TERMS AND CONDITIONS OF GLEDOS PRE-SALE

April 2018

THESE TERMS AND CONDITIONS OF GLEDOS Pre-sale (“Terms” or “Agreement”) GOVERN YOUR PURCHASE OF THE GLEDOS TOKENS (the “Tokens”) DURING THE Pre-sale (AS DEFINED BELOW) PROVIDED THROUGH THE WEBSITE www.gledos.io. (the “Website”).

PLEASE READ THESE TERMS CAREFULLY BEFORE APPLYING FOR THE PRE-SALE OR PURCHASING ANY TOKENS DURING THE PRE-SALE (I.E. CONTRIBUTING ANY AMOUNT OF PAYMENT CURRENCY TO THE INDICATED WALLET ADDRESS), AS THEY AFFECT YOUR OBLIGATIONS AND LEGAL RIGHTS, INCLUDING, BUT NOT LIMITED TO, WAIVERS OF RIGHTS AND LIMITATION OF LIABILITY IN CONNECTION WITH PARTICIPATING IN THE PRE-SALE AND PRE-SALE KYC, USING THE PLATFORM OR OTHER SERVICES PROVIDED BY THE COMPANY AND ACCEPTING TOKENS. BY SELECTING “I AGREE”, APPLYING FOR THE PRE-SALE OR PURCHASING ANY TOKENS DURING THE PRE-SALE, YOU ARE ACKNOWLEDGING THAT YOU HAVE READ THESE TERMS AND YOU ARE AGREEING TO BE BOUND BY THEM. IF YOU DO NOT AGREE TO THESE TERMS, DO NOT APLLY FOR THE PRE-SALE OR PURCHASE ANY TOKENS DURING THE PRE-SALE.

Your purchase of the Tokens during the Pre-sale from INOVITUS Ltd., a limited liability company organized under the laws of Slovenia, entered in to the Slovenian court’s register with the identification number 8062480000, tax number SI54615232 registered seat in Ljubljana and its business address Ljubljana, Ulica bratov Komel 56d, 1210 Ljubljana - Šentvid, Slovenia, (referred as the “Company”, “we,” or “us”) is subject to these Terms. Each of you and Company is a “Party” and, together, the “Parties.”

By purchasing Tokens from us during the Pre-sale, you will be bound by these Terms and any terms incorporated by reference. If you have any questions regarding these Terms, please contact us at [email protected]

Citizens, nationals and residents from certain countries or territories defined in the Section 3 and the Section 13 of these Terms are prohibited from purchasing of the Tokens.

These Terms will be available on the Website during the Pre-sale.

You and Company agree as follows:

Exhibit A

Please find a detailed information in the Gledos Whitepaper published on the web page www.gledos.io

Exhibit B

Certain Risks Relating to purchase, sale, ownership, custody and use of the Tokens and participating in the Pre-sale.

Important Note: As noted elsewhere in these Terms, the Tokens are not being structured or sold as securities or any other form of investment product. Accordingly, none of the information presented in these Terms is intended to form the basis for any investment decision, and no specific recommendations are intended. The Company expressly disclaims any and all responsibility for any direct or consequential loss or damage of any kind whatsoever arising directly or indirectly from: (i) reliance on any information contained in these Terms, (ii) any error, omission or inaccuracy in any such information or (iii) any action resulting from such information.

There is a risk that in some jurisdictions the Tokens might be considered to be securities or some other type of regulated instrument in the future. The Company does not give warranties or guarantees that the Tokens are not a security in any and/or all jurisdictions. Each User of the Tokens shall bear its own legal or financial consequences of the Tokens being considered a security in their respective jurisdiction. Every User is bound to check if acquisition and disposal of the Tokens is legal in its jurisdiction, and by accepting these Terms each User undertakes not to use the Tokens should their use not be legal in the relevant jurisdiction. If a User establishes that the use of the Tokens under these Terms is not legal in its jurisdiction, it should not use the Tokens, not acquire them and should immediately stop using or possessing them if such case arises.

By purchasing, selling, holding, owning, and using the Tokens and participating in the Pre-sale, you expressly acknowledge and assume the following risks:

  • Risk of Losing Access to the Tokens 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 the Tokens stored in you digital wallet or vault. Accordingly, loss of requisite private key(s) associated with you digital wallet or vault storing the Tokens will result in loss of such Tokens. 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 Tokens. Any errors or malfunctions caused by or otherwise related to the digital wallet or vault you choose to receive and store the Tokens, including your own failure to properly maintain or use such digital wallet or vault, may also result in the loss of your Tokens. Additionally, your failure to precisely follow the procedures set forth in for buying and receiving the Tokens, including, for instance, if you provide an incorrect receipt address, or provide an address that is not ERC-20 compatible, may result in the loss of your Tokens.

  • Risks Associated with the Ethereum Protocol
  • Because the Pre-sale, the Crowdsale, the Smart Contract System, the Tokens and the Services are based on the Ethereum protocol, any malfunction, breakdown or abandonment of the Ethereum protocol may have a material adverse effect on the Pre-sale, the Crowdsale, the Smart Contract System, the Services or the Tokens. Moreover, advances in cryptography, or technical advances such as the development of quantum computing, could present risks to the Pre-sale, the Crowdsale, the Smart Contract System, the Tokens and the Services, including the utility of the Tokens for obtaining the Services, by rendering ineffective the cryptographic consensus mechanism that underpins the Ethereum protocol. Smart contracts concepts, the underlying software application and software platform (i.e. the Ethereum blockchain) is still in an early development stage and unproven. There is no warranty or assurance that the process for creating the Tokens, the Pre-sale and the Crowdsale will be uninterrupted or error-free and there is an inherent risk that the software could contain defects, weaknesses, vulnerabilities, viruses or bugs causing, inter alia, the complete loss of Payment Currency contributions and/or the Tokens.

  • 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 the Tokens 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 Services and the Tokens, including, but not limited to, accurate execution and recording of transactions involving the Tokens. You understand and accept that the miners will ultimately be in control of the delivery of the Tokens via the smart contract mechanism, and that a majority of miners could agree at any point to make changes, updates, modifications to, or effect a deletion or destruction of the smart contract mechanism, and that such a scenario could lead to the Tokens losing intrinsic value and/or functionality.

  • Risk of Hacking and Security Weaknesses
  • Hackers or other malicious groups or organizations may attempt to interfere with the Pre-sale, the Crowdsale, the Smart Contract System, the Ethereum Wallet, the User’s Ethereum Wallet, the Services or the Tokens in a variety of ways, including, but not limited to, malware attacks, denial of service attacks, consensus-based attacks, Sybil attacks, smurfing and spoofing. Furthermore, because the Smart Contract System and the Services are based on open-source software, there is a risk that a third party or a member of the Company team may intentionally or unintentionally introduce weaknesses into the core infrastructure of the Services, the Pre-sale, the Crowdsale, the Ethereum Wallet, the User’s Ethereum Wallet or the Smart Contract System, which could negatively affect the Services, the Pre-sale, the Crowdsale, the Smart Contract System, the Ethereum Wallet, the User’s Ethereum Wallet and the Tokens, including the utility of the Tokens for obtaining the Services.

  • Risks Associated with Markets for the Tokens
  • The Tokens are intended to be used solely within the Services and the Company may not enable or otherwise facilitate any secondary trading or external valuation of the Tokens. This may restrict the contemplated avenues for using the Tokens to the provision or receipt of the Services, and could therefore create illiquidity risk with respect to any the Tokens you own. Even if secondary trading of the 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 the Tokens (e.g., as denominated in a fiat or digital currency), such value may be extremely volatile and diminish to zero. If you are purchasing the Tokens as a form of investment on a speculative basis or otherwise, or for a financial purpose, with the expectation or desire that their inherent, intrinsic or cash-equivalent value may increase with time, you assume all risks associated with such speculation or actions, and any errors associated therewith, and accept that the Tokens are not offered by the Company or its affiliates on an investment or speculative basis. You further acknowledge that any funds you consider to be invested in the Company, the Services or the Tokens will not be protected, guaranteed or reimbursed by any governmental, regulatory or other entity, and will not, for instance be guaranteed by any Slovenian’s guarantee scheme, and is unlikely to be protected by any equivalent scheme in a jurisdiction outside of Slovenia.

  • Risks Associated with Uncertain Regulations and Enforcement Actions
  • Blockchain technology allows new forms of interaction and that it is possible that certain jurisdictions will apply existing regulations on, or introduce new regulations addressing, blockchain technology based applications, which may be contrary to the current setup of the smart contract implemented in the Pre-sale, the Crowdsale and which may, inter alia, result in substantial modifications to the smart contract and/or the Services, including its termination and the loss of your Tokens. Additionally, regulation of the business of the Company may be uncertain in various jurisdictions owing to the potential crossovers between the treatment of the business of the Company across insurance services and blockchain technology laws and regulations. It is not known what regulatory framework the Pre-sale, the Crowdsale and the Services will be caught by, the nature and obligations that will be imposed on the Company in order to comply with any such regulatory framework or when/if the Company will even be able to apply to be regulated so that it may lawfully carry out its proposed business activities.

    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 Services 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 Services and the Tokens. Regulatory actions could negatively impact the Services 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. The Company 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.

  • Risk of Uninsured Losses
  • Unlike bank accounts or accounts at some other financial institutions. The 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 or private insurance arranged by the Company, to offer recourse to you.

  • Risks Arising from Taxation
  • The tax characterization of the Tokens is uncertain. You must seek your own tax advice in connection with purchasing the Tokens, which may result in adverse tax consequences to you, including withholding taxes, income taxes and tax reporting requirements. You are urged to consult your own tax adviser as to the tax consequences of the ownership and disposition of the Tokens, including the applicability and effect of any other tax laws or tax treaties, and of pending or proposed changes in applicable tax laws, and of any actual changes in applicable tax laws.

  • Risk of Competing the Services
  • It is possible that alternative services could be established that utilize the same open source code and protocol underlying the Services and attempt to facilitate services that are materially similar to the Services. The Services may compete with these alternatives, which could negatively impact the Services and the Tokens, including the utility of the Tokens for obtaining the Services.

  • Risk of Insufficient Interest in the Services
  • It is possible that the Services 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 services more generally. Such a lack of use or interest could negatively impact the development of the Services and therefore the potential utility of the Tokens, including the utility of the Tokens for obtaining the Services. The creation and issue of the Tokens and the development of the Services may be abandoned for a number of reasons, including lack of interest from the public, lack of funding, lack of commercial success or prospects (e.g. caused by competing projects). You therefore understand and accept that there is no warranty or assurance that, even if the Services is partially or fully developed and launched, you will receive any benefits through the Tokens that you hold.

  • Risks Associated with the Development and Maintenance of the Services
  • The Services is still under development and may undergo significant changes over time. Although we intend for the Tokens and the Services to function as described in Exhibit A and intends to take commercially reasonable steps toward those ends, we may have to make changes to the specifications of the Tokens or the Services for any number of legitimate reasons. Moreover, we have no control over how other participants will use the Services, what products or services will be offered through the Services by third parties, or how third-party products and services will utilize the Tokens (if at all). This could create the risk that the Tokens or the Services, as further developed and maintained, may not meet you expectations at the time of purchase. Furthermore, despite our good faith efforts to develop and participate in the Services, it is still possible that the Services will experience malfunctions or otherwise fail to be adequately developed or maintained, which may negatively impact the Services and the Tokens, and the potential utility of the Tokens, including the utility of the Tokens for obtaining the Services. The Company makes no warranties or representations and offers no assurances (in each case whether express or implied) that the Tokens shall confer any actual and/or exercisable rights of use, functionality, features, purpose or attributes in connection with the Services.

  • Risk of an Unfavourable Fluctuation of ETH Value
  • The Company intends to use the means received from the Pre-sale and the Crowdsale to fund the maintenance and development of the Services, as described further in Exhibit A. The means received from the Pre-sale and the Crowdsale will be denominated in Ether, and may be converted into other cryptographic and fiat currencies. If the value of ETH fluctuates unfavourably during or after the Pre-sale and the Crowdsale, we may not be able to fund development, or may not be able to develop or maintain the Services in the manner that it 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 including uncertainties created by the lack of resolution to the bitcoin scaling debate, the possibility of a so-called “Hard Fork” of bitcoin if one of the competing camps in the scaling debate decides to force the issue; another DAO-like attack on the Ethereum platform; or significant security incidents or market irregularities at one or more of the major cryptocurrency exchanges.

  • Risk of Hard Fork
  • The Services will need to go through substantial development works as part of which it may become the subject of significant conceptual, technical and commercial changes before release. As part of the development, an upgrade to the Tokens may be required (hard-fork of the Tokens) and if you decide not to participate in such upgrade, you may no longer be able to use your Tokens and any non-upgraded Tokens may lose their functionality in full.

  • Risk of Dissolution of the Company or the Services
  • It is possible that, due to any number of reasons, including, but not limited to, an unfavourable fluctuation in the value of ETH (or other cryptographic and fiat currencies), decrease in the Tokens’ utility (including their utility for obtaining the Services), the failure of commercial relationships, or intellectual property ownership challenges, the Services may no longer be viable to operate or the Company may dissolve.

  • Risks Arising from Lack of Governance Rights
  • Because the Tokens confer no governance rights of any kind with respect to the Services or the Company, all decisions involving the Company’s products or the Services or the Company itself will be made by the Company at its sole discretion, including, but not limited to, decisions to discontinue its products or the Services, to create and sell more Tokens for using the Services, or to sell or liquidate the Company. These decisions could adversely affect the Services and the utility of any Tokens you own, including their utility for obtaining the Services.

  • Risks Arising from the Education market
  • The Education market, and by extension the Services, is subject to a variety of federal, state and international laws and regulations, including those with respect to KYC/AML and customer due diligence procedures, privacy and data protection, consumer protection, data security, and others. These laws and regulations, and the interpretation or application of these laws and regulations, could change. In addition, new laws or regulations affecting the Services could be enacted, which could impact the utility of the Tokens and the Services. Additionally, the Services participants are subject to industry specific laws and regulations or licensing requirements. If any of these parties fails to comply with any of these licensing requirements or other applicable laws or regulations, or if such laws and regulations or licensing requirements become more stringent or are otherwise expanded, it could adversely impact the Services and the Tokens, including the Tokens’ utility for obtaining the Services.

  • Unanticipated Risks
  • p>Cryptographic tokens such as the Tokens are a new and untested technology. In addition to the risks included in this Exhibit B. there are other risks associated with your purchase, sale, ownership, custody, possession, and use of the Tokens, including those that the Company cannot reasonably foresee. Such risks may further materialize as unanticipated variations or combinations of the risks discussed in this Exhibit B.

  • Sybil & Outsourcing Attacks
  • Creating multiple (Sybil) identities would theoretically allow for malicious nodes to pretend to store more copies of the same data, but having them stored only once and quickly fetched from the storing location when required to prove they are providing the service. This issue is addressed by establishing a similar mechanism to the Proof-of-Replication introduced in the Whitepaper applied to graphs, with the consideration that the data used for the Services is public by design. With these preconditions in place, encryption is used to prove replication and not used to obscure data - it is up to the data creator to encrypt the input information they require to be obscured before inputting data into the system.

  • The 51% Attack
  • A 51% attack is usually defined as an ability to control an overwhelmingly large amount (at least 51%) of power in a decentralized system (i.e. hashing power in Ethereum), which then grants the ability to manipulate data. In terms of data integrity of the Services, such an attack is not a problem as for each graph it is deterministically verifiable that the data hasn’t been changed by comparing the hash extracted from the DH node with the cryptographic fingerprints in the blockchain layer. Additionally, DH nodes are incentivized to store in its proper form in order to be able to prove storage and receive compensation. If a node fails to provide proof of retrievability / replication, it can be easily substituted by another node in the system by the data creator.

  • Byzantine faults
  • Byzantine faults are defined as faults caused by nodes to deliver supply chain graph data either by being unavailable or having an incorrect data response. An incorrect response is defined as a response that cannot be validated by an appropriate hash fingerprint on the blockchain layer of services. Because of the data governance consensus of replicating the graph data in data holder nodes (where is the number of distinct supply chain data creator nodes), the probability of failure to deliver the requested data significantly diminishes with the number of involved nodes in the exchange. When a DH node fails to deliver service for a required period of time, the data distribution protocol is used to find a new candidate node and replicate the data to keep the required number of copies of the services.

  • Eclipse attacks
  • Isolating a node or a multitude of them from the Services by having all outbound connections reach malicious nodes is called the eclipse attack. This is addressed by using public key hashes as node IDs in Kademlia. To eclipse a node for using the Services the attacker has to generate key pairs that position themselves closer in Kademlia to the targeted node than its nearest non-malicious neighbour, as well as maintaining that position when new nodes join with closer IDs. This problem grows in complexity as more nodes are introduced for using the Services and essentially presents a form of proof-of-work problem.

  • Hostage data attacks
  • A malicious node might refuse to deliver certain graph data in order to extort data owners for additional tokens. This possibility is mitigated by replicating graph data across a multitude of nodes.

  • Internet transmission risks
  • There are risks associated with using the Tokens including, but not limited to, the failure of hardware, software, and Internet connections. The Company shall not be responsible for any communication failures, disruptions, errors, distortions or delays you may experience when using the Website, the Services and the Tokens, howsoever caused.

  • Less than full amount the Tokens sold
  • There can be no assurance that more than the minimum amount of the Tokens (Soft Cap) will be sold during the Pre-sale and the Crowdsale. In that case, less than the maximum necessary funds will be available to the Company and, consequently, its technology development and business development plans and prospects could be adversely affected.