Xory Co. - A Wyoming Corporation
Xory Co., a Wyoming Corporation ("Company")
Series Seed Preferred Stock ("Series Seed")
[______]
[______] – Lead Entity ("Lead Investment Firm" [______]) representing (as exampled):
For every dollar invested, the Company pledges an equivalent value of its proprietary, pre-launch crypto holdings as collateral. These tokens are not backed by any asset, are not yet launched, and carry inherent risks, including uncertain marketability and liquidity. The collateral remains the property of the Company's finance and crypto arms and will only be transferred under the following conditions:
(i) If the investor's capital returns are less than three times (3X) the original investment, the pledged crypto shall be transferred to the investor to help offset the shortfall.
(ii) If the investor's capital returns meet or exceed three times (3X) the original investment, the pledged crypto shall remain with the Company.
This arrangement has no expiration and may extend indefinitely, providing investors with downside protection while preserving equity upside.
The Preferred Stock shall include standard broad-based weighted average anti-dilution protection, rights of first refusal and co-sale on transfers of founder stock, registration rights, and pro-rata participation rights, as specified in the Company's bylaws and shareholder agreements.
Our businesses are organized into three categories to protect all stakeholders.
Together, these entities form a combined valuation of approximately [______].
In the event of a liquidation or a sale of all or substantially all of the Company's assets (a "Company Sale"), the Preferred Stockholders shall be entitled to a 1X non-participating liquidation preference. This means they will receive, prior to any distribution to Common Stockholders, an amount equal to the original purchase price per share of Preferred Stock.
The Preferred Stock shall carry a non-cumulative dividend, payable at the discretion of the Board of Directors, if and when declared, and shall not accumulate if unpaid in any given year.
The Preferred Stock shall automatically convert into Common Stock upon the occurrence of (i) an Initial Public Offering (IPO) or (ii) approval by the Preferred Majority. The initial conversion ratio shall be 1:1, subject to adjustment for stock splits, stock dividends, and broad-based weighted-average anti-dilution protection.
The approval of the Preferred Majority shall be required for any of the following actions:
(i) amending the rights of the Preferred Stock,
(ii) altering the authorized share capital of the Company,
(iii) creating securities that are senior or pari passu to the Preferred Stock,
(iv) repurchasing shares, except for repurchases related to the termination or exercise of rights,
(v) declaring dividends,
(vi) changing the number of directors, or
(vii) initiating a liquidation or Company Sale.
On all other matters, the Preferred Stock shall vote together with the Common Stock on an as-converted basis.
In the event of a Company Sale approved by the Board of Directors, the Preferred Majority, and the Common Majority, all stockholders shall vote in favor of such sale and take all actions reasonably necessary to consummate the transaction, including executing related agreements and instruments. If any stockholder fails to comply, such stockholder hereby grants a limited proxy to the Company, authorizing it to execute only those documents strictly necessary to effectuate the Company Sale in accordance with this provision. This proxy shall be coupled with an interest and shall automatically terminate upon completion of the Company Sale. This provision shall be interpreted in compliance with applicable state law and enforceability requirements.
One board seat shall be granted for each investment representing at least five percent (5%) of the Company's total valuation, including the crypto arm. Based on the current combined valuation of approximately [______], an investment of at least [______] qualifies an investor to appoint one director to the Board, subject to the Company's governing documents, including its bylaws and shareholder agreements.
All employees and founders shall be subject to a four (4) or five (5)-year vesting schedule, with a one (1)-year cliff, followed by monthly vesting thereafter, in accordance with the terms of their respective equity agreements.
This agreement shall expire automatically if both parties do not execute and deliver this agreement, along with any required supporting documents, within 90 days of the effective date. Upon expiration, neither party shall have any further obligations under this agreement.
The Series Seed investment by the Lead Investment Firm is identified by security code "[______]".
Both parties agree to maintain strict confidentiality regarding the terms of this agreement and will not disclose any related information to any third party without the prior written consent of the other party, except as may be required by law or upon approval by a majority of the Board of Directors.
The Lead Investment Firm shall own approximately [______] of the Company, represented by [______] Preferred Shares, each priced at [______], as set forth in the attached capitalization table.
The investment funds shall be used exclusively for working capital purposes, including, but not limited to, the development, enhancement, and commercialization of artificial intelligence products and services.
The Company may, at its discretion, impose stop-transfer instructions on equity securities for a period not exceeding [______] business days, or longer if required by the Managing Underwriter, who shall have the authority to enforce such instructions. The Company will promptly notify the shareholder in writing of any such instructions.
The detailed capitalization information is enclosed for review.
Equity securities may not be transferred, sold, or assigned, whether voluntarily or involuntarily, without the prior written consent of the Company. Any attempt to transfer, sell, or assign equity securities in violation of this restriction shall be null and void and of no effect.
The Company may, at its sole discretion, offer to repurchase equity securities held by a current shareholder. Any such repurchase shall occur strictly between the Company and the relevant shareholder and shall require mutual written agreement.
The Company shall present a proposed valuation and buyback terms, which may differ from any prior, current, or implied terms. The shareholder may accept or decline at its sole discretion. Acceptance constitutes full and final agreement to the valuation and terms offered, irrespective of alternative valuation methods or future valuations.
No third-party valuation, appraisal, or external approval shall be required. All discussions, valuations, negotiations, and agreements related to any such repurchase shall remain strictly confidential and shall not be disclosed to any other party, including but not limited to other shareholders, investors, advisors, or affiliates, except as required by law.
Each party shall bear its own costs and expenses incurred in connection with the due diligence process. Neither party shall be obligated to proceed with any transaction unless and until definitive agreements are executed, notwithstanding the scope or outcome of due diligence conducted.
The Lead Investment Firm represents and warrants that all investors it introduces are either (i) "accredited investors" as defined in Rule 501 of Regulation D under the Securities Act of 1933, or (ii) "sophisticated investors" possessing sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of the investment, either independently or with the assistance of a purchaser representative, in compliance with applicable securities laws.
Each party (the "Indemnifying Party") shall indemnify, defend, and hold harmless the other party, its officers, directors, and affiliates (the "Indemnified Party") from and against any and all losses, claims, damages, liabilities, and expenses (including reasonable attorneys' fees) arising out of or resulting from (i) any breach of this agreement by the Indemnifying Party, or (ii) any willful misconduct or misrepresentation by the Indemnifying Party, except to the extent such losses are caused by the negligence or misconduct of the Indemnified Party.
Either party may terminate this agreement at any time prior to execution of a definitive written agreement. Except for the Confidentiality, Indemnification, Dispute Resolution, and Governing Law sections, which shall remain binding, no other obligations shall survive termination.
All disputes arising out of or related to this agreement shall be resolved exclusively through binding arbitration administered by the American Arbitration Association in Wyoming, under its Commercial Arbitration Rules. Judgment on the arbitration award may be entered in any court of competent jurisdiction.
This agreement and any future definitive agreements shall be governed by and construed in accordance with the laws of the State of Wyoming, without regard to its conflict of law provisions. All disputes shall be resolved through binding arbitration administered by the American Arbitration Association in Wyoming. Each party irrevocably waives any objection to venue or jurisdiction on the grounds of forum non conveniens.