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Simple Agreement for Future Tokens

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SIMPLE AGREEMENT FOR FUTURE TOKENS

This Simple Agreement for Future Tokens (the "Agreement") is made as of by and between Company Name: a organized under the laws of with principal address at (hereinafter "Company"), and Purchaser Name: with principal address at (hereinafter "Purchaser"). Company and Purchaser may be referred to collectively as the "Parties" and individually as a "Party."

RECITALS

WHEREAS, Company is developing a distributed ledger protocol and intends to issue a new digital token to be used in connection with such protocol (the "Tokens"); and

WHEREAS, Purchaser desires to provide capital to Company in exchange for the right to receive Tokens at a future token generation event on the terms and conditions set forth in this Agreement; and

WHEREAS, Company desires to accept such funds and grant Purchaser the economic right to receive Tokens in the manner provided herein.

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. DEFINITIONS

1.1 "Purchase Amount" means the amount of money delivered by Purchaser to Company under this Agreement in the amount of (in lawful currency).

1.2 "Token Generation Event" means the time at which Company first issues or distributes Tokens for use in or on its protocol, platform, or network, as determined by the Company in good faith.

1.3 "Token Allocation" means the number or percentage of Tokens to which Purchaser is entitled upon conversion pursuant to Section 3, such allocation to be determined by reference to the Purchase Amount and the conversion formula set forth in Section 3.

2. PURCHASE AND SALE

2.1 Purchase. Subject to the terms and conditions of this Agreement, Purchaser agrees to pay the Purchase Amount to Company and Company agrees to provide Purchaser the right to receive Tokens in the future as set forth in this Agreement.

2.2 Payment Instructions. Purchaser shall deliver funds to Company by wire transfer or other method mutually agreed in writing. Payment reference or transaction details:

3. CONVERSION; TOKEN ALLOCATION

3.1 Conversion. Upon the occurrence of the Token Generation Event, Company shall use commercially reasonable efforts to allocate to Purchaser such number of Tokens equal to the Purchase Amount divided by the Token Price, subject to the adjustments and limitations set forth herein. Token Price will be determined in accordance with the method set by Company in good faith and in a manner consistent with similar purchasers.

3.2 Token Type and Quantity. Token Type: Estimated Token Quantity: Conversion mechanics, burn schedules, and decimals will be as determined by Company consistent with its tokenomics.

3.3 No Guarantee of Listing. Company makes no representation or warranty that Tokens will be listed, tradable, or of any particular value at any time.

4. CONDITIONS TO CONVERSION

4.1 Conditions. Conversion and delivery of Tokens are conditioned upon (a) Company completing development necessary to support Tokens; (b) Company determining in good faith that issuance of Tokens complies with applicable law; and (c) Company having a mechanism for issuance and delivery. If any regulatory, technical, or commercial impediment prevents issuance within a commercially reasonable time, Company may delay conversion or adjust method of delivery, provided that Company provides written notice to Purchaser of the reason for delay and expected next steps.

5. REPRESENTATIONS AND WARRANTIES

5.1 Company Representations. Company hereby represents and warrants to Purchaser that: (a) Company is duly organized and validly existing under the laws of the jurisdiction indicated above and has full corporate power and authority to enter into and perform this Agreement; (b) the execution and delivery of this Agreement and performance by Company do not and will not violate any material agreement to which Company is a party; and (c) all funds received from Purchaser will be applied in accordance with the use of proceeds described in Section 6.

5.2 Purchaser Representations. Purchaser hereby represents and warrants to Company that: (a) Purchaser has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder; (b) Purchaser acknowledges the speculative nature of Tokens and the risk of total loss; (c) Purchaser is acquiring its rights hereunder for investment purposes and not with a view to distribution or resale except as permitted by applicable law; and (d) Purchaser has such knowledge and experience in financial and business matters to evaluate the risks of this investment.

Purchaser certifies that it is an accredited investor under applicable law.

Purchaser acknowledges that it has read and understands the risk factors associated with purchasing future Tokens.

6. TRANSFER RESTRICTIONS; COMPLIANCE

6.1 Restriction. Purchaser agrees not to transfer, assign, pledge, or otherwise dispose of any rights under this Agreement except in compliance with applicable securities laws and only with the prior written consent of Company, which consent shall not be unreasonably withheld where transfer would not result in a material risk of noncompliance with law.

6.2 Compliance. Company may impose such conditions as it reasonably deems necessary to ensure compliance with applicable law prior to delivering Tokens, including requiring additional documentation from Purchaser or imposing transfer restrictions on Tokens at issuance.

7. USE OF PROCEEDS

Company shall use the Purchase Amount for corporate purposes, including development, operations, and business development. A general description of intended use of proceeds:

8. TERMINATION

8.1 Termination Events. This Agreement will terminate upon the earlier of: (a) conversion and delivery of Tokens to Purchaser in accordance with this Agreement; (b) mutual written agreement of the Parties; or (c) Company's determination that issuance of Tokens is not legally permissible, in which case Company shall return the Purchase Amount to Purchaser less any reasonable unrecoverable third-party costs reasonably incurred by Company in reliance on the Purchase Amount.

9. INDEMNIFICATION; LIMITATION OF LIABILITY

9.1 Indemnification. Each Party agrees to indemnify, defend and hold harmless the other Party and its officers, directors, employees and agents from and against any losses, liabilities, damages, costs or expenses (including reasonable attorneys' fees) arising out of a breach of such Party's representations, warranties or covenants under this Agreement.

9.2 Limitation of Liability. EXCEPT FOR A PARTY'S INDEMNIFICATION OBLIGATIONS OR WILLFUL MISCONDUCT, IN NO EVENT WILL EITHER PARTY'S AGGREGATE LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT EXCEED THE PURCHASE AMOUNT PAID BY PURCHASER.

10. NOTICES

All notices, requests, consents and other communications required or permitted under this Agreement shall be in writing and shall be delivered to the address set forth below for each Party (or to such other address as either Party may designate by notice to the other).

11. MISCELLANEOUS

11.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of , without regard to conflict of laws principles.

11.2 Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings and negotiations, whether written or oral, relating to such subject matter.

11.3 Amendments; Waiver. No amendment, modification or waiver of any provision of this Agreement shall be effective unless in a written instrument signed by the Party against whom enforcement is sought. No failure or delay by any Party in exercising any right constitutes a waiver thereof.

11.4 Severability. If any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.

11.5 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Delivery of an executed signature page by electronic means shall be effective as an original signature.

SIGNATURES

For Company

Printed Name:

By:

Date:

For Purchaser

Printed Name:

By:

Date:

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What a Simple Agreement for Future Tokens Is and When It's Used

A Simple Agreement for Future Tokens (SAFT) is a contract used by token issuers and accredited investors to document the purchase of the right to receive crypto tokens at a later distribution event. It sets purchase terms, token allocation mechanics, conditions for token delivery, and investor protections such as transfer restrictions and representations. SAFTs are typically used in early-stage token financing where tokens are not yet transferable or distributed; the agreement focuses on rights convertible into future tokens rather than immediate token transfers.

Why a Clear SAFT Benefits Issuers and Investors

A well-drafted Simple Agreement for Future Tokens clarifies expectations about token distribution, allocation mechanics, regulatory compliance steps, and dispute resolution — reducing later disputes and supporting governance decisions.

Why a Clear SAFT Benefits Issuers and Investors

Who Typically Uses a Simple Agreement for Future Tokens

The SAFT is primarily used by early-stage token issuers, accredited investors, counsel, and corporate finance teams who handle token offerings or pre-distribution financing.

  • Issuers and founders managing token economics and future distribution rights.
  • Accredited and institutional investors securing a contractual right to future tokens.
  • Corporate and securities counsel drafting compliance provisions and disclosure language.

Use parties should confirm investor accreditation status and consult securities counsel before issuing or executing a SAFT.

Core Components to Include in a Professional SAFT

A complete Simple Agreement for Future Tokens organizes token economics, purchase details, legal conditions, and post-closing obligations so both parties understand timing, rights, and limits.

Purchase Terms

Amount paid, price per token (or conversion formula), and total token entitlement.

Token Definition

Precise description of the token, its function, and whether it is securities-linked for regulatory purposes.

Conversion / Distribution

Trigger events for token issuance, conversion mechanics, vesting, and distribution schedule.

Representations

Issuer and investor statements on authority, accreditation, and regulatory compliance.

Transfer Restrictions

Lockups, resale limitations, and conditions required for secondary transfers.

Dispute Resolution

Governing law, jurisdiction, arbitration clauses, and indemnification.

Step-by-Step: How to Complete a SAFT

Follow this sequence to prepare, execute, and preserve a Simple Agreement for Future Tokens with clarity and compliance.

  • 01
    Prepare Draft: Assemble token terms, purchase amount, and investor representations; have counsel review for securities law issues.
  • 02
    Confirm Accreditation: Obtain and document investor accreditation evidence per applicable securities rules.
  • 03
    Finalize Payment Terms: Agree on payment method, escrow mechanics, and refund or clawback provisions if distribution fails.
  • 04
    Execute and Store: Sign, timestamp, and retain the executed agreement and proof of payment; apply secure retention policies.

How to Customize and Complete the SAFT Online

Typical online workflow settings help automate signature capture, conditional fields, and signer authentication for token agreements.

Field Configuration
Signature Fields Place signer name, signature, and date fields for each party.
Conditional Clauses Show token distribution clauses only if distribution trigger is selected.
Authentication Require email plus SMS code or knowledge-based verification for investor signers.
Audit Trail Capture IP, timestamp, and action log for each signer.

Digital Signing and eSubmission Considerations

Choosing a secure eSignature workflow affects enforceability, signer confidence, and auditability for SAFTs.

  • File Formats: Use PDF or DOCX to preserve formatting and enable embedded audit trails.
  • Authentication Options: Email, SMS codes, or advanced signer authentication reduce identity risk.
  • Integration Needs: Integrate with CRM or ledger systems for investor records and token allocation tracking.

Ensure the chosen platform supports required features such as conditional fields, audit trails, and the ability to export signed records for regulatory review.

Where to Send, File, or Submit a Signed SAFT

After execution, route the agreement and supporting documents to the appropriate internal and external destinations to preserve evidence and meet compliance steps.

  • Issuer Records: Store executed SAFT in corporate contract repository and update cap table or token ledger.
  • Investor Copy: Provide each investor a fully executed copy including the certificate of completion.
  • Legal Counsel: Share the executed agreement with counsel for regulatory documentation and audit readiness.
  • Accounting: Send payment proof and SAFT to accounting for revenue recognition and tax records.

Essential Information and Fields to Include

Issuer Name: Entity full name
Investor Name: Individual or entity legal name
Purchase Amount: Currency and amount
Token Details: Token name and function
Distribution Trigger: Event definition
Signature Date: MM/DD/YYYY format

Risks and Legal Consequences of an Incorrect or Incomplete SAFT

Securities Liability: Civil or regulatory enforcement if offering improperly structured
Tax Exposure: Unclear tax treatment for payments may trigger audits
Contract Disputes: Ambiguous terms increase litigation risk
Enforceability: Missing signatures or identity evidence can void obligations
Investor Accreditation: Failure to verify accreditation can breach securities exemptions
Recordkeeping: Insufficient retention may impede defense in audits or claims

Common Preparation Mistakes to Avoid

  • Vague token descriptions that create allocation disputes later.
  • Missing investor accreditation documentation and proof.
  • Unsigned or partially signed pages lacking audit metadata.
  • Failing to align purchase payment terms with delivery mechanics.

Timelines, Deadlines, and Processing Expectations

Key timing items reflect regulatory, accounting, and operational milestones associated with SAFT execution and future token delivery.

Execution Date:

Date parties sign; use MM/DD/YYYY format

Payment Date:

Date payment clears and is documented

Distribution Window:

Specified triggering window for token issuance

Tax Reporting:

Retain records to meet tax audit timelines and reporting

Regulatory Filings:

File disclosures or notices if required by securities counsel

eSignature Pricing and Feature Comparison (signNow First)

Cost and feature considerations for executing and storing SAFTs electronically. Verify vendor pricing and plan details before purchase.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Varies Varies Varies Varies
Bulk Send Yes Yes Yes Yes Yes
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

Use Cases: How SAFTs Are Applied in Practice

Real-world scenarios show how parties structure SAFTs to align funding and token delivery.

Early-Stage Token Fundraise

An issuer raises USD 500,000 from accredited investors to fund protocol development

  • Investors remit funds into escrow pending mainnet launch
  • The SAFT specifies conversion into tokens upon mainnet release and sets resale restrictions for 12 months to support network stability and regulatory compliance.

Strategic Purchase by Institution

A licensed institution agrees to purchase rights to tokens contingent on regulatory clearance

  • The SAFT includes additional compliance reps and enhanced KYC/AML obligations
  • Execution requires corporate approval, accredited investor certification, and an audit trail preserved for compliance and tax purposes.

FAQs — Common Questions About Simple Agreements for Future Tokens

Answers to typical questions about enforceability, signatures, accreditation checks, and recordkeeping for SAFTs.


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