reproduce or other-wise distribute these T&Cs and any Accompanying Documents or any information contained herein for any purpose whatsoever nor permit or cause the same to occur.
VIII. No offer of securities or registration
These T&Cs and any Accompanying Documents do not constitute a prospectus or offer document of any sort and is not intended to constitute an offer of securities or any other form of investment product or a solicitation for investment in securities or any other form of investment product in any jurisdiction.
No person is bound to enter into any contract or binding legal commitment and no cryptocurrency or other form of payment is to be accepted on the basis of these T&Cs and any Accompanying Documents.
You are not eligible to purchase any AZU in the ITS if you are a citizen or resident (tax or otherwise) of Iran, North Korea, Syria, Guyana, Iraq, Bosnia Herzegovina, Laos, Uganda, Vanuatu, Yemen, Ethiopia, Sri Lanka, Trinidad and Tobago, Tunisia or any other geographic area in which the purchase of AZU is prohibited by applicable law, decree, regulation, treaty, or administrative act. No regulatory authority has examined or approved of any of the information set out in these T&Cs and any Accompanying Documents. No such action has been or will be taken under the laws, regulatory requirements or rules of any jurisdiction. The publication, distribution or dissemination of these T&Cs and any Accompanying Documents does not imply that the applicable laws, regulatory requirements or rules have been complied with.
IX. Risks and uncertainties
Prospective purchasers of AZU should carefully consider and evaluate all risks and uncertainties associated with azultec and its respective businesses and operations, the AZUs and the ITS, all information set out in these T&Cs and any Accompanying Documents and the T&Cs prior to any purchase of AZU. If any of such risks and uncertainties develops into actual events, the business, financial condition, results of operations and prospects of azultec could be materially and adversely affected. In such cases, you may lose all or part of the value of the AZU.
17 Dispute Resolution: Arbitration
(a) Binding Arbitration
As far as you are not a consumer pursuant to Sec. 13 German Civil Code, all disputes arising in connection with this contract or its validity shall be finally settled in accordance with the Arbitration Rules of the German Institution of Arbitration (DIS) without recourse to the ordinary courts of law. The place of arbitration is Bielefeld, Germany. The number of arbitrators shall be three. The language of the arbitral proceedings is German or English.
We accept arbitration proceedings by consumers with “Allgemeine Verbraucherschlichtungsstelle des Zentrums für Schlichtung“ e. V. Straßburger Str. 8, 77694 Kehl, Phone: +49 7851 79579 40 Internet: www.verbraucher-schlichter.de E-Mail: m[email protected]verbraucher-schlichter.de, „Schlichtungsstelle bei der Deutschen Bundesbank“ Postfach 11 12 32, 60047 Frankfurt Telefon: +49 69 2388 1907 Internet: www.bundesbank.de/Navigation/DE/Service / Schlichtungsstelle/schlichtungsstelle.html E-Mail: firstname.lastname@example.org and „Schlichtungsstelle bei der Bundesanstalt für Finanzdienstleistungsaufsicht“ Graurheindorfer Str. 108, 53117 Bonn Telefon: +49 228 4108 0 Internet: www.bafin.de E-Mail: email@example.com. Further details can be found on the Ecosystem on arbitration by the EU commission: www.ec.europa.eu/consumers/odr
(b) No Class or Representative Arbitrations
Any Dispute arising out of or related to these T&Cs is personal to you and azultec and will be resolved solely through individual arbitration and will not be brought as a class arbitration, class action or any other type of representative proceeding. There will be no class arbitration or arbitration in which an individual attempts to resolve a Dispute as a representative of another individual or group of individuals. Further, a Dispute cannot be brought as a class or other type of representative action, whether within or outside of arbitration, or on behalf of any other individual or group of individuals.
(c) Notice: Informal Dispute Resolution
Each Party will notify the other Party in writing of any arbitrable Dispute within thirty (30) days of the date it arises, so that the Parties can attempt in good faith to resolve the Dispute informally. Notice to azultec shall be sent by e-mail to azultec at inf[email protected]azultec.de. Notice to you shall be by email to the email address you provide to us. Your notice must include (i) your name, postal address, email address and telephone number, (ii) a description in reasonable detail of the nature or basis of the Dispute, and
(iii) the specific relief that you are seeking. If you and azultec cannot agree how to resolve the Dispute within thirty (30) days after the date notice is received by the applicable Party or the Parties do not observe the notification period, then either you or azultec may, as appropriate and in accordance with this section, commence an arbitration proceeding.
18 Changes to the Terms & Conditions
We may modify, change, supplement or update these T&Cs and any Accompanying Documents in our sole discretion at any time without advance notice. We suggest that you visit the Website regularly and subscribe to our newsletter to keep up to date with any changes. Your continued use of the Website, Dashboard and the AZU will confirm your acceptance of these T&Cs and Accompanying Documents as modified, changed, supplemented or updated by us. If you do not agree to such revised T&Cs you must stop using this Website and any information, links or content contained on this Website and cease participating in the ITS.
19 Miscellaneous provisions
(a) Governing Law and Venue
These Terms will be governed by and construed and enforced in accordance with the laws of the Federal Republic of Germany (“Germany”), without regard to conflict of law rules or principles (whether of Germany or any other jurisdiction) that would cause the application of the laws of any other jurisdiction. The courts of Bielefeld shall have the whole and exclusive jurisdiction.
If any term, clause or provision of these T&Cs is held unlawful, void or unenforceable, then that term, clause or provision will be severable from these T&Cs and will not affect the validity or enforceability of any remaining part of that term, clause or provision, or any other term, clause or provision of these T&Cs. In the case of a clause not being valid or in the case that a regulation has not been included therein, this gap shall be replaced by a valid clause that the Parties would have been agreed upon if they would have known the gap.
(c) No waiver
The failure of azultec to enforce any of the provisions of these T&Cs or any Accompanying Document or any rights with respect there to shall in no way be considered as a waiver of such provisions or rights or in any way affect the validity of these T&Cs.
Annex 1: Risk Factors
The Tokens are long-term entrepreneurial risk participations. Due to the subordination of the participation amount, the Tokenholder bears entrepreneurial risks of the Issuer. The Tokenholder shall be aware that the participation amount is used for entrepreneurial purposes of the Issuer and represents liable capital. Despite commercial diligence, it may occur that the development of the investments made with the Participation Amount is negative and no profit participation will occur. The participation of the Token sale is related to substantial risks and may lead to total loss of the capital employed (TOTALVERLUSTRISIKO). The Tokenholder must be able to cope with such a loss at all times.
The Issuer does not warrant or guarantee the recoverability or positive performance of the investments made with the participation amount. The Tokenholder is not a shareholder in the Company and its assets; there is also no option or conversion right to such a participation. The participation amount is subordinated as agreed in the AZU Participation Agreement.
The Company is free to use the participation amount in pursuit of his or her own entrepreneurial objectives. The Tokens are not collateralized.
Investments in startups including azultec GmbH involve a high degree of risk, including a possible loss of the entire participation amount of the Participant without any return. Participation in Token sales including the Azul Token sale may involve an even higher degree of risk. Financial and operating risks confronting startups are significant: azultec GmbH is not immune to these. The startup market in which azultec GmbH competes is highly competitive and the percentage of companies that survive and prosper is small.
Startups often experience unexpected problems in the areas of product development, marketing, financing, and general management, among others, which frequently cannot be solved. In addition, startups may require substantial amounts of financing, which may not be available through institutional private placements, the public markets or otherwise. azultec GmbH may be forced to cease operations or take actions that result in its dissolution (such as (a) a voluntary termination of operations of the Company, (b) a general assignment for the benefit of the Company’s creditors or (c) any other liquidation, dissolution or winding up of the Company, whether voluntary or involuntary). It is possible that, due to any number of reasons, including, but not limited to, an unfavorable fluctuation in the value of cryptographic and fiat currencies, the inability by the Company to roll out its mobile datacenters and put them in operation, the failure of commercial relationships, or intellectual property ownership challenges, the Company may no longer be viable to operate and the Company may dissolve or take actions that result in a Dissolution Event.
Risk of Losing Access to AZUs Due to Loss of Private Key(s), Custodial Error or your Error
A private key, or a combination of private keys, is necessary to control and dispose of AZUs stored in your digital wallet or vault. Accordingly, loss of requisite private key(s) associated with your digital wallet or vault storing AZUs will result in loss of such AZUs. Moreover, any third party that gains access to such private key(s), including by gaining access to login credentials of a hosted wallet service you use, may be able to misappropriate your AZUs. Any errors or malfunctions caused by or otherwise related to the digital wallet or vault you choose to receive and store AZUs, including your own failure to properly maintain or use such digital wallet or vault, may also result in the loss of your AZUs. Additionally, your failure to precisely follow the procedures set forth for buying and receiving AZUs, including, for instance, if you provide an incorrect AZU Receipt Address, or provide an address that is not ERC-20 compatible, may result in the loss of your AZUs.
Risks Associated with the Ethereum Protocol
Because Tokens and the Ecosystem are partially based on the Ethereum protocol, any malfunction, breakdown or abandonment of the Ethereum protocol may have a material adverse effect on the Ecosystem or AZUs. Moreover, advances in cryptography, or technical advances such as the development of quantum computing, could present risks to the AZUs and the Ecosystem, including the utility of the AZUs for obtaining Services, by rendering ineffective the cryptographic consensus mechanism that underpins the Ethereum protocol.
Risk of Mining Attacks
As with other decentralized cryptographic Tokens based on the Ethereum protocol, the Tokens are susceptible to attacks by miners in the course of validating Token transactions on the Ethereum blockchain, including, but not limited to, double–spend attacks, majority mining power attacks, and selfish–mining attacks. Any successful attacks present a risk to the Ecosystem and the Tokens, including, but not limited to, accurate execution and recording of transactions involving Tokens.
Risk of Hacking and Security Weaknesses
Hackers or other malicious groups or organizations may attempt to interfere with the Ecosystem or the Tokens in a variety of ways, including, but not limited to, malware attacks, denial of service attacks, consensus-based attacks, smurfing and spoofing. Furthermore, because the Ecosystem is based on open-source software, there is a risk that a third party or a member of the azultec team may intentionally or unintentionally introduce weaknesses into the core infrastructure of the Ecosystem, which could negatively affect the Ecosystem and the Tokens, including the utility of the Tokens for obtaining Services.
Risk of Theft
azultec will make every effort to ensure that the cryptocurrency funds received from the ITS will be securely held in a corporate account wallet on kraken.com. Notwithstanding such security measures, there is no assurance that there will be no theft of the cryptocurrencies as a result of hacks, sophisticated cyber-attacks, distributed denials of service or errors, vulnerabilities or defects on the Website, in the smart contracts on which the wallet and the ITS rely, on the Ethereum or any other blockchain, or otherwise. Such events may include, for example, flaws in programming or source code leading to exploitation or abuse thereof. In such event, even if the ITS is completed, azultec may not be able to receive the cryptocurrencies raised and may not be able to utilize such funds for the development of the Ecosystem. As such, distributed AZU may hold little worth or value, and this would impact its trading price.
Risks Associated with Markets for Tokens
The Tokens are intended to be used solely within the Ecosystem and azultec will not support or otherwise facilitate any secondary trading or external valuation of Tokens. This restricts the contemplated avenues for using Tokens to the provision or receipt of Services and could therefore create illiquidity risk with respect to any Tokens you own. Even if secondary trading of Tokens is facilitated by third-party exchanges, such exchanges may be relatively new and subject to little or no regulatory oversight, making them more susceptible to fraud or manipulation. Furthermore, to the extent that third parties do ascribe an external exchange value to Tokens (e.g., as denominated in a digital or fiat currency), such value may be extremely volatile and diminish to zero.
Risk of Future Sales or Issuance of AZU
Future sales or issuance of AZU could materially and adversely affect the market price of AZU. Any future sale or issuance of AZU would increase the supply of AZU in the market and this may result in a downward price pressure on AZU. The sale or distribution of a significant number of AZU outside of the ITS (including but not limited to the sales of AZU undertaken after the ITS, issuance of AZU to persons other than Participants for purposes of community initiatives, business development, education and market expansion and issuance of AZU as a reward to users of the Ecosystem), or the perception that such further sales or issuance may occur, could adversely affect the trading price of the Tokens.
Risk of Uninsured Losses
Unlike bank accounts or accounts at some other financial institutions, Tokens are uninsured unless you specifically obtain private insurance to insure them. Thus, in the event of loss or loss of utility value, there is no public insurer, such as the Federal Deposit Insurance Corporation, or private insurance arranged by azultec, to offer recourse to you.
Risk in the ITS Process
The ITS may not raise enough proceeds in order to start production of each component in azultecs concept. In this case, azultec GmbH will focus on third party operations and shift the use of proceeds from the participation into MMUs to admin and marketing in order to achieve profitability for Participants.
Adverse developments of Ether‘s or Bitcoin’s value during and after the ITS could result in azultec GmbH not being able to implement the business model as planned because of lacking financial means.
In 2017 Token sales (ICOs or ITSs) raised 5,6bn USD. 981 Token sales are reported up to September 2018 which raised 12,3bn USD. Only a handful of incidents was reported in which websites or wallets were hacked and raised proceeds stolen. Nevertheless, the risk of hacking and theft cannot be excluded. azultec GmbH has not the financial means to indemnify and compensate Participants from such damages. In case such a theft of digital assets occurs, azultec GmbH will continue with the ITS and start its operation on a reduced financial base with the goal that, over time, profits will replace lost proceeds.
Risks Associated with Uncertain Regulations and Enforcement Actions
The regulatory status of the Tokens and distributed ledger technology is unclear or unsettled in many jurisdictions. It is difficult to predict how or whether regulatory agencies may apply existing regulation with respect to such technology and its applications, including the Ecosystem and the Tokens. It is likewise difficult to predict how or whether legislatures or regulatory agencies may implement changes to law and regulation affecting distributed ledger technology and its applications, including the Ecosystem and the Tokens. Regulatory actions could negatively impact the Ecosystem and the Tokens in various ways, including, for purposes of illustration only, through a determination that the purchase, sale and delivery of the Tokens constitutes unlawful activity or that the Tokens are a regulated instrument that require registration or licensing of those instruments or some or all of the parties involved in the purchase, sale and delivery thereof. azultec may cease operations in a jurisdiction in the event that regulatory actions, or changes to law or regulation, make it illegal to operate in such jurisdiction, or commercially undesirable to obtain the necessary regulatory approval(s) to operate in such jurisdiction.
Risks Arising from Taxation
The tax characterization of Tokens is uncertain. You must seek your own tax advice in connection with purchasing Tokens, which may result in adverse tax consequences to you, including withholding taxes, income taxes and tax reporting requirements.
Risk of Competing Ecosystems
It is possible that alternative Ecosystems could be established that utilize similar protocols underlying the Ecosystem and attempt to facilitate services that are materially similar to the Services. The Ecosystem may compete with these alternatives, which could negatively impact the Ecosystem and Tokens, including the utility of the Tokens for obtaining Services.
Risk of Insufficient Interest in the Ecosystem
It is possible that the Ecosystem will not be used by a large number of individuals, companies and other entities or that there will be limited public interest in the creation and development of distributed Ecosystems (such as the Ecosystem) more generally. Such a lack of use or interest could negatively impact the development of the Ecosystem and therefore the potential utility of the Tokens, including the utility of the Tokens for obtaining Services.
Risks Associated with the Development and Maintenance of the Ecosystem
The Ecosystem is still under development and may undergo significant changes over time. Although we intend for the Tokens and Ecosystem to function as described in the Whitepaper and intend to take commercially reasonable steps toward those ends, we may have to make changes to any timelines announced in the Whitepaper, on the Website or any other official channel of azultec, or the specifications of the Tokens or Ecosystem for any number of legitimate reasons. This could create the risk that the Tokens or Ecosystem, as further developed and maintained, may not meet your expectations at the time of purchase.
Risk of an Unfavourable Fluctuation of ETH
If the value of ETH or BTC fluctuates unfavourably during or after the ITS and despite our effort to hedge the proceeds of the ITS, we may not be able to fund development, or may not be able to develop or maintain the Ecosystem in the manner that is intended. In addition to the usual market forces, there are several potential events which could exacerbate the risk of unfavourable fluctuation in the value of ETH or BTC; or significant security incidents or market irregularities at one or more of the major cryptocurrency exchanges.
Risk of Dissolution of azultec or the Ecosystem
It is possible that, due to any number of reasons, including, but not limited to, an unfavourable fluctuation in the value of ETH, BTC (or other cryptographic and fiat currencies), decrease in the Tokens’ utility (including their utility for obtaining Services), the failure of commercial relationships, intellectual property ownership challenges, insolvency, or the liquidation of azultec, the Ecosystem may no longer be viable to operate. The Participants may lose parts or all of their AZU purchasing price.
Risks Arising from Lack of Governance Rights
Because Tokens confer no governance rights of any kind with respect to the Ecosystem or azultec, all decisions involving azultec’s products or services within the Ecosystem or azultec itself will be made by azultec at its sole discretion, including, but not limited to, decisions to discontinue its products or services, to create and sell more Tokens for use on the Ecosystem, or to sell or liquidate azultec. These decisions could adversely affect the Ecosystem and the utility of any Tokens you own, including their utility for obtaining Services.
Risks Associated with business partners
Especially at the start, azultec relies on business partners to provide certain Services, especially for Services that require licenses as financial service institutions. While we have legally–binding agreements with business partners and are already in talks with further potential partners, we cannot guarantee that business partners won’t terminate their cooperation for whatever reason or that we can close new agreements with potential partners. The provision of certain Services might therefore be interrupted, delayed or cannot be offered at all.
Risks Associated with Markets for AZU
AZU are intended to be used solely on the Ecosystem, and azultec will not support or otherwise facilitate any secondary trading or external valuation of AZU. This restricts the contemplated avenues for using AZU to obtain Services or access the Ecosystem and could therefore create illiquidity risk with respect to AZU you hold. Even if secondary trading of AZU is facilitated by third party exchanges, such exchanges may be relatively new and subject to little or no regulatory oversight, making them more susceptible to market-related risks. Furthermore, to the extent that third–parties do ascribe an external exchange value to AZU (e.g., as denominated in a digital or fiat currency), such value may be extremely volatile and diminish to zero.
Risks of Data Centre Facilities of Third Parties
azultec’s infrastructure is established through servers that it rents at data centre facilities of third parties. If azultec is unable to renew its data facility lease under commercially reasonable terms or at all, azultec may be required to transfer its servers to a new data centre facility and may incur significant costs and possible service interruption in connection with the relocation. These facilities are also vulnerable to damage or interruption from, among others, natural disasters, arson, terrorist attacks, power losses, and telecommunication failures. Additionally, the third–party providers of such facilities may suffer a breach of security as a result of third-party action, employee error, malfeasance or otherwise, and a third party may obtain unauthorized access to the data in such servers. As techniques used to obtain unauthorized access to, or to sabotage systems change frequently and generally are not recognized until launched against a target, azultec and the providers of such facilities may be unable to anticipate these techniques or to implement adequate preventive measures. Any such security breaches or damages which occur which impact upon azultec’s infrastructure network and/or the Ecosystem may adversely impact the price of AZU.
Risks of Economic Conditions
azultec has been and could continue to be affected by general global economic and market conditions. Challenging economic conditions worldwide have from time to time, contributed, and may continue to contribute, to slowdowns in the information technology industry at large. Weakness in the economy could have a negative effect on azultec’s business, operations and financial condition, including decreases in revenue and operating cash flows. Additionally, in a down-cycle economic environment, azultec may experience the negative effects of increased competitive pricing pressure and a slowdown in commerce and usage of the Ecosystem. Suppliers on which azultec relies for servers, bandwidth, location and other services could also be negatively impacted by economic conditions that, in turn, could have a negative impact on azultec’s operations or expenses. There can be no assurance, therefore, that current economic conditions or worsening economic conditions or a prolonged or recurring recession will not have a significant adverse impact on azultec’s business, financial condition and results of operations and hence the Ecosystem, which would correspondingly impact the trading price of AZU.
Cryptographic Tokens such as AZUs are a new and untested technology. In addition to the risks included in this Annex. there are other risks associated with your purchase, possession, and use of the Tokens, including unanticipated risks. Such risks may further materialize as unanticipated variations or combinations of the risks discussed in this Annex.