Website Terms of Use

These Terms of Use (this “Agreement”) constitutes a legally binding contract between Mainframe Group Inc., a Delaware corporation (“Company,” “we,” “us,” “our”) and you with respect to your use of our website at mainframe.com (collectively, the “Site”). It is important that you carefully read and understand the terms and conditions of this Agreement. "THESE TERMS OF USE (THESE “TERMS”) SET FORTH THE LEGALLY BINDING TERMS AND CONDITIONS THAT GOVERN YOUR USE OF THE SITE. BY ACCESSING OR USING THE SITE, YOU ARE ACCEPTING THESE TERMS (ON BEHALF OF YOURSELF OR THE ENTITY THAT YOU REPRESENT), AND YOU REPRESENT AND WARRANT THAT YOU HAVE THE RIGHT, AUTHORITY, AND CAPACITY TO ENTER INTO THESE TERMS (ON BEHALF OF YOURSELF OR THE ENTITY THAT YOU REPRESENT). YOU MAY NOT ACCESS OR USE THE SITE OR ACCEPT THE TERMS IF YOU ARE NOT AT LEAST 18 YEARS OLD. IF YOU DO NOT AGREE WITH ALL OF THE PROVISIONS OF THESE TERMS, DO NOT ACCESS AND/OR USE THE SITE."

Be advised that this Agreement contains disclaimers of warranties and limitations on liability that may be applicable to you.

USERS AND PURCHASERS OF MAINFRAME TOKENS MUST BE MADE AWARE OF CERTAIN ILLUSTRATIVE RISK FACTORS AS SET OUT IN APPENDIX A.

Notice Regarding Dispute Resolution: This Agreement contains provisions that govern how claims you and the Company have against each other are resolved (see Section 7 ( Limitation of Liability ), Section 10 ( Dispute Resolution ), and Section 11 ( Choice of Law and Forum ) below). It also contains an agreement to arbitrate, which will, with limited exception, require you to submit claims you have against us to binding and final arbitration, unless you opt-out of the agreement to arbitrate in accordance with Section 10(c). Unless you opt-out: (A) you will only be permitted to pursue claims against the Company on an individual basis, not as part of any class or representative action or proceeding and (B) you will only be permitted to seek relief (including monetary, injunctive, and declaratory relief) on an individual basis.

Changes to this Agreement

We reserve the right to change the terms and conditions of this Agreement by providing you with notice of such changes, such as by sending an email notification, providing notice through the Site, or updating the “Last Updated” date at the beginning of this Agreement. Any changes we make will be effective immediately upon providing notice to you. Your continued use of the Site will constitute your acceptance of any such updated Agreement terms. Be sure to return to this page periodically to ensure familiarity with the most current version of this Agreement.

Rules Governing Your Use of the SITE

The Site will provide you with information relating to our services and the use of Mainframe tokens.

You represent and warrant that you are at least [21] years old and have the full right, power, and authority to enter into and perform this Agreement without the consent or approval of any third party.

You may not use the Site, or assist or encourage any other party, to engage in any of the following prohibited activities:

Violating any applicable law, statute, ordinance, or regulation, or encouraging any conduct that could constitute a criminal offense or give rise to civil liability;

Copying, framing, or mirroring any part of the Site;

Permitting any third party to access the Site;

Publishing, transmitting, distributing, or storing content, material, information, or data that: (a) is illegal, obscene, defamatory, libelous, threatening, harassing, abusive, or hateful or that advocates violence or threatens the health of others; (b) is harmful to or interferes with the Site or any third party’s networks, equipment, applications, services, or websites (e.g., viruses, worms, Trojan horses, etc.); (c) infringes, dilutes, misappropriates, or otherwise violates any privacy, intellectual property, publicity, or other personal rights including, without limitation, copyrights, patents, trademarks, trade secrets, or other proprietary information (including unauthorized use of domain names); or (d) is fraudulent or contains false, deceptive, or misleading statements, claims, or representations (such as “phishing”);

Attempting to disrupt, degrade, impair, or violate the integrity or security of the Site or the computers, services, accounts, or networks of any other party (including, without limitation, “hacking,” “denial of service” attacks, etc.), including any activity that typically precedes attempts to breach security such as scanning, probing, or other testing or vulnerability assessment activity, or engaging in or permitting any network or hosting activity that results in the blacklisting or other blockage of the Company internet protocol space;

Collecting or harvesting any personally identifiable information, including account names, from the Site;

Impersonating another person or otherwise misrepresenting your affiliation with a person or entity, conducting fraud, hiding or attempting to hide your identity;

Submitting to the Site or to the Company any personally identifiable information, except as requested by the Company;

Bypassing the measures we may use to prevent or restrict access to the Site;

Transmitting any trade secret or other material, non-public information about any person, company, or entity without the authorization to do so;

Removing any copyright, trademark, or other proprietary rights notices contained in or on the Site;

Sublicensing, selling, renting, leasing, transferring, assigning, or conveying any rights under this Agreement to any third party, except as expressly permitted herein;

Executing any form of network monitoring or running a network analyzer or packet sniffer or other technology to intercept, decode, mine, or display any packets used to communicate between the Company’s servers or any data not intended for you; and/or

Harvesting or collecting information about any Site visitors or members.

Improper use of the Site may result in termination of your access to and use of the Site, and/or civil or criminal liabilities. You agree to use the Site in accordance with all applicable laws and regulations.

Intellectual Property

Your Rights. The Company grants you a limited, revocable right to access and use the Site solely for your own internal, non-commercial use. Use of the Site for any other purpose is strictly prohibited. You must not reproduce, distribute, modify, create derivative works of, publicly display, publicly perform, republish, download, store, or transmit any of the material on the Site. Except as expressly set forth herein, no rights or licenses are granted to you under this Agreement, whether by implication, estoppel, or otherwise.

Company Rights. The Site and its contents are owned and operated by the Company and its licensors. The Site and its contents are protected by U.S. and international copyright, trademark, and other laws and will remain the property of the Company and its licensors. The Company reserves all rights not expressly granted herein in the Site. You acknowledge that you do not acquire any ownership rights by using the Site. The trademarks, logos, and service marks displayed on the Site (collectively, the “Company Trademarks”) are the registered and unregistered trademarks of the Company or the Company’s licensors and suppliers. Nothing contained in this Agreement or the Site should be construed as granting, by implication, estoppel, or otherwise, any license or right to use any Company Trademarks without the express written permission of the Company or the Company’s licensors.

PRIVACY

Please refer to our Privacy Policy at mainframe.com/legal/privacy for information about how we collect, use and share your information.

Term & Termination

This Agreement is effective from the date on which you first access the Site and shall remain effective until terminated in accordance with its terms. The Company may immediately terminate this Agreement, and/or your access to and use of the Site, or any portion thereof, at any time and for any reason, with or without cause, by providing notice to you. The Company may also terminate this Agreement immediately if you fail to comply with any term or provision of this Agreement. Upon termination of this Agreement by either party, your right to access and use the Site shall immediately cease and you shall cease all access and use of the Site.

Upon termination or expiration of this Agreement for any reason, Sections 1, 2, 3.2, and 4–12 shall survive.

We reserve the right at any time and from time to time to modify or discontinue, temporarily or permanently, the Site, or any part or portion thereof, by providing notice to you. You agree that we shall not be liable to you or to any third party for any modification, suspension, or discontinuance of the Site, or any part or portion thereof. Nothing in this Agreement shall be construed to obligate the Company to maintain and support the Site, or any part or portion thereof, during the term of this Agreement.

Disclaimers

THE SITE IS PROVIDED “AS IS” AND “WITH ALL FAULTS” AND WITHOUT WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, AND ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, IMPLIED WARRANTIES OF TITLE, NON-INFRINGEMENT, ACCURACY, COMPLETENESS, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, ANY WARRANTIES THAT MAY ARISE FROM COURSE OF DEALING, COURSE OF PERFORMANCE, OR USAGE OF TRADE, AND ANY WARRANTIES THAT THE SITE IS CURRENT AND/OR UP-TO-DATE ARE HEREBY EXPRESSLY DISCLAIMED TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW.

THERE IS NO WARRANTY, REPRESENTATION, OR GUARANTEE THAT THE SITE, OR YOUR USE OF THE SITE, WILL BE UNINTERRUPTED, COMPLETE, ACCURATE, CURRENT, RELIABLE, ERROR-FREE, SECURE, OR THAT ANY PROBLEMS WILL BE CORRECTED, OR THAT THE SITE, OR ANY INFORMATION, SOFTWARE, OR OTHER MATERIAL ACCESSIBLE FROM THE SITE, IS FREE OF VIRUSES OR OTHER HARMFUL COMPONENTS. WE DO NOT WARRANT, GUARANTEE, OR MAKE ANY REPRESENTATION REGARDING THE USE OF, OR THE RESULTS OF THE USE OF, THE SITE AND YOU ASSUME ALL RESPONSIBILITY AND RISK FOR YOUR USE OF THE SITE, AND YOUR RELIANCE THEREON.

Limitation of Liability

NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY OF ANY KIND, NEITHER THE COMPANY NOR ANY OF ITS LICENSORS, SPONSORS, AGENTS, SUCCESSORS, OR ASSIGNS, NOR OUR OR THEIR DIRECTORS, OFFICERS, EMPLOYEES, CONSULTANTS, OR OTHER REPRESENTATIVES, ARE RESPONSIBLE OR LIABLE FOR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL, EXEMPLARY, PUNITIVE OR OTHER INDIRECT DAMAGES (INCLUDING, WITHOUT LIMITATION, ANY LOSS OF PROFITS, LOST SAVINGS, OR LOSS OF DATA) UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY, OR OTHER THEORY ARISING OUT OF OR RELATING IN ANY MANNER TO YOUR USE, OR INABILITY TO USE, THE SITE, WHETHER OR NOT WE HAVE BEEN INFORMED OF THE POSSIBILITY OF SUCH DAMAGES OR LIABILITIES.

SOME STATES DO NOT ALLOW THE EXCLUSION OR LIMITATION OF CERTAIN WARRANTIES AND/OR LIABILITIES, SO CERTAIN OF THE ABOVE LIMITATIONS OR EXCLUSIONS MAY NOT APPLY TO YOU.

Indemnification

You agree to fully indemnify, defend (at the Company’s request), and hold the Company, our licensors, suppliers, agents, successors, and assigns, and our and their directors, officers, employees, consultants, and other representatives (collectively, the “Company Parties”) harmless from and against any and all claims, damages, losses, costs (including reasonable attorneys’ fees), and other expenses that arise directly or indirectly out of or from: (a) your actual or alleged breach of this Agreement; (b) any allegation that any materials you submit to us or transmit to the Site infringe, misappropriate, or otherwise violate the copyright, patent, trademark, trade secret, or other intellectual property or other rights of any third party; (c) your activities in connection with the Site; (d) your negligence or willful misconduct; (e) your use of the results, content, data, or information provided via the Site; (f) any service or product offered by you in connection with or related to your use of the Site; and/or (g) your violation of any laws, rules, regulations, codes, statutes, ordinances, or orders of any governmental and quasi-governmental authorities, including, without limitation, all regulatory, administrative and legislative authorities.

Jurisdictional Issues

The Company makes no representation that the Site operates (or is legally permitted to operate) in all geographic areas, or that the Site is appropriate or available for use in other locations. Accessing the Site from territories where the Site or any content or functionality of the Site or portion thereof is illegal is expressly prohibited. If you choose to access the Site, you agree and acknowledge that you do so on your own initiative and at your own risk, and that you are solely responsible for compliance with all applicable laws. [The Site is operated from the United States. If you are located outside of the United States and choose to use the Site, your information will be transferred, processed, and stored in the United States. U.S. privacy laws may not be as protective as those in your jurisdiction. Your agreement to the terms of this Agreement followed by your submission of your information in connection with the Site represents your agreement to this practice. If you do not want your information transferred to or processed or stored in the United States, you should not access or use the Site.]

Dispute Resolution

Arbitration. The parties shall use their best efforts to settle any dispute, claim, question, or disagreement directly through good-faith negotiations, which shall be a precondition to either party initiating a lawsuit or arbitration. Except for disputes relating to the Company’s intellectual property (such as trademarks, trade dress, domain names, trade secrets, copyrights, and patents) or if you opt out of this agreement to arbitrate, all claims arising out of or relating to this Agreement and your access and use of the Site shall be finally settled by binding arbitration administered by the American Arbitration Association (“AAA”) in accordance with the provisions of its Commercial Arbitration Rules and of its supplementary procedures for consumer-related disputes, excluding any rules or procedures governing or permitting class actions. The arbitrator, and not any court or agency, shall have exclusive authority to resolve all disputes arising out of or relating to this Agreement, including, but not limited to, any claim that all or any part of this Agreement is void or voidable. The arbitrator shall be empowered to grant whatever relief would be available in a court; provided, however, that the arbitrator will not have authority to award damages, remedies, or awards that conflict with this Agreement. The arbitrator’s award shall be binding on the parties and may be entered as a judgment in any court of competent jurisdiction. To the extent the filing fee for the arbitration exceeds the cost of filing a lawsuit, the Company will pay the additional cost. You and the Company hereby expressly waive trial by jury. You also agree not to participate in claims brought in a private attorney general or representative capacity, or consolidated claims involving another person’s account, if the Company is a party to the proceeding. This dispute resolution provision will be governed by the Federal Arbitration Act.

The parties understand that, absent this mandatory provision, they would have the right to sue in court and have a jury trial. They further understand that, in some instances, the costs of arbitration could exceed the costs of litigation and that the right to discovery may be more limited in arbitration than in court.

Class-Action Waiver. The parties further agree that any arbitration shall be conducted in their individual capacities only, and not as a class action or other representative action. If any court or arbitrator determines that the class-action waiver set forth in this section is void or unenforceable for any reason, or that an arbitration can proceed on a class basis, then the arbitration provision set forth above shall be deemed null and void in its entirety and the parties shall be deemed not to have agreed to arbitrate disputes.

Exception—Litigation of Small-Claims-Court Claims. Notwithstanding the parties’ decision to resolve all disputes through arbitration, either party may also seek relief in a small claims court for disputes or claims within the scope of that court’s jurisdiction.

Thirty-Day Right to Opt Out. You have the right to opt out and not be bound by the arbitration- and class-action-waiver provisions set forth in this section by sending written notice of your decision to opt out to the following email address: legal@mainframe.com. The notice must be sent within 30 days after first accessing the Site and shall be deemed given 24 hours after it is sent. If you opt out of these arbitration provisions, the Company also will not be bound by them. In addition, if you elect to opt out of these arbitration provisions, the Company may prohibit you from accessing or using the Site.

Time Limitation on Claims. You agree that any claim you may have arising out of or related to your relationship with the Company and this Agreement must be filed within one year after such claim arose; otherwise, your claim is permanently barred.

Choice of Law and Forum

This Agreement and your relationship with the Company Parties shall be governed by, and construed and interpreted in accordance with, the laws of the State of California without regard to its conflict of laws principles. Subject to Section 10, the parties irrevocably consent to bring any action to enforce this Agreement in the federal or state courts located in Utah County, Utah and you consent to the exclusive jurisdiction of the federal or state courts located in Utah County, Utah.

Miscellaneous

If any provision of this Agreement is held to be invalid or unenforceable by a court of competent jurisdiction, then the remaining provisions will nevertheless remain in full force and effect, and such provision will be reformed in a manner to effectuate the original intent of the parties as closely as possible and remain enforceable. If such reformation is not possible in a manner that is enforceable, then such term will be severed from the remaining terms, and the remaining terms will remain in effect. This is the entire Agreement between you and us relating to the subject matter herein and supersedes any and all prior or contemporaneous written or oral agreements between you and us with respect to such subject matter. This Agreement may not be changed, waived, or modified except by a written instrument signed by the Company. If any employee of the Company offers to modify this Agreement, he or she is not acting as an agent for the Company or speaking on the Company’s behalf. You may not rely, and should not act in reliance on, any statement or communication from an employee of the Company or anyone else purporting to act on the Company’s behalf. This Agreement is between you and the Company; there are no third-party beneficiaries. You may not access the Site if you are a resident of a country embargoed by the United States, or are a foreign person or entity blocked or denied by the United States government. No agency, partnership, joint venture, employee-employer, or franchiser-franchisee relationship is intended or created by this Agreement. Neither this Agreement nor any right, obligation, or remedy hereunder is assignable, transferable, delegable, or sublicensable by you except with the Company’s prior written consent, and any attempted assignment, transfer, delegation, or sublicense shall be null and void. The Company may assign, transfer, or delegate this Agreement or any right or obligation or remedy hereunder in its sole discretion. No waiver by either party of any breach or default hereunder shall be deemed to be a waiver of any preceding or subsequent breach or default. Except as explicitly stated otherwise, legal notices shall be served on the Company at legal@mainframe.com. Notice to you shall be deemed given 24 hours after the e-mail is sent. Any heading, caption, or section title contained in this Agreement is inserted only as a matter of convenience, and in no way defines or explains any section or provision hereof.

The Site is Operated By

Mainframe Group Inc.
Effective _____________, 2018

APPENDIX A

CERTAIN RISK FACTORS ASSOCIATED WITH MAINFRAME TOKENS (“MFT”)

Risk of Losing Access to MFT tokens As a Result of Loss of Private Key(s), Custodial Error or Purchaser Error

A private key, or a combination of private keys, is necessary to access a digital wallet or vault containing a purchaser’s MFT tokens. As a result, such private key(s) are necessary in order to control, sell and otherwise dispose of the MFT tokens stored in such digital wallet or vault. The loss of the private key(s) needed to access such digital wallet or vault containing a purchaser’s MFT tokens will result in such purchaser’s effective loss of such MFT tokens. Furthermore, any third-party that gains access to such private key(s), including by gaining access to login credentials of a digital wallet or vault service that a purchaser uses, may be able to misappropriate a purchaser’s MFT tokens. Any errors or malfunctions with respect to the digital wallet or vault a purchaser uses to receive and store MFT tokens, including such purchaser’s failure to properly maintain or use such digital wallet or vault, could also result in such purchaser’s effective loss of MFT tokens. Additionally, a purchaser’s failure to precisely follow the procedures for buying and receiving MFT tokens, including, for instance, providing the wrong wallet or vault address for receiving MFT tokens, could result in such purchaser’s effective loss of MFT tokens.

Risks Associated with the Ethereum Protocol

MFT tokens are based on the Ethereum protocol. As such, any malfunction, unintended function, unexpected functioning, forking, breakdown or abandonment in the Ethereum protocol, or any attack on the Ethereum protocol, could cause MFT tokens to malfunction or function in an unexpected or unintended manner, including, but not limited to, impacting your ability to transfer or securely hold MFT tokens. Such impact could adversely affect the value of MFT tokens. Ether, the native token of the Ethereum protocol, could itself decline in value, which could negatively affect the functioning of MFT tokens. Furthermore, advances in cryptography or other technical advances, such as the development of quantum computing, could present risks to MFT tokens by rendering ineffective the cryptographic consensus mechanism that underpins the Ethereum protocol. For more information on the Ethereum protocol, see http://www.ethereum.org.

Risk of a Decrease in the Value of Bitcoin, Ether and Other Currencies

The Mainframe Group intends to use the proceeds from the sale of MFT tokens to fund development of the Mainframe platform as discussed in the whitepaper. The proceeds of the sale of MFT tokens will be received/held in USD, bitcoin and ether, and may, at the Mainframe Group’s discretion, be converted into other cryptographic or fiat currencies. If the value of USD, bitcoin, ether or other currencies decreases during or after the token sale, the value of proceeds received by the Mainframe Group will decrease and the Mainframe Group may not be able to fund development on the intended scale, or at all.

Risk of Hacking and Security Weaknesses

Hackers and other malicious groups or organizations may attempt to interfere with the functioning and ownership of MFT tokens in a variety of ways, including, but not limited to, undertaking malware attacks, denial of service attacks, consensus-based attacks, Sybil attacks, smurfing and spoofing. Furthermore, because MFT tokens are based on open-source software, there is a risk that a third-party or a member of the Mainframe Group team could intentionally or unintentionally introduce weaknesses into MFT tokens which could in turn be exploited by such groups. It may be difficult for the Mainframe Group to maintain or develop MFT tokens to address emerging issues or malicious programs that develop adequately or in a timely manner, and Mainframe Group may not have adequate resources to do so. Such events could result in a loss of trust in the security and operation of MFT tokens, which could materially adversely affect the value of MFT tokens and the ownership thereof.

Risk of Theft of Funds Raised in the Token Generation Event

The Mainframe Group will make every effort to ensure that the funds received from the MFT token sale will be securely held. 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 Mainframe Group website, in the smart contract(s) on which the escrow wallet and the MFT token sale relies, on 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 MFT token sale is completed, the Mainframe Group may not be able to receive the cryptocurrencies raised. In such case, the Mainframe platform and any associated plans might be temporarily or permanently curtailed. As such, distributed MFT tokens may hold little worth or value.

Risk of Mining Attacks

As with other decentralized cryptographic tokens and cryptocurrencies, the blockchain used for the MFT token application is susceptible to mining attacks, including, but not limited to, double-spend attacks, majority mining power attacks, selfish-mining attacks and race condition attacks. Any successful attacks present a risk to MFT tokens and holders thereof, and to the expected proper execution and sequencing of Ethereum contract computations. Despite the efforts of the Mainframe Group, the risk of known or novel mining attacks persists, and the Mainframe Group may not be able to protect against such attacks. If successful, such attacks could materially adversely affect the value of MFT tokens and the ownership thereof.

Risk of Unfavorable Regulatory Intervention in One or More Jurisdictions

Blockchain technologies and cryptocurrencies are relatively recent technologies which have developed rapidly and have been rolled out into numerous applications. This evolution has presented novel issues in terms of the classification, regulation and control of these technologies. As a result, it is often unclear what, if any, regulatory regime is applicable to blockchain technologies and cryptocurrencies.

As the popularity of blockchain technologies and cryptocurrencies, as well as the aggregate capitalization of cryptocurrencies, have grown, blockchain technologies have come under the scrutiny of various regulatory bodies around the world, and U.S. federal and state agencies have begun to take interest in, and in some cases initiated efforts to regulate, their use and operation.

In light of this evolving technological and legal landscape, the regulation of tokens (including MFT tokens), token offerings, cryptocurrencies, blockchain technologies, and cryptocurrency exchanges is likely to continue to evolve rapidly, to vary significantly among international, U.S. federal, state and local jurisdictions and regulatory bodies, and to be subject to significant uncertainty. Going forward, various legislative, executive and regulatory bodies in the United States and in other countries could adopt laws, regulations or guidance, or take other actions, which could materially negatively impact the functioning, use or legality of MFT tokens. For example, regulatory inquiries or actions, including the imposition of licensing requirements or restrictions on the use, sale, or possession of digital tokens such as MFT tokens, could impede, limit or terminate the development of the tokens.

Furthermore, any failure by the Mainframe Group, purchasers of MFT tokens or related parties to comply with any laws, rules, and regulations, some of which may not yet exist yet or may be subject to uncertain or varying interpretation, and which may be subject to change, could result in a variety of adverse consequences for such parties, including civil penalties and fines.

At the state level in the United States, some state regulators such as the New York Department of Financial Services have created new regulatory frameworks to directly address cryptocurrencies. Some other state regulators, such as in Texas, have published guidance on how such states’ existing regulatory regimes apply to cryptocurrencies. Yet other states, such as New Hampshire, North Carolina and Washington, have amended their state statutes to explicitly apply existing licensing regimes to cryptocurrencies.

At the federal level in the United States, the treatment of cryptocurrencies under the law continues to evolve as well. The Department of the Treasury, the Securities Exchange Commission (the “SEC”) and the Commodity Futures Trading Commission (the “CFTC”) have all published guidance on the treatment of cryptocurrencies. The Internal Revenue Service released guidance treating cryptocurrencies as property that is not currency for U.S. federal income tax purposes, although there is no indication yet whether courts or other U.S. federal or state regulators will follow this classification. Various U.S. federal and state agencies have instituted enforcement actions against those violating their interpretation of existing laws.

The regulation of the use of blockchain assets other than as currency is also uncertain. The CFTC has publicly taken the position that certain blockchain assets are commodities, and the SEC has issued statements, including a public report and a cease-and-desist order, stating that U.S. federal securities laws require treating some non-currency blockchain assets as securities. To the extent that a domestic governmental or quasi-governmental agency exerts regulatory authority over blockchain networks or assets, such regulation could extend to MFT tokens, which could have a material adverse effect on the Mainframe Group, the value of the tokens and holders of tokens.

In other countries, the regulatory landscape of blockchain technologies and cryptocurrencies is also uncertain and varied. Various non-U.S. jurisdictions could, in the near future, adopt laws, regulations or directives that affect MFT tokens. Such laws, regulations or directives may conflict with those of the United States or may directly and negatively impact the Mainframe Group’s business. The effect of any future regulatory change is impossible to predict, and could have a material adverse effect on the Mainframe Group, the value of the tokens and holders tokens.

New or changing laws and regulations, or interpretations of existing laws and regulations, in the United States and other jurisdictions, could also materially adversely affect the value of currencies into which MFT tokens may be exchanged, the liquidity of the tokens, the ability to access marketplaces or exchanges to trade the tokens and the structure, use and transferability of the tokens. The Mainframe Group may choose to cease operations in a particular 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 approvals to operate in such jurisdiction.

Risks Inherent in the Interoperable Nature of Cryptographic Tokens

Cryptographic tokens, especially those built on the ERC-20 standard, such as MFT tokens, are generally tradable on exchanges or through direct peer-to-peer trading protocols that are not currently regulated by any governmental authority in a manner that traditional stock or equity interests are regulated. Therefore, purchasers of MFT tokens are not afforded any of the protections of laws or regulations that purchasers of traditional shares or equity would enjoy. Additionally, the Mainframe Group has included transfer restrictions as a condition for the purchase of any MFT tokens, but, due to the interoperability of ERC-20 tokens, such as MFT tokens, the Mainframe Group may not be able to effectively enforce such restrictions and may be unable to prevent the negative consequences of unauthorized MFT token transfers and potentially subject the Mainframe Group to regulatory fines, actions or registration requirements.

Risk that a Liquid Market for MFT Tokens May not Develop

MFT tokens are not listed on any cryptocurrency exchange. The Mainframe Group may seek to list the tokens on one or more cryptocurrency exchanges, but there is no guarantee that such listing will be successful or will be maintained. Furthermore, even if such approval is granted by a cryptocurrency exchange, there is no assurance that an active or liquid trading market for MFT tokens will develop, or if developed, will be sustained after the MFT tokens have been made available for trading on such cryptocurrency exchange. There is also no assurance that the market price of the MFT tokens will not decline below the original purchase price. The purchase price may not be indicative of the market price of MFT tokens after they have been made available for trading on a cryptocurrency exchange. Any expectation that the value of the MFT tokens will increase is purely speculative.

MFT tokens are not currency issued by any central bank or national, supra-national or quasi-national organization, nor are they backed by any hard assets or other credit. The Mainframe Group is not responsible for, [nor does it pursue], the circulation and trading of MFT tokens on the market. Trading of MFT tokens will merely depend on the consensus on its value between the relevant market participants. No one is obliged to purchase any MFT tokens from any holder of the MFT tokens, including the purchasers, nor does anyone guarantee the liquidity or market price of MFT tokens to any extent at any time.

Furthermore, MFT tokens may not be freely resold unless pursuant to an applicable exemption to purchasers who are citizens or permanent residents of the People’s Republic of China, Singapore, the United States or any other jurisdiction where the purchase of MFT tokens may be in violation of applicable laws. Accordingly, the Mainframe Group cannot ensure that there will be any demand or market for MFT tokens, or that the purchase price is indicative of the market price of MFT tokens after they have been made available for trading on a cryptocurrency exchange.

Risks Associated with Cryptocurrency Exchanges

Cryptocurrency exchanges on which MFT tokens may trade may be relatively new and largely unregulated and may therefore be more exposed to fraud and failure than established regulated exchanges. To the extent that the cryptocurrency exchanges representing a substantial portion of the volume in MFT token trading are involved in fraud or experience security failures or other operational issues, such cryptocurrency exchange failures may result in a reduction in the price and can adversely affect the value of the tokens. A lack of stability in cryptocurrency exchanges and the closure or temporary shutdown of cryptocurrency exchanges due to fraud, business failure, hackers or malware, or government-mandated regulation may result in greater volatility in the price of the tokens.

Risks Related to Future Sales or Issuance of MFT tokens

Any future sale or issuance of the MFT tokens would increase the supply of MFT tokens in the market and this may result in a downward price pressure on the MFT tokens. The sale or distribution of a significant number of MFT tokens outside of the token generation event (including but not limited to the sales of MFT tokens undertaken after the completion of the pre-sale and issuance of MFT tokens to persons other than purchasers for purposes outlined in the whitepaper), or the perception that such further sales or issuance may occur, could adversely affect the trading price of MFT tokens.

Risks Related to Token Taxation

The tax characterization of MFT tokens in the United States and elsewhere is uncertain. Purchasers of the tokens must seek their own tax advice in connection with purchasing, holding and selling the tokens, which may result in adverse tax consequences, including withholding taxes, increased income tax liability and additional tax reporting requirements. Purchasers of the tokens should consult with and must rely upon the advice of their own professional tax advisors with respect to the U.S. and non-U.S. tax treatment of their receipt, purchase, holding and sale of the tokens.

Risk of Negative Publicity

Negative publicity involving the Mainframe Group, MFT tokens, or any of the key personnel of the Mainframe Group, regulation of cryptocurrencies in the U.S. or worldwide, may materially and adversely affect the market perception or market price of the MFT token, whether or not it is justified.

Risk of Personal Information Disclosure

The Mainframe Group may determine, in its sole discretion, that it is necessary to obtain certain information about a purchaser of MFT tokens in order to comply with applicable law or regulation in connection with selling MFT tokens to such purchaser. A purchaser may be asked to provide such information upon request, and the Mainframe Group may refuse to sell MFT tokens to such purchaser until they provide the requested information and the Mainframe Group has determined that it is permissible to sell MFT tokens to them under applicable law or regulation. The Mainframe Group will take reasonable measures to ensure that any such disclosed personal information is maintained confidentially and/or destroyed as applicable, but where such information is transmitted or stored electronically, there is a risk of its unintentional disclosure to third parties as a result of hacking, accidental disclosure or disclosure demanded by governmental authorities.

Risk of Uninsured Losses

Unlike bank accounts or accounts at certain other financial institutions, MFT tokens are uninsured as a store of value unless a purchaser specifically obtains private insurance to insure them. Thus, in the event of loss or loss of value of MFT tokens, there is no public insurer, such as the Federal Deposit Insurance Corporation, or private insurance arranged by the Mainframe Group, to offer recourse to a purchaser of MFT tokens.

Unanticipated Risks

Cryptographic tokens are a new and untested technology. In addition to the risks discussed here there are risks that the Mainframe Group cannot anticipate. Further risks may materialize as unanticipated combinations or variations of the aforementioned risks, or yet unforeseen risks, develop. Such risks could have unanticipated consequences, including a material adverse impact on the value of MFT tokens or the ownership thereof.