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Token Sale Agreement Template for India

A comprehensive legal agreement governed by Indian law that establishes the terms and conditions for the sale of digital tokens. The document outlines the token's characteristics, purchase process, distribution mechanisms, and compliance requirements while adhering to Indian regulatory frameworks including securities laws, financial regulations, and technology-related legislation. It incorporates necessary provisions for KYC/AML compliance, risk disclosures, and regulatory representations specific to the Indian jurisdiction, while also addressing technical aspects such as smart contract functionality and wallet compatibility.

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What is a Token Sale Agreement?

The Token Sale Agreement serves as the primary legal framework for conducting token sales in India, establishing the rights and obligations of both token issuers and purchasers. This document is essential when a company or project plans to issue and sell digital tokens, whether for utility purposes, asset representation, or other blockchain-based functionalities. It must carefully navigate India's evolving regulatory landscape, particularly regarding cryptocurrency and digital assets, while incorporating international best practices for token sales. The agreement includes comprehensive sections on token specifications, sale terms, compliance requirements, risk factors, and technical implementation details, ensuring alignment with Indian securities laws, financial regulations, and technology-related legislation. Given the complex regulatory environment in India, special attention is paid to regulatory compliance, KYC/AML requirements, and appropriate risk disclosures.

What sections should be included in a Token Sale Agreement?

1. Parties: Identification of the token issuer and the purchaser, including complete legal names and addresses

2. Background: Context of the token sale, brief description of the project, and purpose of the agreement

3. Definitions: Detailed definitions of technical terms, token characteristics, and other key concepts used in the agreement

4. Token Description: Detailed description of the token's features, functionality, and technical specifications

5. Sale Terms: Specific terms of the token sale including price, payment methods, minimum/maximum purchase amounts, and sale periods

6. Purchase Process: Step-by-step process for token purchase, including KYC/AML requirements and wallet requirements

7. Token Distribution: Timeline and method of token distribution, including any vesting or lock-up periods

8. Use of Proceeds: Explanation of how the funds from the token sale will be used

9. Representations and Warranties: Statements of fact and assurances from both parties regarding their capacity, authority, and compliance

10. Risk Factors: Comprehensive disclosure of risks associated with the token purchase

11. Compliance Requirements: Regulatory compliance obligations for both parties, including ongoing requirements

12. Restrictions and Limitations: Transfer restrictions, jurisdictional limitations, and usage constraints

13. Termination: Circumstances under which the agreement can be terminated and the consequences

14. Governing Law and Jurisdiction: Specification of Indian law as governing law and jurisdiction for disputes

15. General Provisions: Standard contractual provisions including notices, amendments, and severability

What sections are optional to include in a Token Sale Agreement?

1. Smart Contract Terms: Required if the token functionality is governed by smart contracts, detailing the smart contract specifications and operation

2. Staking Provisions: Include if the token includes staking functionality, detailing staking requirements and rewards

3. Governance Rights: Required if the token grants governance or voting rights in the project

4. Token Burning Mechanism: Include if the project includes token burning or buyback mechanisms

5. Exchange Listing: Include if there are specific plans or commitments regarding exchange listings

6. Project Milestones: Required if token benefits are tied to project development milestones

7. Affiliate Program: Include if the token sale includes referral or affiliate programs

8. Tax Considerations: Detailed section on tax implications if targeting sophisticated investors

9. Privacy Policy: Required if personal data collection goes beyond basic KYC requirements

10. Force Majeure: Include for added protection against unforeseen circumstances affecting token functionality

What schedules should be included in a Token Sale Agreement?

1. Token Specifications: Technical specifications of the token including smart contract code and architecture

2. Token Economics: Detailed breakdown of token distribution, vesting schedules, and tokenomics

3. KYC/AML Procedures: Detailed procedures for identity verification and anti-money laundering compliance

4. Risk Disclosure Statement: Comprehensive list of risk factors and detailed risk explanations

5. Project Roadmap: Detailed timeline of project development and token utility implementation

6. Wallet Requirements: Technical specifications for compatible wallets and storage requirements

7. Purchase Procedures: Step-by-step guide to the token purchase process

8. Legal Opinions: Relevant legal opinions regarding token classification and regulatory compliance

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

India

Publisher

Genie AI

Document Type

Sales Agreement

Sector

Sales

Cost

Free to use

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