Document:

Exhibit 10.1

 

 

 

 

SINGLE FAMILY HOMES

REAL ESTATE PURCHASE AND SALE AGREEMENT

 

by and among

 

THE ENTITIES AND INDIVIDUALS LISTED ON SCHEDULE
I HERETO,

 

collectively, as Seller

 

and

 

REVEN HOUSING FLORIDA, LLC,

a Delaware limited liability company,

 

as Buyer

 

September 11, 2014

 

 

 

 

    	 

    	 

    

  

THIS SINGLE FAMILY
HOMES PURCHASE AND SALE AGREEMENT (this “Agreement”) is made and entered into as of September 11, 2014
(“Effective Date”), by and between THE ENTITIES AND INDIVIDUALS LISTED ON SCHEDULE I HERETO (collectively, “Seller”)
and REVEN HOUSING FLORIDA, LLC, a Delaware limited liability company (“Buyer”).

 

BASIC TERMS

 

The following terms,
as used in this Agreement, will have the meanings assigned to such terms in this Basic Terms section of the Agreement, subject
to any adjustments set forth elsewhere in this Agreement.

 

Purchase
Price: Five Million Ninety Thousand Eight Hundred Sixty-Six and 62/100 Dollars ($5,090,866.62) subject to adjustment in accordance
with the provisions of this Agreement.

 

Deposit: Fifty
Thousand Nine Hundred Eight and 66/100 Dollars ($50,908.66).

 

Closing Date:
Thirty (30) days after expiration of the Due Diligence Period, unless Seller has agreed to cure objections raised by Buyer during
the Due Diligence Period, in which case the Closing Date shall be five (5) days after the final objection is cured.

 

Due Diligence
Period: Subject to the provisions of Section 7 below, the period commencing on the Effective Date and ending on the
date that is 30 days after Buyer receives all Property Information to be delivered to Buyer pursuant to Section 6(a)(3) and Section
7(a), during which period Buyer will be provided the opportunity to review all aspects of the Property. 

 

Escrow Holder: Fidelity National
Title Insurance Company.

 

Title Company: Fidelity National
Title Insurance Company.

 

Seller’s Broker: SunCoast Property
Management, LLC.

 

Buyer’s Broker: None.

 

PRELIMINARY
STATEMENTS

 

A.Seller is the
owner of the Property (as defined herein); and

 

B.Seller desires
to sell, and Buyer desires to buy, the Property, at the price and on the terms and conditions hereafter set forth.

 

In consideration of
the recitals, mutual covenants, and agreements set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are mutually acknowledged, Seller and Buyer hereby agree as follows:

 

1.                 
Premises. The real estate which is the subject of this Agreement consists of seventy-seven (77) single family homes,
in the State of Florida, which are identified and generally described on Exhibit A attached hereto, together with all of
the improvements and structures located thereon (“Improvements”), any heating and ventilating systems
and other fixtures located therein or thereon, and all rights, interests, benefits, privileges, easements and appurtenances to
the land and the Improvements, if any (collectively, the “Premises”).

 

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2.                 
Personal Property and Leases.

 

(a)               
The “Personal Property” referred to herein shall consist of all right, title, and interest
of Seller, if any, in all tangible (including all advertising materials, plans and specifications) and intangible personal property,
including any equipment, appliances, or furnishings that remain in the Premises at the Closing, and any and all existing licenses
and permits held by Seller and not constituting part of the real estate, located on and used in connection with the Premises.

 

(b)              
The “Leases” referred to herein shall consist of the leases, occupancy and rental agreements
between the Seller, as landlord and tenants of the single family homes that comprise the Premises that are in effect as of the
date of the Closing (defined below), as well as and service contracts relating to the maintenance and repair of such homes.

 

3.                 
Sale/Conveyance and Assignment. Seller agrees to sell, convey and assign to Buyer, and Buyer agrees to buy and assume
from Seller, at the price and upon the other terms and conditions hereafter set forth (a) the Premises, (b) the Personal Property,
(c) the Improvements, and (d) the Leases (a-d collectively, the “Property”).

 

4.                 
Transfer of Title.

 

(a)               
Title to the various properties constituting the Property shall be conveyed to Buyer by deeds that are in the form that
are customarily used in the county in which the Premises are located (collectively, the “Deed”) executed
by Seller, in the form attached hereto as Exhibit C.

 

(b)              
The Personal Property shall be conveyed to Buyer by a bill of sale (the “Bill of Sale”) executed
by Seller, in the form attached hereto as Exhibit D.

 

(c)               
The Leases shall be assigned by Seller and assumed by Buyer by an Assignment Leases and Contracts (the “Assignment
of Leases and Contracts”), in the form attached hereto as Exhibit E.

 

5.                 
Purchase Price; Deposit(a)               
.

 

(a)               
Delivery of Purchase Price. The purchase price for the Property shall be the price identified in the Basic Terms
(the “Purchase Price”), which shall be subject to reduction in accordance with Section 7(d) and
payable by Buyer to Seller as follows:

 

(1)              
Within five (5) business days after the execution of this Agreement, Buyer shall deposit into an escrow account (the “Escrow”)
established with Escrow Holder (as identified in the Basic Terms), which will serve as escrow holder for this transaction a deposit
in the amount of the Deposit (as identified in the Basic Terms above). If Buyer notifies Seller that it elects to proceed to purchase
the Property in accordance with the provisions of Section 7, then the Deposit (as defined in the Basic Terms) will become
non-refundable to Buyer, except in the event of a default or breach of this Agreement by Seller. The Deposit shall at all times
prior to Closing be invested in United States treasury obligations or such other interest bearing accounts or securities as are
approved by Buyer in writing; all interest earned on the Deposit will be administered, paid or credited (as the case may be) in
the same manner as the Deposit and, when credited to the escrow account shall constitute additional Deposit. At the closing of
the transactions contemplated by this Agreement (the “Closing”), Buyer shall receive a credit against
the Purchase Price for the Deposit.

 

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(2)              
The Purchase Price, less a credit for the Deposit, and plus or minus prorations and adjustments as set forth in Section
17 hereof, shall be paid by Buyer to Seller by wire transfer of immediately available federal funds on the Closing Date.

 

(b)              
Property Valuation. Buyer may elect to retain an independent, third-party valuation consultant to prepare a valuation
report (“Valuation Report”) for each of the properties that comprise the Property. If the sum of the
values of the properties that comprise the Property (“Total Valuation”) is less than the Purchase Price,
Buyer may elect to (i) attempt to renegotiate the Purchase Price with Seller, (ii) terminate this Agreement, or (iii) proceed to
Closing hereunder at the stated Purchase Price. If Buyer terminates this Agreement in accordance with this Section 5(b),
then this Agreement will have no further force or effect, the parties will have no further obligations to each other (except for
any indemnities or other provisions that expressly survive termination of this Agreement) and Escrow Holder shall refund the Deposit
to Buyer.

 

(c)               
Notwithstanding Section 5(b) above and Section 7(d) below, Buyer may, in lieu of adjusting the Purchase Price
as a result of necessary repairs and replacements or a Total Valuation that is less than the Purchase Price in accordance with
those provisions, elect to exclude specified properties from the properties identified on Exhibit A. If, as a result of
its due diligence investigations, Buyer elects to exclude one or more properties from the Property being acquired in accordance
with this Agreement, then at least two business days before the end of the Due Diligence Period, Buyer will notify Seller that
certain specified properties (“Excluded Properties”) are to be excluded from the sale contemplated in
this Agreement. Following Buyer’s notification to Seller and identification of the Excluded Properties, (i) the description
of the properties that comprise the Property, as identified on Exhibit A, will be deemed modified to exclude the Excluded
Properties; and (ii) the Purchase Price will be reduced by the sum of the Assigned Home Price (defined below) for each of the Excluded
Properties. Once Buyer identifies to Seller the Excluded Properties, those properties so identified will no longer be the subject
of this Agreement and Seller will be free to sell them to another party or take any action that Seller elects with respect to the
Excluded Properties. For purposes of this Section 5(c), the “Assigned Home Price” will be the
value, measured in dollars, that is agreed upon by Seller and Buyer assigned to each single family home listed in Exhibit A.

 

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6.                 
Representations, Warranties and Covenants.

 

(a)               
Seller’s Representations and Warranties. As a material inducement to Buyer to execute this Agreement and consummate
this transaction, Seller represents and warrants to Buyer as follows:

 

(1)              
Organization and Authority. Seller has been duly organized and is validly existing as a Florida limited liability
company or as a Florida corporation, as applicable. Seller has the full right and authority and has obtained any and all consents
required therefor to enter into this Agreement, consummate or cause to be consummated the sale and make or cause to be made transfers
and assignments contemplated herein. The persons signing this Agreement on behalf of Seller are authorized to do so. This Agreement
and all of the documents to be delivered by Seller at the Closing have been authorized and properly executed and will constitute
the valid and binding obligations of Seller, enforceable against Seller in accordance with their terms.

 

(2)              
Conflicts. There is no agreement to which Seller is a party or, to Seller’s Knowledge, binding on Seller or
the Property, that is in conflict with this Agreement or that would limit or restrict the timely performance by Seller of its obligations
pursuant to this Agreement.

 

(3)              
Documents and Records. To Seller’s Knowledge, Seller has provided (or upon the execution hereof will provide)
Buyer with, or has made available to Buyer, true, correct and complete copies of the items scheduled in Schedule 6(a)(3)
attached hereto (all of the foregoing collectively the “Property Information”). The Property Information
consists of all documents relating to the Property in Seller’s possession or control.

 

(4)              
Litigation. There is no action, suit or proceeding pending or to Seller’s knowledge threatened which (i) if
adversely determined, would not be covered by insurance (subject to the payment of a customary insurance deductible) or adversely
affect the Property, or (ii) which challenges or impairs Seller’s ability to execute, deliver or perform this Agreement or
consummate the transaction contemplated hereby.

 

(5)              
Leases. Schedule 6(a)(5) sets forth a list of the leases and all contracts (including all service, maintenance,
and warranty contracts) that apply to the properties that comprise the Property, which, to Seller’s Knowledge, is true and
correct and complete list of such leases and contracts as of the date of such schedule. To Seller’s Knowledge, except as
scheduled in Schedule 6(a)(5), neither Seller nor any other party is in default with respect to any of its obligations
or liabilities pertaining to the Leases. To Seller’s Knowledge, other than the Leases and any other matters disclosed in
the Title Report, there are no leases, licenses or other occupancy agreements to which Seller is a party or is bound affecting
any portion of the Property as of the date hereof, which will be in force on the Closing Date. Seller has delivered or made available
at the Property, true and correct copies of the Leases to Buyer. No lessee under any Lease has any right of first refusal or option
to purchase the property that is the subject of their Lease. With respect to any property identified on Exhibit A, if any
Lease expires and is extended or renewed, or if Seller elects to sign a new Lease, during the period this Agreement is in effect,
then such new Lease must include the same or greater rental rate as the previous Lease, may not have a term shorter than one year,
and may not include any free rent period or cancellation right on the part of the tenant, unless such terms are approved by Buyer
in writing.

 

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(6)              
Contracts. Exhibit B sets forth all contracts presently outstanding with respect to the Property. To Seller’s
Knowledge, neither Seller nor any other party is in default with respect to any of its obligations or liabilities pertaining to
any contracts that will survive the Close of Escrow.

 

(7)              
Notice of Violations. Seller has received no written notice that either the Property or the use thereof violates
any laws, rules and regulations of any federal, state, city or county government or any agency, body, or subdivision thereof having
any jurisdiction over the Property that have not been resolved to the satisfaction of the issuer of the notice.

 

(8)              
Withholding Obligation. Seller is not a “foreign person” within the meaning of Section 1445 of the
Internal Revenue Code of 1986, as amended.

 

(9)              
Condemnation. Except for any condemnation proceedings which Seller has not yet been served with process, there are
no pending or, to Seller’s Knowledge, threatened condemnation or similar proceedings affecting the Property or any individual
property that is a part thereof.

 

(10)          
Employees.Seller has no employees at the Property.

 

(11)          
No Bankruptcy Proceedings. Seller has not (i) made a general assignment for the benefit of creditors, (ii)
filed any voluntary petition in bankruptcy or suffered the filing of any involuntary petition by Seller’s creditors, (iii)
suffered the appointment of a receiver to take possession of all or substantially all of Seller’s assets, or (iv)
suffered the attachment or other judicial seizure of all or substantially all of Seller’s assets.

 

(12)          
Unrecorded Documents. Other than as disclosed in the Property Information, the Title Commitment, or any other documents
delivered to Buyer, Seller has not entered into any unrecorded contracts, leases, easements or other agreements with respect to
the Property that would be binding on Buyer or the Property following the Closing. Seller has no knowledge of any claim of any
third party affecting the use, title, occupancy or development of the Property that has not been disclosed to Buyer. Seller has
not granted any right of first refusal, option or other right to acquire all or any part of the Property.

 

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For purposes of this
Section 6(a), the term “Seller’s Knowledge” means the actual knowledge of Chris Funk,
the person who Seller represents to be the most knowledgeable about the Property.

 

(b)              
Buyer’s Representations and Warranties. As a material inducement to Seller to execute this Agreement and consummate
this transaction, Buyer represents and warrants to Seller that Buyer has been duly organized and is validly existing as a Delaware
limited liability company. Buyer has the full right and authority and has obtained any and all consents required therefore to enter
into this Agreement, consummate or cause to be consummated the purchase, and make or cause to be made the deliveries and undertakings
contemplated herein or hereby. The persons signing this Agreement on behalf of Buyer are authorized to do so. This Agreement and
all of the documents to be delivered by Buyer at the Closing have been authorized and properly executed and will constitute the
valid and binding obligations of Buyer, enforceable against Buyer in accordance with their terms.

 

(c)               
Covenants of Seller. Seller covenants and agrees that during the period from the date of this Agreement through and
including the Closing Date:

 

(1)              
Seller will timely pay and perform its obligations under the Leases and any contracts to be assumed by Buyer pursuant hereto.

 

(2)              
All tenant repair requests, including move-in punch-list items, have been fixed properly or will be fixed properly and paid
for before the Closing Date.

 

(d)              
Seller’s Representations Regarding Tenants. Seller hereby represents and warrants that each tenant is occupying
its respective home and is current in the payment of rent, no default currently exists and no condition exists, which, with the
passage of time may become a default under any of the Leases, and that, as of the date of this Agreement, the Rent Roll with Accounts
Receivable attached hereto as Exhibit H is accurate.

 

(1)              
Following the expiration of the Due Diligence Period, Seller will not enter into any contract (other than new Leases) that
will be an obligation affecting the Property subsequent to the Closing Date except for contracts entered into in the ordinary course
of business that are terminable without cause and without payment of a penalty on not more than 30-days’ notice.

 

(2)              
Seller will not remove any Personal Property from the Property except as may be required for necessary repair or replacement,
and in the event of such replacement, the replacement shall be of materially equal or better quality and quantity as existed as
of the time of its removal.

 

(3)              
Seller will continue to operate and maintain the Property in accordance with past practices and will not make any material
alterations or changes thereto;

 

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(4)              
Seller will maintain casualty and liability insurance of a level and type consistent with the insurance maintained by Seller
prior to the execution of this Agreement with respect to the Property;

 

(5)              
Seller will not do anything, or authorize anything to be done, that would adversely affect the condition of title as shown
on the Title Commitment.

 

(6)              
Seller agrees to terminate by written notice to the other parties thereto, effective as of Closing, any service contracts
that Buyer, pursuant to written notice to Seller prior to the expiration of the Due Diligence Period, requests Seller to terminate.
Seller shall deliver to Buyer copies of all notices of termination given by Seller pursuant to this subsection.

 

(7)              
Seller shall repair all homes that become vacant at least five (5) days prior to the Closing to “rent-ready”
condition in accordance with Seller’s customary practice and procedure for the Property. Buyer shall receive a $3,500 credit
against the Purchase Price with respect to any unit that is vacant and not in “rent ready” condition on the Closing
Date. At Buyer’s request, Seller shall inspect each of the vacant units prior to the Closing to determine if any of such
units cannot be restored to “rent ready” condition at a cost of $3,500 or less, and Buyer and Seller hereby agree to
make such adjustments to the $3,500 per unit credit as Buyer and Seller agree, acting reasonably, are necessary in order to pay
for the cost of restoring the vacant units to “rent ready” condition. Upon request, Seller shall keep Buyer reasonably
informed as to the status of leasing prior to the Closing Date and shall deliver to Buyer copies of all new Leases.

 

(e)               
Representation and Warranties Prior to Closing. The continued validity in all material respects of the foregoing
representations and warranties shall be a condition precedent to the obligation of the party to whom the representation and warranty
is given to close this transaction. If any of Seller’s representations and warranties are not true and correct in all material
respects at any time on or before the Closing even if true and correct as of the date of this Agreement or whether any change in
facts or circumstances has made the applicable representation and warranty no longer true and correct and regardless as to whether
Buyer becomes aware of such fact through Seller’s notification or otherwise, then Buyer may, at Buyer’s option, exercised
by written notice to Seller (and as its sole and exclusive remedy), either (i) proceed with this transaction, accepting the applicable
representation and warranty as being modified by such subsequent matters or knowledge and waiving any right relating thereto, if
any, or (ii) terminate this Agreement and declare this Agreement of no further force and effect and in which event Escrow Holder
shall, without further instruction, return the Deposit to Buyer and Seller shall have no further liability hereunder by reason
thereof; provided, that if the breach of any representation or warranty of Seller hereunder results from the willful and intentional
act of Seller, Buyer will have the rights and remedies available to Buyer under Section 18(b) of this Agreement upon
a default by Seller of its obligations under this Agreement.

 

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7.                 
Due Diligence Period.

 

(a)               
Buyer will have a period commencing on the Effective Date and ending at 6:00 PM Pacific Time on the date that is thirty
(30) days after Buyer has received all Property Information set forth in Schedule 6(a)(3) (the “Due Diligence
Period”) to examine, inspect, and investigate the Property and, in Buyer’s sole judgment and discretion,
to determine whether Buyer desires to purchase the Property. However, if Buyer is acting diligently and in good faith to proceed
with the consummation of the transaction contemplated by this Agreement, Seller shall agree, upon the written request of Buyer,
to extend the Closing Date up to fourteen (14) business days. Seller shall deliver written notice to Buyer confirming that Seller
has sent all Property Information. Buyer shall have seven (7) business days after receipt of such notice to (i) confirm its receipt
of all Property Information or (ii) notify Seller of any missing Property Information. If Buyer notifies Seller of any missing
Property Information within such seven (7) business day period, Seller shall have an additional five (5) business days to deliver
such missing Property Information to Buyer.

 

(b)              
Buyer may terminate this Agreement for any or no reason by giving written notice of such termination to Seller on or before
the last day of the Due Diligence Period. If this Agreement is terminated pursuant to this Section 7, the Deposit shall
be immediately refunded to Buyer, and neither party shall have any further liability or obligation to the other under this Agreement
except for the indemnity provisions set forth in Section 7(c) of this Agreement and any other provision of this Agreement
that is expressly intended to survive the termination of this Agreement. In the event this Agreement is terminated as provided
for herein, Escrow Holder shall promptly return Buyer’s Deposit and Seller shall not cause Escrow Holder to delay the return
of the Deposit to Buyer for any reason. If Buyer does not elect to exercise its right to terminate this Agreement during the Due
Diligence Period, then Buyer shall notify Seller of Buyer’s intention to acquire the Property before the expiration of the
Due Diligence Period. If Buyer does not, before the expiration of the Due Diligence Period, either affirmatively notify Seller
of its desire to acquire the Property or send a termination notice to Seller, and such failure continues for five (5) business
days thereafter, then Buyer will be deemed to have elected to terminate this Agreement. If Buyer elects to proceed to purchase
the Property, and this Agreement is not terminated or deemed terminated before the expiration of the Due Diligence Period, then
the Deposit shall be non-refundable except in the event of a default hereunder by Seller.

 

(c)               
Subject to the rights of tenants under the Leases, Seller will provide to Buyer reasonable access to the Property for the
purpose of examining any or all aspects thereof, including conducting on a non-destructive basis, surveys, architectural, engineering,
non-invasive geo-technical and environmental inspections and tests, and any other inspections, studies, or tests reasonably required
by Buyer. Buyer shall give Seller reasonable notice by telephone or e-mail before entering onto any of the properties that comprise
the Property to perform inspections or tests, and in the case of tests (i) Buyer shall specify to Seller the precise nature of
the test to be performed, and (ii) Seller may require, as a condition precedent to Buyer’s right to perform any such test,
that Buyer deliver Seller evidence of public liability and other appropriate insurance naming Seller as an additional insured thereunder.
Such examination of the physical condition of the Property, including the Third Party Inspection Report (defined in Section
7(d) below) may include an examination for the presence or absence of hazardous or toxic materials, substances or wastes, which
shall be performed or arranged by Buyer at Buyer’s sole expense. Buyer shall keep the Property free and clear of any liens
and will indemnify, protect, defend, and hold each Seller Related Party (defined below) harmless from and against all losses, costs,
damages, claims, liabilities and expenses (including reasonable attorneys’ fees and court costs) (collectively, “Losses”)
arising from damage to the Property and injury to persons asserted against or incurred by any Seller Related Party as a result
of such entry by Buyer, its agents, employees or representatives (except that Buyer shall have no liability or indemnity obligation
for any diminution in the value of the Property as a result of any unfavorable analysis, test, study, opinion or recommendation
made to or for or reach by Buyer). If any inspection or test disturbs the Property and Buyer does not acquire the Property, Buyer
will restore the Property to substantially the same condition as existed prior to any such inspection or test. Buyer and its agents,
employees, and representatives may, upon not less than 24 hours prior telephonic notice to Seller, examine and make copies of all
books and records and other materials relating to the condition of the Property in Seller’s possession at the office where
such records are maintained. Any information provided to or obtained by Buyer with respect to the Property shall be subject to
the provisions of Section 22(p) of this Agreement. The obligations of Buyer under this Section shall survive the termination
of the Agreement.

 

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(d)              
Buyer may retain a contractor or home inspector to prepare a report or reports describing the physical condition of the
Property (collectively, the “Third Party Inspection Report”), which Third Party Inspection Report shall
adequately identify any necessary repairs or improvements and the estimated costs of such repairs or improvements (collectively,
the “Necessary Repairs”). The person or entity preparing the Third Party Inspection Report must be licensed
to perform such inspections in the jurisdiction where the Property is located, and may not be, or have ever been, owned or controlled
by Buyer or an affiliate of Buyer or otherwise not at arm’s length from Buyer. Buyer will provide a copy of the Third Party
Inspection Report to Seller prior to the expiration of the Due Diligence Period. If any Necessary Repairs are identified in the
Third Party Inspection Report and subject to the limitations set forth below, Seller shall have the right to (i) make the Necessary
Repairs after Closing and the estimated cost of the Necessary Repairs as set forth in the Third Party Inspection Report shall be
held in escrow by the Escrow Holder until such Necessary Repairs are completed by Seller within forty-five (45) days or (ii) reduce
the Purchase Price by the estimated cost of the repairs or replacements set forth in the Third Party Inspection Report. In the
event Seller elects to reduce the Purchase Price, Seller and Buyer agree that the Purchase Price will not be reduced by an amount
greater than five percent (5%) of the Purchase Price without Seller’s written agreement. Normal wear and tear shall not constitute
grounds for a reduction in the Purchase Price. If the cost to make the repairs and replacements identified in the Third Party Inspection
Report exceeds five percent (5%) of the Purchase Price, and Seller does not agree to reduce the Purchase Price by the identified
cost of such repairs and replacements as set forth in the Third Party Inspection Report, then Buyer may, upon written notice to
Seller and prior to the end of the Due Diligence Period, elect to (i) close the transaction as contemplated with a five percent
(5%) reduction of the Purchase Price or (ii) terminate this Agreement. If Buyer terminates this Agreement in accordance with this
Section 7(d), then this Agreement will have no further force or effect, the parties will have no further obligations to
each other (except for any indemnities or other provisions that expressly survive termination of this Agreement) and Escrow Holder
shall refund the Deposit to Buyer. The reductions to the Purchase Price contemplated in this Section 7(d) are in addition
to those contemplated in Section 5(b) and 5(c) of this Agreement.

 

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(e)               
Notwithstanding any provision to the contrary set forth herein, in addition to the rights set forth in Sections 5(b),
5(c) and 7(d), at any time during the Due Diligence Period, Buyer may in its sole discretion, elect to designate
specified properties from the properties identified on Exhibit A as Excluded Properties as defined in Section 5(c),
with the understanding that Seller’s written consent is required if Buyer elects to buy fewer than eighty-five percent (85%)
of the properties comprising the Property. In the event of such an election, Buyer shall deliver to Seller a notice stating which
properties it has designated as Excluded Properties no later than two (2) days prior to the end of the Due Diligence Period
(the “Notice to Seller”). Upon delivery of the Notice to Seller, the designated properties described
in the Notice to Seller shall be Excluded Properties, and the terms of Section 5(c) shall apply with respect thereto.

 

8.                 
As Is Sale.

 

(a)               
BUYER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT SELLER IS SELLING AND BUYER IS PURCHASING THE PROPERTY ON AN “AS IS
WITH ALL FAULTS” BASIS AND THAT, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT AND THE CLOSING DOCUMENTS DELIVERED BY SELLER
TO BUYER AT CLOSING, BUYER IS NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, FROM
SELLER, ITS AGENTS, OR BROKERS AS TO ANY MATTERS CONCERNING THE PROPERTY, INCLUDING WITHOUT LIMITATION: (I) THE QUALITY, NATURE,
ADEQUACY AND PHYSICAL CONDITION OF THE PROPERTY, INCLUDING, BUT NOT LIMITED TO THE STRUCTURAL ELEMENTS, FOUNDATION, ROOF, APPURTENANCES,
ACCESS, LANDSCAPING, PARKING FACILITIES AND THE ELECTRICAL, MECHANICAL, HVAC, PLUMBING, SEWAGE, AND UTILITY SYSTEMS, FACILITIES
AND APPLIANCES, (II) THE QUALITY, NATURE, ADEQUACY, AND PHYSICAL CONDITION OF SOILS, GEOLOGY AND ANY GROUNDWATER, (III) THE EXISTENCE,
QUALITY, NATURE, ADEQUACY AND PHYSICAL CONDITION OF UTILITIES SERVING THE PROPERTY, (IV) THE DEVELOPMENT POTENTIAL OF THE PROPERTY,
AND THE PROPERTY’ USE, HABITABILITY, MERCHANTABILITY, OR FITNESS, SUITABILITY, VALUE OR ADEQUACY OF THE PROPERTY FOR ANY
PARTICULAR PURPOSE, (V) THE ZONING OR OTHER LEGAL STATUS OF THE PROPERTY OR ANY OTHER PUBLIC OR PRIVATE RESTRICTIONS ON USE OF
THE PROPERTY, (VI) THE COMPLIANCE OF THE PROPERTY OR ITS OPERATION WITH ANY APPLICABLE CODES, LAWS, REGULATIONS, STATUTES, ORDINANCES,
COVENANTS, CONDITIONS AND RESTRICTIONS OF ANY GOVERNMENTAL OR QUASI-GOVERNMENTAL ENTITY OR OF ANY OTHER PERSON OR ENTITY, (VII)
THE PRESENCE OR ABSENCE OF HAZARDOUS MATERIALS (AS DEFINED IN ANY ENVIRONMENTAL STATUTE) ON, UNDER OR ABOUT THE PROPERTY OR THE
ADJOINING OR NEIGHBORING PROPERTY, (VIII) THE QUALITY OF ANY LABOR AND MATERIALS USED IN ANY IMPROVEMENTS ON THE PROPERTY, (IX)
THE CONDITION OF TITLE TO THE PROPERTY, (X) THE LEASES (INCLUDING ALL SERVICE CONTRACTS) AND ANY OTHER AGREEMENTS AFFECTING THE
PROPERTY AND (XI) THE ECONOMICS OF ANY PAST OR FUTURE OPERATIONS OF THE PROPERTY.

 

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9.                 
Survival of Representations and Warranties After Closing.

 

(a)               
All representations and warranties of Seller herein shall survive the Closing for a period of nine (9) months (the “Limitation
Period”).

 

(b)              
Buyer shall provide actual written notice to Seller of any breach of any of Seller’s warranties or representations
of which Buyer acquires knowledge, through any means, at any time after the Closing Date but prior to the expiration of the Limitation
Period, and shall allow Seller thirty (30) days within which to cure such breach, or, if such breach is susceptible of cure but
cannot reasonably be cured within thirty (30) days, an additional reasonable time period required to effect such cure so long as
such cure has been commenced within such thirty (30) days and diligently pursued but in no event more than ninety (90) days. If
Seller fails to cure such breach after actual written notice and within such cure period (as extended), Buyer’s sole remedy
shall be an action at law for damages as a consequence thereof, which must be commenced, if at all, within the six (6) months after
the expiration of the Limitation Period.

 

10.             
Closing.

 

(a)               
The purchase and sale transaction contemplated in this Agreement shall occur on the date specified in the Basic Terms section
of this Agreement (the “Closing Date”), and accomplished by recording the Deed (as defined in Section 14) in
the Official Records of the particular County in which each of the individual properties that constitute the Property is located
(the “Official Records”), provided that all conditions precedent to the Closing have been fulfilled or
have been waived in writing by the respective party entitled to waive same.

 

(b)              
On or before the Closing Date, the parties shall establish the usual form of deed and money escrow with Escrow Holder. Counsel
for the respective parties is hereby authorized to execute the escrow trust instructions as well as any amendments thereto.

 

11.             
Conditions to Buyer’s Obligation to Close.

 

(a)               
Buyer will not be obligated to proceed with the Closing unless and until each of the following conditions has been either
fulfilled or waived in writing by Buyer:

 

(1)              
This Agreement shall not have been previously terminated pursuant to any other provision hereof;

 

    	11

    	 

    

  

(2)              
Seller shall be prepared to deliver or cause to be delivered to Buyer all instruments and documents to be delivered to Buyer
at the Closing pursuant to Section 14 and Section 16 or any other provision of this Agreement; and

 

(3)              
All property managing services provided to the Property under any property management agreement shall have been terminated
on or prior to the Closing at no cost, liability or expense to Buyer.

 

(b)              
If any of the foregoing conditions are not fulfilled on or before the time for Closing hereunder or waived by the Buyer
in writing, then subject to the provisions of Section 18(b) hereof, Buyer may elect, upon notice to Seller, to terminate
this Agreement, in which event the Deposit shall be returned to Buyer, and neither party shall have any further liability or obligation
to the other, except for the provisions of this Agreement which are expressly stated to survive the termination of this Agreement.

 

12.             
Conditions to Seller’s Obligation to Close.

 

(a)               
Seller will not be obligated to proceed with the Closing unless and until each of the following conditions has been fulfilled
or waived in writing by Seller:

 

(1)              
Buyer shall be prepared to pay to Seller the Purchase Price and all other amounts to be paid to it at Closing pursuant to
the provisions of this Agreement;

 

(2)              
Buyer shall be prepared to deliver to Seller all instruments and documents to be delivered to Seller at the Closing pursuant
to Section 15  and Section 16 or any other provision of this Agreement; and

 

(3)              
This Agreement shall not have been previously terminated pursuant to any other provision hereof.

 

(b)              
If the foregoing conditions are not fulfilled on or before the time for Closing hereunder or waived by Seller in writing,
then subject to the provisions of Section 18(a) hereof, Seller may elect, upon notice to Buyer, to terminate this Agreement,
in which event the Deposit shall be returned to Buyer, and neither party shall have any further liability or obligation to the
other, except for the provisions of this Agreement which are expressly stated to survive the termination of this Agreement. For
the avoidance of doubt, it is understood that if Buyer defaults after the expiration of the Due Diligence period, then the Deposit
shall be paid to the Seller.

 

13.             
Title Insurance. (a) Following completion of the 3rd party valuation of the Property, Buyer and Seller
shall cause Title Company to deliver to Buyer a commitment for the Title Policy described in subsection (b) below (the “Title
Commitment”), together with legible copies of all of the underlying documentation described in such Title Commitment.
Seller shall, include in the Property Information the most recent surveys of the properties that comprise the Property in Seller’s
possession, custody or control (the “Surveys”). The cost to deliver the Title Commitment to the Buyer
shall be split equally (50% / 50%) between Buyer and Seller.

 

    	12

    	 

    

  

(a)               
At Closing, and as a condition thereof, Buyer shall receive an owner’s title insurance policy (the “Title
Policy”) issued by Title Company, dated the day of Closing, with liability in the full amount of the Purchase Price,
the form of which shall be an American Land Title Association Owner’s Policy, Standard Form B, 1992 (or other form preferred
by Buyer or required or promulgated pursuant to applicable state insurance regulations), subject only to the Permitted Exceptions
(defined below). The Title Policy may contain any endorsements requested by Buyer.

 

(b)              
Prior to the expiration of the Due Diligence Period, Buyer shall review title to the Property as disclosed by the Title
Commitment and the Surveys, and satisfy itself as to the availability from the Title Company of the Title Policy and all requested
endorsement to such Title Policy. Buyer shall have the right, at its own cost and expense, to obtain an update of the Surveys or
to secure new surveys at any time prior to the expiration of the Due Diligence Period.

 

(c)               
Seller shall have no obligation to remove or cure title objections, except for (1) liens of an ascertainable amount created
by Seller, which liens Seller shall cause to be released at the Closing or affirmatively insured over by the Title Company with
Buyer’s approval, (2) any exceptions or encumbrances to title which are created by Seller after the date of this Agreement
without Buyer’s consent, and (3) non-consensual liens which liens Seller shall cause to be released at the Closing or affirmatively
insured over by the Title Company. In addition, Seller shall provide the Title Company with any affidavits, ALTA statements or
personal undertakings (collectively, an “Owner’s Affidavit”), in form and substance reasonably
acceptable to the Title Company, that will permit the Title Company to remove the standard “mechanics lien” and “GAP”
exceptions and otherwise issue the Title Policy in the form required by Buyer.

 

(d)              
“Permitted Exceptions” shall mean: (1) any exception arising out of an act of Buyer or its representatives,
agents, employees or independent contractors permitted under this Agreement; (2) zoning and subdivision ordinances and regulations;
(3) the specific exceptions in the Title Commitment that the Title Company has not agreed to insure over or remove from the Title
Commitment as of the end of the Due Diligence Period and that Seller is not required to remove as provided above; (4) items shown
on the Surveys or any updated or new surveys of the Property which have not been removed as of the end of the Due Diligence Period;
(5) real estate taxes and assessments not yet due and payable; and (6) rights of tenants under the Leases, as occupancy tenants
only and without any rights of first refusal, rights of first offer or purchase options.

 

14.             
Documents to be Delivered to Buyer at Closing. At Closing, Seller shall deliver or cause to be delivered to Buyer
each of the following instruments and documents:

 

(a)               
Deed. The Deed, in the form attached hereto as Exhibit C.

 

(b)              
Bill of Sale. The Bill of Sale covering the Personal Property, in the form attached hereto as Exhibit D.

 

    	13

    	 

    

  

(c)               
The Title Policy. The Title Policy may be delivered after the Closing if at the Closing the Title Company issues
a currently effective, duly-executed “marked-up” Title Commitment and irrevocably commits in writing to issue the Title
Policy in the form of the “marked-up” Title Commitment after the Closing.

 

(d)              
Assignment of Leases and Contracts. An Assignment of Leases and Contracts, in the form attached hereto as Exhibit E,
transferring and assigning to Buyer, to the extent the same are assignable, all right, title and interest of Seller in the Leases
and the other property described therein.

 

(e)               
Transfer Tax Declarations. Original copies of any required real estate transfer tax or documentary stamp tax declarations
executed by Seller or any other similar documentation required to evidence the payment of any tax imposed by the state, county
and city on the transaction contemplated hereby.

 

(f)                
FIRPTA. An affidavit, in the form attached hereto as Exhibit F, stating Seller’s U.S. taxpayer
identification number and that Seller is a “United States person”, as defined by Internal Revenue Code Section 1445(f)(3)
and Section 7701(b).

 

(g)               
Owner’s Affidavit. The Owner’s Affidavit materials referred to in Section 13(d) above.

 

(h)               
Surveys, Plans, Permits and Specifications.All existing surveys, blueprints, drawings, plans and specifications,
permits, and operating manuals for or with respect to any of the properties that comprise the Property or any part thereof to the
extent the same are in Seller’s possession.

 

(i)                 
Keys.All keys to the improvements, to the extent the same are in Seller’s possession.

 

(j)                
Leases. Originals of all Leases in effect on the Closing Date (or copies thereof in the event the originals are
not in Seller’s possession, or in the possession of Sellers’ property manager and such copies of Leases are in Seller’s
possession), and the tenant files with respect to such Leases, to the extent the same are in Seller’s possession.

 

(k)              
Certificate.A certificate (the “Update”) of Seller dated as of the Closing Date certifying
that the representations and warranties of Seller set forth in Section 6(a) of this Agreement as applicable, remain true
and correct in all material respects as of the Closing Date, except as to Schedule 6(a)(5), which Update shall be dated
no earlier than three (3) days prior to Closing.

 

(l)                 
Other Deliveries. Such other documents and instruments as may be required by any other provision of this Agreement
or as may reasonably be required to carry out the terms and intent of this Agreement.

 

    	14

    	 

    

  

15.             
Documents to be Delivered to Seller at Closing. At Closing, Buyer shall deliver or cause to be delivered to Seller
each of the following instruments, documents and amounts:

 

(a)               
Purchase Price. The Purchase Price, subject to adjustment and proration as provided in Section 17 below.

 

(b)              
Transfer Tax Declarations. Original copies of any required real estate transfer tax or documentary stamp tax declarations
executed by Buyer or any other similar documentation required to evidence the payment of any tax imposed by the state, county and
city on the transaction contemplated hereby.

 

(c)               
Assignment of Leases. A counterpart of the Assignment of Leases and Contracts, in the form attached hereto as Exhibit
E.

 

(d)              
Certificate.A certificate of Buyer (the “Buyer’s Update”) dated as of the Closing
Date certifying that the representations and warranties of Buyer set forth in Section 6(b) of this Agreement as applicable,
remain true and correct in all material respects as of the Closing Date, which Buyer’s Update shall be dated no earlier than
three (3) days prior to Closing.

 

(e)               
Other Documents. Such other documents and instruments as may be required by any other provision of this Agreement
or as may reasonably be required to carry out the terms and intent of this Agreement.

 

16.             
Documents to be Delivered by Seller and Buyer at Closing. At Closing, Buyer and Seller shall deliver or cause to
be delivered each of the following instruments and documents:

 

(a)               
Escrow Instructions. Escrow instructions (as described in Section 10(b)).

 

(b)              
Settlement Statement. A fully executed settlement statement.

 

(c)               
Notice to Tenants. A duly executed notice to each of the tenants under the Leases.

 

17.             
Prorations and Adjustments.

 

(a)               
The following items shall be prorated and adjusted based upon the number of calendar days in the measuring period between
Seller and Buyer as of midnight on the date of Closing, except as otherwise specified:

 

(1)              
Taxes. All real estate taxes and assessments (“Taxes”) assessed against the Property for
the year of Closing shall be prorated as follows: Seller will be responsible for the payment of Taxes applicable to the period
before the Closing Date, and Buyer will be responsible for the period on and after the Closing Date. If the actual taxes and assessments
cannot be determined for such year as of the Closing Date, then the parties shall make such proration based upon One Hundred and
Ten percent (110%) of the most recently issued tax bill for the Property and thereafter, make a final adjustment of such Taxes
upon receipt of the final bill. The provisions of this Section 17(a)(1) shall survive Closing.

 

    	15

    	 

    

  

(2)              
Utilities. All utilities shall be prorated based upon estimates using the most recent actual invoices. Seller shall
receive a credit for the amount of deposits, if any, with utility companies that are transferable and that are assigned to Buyer
at the Closing. In the case of non-transferable deposits, Buyer shall be responsible for making any security deposits required
by utility companies providing service to the Property.

 

(3)              
Collected Rent. Buyer shall receive a credit for any rent and other income (and any applicable state or local tax
on rent) under Leases collected by Seller before Closing that applies to any period after Closing. Uncollected rent and other uncollected
income shall not be prorated at Closing. After Closing, Buyer shall apply all rent and income collected by Buyer from a tenant
(x) first to such tenant’s rental obligations for the month in which the Closing occurs, (y) next to such tenant’s
monthly rental for the month in which the payment is made, and (z) then to arrearages in the reverse order in which they were due,
remitting to Seller, after deducting collection costs, any rent or expense reimbursements properly allocable to Seller’s
period of ownership. Buyer shall bill and attempt to collect such rent arrearages in the ordinary course of business, but shall
not be obligated to engage a collection agency or take legal action to collect any rent arrearages. Any rent or other income received
by Seller or Buyer after Closing which are owed to Seller or Buyer shall be remitted to Seller or Buyer as applicable, promptly
after receipt.

 

(b)              
Tenant Security Deposits. All unapplied tenant security deposits (and interest thereon if required by law or contract
to be earned thereon) under the Leases, shall be credited to Buyer at Closing.

 

(1)              
Service Contracts. With respect to any contracts that are assumed by Buyer and survive the Closing, Seller shall
receive a credit for prepaid charges and premiums applicable to Buyer’s period of ownership. The Buyer shall receive a credit
for any payments made in arrears. In addition and without limitation of the foregoing, Buyer shall receive a credit under any assumed
contract (each a “Service Provider Contract”) in which Seller has received any advance payments or other
income from the servicer provider under such Service Provider Contract in exchange for agreeing to enter into such Service Contract
(regardless of whether such advance payment or other income was paid in a lump sum or in installments). Any lump sum payments shall
be pro-rated on a straight line basis over the term of any applicable Service Provider Contract.

 

(2)              
Owner Deposits. Seller shall be entitled to the return of all bonds, deposits, letters of credit, set aside letters
or other similar items, if any, that are outstanding with respect to the Property that have been provided by Seller or any of its
affiliates, agents or investment advisors to any governmental agency, public utility, or similar entity (collectively, “Owner
Deposits”). Buyer shall replace such Owner Deposits. To the extent that any funds are released as a result of the
termination of any Owner Deposits for which Seller did not receive a credit, such funds shall be delivered to Seller immediately
upon their receipt.

 

    	16

    	 

    

  

(c)               
Final Prorations. With regards to any prorations set forth in this Section 17 that are based upon estimates,
such prorations shall be readjusted based upon the actual bills after the Closing and before the expiration of the Limitation Period.
The provisions of this Section 17(c) shall survive Closing.

 

18.             
Default; Termination(a)               
. (a) IF THE CLOSING FAILS TO OCCUR BECAUSE OF BUYER’S DEFAULT, THE DEPOSIT SHALL BE RETAINED BY SELLER AS LIQUIDATED
DAMAGES. THE PARTIES HERETO EXPRESSLY AGREE AND ACKNOWLEDGE THAT SELLER’S ACTUAL DAMAGES IN THE EVENT OF A DEFAULT BY BUYER
WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO ASCERTAIN BECAUSE OF THE NATURE OF THE PROPERTY AND THAT THE AMOUNT OF THE DEPOSIT
REPRESENTS THE PARTIES’ REASONABLE ESTIMATE OF SUCH DAMAGES. THE PAYMENT OF SUCH AMOUNT AS LIQUIDATED DAMAGES IS NOT INTENDED
AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF ANY APPLICABLE LAWS, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS SECTION 18, SELLER AND BUYER AGREE THAT THIS LIQUIDATED DAMAGES
PROVISION IS INTENDED TO BE SELLER’S SOLE AND EXCLUSIVE REMEDY FOR A DEFAULT BY BUYER, BUT IS NOT INTENDED AND SHOULD NOT
BE DEEMED OR CONSTRUED TO LIMIT IN ANY WAY BUYER’S INDEMNIFICATION OBLIGATIONS UNDER THIS AGREEMENT.

 

SELLER’S INITIALS: _____             BUYER’S INITIALS: _____

 

 

(b)              
If Seller defaults in any material respect hereunder, then provided Buyer is not in default any material respect, Buyer
may, at its sole election, either:

 

(1)              
Terminate this Agreement, whereupon the Deposit shall be promptly returned to Buyer, as well as Buyer’s actual out
of pocket costs to unrelated and independent third party vendors, including reasonable attorneys’ fees, incurred as a result
of this transaction not to exceed Fifty Thousand and 00/100 Dollars ($50,000.00) in the aggregate, and neither party shall have
any further liability or obligation to the other, except for the provisions of this Agreement which are expressly stated to survive
the termination of this Agreement; or

 

(2)              
Assert and seek judgment against Seller for specific performance with respect to one or more (at Buyer’s election)
of the properties that comprise the Property; provided that if Buyer elects to purchase less than all of such properties pursuant
to the terms of Section 7(e) of this Agreement, then the Purchase Price will be reduced by the aggregate Assigned Home Price for
the Excluded Properties. If a court of competent jurisdiction determines that the remedy of specific performance is not available
to Buyer, then Buyer shall have the right to assert and seek judgment against Seller for actual contract damages.

 

    	17

    	 

    

  

19.             
Expenses.

 

(a)               
One half (1/2) of all title insurance premiums for the Title Policy, title search, all state and county transfer taxes,
deed recording and fees charged by the Escrow Holder shall be borne and paid by Seller.

 

(b)              
One half (1/2) of all title insurance premiums for the Title Policy, title search, all state and county transfer taxes,
deed recording and fees charged by the Escrow Holder shall be borne by Buyer. Any closing cost related to financing of the Property
shall be borne by Buyer.

 

(c)               
All other costs, charges, and expenses shall be borne and paid as provided in this Agreement, or in the absence of such
provision, in accordance with custom where the properties in question are located.

 

20.             
Intermediaries. (a) Buyer and Seller acknowledge and agree that Seller’s Broker (as defined in the Basic Terms)
has acted as a broker in connection with this transaction on behalf of Seller. Upon Closing, Seller agrees to pay a brokerage
commission to Seller’s Broker pursuant to a separate agreement between Seller and Seller’s Broker. Seller and Buyer
agree that Buyer has not engaged a broker with respect to the transaction contemplated in this Agreement and that Buyer is not
responsible in any way for Seller’s Broker fees and/or commissions. All brokerage fees are to be paid through Escrow Holder
at Closing as a Closing Cost.

 

(b)              
Seller represents to Buyer, and Buyer represents to Seller, that except for Seller’s Broker there are no fees owed
to any broker, finder, or intermediary of any kind with whom such party has dealt in connection with this transaction. Except as
expressly set forth above, if any claim is made for broker’s or finder’s fees or commissions in connection with the
negotiation, execution or consummation of this Agreement or the transactions contemplated hereby, each party shall defend, indemnify
and hold harmless the other party from and against any such claim based upon any statement, representation or agreement of such
party, which obligation shall survive Closing.

 

21.             
Destruction of Improvements.

 

(a)               
If, prior to Closing, any of the Improvements on any of the properties that comprise the Property are damaged or destroyed
such that the cost of repair or replacement of such improvements is material (“Material Damage”), or
a condemnation proceeding is commenced or threatened in writing by a governmental or quasi-governmental agency with the power of
eminent domain (“Condemnation”), then:

 

    	18

    	 

    

  

(1)              
Buyer may elect, within fourteen (14) days from receipt of notice of said Material Damage, or notice of a Condemnation,
by written notice to Seller, to exclude the individual property affected by such event from this transaction; provided that if
more than twenty-five percent (25%) of the properties that comprise the Property suffer Material Damage, or become the subject
of a Condemnation, then Buyer may terminate this Agreement. If necessary, the time of Closing shall be extended to permit Buyer
to evaluate and make the elections contemplated in this Section 21. If Buyer elects to terminate this Agreement in accordance
with this Section 21, then the Deposit shall be returned to Buyer and, except for the provisions of this Agreement that
expressly survive Closing or earlier termination of this Agreement, this Agreement shall be void and of no further force and effect,
and neither party shall have any liability to the other by reason hereof; or

 

(2)              
If Buyer elects to exclude certain properties from this transaction, and proceed to the Closing, then the Purchase Price
will be reduced by the aggregate Assigned Home Value of the properties not purchased. If, however, it is determined that any damage
to one or more properties does not constitute a Material Damage, or Buyer elects to purchase one or more properties that have suffered
Material Damage, then the transaction contemplated hereby shall be closed without a reduction in the Purchase Price, and Seller
shall assign to Buyer Seller’s rights in any insurance proceeds or Condemnation award to be paid to Seller in connection
with such damage or Condemnation, and, in the case of Material Damage, Seller shall pay to Buyer an amount equal to the deductible
under Seller’s policy of casualty insurance and Seller shall execute and deliver to Buyer all required proofs of loss, assignments
of claims and other similar items.

 

(b)              
For purposes of this Section 21, damage or destruction will be considered “Material Damage” if one or
more of the properties that comprise the Property are rendered uninhabitable, or if the time to repair such damage, despite reasonable
expectations with respect to repairs, is reasonably by Buyer to exceed three months. If, prior to Closing, any of the improvements
on the Property are damaged or destroyed and such damage is not Material Damage, Buyer shall remain obligated to close hereunder
with no abatement in the Purchase Price. At Closing, Seller shall assign to Buyer Seller’s rights in any insurance proceeds
to be paid to Seller in connection with such damage or destruction, and Buyer shall receive a credit against the Purchase Price
in an amount equal to the deductible amount under Seller’s casualty insurance policy.

 

22.             
General Provisions.

 

(a)               
Entire Agreement. This written Agreement, including all Exhibits attached hereto and documents to be delivered pursuant
hereto, shall constitute the entire agreement and understanding of the parties, and there are no other prior or contemporaneous
written or oral agreements, undertakings, promises, warranties, or covenants not contained herein.

 

    	19

    	 

    

  

(b)              
Amendments in Writing. This Agreement may be amended only by a written memorandum subsequently executed by all of
the parties hereto.

 

(c)               
Waiver. No waiver of any provision or condition of this Agreement by any party shall be valid unless in writing signed
by such party. No such waiver shall be taken as a waiver of any other or similar provision or of any future event, act, or default.

 

(d)              
Time of the Essence. Time is of the essence of this Agreement. However, if Buyer is acting diligently and in good
faith to proceed with the consummation of the transaction contemplated by this Agreement on the Closing Date, Seller will agree,
upon the written request of Buyer, to extend the Closing Date up to three (3) business days. Likewise, if Seller is acting diligently
and in good faith to proceed with the consummation of the transaction contemplated by this Agreement on the Closing Date, Buyer
will agree, upon the written request of Seller, to extend the Closing Date up to three (3) business days. In the computation of
any period of time provided for in this Agreement or by law, any date falling on a Saturday, Sunday or legal holiday when banks
are not open for business in the State where the Property is located, will be deemed to refer to the next day which is not a Saturday,
Sunday, or legal holiday when banks are not open for business in such State.

 

(e)               
Severability. If any provision of this Agreement is rendered unenforceable in whole or in part, such provision will
be limited to the extent necessary to render the remainder of the Agreement valid, or will be deemed to be removed from this Agreement,
as circumstances require, and this Agreement shall be construed as if said provision had been incorporated herein as so limited,
or as if said provision has not been included herein, as the case may be.

 

(f)                
Headings. Headings of sections are for convenience of reference only, and shall not be construed as a part of this
Agreement.

 

(g)               
Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefits of the parties hereto,
and their respective successors, and permitted assigns. This Agreement may not be assigned by either party without the consent
of the other party, except that Buyer may, without consent from Seller, assign this Agreement to an affiliate of Buyer, Reven Housing
REIT, Inc, or any affiliate of Reven Housing REIT, Inc. or any entity formed by Buyer for the purpose of acquiring or taking title
to the Property; provided that such assignment will not release Buyer from its obligations under this Agreement. Any assignment
in accordance with this Section 22(g) will entitle the assignee thereunder to all rights and benefits, and subject such
assignee to all obligations, of Buyer hereunder.

 

(h)               
Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed,
or sent by Federal Express, UPS or other recognized overnight courier service for next business day delivery, or sent by facsimile
transmission or electronic mail (so long as reasonable evidence that such notice was sent and received is obtained by the sending
party). Any notice provided hereunder shall be deemed to be given when sent in accordance with this provision, but any time to
respond to such notice as provided in this Agreement will not commence until the actual receipt of the notice. Notices will be
deemed valid if sent to the parties as follows:

 

    	20

    	 

    

  

IF TO BUYER

 

Reven Housing
REIT, Inc.

P.O. Box
1459

La Jolla,
California 92038-1459

Phone: 858-459-4000

e-mail: cmc@revenhousingreit.com

e-mail: mps@revenhousingreit.com

Attention:
Chad Carpenter and Michael Soni

 

 

with a copy to:

 

Greenberg Traurig, LLP

1840 Century Park East

Suite 1900

Los Angeles, California
90067

Phone: (310) 586-6505

e-mail: treisterd@gtlaw.com

Attention: Dana S. Treister

 

with an additional copy
to:

 

Greenberg Traurig, LLP

1840 Century Park East

Suite 1900

Los Angeles, California
90067

Phone: (310) 586-7855

e-mail: presants@gtlaw.com

Attention: Sandy
Presant

 

    	21

    	 

    

   

IF TO SELLER:

 

Bessie Circle Land Trust

Blanco Court Land Trust

Doncaster Ave. Land Trust

Ensign Ave. Land Trust

Fredericksburg Ave. Land
Trust

Green Knoll Land Trust

Greenleaf Road Land Trust

Holcroft Dr. Land Trust

Karenita Drive Land Trust

Miss Muffett Land Trust

Penton Street Land Trust

Portsmouth Ave Land Trust

Ribault Scenic Drive
Land Trust

Robert C Weaver Dr. Land
Trust

S. Miss Muffett Land
Trust

Spottswood Land Trust

Tallyho Ave. Land Trust

Tango Lane Land Trust

Tinkerbell Lane Trust

Tusk Court Land Trust

Waynesboro Ave Land Trust

Williamsburg Land Trust

637 South Pokeberry Place

Saint Johns, Florida
32259

E-mail: viptwo@yahoo.com

Attention: Anthony Simonetta

 

Ben C. Bishop III

50 N. Laura Street, #3625

Jacksonville, Florida
32202

E-mail: bbishop3@allenewing.com

Attention: Ben Bishop

 

 

Triton Homes, Inc.

13440 Troon Trace Lane

Jacksonville, Florida
32225

E-mail: briankolke11@hotmail.com

Attention: Brian Kolke

 

    	22

    	 

    

   

CKF Investment Properties,
LLC

DCCF Properties, LLC

NBJW Properties, LLC

First Coast Residential
Income Fund, LLC

6005 Powers Ave., #103

Jacksonville, Florida
32217

E-mail: chrisfunkck@aol.com

Attention: Chris Funk

 

Clyde Montgomery

2353 St. Johns Bluff
Road S.

Jacksonville, FL 32202

E-mail: garymoreau@bellsouth.net

 

 

Darius Trunk

2353 St. Johns Bluff
Road S.

Jacksonville, FL 32202

E-mail: garymoreau@bellsouth.net

 

Gary Moreau

2353 St. Johns Bluff
Road S.

Jacksonville, FL 32202

E-mail: garymoreau@bellsouth.net

 

FCAM Rentals, LLC

5651 Colcord Ave.

Jacksonville, FL 32211

E-mail: fcreinc@gmail.com

Attention: Gary Wetherhold

 

Matson Family Trust

8050 A1A South, Unit
106

St. Augustine, Florida
32080

E-mail: ___
matsonm@bellsouth.net_______

Attention: Joanne Matson

 

Joe Danese

8613 Old Kings Road S.,
#106

Jacksonville, Florida
32217

E-mail: danese3@sunshinetitle.com

 

    	23

    	 

    

  

Larry Payne

163 Hickory Hill Dr.

St. Augustine, Florida
32095

E-mail: lpane1@bellsouth.net

 

Lydell Bryant

2353 St. Johns Bluff
Road S.

Jacksonville, FL 32202

E-mail: garymoreau@bellsouth.net

  

Robert Reinard

3371 Putting Green Court

Oceanside, California
92056

E-mail: rreinard@cox.net

 

FCRE, Inc.

5651 Colcord Ave.

Jacksonville, Florida
32211

E-mail: romyshaw@gmail.com

 

Bay Island Holdings,
LLC

3948 3rd Street
South, #161

Jacksonville Beach, Florida
32250

E-mail: wyatt.payne@comcast.net

Attention: Wyatt Payne

 

 

With copies to:

 

 

Attention:

 

 

IF TO ESCROW HOLDER:

 

Fidelity National Title
Insurance Company

1300 Dove Street, Suite
130

Newport Beach, California 
92660

Phone: (949) 221-4715

e-mail: paul.mcdonald@fnf.com

Attention: 
Paul McDonald

 

    	24

    	 

    

   

or to such additional or other persons,
at such other address or addresses as may be designated by notice from Buyer or Seller, as the case may be, to the other. Notices
by mail shall be sent by United States certified or registered mail, return receipt requested, postage prepaid, and shall be deemed
given upon receipt or refusal of receipt. Notices by facsimile or electronic mail shall be deemed given and effective upon receipt
or refusal of receipt. Notices by overnight courier shall be deemed given and effective upon receipt or refusal of receipt from
Federal Express, UPS or another recognized overnight courier service.

 

(i)                 
Governing Law; Venue. To the extent enforceable, the parties agree that this Agreement shall be governed in all respects
by the internal laws of the State of Florida; provided that if the dispute involves an individual property the law of the State
where such property is located will apply. In any dispute arising out of or related to this Agreement, an action must be brought
in Federal or State court, as applicable, in the County of Duval, Florida. The provisions of this Section 22(i) will survive
the termination of this Agreement.

 

(j)                
Counterparts. This Agreement may be executed in any number of identical counterparts, any or all of which may contain
the signatures of less than all of the parties, and all of which shall be construed together as but a single instrument.

 

(k)              
Attorneys’ Fees. If any action or proceeding brought by either party against the other under this Agreement,
the prevailing party shall be entitled to recover all costs and expenses including its attorneys’ fees in such action or
proceeding in such amount as the court may adjudge reasonable. The prevailing party shall be determined by the court based upon
an assessment of which party’s major arguments made or positions taken in the proceedings could fairly be said to have prevailed
over the other party’s major arguments or positions on major disputed issues in the court’s decision. If the party
that commenced or instituted the action, suit or proceeding dismisses or discontinues it without the concurrence of the other party,
such other party shall be deemed the prevailing party. The provisions of this Section 22(k) will survive any termination
of this Agreement.

 

(l)                 
Construction. This Agreement will not be construed more strictly against either party by virtue of the fact that
it was prepared by one party or its counsel, it being recognized that each party hereto has had the opportunity to review, have
its counsel review, and provide input into this Agreement. All words herein that are expressed in the neuter gender shall be deemed
to include the masculine, feminine and neuter genders and any word herein that is expressed in the singular or plural shall be
deemed, whenever appropriate in the context, to include the plural and the singular.

 

(m)             
Reporting Obligations. Seller and Buyer hereby designate Escrow Holder to act as and perform the duties and obligations
of the “reporting person” with respect to the transaction contemplated by this Agreement for purposes of 26 C.F.R.
Section 1.6045-4(e)(5) relating to the requirements for information reporting on real estate transactions. If required under
applicable law, Seller, Buyer and Escrow Holder shall execute at Closing a Designation Agreement designating the Escrow Holder
as the reporting person with respect to the transaction contemplated by this Agreement.

 

    	25

    	 

    

  

(n)               
1031 Exchange. Either party may involve this transaction in a like-kind exchange under Internal Revenue Code Section
1031, the cost and expense of which will be borne solely by the party invoking such structure. Each party shall reasonably cooperate
with the other in such structure, provided that the party that is not participating in a like-kind exchange shall incur no material
costs, expenses or liabilities in connection with the other’s exchange and will not be required to take title to or contract
for purchase of any other property. If either party uses a qualified intermediary or exchange accommodator to effectuate the exchange,
any assignment of the rights or obligations of such party shall not relieve, release or absolve such party of its obligations to
the other.

 

(o)              
Bulk Sales. Seller agrees to indemnify and hold Buyer, any permitted assignee of Buyer’s rights under this
Agreement and any of their respective affiliates, officers, directors, shareholders, members, partners, agents, employees and advisors
(collectively, the “Indemnified Parties”) harmless from and against any and all claims, damages, losses,
costs, expenses, liens, actions and causes of actions (including, without limitation, reasonable attorneys’ fees and expenses)
that may be incurred by, or asserted against, Buyer, any of the other Indemnified Parties or the Property by reason of either such
noncompliance with the Bulk Sales laws applicable in the state or states where the Property is located, or the failure of Seller
to have paid any taxes, penalties or interest which are the subject of such laws. The provisions and obligations of this Section
24(o) shall survive the Closing.

 

(p)              
Confidentiality. Buyer and its representatives shall hold in strictest confidence all data and information obtained
with respect to the operation and management of the Property, whether obtained before or after the execution and delivery hereof,
and shall not use such data or information for purposes unrelated to this Agreement or disclose the same to others except as expressly
permitted hereunder. The preceding sentence shall not be construed to prevent Buyer from disclosing to its prospective lenders
or investors, or to its officers, directors, attorneys, accountants, architects, engineers and consultants to perform their designated
tasks in connection with Buyer’s inspection and proposed acquisition of the Property, provided Buyer advises any such party
of the confidential nature of the information disclosed. However, neither party shall have this obligation concerning information
which: (a) is published or becomes publicly available through no fault of either the Buyer or Seller; (b) is rightfully
received from a third party; or (c) is required to be disclosed by law. Notwithstanding the preceding, nothing in this Agreement
will prevent or be deemed to limit Buyer’s ability to disclose the existence of this Agreement, and the nature of any material
terms herein, to the Securities and Exchange Commission or any other governmental agency to which Buyer, or its successors hereunder,
have a disclosure obligation under any applicable law.

 

(q)              
Post-Closing Vacancy Holdback. Twenty Thousand and 00/100 Dollars ($20,000.00) of the Purchase Price (the “Post-Closing
Vacancy Holdback”) shall be withheld by the Escrow Holder subject to the following terms. If any of the properties that
comprise the Property become tenantless or vacant because the tenant or other occupant breached the lease or other occupancy agreement
within sixty (60) days after Closing, for each such property, Buyer shall provide back-up documentation reasonably satisfactory
to Seller documenting the breach and missing tenant or vacancy and shall be refunded Five Thousand and 00/100 Dollars ($5,000.00)
from the Post-Closing Vacancy Holdback. After sixty (60) days have elapsed after the closing, the balance of the Post-Closing Vacancy
Holdback, if any, shall be delivered to Seller.

 

    	26

    	 

    

  

(r)                
Post-Closing Return of Properties. If during the ninety (90) day period after Closing Buyer learns that any leases,
other occupancy agreements or contracts of any kind on properties that comprise the Property provide the tenant, occupant or any
other third party with an option to purchase the property, a right of first refusal, a right of first offer or any other contractual
option or right to purchase the property, then the sale of such property to Buyer shall be rescinded and the purchase price of
such property shall be refunded by Seller to Buyer within thirty (30) days of Buyer’s written notice to Seller. Buyer’s
notice to Seller shall include back-up documentation reasonably satisfactory to Seller demonstrating the existence of the option
to purchase the property, a right of first refusal, a right of first offer, or any other contractual option or right to purchase
the property.

 

 

 

[SIGNATURE PAGE FOLLOWS]

 

    	27

    	 

    

   

IN WITNESS WHEREOF,
the parties have caused this Agreement to be executed as of the day and year first above written.

 

	 	SELLER
	 	 	 
	 	BESSIE CIRCLE LAND TRUST,
	 	a Florida Land Trust
	 	 
	 	 	 
	 	By:	/s/ Anthony Simunetta
	 	Name:	Anthony Simunetta
	 	Its:	Sole Beneficiary
	 	 	 
	 	 	 
	 	BLANCO COURT LAND TRUST,
	 	a Florida Land Trust
	 	 
	 	 	 
	 	By:	/s/ Anthony Simunetta
	 	Name:	Anthony Simunetta
	 	Its:	Sole Beneficiary
	 	 	 
	 	 	 
	 	DONCASTER AVE. LAND TRUST,
	 	a Florida Land Trust
	 	 
	 	 	 
	 	By:	/s/ Anthony Simunetta
	 	Name:	A.J. Simunetta
	 	Its:	Sole Beneficiary
	 	 	 
	 	 	 
	 	ENSIGN AVE. LAND TRUST,
	 	a Florida Land Trust
	 	 	 
	 	 	 
	 	By:	/s/ Anthony Simunetta
	 	Name:	Anthony Simunetta
	 	Its:	Sole Beneficiary

 

    	28

    	 

    

 

	 	FREDERICKSBURG AVE. LAND TRUST,
	 	a Florida Land Trust
	 	 	 
	 	 	 
	 	By:	/s/ Anthony Simunetta
	 	Name:	Anthony Simunetta
	 	Its:	Sole Beneficiary
	 	 	 
	 	 	 
	 	GREEN KNOLL LAND TRUST,
	 	a Florida Land Trust
	 	 
	 	 	 
	 	By:	/s/ Anthony Simunetta
	 	Name:	Anthony Simunetta
	 	Its:	Sole Beneficiary
	 	 	 
	 	 	 
	 	GREENLEAF ROAD LAND TRUST,
	 	a Florida Land Trust
	 	 
	 	 	 
	 	By:	/s/ Anthony Simunetta
	 	Name:	Anthony Simunetta
	 	Its:	Sole Beneficiary
	 	 	 
	 	 	 
	 	HOLCROFT DR. LAND TRUST,
	 	a Florida Land Trust
	 	 
	 	 	 
	 	By:	/s/ Anthony Simunetta
	 	Name:	Anthony Simunetta
	 	Its:	Sole Beneficiary
	 	 	 
	 	 	 
	 	KARENITA DRIVE LAND TRUST,
	 	a Florida Land Trust
	 	 
	 	 	 
	 	By:	/s/ Anthony Simunetta
	 	Name:	Anthony Simunetta
	 	Its:	Sole Beneficiary

 

    	29

    	 

    

 

	 	MISS MUFFETT LAND TRUST,
	 	a Florida Land Trust
	 	 
	 	 	 
	 	By:	/s/ Anthony Simunetta
	 	Name:	Anthony Simunetta
	 	Its:	Sole Beneficiary
	 	 	 
	 	 	 
	 	PENTON STREET LAND TRUST,
	 	a Florida Land Trust
	 	 
	 	 	 
	 	By:	/s/ Anthony Simunetta
	 	Name:	Anthony Simunetta
	 	Its:	Sole Beneficiary
	 	 	 
	 	 	 
	 	PORTSMOUTH AVE. LAND TRUST,
	 	a Florida Land Trust
	 	 
	 	 	 
	 	By:	/s/ Anthony Simunetta
	 	Name:	Anthony Simunetta
	 	Its:	Sole Beneficiary
	 	 	 
	 	 	 
	 	RIBAULT SCENIC DRIVE LAND TRUST,
	 	a Florida Land Trust
	 	 
	 	 	 
	 	By:	/s/ Anthony Simunetta
	 	Name:	Anthony Simunetta
	 	Its:	Sole Beneficiary
	 	 	 
	 	 	 
	 	ROBERT C. WEAVER DR. LAND TRUST,
	 	a Florida Land Trust
	 	 
	 	 	 
	 	By:	/s/ Anthony Simunetta
	 	Name:	Anthony Simunetta
	 	Its:	Sole Beneficiary

 

    	30

    	 

    

 

	 	S. MISS MUFFETT LAND TRUST,
	 	a Florida Land Trust
	 	 
	 	 	 
	 	By:	/s/ Anthony Simunetta
	 	Name:	Anthony Simunetta
	 	Its:	Sole Beneficiary
	 	 	 
	 	 	 
	 	SPOTTSWOOD LAND TRUST,
	 	a Florida Land Trust
	 	 
	 	 	 
	 	By:	/s/ Anthony Simunetta
	 	Name:	Anthony Simunetta
	 	Its:	Sole Beneficiary
	 	 	 
	 	 	 
	 	TALLYHO AVE. LAND TRUST,
	 	a Florida Land Trust
	 	 
	 	 	 
	 	By:	/s/ Anthony Simunetta
	 	Name:	Anthony Simunetta
	 	Its:	Sole Beneficiary
	 	 	 
	 	 	 
	 	TANGO LANE LAND TRUST,
	 	a Florida Land Trust
	 	 
	 	 	 
	 	By:	/s/ Anthony Simunetta
	 	Name:	Anthony Simunetta
	 	Its:	Sole Beneficiary
	 	 	 
	 	 	 
	 	TINKERBELL LANE LAND TRUST,
	 	a Florida Land Trust
	 	 
	 	 	 
	 	By:	/s/ Anthony Simunetta
	 	Name:	Anthony Simunetta
	 	Its:	Sole Beneficiary

 

    	31

    	 

    

 

	 	TUSK COURT LAND TRUST,
	 	a Florida Land Trust
	 	 
	 	 	 
	 	By:	/s/ Anthony Simunetta
	 	Name:	Anthony Simunetta
	 	Its:	Sole Beneficiary
	 	 	 
	 	 	 
	 	WAYNESBORO AVE. LAND TRUST,
	 	a Florida Land Trust
	 	 
	 	 	 
	 	By:	/s/ Anthony Simunetta
	 	Name:	Anthony Simunetta
	 	Its:	Sole Beneficiary
	 	 	 
	 	 	 
	 	WILLIAMSBURG LAND TRUST,
	 	a Florida Land Trust
	 	 
	 	 	 
	 	By:	/s/ Anthony Simunetta
	 	Name:	Anthony Simunetta
	 	Its:	Sole Beneficiary
	 	 	 
	 	 	 
	 	Ben C. Bishop III
	 	 
	 	 	 
	 	By:	/s/ Ben C. Bishop III
	 	Name: 	Ben C. Bishop III
	 	 	 
	 	 	 
	 	First Coast Residential Income Fund, LLC,
	 	a Florida limited liability company
	 	 
	 	 	 
	 	By:	/s/ Chris Funk
	 	Name: 	Chris Funk
	 	Its:	Managing Member

 

    	32

    	 

    

 

	 	TRITON HOMES, INC.,
	 	a Florida corporation
	 	 
	 	 	 
	 	By:	/s/ Brian Kolke
	 	Name:	Brian Kolke
	 	Its:	President
	 	 	 
	 	 	 
	 	CKF INVESTMENT PROPERTIES, LLC,
	 	a Florida limited liability company
	 	 	 
	 	By:	/s/ Chris Funk
	 	Name:	Chris Funk
	 	Its:	Managing Member
	 	 	 
	 	 	 
	 	DCCF PROPERTIES, LLC,
	 	a Florida limited liability company
	 	 	 
	 	By:	/s/ Chris Funk
	 	Name:	Chris Funk
	 	Its:	Managing Member
	 	 	 
	 		 
	 	NBJW PROPERTIES, LLC,
	 	a Florida limited liability company
	 	 	 
	 	By:	/s/ Chris Funk
	 	Name:	Chris Funk
	 	Its:	Managing Member
	 	 	 
	 	 	 
	 	CLYDE MONTGOMERY,
	 	 	 
	 	           /s/ Clyde Montgomery

 

    	33

    	 

    

 

	 	DARIUS TRUNK,
	 	 
	 	 	 
	 	                /s/ Darius Trunk 
	 	 	 
	 	 	 
	 	GARY MOREAU,
	 	 
	 	 	 
	 	                /s/ Gary Moreau 
	 	 	 
	 	 	 
	 	FCAM RENTALS, LLC,
	 	a Florida limited liability company
	 	 
	 	 	 
	 	By:	/s/ Gary R. Wetherhold
	 	Name:	Gary R. Wetherhold
	 	Its:	Manager
	 	 	 
	 	 	 
	 	MATSON FAMILY TRUST,
	 	a Florida Living Trust dated May 11, 1995
	 	 
	 	 	 
	 	By:	/s/ Joanne Matson
	 	Name:	Joanne Matson
	 	Its:	Trustee
	 	 	 
	 	 	 
	 	JOE DANESE,
	 	 
	 	 	 
	 	                /s/ Joe Danese 
	 	 	 
	 	 	 
	 	LARRY PAYNE,
	 	 
	 	 	 
	 	                /s/ Larry C. Payne 

 

    	34

    	 

    

 

	 	LYDELL BRYANT,
	 	 
	 	 	 
	 	                /s/ Lydell Bryant 
	 	 	 
	 	 	 
	 	ROBERT REINARD,
	 	 
	 	 	 
	 	                /s/ Robert Reinard 
	 	 	 
	 	 	 
	 	FCRE, INC.,
	 	a Florida corporation
	 	 
	 	 	 
	 	By:	/s/ Romy L. Shaw
	 	Name:	Romy L. Shaw
	 	Its:	President
	 	 	 
	 	 	 
	 	BAY ISLAND HOLDINGS, LLC,
	 	a Florida limited liability company
	 	 
	 	 	 
	 	By:	/s/ P. Wyatt Payne, Jr.
	 	Name:	P. Wyatt Payne, Jr.
	 	Its:	Managing Member
	 	 	 
	 	 	 
	 	BUYER
	 	 	 
	 	Reven HOUSING FLORIDA, LLC,
	 	a Delaware limited liability company
	 	 	 
	 	 	 
	 	By:	/s/ Chad Carpenter
	 	 	Chad Carpenter
	 	 	Chief Executive Officer

 

    	35

    	 

    

 

LIST OF EXHIBITS AND SCHEDULES

 

	EXHIBITS	DESCRIPTIONS
	1. EXHIBIT A	DESCRIPTION OF THE PROPERTIES
	2. EXHIBIT B	LIST OF CONTRACTS
	3. EXHIBIT C	FORM OF DEED
	4. EXHIBIT D	FORM OF BILL OF SALE
	5. EXHIBIT E	FORM OF ASSIGNMENT OF LEASES AND CONTRACTS 
	6. EXHIBIT F	FORM OF FIRPTA AFFIDAVIT
	7. EXHIBIT G	TENANT ESTOPPEL AGREEMENT
	8. EXHIBIT H	RENT ROLL
	SCHEDULES	DESCRIPTIONS
	1. I	LIST OF SELLER ENTITIES AND INDIVIDUALS
	2. 6(a)(3)	PROPERTY INFORMATION
	2. 6(a)(5)	LIST OF LEASES

 

    	 

    	 

    

 

SCHEDULE I

 

	 	1	 	 	Bessie Circle Land Trust
	 	2	 	 	Blanco Court Land Trust
	 	3	 	 	Doncaster Ave Land Trust
	 	4	 	 	Ensign Ave Land Trust
	 	5	 	 	Fredericksburg Ave Land Trust
	 	6	 	 	Green Knoll Land Trust
	 	7	 	 	Greenleaf Road Land Trust
	 	8	 	 	Holcroft Dr Land Trust
	 	9	 	 	Karenita Drive Land Trust
	 	10	 	 	Kylan Drive Land Trust
	 	11	 	 	Miss Muffett Land Trust
	 	12	 	 	Penton Street Land Trust
	 	13	 	 	Portsmouth Ave Land Trust
	 	14	 	 	Ribault Scenic Drive Land Trust
	 	15	 	 	Robert C Weaver Dr Land Trust
	 	16	 	 	S Miss Muffet Land Trust
	 	17	 	 	Spottswood Land Trust
	 	18	 	 	Tallyho Ave Land Trust
	 	19	 	 	Tango Lane Land Trust
	 	20	 	 	Tinkerbell Lane Trust
	 	21	 	 	Tusk Court Land Trust
	 	22	 	 	Waynesboro Ave Land Trust
	 	23	 	 	Williamsburg Land Trust
	 	24	 	 	Ben C. Bishop III
	 	25	 	 	First Coast Residential Income Fund, LLC a Florida limited liability company
	 	26	 	 	Triton Homes Inc., a Florida corporation
	 	27	 	 	CKF Investment Properties, LLC, a Florida limited liability company
	 	28	 	 	DCCF Properties, LLC, a Florida limited liability company
	 	29	 	 	NBJW Properties LLC, a Florida limited liability company
	 	30	 	 	Clyde Montgomery, an individual
	 	31	 	 	 
	 	32	 	 	Darius Trunk, an individual
	 	33	 	 	Gary Moreau, an individual
	 	34	 	 	FCAM Rentals LLC, a Florida limited liability company
	 	35	 	 	Matson Family Trust
	 	36	 	 	Joe Danese, an individual
	 	37	 	 	Larry Payne Larry, an individual
	 	38	 	 	Lydell Bryant, an individual
	 	39	 	 	 
	 	40	 	 	 
	 	41	 	 	Robert Reinard, an individual
	 	42	 	 	FCRE, INC., a Florida corporation
	 	43	 	 	Bay Island Holdings, LLC, a Florida limited liability companyEXHIBIT 10.1

 

 EXHIBIT 10.1
 

 

 

 EXCLUSIVE LICENSE AGREEMENT
 

 

 

 

 between
 

 

 

 THE REGENTS OF THE UNIVERSITY OF CALIFORNIA
 

 

 and
 

 

 ACCUREXA, INC.
 

 

 for
 

 

 MICROINJECTION BRAIN CATHETER [UC Case No. SF2012-063]
 

 

 

 
 

 

 TABLE OF CONTENTS
 	
	 Article No.
 Title
      Page
 BACKGROUND
 1
 1.
 DEFINITIONS
 2
 2.
 GRANT
 5
 3.
 SUBLICENSES
 7
 4.
 PAYMENT TERMS
 8
 5. LICENSE ISSUE FEE 9
 6.
 LICENSE MAINTENANCE FEE
 10
 7.
 PAYMENTS ON SUBLICENSES
 10
 8.
 EARNED ROYALTIES AND MINIMUM ANNUAL ROYALTIES
 10
 9.
 MILESTONE PAYMENTS
 11
 10.
 INDEXED MILESTONE
 12
 11.
 DUE DILIGENCE
 13
 12.
 PROGRESS AND ROYALTY REPORTS
 15
 13.
 BOOKS AND RECORDS
 16
 14.
 LIFE OF THE AGREEMENT
 16
 15.
 TERMINATION
 17
 16.
 USE OF NAMES AND TRADEMARKS
 18
 17.
 LIMITED WARRANTY
 18
 18.
 LIMITATION OF LIABILITY
 19
 19.
 PATENT PROSECUTION AND MAINTENANCE
 19
 20.
 PATENT MARKING
 21
 21.
 PATENT INFRINGEMENT
 21
 22.
 INDEMNIFICATION
 24
 23.
 NOTICES
 25
 24.
 ASSIGNABILITY
 26
 25.
 FORCE MAJEURE
 27
 26.
 GOVERNING LAWS; VENUE
 27
 27.
 GOVERNMENT APPROVAL OR REGISTRATION
 27
 28.
 COMPLIANCE WITH LAWS
 28
 29.
 CONFIDENTIALITY
 28
 30.
 MISCELLANEOUS
 29

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 EXCLUSIVE LICENSE AGREEMENT
 for
 Microinjection Brain Catheter 
 UC Case No. SF2012-063
  
 This exclusive license agreement ("Agreement") is made effective September 16, 2014 ("Effective Date"), by and between The Regents of the University of California, a California corporation, having its statewide administrative offices at 1111 Franklin Street, 12th Floor, Oakland, California 94607-5200 ("The Regents") and acting through its Office of Innovation, Technology, and Alliances, University of California San Francisco (“UCSF”), 3333 California Street, Suite S-11, San Francisco, CA 94143 and Accurexa, Inc., a Delaware corporation, having a principal place of business at 201 Spear Street, Suite 1100, San Francisco 94105 ("Licensee").
 

 BACKGROUND
 

 A.
 Certain inventions, generally characterized as “Microinjection Brain Catheter” (UC Case No. SF2012-063) (collectively "Invention"), made in the course of research at UCSF by Drs. Daniel A. Lim, Matthew Silvestrini, and Tejal A. Desai, (collectively, the “Inventors”) and are claimed in Patent Rights as defined below.
 B.
 The development of the Invention was sponsored in part by the National Institutes of Health and, as a consequence, this license is subject to overriding obligations to the United States Federal Government under 35 U.S.C. §§ 200-212 and applicable regulations including a non-exclusive, non-transferable, irrevocable, paid-up license to practice or have practiced the Invention for or on behalf of the United States Government throughout the world.
 C.
 Dr. Daniel A. Lim was an employee of the Veterans Administration Medical Center and The Regents at the time of development of the Invention. Certain obligations to the United States Department of Veterans Affairs ("VA") apply to the Invention. 
 D.
 The Invention was developed under funding from the California Institute for Regenerative Medicine ("CIRM") and is therefore subject to the provisions of Title 17, California Code of Regulations, Sections 100600-100611, and any subsequently adopted applicable regulations.
 

 Exclusive License SF2012-063   Page 1 of  34
 

 
 
 E.
 The Licensee and The Regents have executed a Secrecy Agreement (UC Control No. 2014-20-0085) with an effective date of 09/20/2013.
 F.
 The Licensee and The Regents have executed a Letter of Intent (UC Control No. 2015-30-0004) with an effective date of 07/03/2014.
 G.
 The scope of such rights granted by The Regents is intended to extend to the scope of the patents and patent applications in Patent Rights, but only to the extent that The Regents and the VA have proprietary rights in and to the Valid Claims of such Patent Rights.
 H.
 Both parties recognize and agree that Earned Royalties are due under this Agreement with respect to products and methods and that such royalties will be paid with respect to both pending patent applications and issued patents, in accordance with the terms and conditions set forth herein.
 I.
 The Licensee is/is not a "small business firm" as defined in 15 U.S.C. §632. 
 J.
 The Licensee acknowledges that: (i) consideration for Technology Rights is due to early access; (ii) some of the technology in Technology Rights may become public without a decrease in consideration due to The Regents under this Agreement; and (iii) while the Licensee is subject to restriction in dissemination of technology in Technology Rights, The Regents may make such technology available to others without restriction.
 

 - - oo 0 oo - -
 

 The parties agree as follows:
 

 1.
 DEFINITIONS
 As used in this Agreement, the following terms, whether used in the singular or plural, shall have the following meanings:
 1.1
 "Affiliate" of the Licensee means any entity which, directly or indirectly, Controls the Licensee, is Controlled by the Licensee or is under common Control with the Licensee.  "Control" means (i) having the actual, present capacity to elect a majority of the directors of such affiliate; (ii) having the power to direct at least fifty percent (50%) of the voting rights entitled to elect directors; or (iii) in any country where the local law will not permit foreign equity participation of a majority, ownership or control, directly or indirectly, of 
 

 Exclusive License SF2012-063   Page 2 of  34
 

 
 the maximum percentage of such outstanding stock or voting rights permitted by local law.
 1.2
 "Field of Use" means Sale of Licensed Products for research and clinical use only. All other uses are specifically excluded.  
 1.3
 "Licensed Method" means any process, art or method the use or practice of which, but for the license granted in this Agreement, would infringe, or contribute to, or induce the infringement of, any Patent Rights in any country were they issued at the time of the infringing activity in that country.
 1.4
 "Licensed Product(s) " means any product, including, without limitation, a product for use or used in practicing a Licensed Method and any product made by practicing a Licensed Method, the manufacture, use, Sale, offer for Sale or import of which, but for the license granted in this Agreement, would infringe, or contribute to, or induce the infringement of, any Patent Rights in any country were they issued at the time of the infringing activity in that country.
 1.5
 "Net Sale" means the total amount invoiced by Licensee or by any Affiliate or Sublicensee on account of Sales of Licensed Product, after deduction of all the following in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) to the extent applicable to such Sales:
 1.5.1
 trade, quantity and cash discounts or rebates, actually allowed or taken;
 1.5.2
 allowances or credits given for rejection or for return of previously sold Licensed Product or outdated Licensed Product;
 1.5.3
 sales commissions;
 1.5.4
 any tax or other governmental charge (including without limitation custom surcharges) borne by the Licensee other than income tax levied on the Sale, transportation or delivery of Licensed Product, and
 1.5.5
 any charges for packing, handling, freight, insurance, transportation and duty charges borne by the seller.
 If Licensee makes any Net Sales to any party at a price less than the regular price charged to other parties, and unless a cash discount within the meaning of this Paragraph 1.5 (Net Sale) above, the royalties payable to the Regents shall be computed on the basis of the regular price charged to other parties.
 

 Exclusive License SF2012-063   Page 3 of  34
 

 
 
 1.6
 "Patent Rights" means the Valid Claims of, to the extent assigned to or otherwise obtained by The Regents, the following United States patents and patent applications:
 	 	 	
	 

 UC Case Number
	 

 United States Application Number
	 

 Filing or Issue Date

	 SF2012-063
	 PCT/US13/52301
	 07/26/2013

 

 Patent Rights shall further include the Valid Claims of, to the extent assigned to or otherwise obtained by The Regents, the corresponding foreign patents and patent applications and any reissues, extensions, substitutions, continuations, divisions, and continuation-in-part applications (but only those Valid Claims in the continuation-in-part applications that are entirely supported in the specification and entitled to the priority date of the parent application).  
 1.7
 "Sale" means the act of selling, leasing or otherwise transferring, providing, or furnishing for use for any consideration.  
 1.8
 "Sublicensee" means any person or entity (including any Affiliate) to which any of the license rights granted to the Licensee hereunder are sublicensed either under an option or a license. 
 1.9
 "Sublicensing Revenues" means amounts (including, without limitation, any licensing fees, or license maintenance fees, or milestone payments), received by or payable to the Licensee from any Sublicensee under a sublicense of the Licensee’s rights under this Agreement, provided that Sublicensing Revenues will not include royalty payments.
 1.10
 "Technology Rights" means  The Regents' personal proprietary rights in the existing know-how that was developed in the laboratory of Dr. Daniel A. Lim at the University of California, San Francisco, relating to Patent Rights in existence at the time of execution of this Agreement.
 1.11
 "Valid Claim" means a claim of a patent or patent application in any country that (i) has not expired; (ii) has not been disclaimed; (iii) has not been cancelled or superseded, or if cancelled or superseded, has been reinstated; and (iv) has not been revoked, held invalid, or otherwise declared unenforceable or not allowable by a tribunal or patent authority of competent jurisdiction over such claim in such country from which no further appeal has or may be taken.
 

 

 Exclusive License SF2012-063   Page 4 of  34
 

 
 
 2.
 GRANT
 2.1
 Subject to the limitations and other terms and conditions set forth in this Agreement including the license granted to the United States Government, VA and those reserved by The Regents set forth in the Background and in Paragraphs 2.3.2 (obligations to the United States Government) and 2.6 (Government Requirements), The Regents grants to the Licensee a  license under its rights in and to Patent Rights and Technology Rights to make, use, Sell, offer for Sale and import Licensed Products and to practice Licensed Methods, in the United States and in other countries where The Regents may lawfully grant such licenses, only in the Field of Use.
 2.2
 Except as otherwise provided for in this Agreement, the license granted under Patent Rights in Paragraph 2.1 is exclusive.  Except as otherwise provided for in this Agreement, the license granted under Technology Rights in Paragraph 2.1 is non-exclusive.
 2.3
 The license granted in Paragraphs 2.1 and 2.2 is subject to the following:
 2.3.1
 The license granted in Paragraph 2.1 is subject to the following:
 2.3.2
 The obligations to the United States Government under 35 U.S.C. §§ 200-212 and all applicable governmental implementing regulations, as amended from time to time, including the obligation to report on the utilization of the Invention as set forth in 37 CFR. § 401.14(h), and all applicable provisions of any license to the United States Government executed by The Regents; 
 2.3.3
 VA Requirements: Dr. Daniel A. Lim was an employee of the Veterans Administration Medical Center and The Regents at the time of development of the Invention. In accordance with the policy of the United States Department of Veterans Affairs ("VA"), Dr. Lim reported the Invention to the VA for a determination of rights. The VA has not provided a response to the determination of rights letter provided by Dr. Lim, as of the Effective Date of this Agreement. In the event the VA asserts the U.S. Federal Government's rights in the Invention, this Agreement will be subject to the terms and obligations of the Cooperative Technology Administration Agreement ("CTAA") executed between the VA and The Regents effective May 19, 2000, as amended from time to time including but not limited to, a non-exclusive, non-transferable, irrevocable, royalty-free, paid-
 

 Exclusive License SF2012-063   Page 5 of  34
 

 
 up license to practice or have practiced the Invention for or on behalf of the United States Government throughout the world and on behalf of any foreign government or international organization pursuant to any existing or future treaty or agreement to which the United States Government is a signatory. In the event the VA asserts the U.S. Federal Government's rights in the Invention, to comply with the CTAA, The Regents may amend this Agreement (“VA Amendment”) by incorporation of Appendix B and the Licensee shall co-operate in executing the VA Amendment within thirty (30) days of receiving a notification from The Regents. The Licensee acknowledges, that the Agreement may be terminated, at The Regents sole discretion, if the VA Amendment is not executed; and
 2.4
 the National Institutes of Health "Principles and Guidelines for Recipients of NIH Research Grants and Contracts on Obtaining and Disseminating Biomedical Research Resources," 64 F.R. 72090 (Dec. 23, 1999), as amended from time to time, ) 
 2.5
 Reservation of Rights.  The Regents reserves and retains the right (and the rights granted to the Licensee in this Agreement shall be limited accordingly) to make, use and practice the Invention, the Technology Rights, and any technology relating to any of the foregoing and to make and use any products and to practice any process that is the subject of the Patent Rights (and to grant any of the foregoing rights to other educational and non-profit institutions) for educational and academic research purposes, including without limitation, any sponsored research performed for or on behalf of commercial entities and including publication and other communication of any research results; provided, however, that The Regents shall not grant a commercial license to Patent Rights to any third party. 
 2.6
 Government Requirements. Because the Invention was made under funding provided by the United States Government, the parties agree to comply with the terms set forth in 35 U.S.C. § 204.  The Regents will offer reasonable assistance in obtaining a waiver of these requirements upon Licensee’s request.  
 3.
 SUBLICENSES
 3.1
 Permitted Sublicensing. The Regents also grants to the Licensee the right to sublicense to third parties (including to Affiliates) the rights granted to the Licensee hereunder, with no right to further sublicense except as provided below, as long as the Licensee has 
 

 Exclusive License SF2012-063   Page 6 of  34
 

 
 current exclusive rights thereto under this Agreement.  Each Sublicensee must be subject to a written sublicense agreement.  All sublicenses will include all of the rights of, and will require the performance of all the obligations due to, The Regents (and, if applicable, the United States Government and other sponsors), other than those rights and obligations specified in Article 5 (License Issue Fee), Article 6 (License Maintenance Fee) and Paragraph 8.2 (Minimum Annual Royalty) and Paragraphs 19.3 and 19.4 (reimbursement of Patent Prosecution Costs).  For the purposes of this Agreement, the operations of all Sublicensees shall be deemed to be the operations of the Licensee, for which the Licensee shall be responsible.
 3.2
 Sublicense Requirements. The Licensee shall provide The Regents with a copy of each sublicense issued within thirty (30) days of execution of such sublicense or sublicense amendment; collect and guarantee payment of all payments due The Regents from Sublicensees; and summarize and deliver all reports due The Regents from Sublicensees.
 3.3
 Mandatory Sublicensing.  If Licensee is unable or unwilling to serve or develop a potential market or market territory for which there is a company willing to be a Sublicensee, Licensee will, at The Regents' request, negotiate in good faith a Sublicense with any such Sublicensee. The Regents would like licensees to address unmet needs, such as those of neglected patient populations or geographic areas, giving particular attention to improved therapeutics, diagnostics and agricultural technologies for the developing world.
 3.4
 License Termination.  Upon termination of this Agreement for any reason, all sublicenses shall automatically terminate, unless The Regents, at its sole discretion, agrees in writing to an assignment to The Regents of any sublicense.  In the event of termination of this Agreement and if The Regents accepts assignment of any sublicense, The Regents will not be bound by any grant of rights broader than or will not be required to perform any obligation other than those rights and obligations contained in this Agreement.  The Regents will have the sole right to modify each such assigned sublicense to include all of the rights of The Regents (and, if applicable, the United States Government and other sponsors) that are contained in this Agreement.
 

 

 

 Exclusive License SF2012-063   Page 7 of  34
 

 
 
 4.
 PAYMENT TERMS
 4.1
 Payment Obligations.  Paragraphs 1.3, 1.4 and 1.6 define Licensed Method, Licensed Product, and Patent Rights, so that Earned Royalties are payable on products and methods covered by both pending patent applications and issued patents.  Earned Royalties will accrue in each country for the duration of Patent Rights in that country and will be payable to The Regents when Licensed Products are invoiced, or if not invoiced, when delivered or otherwise exploited by the Licensee or Sublicensee in a manner constituting a Net Sale as defined in Paragraph 1.5 (Net Sale).  Sublicense Fees with respect to any Sublicensing Revenue shall accrue to The Regents within thirty (30) days of the date that such Sublicensing Revenue is due to the Licensee.
 4.2
 Schedule.  The Licensee will pay to The Regents all Earned Royalties, Sublicense Fees and other consideration payable to The Regents quarterly on or before February 28 (for the calendar quarter ending December 31), May 31 (for the calendar quarter ending March 31), August 31 (for the calendar quarter ending June 30) and November 30 (for the calendar quarter ending September 30) of each calendar year.  Each payment will be for Earned Royalties, Sublicense Fees and other consideration which has accrued within the Licensee's most recently completed calendar quarter.
 4.3
 Currency.  All consideration due The Regents will be payable and will be made in United States dollars by check payable to "The Regents of the University of California" or by wire transfer to an account designated by The Regents.  The Licensee is responsible for all bank or other transfer charges.  When Licensed Products are Sold for monies other than United States dollars, the Earned Royalties and other consideration will first be determined in the foreign currency of the country in which such Licensed Products were Sold and then converted into equivalent United States dollars.  The exchange rate will be the average exchange rate quoted in the The Wall Street Journal during the last thirty (30) days of the reporting period.
 4.4
 Taxes.  Sublicense Fees and Earned Royalties on Net Sales of Licensed Products and other consideration accrued in, any country outside the United States may not be reduced by any taxes, fees or other charges imposed by the government of such country, except those taxes, fees and charges allowed under the provisions of Paragraph 1.5 (Net Sale).
 

 Exclusive License SF2012-063   Page 8 of  34
 

 
 
 4.5
 Accrual.  In the event that any patent or claim thereof included within the Patent Rights is held invalid in a final decision by a court of competent jurisdiction and last resort and from which no appeal has or can be taken, then all obligation to pay royalties based on that patent or claim or any claim patentably indistinct therefrom will cease as of the date of final decision.  The Licensee will not, however, be relieved from paying any royalties that accrued before such final decision and the Licensee shall be obligated to pay the full amount of royalties due hereunder to the extent that The Regents licenses one or more Valid Claims within the Patent Rights to the Licensee with respect to Licensed Products or to the extent that Licensed Products are based on Technology Rights.
 4.6
 Interest.  In the event that royalties, fees, reimbursements for Patent Prosecution Costs or other monies owed to The Regents are not received by The Regents when due, the Licensee will pay to The Regents interest at a rate of ten percent (10%) simple interest per annum.  Such interest will be calculated from the date payment was due until actually received by The Regents.  Such accrual of interest will be in addition to and not in lieu of, enforcement of any other rights of The Regents due to such late payment.
 

 5.
 LICENSE ISSUE FEE
 5.1
 Subject to Paragraph 5.2, the Licensee will pay to The Regents a license issue fee of fifty thousand dollars ($50,000) payable according to the following payment schedule: 
 5.1.1
 ten thousand dollars ($10,000) due within seven (7) days of the Effective Date; and
 5.1.2
 forty thousand dollars ($40,000) due in one or more installments at Licensee financing events, and such installment shall be due as follows (i) ten percent (10%) of the total financing amount received by Licensee, will be payable to The Regents, until the total license issue fee of fifty thousand dollars ($50,000) has been paid and; (ii) each installment is due within thirty (30) days of a Licensee financing event.   
 5.2
 This license issue fee in Paragraph 5.1 is non-refundable, non-cancelable and is not an advance or otherwise creditable against any royalties or other payments required to be paid under the terms of this Agreement.  
 

 

 Exclusive License SF2012-063   Page 9 of  34
 

 
 
 6.
 LICENSE MAINTENANCE FEE
 6.1
 Subject to Paragraph 6.2, the Licensee will also pay to The Regents a license maintenance fee within seven (7) days after the one-year anniversary of the Effective Date and within seven (7) days after each subsequent anniversary of the Effective Date in an amount equal to:.  
 6.1.1
 fifteen thousand dollars ($15,000) due within seven (7) days after the one-year anniversary of the Effective Date; and
 6.1.2
 twenty five thousand  dollars ($25,000) within seven (7) days after the two-year anniversary of the Effective Date and annually thereafter for the life of Patent Rights.
 6.2
 The license maintenance fee is not due on any anniversary of the Effective Date if on that date, the Licensee is Selling or otherwise exploiting Licensed Products and is paying an Earned Royalty to The Regents on the Net Sales of such Licensed Product.  The license maintenance fee is non-refundable and is not an advance or otherwise creditable against any royalties or other payments required to be paid under the terms of this Agreement.
 

 7.
 PAYMENTS ON SUBLICENSES
 7.1
 The Licensee will pay to The Regents the following non-refundable and non-creditable sublicense fees ("Sublicense Fees") of fifty percent (50%) of all Sublicensing Revenues.
 

 8.
 EARNED ROYALTIES AND MINIMUM ANNUAL ROYALTIES
 8.1
 Earned Royalty.  The Licensee will pay to The Regents an Earned Royalty of thirty five percent (35%) of the Net Sales of Licensed Product or Licensed Method by the Licensee, Sublicensee, or any Affiliate for all aggregate Net Sales ("Earned Royalty").
 8.2
 Minimum Annual Royalty.  Subject to Paragraph 8.3, the Licensee will also pay to The Regents a minimum annual royalty for the life of Patent Rights, for Licensed Product or Licensed Method, as follows:  
 8.2.1
 fifteen thousand dollars ($15,000) beginning with the year of the first Sale of  Licensed Product or Licensed Method;
 8.2.2
 fifteen thousand dollars ($15,000) for the second year of Sale of  Licensed Product or Licensed Method; and
 

 Exclusive License SF2012-063   Page 10 of  34
 

 
 
 8.2.3
 thirty thousand  dollars ($30,000) for the third year of Sale of  Licensed Product or Licensed Method and for each year thereafter for the life of the Patent Rights related to a Licensed Product or Licensed Method. 
 8.3
 The minimum annual royalty will be paid to The Regents by February 28 of each year and will be credited against the Earned Royalty due for the calendar year in which the minimum payment was made.  Licensee's obligation to pay the minimum annual royalty will be pro-rated for the number of months remaining in the calendar year when Sales commence and will be due the following February 28 (along with the minimum annual royalty payment for that year), to allow for crediting of the pro-rated year's Earned Royalties.
 

 9.
 MILESTONE PAYMENTS
 9.1
 With respect to each Licensed Product, the Licensee will pay to The Regents the following non-refundable, non-creditable amounts: 
 9.1.1
  fifteen thousand dollars ($15,000) upon each FDA market approval for a Licensed Product; 
 9.1.2
 twenty five thousand dollars ($25,000) upon  execution of each  collaboration or partnership agreement with a company for the development of each Licensed Product;
 9.1.3
 one-time payment of seventy five thousand dollars ($75,000) upon cumulative gross sales of five million dollars ($5,000,000) for Licensed Products sold for research use; and
 9.1.4
 one-time payment of seventy five thousand dollars ($75,000) upon cumulative gross sales of five million dollars ($5,000,000) for Licensed Products sold for clinical use.
 9.2
 For the avoidance of doubt, each of the milestone payments set forth in Paragraphs 9.1.1 through 9.1.2 will be payable with respect to each Licensed Product and regardless of whether the applicable milestone event has been achieved by the Licensee, Sublicensee, or any Affiliate.
 9.3
 All milestone payments set forth in Paragraphs 9.1.1 through 9.1.4are due to The Regents within thirty (30) days of the occurrence of the applicable milestone event.
 

 Exclusive License SF2012-063   Page 11 of  34
 

 
 

 10.
 INDEXED MILESTONE
 10.1
 Within sixty (60) days of the earlier of (i) an initial public offering of the equity securities of the Licensee and (ii) a Change of Control Transaction, (the earlier to occur of (i) or (ii), the “Indexed Milestone Event”), the Licensee shall make to The Regents a cash payment equal to N times $P, where: N is the number of shares that would have been received by the holders of five percent (5.0%) of the then issued and outstanding shares of Licensee’s common stock (calculated on a Fully Diluted Basis) at the time of the Change of Control Transaction; and $P is the average price per share paid by the acquiring third party for all shares acquired in the Change of Control Transaction, before taking into account any liquidation preferences held by the preferred shareholders that would be received by Licensee’s stockholders in the Change of Control Transaction and including the fair market value of any non-cash consideration paid by such acquiring third party therefore.
 "Change of Control Transaction" means any acquisition, consolidation, merger, reorganization or other transaction or series of transactions in which greater than fifty percent (50%) of the voting power of Licensee is transferred to a third party.  However, a transaction involving a third party will not be considered as a Change of Control Transaction if such transaction or series of transactions does not provide liquidity to at least a majority of Licensee's previous shareholders, either in the form of cash or stock that is freely tradeable and listed on a national securities exchange. 
 “Fully Diluted Basis” means the number of shares of common stock that would be outstanding if (i) all convertible debt and convertible preferred stock were converted, (ii) all outstanding warrants were exercised, (iii) all outstanding stock options (regardless of whether vested) were exercised, (iv) all shares reserved for issuance under an employee stock option plan or other incentive compensation plan for service providers were issued, whether or not grants of options to purchase such shares have yet been made, and (v) all other outstanding convertible securities or other rights to acquire common stock were fully converted and/or exercised; no deduction from Fully Diluted Shares shall be made in respect of any receipt of option exercise prices or relief from debt upon conversion of convertible debt. 
 10.2
 Notwithstanding the above, at any time after the fifth anniversary of the effective date of the license agreement by giving written notice to the Licensee, The Regents will have the 
 

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 ability to cash in the Indexed  Milestone payment in which Licensee shall make to The Regents a cash payment equal to the greater of a) N times $P, where N equals the number of shares that represents five percent (5.0%) of the then-outstanding shares of Licensee’s common stock (calculated based on Fully Diluted Shares) issued as of the date of notice from The Regents and $P is the price per share as determined by an  independent qualified financial professional; or b) two hundred and fifty thousand dollars ($250,000); at which time the Licensee shall have thirty (30) days to make the payment.
 10.3
 The indexed milestone payment shall be a one-time payment obligation and will survive termination or expiration of the Agreement.
 10.4
 Participation Rights.   If the Licensee proposes to sell any equity securities or securities that are convertible into equity securities of the Licensee, then The Regents and/or its Assignee (as defined below) will have the right to purchase up to 10% of the securities issued in each offering on the same terms and conditions as are offered to the other purchasers in each such financing.  Licensee shall provide thirty (30) days advanced written notice of each such financing, including reasonable detail regarding the terms and purchasers in the financing.  The term “Assignee” means (a) any entity to which The Regents’ participation rights under this section have been assigned either by The Regents or another entity, or (b) any entity that is controlled by The Regents.  This paragraph shall survive the termination of this agreement.
 

 11.
 DUE DILIGENCE
 11.1
 The Licensee, upon execution of this Agreement, will diligently proceed with the development, manufacture and Sale of Licensed Products and will earnestly and diligently market the same after execution of this Agreement and in quantities sufficient to meet the market demands therefor.
 11.2
 The Licensee or a Sublicensee will obtain all necessary governmental approvals in each country where Licensed Products are manufactured, used, Sold, offered for Sale or imported.
 11.3
 Licensee agrees to make Licensed Products readily accessible on reasonable terms to CIRM grantee organizations for non-commercial purposes.
 11.4
 The Licensee will: 
 

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 11.4.1
  market Licensed Products for research use within three (3) months from the Effective Date;  
 11.4.2
 sell Licensed Product for research use within twelve (12) months of the Effective Date; 
 11.4.3
 File and finalize any necessary regulatory documentation for FDA 510(k) approval for the 510(k) application within six (6) months after the 510(k) application has been filed;
 11.4.4
 market Licensed Products for clinical use within six (6) months of receiving market approval of such Licensed Product from FDA or equivalent foreign regulatory agency;
 11.4.5
 sell Licensed Products for clinical use within twelve (12)  months of receiving market approval of such Licensed Product from FDA or equivalent foreign regulatory agency;
 11.4.6
 within one (1) year of the Effective Date, raise at least seven hundred and fifty thousand dollars ($750,000) in funding or revenue; 
 11.4.7
 market Licensed Product in the United States within six (6) months of receiving approval of such Licensed Product from the FDA; and
 11.4.8
 use commercially reasonable efforts to fill the market demand for Licensed Products following commencement of marketing at any time during the exclusive period of this Agreement.
 11.5
 If the Licensee is unable to perform any of the above provisions, then The Regents has the right and option to either terminate this Agreement or reduce the Licensee's exclusive license to a nonexclusive license, under the terms set forth in Article 15 (Termination).  This right, if exercised by The Regents, supersedes the rights granted in Article 2 (Grant).
 

 12.
 PROGRESS AND ROYALTY REPORTS
 12.1
 Progress Reports.  Beginning on December 31, 2014, and semiannually thereafter, Licensee will submit a written report to The Regents covering the Licensee’s (and any Affiliates’ or Sublicensees’) activities related to this Agreement. The report will include information sufficient to enable The Regents to satisfy reporting requirements of the U.S. Government and to ascertain progress by Licensee toward meeting this Agreement’s 
 

 Exclusive License SF2012-063   Page 14 of  34
 

 
 diligence requirements set forth in Article 10 (Due Diligence). Each report will describe, where relevant: progress toward commercialization of Licensed Products, including work completed, key scientific discoveries, summary of work in progress, current schedule of anticipated events or milestones, market plans for introduction of Licensed Products and significant corporate transactions involving Licensed Product.
 12.2
 First Sale. The Licensee will report to The Regents the date of first Sale of a Licensed Product in each country in its first progress and royalty reports following such first Sale of a Licensed Product.
 12.3
 Royalty Reports.  Beginning with the earlier of (i) the first Sale of a Licensed Product or (ii) the first transaction that results in Sublicense Fees accruing to The Regents, the Licensee shall make quarterly royalty reports to The Regents on or before each February 28, of each year.  Each royalty report will cover the Licensee's most recently completed calendar quarter and will show (a) the gross Sales and Net Sales of Licensed Products Sold during the most recently completed calendar quarter; (b) the number of each type of Licensed Product Sold; (c) the royalties, in U.S. dollars, payable with respect to Sales of Licensed Products; (d) the method used to calculate the royalty; (e) any Sublicense Fees due to The Regents;  (f) the exchange rates used; and (g) any other information reasonably necessary to confirm Licensee's calculation of its financial obligations hereunder.
 12.4
 Entity Status. The Licensee has a continuing responsibility to keep The Regents informed of the large/small business entity status (as defined by the United States Patent and Trademark Office) of itself and its Sublicensees and Affiliates.
 

 

 

 13.
 BOOKS AND RECORDS
 13.1
 Accounting.  The Licensee shall keep accurate books and records showing all Licensed Products manufactured, used, and/or Sold under the terms of this Agreement.  Books and records must be preserved for at least five (5) years from the date of the royalty payment to which they pertain.
 

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 13.2
 Auditing.  Books and records must be open to inspection by representatives or agents of The Regents at reasonable times.  The Regents shall bear the fees and expenses of examination but if an error in royalties of more than five percent (5%) of the total royalties due for any year is discovered in any examination then the Licensee shall bear the fees and expenses of that examination and shall remit such underpayment to The Regents within thirty (30) days of the examination results.
 

 14.
 LIFE OF THE AGREEMENT
 14.1
 Term.  Unless otherwise terminated by operation of law, Paragraph 14.2 (Bankruptcy), or by acts of the parties in accordance with the terms of this Agreement, this Agreement will remain in effect from the Effective Date until the expiration or abandonment of the last of the Patent Rights licensed hereunder.
 14.2
 Bankruptcy.  This Agreement will automatically terminate without the obligation to provide sixty (60) days' notice as set forth in Paragraph 15.1 (Termination By The Regents) upon the filing of a petition for relief under the United States Bankruptcy Code by or against the Licensee as a debtor or alleged debtor.
 14.3
 Surviving Provisions.  Any termination or expiration of this Agreement will not affect the rights and obligations set forth in the following Articles:  
 Article 1
 Definitions
 Paragraph 4.6
 Late Payments
 Article 5
 License Issue Fee
 Article 7
 Payments on Sublicenses
 Paragraphs 8.1 and 8.2
 Earned Royalties and Minimum Annual Royalties
 Article 10
 Indexed Milestone
 Article 13
 Books and Records
 Article 14
 Life of the Agreement 
 Article 16 
 Use of Names and Trademarks
 Article 17
 Limited Warranty
 Article 18
 Limitation of Liability
 Paragraphs 19.3 & 19.4
 Patent Prosecution Costs and Effects of Termination
 Article 22 
 Indemnification
 Article 23
 Notices
 Article 26
 Governing Laws; Venue
 Article 29
 Confidentiality
 

 14.4
 Effects of Termination.  The termination or expiration of this Agreement will not relieve the Licensee of its obligation to pay any fees, royalties or other payments owed to The 
 

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 Regents at the time of such termination or expiration and will not impair any accrued right of The Regents, including the right to receive Earned Royalties in accordance with Article 8 (Earned Royalties and Minimum Annual Royalties).
 

 15.
 TERMINATION
 15.1
 By The Regents.  If the Licensee fails to perform or violates any term of this Agreement, then The Regents may give written notice of default (Notice of Default) to the Licensee.  If the Licensee fails to repair the default within sixty (60) days of the effective date of Notice of Default, The Regents may terminate this Agreement and its licenses by a second written notice (Notice of Termination).  If a Notice of Termination is sent to the Licensee, this Agreement will automatically terminate on the effective date of that notice. 
 15.2
 By Licensee.  The Licensee has the right at any time to terminate this Agreement by providing a Notice of Termination to The Regents.  Moreover, the Licensee will be entitled to terminate the rights under Patent Rights on a country-by-country basis by giving notice in writing to The Regents. Termination of this Agreement (but not termination of any patents or patent applications under Patent Rights, which termination is subject to Paragraph 19.4 (Effects of Termination)) will be effective sixty (60) days from the date such termination notice is sent by Licensee.
 15.3
 Immediate Termination.  The Agreement will terminate immediately if the Licensee files a claim that includes in any way the assertion that any portion of The Regents’ Patent Rights is invalid or unenforceable where the filing is by Licensee, a third party on behalf of Licensee, or a third party at the written urging of, or with the assistance of, the Licensee.
 

 

 

 16.
 USE OF NAMES AND TRADEMARKS
 16.1
 Nothing contained in this Agreement will be construed as conferring any right to either party to use in advertising, publicity or other promotional activities any name, trade name, trademark or other designation of the other party (including a contraction, abbreviation or simulation of any of the foregoing).  Without the Licensee's consent case-
 

 Exclusive License SF2012-063   Page 17 of  34
 

 
 by-case, The Regents may list Licensee's name as a licensee of technology from The Regents and identify Licensee as a UCSF startup without further identifying the technology.  Unless required by law or unless consented to in writing by Director of Technology Management, Office of Innovation, Technology, and Alliances, the use by the Licensee of the name "The Regents of the University of California" or the name of any campus of the University of California in advertising, publicity or other promotional activities is expressly prohibited.  
 

 17.
 LIMITED WARRANTY
 17.1
 To the extent of the knowledge of the licensing professional administering this Agreement and as of the Effective Date, The Regents warrants to the Licensee that it has the lawful right to grant this license.
 17.2
 Except as expressly set forth in this Agreement, this license and the associated Invention, Patent Rights, Licensed Products and Licensed Methods are provided by The Regents WITHOUT WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER WARRANTY OF ANY KIND, EXPRESS OR IMPLIED.  THE REGENTS MAKES NO EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY THAT THE INVENTION, PATENT RIGHTS, LICENSED PRODUCTS OR LICENSED METHODS WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK OR OTHER RIGHTS.
 17.3
 This Agreement does not:
 17.3.1
 express or imply a warranty or representation as to the validity, enforceability, or scope of any Patent Rights or Technology Rights; or
 17.3.2
 express or imply a warranty or representation that anything made, used, Sold, offered for Sale or imported or otherwise exploited under any license granted in this Agreement is or will be free from infringement of patents, copyrights, or other rights of third parties; or
 17.3.3
 obligate The Regents to bring or prosecute actions or suits against third parties for patent infringement except as provided in Article 21 (Patent Infringement); or
 

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 17.3.4
 confer by implication, estoppel or otherwise any license or rights under any patents or other rights of The Regents other than Patent Rights, regardless of whether such patents are dominant or subordinate to Patent Rights; or
 17.3.5
 obligate The Regents to furnish any advancements, developments, or other improvements to Patent Rights which are not entitled to the priority dates of Patent Rights, or know-how, technology or information not provided in Patent Rights or Technology Rights; or
 17.3.6
 obligate The Regents to update the technology in Technology Rights.
 

 18.
 LIMITATION OF LIABILITY
 18.1
 THE REGENTS WILL NOT BE LIABLE FOR ANY LOST PROFITS, COSTS OF PROCURING SUBSTITUTE GOODS OR SERVICES, LOST BUSINESS, ENHANCED DAMAGES FOR INTELLECTUAL PROPERTY INFRINGEMENT OR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR OTHER SPECIAL DAMAGES SUFFERED BY LICENSEE, SUBLICENSEES, OR AFFILIATES ARISING OUT OF OR RELATED TO THIS AGREEMENT FOR ALL CAUSES OF ACTION OF ANY KIND (INCLUDING TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY AND BREACH OF WARRANTY) EVEN IF THE REGENTS HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
 

 19.
 PATENT PROSECUTION AND MAINTENANCE
 19.1
 Patent Prosecution.  As long as the Licensee has paid patent costs as provided for in this Article, The Regents shall diligently endeavor to prosecute and maintain the United States and foreign patents comprising Regents' Patent Rights using counsel of its choice. The Regents will provide the Licensee with copies of all relevant documentation so that the Licensee will be informed of the continuing prosecution and may comment upon such documentation sufficiently in advance of any initial deadline for filing a response, provided, however, that if the Licensee has not commented upon such documentation in a reasonable time for The Regents to sufficiently consider the Licensee’s comments prior to a deadline with the relevant government patent office, or The Regents must act to 
 

 Exclusive License SF2012-063   Page 19 of  34
 

 
 preserve the Patent Rights, The Regents will be free to respond without consideration of the Licensee’s comments, if any.  The Licensee agrees to keep this documentation confidential.  The Regents' counsel will take instructions only from The Regents, and all patents and patent applications under this Agreement will be assigned solely to The Regents.  The Regents shall use all reasonable efforts to amend any patent application to include claims reasonably requested by the Licensee to protect the products contemplated to be sold under this Agreement and to file and prosecute patents in foreign countries indicated by and paid for by Licensee.
 19.2
 Patent Term.  The Licensee shall apply for an extension of the term of any patent included within Regents' Patent Rights if appropriate under the Drug Price Competition and Patent Term Restoration Act of 1984 and/or European, Japanese and other foreign counterparts of this Law.  The Licensee shall prepare all documents, and The Regents agrees to execute the documents and to take additional action as the Licensee reasonably requests in connection therewith.
 19.3
 Costs.  The Licensee will bear all costs of preparing, filing, prosecuting and maintaining all United States and foreign patent applications contemplated by this Agreement ("Patent Prosecution Costs").  Patent Prosecution Costs billed by The Regents' counsel will be rebilled to the Licensee and are due within thirty (30) days of rebilling by The Regents.  These Patent Prosecution Costs will include, without limitation, patent prosecution costs for the Invention incurred by The Regents prior to the execution of this Agreement and any patent prosecution costs that may be incurred for patentability opinions, re-examination, re-issue, interferences, oppositions or inventorship determinations. Prior Patent Prosecution Costs will be due upon execution of this Agreement and billing by The Regents and are at least $8,586.50.
 19.4
 Effects of Termination.  The Licensee will be obligated to pay any Patent Prosecution Costs incurred during the three (3)-month period after receipt by either party of a Notice of Termination, even if the invoices for such Patent Prosecution Costs are received by the Licensee after the end of the three (3)-month period following receipt of a Notice of Termination.  The Licensee may terminate its obligation to pay Patent Prosecution Costs with respect to any given patent application or patent under Patent Rights in any or all designated countries upon three (3)-months' written notice to The Regents. The Regents 
 

 Exclusive License SF2012-063   Page 20 of  34
 

 
 may continue prosecution and/or maintenance of such application(s) or patent(s), and applications in foreign countries where Licensee has elected not to file, at its sole discretion and expense, provided, however, that the Licensee will have no further right or licenses thereunder.  Non-payment of Patent Prosecution Costs may be deemed by The Regents as an election by the Licensee not to maintain such application(s) or patent(s).
 

 20.
 PATENT MARKING
 20.1
 The Licensee will mark all Licensed Products made, used or Sold under the terms of this Agreement or their containers in accordance with the applicable patent marking laws.
 

 21.
 PATENT INFRINGEMENT
 21.1
 Infringement Notice.  In the event that The Regents (to the extent of the knowledge of the licensing professional responsible for the administration of this Agreement) or the Licensee learns of infringement of potential commercial significance of any patent licensed under this Agreement, the knowledgeable party will provide the other (i) with written notice of such infringement and (ii) with any evidence of such infringement available to it (the "Infringement Notice").  During the period in which, and in the jurisdiction where, the Licensee has exclusive rights under this Agreement, neither The Regents nor the Licensee will notify a possible infringer of infringement or put such infringer on notice of the existence of any Patent Rights without first obtaining consent of the other.  If the Licensee puts such infringer on notice of the existence of any Patent Rights with respect to such infringement without first obtaining the written consent of The Regents and if a declaratory judgment action is filed by such infringer against The Regents, then Licensee’s right to initiate a suit against such infringer for infringement under Paragraph 21.2 (Company Suit and Joining) below will terminate immediately without the obligation of The Regents to provide notice to the Licensee.  Both The Regents and the Licensee will use their diligent efforts to cooperate with each other to terminate such infringement without litigation.
 21.2
 Company Suit and Joining.  If infringing activity of potential commercial significance by the infringer has not been abated within ninety (90) days following the date the Infringement Notice takes effect, then the Licensee may institute suit for patent 
 

 Exclusive License SF2012-063   Page 21 of  34
 

 
 infringement against the infringer.  The Regents may voluntarily join such suit at its own expense, but may not otherwise commence suit against the infringer for the acts of infringement that are the subject of the Licensee's suit or any judgment rendered in that suit.  The Licensee may not join The Regents as a party in a suit initiated by the Licensee without The Regents' prior written consent.  If, in a suit initiated by the Licensee, The Regents is involuntarily joined other than by the Licensee, then the Licensee will pay any costs incurred by The Regents arising out of such suit, including but not limited to, any legal fees of counsel that The Regents selects and retains to represent it in the suit.
 21.3
 Regents’ Suit.  If, within a hundred and twenty (120) days following the date the Infringement Notice takes effect, infringing activity of potential commercial significance by the infringer has not been abated and if the Licensee has not brought suit against the infringer, then The Regents may institute suit for patent infringement against the infringer.  If The Regents institutes such suit, then the Licensee may not join such suit without The Regents' consent and may not thereafter commence suit against the infringer for the acts of infringement that are the subject of The Regents' suit or any judgment rendered in that suit.
 21.4
 Infringement Notice. Notwithstanding anything to the contrary in this Agreement, in the event that the infringement or potential infringement pertains to an issued patent included within the Patent Rights and written notice is given under the Drug Price Competition and Patent Term Restoration Act of 1984 (and/or foreign counterparts of this Law), then the party in receipt of such notice under the Act (in the case of The Regents to the extent of the actual knowledge of the licensing officer responsible for the administration of this Agreement) shall provide the Infringement Notice to the other party promptly.  If the time period is such that the Licensee will lose the right to pursue legal remedy for infringement by not notifying a third party or by not filing suit, the notification period and the time period to file suit will be accelerated to within forty-five (45) days of the date of such notice under the Act to either party.
 21.5
 Recovery.  Any recovery or settlement received in connection with any suit will first be shared by The Regents and the Licensee equally to cover any litigation costs each incurred and next shall be paid to The Regents or the Licensee to cover any litigation costs it incurred in excess of the litigation costs of the other.  In any suit initiated by the 
 

 Exclusive License SF2012-063   Page 22 of  34
 

 
 Licensee, any recovery in excess of litigation costs will be shared between Licensee and The Regents as follows:  (a) for any recovery other than amounts paid for willful infringement: (i) The Regents will receive fifteen percent (15%) of the recovery if The Regents was not a party in the litigation and did not incur any litigation costs, (ii) The Regents will receive twenty-five percent (25%) of the recovery if The Regents was a party in the litigation whether joined as a party under the provisions of Paragraph 21.2 (Company Suit and Joining) or otherwise, but The Regents did not incur any litigation costs, and (iii) The Regents will receive fifty percent (50%) of the recovery if The Regents incurred any litigation costs in connection with the litigation; and (b) for any recovery for willful infringement, The Regents will receive  fifty percent (50%) of the recovery.  In any suit initiated by The Regents, any recovery in excess of litigation costs will belong to The Regents.  The Regents and the Licensee agree to be bound by all determinations of patent infringement, validity and enforceability (but no other issue) resolved by any adjudicated judgment in a suit brought in compliance with this Article 21 (Patent Infringement).
 21.6
 Sublicenses.  Any agreement made by the Licensee for purposes of settling litigation or other dispute shall comply with the requirements of Article 3 (Sublicenses) of this Agreement.
 21.7
 Cooperation.  Each party will cooperate with the other in litigation proceedings instituted hereunder but at the expense of the party who initiated the suit (unless such suit is being jointly prosecuted by the parties).
 21.8
 Control.  Any litigation proceedings will be controlled by the party bringing the suit, except that The Regents may be represented by counsel of its choice in any suit brought by the Licensee.
 

 22.
 INDEMNIFICATION
 22.1
 Indemnification.  The Licensee will, and will require its Sublicensees to, indemnify, hold harmless and defend The Regents, the sponsors of the research that led to the Invention  and any invention claimed in patents or patent applications under Patent Rights (including the Licensed Products and Licensed Methods contemplated thereunder) and their employers, and the officers, employees and agents of any of the foregoing, 
 

 Exclusive License SF2012-063   Page 23 of  34
 

 
 against any and all claims, suits, losses, damage, costs, fees and expenses resulting from, or arising out of, the exercise of this license or any sublicense.  This indemnification will include, but not be limited to, any product liability.  If The Regents believes that there will be a conflict of interest or it will not otherwise be adequately represented by counsel chosen by the Licensee to defend The Regents in accordance with this Paragraph 22.1 (Indemnification), then The Regents may retain counsel of its choice to represent it and the Licensee will pay all expenses for such representation.  
 22.2
 Insurance.  The Licensee, at its sole cost and expense, will insure its activities in connection with any work performed hereunder and will obtain, keep in force, and maintain the following insurance:  
 22.2.1
 Absent Sale of Licensed Product, Commercial Form General Liability Insurance (contractual liability included) with limits as follows:
 Each Occurrence
 $1,000,000
 Personal and Advertising Injury
 $1,000,000
 General Aggregate (commercial form only)
 $2,000,000
 22.2.2
 At first Sale of a Licensed Product, Commercial Form General Liability Insurance (contractual liability included) with limits as follows:
 Each Occurrence
 $5,000,000
 Products/Completed Operations Aggregate
 $10,000,000
 Personal and Advertising Injury
 $5,000,000
 General Aggregate (commercial form only)
 $10,000,000
 22.2.3
 If the insurance in Paragraphs 22.2.1 and 22.2.2 is written on a claims-made form, it shall continue for three (3) years following termination or expiration of this Agreement.  The insurance in Paragraph 22.2.1 shall have a retroactive date of placement prior to or coinciding with the Effective Date of this Agreement; and
 22.2.4
 Worker's Compensation as legally required in the jurisdiction in which the Licensee is doing business.
 22.3
 No Limitation of Liability. The coverage and limits above will not in any way limit the Licensee’s liability under this Article 22 (Indemnification.)
 22.4
 Certificates. Upon the execution of this Agreement, the Licensee will furnish The Regents with certificates of insurance evidencing compliance with all requirements.  
 

 Exclusive License SF2012-063   Page 24 of  34
 

 
 Such certificates will: indicate The Regents as an additional insured(s) under the coverage described above in Paragraph 22.2 (Insurance); and include a provision that the coverage will be primary and will not participate with, nor will be excess over, any valid and collectable insurance or program of self-insurance maintained by The Regents.
 22.5
 Notification.  The Regents will promptly notify the Licensee in writing of any claim or suit brought against The Regents for which The Regents intends to invoke the provisions of this Article 22 (Indemnification).  The Licensee will keep The Regents informed of its defense of any claims pursuant to this Article 22 (Indemnification).  
 

 23.
 NOTICES
 23.1
 Any notice or payment hereunder shall be deemed to have been properly given when sent in writing in English to the respective address below and shall be deemed effective:
 23.1.1
 on the date of delivery if delivered in person,
 23.1.2
 on the date of mailing if mailed by first-class certified mail, postage paid, or
 23.1.3
 on the date of mailing if mailed by any global express carrier service that requires the recipient to sign the documents demonstrating the delivery of such notice or payment, or
 23.1.4
 in the case of notices, if sent by email, on the date the recipient acknowledges having received that email by either an email sent to the sender or by a notice delivered by another method in accordance with this Paragraph 23.1 (Notices), provided that, automated replies and “read receipts” shall not be considered acknowledgement of receipt.
 

 In the case of Licensee:
 Accurexa, Inc.
 201 Spear St, Suite 1100
 San Francisco, CA 94105
 Attention:  George Yu, President and CEO
 Phone: 415 494 7850
 Email: gyu@accurexa.com
 Website:www.accurexa.com
 

 In the case of The Regents:
 For notices:
 Office of Innovation, Technology, and Alliances
 

 Exclusive License SF2012-063   Page 25 of  34
 

 
 3333 California Street, Suite S-11
 San Francisco, CA 94143-1209 
 (for express mail and deliveries use zip 94118)
 Attention:  Director, Technology Management
 Referring to: UC Case No. SF2012-063
 Email: innovation@ucsf.edu
 

 For remittance of payments:
 Innovation Alliances and Services
 Attn:  Accounts Receivable
 University of California
 Office of the President
 1111 Franklin Street, 5th Floor
 Oakland, CA 94607-5200
 Referring to: UC Case No. SF2012-063
 

 

 24.
 ASSIGNABILITY
 24.1
 The Licensee may assign or transfer this Agreement, without The Regents' prior written consent, only in the case of assignment or transfer to a party that succeeds to all or substantially all of Licensee's business or assets relating to this Agreement, whether by Sale, merger, operation of law or otherwise, provided that a) such assignee or transferee promptly agrees to be bound by the terms and conditions of this Agreement and signs The Regents' standard substitution of party letter (attached here as Appendix A), b) Licensee gives The Regents a thirty (30) day notice of assignment, and c) upon payment by Licensee to The Regents of the one hundred thousand dollar ($100,000) assignment fee.  Any attempted assignment by Licensee other than in accordance with this Paragraph 24.1 will be null and void.  This Agreement is binding upon and will inure to the benefit of The Regents, its successors and assigns.
 

 25.
 FORCE MAJEURE
 25.1
 Except for the Licensee's obligation to make any payments to The Regents hereunder, the parties shall not be responsible for failure to perform due to the occurrence of any events beyond their reasonable control which render their performance impossible or onerous, including, but not limited to:  accidents (environmental, toxic spill, etc.); acts of God; biological or nuclear incidents; casualties; earthquakes; fires; floods; governmental acts; orders or restrictions; inability to obtain suitable and sufficient labor, transportation, fuel 
 

 Exclusive License SF2012-063   Page 26 of  34
 

 
 and materials; local, national or state emergency; power failure and power outages; acts of terrorism; strike; and war.
 

 26.
 GOVERNING LAWS; VENUE
 26.1
 Choice of Law.  THIS AGREEMENT WILL BE INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, excluding any choice of law rules that would direct the application of the laws of another jurisdiction and without regard to which party drafted particular provisions of this Agreement, but the scope and validity of any patent or patent application will be governed by the applicable laws of the country of such patent or patent application.
 26.2
 Venue.  Any legal action brought by the parties hereto relating to this Agreement will be conducted in San Francisco, California.
 

 27.
 GOVERNMENT APPROVAL OR REGISTRATION
 27.1
 If this Agreement or any associated transaction is required by the law of any nation to be either approved or registered with any governmental agency, the Licensee will assume all legal obligations to do so.  The Licensee will notify The Regents if it becomes aware that this Agreement is subject to a United States or foreign government reporting or approval requirement. The Licensee will make all necessary filings and pay all costs including fees, penalties and all other out-of-pocket costs associated with such reporting or approval process.
 

 

 28.
 COMPLIANCE WITH LAWS
 28.1
 The Licensee shall comply with all applicable international, national, state, regional and local laws and regulations in performing its obligations hereunder and in its use, manufacture, Sale or import of the Licensed Products or practice of the Licensed Method.  The Licensee will observe all applicable United States and foreign laws with respect to the transfer of Licensed Products and related technical data to foreign countries, including, without limitation, the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations.  The Licensee shall manufacture Licensed 
 

 Exclusive License SF2012-063   Page 27 of  34
 

 
 Products and practice the Licensed Method in compliance with applicable government importation laws and regulations of a particular country for Licensed Products made outside the particular country in which such Licensed Products are used, Sold or otherwise exploited.
 

 29.
 CONFIDENTIALITY
 29.1
 The Licensee and The Regents will treat and maintain the other party’s proprietary business, patent prosecution, software, engineering drawings, process and technical information and other proprietary information, including the negotiated terms of this Agreement and any progress reports and royalty reports and any sublicense agreement issued pursuant to this Agreement ("Proprietary Information") in confidence using at least the same degree of care as the receiving party uses to protect its own proprietary information of a like nature from the date of disclosure until five (5) years after the termination or expiration of this Agreement.  Proprietary Information can be written, oral, or both. This confidentiality obligation will apply to the information defined as "Data" under the Secrecy Agreement and such Data will be treated as Proprietary Information hereunder.
 29.2
 Nothing contained herein will restrict or impair, in any way, the right of the Licensee or The Regents to use or disclose any Proprietary Information:
 29.2.1
 that recipient can demonstrate by written records was previously known to it prior to its disclosure by the disclosing party;
 29.2.2
 that recipient can demonstrate by written records is now, or becomes in the future, public knowledge other than through acts or omissions of recipient;
 29.2.3
 that recipient can demonstrate by written records was obtained lawfully and without restrictions on the recipient from sources independent of the disclosing party; and
 29.2.4
 that The Regents is required to disclose pursuant to the California Public Records Act or other applicable law.
 29.3
 The Licensee or The Regents also may disclose Proprietary Information that is required to be disclosed (i) to a governmental entity or agency in connection with seeking any governmental or regulatory approval, governmental audit, or other governmental 
 

 Exclusive License SF2012-063   Page 28 of  34
 

 
 contractual requirement or (ii) by law, provided that the recipient uses reasonable efforts to give the party owning the Proprietary Information sufficient notice of such required disclosure to allow the party owning the Proprietary Information reasonable opportunity to object to, and to take legal action to prevent, such disclosure. Nothing in this Agreement will be construed to prevent The Regents from reporting de-identified raw terms of the Agreement as part of a larger database.  
 29.4
 Upon termination of this Agreement, the Licensee and The Regents will destroy or return any of the disclosing party’s Proprietary Information in its possession within fifteen (15) days following the termination of this Agreement and provide each other with prompt written notice that such Proprietary Information has been returned or destroyed.  Each party may, however, retain one copy of such Proprietary Information for archival purposes in non-working files.
 

 30.
 MISCELLANEOUS
 30.1
 Appendices.  This Agreement includes the attached Appendix A and B.
 30.2
 Headings.  The headings of the several sections are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.
 30.3
 Binding Agreement.  This Agreement is not binding on the parties until it has been signed below on behalf of each party.  It is then effective as of the Effective Date.
 30.4
 Amendments.  No amendment or modification of this Agreement is valid or binding on the parties unless made in writing and signed on behalf of each party.
 30.5
 Waiver.  No waiver by either party of any breach or default of any of the agreements contained herein will be deemed a waiver as to any subsequent and/or similar breach or default.
 30.6
 Entire Agreement.  This Agreement embodies the entire understanding of the parties and supersedes all previous communications, representations or understandings, either oral or written, between the parties relating to the subject matter hereof.  
 30.7
 Invalidity.  In case any of the provisions contained in this Agreement is held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability will not affect any other provisions of this Agreement and this 
 

 Exclusive License SF2012-063   Page 29 of  34
 

 
 Agreement will be construed as if such invalid, illegal or unenforceable provisions had never been contained in it.
 30.8
 Independent Contractors.  In performing their respective duties under this Agreement, each of the parties will be operating as an independent contractor.  Nothing contained herein will in any way constitute any association, partnership, or joint venture between the parties hereto, or be construed to evidence the intention of the parties to establish any such relationship.  Neither party will have the power to bind the other party or incur obligations on the other party's behalf without the other party's prior written consent.
 30.9
 Counterparts.  This Agreement may be executed in one or more counterparts, each of which together shall constitute one and the same Agreement.  For purposes of executing this Agreement, a facsimile (including a PDF image delivered via email) copy of this Agreement, including the signature pages, will be deemed an original.  The parties agree that neither party will have any rights to challenge the use or authenticity of a counterpart of this Agreement based solely on that its signature, or the signature of the other party, on such counterpart is not an original signature. 
 30.10
 Execution. The terms and conditions of this Agreement shall be considered by The Regents to be withdrawn from the Licensee’s consideration and the Agreement itself to be null and void, unless this Agreement is executed by both The Regents and the Licensee within thirty (30) days of when the execution copy is circulated for signatures.
 

 

 

 

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 Exclusive License SF2012-063   Page 30 of  34
 

 
 IN WITNESS WHEREOF, both The Regents and the Licensee have executed this Agreement by their respective and duly authorized officers on the day and year written.
 

 ACCUREXA, INC.
 THE REGENTS OF THE UNIVERSITY
 OF CALIFORNIA
 

 By:
 __________________________
 By:
 ___________________________
 (Signature)
 (Signature)
 

 Name:
 __________________________
 Name:
 __________________________
 (Please Print)
 (Please Print)
 

 Title:
 __________________________
 Title:
 __________________________
 

 Date:
 __________________________
 Date:
 __________________________
 

 Exclusive License SF2012-063   Page 31 of  34
 

 
 APPENDIX A:  CONSENT TO SUBSTITUTION OF PARTY
 UC Case No.  SF2012-063
 

 This substitution of parties ("Agreement") is effective this             day of                    , 20__, among The Regents of the University of California (“The Regents”), a California corporation, having its statewide administrative offices at 1111 Franklin Street, 12th Floor, Oakland, California 94607-5200 and acting through its Office of Innovation, Technology, and Alliances, University of California San Francisco (“UCSF”), 3333 California Street, Suite S-11, San Francisco, California 94143; Accurexa, Inc. ("Accurexa"), a _____ corporation, having a principal place of business ________; and [new licensee name] [("YYY")] a ______________________ corporation, having a principal place of business at _________________________________.
 

 BACKGROUND
 

 A.
 The Regents and Accurexa entered into a License Agreement effective ________________ (UC Control No. __-__-____), entitled _________________ ("License Agreement"), wherein Accurexa was granted certain rights.
 B.
 Accurexa desires that [YYY] be substituted as Licensee (defined in the License Agreement) in place of Accurexa, and The Regents is agreeable to such substitution.
 C.
 [YYY] has read the License Agreement and agrees to abide by its terms and conditions.
 

 The parties agree as follows:
 1.
 [YYY] assumes all liability and obligations under the License Agreement and is bound by all its terms in all respects as if it were the original Licensee of the License Agreement in place of Accurexa.
 2.
 [YYY] is substituted for Accurexa, provided that [YYY] assumes all liability and obligations under the License Agreement as if [YYY] were the original party named as Licensee as of the effective date of the License Agreement.
 3.
 The Regents releases Accurexa from all liability and obligations under the License Agreement arising before or after the effective date of this Agreement.
 

 Exclusive License SF2012-063   Page 32 of  34
 

 
 The parties have executed this Agreement in triplicate originals by their respective authorized officers on the following day and year.
 

 ACCUREXA, INC.
 THE REGENTS OF THE
 UNIVERSITY OF CALIFORNIA
 

 By:
 _____________________________
 By: 
 _____________________________
 (Signature)
 Name:
 _____________________________
 Name:
 ____________________________
 (Please print)
 Title:
 _____________________________
 Title:
 _____________________________
               
 Date:
 _____________________________
 Date:
 _____________________________
 

 [YYY] COMPANY
 By:
 ___________________________
 (Signature)
 Name:
 ___________________________
 (Please print)
 Title:
 ___________________________
 

 Date:
 ___________________________ 
 

 

 

 

 

 

 

 

 

 

 Exclusive License SF2012-063   Page 33 of  34
 

 
 APPENDIX B
 

 Cooperative Technology Administration Agreement ("CTAA") executed between the VA and The Regents- See Attached.
 

 

 Exclusive License SF2012-063   Page 34 of  34

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