Company: FOACW
Filing Date: 2025-03-27
Form Type: DEF 14A
Source: 0001193125-25-065614
Chunk: 62

Company: Finance of America Companies Inc.
Filing Date: 2025-03-27
Form: DEF 14A
Chunk 62
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 receive payments under the Tax Receivable Agreements.

Payments under the Tax Receivable Agreements will be based on the tax reporting positions that we will determine. The Company will not be reimbursed for any cash payments previously made to the TRA Parties pursuant to the Tax Receivable Agreements if any tax benefits initially claimed by the Company are subsequently challenged by a taxing authority and are ultimately disallowed. Instead, any excess cash payments made by the Company to a TRA Parties will be netted against any future cash payments that the Company might otherwise be required to make under the terms of the Tax Receivable Agreements. As a result, it is possible that the Company could make cash payments under the Tax Receivable Agreements that are substantially greater than its actual cash tax savings.

FOA Equity Amended and Restated Limited Liability Company Agreement

In connection with the Business Combination, immediately prior to the closing thereof, FOA Equity adopted an Amended and Restated Limited Liability Company Agreement (the “A&R LLC Agreement”). In connection with the adoption of the A&R LLC Agreement, all equity interests of FOA Equity as of immediately prior to the closing of the Business Combination were reclassified into a single class of unitized equity interests designated as FOA Units.

Pursuant to the A&R LLC Agreement, the Company has the sole right to appoint all of the managers of FOA Equity. The board of managers has the right to determine when distributions will be made to the members of FOA Equity and the amount of any such distributions. If the board of managers authorizes a distribution, such distribution will be made to the holders of FOA Units pro rata in accordance with the percentages of their respective FOA Units held. The A&R LLC Agreement provides for tax distributions to the holders of FOA Units if the board of managers determines that a holder, by reason of holding FOA Units, incurs an income tax liability. These tax distributions are computed based on the board of managers’ estimate of the net taxable income of FOA Equity multiplied by an assumed tax rate equal to the highest effective marginal combined United States federal, state and local income tax rate prescribed for an individual (or, if greater, a corporation) resident in California or New York, New York (whichever is higher), taking into account the deductibility of certain expenses and any limitations thereof and the character of FOA Equity’s income.**

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The A&R LLC Agreement also provides that substantially all expenses incurred by or attributable to the Company,