Purpose and Scope

TokenRealty.Exchange is a platform licensed by DA Brands LLC, Montana. The platform enables licensed brokers to tokenize collateralized equity backed by UCC1 filings into tokens of equal value. Tokens represent OTC commodities tied to the property market in specific locations, determined by Automated Valuation Models (AVMs). Tokens do not represent fractional ownership of physical assets or properties.

Ownership and Structure

- All tokenized equity and token portfolios are held by Token Realty Exchange Series LLC.
- Token Realty Exchange Series LLC is owned and operated by Token Realty Exchange DAO LLC, a decentralized autonomous organization (DAO).

Immutable Bylaws

- These bylaws are immutable. Any attempt to modify them will result in a review of the violating licensee account for potential suspension or termination.

Notifications and Updates

- Updates to terms or policies will be communicated via the platform’s inbox messaging system.
- Users are responsible for staying informed of updates.

Licensee Availability and Auction Terms

- Each year, one new licensee spot for Brokers, Financial Advisors, and Sales Managers becomes available per state.
- Licensee spots are awarded via a competitive auction process. Participants must submit bids via the designated auction portal during the specified period.
- The winning bidder must provide proof of eligibility, such as an active broker or financial advisor license.
- Existing licensees can maintain their positions by renewing and maintaining compliance.

Partner and Sublicense Program

- Licensees may add partners through sublicenses.
- Licensees earn a licensing fee of 0.5% on:
- Tokenization deals executed by their partners.
- Token sales facilitated through their partner’s custom interface.

White-Label UI and Subdomains

- Each licensee and sublicensee partner receives a white-label user interface and a custom subdomain in the format: name.tokenrealty.exchange.

Compliance Requirements

- All licensees and partners must maintain an active license in good standing within their respective states.
- Noncompliance may lead to suspension or termination of the account.

KYC/AML Compliance

- All users must complete Know Your Customer (KYC) and Anti-Money Laundering (AML) processes.
- Costs associated with KYC/AML are passed directly to the user.

Tax Responsibilities

- Users, licensees, and partners are responsible for all applicable taxes, including capital gains tax, sales tax, and state and federal income taxes.

Legal Compliance and Filing

- Legal compliance and filing are conducted via a third-party service.
- This third party has no managerial oversight of any users or portfolios. - The third party’s role is limited to segregated administrative tasks, such as filing UCC1 documents and auditing licensee credentials.

Token Representation

- Tokens represent OTC commodities tied to the property market.
- Tokens do not confer fractional ownership of physical assets.
- Token values are determined by Automated Valuation Models (AVMs).

Property Sale Requirements

- Property owners with tokenized collateral equity on their properties must sell the property for an amount equal to or greater than outstanding lien balances, including the UCC1 representing tokenized collateral equity.
- Exceptions are allowed if the sale is initiated by a bank or mortgage company for a short sale, foreclosure, or court order

Liquidity Pool Requirements

- Buyers must buy out the liquidity pool value, which is added to the gross selling price of the property in the buyer’s contract.

Property Owner Earnings from Liquidity Pools

- Property owners in possession of a liquidity pool earn
- 2.5% on token sells to the liquidity pool.
- 2.5% on token buys from the liquidity pool.

Licensee Roles

- Brokers: Manage property-backed tokenization, ensure compliance with state real estate laws, and oversee agents.
- Financial Advisors: Provide financial guidance and investment advice related to tokenized portfolios
- Sales Managers: Coordinate and oversee sales activities (no professional license required).

Good Faith and Professional Conduct

- All licensees and partners must act in good faith, promoting transparency, honesty, and professionalism.

Harassment and Misconduct

- Harassment or inappropriate behavior may result in forfeiture of the licensee account and further investigation.

Property Owner Earnings from Liquidity Pools

- Property owners in possession of a liquidity pool earn
- 2.5% on token sells to the liquidity pool.
- 2.5% on token buys from the liquidity pool.

Arbitration Agreement

- Any disputes arising from platform use shall be resolved through arbitration by designated platform licensees.
- Arbitration fees are outlined in the Arbitration Agreement.

Indemnity Clause

- TokenRealty.Exchange, its partners, and affiliates are indemnified against any liabilities, losses, or outcomes resulting from tokenized equity values or performance.

. Immutable Licensing Fees

- All licensing fees are immutable and non-refundable.

Immutable Bylaws

- These bylaws cannot be changed. Violations will lead to a review of the licensee’s account and possible termination.