Auto-Deleveraging (ADL) Agreement

This Auto-Deleveraging Agreement (“Agreement”) constitutes a legally binding agreement between Darkex Exchange (“Exchange”) and the user (“User”) governing the application of the Auto-Deleveraging mechanism in connection with leveraged and derivatives trading on the platform.

By engaging in futures, perpetual contracts, margin trading, or any leveraged derivative instruments offered by the Exchange, the User acknowledges and agrees to be bound by this Agreement.

1. PURPOSE

The purpose of this Agreement is to define the circumstances, methodology, and legal consequences of the Auto-Deleveraging (“ADL”) mechanism implemented by the Exchange as part of its systemic risk management framework.

ADL is designed to preserve the integrity, stability, and solvency of the derivatives market operated by the Exchange.

2. NATURE OF AUTO-DELEVERAGING

2.1 ADL is a risk management mechanism that may automatically reduce or close opposing positions when:

• A liquidated position cannot be fully closed at or near its bankruptcy price; and
• The Exchange's insurance fund is insufficient to absorb the resulting deficit; and
• Continued exposure would create systemic risk to the platform.

2.2 ADL is not a liquidation triggered by margin insufficiency of the affected User. However, ADL may result in similar economic consequences.

3. TRIGGERING CONDITIONS

ADL may be activated under extraordinary market conditions, including but not limited to:

• Extreme volatility
• Sudden liquidity shortages
• Market dislocations
• Insurance fund depletion
• Cascading liquidation risk

The Exchange shall determine the existence of such conditions acting reasonably and in good faith in accordance with its internal risk management policies.

4. POSITION RANKING AND SELECTION

4.1 Positions subject to ADL shall be selected based on algorithmic risk-ranking criteria, which may include:

• Effective leverage ratio
• Unrealized profit ratio
• Margin ratio
• Overall exposure
• Risk tier classification

4.2 The Exchange shall not be obligated to disclose the exact parameters, weighting, or proprietary methodology of its risk-ranking algorithm.

4.3 The User acknowledges that ADL execution may occur without prior notice.

5. EXECUTION OF ADL

5.1 Positions subject to ADL may be partially or fully reduced.

5.2 Execution shall occur at prevailing market conditions and may materially differ from expected or desired exit prices.

5.3 Slippage, rapid price movements, or temporary liquidity constraints may impact execution outcomes.

6. USER ACKNOWLEDGMENT OF RISK

The User expressly acknowledges and agrees that:

• Leveraged trading inherently carries systemic and counterparty risk;
• ADL is an integral feature of leveraged derivatives markets;
• Profitable positions may be reduced or closed under ADL;
• Market opportunities may be lost as a result of ADL;
• ADL is implemented to prevent broader market instability and cascading defaults.

7. LIMITATION OF LIABILITY

To the fullest extent permitted under the applicable laws of Georgia, the Exchange shall not be liable for:

• Lost profits
• Opportunity costs
• Market exposure changes
• Trading strategy disruption
• Indirect, consequential, or special damages

arising from the lawful implementation of ADL.

Nothing in this Agreement shall exclude liability in cases of wilful misconduct or gross negligence by the Exchange.

8. NO COMPENSATION GUARANTEE

The Exchange does not guarantee compensation for any losses resulting from ADL execution. ADL outcomes are a function of prevailing market conditions and systemic risk mitigation requirements.

9. RELATIONSHIP TO OTHER AGREEMENTS

This Agreement forms an integral part of:

• The User Agreement
• The Risk Disclosure Statement

In case of inconsistency, the provisions most protective of systemic market integrity shall prevail with respect to ADL matters.

10. GOVERNING LAW AND DISPUTE RESOLUTION

This Agreement shall be governed by and construed in accordance with the laws of Georgia.

Any dispute arising out of or in connection with this Agreement shall be finally resolved by arbitration under the rules of the Georgian International Arbitration Centre. The seat of arbitration shall be Georgia. The language of arbitration shall be English. The number of arbitrators shall be one, unless otherwise required under applicable arbitration rules.

11. ACCEPTANCE

By accessing or using leveraged trading services, the User confirms that they:

• Have read and understood this Agreement;
• Accept the possibility and consequences of ADL;
• Agree to be legally bound by its terms.