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Terms and condition

artèQ Token

The present document is a translation into English from the original Terms and Conditions of Services written in German according to the Austrian regulation. Please note, for all intents and purposes, the original Terms and Conditions of Services in German remains the primary reference.

1. preamble

1.1. Issuer. Digital First GmbH is a limited liability company under Austrian law, with its registered office in Vienna and its business address at Wallnerstrasse 3, 1010 Vienna "Issuer" or "Digital First".

1.2. As an innovative Austrian company, Digital First plans to develop and operate a platform called artèQ for trading and auctions for digital art in the form of so-called NFTs. Digital First will also launch and operate a digital fund for digital art as described in the white paper. By issuing tokenized shares in the form of artèQ Tokens through a Pre-Security Token Offering (hereinafter "Pre-STO"), Digital First plans to capitalize the fund, acquire the first artworks in the form of NFT's and fund the initial costs incurred. This financing is in the form of a tokenized non-equity share and relates only to the Fund the finalization of the artèQ Token.

2. issue of artèQ tokens

2.1. Total nominal amount. Analogous to Section 3 Paragraph 3 of the Capital Market Act (hereinafter “KMG”), Digital First issues tokenized shares in the ArtèQ Fund with a total nominal amount of up to EUR 1,000,000 (in words: EUR one million) in accordance with these ArtèQ Token Participation Certificate Conditions.

2.2. Denomination. The total nominal amount of the tokenized shares will be based on the total amount of money raised by subscribers, denominated in EUR and divided into up to 100,000,000 (in words: one hundred million) individual artèQ Tokens, each with a nominal value of EUR 0.01 (euro zero point zero one). As this Pre-STO is an initial funding round of the Fund, the artèQ Tokens will only be created after the end of this round on 15 November 2021 and will be delivered to subscribers as described below. The exact amount of artèQ Tokens to be created will therefore depend on the total amount of subscribed shares.

2.3. Subscription. The tokenized shares can be subscribed by interested investors (hereinafter the "Subscribers") in the period from 03.11.2021 to 15.11.2021. The tokenized shares are subscribed in the form - after the Subscribers have made a legally valid payment to Digital First via the website of Digital First or artèQ via their bank account or credit card (payment processor is the internationally active company Stripe) - by paying the subscription amount in euros into the bank account deposited by Digital First through the payment processor (incoming).

2.4. Offer & Issue Price. The issuance of the tokenized shares is carried out in the context of a private offering pursuant to § 3 3rd KMG, with a maximum total investment value in the European Economic Area (EEA) of less than two million euros, whereby the issue price of the artèQ Tokens corresponds to the nominal value of EUR 0.01 per artèQ Token, plus a 10% bonus on the tokens due to the Pre-STO Phase.

2.5. Tokens, "Tokenization". Each subscribed Share entitles the subscriber to receive one artèQ Token, an ERC20 token based on the Ethereum Blockchain (hereinafter the "artèQ Token") corresponding to one share in the NFT Art Fund described in the Preamble (claims of the subscribers to Digital First itself are excluded in any form). The shares are tokenized. This means that all rights in relation to the tokenized share are legally and technically linked to the ownership of an artèQ token. Persons holding tokenized Shares are therefore also referred to as Token Holders (hereinafter the "Token Holders").

2.6. Issue of the artèQ Tokens. The Issuer will transfer the respective number of artèQ Tokens to the Ethereum Wallet address disclosed by the Subscribers during the payment process or at a later point in time within three banking days after receipt of the subscription amount at the Digital First Bank Account, but for the first time not before 15.11.2021. " Bank working day" means a day on which banks and credit institutions are open in Austria.

2.7. Transferability. The tokenized participation rights are freely transferable and may therefore be transferred to a third party at any time (except for a lock-up period as defined in Section 7.2.) and without the consent of the Issuer by means of a transfer of the artèQ Tokens on the Ethereum or a technically subsequent Blockchain in accordance with the provisions of Section 4. The Issuer shall consider a transfer to be effective if it has been confirmed after the respective recorded transfer on the Ethereum Blockchain of currently at least 120 Blocks.

2.8. Term. The aim is to decentralize the management and decision-making of the artèQ Fund and decouple it from Digital First. Until decentralized management of the Fund is achieved, Digital First will manage the Fund in accordance with the details set out in the White Paper.

2.9. Private Offer. The present private offer for the subscription of shares (see section 2 .3) does not constitute a public offer within the meaning of § 1 of the Austrian Capital Market Act (Kapitalmarktgesetz) and is exempt from the provisions of § 2 of the Austrian Capital Market Act (KMG) (hereinafter "KMG"), since, pursuant to § 3 3 of the KMG, it exclusively concerns an offer of investments with a total value in the European Economic Area (EEA) of less than two million Euro.

2.10. Use of the subscribed capital. Digital First undertakes to use the capital only to pursue the project described in the preamble and the white paper without the written consent of the investors.

2.11 Admission to a Regulated Market. The Issuer intends to list the artèQ Tokens on one or more cryptocurrency exchanges or trading venues.

3. subject of the tokenized share (artèQ token)

3.1. The holders of artèQ Tokens participate exclusively in the increase in value of the Token itself, i.e. the performance of the Fund. This can be achieved by price increases of the artèQ Tokens on the market. There is no entitlement to regular distributions or other participation.

3.2 Tokenholders will not have the right to convert the Shares into Shares in Digital First or any subsidiary that may be spun off.

3.3 Token holders have no shareholder rights.

4. handling of the artèQ tokens

4.1 Each artèQ Token represents one tokenized share with a nominal value of EUR 0.01 (Euro zero point zero one).

4.2 artèQ Tokens are digital (value) units in the form of a record that are created ("minted") based on a protocol in a blockchain exclusively by or on behalf of Digital First and issued to Unitholders.

4.3 The tokenized participation rights issued by Digital First will be digitized in the form of ERC20 standard tokens, whereby artèQ tokens can currently only be transferred to Ethereum wallets that support the ERC20 standard and where the owners or holders behind them have been identified by a trusted provider (4.8.).

4.4 The transfer of an artèQ Token on the Blockchain is equivalent to the transfer of a share by delivery of a certificate (by analogy). There are no contractual restrictions on the transferability of artèQ Tokens or tokenized Shares. Since the shares are tokenized, all associated rights are linked to the ownership of the respective artèQ token. This means that a technical transfer of the artèQ Token from one person to another automatically entails the legal transfer of the associated tokenized share.

4.5 The transfer of artèQ Tokens shall (currently) take place on the Ethereum Blockchain and, after validation and execution, shall be communicated and evidenced by way of a computer protocol (hereinafter "Smart Contract"). Digital First will consider a transfer to be effective when it has been confirmed on the Ethereum Blockchain by at least 120 Blocks after the respective recorded transfer.

4.6 In order to make a transaction on the Ethereum Blockchain (i.e. to transfer artèQ Tokens) and to execute a Smart Contract, the computing power of the so-called Nodes (hereinafter the "Nodes") is required. The use of this computing power costs (i) "gas", a fixed fee for certain computing services for the use of the Ethereum network and (ii) a "fee", a service fee, which is to be paid to the Nodes that validate the transaction and execute the Smart Contract. Both are to be paid by the respective token holder via the cryptocurrency Ether (hereinafter "ETH").

4.7. The Token Holders shall themselves be responsible for setting up and maintaining the technical conditions necessary for receiving, holding, and transferring the artèQ Tokens on their side. The Token Holders shall in particular ensure the security and safekeeping of their private cryptographic key ("private key") to their Ethereum Wallet in accordance with the current state of the art and also protect it against loss or unauthorized access by third parties. Digital First will support the initial token holders in setting up and maintaining these technical conditions upon request - if necessary by paying a separate fee.

4.8. Each Token Holder shall - if not already existing - create an Ethereum Wallet with which ERC20 Tokens can be held and received, which is controlled by him and which is linked to him as part of the identity establishment process, the so-called "Know-Your-Customer-Check" (hereinafter "KYC"). Each Token Holder must therefore register with Digital First or a so-called "Identity Provider" and have his identity established (see also point 2.3).

4.9. Digital First reserves the right in extreme circumstances (Ethereum network failure, Ethereum hardfork, etc.) to transfer the tokenized share tokenization to another suitable blockchain or distributed ledger technology ("DLT").

5. risks

5.1. Risks relating to the Issuer

- The Issuer operates in a new business segment. It is uncertain whether the Issuer's business activities can be implemented and operated profitably in the long term.

- Even though the Issuer is, as far as is known, a pioneer in its business field, at least in Europe, and there are currently no competitors on the market, it cannot be ruled out that in the future competitors in Austria or internationally will have a negative impact on the potential sales of Digital First / artèQ.

- The Issuer may be targeted by hackers who disrupt the Issuer's business by stealing data or using computer viruses that damage the Issuer's business.

- The Issuer is dependent on specialized key personnel with important knowledge of the crypto industry and distributed ledger or blockchain technology and may suffer a slowdown in development if one or more key personnel and/or executives decide to leave the Issuer or if significant developments and trends in the crypto industry are not identified in a timely manner.

- Negative reporting due to customer complaints, litigation, or other factors as well as a negative public perception of the Issuer may have an adverse effect on the Issuer's business success and, in particular, its sales.

- The Issuer is subject to general contractual risks, such as defective performance, insolvency of contractual partners, breaches of contract, or breaches of contractual obligations.

- The Issuer may undertake reorganization measures, such as changing its current legal form from a limited liability company to a stock corporation. These measures may lead to increased costs.

- The Issuer may require additional capital to support business development and improve profitability. There is a risk that refinancing on acceptable terms may not be available.

5.2. Risks relating to the Issuer's industry

- Austrian banks are reluctant to enter into business relationships with customers in the cryptocurrency industry. The Issuer relies on a bank account for its business. If the Issuer's bank account is terminated, this could have a material adverse effect on the business.

- Cryptocurrencies are subject to very high risk and equally high volatility. After reaching an all-time high at the end of 2017, the prices for cryptocurrencies, such as the "lead currency" Bitcoin in particular, have fallen very sharply, and with them the overall market capitalization. The market prices of virtual currencies are highly dependent on people's trust in this new form of investment. A loss of confidence can lead to lower market prices and thus in the future both existing investors and traders, and in particular new investors and traders could be deterred from investing in cryptocurrencies and thus negatively affect the Issuer's business model.

- Changes in the monetary policy of the US Federal Reserve ("Fed") as well as the European Central Bank ("ECB") could have a negative impact on the market value of cryptocurrencies, which in turn could have a negative impact on the entire crypto-economy and the trading of cryptocurrencies.

- The industry in which the Issuer operates depends on the continued growth and, more importantly, acceptance of cryptocurrencies. If investors and traders lose confidence in cryptocurrencies or blockchain technology, this could have a negative impact on the Issuer's business.

- Current or future laws or regulations restricting the use of cryptocurrencies or the Issuer's business could adversely affect the Issuer's business prospects.

5.3. Risks related to the artèQ Tokens

- The tokenized shares in the form of artèQ Tokens represent a high-risk investment. Investors could lose all or part of their investment.

- If investors decide to invest in tokenized shares pursuant to these PPC Terms without professional advice on tax, legal and economic matters, investors may not fully appreciate the tax, legal and economic implications of an investment in artèQ Tokens.

- Potential investors, in particular from the EEA Contracting States, should familiarise themselves with Austrian law before deciding to invest in tokenized shares; Austrian law may possibly provide for different rights than the law known to investors from their home country.

- Virtual currencies and tokens are highly volatile and the market value of a virtual currency or token can fluctuate widely and unpredictably. There is a risk that virtual currencies may lose all of their value. Investors who purchase tokens with Euro artèQ expose themselves to a significant volatility risk, which can lead to a total loss of the investment.

- The tax implications of an investment in artèQ Tokens should be carefully considered. Tax implications could negatively impact investment in artèQ Tokens. It should be noted that tax implications are difficult to assess due to the lack of legislation, case law, and published legal opinion to date.

- The Tokenised Shares are subject to Austrian law and any changes in the law. Regulations or regulatory requirements may adversely affect the Issuer, the Tokenised Shares, and the Token holders.

- Token holders receive payments on their tokenized shares in ETH and are therefore subject to the exchange rate risk of ETH at the time of the potential distribution on the relevant record date.

- The incidental costs associated with the purchase and sale of artèQ Tokens may adversely affect the earning potential of artèQ Tokens.

- Token holders are exposed to an uncertain market price when selling their artèQ tokens.

- The issuance of these tokenized shares could inadvertently violate laws that the Issuer did not consider in preparing this issue. If this was the case and this issuance was to violate any law or regulation, this could render the issuance unlawful and artèQ Tokens even worthless.

- Investors should not take out a loan to finance the purchase of artèQ Tokens. The token holder may suffer a total loss of their investment and would then have to repay the loan and associated interest.

- The tokenized shares are not covered by deposit insurance. The liquidation of the Issuer could result in a substantial or complete loss of the Token holders' investment.

5.4. Risks related to blockchain technology

- The Shares issued under this Agreement are tokenized. This means that all associated rights are linked to the ownership of an artèQ Token. The artèQ Tokens are based on the Ethereum Blockchain. The use of this technology entails a variety of risks.

- A blockchain is a public and decentralized registry that permanently records transaction data. This means that there is no privacy when a transaction is made. Every single transfer of tokenized shares is recorded publicly for an indefinite period of time.

- The Issuer will issue the artèQ Tokens to the associated Ethereum Wallet address of the tokenized shares in the Ethereum Blockchain provided by the Token holders. If the Token Holders (a) use wallet software that does not support the ERC20 standard, or (b) are not in possession of the private key, or (c) lose the private key of this address, the Token Holders will not be able to access the issued Tokens (see also under point 4.).

- The Issuer uses a Smart Contract to transfer the artèQ Tokens to the Ethereum Wallet address on the Ethereum

Blockchain. Errors in the programming of the smart contract or the Ethereum platform may result in failed transactions and a loss for the token holder.

6. term, blocking period, and termination

6.1. Term. The aim is to decentralize the management and decision-making of the artèQ Fund and decouple it from Digital First. Until decentralized management of the Fund is achieved, Digital First will manage the Fund in accordance with the details set out in the White Paper.

6.2. Lock-up Period. Each Token Holder under this Agreement is subject to a lock-up period and may sell the Tokens no earlier than six months after the initial subscription of the artèQ Tokens ("Lock-up Period"). This lock-up period is programmed into the Smart Contract and cannot be changed.

6.3 Issuer's special right of termination. Digital First has a unilateral special right of termination until the record date of 15.11.2021. In the event of termination of the tokenized share by Digital First, the capital actually subscribed and paid in shall be repaid at the nominal amount.

7. no establishment of company rights

7.1. The business relationship does not establish a corporate relationship of any kind. The Token Holders are not entitled to any corporate rights, either in Digital First, in an affiliated company, or in the artèQ Fund, in particular no voting rights and no participation in the corporate assets. This also applies to any successors in the title to Digital First. The Token Holders do not have the right to attend the shareholders' meetings and/or advisory board meetings of Digital First or any legal successor as a guest or to be informed about resolutions.

7.2. The shareholders of Digital First as well as Digital First itself are free to undertake any reorganization measures (merger, conversion, demerger, contribution, etc.) without the prior consent of the Token Holders. In this case, the interests of the Token Holders (participation in the Fund) must be considered.

8. costs and taxes

8.1. All costs associated with artèQ Tokens, distributions, sales proceeds, and all taxes and other duties must be borne and paid or deducted by the Token Holders themselves. If the Issuer is required by law to withhold or deduct taxes, fees, and other charges, the Issuer will distribute only the remaining amount to the Token holders. It should be noted that the tax treatment (incl. capital gains tax deduction) requires clarification of detailed issues with the Austrian tax authorities due to a lack of case law, as well as legal opinion published to date. If the Issuer is obliged to withhold capital gains tax, it will withhold the capital gains tax and pay it to the competent Austrian tax authorities.

9. announcements

9.1. All notices concerning the tokenized shares will be sent by e-mail to the last known address of the respective token holders.

10. final provisions

10.1. Applicable law and place of jurisdiction. The tokenized shares shall be governed exclusively by Austrian law to the exclusion of the respective conflict of law rules of private international law. If the respective Token holders are not consumers within the meaning of the KSchG or FAGG, Vienna is agreed as the place of performance and jurisdiction.

10.2. Severability clause. If any provision of this agreement is or becomes legally invalid for whatever reason, this shall not affect the validity of the remaining provisions. The invalid or missing provision shall be replaced by a provision that comes as close as possible to the intention of the parties as expressed in these Terms and Conditions for Profit Participation Certificates.

Digital First GmbH